[Federal Register Volume 77, Number 214 (Monday, November 5, 2012)]
[Proposed Rules]
[Pages 66422-66429]
[FR Doc No: 2012-26977]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2011-0552; FRL-9748-9]

Approval and Promulgation of Implementation Plans; Arizona; Motor
Vehicle Inspection and Maintenance Programs

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to approve three revisions to the Arizona
State Implementation Plan submitted by the Arizona Department of
Environmental Quality. Two of these revisions relate to an amendment to
Arizona's Basic and Enhanced Vehicle Emissions Inspection Programs that
would exempt motorcycles in the Phoenix metropolitan area from
emissions testing requirements. The third revision would expand the
geographic area in which various air quality control measures,
including the vehicle emissions inspection program but also including
other control measures, apply in the Phoenix metropolitan area. EPA is
proposing approval of these SIP revisions because we have found that
they meet all applicable requirements and would not interfere with
reasonable further progress or attainment of any of the national
ambient air quality standards. EPA is proposing this action under the
Clean Air Act obligation to take action on State submittals of
revisions to state implementation plans.

DATES: Written comments must be received on or before December 5, 2012.

ADDRESSES: Submit your comments, identified by Docket No. EPA-R09-OAR-
2011-0552, by one of the following methods:
    1. Federal Rulemaking Portal: http://www.regulations.gov. Follow
the on-line instructions for submitting comments.
    2. Email: Jeffrey Buss at<EMAIL_ADDRESS>    3. Fax: Jeffrey Buss, Air Planning Office (AIR-2), at fax number
415-947-3579.
    4. Mail: Jeffrey Buss, Air Planning Office (AIR-2), U.S.
Environmental Protection Agency, Region IX, 75 Hawthorne, San
Francisco, California 94105.
    5. Hand or Courier Delivery: Jeffrey Buss, Air Planning Section
(AIR-2), U.S. Environmental Protection Agency, Region IX, 75 Hawthorne,
San Francisco, California 94105. Such deliveries are only accepted
during the Regional Office's normal hours of operation. Special
arrangements should be made for deliveries of boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-R09-OAR-
2011-0552. EPA's policy is that all comments received will be included
in the public docket without change and may be made available online at
www.regulations.gov, including any personal information provided,
unless the comment includes information claimed to be Confidential
Business Information (CBI) or other information the disclosure of which
is restricted by statute. Do not submit information through
www.regulations.gov or email that you consider to be CBI or otherwise
protected from disclosure. The www.regulations.gov Web site is an
anonymous access system, which means EPA will not know your identity or
contact information unless you provide it in the body of your comment.
If you send an email comment directly to EPA without going through
www.regulations.gov, your email address will be automatically captured
and included as part of the comment that is placed in the public docket
and made available on the Internet. If you submit an electronic
comment, EPA recommends that you include your name and other contact
information in the body of your comment and with any disk or CD-ROM you
submit. If EPA cannot read your comment due to technical difficulties
and cannot contact you for clarification, EPA may not be able to
consider your comment. Electronic files should avoid the use of special
characters, any form of encryption, and be free of any defects or
viruses.
    Docket: All documents in the docket are listed in the
www.regulations.gov index. Although listed in the index, some
information is not publicly available, e.g., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, will be publicly available only in hard copy.
Publicly available docket materials are available either electronically
in www.regulations.gov or in hard copy at the Air Planning Office (AIR-
2), U.S. Environmental Protection Agency, Region IX, 75 Hawthorne
Street, San Francisco, California 94105. EPA requests that if at all
possible, you contact the person listed in the FOR FURTHER INFORMATION
CONTACT section to schedule your inspection during normal business
hours.

FOR FURTHER INFORMATION CONTACT: Jeffrey Buss, Office of Air Planning,
U.S. Environmental Protection Agency, Region 9,<PHONE_NUMBER>, email:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this document, the terms ``we,''
``us,'' and ``our'' refer to EPA.

Table of Contents

I. Introduction and Background
II. Summary of Arizona's SIP Submittals
III. EPA Review of the SIP Revisions
    A. CAA Procedural Provisions
    B. I/M Program Requirements
    1. Geographic Coverage
    2. Vehicle Coverage and Exemptions
    3. Compliance Enforcement
    4. Performance Evaluation
    C. Demonstrating Noninterference With Attainment and Maintenance
Under CAA Section 110(l)
    1. Ozone
    2. Carbon Monoxide
    3. Particulate Matter
    4. Air Toxics
    5. Conclusion
IV. EPA's Proposed Action and Request for Public Comment
V. Statutory and Executive Order Reviews

I. Introduction and Background

    In May 1995, EPA approved Arizona's Basic and Enhanced Vehicle
Emissions Inspection/Maintenance (VEI) Programs as a revision to the
Arizona State Implementation Plan (SIP) under the Clean Air Act, as
amended in 1990 (CAA or ``Act'') and EPA's motor vehicle inspection and
maintenance rule (``EPA's I/M rule'' or ``federal I/M rule'') as
amended. See 60 FR 22518 (May 8, 1995). A ``basic'' I/M program was
required in the Phoenix metropolitan area (referred to as ``Area A'')
due to the area's designation as a ``moderate'' nonattainment area for
the carbon monoxide (CO) and the 1-hour ozone national ambient air
quality standards (NAAQS or ``standard'').\1\ The VEI program was
designed to reduce emissions of CO, volatile organic compounds (VOC)
and oxides of nitrogen (NOX).\2\ At that time, although

it was not required to have an ``enhanced'' I/M program, Arizona was
implementing most elements of an enhanced program in Phoenix. Arizona's
program, as implemented in Phoenix, