[Federal Register Volume 85, Number 156 (Wednesday, August 12, 2020)]
[Rules and Regulations]
[Pages 49170-49220]
[FR Doc No: 2020-14408]

Vol. 85

Wednesday,

No. 156

August 12, 2020

Part IV

 Environmental Protection Agency

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40 CFR Part 97

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Promulgation of Air Quality Implementation Plans; State of Texas;
Regional Haze and Interstate Visibility Transport Federal
Implementation Plan; Final Rule

Federal Register / Vol. 85, No. 156 / Wednesday, August 12, 2020 /
Rules and Regulations

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 97

[EPA-R06-OAR-2016-0611; FRL-10010-52-Region 6]

Promulgation of Air Quality Implementation Plans; State of Texas;
Regional Haze and Interstate Visibility Transport Federal
Implementation Plan

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: Pursuant to the federal Clean Air Act (CAA or Act), the
Environmental Protection Agency (EPA) is finalizing its affirmation,
with amendments, of an intrastate sulfur dioxide (SO2)
trading program as an alternative to best available retrofit technology
(BART) requirements for certain sources in Texas. This action finalizes
the August 2018 proposed affirmation and November 2019 supplemental
notice of proposed rulemaking (SNPRM) concerning certain aspects of a
final rule published on October 17, 2017, partially approving the 2009
Texas Regional Haze State Implementation Plan (SIP) submission and
promulgating a Federal Implementation Plan (FIP) for Texas to address
certain outstanding CAA regional haze requirements for the first
implementation period.

DATES: This final rule is effective on September 11, 2020.

ADDRESSES: The EPA has established a docket for this action under
Docket ID No. EPA-R06-OAR-2016-0611. All documents in the docket are
listed on the http://www.regulations.gov website. Although listed in
the index, some information is not publicly available, e.g.,
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute therefore is not posted to
regulations.gov. Certain other material, such as copyrighted material,
is not placed on the internet and will be publicly available only in
hard copy. Publicly available docket materials are available either
electronically through http://www.regulations.gov or in hard copy at
EPA Region 6, 1201 Elm Street, Suite 500, Dallas, Texas 75270.

FOR FURTHER INFORMATION CONTACT: Jennifer Huser, Air and Radiation
Division, Environmental Protection Agency, Region 6, 1201 Elm Street,
Suite 500, Dallas, Texas 75270, telephone<PHONE_NUMBER>; email address
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this document wherever ``we,''
``us,'' or ``our'' is used, we mean the EPA.

Table of Contents

I. Background
    A. Regional Haze
    B. Interstate Transport of Pollutants That Affect Visibility
    C. Previous Actions Related to Texas Regional Haze
    D. EPA's Denial of the Petition for Reconsideration of CSAPR as
a BART Alternative and its Relationship to This Final Action
II. Our Proposed Actions
    A. Proposed Rule Affirming the October 2017 Final Action
    B. Supplemental Notice of Proposed Rulemaking
III. Summary of Our Final Decisions
    A. Regional Haze
    1. Amendments to the Texas SO2 Trading Program
    2. Analysis of Texas SO2 Trading Program as a BART
Alternative
    3. PM BART
    4. Reasonable Progress
    B. Interstate Transport of Pollutants That Affect Visibility
IV. Summary and Responses to Significant Issues Raised by Commenters
    A. Texas SO2 Trading Program as a BART Alternative
    B. PM BART
    C. Appropriateness of the Texas SO2 Trading Program
vs. Source-Specific BART FIP
    D. Statutory Requirements for FIP Promulgation and
Implementation
    E. Timing of the Plan for the First Implementation Period
    F. Notice and Comment Requirements
    G. Subject-to-BART Determinations
    H. Visibility Transport
    I. Reasonable Progress
    J. Coleto Creek
    K. Assurance Provisions and the Variability Limit
    L. Venue
    M. Other
V. Final Action
    A. Regional Haze
    B. Interstate Visibility Transport
VI. Statutory and Executive Order Reviews

I. Background

A. Regional Haze

    Regional haze is visibility impairment that is produced by a
multitude of sources and activities that are located across a broad
geographic area. These sources--both human-caused (anthropogenic) and
naturally occurring--emit or otherwise introduce into the atmosphere
PM, including fine PM (PM2.5) (e.g., sulfates, nitrates,
organic carbon (OC), elemental carbon (EC), and soil dust), or
pollutants that are precursors to the formation of PM2.5
(e.g., SO2, NOX, and, in some cases, ammonia
(NH3) and volatile organic compounds (VOCs)). Fine-particle
precursors react in the atmosphere to form PM2.5, which
impairs visibility by scattering and absorbing light. Visibility
impairment limits visual distance and reduces color, clarity, and
contrast of view. Reducing PM2.5 and its precursor gases in
the atmosphere is an effective method of improving visibility.
PM2.5 can also cause serious health effects and mortality in
humans and contributes to environmental effects, such as acid
deposition and eutrophication.
    Data from the existing visibility monitoring network, the
``Interagency Monitoring of Protected Visual Environments'' (IMPROVE)
monitoring network, show that visibility impairment caused by air
pollution occurs virtually all the time at most national parks and
wilderness areas. In 1999, the average visual range \1\ in many
mandatory Class I areas \2\ (i.e., national parks and memorial parks,
wilderness areas, and international parks meeting certain size
criteria) in the western United States was 100-150 kilometers, or about
one-half to two-thirds of the visual range that would exist without
anthropogenic air pollution. In most of the eastern Class I areas of
the United States, the average visual range was less than 30
kilometers, or about one-fifth of the visual range that would exist
under estimated natural conditions.\3\ Since the promulgation of the
original Regional Haze Rule in 1999, CAA programs have reduced
emissions of haze-causing pollution, lessening visibility impairment
and resulting in improved average visual ranges.\4\
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    \1\ Visual range is the greatest distance, in kilometers or
miles, at which a dark object can be viewed against the sky.
    \2\ Areas designated as mandatory Class I Federal areas consist
of National Parks exceeding 6,000 acres, wilderness areas and
national memorial parks exceeding 5,000 acres, and all international
parks that were in existence on August 7, 1977. 42 U.S.C. 7472(a).
In accordance with section 169A of the CAA, EPA, in consultation
with the Department of Interior, promulgated a list of 156 areas
where visibility is identified as an important value. 44 FR 69122
(November 30, 1979). The extent of a mandatory Class I area includes
subsequent changes in boundaries, such as park expansions. 42 U.S.C.
7472(a). Although states and tribes may designate as Class I
additional areas which they consider to have visibility as an
important value, the requirements of the visibility program set
forth in section 169A of the CAA apply only to ``mandatory Class I
Federal areas.'' Each mandatory Class I Federal area is the
responsibility of a ``Federal Land Manager.'' 42 U.S.C. 7602(i).
When we use the term ``Class I area'' in this action, we mean a
``mandatory Class I Federal area.''
    \3\ 64 FR 35714 (July 1, 1999).
    \4\ An interactive ``story map'' depicting efforts and recent
progress by EPA and states to improve visibility at national parks
and wilderness areas may be visited at: http://arcg.is/29tAbS3.
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    In Section 169A of the 1977 Amendments to the CAA, Congress created
a program for protecting visibility in the nation's national parks

and wilderness areas. This section of the CAA establishes as a national
goal the prevention of any future, and the remedying of any existing,
man-made impairment of visibility in 156 national parks and wilderness
areas designated as mandatory Class I Federal areas. On December 2,
1980, EPA promulgated regulations to address visibility impairment in
Class I areas that is ``reasonably attributable'' to a single source or
small group of sources, i.e., ``reasonably attributable visibility
impairment.'' \5\ These regulations represented the first phase in
addressing visibility impairment. EPA deferred action on regional haze
that emanates from a variety of sources until monitoring, modeling, and
scientific knowledge about the relationships between pollutants and
visibility impairment were improved.
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    \5\ 45 FR 80084 (Dec. 2, 1980).
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    Congress added section 169B to the CAA in 1990 to address regional
haze issues, and we promulgated regulations addressing regional haze in
1999.\6\ The Regional Haze Rule revised the existing visibility
regulations to integrate into the regulations provisions addressing
regional haze impairment and established a comprehensive visibility
protection program for Class I areas. EPA's focus, following
congressional direction, continued to be on three important visibility-
impairing pollutants from relatively uncontrolled anthropogenic
sources: Oxides of nitrogen (NOX), sulfur dioxide
(SO2), and particulate matter (PM).\7\ The requirements for
regional haze, found at 40 CFR 51.308 and 51.309, are included in our
visibility protection regulations at 40 CFR 51.300-309. The requirement
to submit a regional haze SIP applies to all 50 states, the District of
Columbia, and the Virgin Islands (referred to collectively hereafter as
``states''). States were required to submit their first SIP addressing
regional haze visibility impairment no later than December 17, 2007.\8\
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    \6\ 64 FR 35714 (July 1, 1999), codified at 40 CFR part 51,
subpart P (Regional Haze Rule).
    \7\ Id. 35715.
    \8\ See 40 CFR 51.308(b). EPA's regional haze regulations
require subsequent updates to the regional haze SIPs. 40 CFR
51.308(g)-(i).
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    Section 169A(b)(2)(A) of the CAA directs states to evaluate the use
of retrofit controls at certain larger, often under-controlled, older
stationary sources in order to address visibility impacts from these
sources. Specifically, section 169A(b)(2)(A) of the CAA requires states
to revise their SIPs to contain such measures as may be necessary to
make reasonable progress toward the natural visibility goal, including
a requirement that certain categories of existing major stationary
sources \9\ built between 1962 and 1977 procure, install and operate
best available retrofit technology (BART). Larger ``fossil-fuel fired
steam electric plants'' are included among the statutory list of BART
source categories at section 169A(g)(7). Under the Regional Haze Rule,
states are directed to conduct BART determinations for ``BART-
eligible'' sources that may be anticipated to cause or contribute to
any visibility impairment in a Class I area. The evaluation of BART for
EGUs that are located at fossil-fuel-fired power plants having a
generating capacity in excess of 750 megawatts must follow the
``Guidelines for BART Determinations Under the Regional Haze Rule'' at
appendix Y to 40 CFR part 51 (hereinafter referred to as the ``BART
Guidelines''). States are required to identify the level of control
representing BART after considering the five statutory factors set out
in section 169A(g)(2).\10\ States must establish emission limits, a
schedule of compliance, and other measures consistent with the BART
determination process for each source subject-to-BART.
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    \9\ See 42 U.S.C. 7491(g)(7) (listing the set of ``major
stationary sources'' potentially subject-to-BART).
    \10\ The State must take into consideration the five statutory
factors: (1) The costs of compliance, (2) the energy and non-air
quality environmental impacts of compliance, (3) any existing
control technology in use at the source, (4) the remaining useful
life of the source, and (5) the degree of visibility improvement
which may reasonably be anticipated to result.
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    Rather than requiring source-specific BART controls, states also
have the flexibility to adopt an emissions trading program or
alternative program as long as the alternative provides greater
reasonable progress towards improving visibility than BART. 40 CFR
51.308(e)(2) specifies how a state must conduct the demonstration to
show that an alternative program will achieve greater reasonable
progress than the installation and operation of BART. 40 CFR
51.308(e)(2)(i)(E) requires a determination under 40 CFR 51.308(e)(3)
or otherwise based on the clear weight of evidence that the trading
program or other alternative measure achieves greater reasonable
progress than would be achieved through the installation and operation
of BART at the covered sources. Specific criteria for determining if an
alternative measure achieves greater reasonable progress than source-
specific BART are set out in 40 CFR 51.308(e)(3); however, as noted
above, under 40 CFR 51.308(e)(2)(i)(E) states have the flexibility to
develop their own criteria to establish greater reasonable progress
based on the ``clear weight of the evidence.'' Finally, 40 CFR
51.308(e)(4) provides that states whose sources participate in the
Cross-State Air Pollution Rule (CSAPR) trading programs need not
require the BART-eligible fossil fuel-fired steam electric plants
subject to those programs to install, operate, and maintain BART for
the pollutant covered by the CSAPR trading program.
    Regional haze requirements are generally implemented through the
cooperative-federalism framework of section 110 of the Act, in which
states are given the primary opportunity to meet the requirements
through state implementation plans (SIPs). Under section 110(c) of the
CAA, whenever we disapprove a mandatory SIP submission in whole or in
part, or make a finding that a state has failed to make such a
submission, we are required to promulgate a federal implementation plan
(FIP) within two years unless the state corrects the deficiency and we
approve the new SIP submittal.

B. Interstate Transport of Pollutants That Affect Visibility

    Section 110(a) of the CAA directs states to submit a SIP that
provides for the implementation, maintenance, and enforcement of each
NAAQS. This is commonly referred to as an ``infrastructure SIP.'' CAA
section 110(a)(2)(D)(i)(II) requires that infrastructure SIPs contain
adequate provisions to prohibit interference with measures required to
protect visibility in other states. This is referred to as ``interstate
visibility transport'' (or ``prong 4'' of the four requirements or
``prongs'' found in section 110(a)(2)(D)(i)). Infrastructure SIPs are
due to the EPA within three years after the promulgation of a new or
revised NAAQS (or within such shorter period as we may prescribe). A
state's failure to submit a complete, approvable infrastructure SIP,
including one that meets the requirements for interstate visibility
transport, creates an obligation for the EPA to address this
requirement pursuant to section 110(c).

C. Previous Actions Related to Texas Regional Haze

    On March 31, 2009, Texas submitted a regional haze SIP (the 2009
Regional Haze SIP) to the EPA that included reliance on Texas'
participation in trading programs under the Clean Air Interstate Rule
(CAIR) as an alternative to BART for SO2 and NOX
emissions

from EGUs.\11\ This reliance was consistent with the EPA's
regulations at the time that Texas developed its 2009 Regional Haze
SIP.\12\ However, at the time that Texas submitted this SIP to the EPA,
the D.C. Circuit had remanded CAIR (without vacatur).\13\ The court
left CAIR and our CAIR FIPs in place in order to ``temporarily preserve
the environmental values covered by CAIR'' until we could, by
rulemaking, replace CAIR consistent with the court's opinion. The EPA
promulgated the Cross-State Air Pollution Rule (CSAPR) to replace CAIR
in 2011 \14\ (and revised it in 2012).\15\ CSAPR established FIP
requirements for sources in a number of states, including Texas, to
address the states' interstate transport obligation under CAA section
110(a)(2)(D)(i)(I). CSAPR addresses interstate transport of fine
particulate matter and ozone by requiring affected EGUs in these states
to participate in one or more of the CSAPR trading programs, which
establish emissions budgets that apply to the EGUs' collective annual
emissions of SO2 and NOX, as well as emissions of
NOX during ozone season.\16\
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    \11\ CAIR required certain states, including Texas, to reduce
emissions of SO2 and NOX that significantly
contribute to downwind nonattainment of the 1997 NAAQS for fine
particulate matter and ozone. See 70 FR 25152 (May 12, 2005).
    \12\ See 70 FR 39104 (July 6, 2005).
    \13\ See North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008),
as modified, 550 F.3d 1176 (D.C. Cir. 2008).
    \14\ 76 FR 48207 (Aug. 8, 2011).
    \15\ CSAPR was amended three times in 2011 and 2012 to add five
states to the seasonal NOX program and to increase
certain state budgets. 76 FR 80760 (December 27, 2011); 77 FR 10324
(February 21, 2012); 77 FR 34830 (June 12, 2012).
    \16\ The ozone season for CSAPR purposes is May 1 through
September 30.
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    Following issuance of CSAPR, the EPA determined that CSAPR would
achieve greater reasonable progress towards improving visibility than
would source-specific BART in CSAPR states (a determination often
referred to as ``CSAPR Better-than-BART'').\17\ In the same action, we
revised the Regional Haze Rule to allow states whose sources
participate in the CSAPR trading programs to rely on such participation
in lieu of requiring BART-eligible EGUs in the state to install BART
controls as to the relevant pollutant.
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    \17\ 77 FR 33641 (June 7, 2012). This determination was recently
upheld by the D.C. Circuit. See Util. Air Regulatory Grp. v. EPA,
885 F.3d 714 (D.C. Cir. 2018).
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    In the same action that EPA determined that states could rely on
CSAPR to address the BART requirements for EGUs, EPA issued a limited
disapproval of a number of states' regional haze SIPs, including the
2009 Regional Haze SIP submittal from Texas, due to the states'
reliance on CAIR, which had been replaced by CSAPR.\18\ The EPA did not
immediately promulgate a FIP to address those aspects of the 2009
Regional Haze SIP submittal subject to the limited disapproval of
Texas' regional haze SIP to allow more time for the EPA to assess the
remaining elements of the 2009 Texas SIP submittal.
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    \18\ Id.
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    In December 2014, we proposed an action to address the remaining
regional haze obligations for Texas.\19\ In that action, we proposed,
among other things, to rely on our CSAPR FIP requiring Texas sources'
participation in the CSAPR trading programs to satisfy the
NOX and SO2 BART requirements for Texas' BART-
eligible EGUs; we also proposed to approve the portions of the 2009
Regional Haze SIP addressing PM BART requirements for the state's EGUs.
Before that rule was finalized, however, the D.C. Circuit issued a
decision on a number of challenges to CSAPR, denying most claims, but
remanding the CSAPR SO2 and/or seasonal NOX
emissions budgets of several states to the EPA for reconsideration,
including the Phase 2 SO2 and seasonal NOX
budgets for Texas.\20\ Due to the uncertainty arising from the remand
of Texas' CSAPR budgets, we did not finalize our December 2014 proposal
to rely on CSAPR to satisfy the SO2 and NOX BART
requirements for Texas EGUs.\21\ Additionally, because our proposed
action on the PM BART provisions for EGUs was dependent on how
SO2 and NOX BART were satisfied, we did not take
final action on the PM BART elements of the 2009 Texas' Regional Haze
SIP.\22\ In January 2016, we finalized action on the remaining aspects
of the December 2014 proposal.\23\ This final action disapproved, among
other things, Texas' Reasonable Progress Goals for the Big Bend and
Guadalupe Mountains Class I areas in Texas, Texas's reasonable progress
analysis and Texas's long-term strategy. EPA promulgated a FIP
establishing a new long-term strategy that consisted of SO2
emission limits for 15 coal-fired EGUs at eight power plants. That
rulemaking was judicially challenged, however, and in July 2016, the
Fifth Circuit granted the petitioners' motion to stay the rule pending
review.\24\ On March 22, 2017, following the submittal of a request by
the EPA for a voluntary remand of the parts of the rule under
challenge, the Fifth Circuit Court of Appeals remanded the rule in its
entirety.\25\
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    \19\ 79 FR 74818 (Dec. 16, 2014).
    \20\ EME Homer City Generation, L.P. v. EPA (EME Homer City II),
795 F.3d 118, 132 (D.C. Cir. 2015).
    \21\ See 81 FR 296, 301-02 (Jan. 5, 2016).
    \22\ Id.
    \23\ 81 FR 296 (Jan. 5, 2016).
    \24\ Texas v. EPA, 829 F.3d 405 (5th Cir. 2016).
    \25\ Order, Texas v. EPA, 16-60118 (5th Cir. Mar. 22, 2017).
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    On October 26, 2016, the EPA finalized an update to CSAPR to
address the interstate transport requirements of CAA section
110(a)(2)(D)(i)(I) with respect to the 2008 ozone NAAQS (CSAPR
Update).\26\ The EPA also responded to the D.C. Circuit's remand in EME
Homer City II of certain CSAPR seasonal NOX budgets in that
action. As to Texas, the EPA withdrew Texas' seasonal NOX
budget finalized in CSAPR to address the 1997 ozone NAAQS. However, in
that same action, the EPA promulgated a FIP with a revised seasonal
NOX budget for Texas to address the 2008 ozone NAAQS.\27\
Accordingly, Texas sources remain subject to CSAPR seasonal
NOX requirements.
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    \26\ 81 FR 74504 (Oct. 26, 2016).
    \27\ Id. 74524-25.
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    On November 10, 2016, in response to the D.C. Circuit's remand of
Texas's CSAPR SO2 budget, we proposed to withdraw the FIP
provisions that required EGUs in Texas to participate in the CSAPR
trading programs for annual emissions of SO2 and
NOX.\28\ We also proposed to reaffirm the EPA's 2012
analytical demonstration that CSAPR provides greater reasonable
progress than BART, despite changes in CSAPR's geographic scope to
address the EME Homer City II remand, including removal of Texas' EGUs
from the CSAPR trading program for SO2 emissions. On
September 29, 2017, we finalized the withdrawal of the FIP provisions
for annual emissions of SO2 and NOX for EGUs in
Texas \29\ and affirmed our proposed finding that the EPA's 2012
analytical demonstration remains valid and that participation in the
CSAPR trading programs as they now exist meets the Regional Haze Rule's
criteria for an alternative to BART. (We refer to this as the ``2017
CSAPR Better-than-BART affirmation finding'' throughout this notice.)
As discussed in Section I.D below, certain environmental organizations
filed a petition for reconsideration of this finding in November 2017.
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    \28\ 81 FR 78954 (Nov. 10, 2016).
    \29\ 82 FR 45481 (Sept. 29, 2017). As explained above, Texas
sources continue to be subject to the CSAPR Update FIP, under which
they participate in a CSAPR trading program for ozone season
NOX.
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    On January 4, 2017, we proposed a FIP to address the EGU BART

requirements for Texas' EGUs. With respect to NOX, we
proposed to replace the 2009 Regional Haze SIP's reliance on CAIR with
reliance on our CSAPR FIP to address the NOX BART
requirements for EGUs.\30\ This portion of our proposal was based on
the CSAPR Update and our separate November 10, 2016 proposed finding,
described above, that the EPA's actions in response to the D.C.
Circuit's remand would not adversely impact our 2012 demonstration that
participation in the CSAPR trading programs meets the Regional Haze
Rule's criteria for alternatives to BART. We noted that we could not
finalize this portion of our proposed FIP to address the NOX
BART requirements for EGUs unless and until we finalized our proposed
finding that CSAPR was still better than BART.\31\ (This predicate
finding was finalized on September 29, 2017, as described above.)
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    \30\ 82 FR 912, 914-15 (Jan. 4, 2017).
    \31\ Id. 915.
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    With respect to SO2, our January 4, 2017 proposed action
addressing the BART requirements for Texas EGUs acknowledged that
because Texas sources would no longer be participating in the CSAPR
program for SO2, Texas would no longer be eligible to rely
on participation in CSAPR as an alternative to source-specific EGU BART
for SO2 under 40 CFR 51.308(e)(4). As a result, there were
BART requirements that were left unfulfilled with respect to Texas's
BART-eligible EGU emissions of SO2 that would need to be
fulfilled by either an approved SIP or an EPA-issued FIP that satisfied
the BART requirements under 40 CFR 51.308(e)(1) or constituted a viable
BART alternative under 40 CFR 51.308(e)(2) for those emissions. EPA
proposed to satisfy these requirements through a BART FIP, entailing
the identification of BART-eligible EGU sources, screening to identify
which BART-eligible sources are ``subject-to-BART'' (i.e., may
reasonably be anticipated to cause or contribute to any impairment of
visibility in any Class I area), and source-by-source determinations of
SO2 BART controls as appropriate. For those EGU sources we
proposed to find subject to BART, we proposed to promulgate source-
specific SO2 requirements. We proposed SO2
emission limits on 29 EGUs located at 14 facilities.
    With respect to PM, in the January 2017 proposal, we proposed to
disapprove the portion of the 2009 Regional Haze SIP that made BART
determinations for PM from EGUs, on the grounds that the demonstration
in the 2009 Texas Regional Haze SIP relied on underlying assumptions as
to how the SO2 and NOX BART requirements for EGUs
were being met that were no longer valid with the proposed source-
specific SO2 requirements.\32\ In place of these
determinations, we proposed to promulgate source-specific PM BART
requirements based on existing practices and control capabilities for
those EGUs that we proposed to find subject to BART. Previously, we had
proposed to approve the EGU BART determinations for PM in the 2009
Texas Regional Haze SIP, and this proposal had never been
withdrawn.\33\ At that time, CSAPR was an appropriate alternative for
SO2 and NOX BART for EGUs. The 2009 Texas
Regional Haze SIP included a pollutant-specific screening analysis for
PM to demonstrate that Texas EGUs were not subject to BART for PM. In a
2006 guidance document,\34\ the EPA stated that pollutant-specific
screening can be appropriate where a state is relying on a BART
alternative to address both NOX and SO2 BART.
However, in the January 2017 proposal, we proposed to disapprove the PM
BART determination since SO2 BART was no longer addressed by
a BART alternative. For coal-fired units, we proposed PM BART limits
consistent with PM emission limits in the Mercury and Air Toxics
Standards (MATS) rule; for gas-fired units, we proposed PM BART would
be satisfied by making burning pipeline-quality gas federally
enforceable; and for oil-fired units, we proposed that fuel-content
requirements for SO2 BART would also satisfy PM BART.\35\
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    \32\ In the 2009 Regional Haze Texas SIP, for EGU BART, Texas'
BART-eligible EGUs' emissions of both SO2 and
NOX were covered by participation in trading programs,
which allowed Texas to conduct a screening analysis of the
visibility impacts from PM emissions from such units in isolation.
However, modeling on a pollutant-specific basis for PM is
appropriate only in the narrow circumstance of reliance on BART
alternatives to satisfy both NOX and SO2 BART.
Due to the complexity and nonlinear nature of atmospheric chemistry
and chemical transformation among pollutants, EPA has not
recommended performing modeling on a pollutant-specific basis to
determine whether a source is subject to BART, except in the unique
situation described above. See discussion in Memorandum from Joseph
Paisie to Kay Prince, ``Regional Haze Regulations and Guidelines for
Best Available Retrofit Technology (BART) Determinations,'' July 19,
2006.
    \33\ 79 FR 74817, 74853-54 (Dec. 16, 2014).
    \34\ See discussion in Memorandum from Joseph Paisie to Kay
Prince, ``Regional Haze Regulations and Guidelines for Best
Available Retrofit Technology (BART) Determinations,'' July 19,
2006.
    \35\ 82 FR 936.
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    In our final action addressing BART for Texas published on October
17, 2017, we finalized our January 2017 proposed determination that
Texas' participation in CSAPR's trading program for ozone-season
NOX qualifies as an alternative to source-specific
NOX BART. We determined that the SO2 BART
requirements for all BART-eligible coal-fired units and a number of
BART-eligible gas- or gas/fuel oil-fired units are satisfied by a BART
alternative for SO2--specifically, a new intrastate trading
program that we established addressing emissions of SO2 from
certain EGUs in Texas. The remaining BART-eligible EGUs not covered by
the SO2 BART alternative were previously determined to be
not subject to BART based on screening methods using model plants and
CALPUFF \36\ modeling as described in our proposed rule and BART
Screening technical support document (TSD).\37\ Finally, because both
NOX and SO2 were now being addressed by a BART
alternative, we approved the 2009 Regional Haze SIP's determination,
based on a pollutant-specific screening analysis, that Texas' EGUs are
not subject to BART for PM. With respect to visibility transport
obligations, we determined that the BART alternative to address
SO2 and Texas sources' participation in CSAPR's trading
program for ozone-season NOX to address NOX BART
at Texas' EGUs fully addresses Texas' obligations for six NAAQS.
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    \36\ CALPUFF (California Puff Model) is a multi-layer, multi-
species non-steady-state puff dispersion modeling system that
simulates the effects of time- and space-varying meteorological
conditions on pollutant transport, transformation, and removal.
CALPUFF is intended for use in assessing pollutant impacts at
distances greater than 50 kilometers to several hundreds of
kilometers. It includes algorithms for calculating visibility
effects from long range transport of pollutants and their impacts on
Federal Class I areas. EPA previously approved the use of the
CALPUFF model in BART related analyses (40 CFR part 51 Regional Haze
Regulations and Guidelines for Best Available Retrofit Technology
(BART) Determinations; Final Rule; 70 FR 39104--39172; July 6,
2005). For instructions on how to download the appropriate model
code and documentation that are available from Exponent (Model
Developer/Owner) at no cost for download, see EPA's website: https://www.epa.gov/scram/air-quality-dispersion-modeling-preferred-and-recommended-models#calpuff.
    \37\ See document at docket identification number EPA-R06-OAR-
2016-0611-0005.
---------------------------------------------------------------------------

D. EPA's Denial of the Petition for Reconsideration of CSAPR as a BART
Alternative and its Relationship to This Final Action

    As explained in the section above, on September 29, 2017, we
finalized the withdrawal of the CSAPR FIP provisions for annual
emissions of SO2 and NOX for EGUs in Texas.\38\
We also finalized our November 2016 proposed finding affirming that the
EPA's 2012 analytical demonstration remains valid and that
participation in the CSAPR

trading programs continues to meet the Regional Haze Rule's criteria
for an alternative to BART. In our October 17, 2017, action
promulgating the Texas intrastate SO2 trading program, we
relied on that determination and the fact that the Texas program would
achieve SO2 emission reductions similar to what CSAPR would
have achieved in Texas to conclude that the Texas program satisfies the
requirements for a BART alternative under 40 CFR 51.308(e)(2).\39\
---------------------------------------------------------------------------

    \38\ 82 FR 45481 (Sept. 29, 2017).
    \39\ 82 FR 48324, 48330, 48357 (Oct. 17, 2017).
---------------------------------------------------------------------------

    On November 28, 2017, Sierra Club and the National Parks
Conservation Association submitted a petition for partial
reconsideration of our September 2017 finding affirming that CSAPR
continues to satisfy requirements as a BART alternative.\40\ Among
other things, these petitioners alleged that our analysis was
materially flawed and must be reconsidered to the extent that it rested
on an assumption that EGU BART sources in Texas would be subject to
source-specific BART controls for SO2 rather than the
intrastate SO2 trading program.\41\ Petitioners alleged in
particular that EPA's emissions shifting analysis accounted for
potential increases in emissions in remaining CSAPR states of between
22,300 to 53,000 tons by assuming these emissions would be offset by an
estimated 127,300 tons of SO2 emission reductions in Texas
due to source-specific BART controls.\42\ However, these petitioners
alleged that this assumption was proven false when EPA promulgated the
Texas intrastate trading program rather than source-specific BART.\43\
On this basis, among other things, petitioners sought mandatory
reconsideration of the September 29, 2017 action under CAA section
307(d)(7)(B).
---------------------------------------------------------------------------

    \40\ Sierra Club and National Parks Conservation Association,
Petition for Partial Reconsideration of Interstate Transport of Fine
Particulate Matter: Revision of Federal Implementation Plan
Requirements for Texas; Final Rule; 82 FR 45,481 (Sept. 29, 2017);
EPA-HQ-OAR-2016-0598; FRL-9968-46-OAR (Nov. 28, 2017).
    \41\ See, e.g., id. 6 (citing 82 FR 45494).
    \42\ Id. 13-14 (citing 82 FR 45493-94).
    \43\ Id.
---------------------------------------------------------------------------

    In a separate action, EPA is denying this petition for
reconsideration.\44\ That action, and the basis for that action as it
relates to the determination that CSAPR remains a valid BART
alternative, are beyond the scope of this action. With the denial of
the petition for reconsideration of our 2017 affirmation in that
separate action, EPA has made a final determination that the objections
raised by the petitioners on the 2017 affirmation of CSAPR as a BART
alternative are not of central relevance.\45\ As such, there is no
longer any outstanding question whether CSAPR is a satisfactory BART
alternative. Therefore, as discussed in Section III.A.2 below, in this
action EPA is finalizing its affirmation that it may rely on the CSAPR
BART-alternative analysis as a part of its ``clear weight of the
evidence'' demonstration that the Texas intrastate trading program
achieves greater reasonable progress than BART.
---------------------------------------------------------------------------

    \44\ See U.S. EPA, Denial of Petition for Partial
Reconsideration of ``Interstate Transport of Fine Particulate
Matter: Revision of Federal Implementation Plan Requirements for
Texas'' (82 FR 45481; Sept. 29, 2017) (EPA-HQ-OAR-2016-0598). A copy
of the denial of petition letter sent to the petitioners and the
denial of petition Notice of Availability (NOA) published in the
Federal Register are available at Docket ID EPA-HQ-OAR-2016-0598.
    \45\ Id.
---------------------------------------------------------------------------

II. Our Proposed Actions

A. Proposed Rule Affirming the October 2017 Final Action

    On December 15, 2017, EPA received a petition for reconsideration
of the October 2017 final rule addressing BART in Texas requesting that
the Administrator reconsider certain aspects of the FIP related to the
intrastate trading program promulgated to address the SO2
BART requirement for Texas EGUs. In our April 30, 2018 letter in
response to that petition, we stated that we believed that certain
aspects of the federal plan could benefit from further public comment.
Accordingly, in a notice published on August 27, 2018, we proposed to
affirm certain aspects of our SIP approval and of the FIP, and we
provided the public with an opportunity to comment on those aspects, as
well as other specified related issues.\46\ Specifically, we took
comment on the following elements, which effectively covered all of
petitioners' central objections: (1) The proposal to affirm the October
2017 FIP establishing an intrastate trading program addressing
emissions of SO2 from certain EGUs in Texas as a BART
alternative and the determination that this program satisfies the
requirements for BART alternatives; (2) the proposal to affirm the
finding that the BART alternatives in the October 2017 rulemaking to
address SO2 and NOX BART at Texas' EGUs result in
emission reductions adequate to satisfy the requirements of CAA section
110(a)(2)(D)(i)(II) with respect to visibility for the following NAAQS:
1997 8-hour ozone, 1997 PM2.5 (annual and 24-hour), 2006
PM2.5 (24-hour), 2008 8-hour ozone, 2010 1-hour
NO2, and 2010 1-hour SO2 NAAQS; and (3) the
proposal to affirm our October 2017 approval of Texas' SIP
determination that no sources are subject to BART for PM. The August
2018 affirmation proposed rule also solicited comment on the specific
issues of whether recent shutdowns of sources included in the trading
program and the merger of two owners of affected EGUs should impact the
allocation methodology for certain SO2 allowances. In
addition to soliciting comment on the above elements and aforementioned
specific issues, the August 2018 affirmation proposal also invited
comment on additional issues that could inform our decision making with
regard to the SO2 BART obligations for Texas. First, we
sought input on whether SO2 BART would be better addressed
through a source-by-source approach (source-specific BART), the October
2017 SO2 trading program, or some other appropriate BART
alternative. Second, EPA requested comment on whether a SIP-based
program would serve Texas better than a FIP. Third, we requested public
input on whether and how the SO2 trading program finalized
in the October 2017 final rule addresses the long-term strategy and
reasonable progress requirements for Texas.
---------------------------------------------------------------------------

    \46\ 83 FR 43586.
---------------------------------------------------------------------------

B. Supplemental Notice of Proposed Rulemaking

    In response to certain comments received during the public comment
period for the August 2018 proposal to affirm the October 2017 FIP, we
proposed revisions to the Texas SO2 Trading Program in a
supplemental proposal published on November 14, 2019.\47\ In the
supplemental proposal, we proposed to make four sets of amendments to
the Texas SO2 Trading Program: (1) The addition of assurance
provisions; (2) revisions to the Supplemental Allowance Pool allocation
provisions; (3) termination of the opt-in provisions; and (4) revision
of the allowance recordation provisions.
---------------------------------------------------------------------------

    \47\ 84 FR 61850.
---------------------------------------------------------------------------

    (1) Addition of Assurance Provisions. The Texas SO2
Trading Program, as promulgated in October 2017, did not include an
assurance level. In contrast to CSAPR, the Texas SO2 Trading
Program does not allow for sources to purchase allowances from sources
in other states. Therefore, the number of allowances available to the
Texas sources under the SO2 trading program, as promulgated
in October 2017, is limited by the total number of allowances allocated
under the program. While this limits the average annual emissions under
the program, we recognized that the potential use of

banked allowances and allowances allocated from the Supplemental
Allowance Pool could allow for potentially significant year-to-year
variability in emissions. In each of the CSAPR trading programs, EPA
set an assurance level for each state in order to ensure that, despite
the broad, interstate trading region, emissions reductions would be
achieved appropriately in a geographically distributed way commensurate
with states' ``good neighbor'' obligations as determined by EPA through
its analysis under CAA section 110(a)(2)(D)(i)(I).\48\ In order to
maintain consistency with the CSAPR program and to provide additional
support for our determination that SO2 emissions under the
Texas SO2 Trading Program will remain below the requisite
level on an annual basis, the EPA proposed to add assurance provisions
to the Texas SO2 Trading Program in the November 2019
supplemental proposal, setting the assurance level by relying on the
same analysis and methodology that were used to set assurance levels in
the original CSAPR rulemaking while accounting for the fact that the
Texas SO2 Trading Program is intrastate-only (i.e., does not
permit interstate trading). EPA proposed to set an assurance level for
the Texas SO2 Trading Program of 255,081 tons and proposed
to impose a penalty surrender ratio of three allowances for each ton of
emissions in any year in excess of the 255,081-ton assurance level.
---------------------------------------------------------------------------

    \48\ 76 FR 48208, 48265-66 (Aug. 8, 2011).
---------------------------------------------------------------------------

    EPA further proposed that this assurance level would strengthen our
determination that the Texas program compares favorably to CSAPR in
terms of stringency. EPA noted that its previous CSAPR Better-than-BART
analysis relied on assuming annual SO2 emissions from Texas
EGUs of 317,100 tons. For certain EGUs not covered by the Texas program
but that would have been subject to CSAPR, EPA made a conservative
estimate of 35,000 tons of annual emissions. Adding this to the 255,081
ton assurance level produced an upper bound estimate of 290,081 tons of
emissions, which EPA noted is below the 317,100 ton assumption used for
CSAPR.\49\
---------------------------------------------------------------------------

    \49\ 84 FR 61850, 61853.
---------------------------------------------------------------------------

    (2) Revisions to the Supplemental Allowance Pool Allocation
Provisions. 40 CFR 97.912 of the existing Texas SO2 Trading
Program regulations establishes how allowances are allocated from the
Supplemental Allowance Pool to sources (collections of participating
units at a facility) that have reported total emissions for that
control period exceeding the total amounts of allowances allocated to
the participating units at the source for that control period (before
any allocation from the Supplemental Allowance Pool). While all other
sources required to participate in the trading program have flexibility
to transfer allowances among multiple participating units under the
same owner/operator when planning operations, Coleto Creek consists of
only one coal-fired unit, and at the time of our October 2017 FIP, was
the only coal-fired unit in Texas owned and operated by Dynegy. To
provide this source additional flexibility, in the trading program as
it was promulgated in October 2017, Coleto Creek was allocated its
maximum supplemental allocation from the Supplemental Allowance Pool as
long as there are sufficient allowances in the Supplemental Allowance
Pool available for allocation, and its actual allocation would not be
reduced in proportion with any reductions made to the supplemental
allocations to other sources. In our August 2018 proposal, we noted
that Dynegy has merged with Vistra, which owns other units that are
subject to the trading program. In the August 2018 proposal, we
solicited comment on eliminating this additional flexibility for Coleto
Creek in light of the recent change in ownership, and we received no
adverse comments on such a change. Therefore, in the November 2019
supplemental proposal, we proposed to make this change to the
regulations.\50\
---------------------------------------------------------------------------

    \50\ Id. 61855.
---------------------------------------------------------------------------

    Some comments on our August 2018 proposal also expressed the view
that it would be more equitable to make allocations from the
Supplemental Allowance Pool in proportion to each owner's total
emissions in excess of the owner's total base allowance allocations
instead of in proportion to each individual source's emissions in
excess of the individual source's base allowance allocation. In the
November 2019 supplemental proposal, EPA proposed to agree that this
change would be equitable and noted that it would also be consistent
with the rationale for proposing to eliminate the special flexibility
in the existing regulations for Coleto Creek. Accordingly, EPA proposed
to amend the Supplemental Allowance Pool allocation provisions to
reflect this further change in the allocation methodology. EPA
specifically requested comment on the proposed revisions to the
Supplemental Allowance Pool allocation provisions.\51\
---------------------------------------------------------------------------

    \51\ Id.
---------------------------------------------------------------------------

    (3) Termination of the Opt-in Provisions. In response to a comment
on the August 2018 proposal that asserted that the opt-in provisions
weakened the functional equivalence of the Texas SO2 Trading
Program to CSAPR, EPA proposed to terminate the opt-in provisions in
the Texas SO2 Trading Program in the November 2019
supplemental proposal. We noted that our proposal to terminate the opt-
in provisions is consistent with the supplemental proposal's overall
objective of strengthening our finding that the Texas SO2
Trading Program will result in SO2 emission levels from
Texas EGUs that are similar to or less than the emission levels from
Texas EGUs that would have been realized from participation in the
SO2 trading program under CSAPR. EPA also specifically
requested comment on the proposed termination of the opt-in provisions
and solicited comment as to what other relevant provisions in the Texas
SO2 Trading Program may offset the commenter's concerns with
the opt-in provisions.\52\
---------------------------------------------------------------------------

    \52\ Id. 61855-56.
---------------------------------------------------------------------------

    (4) Revision of the Allowance Recordation Provisions. In the
November 2019 supplemental proposal, we also proposed to amend the
language in the recordation provisions such that the Administrator can
delay recordation of Texas SO2 Trading Program allowances
for the specified control periods only in the event that Texas submits
a SIP revision and EPA takes final action to approve it. Under 40 CFR
97.921(a) of the Texas SO2 Trading Program regulations as
originally promulgated in October 2017, ``[t]he Administrator may delay
recordation of Texas SO2 Trading Program allowances for the
specified control periods if the State of Texas submits a SIP revision
before the recordation deadline.'' Similarly, under Sec.  97.921(b),
``[t]he Administrator may delay recordation of the Texas SO2
Trading Program allowances for the applicable control periods if the
State of Texas submits a SIP revision by May 1 of the year of the
applicable recordation deadline under this paragraph.'' The revisions
we proposed in the November 2019 supplemental proposal are necessary to
ensure that the program remains fully operational unless it is replaced
by a SIP revision that is approved by EPA as meeting the SO2
BART requirements for the covered units. EPA specifically requested
comment on the proposed revisions to the allowance recordation
provisions.\53\
---------------------------------------------------------------------------

    \53\ Id. 61856.

---------------------------------------------------------------------------

    Finally, the EPA noted that the proposed revisions to the Texas
SO2 Trading Program would strengthen the program in a manner
that provides further support that it will achieve greater emission
reductions than Texas had agreed to in consultations with other states
in setting reasonable progress goals for Class I areas outside Texas
for the first implementation period of the Regional Haze Rule. As a
result, the EPA believed the proposed changes strengthened its
conclusion that the Texas trading program, in conjunction with Texas'
participation in the CSAPR ozone-season NOX trading program,
satisfies interstate visibility transport obligations under section
110(a)(2)(D)(i)(II) as to the six NAAQS identified above. The EPA
solicited comment on this relationship.\54\
---------------------------------------------------------------------------

    \54\ Id. 61856-57.
---------------------------------------------------------------------------

III. Summary of Our Final Decisions

A. Regional Haze

    After carefully considering the comments we received on our August
27, 2018 proposed rule and our November 14, 2019 supplemental proposal,
we are taking final action to affirm our determination that our October
2017 FIP that established an intrastate trading program addressing
emissions of SO2 from certain EGUs in Texas, as amended in
this final action as described in section III.A.1 below, satisfies the
Regional Haze Rule requirements for a BART alternative under 40 CFR
51.308(e)(2). We are taking final action to affirm our determination
that the BART alternatives addressing SO2 BART, as amended
in this final action, and NOX BART at Texas' EGUs are
adequate to satisfy the interstate visibility transport requirements
for six NAAQS. We are also taking final action to affirm our October
2017 approval of Texas' SIP determination that no sources are subject
to BART for PM. A discussion of the amendments to the Texas
SO2 Trading Program we are finalizing in today's final
action and explanation of how the trading program satisfies the
regulatory requirements for BART alternatives are discussed below in
sections III.A.1 and III.A.2, respectively. This final rule is
promulgated pursuant to CAA section 307(d). This includes our
affirmation of the several aspects of the FIP promulgating the Texas
SO2 Trading Program, amendments to certain provisions of the
FIP, which are 307(d)-listed actions, see 307(d)(1)(B). In addition,
EPA exercises its discretion under 307(d)(1)(V) to treat the
affirmation of our approval of parts of the 2009 Texas Regional Haze
SIP as also an action subject to 307(d) requirements and procedural
protections.

1. Amendments to the Texas SO2 Trading Program

    In response to certain comments we received during the public
comment period for the August 2018 proposal to affirm the October 2017
FIP, we proposed revisions to the Texas SO2 Trading Program
in a supplemental proposal published on November 14, 2019.\55\ We
proposed to make four sets of amendments to the Texas SO2
Trading Program: (1) The addition of assurance provisions; (2)
revisions to the Supplemental Allowance Pool allocation provisions; (3)
termination of the opt-in provisions; and (4) revision of the allowance
recordation provisions. We are finalizing these amendments to the Texas
SO2 Trading Program, with certain modifications. We are also
correcting a 2-ton error we made in the allowance allocation for El
Paso Electric's Newman Plant due to a unit-identification error,
thereby increasing the trading program budget from 238,393 tons to
238,395 tons. The amendments we are finalizing in today's action
strengthen the Texas SO2 Trading Program and increase its
consistency with CSAPR. These amendments are discussed in the
paragraphs that follow.
---------------------------------------------------------------------------

    \55\ 84 FR 61850 (Nov. 14, 2019).
---------------------------------------------------------------------------

    Addition of Assurance Provisions. In order to maintain consistency
with the CSAPR program and to provide additional support for our
determination that SO2 emissions under the Texas
SO2 Trading Program will remain below the requisite level on
an annual basis, we are taking final action to add assurance provisions
to the Texas SO2 Trading Program. To set the assurance
level, we are relying on the same analysis and methodology that were
used to set assurance levels in the original CSAPR rulemaking while
accounting for the fact that the Texas SO2 Trading Program
is intrastate-only (i.e., does not permit interstate trading). As
discussed in our supplemental proposal, EPA determined in the CSAPR
rulemaking that, on a state-specific basis for Texas, the statistical
percentage measure representing the maximum expected one-year deviation
from the state's average annual fossil fuel consumption for electricity
generation was seven percent.\56\ Applying that same percentage to the
current Texas SO2 Trading Program budget, EPA is finalizing
a variability limit for Texas at 16,688 tons, which is seven percent of
the corrected trading budget of 238,395 tons. The assurance level we
are finalizing is the sum of the budget and the variability limit, or
255,083 tons, and we are making this assurance level effective
beginning with the 2021 compliance period and for each period
thereafter. We are also taking final action to amend the Texas
SO2 Trading Program's regulations to impose a penalty
surrender ratio of three allowances for each ton of emissions in any
year in excess of the 255,083-ton assurance level. We are taking final
action to impose the penalty proportionately to emissions from those
groups of sources represented by a common designated representative
that emit in excess of the groups' annual allocations of allowances.
Thus, if the total emissions of all sources in the program in any year
exceed the annual program budget by more than a variability limit of
16,688 tons, the emissions over the assurance level will trigger a
requirement for some sources to surrender three allowances for each ton
of emissions over the assurance level, providing a strong disincentive
against emissions exceeding the assurance level.
---------------------------------------------------------------------------

    \56\ Id. 61853.
---------------------------------------------------------------------------

    We are taking final action to add new provisions at multiple
locations in the Texas SO2 Trading Program regulations at 40
CFR part 97, subpart FFFFF (40 CFR 97.901 through 97.935) to add these
assurance provisions. In Sec.  97.902, new definitions of several terms
used in the assurance provisions (``assurance account,'' ``common
designated representative,'' ``common designated representative's
assurance level,'' and ``common designated representative's share'')
are being added in this final action. New Sec.  97.906(c)(2)
and(c)(3)(ii) set forth the central requirement of the assurance
provisions--namely, that if SO2 emissions from all covered
sources in 2021 or any subsequent year collectively exceed the
program's assurance level, then the owners and operators of the groups
of sources determined to be responsible for the collective exceedance
would be required to surrender allowances totaling twice the amount of
the exceedance by a specified deadline, in addition to the allowances
surrendered to account for the sources' total emissions. New Sec.
97.910(b) and (c) establish the variability limit that would be added
to the trading program budget to determine the amount of the assurance
level. New Sec.  97.920(b) provides for the establishment of assurance
accounts, when appropriate, to hold the additional allowances to be
surrendered. New Sec.  97.925 sets forth

additional procedures for EPA's administration of and sources'
compliance with the assurance provisions. In addition to adding the
provisions discussed above, in Sec. Sec.  97.906 and 97.920, we are
also taking final action to renumber and update internal cross-
references to reflect the added and renumbered paragraphs. Finally, we
are making revisions to existing language at Sec. Sec.  97.902
(definitions of ``general account'' and ``Texas SO2 Trading
Program allowance deduction''), 97.906(b)(2), 97.913(c), 97.926(b),
97.928(b), and renumbered 97.906(c)(4)(ii) to integrate the new
assurance provisions with various existing provisions of the Texas
program regulations.
    As discussed in our November 2019 supplemental proposal, in
addition to being consistent with the original CSAPR methodology for
setting assurance levels, an assurance level set at 255,083 tons is
appropriate for the Texas SO2 Trading Program because it
provides further support for our October 2017 finding that the Texas
SO2 Trading Program will result in SO2 emission
levels from Texas EGUs that are similar to or less than the emission
levels from Texas EGUs that would have been realized from participation
in the SO2 trading program under CSAPR. Additionally, at an
assurance level of 255,083 tons of emissions annually, EPA has high
confidence that emissions will be below the amount assumed in the BART-
alternative sensitivity analysis utilized for the 2012 CSAPR Better-
than-BART determination (i.e., 317,100 tons), and thus visibility
levels at Class I areas impacted by sources in Texas are anticipated to
be at least as good as the levels projected in the 2012 analysis that
assumed Texas would be in the larger CSAPR SO2 trading
program.\57\
---------------------------------------------------------------------------

    \57\ Id.
---------------------------------------------------------------------------

    The language of the revisions to the Texas SO2 Trading
Program regulations we are finalizing in this final rulemaking would
generally parallel the analogous language from the CSAPR regulations at
40 CFR part 97, subparts AAAAA through EEEEE, streamlined to reflect
the Texas program's narrower applicability (i.e., specific units
located only in Texas, excluding any new units built either in Texas or
in Indian country within Texas' borders). The only substantive
differences from the analogous CSAPR assurance provisions concern the
approach used to impute allocation amounts--for use in apportioning
responsibility for any collective exceedance of the assurance level--to
any units that do not receive actual allowance allocations from the
trading program budget. Under CSAPR, the only units potentially in this
situation are new units that do not receive allowance allocations from
the CSAPR new unit set-asides. The CSAPR regulations include a
methodology for computing unit-specific imputed allocation amounts
based on several data elements relating to the new units' design and
potential operation.\58\ In contrast, under the Texas SO2
Trading Program, the only units potentially in this situation would be
existing units that have ceased operation for an extended period,
thereby losing their allocations from the trading budget under Sec.
97.911(a), and that subsequently resume operation.\59\ Because the
Texas SO2 Trading Program regulations already identify the
unit-specific allowance allocations that these units would formerly
have received from the trading budget, the Texas SO2 Trading
Program assurance provisions we are finalizing in this final rulemaking
would use these previously established amounts for purposes of
assurance provision calculations instead of requiring new imputed
allocation amounts to be computed according to the more complex
methodology in the CSAPR assurance provisions. The simpler approach we
are finalizing for the Texas SO2 Trading Program assurance
provisions appears at paragraph (2) of the new definition of ``common
designated representative's assurance level'' we are finalizing in
Sec.  97.902.
---------------------------------------------------------------------------

    \58\ See, e.g., paragraph (3) of the definition of ``common
designated representative's share'' at 40 CFR 97.702.
    \59\ Although the owners and operators of a unit in this
situation might receive an allocation of allowances from the
Supplemental Allowance Pool under Sec.  97.912 based in part on the
unit's emissions following resumption of operations, under the Texas
program assurance provisions, any allocations of allowances from the
Supplemental Allowance Pool would not be considered when
apportioning responsibility for a collective exceedance of the
assurance level.
---------------------------------------------------------------------------

    Revisions to the Supplemental Allowance Pool Allocation Provisions.
All sources required to participate in the Texas SO2 Trading
Program have the flexibility to transfer allowances among multiple
participating units under the same owner/operator when planning
operations. As discussed in section II.B of this final action, the
October 2017 final rule included additional flexibility to transfer
allowances for Coleto Creek, but given the subsequent merger of Dynegy
with Vistra, which owns other units that are subject to the trading
program, Coleto Creek now has the same flexibility as other sources
required to participate in the trading program to transfer allowances
among multiple participating units under the same ownership when
planning operations. In light of this, we are taking final action to
eliminate the additional flexibility originally offered under the
trading program for Coleto Creek.
    We are also finalizing amendments to the methodology for allocating
allowances from the Supplemental Allowance Pool such that allowance
allocations are in proportion to each owner's total emissions in excess
of the owner's total base allowance allocations instead of in
proportion to each individual source's emissions in excess of the
individual source's base allowance allocation. Comments we received on
our August 2018 proposal and our November 2019 supplemental proposal
generally indicated support for this change.\60\ We find that this
change would make the methodology for allocating allowances more
equitable and is also consistent with the rationale for eliminating the
special flexibility in the existing regulations for Coleto Creek. For
consistency with the new variability limit of 16,688 tons, we are also
reducing the number of allowances that can be allocated from the
Supplemental Allowance Pool in any year to 16,688 tons plus any
allowances added to the pool in that year from retired units. The
effect of this revision is that the total number of allowances that can
be issued in any year, considering both initial allocations and
allowances issued from the Supplemental Allowance Pool, will not exceed
the program's assurance level of 255,083 tons. This revision to the
Supplemental Allowance Pool provisions is consistent with and
reinforces the disincentive created by the assurance provisions against
emissions exceeding the assurance level.
---------------------------------------------------------------------------

    \60\ Supportive comments were submitted by most of the sources
covered by the Texas SO2 Trading Program, except for LCRA
who did not specifically comment on the reduction in the number of
allowances that can be allocated from the Supplemental Allowance
Pool. Supportive comments can be found in the docket for this action
at Document IDs EPA-R06-OAR-2016-0611-0157, EPA-R06-OAR-2016-0611-
0127, EPA-R06-OAR-2016-0611-0163, EPA-R06-OAR-2016-0611-0156.
---------------------------------------------------------------------------

    To implement these modifications to the Supplemental Allowance
Pool, we are finalizing several revisions to Sec. Sec.  97.911 and
97.912. In Sec.  97.912, we are editing paragraph (a) to limit
applicability of the current allocation methodology to the 2019 and
2020 control periods, and we are adding a new paragraph (b) that sets
forth the revised allocation methodology for the control periods in
2021 and subsequent years. We are also renumbering two

existing paragraphs of the section to accommodate the new paragraph (b)
and are updating internal cross-references to reflect the renumbering
and to integrate the provisions of the revised allocation methodology
with other existing provisions. We are adding new Sec.  97.912(b)(1)
that addresses the revised allocation methodology and sets forth a
procedure for assigning units into groups under common ownership called
``affiliated ownership groups.'' Under the new procedure, the group
assignments will remain constant unless and until revised by EPA to
reflect an ownership transfer. The initial group assignments for all
covered units are specified in a new column that we are adding to the
existing allowance allocation table in Sec.  97.911(a)(1). Renumbered
Sec.  97.912(d) is revised to reduce the cap on the number of
allowances that can be allocated from the Supplemental Allowance Pool
for any given control period starting in 2021 to 16,688 tons plus any
allowances added to the pool in that year from retired units. Existing
Sec.  97.912(a)(3)(ii)(B) is revised to add the same procedure included
in new Sec.  97.912(b)(4)(i)(C) for adjusting allocation amounts up or
down by one allowance as needed to address rounding errors. Finally, we
are finalizing non-substantive revisions to Sec.  97.911(a)(2) and
(c)(5) that clarify that allowances from the trading budget that are
transferred to the Supplemental Allowance Pool are not necessarily
``allocated under'' Sec.  97.912, but instead are made available for
``potential allocation in accordance with'' Sec.  97.912.
    Termination of Opt-in Provisions. To address concerns that the opt-
in provisions weakened the functional equivalence of the Texas
SO2 Trading Program to CSAPR and to be consistent with EPA's
determination not to include opt-in provisions in the CSAPR trading
programs on the basis that opt-in provisions would undermine
achievement of the CSAPR program's emission reduction objectives, we
are taking final action to terminate the opt-in provisions in the Texas
SO2 Trading Program. As we discuss in the response to
comments below, we find that this termination of the opt-in provisions
will address concerns about the difficulty of distinguishing new
emission reductions from reductions that opt-in sources would have made
anyway, and the consequent likelihood that the amounts of allowances
allocated to the sources would exceed their starting emissions levels
and thus introduce ``extra'' allowances available to be traded to other
sources. Our final action to terminate the opt-in provisions
strengthens our finding that the Texas SO2 Trading Program
will result in SO2 emission levels from Texas EGUs that are
similar to or less than the emission levels from Texas EGUs that would
have been realized from participation in the SO2 trading
program under CSAPR.
    Because no units opted into the Texas SO2 Trading
Program for the 2019 or 2020 control periods and opting in is not
allowed for any future control period, we are implementing our final
action to terminate the opt-in provisions by removing the provisions
from the regulations in their entirety. Specifically, Sec. Sec.
97.904(b), 97.911(b), and 97.921(d), which concerned the procedure for
opting in, allowance allocations for opt-in units, and recordation for
opt-in units, respectively, are being removed. In addition, conforming
revisions to reflect removal of the opt-in provisions are being made to
the existing provisions at Sec. Sec.  97.911(c)(5), 97.915(d),
97.930(b), 97.934(d)(1), and renumbered Sec.  97.906(c)(3)(i).
    Revision of Allowance Recordation Provisions. We are taking final
action to condition any exceptions to scheduled allowance recordation
activities on Texas' submission and EPA's approval of a SIP revision,
rather than just on Texas' submission of a SIP revision. This revision
will ensure that the program remains fully operational unless it is
replaced by a SIP revision that is approved by EPA as meeting the
SO2 BART requirements for the covered units. To implement
our final revision to the allowance recordation provisions, we are
amending three paragraphs of Sec.  97.921. In Sec.  97.921(a), we are
deleting without replacement the language providing for a possible
delay of recordation activities scheduled for November 1, 2018; the
language is moot because the recordation date has already passed. In
Sec.  97.921(b), which governs future recordation of allowances
allocated from the trading budget under Sec.  97.911(a), we are
revising the existing language to provide that future recordation
activities will take place as scheduled unless provided otherwise in
EPA's approval of a SIP revision replacing the provisions of subpart
FFFFF. We are also adding the same revised condition to Sec.
97.921(c), which governs future recordation of allowances allocated
from the Supplemental Allowance Pool under Sec.  97.912.
    Error Correction Adjusting the Allocation for El Paso Electric's
Newman Plant. Our last amendment to the Texas SO2 Trading
Program regulations in this action corrects a small error in the
allowance allocations and budget established in the October 2017 FIP.
In our October 2017 action, we determined that several units at El Paso
Electric's Newman plant (ORIS 3456) should be included in the Texas
SO2 Trading Program, including ``Newman unit 4.'' This
``unit'' is actually a multi-unit combined cycle system consisting of
two gas- and oil-fired combustion turbine units serving a common steam
turbine-generator. The combustion turbine units are identified in the
databases used for the CSAPR SO2 program as ``Newman unit
**4'' and ``Newman unit **5.'' Both of these combustion turbine units
are BART-eligible and both are properly included in the Texas
SO2 Trading Program pursuant to the evaluation of ``Newman
unit 4'' set forth in our October 2017 action.\61\ However, in
establishing the allowance allocations and budgets in our October 2017
action, while we correctly accounted for the 2-ton CSAPR allocation to
Newman unit **4, we mistakenly omitted the 2-ton CSAPR allocation to
Newman unit **5. We are correcting our omission in this action.
Specifically, in Table 1 in Sec.  97.911(a)(1), we are relabeling the
existing entry for ``Newman unit 4'' as ``Newman unit **4'' and adding
a new entry for ``Newman unit **5'' with an additional 2-ton
allocation, and in Sec.  97.910(a)(1), we are increasing the Texas
SO2 Trading Program budget by 2 tons to 238,395 tons.\62\ We
find that these corrections are entirely consistent with the
methodology and rationale we set forth when establishing the
allocations and budget in our October 2017 action. Because the
otherwise applicable recordation deadlines for the allowances allocated
to Newman unit **5 for the control periods from 2019 through 2024 will
have already passed by the effective date of this action, new Sec.
97.921(f) establishes December 31, 2020 as the delayed recordation
deadline for these allocations. Finally, language is added to Sec.
97.912(a)(1) and (2) clarifying that allocations under Sec.  97.911 are
not considered in determining a source's eligibility to receive
allocations from the Supplemental Allowance Pool unless the allocations
have actually been recorded in the source's compliance account under
Sec.  97.921.
---------------------------------------------------------------------------

    \61\ See 82 FR at 48354-57, where we identify ``Newman unit 4''
as a BART-eligible source and discuss our evaluation for determining
the inclusion of units in the Texas SO2 Trading Program.
    \62\ Both Newman unit **4 and Newman unit **5 have participated
in the Texas SO2 Trading Program since January 1, 2019.
El Paso Electric has monitored and reported the SO2
emissions for both units under the program.

---------------------------------------------------------------------------

2. Analysis of Texas SO2 Trading Program as a BART
Alternative
    We are taking final action to affirm our October 17, 2017 final
action promulgating the Texas SO2 Trading Program under 40
CFR 52.2312 and subpart FFFFF of part 97 as a BART alternative, with
the amendments discussed in Section III.A.1. We are affirming our
determination that the Texas SO2 Trading Program, including
the addition of the assurance provisions and other amendments to the
program we are finalizing in this action, will result in future EGU
emissions in Texas that will be less than the SO2 emission
levels used in the 2012 Better-than-BART demonstration for Texas EGU
emissions assuming CSAPR participation.\63\ Additionally, the aggregate
visibility impact from Texas EGU emissions under the trading program
will be similar to or less than what would have been realized from
Texas participation in the CSAPR SO2 trading program.\64\
Further, on the basis of EPA's denial of a petition for reconsideration
of the 2017 CSAPR Better-than-BART affirmation finding in a separate
action,\65\ EPA can now affirm that it has fully accounted for the
stringency of the Texas program in the CSAPR Better-than-BART analysis
(including accounting for the effects of Texas no longer being a part
of the interstate trading region of CSAPR). We are taking final action
to affirm our determination that the Texas SO2 Trading
Program satisfies the Regional Haze Rule requirements for BART
alternatives, and therefore satisfies the SO2 BART
requirements for the BART-eligible coal-fired EGUs and gas- and gas/
fuel oil-fired EGUs identified in the table below.
---------------------------------------------------------------------------

    \63\ 83 FR 43586, 43591 (Aug. 27, 2018).
    \64\ Id. 43592.
    \65\ See U.S. EPA, Denial of Petition for Partial
Reconsideration of ``Interstate Transport of Fine Particulate
Matter: Revision of Federal Implementation Plan Requirements for
Texas'' (82 FR 45481; Sept. 29, 2017) (EPA-HQ-OAR-2016-0598). A copy
of the denial of petition letter sent to the petitioners and the
denial of petition Notice of Availability (NOA) published in the
Federal Register are available at Docket ID EPA-HQ-OAR-2016-0598.

       Table 1--Texas EGUs Subject to the FIP SO2 Trading Program
------------------------------------------------------------------------
        Owner/operator                  Units            BART-eligible
------------------------------------------------------------------------
AEP...........................  Welsh Power Plant      Yes.
                                 Unit 1.
                                Welsh Power Plant      Yes.
                                 Unit 2.
                                Welsh Power Plant      No.
                                 Unit 3.
                                H W Pirkey Power       No.
                                 Plant Unit 1.
                                Wilkes Unit 1          Yes.
                                 [dagger].
                                Wilkes Unit 2          Yes.
                                 [dagger].
                                Wilkes Unit 3          Yes.
                                 [dagger].
CPS Energy....................  JT Deely Unit 1......  Yes.
                                JT Deely Unit 2......  Yes.
                                Sommers Unit 1         Yes.
                                 [dagger].
                                Sommers Unit 2         Yes.
                                 [dagger].
LCRA..........................  Fayette/Sam Seymour    Yes.
                                 Unit 1.
                                Fayette/Sam Seymour    Yes.
                                 Unit 2.
Vistra........................  Big Brown Unit 1.....  Yes.
                                Big Brown Unit 2.....  Yes.
                                Coleto Creek Unit 1..  Yes.
                                Martin Lake Unit 1...  Yes.
                                Martin Lake Unit 2...  Yes.
                                Martin Lake Unit 3...  Yes.
                                Monticello Unit 1....  Yes.
                                Monticello Unit 2....  Yes.
                                Monticello Unit 3....  Yes.
                                Sandow Unit 4........  No.
                                Stryker Unit ST2       Yes.
                                 [dagger].
                                Graham Unit 2          Yes.
                                 [dagger].
NRG...........................  Limestone Unit 1.....  No.
                                Limestone Unit 2.....  No.
                                WA Parish Unit WAP4    Yes.
                                 [dagger].
                                WA Parish Unit WAP5..  Yes.
                                WA Parish Unit WAP6..  Yes.
                                WA Parish Unit WAP7..  No.
Xcel..........................  Tolk Station Unit      No.
                                 171B.
                                Tolk Station Unit      No.
                                 172B.
                                Harrington Unit 061B.  Yes.
                                Harrington Unit 062B.  Yes.
                                Harrington Unit 063B.  No.
El Paso Electric..............  Newman Unit 2[dagger]  Yes.
                                Newman Unit 3          Yes.
                                 [dagger].
                                Newman Unit **4        Yes.
                                 [dagger].
                                Newman Unit **5        Yes.
                                 [dagger].
------------------------------------------------------------------------
[dagger] Gas-fired or gas/fuel oil-fired units.

    Under 40 CFR 51.308(e)(2), a State may opt to implement or require
participation in an emissions trading program or other alternative
measure rather than to require sources subject to BART to install,
operate, and maintain BART. Among other things, such an emissions
trading program or other alternative measure must achieve greater
reasonable progress than would be achieved through the installation and
operation of BART. In the paragraphs

that follow, we summarize the BART alternative requirements under Sec.
51.308(e)(2) and explain how the Texas SO2 Trading Program
satisfies each requirement.
    Section 51.308(e)(2)(i) requires a demonstration that the emissions
trading program or other alternative measure will achieve greater
reasonable progress than would have resulted from the installation and
operation of BART at all sources subject to BART in the State and
covered by the alternative program. This demonstration must be based on
the criteria listed under Sec.  51.308(e)(2)(i)(A) through (E).
    Section 51.308(e)(2)(i)(A). As part of the demonstration that the
emissions trading program or other alternative measure will achieve
greater reasonable progress than BART, the Regional Haze Rule requires
that a list of all BART-eligible sources within the state be provided.
In our October 2017 final action, we finalized our list of all BART-
eligible sources in Texas,\66\ which serves to satisfy
51.308(e)(2)(i)(A). As explained in our August 27, 2018 affirmation
proposal,\67\ we did not reopen the identification of BART-eligible
sources and thus did not request comment on this element.
---------------------------------------------------------------------------

    \66\ See 82 FR at 48356 (final action) and 82 FR at 918
(proposed action).
    \67\ 83 FR at 43598.
---------------------------------------------------------------------------

    Section 51.308(e)(2)(i)(B). This provision requires that a list of
all BART-eligible sources and all BART source categories covered by the
alternative program be provided. The regulations do not require
inclusion of every BART source category or every BART-eligible source
within a BART source category in an alternative program, but each BART-
eligible source in the state must be subject to the requirements of the
alternative program, have a federally enforceable emission limitation
determined by the state and approved by EPA as meeting BART in
accordance with section 302(c) or Sec.  51.308(e)(1), or be otherwise
addressed under Sec.  51.308(e)(1) or (e)(4). Our October 2017 final
action and our August 2018 affirmation proposal included a list of all
EGUs covered by the trading program. We are finalizing our affirmation
of the list of BART-eligible EGUs in Texas covered by the alternative
program with one minor non-substantive change,\68\ satisfying the first
requirement of 51.308(e)(2)(i)(B). Table 1 above lists all
participating units and identification of BART-eligible participating
units. All BART-eligible coal-fired units, some additional coal-fired
EGUs, and some BART-eligible gas-fired and oil-and-gas-fired units are
covered by the alternative program. This coverage and our determination
in a previous final action that the BART-eligible gas-fired and oil-
and-gas-fired EGUs not covered by the program are not subject-to-BART
for NOX, SO2 and PM satisfy the second
requirement of 51.308(e)(2)(i)(B). We note that EPA's determination
that these EGU units not covered by the program are not subject to BART
was finalized in our October 2017 final action,\69\ and we did not
reopen that determination in the August 2018 proposal.\70\
---------------------------------------------------------------------------

    \68\ As discussed in section III.A.2, ``Newman unit 4'' at the
El Paso Electric Newman plant (ORIS 3456), which is included in the
Texas SO2 Trading Program, is actually a multi-unit
combined cycle system consisting of two gas- and oil-fired
combustion turbine units (Newman unit **4 and Newman unit **5)
serving a common steam turbine-generator. Both of these combustion
turbine units are BART-eligible, and both are properly included in
the Texas SO2 Trading Program. In this final action, we
are not identifying any new units as BART-eligible, we are merely
relabeling the already-identified BART-eligible ``Newman unit 4'' as
its components: ``Newman unit **4'' and ``Newman unit **5.'' Thus,
we do not consider this change to be substantive.
    \69\ 82 FR at 48328.
    \70\ 83 FR at 43598, footnote 80.
---------------------------------------------------------------------------

    Section 51.308(e)(2)(i)(C). This provision requires an analysis of
the best system of continuous emission control technology available and
associated emission reductions achievable for each source within the
state subject to BART and covered by the alternative program. This
analysis must be conducted by making a determination of BART for each
source subject to BART and covered by the alternative program as
provided for under Sec.  51.308(e)(1), unless the emissions trading
program or other alternative measure has been designed to meet a
requirement other than BART. In such a case, the state may determine
the best system of continuous emission control technology and
associated emission reductions for similar types of sources within a
source category based on both source-specific and category-wide
information, as appropriate. As discussed in our August 2018 proposal,
we considered the question of whether, in applying this portion of the
Regional Haze Rule, we should take as the baseline the application of
source-specific BART at the covered sources.\71\ We have determined not
to take this approach here, given that 51.308(e)(2)(i)(C) provides for
an exception (which we are exercising) to the requirement for source-
specific BART determinations for the covered sources. The regulations
allow for the BART ``benchmark'' to be set using ``category-wide''
information when the alternative measure ``has been designed to meet a
requirement other than BART (such as the core requirement to have a
long-term strategy to achieve the reasonable progress goals established
by States).'' See 40 CFR 51.308(e)(2)(i)(C). As discussed below,
category-wide information may include, for example, the use of
``presumptive'' BART emission limits for a particular source category,
such as coal-fired EGUs. The Texas SO2 Trading Program meets
the conditions of the exception allowed under Sec.  51.308(e)(2)(i)(C),
as discussed in sections III.B and V.B of this final notice, because it
has been designed to meet Texas' interstate visibility transport
requirements under CAA section 110(a)(2)(D)(i)(II). This BART
alternative extends beyond all BART-eligible coal-fired units to
include a number of additional coal-fired EGUs, and some BART-eligible
gas-fired and oil-and-gas-fired units, capturing the majority of
emissions from EGUs in the state, and is designed to provide the
measures that are needed to address interstate visibility transport
requirements for several NAAQS. This is because for all sources covered
by the Texas SO2 Trading Program, those sources' CSAPR
allocations for SO2 are incorporated into the BART
alternative, and the Texas SO2 Trading Program ensures more
emission reductions of SO2 than the level of emissions
reductions relied upon by other states during consultation and assumed
by other states in their own regional haze SIPs, including their
reasonable progress goals for their Class I areas.
---------------------------------------------------------------------------

    \71\ 83 FR at 43599.
---------------------------------------------------------------------------

    As allowed under Sec.  51.308(e)(2)(i)(C), rather than using
source-specific BART at the covered sources, we are relying on the
determinations of BART and associated emission reductions for EGUs that
were used in our 2012 determination that showed that CSAPR as finalized
and amended in 2011 and 2012 achieves more reasonable progress than
BART (``CSAPR Better-than-BART''). This analysis establishes by the
clear weight of evidence that the Texas SO2 Trading Program,
which is modeled on the CSAPR trading programs, will provide for
greater reasonable progress than BART in Texas. These determinations of
the best system of continuous emission control technology and
associated emission reductions for EGUs that were used in our 2012
CSAPR Better-than-BART demonstration were based largely on category-
wide information, including the use of ``presumptive'' BART limits.\72\
EPA finds that reliance on the category-wide BART analysis from the

2012 CSAPR Better-than-BART demonstration is appropriate here and that
the BART determinations derived from that CSAPR Better-than-BART
demonstration are an appropriate BART benchmark for comparison against
the Texas SO2 Trading Program given that the Texas
SO2 Trading Program is modeled on the CSAPR trading
programs.
---------------------------------------------------------------------------

    \72\ 77 FR at 33649-50.
---------------------------------------------------------------------------

    We note that in our August 2018 proposal, we proposed to affirm our
finding that the Texas SO2 trading program is also designed
to be part of the long-term strategy needed to meet the reasonable
progress requirements of the Regional Haze Rule, which remain
outstanding after the remand of our January 2016 FIP addressing Texas'
reasonable progress obligations by the Fifth Circuit Court of Appeals.
After consideration of the comments we received addressing this issue
during the public comment period for our August 2018 proposal, we are
not finalizing our affirmation of the finding that the Texas
SO2 trading program is also designed to be part of the long-
term strategy needed to meet the reasonable progress requirements of
the Regional Haze Rule at this time. While the Texas SO2
trading program certainly contributes to reasonable progress toward
meeting the visibility goals of the regional haze program through
enforceable reductions of a visibility pollutant from baseline emission
levels, EPA has made clear that it intends to address the specific
regulatory requirements for the long-term strategy for Texas through a
separate action.\73\ However, this does not impact our determination
that the Texas SO2 trading program satisfies the
requirements of section 51.308(e)(2)(i)(C) given that the trading
program is designed to provide the measures that are needed to address
interstate visibility transport requirements for several NAAQS, and
this sufficiently meets the criteria under Sec.  51.308(e)(2)(i)(C)
allowing us to exercise the exception allowed under the provision.
Thus, we have met the requirements of Sec.  51.308(e)(2)(i)(C).
---------------------------------------------------------------------------

    \73\ 83 FR at 43596 n.63.
---------------------------------------------------------------------------

    Section 51.308(e)(2)(i)(D). This provision requires an analysis of
the projected emissions reductions achievable through the trading
program or other alternative measure. Our analysis is that the Texas
trading program will effectively limit the aggregate annual
SO2 emissions of the covered EGUs to be no higher than the
assurance level of 255,083 tons. The Texas SO2 Trading
Program is an intrastate cap-and-trade program for listed covered
sources in the State of Texas modeled after the EPA's CSAPR
SO2 Group 2 Trading Program. Authorizations to emit
SO2, known as allowances, are allocated to the affected
units as listed in Table 1 above. As discussed elsewhere, the program
includes a Supplemental Allowance Pool, as revised in this final
action, with additional allowances that may be allocated to subject
units and sources to provide compliance assistance. The average total
annual allowance allocation for all covered sources is 238,395 tons,
with an additional 10,000 tons allocated to the Supplemental Allowance
Pool. In addition, while the Supplemental Allowance Pool may grow over
time as unused supplemental allowances remain available and allocations
from retired units are placed in the pool, the total number of
allowances that can be allocated to sources in a control period from
the supplemental pool beginning with the 2021 compliance period and for
each period thereafter is limited to a maximum 16,688 tons plus the
amount of any allowances placed in the pool that year from retired
units and corrections. Therefore, the total annual average emissions
for the covered sources will be less than or equal to 248,395 tons.
Although there will be some year-to-year variability, that variability
will be constrained by the addition of an assurance level in this final
action. We are finalizing an assurance level of 255,083 tons per year
for the Texas SO2 Trading Program, which, in light of the
three-for-one penalty surrender ratio imposed on emissions exceeding
that level, represents the highest annual SO2 emissions
anticipated from units subject to the Texas program. In reality, there
is no reasonable expectation that actual emissions would even approach
this level in light of ongoing changes in the electric-generating
sector in Texas.
    Further, the projected average SO2 emission reduction
that will be achieved by the program in any given year, relative to any
selected historical baseline year, would be the difference between the
aggregate historical baseline emissions of the covered units and the
average total annual allocation of 238,395 SO2 tons plus a
Supplemental Allowance Pool budget of 10,000 tons, or 248,395. As
detailed in our October 2017 final rule, for the purpose of this
analysis, we selected 2014 as the baseline year.\74\ The aggregate 2014
SO2 emissions of the covered EGUs were 309,298 tons per
year, while the average total annual allocation for the covered EGUs is
238,395 SO2 tons plus a Supplemental Allowance Pool budget
of 10,000 tons, or 248,395 tons per year. Therefore, compared to 2014
emissions, the Texas trading program is projected to achieve an average
reduction of approximately 60,903 tons per year from the covered
units.\75\ (We note that with the termination of the opt-in provisions
in this final action, there is no need for this comparison to include
consideration of the 2014 emissions from those units formerly eligible
to opt into the trading program.)
---------------------------------------------------------------------------

    \74\ Texas sources were subject to the CSAPR SO2
trading program in 2015 and 2016 but are no longer subject to that
program. We therefore select 2014 as the appropriate most recent
year for comparing the aggregate historical baseline emissions of
the covered units to the average total annual allocation for
purposes of estimating the SO2 emission reduction that
will be achieved by the program.
    \75\ We note that for other types of alternative programs that
might be adopted under 40 CFR 51.308(e)(2), the analysis of
achievable emission reductions could be more complicated. For
example, a program that involved economic incentives instead of
allowances or that involved interstate allowance trading would
present a more complex situation in which achievable emission
reductions could not be calculated simply by comparing aggregate
baseline emissions to aggregate allowances.
---------------------------------------------------------------------------

    We also note that the Regional Haze Rule provides that the baseline
period for the first planning period is 2000-2004.\76\ The Texas
SO2 Trading Program, with the assurance level we are
finalizing in this action, achieves significantly lower emissions
relative to the baseline period using 2002 as the baseline. As shown in
Table 2, the total combined SO2 emissions from Texas EGUs
participating in the Texas SO2 Trading Program were 515,526
tons in 2002. The combined actual SO2 emissions from all
Texas EGUs (both those in the Texas SO2 Trading Program and
those not in the program) were 562,516 tons in 2002.\77\ By comparison,
the Texas SO2 Trading Program budget is 238,395
SO2 tons (plus a Supplemental Allowance Pool budget of
10,000 tons). Thus for the covered units, the program achieves average
annual emissions from the covered units of 248,395 tons. Compared with
the 2002 baseline for these units, the program achieves 267,131 tons of
reductions.
---------------------------------------------------------------------------

    \76\ See 40 CFR 51.308(d)(2)(i).
    \77\ See Excel spreadsheet file ``Texas EGU 2002 SO2
Emissions.xlsx,'' which is available in the docket for this action.
---------------------------------------------------------------------------

    When we account for Texas units that were in CSAPR but not in the
current program, we see a similar result using a conservative
assumption about those units' emissions going forward. (As we explained
in our supplemental proposal, our comparison of the Texas program to
CSAPR should take account

of emissions from these units.\78\) For illustrative purposes, in this
comparison we will also use the higher figure of the assurance level
for the Texas program rather than the average annual allocation. When
our conservative assumption of 35,000 tons as the future combined
SO2 emissions for units that were in the CSAPR program but
not covered by the Texas SO2 Trading Program is added to the
highest annual SO2 emissions anticipated from units under
the Texas SO2 Trading Program, 255,083 tons per year (i.e.,
the assurance level for the program), the total figure is 290,083 tons
per year. A comparison of these figures reveals that the combined
actual SO2 emissions from all Texas EGUs in 2002 during the
baseline period (562,516 tons) were considerably higher than the
highest annual SO2 emissions anticipated from all Texas EGUs
anticipated from operation of the Texas SO2 Trading Program
(290,083 tons), including the CSAPR units not included in that
program--a difference of 272,433 tons. The emission reductions that are
secured by the Trading Program contribute to improvements in visibility
from the baseline period and are permanent and enforceable as part of
the long-term strategy for the State of Texas.
---------------------------------------------------------------------------

    \78\ 84 FR at 61853.

   Table 2--2002 SO2 Emissions From Texas EGUs Subject to the FIP SO2
                        Trading Program [dagger]
------------------------------------------------------------------------
                                                         SO2  emissions
        Owner/operator                  Units                (tons)
------------------------------------------------------------------------
AEP...........................  Welsh Power Plant      12,259
                                 Unit 1.
                                Welsh Power Plant      11,937
                                 Unit 2.
                                Welsh Power Plant      11,584
                                 Unit 3.
                                H W Pirkey Power       19,476
                                 Plant Unit 1.
                                Wilkes Unit 1........  1
                                Wilkes Unit 2........  2
                                Wilkes Unit 3........  3
CPS Energy....................  J T Deely Unit 1.....  9,936
                                J T Deely Unit 2.....  11,577
                                Sommers Unit 1.......  1
                                Sommers Unit 2.......  2
LCRA..........................  Fayette/Sam Seymour    13,617
                                 Unit 1.
                                Fayette/Sam Seymour    16,401
                                 Unit 2.
Vistra........................  Coleto Creek Unit 1..  14,288
                                Big Brown Unit 1.....  43,413
                                Big Brown Unit 2.....  34,448
                                Martin Lake Unit 1...  24,837
                                Martin Lake Unit 2...  22,539
                                Martin Lake Unit 3...  19,023
                                Monticello Unit 1....  28,643
                                Monticello Unit 2....  34,700
                                Monticello Unit 3....  22,976
                                Sandow Unit 4........  23,330
                                Stryker ST2..........  43
                                Graham Unit 2........  23
NRG...........................  Limestone Unit 1.....  17,009
                                Limestone Unit 2.....  13,830
                                W A Parish Unit WAP4.  4
                                W A Parish Unit WAP5.  21,310
                                W A Parish Unit WAP6.  18,006
                                W A Parish Unit WAP7.  18,459
Xcel..........................  Tolk Station Unit      12,703
                                 171B.
                                Tolk Station Unit      12,171
                                 172B.
                                Harrington Station     9,197
                                 Unit 061B.
                                Harrington Station     8,927
                                 Unit 062B.
                                Harrington Station     8,844
                                 Unit 063B.
El Paso Electric..............  Newman Unit 2........  1
                                Newman Unit 3........  1
                                Newman Unit **4......  1
                                Newman Unit **5......  1
Total Combined 2002 SO2         .....................  515,526
 Emissions.
------------------------------------------------------------------------
[dagger] Based on 2002 Clean Air Markets Division (CAMD) data.

    Section 51.308(e)(2)(i)(E). This provision requires a
determination, under the specific criteria laid out at 40 CFR
51.308(e)(3) or otherwise based on the clear weight of evidence, that
the trading program or other alternative measure achieves greater
reasonable progress than would be achieved through the installation and
operation of BART at the covered sources. The BART alternative EPA is
taking final action to affirm here is supported by the clear weight of
the evidence. Specifically, with respect to SO2 emissions
from the covered BART-eligible units, because the Texas SO2
trading program, as amended, is designed to ensure that emissions
levels in each year under the trading program are similar to or less
than what would have been realized from Texas EGUs from participation
in the SO2 trading program under CSAPR, EPA can rely on the
2012 and 2017 findings that CSAPR achieves greater

reasonable progress than BART as evidence that the Texas program
achieves greater reasonable progress than BART, in the context of the
continued operation of the CSAPR ozone-season NOX trading
program (to which units in Texas remain subject) and the CSAPR annual
NOX and SO2 trading programs.\79\ As used in our
51.308(e)(2)(i)(D) analysis above and laid out in more detail below, a
conservative estimate for the maximum total annual emissions from all
EGUs in Texas that can be anticipated with the Texas program in place
is 290,083 tons. As explained below, this is less than the maximum
total annual emissions assumed for Texas under CSAPR in the CSAPR
Better-than-BART analysis, which is 317,100 tons. Thus, we are relying
on the demonstration in the 2012 and 2017 CSAPR Better-than-BART rules
(as reaffirmed in the separate denial of petition for reconsideration
of the 2017 rule) to show that the clear weight of evidence
demonstrates that the Texas SO2 Trading Program, which is
modeled on the CSAPR trading programs, provides for greater reasonable
progress than BART in Texas.
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    \79\ EPA's determination that Texas' participation in CSAPR for
ozone-season NOX satisfies NOX BART for EGUs
is final and we did not reopen that determination in our August 2018
proposal or our November 2019 supplemental proposal.
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    Because the Texas program is designed to achieve greater
SO2 emission reductions than CSAPR in Texas, we are
finalizing our affirmation that it is appropriate to continue to rely
on the 2012 CSAPR Better-than-BART demonstration, which includes the
treatment of Texas as a CSAPR state, as reaffirmed in September 2017
(and again affirmed in EPA's denial of the November 28, 2017 petition
for reconsideration, as discussed under section I.D of this final
action \80\). That analysis compared CSAPR in Texas and elsewhere in
the country to presumptive BART emission limits for the sources in
Texas (as elsewhere) and is described in greater detail in our August
2018 proposed affirmation. See 83 FR 43586, at 43594-95. While Texas is
no longer in the CSAPR trading program for SO2 itself, we
find that it is appropriate for us to continue relying here on the
CSAPR Better-than-BART analysis for Texas given that the Texas
SO2 Trading Program is specifically designed to mimic the
CSAPR program and the amendments to the Texas trading program EPA is
finalizing in this action allow EPA to affirm that the Texas program is
similar to or more stringent than CSAPR in Texas. As such, the
stringency of the Texas program is sufficient to allow for the
continued use of the CSAPR Better-than-BART analysis for Texas.
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    \80\ See U.S. EPA, Denial of Petition for Partial
Reconsideration of ``Interstate Transport of Fine Particulate
Matter: Revision of Federal Implementation Plan Requirements for
Texas'' (82 FR 45481; Sept. 29, 2017) (EPA-HQ-OAR-2016-0598). A copy
of the denial of petition letter sent to the petitioners and the
denial of petition Notice of Availability (NOA) published in the
Federal Register are available at Docket ID EPA-HQ-OAR-2016-0598.
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    Although it is not within the scope of this action, EPA notes that
the 2017 CSAPR Better-than-BART finding has been reaffirmed through the
denial of a petition for reconsideration.\81\ In our response to the
petition for reconsideration, EPA explains that it has fully accounted
for the stringency of the Texas trading program as well as the
potential for emission shifting back into the remaining CSAPR region
with the removal of Texas into its own intrastate trading region.\82\
To the extent that this potential for emission shifting posed any
concern that the CSAPR Better-than-BART analysis could not be relied
upon by Texas or other states, this issue has been resolved through the
analysis set forth in that denial.
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    \81\ See U.S. EPA, Denial of Petition for Partial
Reconsideration of ``Interstate Transport of Fine Particulate
Matter: Revision of Federal Implementation Plan Requirements for
Texas'' (82 FR 45481; Sept. 29, 2017) (EPA-HQ-OAR-2016-0598). A copy
of the denial of petition letter sent to the petitioners and the
denial of petition Notice of Availability (NOA) published in the
Federal Register are available at Docket ID EPA-HQ-OAR-2016-0598.
    \82\ Id.
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    We are finalizing our determination that anticipated maximum
potential SO2 emissions in Texas under the Texas
SO2 Trading Program BART alternative are less than the
SO2 emission levels from Texas EGUs that were forecast in
the CSAPR Better-than-BART demonstration assuming their participation
in the CSAPR SO2 trading program.\83\ In our October 2017
final rule and the August 2018 proposal to affirm that rule, we noted
the results of the sensitivity analysis \84\ for the 2012 final ``CSAPR
Better-than-BART'' rulemaking, namely that CSAPR was expected to
provide for greater reasonable progress than BART nationwide even with
potential SO2 emissions from Texas EGUs under CSAPR as high
as 317,100 tons.\85\ In our October 2017 final rule and the August 2018
proposal to affirm that rule, EPA used this benchmark (317,100 tons of
SO2 emissions per year) to gauge whether the Texas
SO2 Trading Program was sufficiently stringent for EPA to
continue to rely on the BART-alternative analysis we conducted in the
2012 ``CSAPR Better-than-BART'' rulemaking. In the August 2018
proposal, EPA proposed to affirm that the weight of evidence supported
the conclusion that the Texas SO2 Trading Program met the
requirements of a BART alternative.\86\ Informed by comments we
received on the August 2018 proposal, we issued a supplemental proposal
in November 2019 that proposed to amend a number of provisions of the
Texas SO2 Trading Program, including the addition of an
assurance level. EPA's proposed analysis in November of 2019
accompanying those amendments, updates in certain respects and replaces
the analysis of the Texas program's stringency for purposes of
determining the appropriateness of relying on the CSAPR Better-than-
BART findings for the Texas BART-alternative program.
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    \83\ See Technical Support Document for Demonstration of the
Transport Rule as a BART Alternative, Docket ID No. EPA-HQ-OAR-2011-
0729-0014 (December 2011), available in the docket for this action.
    \84\ See Sensitivity Analysis Accounting for Increases in Texas
and Georgia Transport Rule State Emissions Budgets, Docket ID No.
EPA-HQ-OAR-2011-0729-0323 (May 29, 2012), available in the docket
for this action.
    \85\ 83 FR at 43595.
    \86\ 83 FR at 43602.
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    As explained in the November 2019 supplemental proposal and in
Section III.A.I above, an assurance level represents the total level of
annual emissions above which units participating in the program will be
penalized with a higher allowance surrender ratio than the one-to-one
ratio that applies to emissions below the assurance level. The
assurance level we proposed was determined by relying on the same
analysis and methodology that were used to set assurance levels in the
original CSAPR rulemaking.\87\ Using this methodology, EPA proposed a
variability limit for Texas set at 16,688 tons, which is seven percent
of the original trading budget of 238,393 tons. We are finalizing the
variability limits set at 16,688 tons with no change from proposal and
in light of the minor correction to the trading program budget, as
discussed in section III.A.1, we are finalizing an assurance level of
255,083 tons rather than the 255,081-ton assurance level we proposed in
the November 2019 supplemental proposal. This 255,083-ton assurance
level represents the highest annual SO2 emissions
anticipated from units subject to the Texas program.
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    \87\ See Power Sector Variability Final Rule TSD (July 2011),
available at https://www.epa.gov/csapr/power-sector-variability-final-rule-tsd and in the docket for this action.

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    In addition to being consistent with the original CSAPR methodology
for setting assurance levels, EPA also believes that an assurance level
set at 255,083 tons is appropriate for the Texas SO2 Trading
Program because it will strengthen the stringency of the Texas
SO2 Trading Program in terms of ensuring that annual
emissions from participating units will remain below that level. This
allows EPA to project with confidence emissions under the Texas
SO2 Trading Program for purposes of determining whether the
trading program meets the requirements of a BART alternative.
    In the modeling conducted for the proposed CSAPR Better-than-BART
determination in 2011, projected SO2 emissions from Texas'
EGUs under CSAPR were 266,600 tons. Subsequent to performance of that
modeling, the CSAPR SO2 budget for Texas was increased by
50,517 tons. In the BART-alternative sensitivity analysis utilized for
the final 2012 CSAPR Better-than-BART determination, EPA made the
conservative assumption that SO2 emissions from Texas EGUs
under CSAPR could potentially increase by the full amount of the Texas
budget increase, or up to 317,100 tons per year (266,600 + 50,517).
(While this level of emissions would have exceeded Texas' CSAPR budget,
it would not have been in excess of Texas' amended assurance level
under the CSAPR program of 347,476 tons. In any case, the figure was
solely intended to represent a conservative assumption that all
allowances allocated under Texas' amended CSAPR budget would be
emitted.) In that BART-alternative sensitivity analysis, EPA
demonstrated that CSAPR was expected to provide for greater reasonable
progress than BART nationwide even with potential SO2
emissions from Texas EGUs under CSAPR as high as 317,100 tons.\88\ By
comparison, the Texas SO2 Trading Program has a budget of
238,395 SO2 tons (plus 10,000 tons in the Supplemental
Allowance Pool), and we are finalizing an assurance level of 255,083
tons in this final action.
---------------------------------------------------------------------------

    \88\ 83 FR at 43595.
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    In determining that the Texas program will perform at least as
stringently as CSAPR would have, EPA also must account for the
emissions from certain EGUs that would have been subject to CSAPR but
are not included in the Texas program. Even with these emissions
factored in, the Texas program is designed to ensure reductions similar
to or greater than CSAPR. In our analysis in this final action, we are
finalizing the more conservative emissions assumptions for these units
provided in our November 2019 supplemental proposal. In our August 2018
proposal, we had used an assumption that emissions from these units
could be as high as 27,500 tons per year.\89\ As proposed in our
November 2019 supplemental proposal,\90\ we are updating our analysis
by adjusting this assumption to 35,000 tons per year. Given that Texas
units that were in the CSAPR program but not covered by the Texas
SO2 Trading Program had a combined maximum annual emission
level of 34,129 tons over the past five years (2014-2018) and
considering that several of these units have recently shut down or have
been announced for shutdown in the near future,\91\ EPA regards this as
a conservative assumption for emissions performance from these units.
Even when this conservative figure is added to the highest annual
SO2 emissions anticipated from units under the Texas
program, 255,083 tons per year (i.e., the assurance level for the
program), the total figure is 290,083 tons per year. This figure is
still 27,017 tons below the 317,100 ton per year emissions level EPA
had used in the CSAPR Better-than-BART analysis.
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    \89\ 83 FR 43602.
    \90\ 84 FR at 61853.
    \91\ See ``Texas EGU SO2 emissions, 2014-2018.xlsx'',
available in the docket for this action. Sandow Station units 5A and
5B have been permanently retired. AEP has announced retirement of
Oklaunion by September 2020. Gibbons Creek is currently not
operating although it has not been officially retired.
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    In addition to finding that the differences in source coverage
between the two trading programs do not affect EPA's determination, we
also find that the relative stringency of the Texas SO2
Trading Program as compared to CSAPR is further demonstrated in the
following points, as discussed in our August 27, 2018 affirmation
proposal:
     This BART alternative includes all BART-eligible coal-
fired units in Texas, additional coal-fired EGUs, and some additional
BART-eligible gas and gas/fuel oil-fired units.
     Covered sources under the Texas SO2 Trading
Program we are taking final action to affirm represent 89% \92\ of all
SO2 emissions from all Texas EGUs in both 2016 and 2017, and
approximately 85% of CSAPR allocations for existing units in Texas.
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    \92\ In 2016, EGUs included in the program emitted 218,292 tons
of SO2, and other EGUs emitted 27,507 tons (11.2% of the
total emitted by Texas EGUs). In 2017, sources included in the
program emitted 245,871 tons of SO2, and other EGUs
emitted 30,122 (10.9%).
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     The remaining 11% (100 minus 89) of 2016 and 2017
emissions from sources not covered by the Texas SO2 Trading
Program come from gas units that rarely burn fuel oil or from coal-
fired units that on average are better controlled for SO2
than the covered sources and generally are less relevant to visibility
impairment. As such, any shifting of generation to non-covered sources,
as might occur if a covered source were to reduce its operation in
order to remain within its SO2 emissions allowance
allocation, would result in fewer emissions to generate the same amount
of electricity.
     Furthermore, the non-inclusion of a large number of gas-
fired units that rarely burn fuel oil reduces the amount of available
allowances for such units that would typically and collectively be
expected to use only a fraction of their CSAPR emissions allowances.
Many of these sources typically emit at levels much lower than their
allocation level.
     The BART alternative does not allow purchasing of
allowances from out-of-state sources. Emission projections under CAIR
and CSAPR showed that Texas sources were anticipated to purchase
allowances from out-of-state sources.93 94
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    \93\ See section 10 of the 2009 Texas Regional Haze SIP. Table
10-7 shows CAIR 2018 emission projections of approximately 350,000
tons SO2 emitted from Texas EGUs compared to CAIR budget
for Texas of 225,000 tons. Thus, Texas was projected to purchase
125,000 tons of allowances (350,000-225,000) from out-of-state
sources. The SIP submittal can be found in www.regulations.gov,
docket ID EPA-R06-OAR-2016-0611, document EPA-R06-OAR-2016-0611-
0002.
    \94\ For the projected annual SO2 emissions from
Texas EGUs under CSAPR, see Technical Support Document for
Demonstration of the Transport Rule as a BART Alternative, Docket ID
No. EPA-HQ-OAR-2011- 0729-0014 (December 2011) (2011 CSAPR/BART
Technical Support Document), available in the docket for this action
at table 2-4.
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    Based on our quantitative and qualitative assessment of the
operation of the BART alternative as presented here, we are taking
final action to affirm our determination that the Texas SO2
Trading Program as amended in this final action through the addition of
the 255,083-ton assurance level and other amendments discussed in
section III.A.1, will result in annual emissions from the covered EGUs
and other EGUs in Texas that are lower than what was required under
Texas participation in CSAPR's SO2 trading program. Because
this is the case, EPA can rely on the CSAPR Better-than-BART analysis
to demonstrate, by the clear weight of the evidence, that the Texas
SO2 Trading Program, in conjunction with continued
implementation of CSAPR in other states, provides greater reasonable
progress than BART. Accordingly, we are taking final action to affirm
that the Texas SO2 Trading Program, as

amended in today's final action, satisfies the requirements for a BART
alternative under 40 CFR 51.308(e)(2)(i)(E).
    Section 51.308(e)(2)(iii). This provision requires that the
emission reductions from BART alternatives occur ``during the period of
the first long-term strategy for regional haze.'' The Texas
SO2 BART alternative was implemented beginning in January
2019, and thus emission reductions needed to comply with the BART
alternative were required to take place by the end of 2019. In our
August 2018 proposal,\95\ we proposed to affirm our determination that
for the purpose of evaluating Texas' BART alternative, the end of the
period of the first long-term strategy for Texas is 2021, consistent
with the requirement that states submit revisions to their long-term
strategy to address the second planning period by July 31, 2021.\96\ We
also proposed to affirm our determination that because the emission
reductions from the Texas SO2 Trading Program will be
realized prior to that date, the necessary emission reductions will
take place within the period of Texas' first long-term strategy for
regional haze. We received a comment raising the concern that this
determination we proposed to affirm would be at odds with the national
finding in the January 2017 action that our amendments there ``do not
affect the development and review of state plans for the first
implementation period. . . .'' 82 FR at 3080. After further review of
our discussion in the January 2017 final rule making amendments to the
Regional Haze Rule and consideration of the comments we received
pertaining to this issue, we are not finalizing a position in this
action that the first planning period has been extended to July 31,
2021.
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    \95\ 83 FR 43592.
    \96\ 40 CFR 51.308(f).
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    Nonetheless, we are finalizing our determination that the Texas
SO2 Trading Program satisfies the timing requirements of
51.308(e)(2)(iii), because the level of emissions achieved by the
covered Texas units was below the budget of the Texas program prior to
the end of 2018 and the program took effect immediately at the
beginning of 2019. This meets the requirement at (e)(2)(iii) that the
emission reductions called for by the BART alternative occur before the
end of the period for the first long-term strategy. As discussed in our
November 2019 supplemental proposal, the combined SO2
emissions from Texas EGUs participating in the intrastate trading
program were 179,630 SO2 tons in 2018, which is well below
the Texas SO2 Trading Program budget of 238,395 tons (as
well as the assurance level of 255,083 tons we are finalizing in this
action).\97\ Therefore, the emissions reductions secured under the
Texas SO2 Trading Program occurred prior to the end of the
period of the first long-term strategy for regional haze. EPA has
previously proposed a view that where emission reductions required by a
BART alternative are already achieved in practice during the first
planning period, even though the enforceable requirement was not
mandated until after the planning period, this can satisfy 40 CFR
51.308(e)(2)(iii). This was our position in our action proposing to
approve a SIP revision from the State of Arkansas establishing a BART-
alternative for the Domtar Ashdown Mill.\98\ There, we explained that
even though the BART alternative emission limits for the Domtar Ashdown
Mill became enforceable by the State on February 28, 2019, the SIP
revision submitted by Arkansas provided adequate documentation
demonstrating that the two subject-to-BART units at the Domtar Ashdown
Mill have actually been operating at emission levels below the BART
alternative emission limits since December 2016.\99\ Based on the
documentation provided in the Arkansas SIP revision, we proposed to
find that the subject-to-BART units at the Domtar Ashdown Mill satisfy
the timing requirements of 40 CFR 51.308(e) that the necessary emission
reductions associated with the BART alternative occur during the first
long-term strategy for regional haze.\100\ Consistent with that
proposed action, we do not interpret Sec.  51.308(e)(2)(iii) as
requiring that all enforceable limits on annual emissions under the
Texas SO2 Trading Program be in place by December 31, 2018,
or that the Trading Program itself must be implemented by December 31,
2018, if the emission levels called for by the BART alternative are
achieved prior to that date and remain at or below that level until the
alternative becomes enforceable (which in this case, is immediately
following 2018). We are taking final action that the Trading Program
satisfies the timing requirements of Sec.  51.308(e)(2)(iii).
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    \97\ 84 FR 61853.
    \98\ See 85 FR 14847 (March 16, 2020).
    \99\ 85 FR 14861.
    \100\ 85 FR 14861.
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    Section 51.308(e)(2)(iv). This provision requires a demonstration
that the emission reductions resulting from the emissions trading
program or other alternative measure will be surplus to those
reductions resulting from measures adopted to meet requirements of the
CAA as of the baseline date of the SIP. When promulgating this
requirement in 1999, the EPA explained that emission reductions must be
``surplus to other Federal requirements as of the baseline date of the
SIP, that is, the date of the emission inventories on which the SIP
relies.'' \101\ The baseline date for the 2009 Texas Regional Haze SIP
emission inventory was previously established as 2002 during SIP
planning stages for the first implementation period.\102\ The emission
reductions secured under the Texas SO2 Trading Program are
additional and will not result in double-counting of reductions from
other Federal requirements since they will occur after the original
2002 emission inventory. Thus, this BART alternative satisfies the
requirements of Sec.  51.308(e)(2)(iv).
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    \101\ See 64 FR 35714, 35742 (July 1, 1999); see also 70 FR
39104, 39143 (July 6, 2005).
    \102\ See Memorandum from Lydia Wegman and Peter Tsirigotis,
2002 Base Year Emission Inventory SIP Planning: 8-hr Ozone,
PM2.5, and Regional Haze Programs, November 8, 2002.
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    Section 51.308(e)(2)(vi). For plans that include an emissions
trading program that establishes a cap on total annual emissions of
SO2 or NOX from sources subject to the program,
this provision requires the owners and operators of sources to hold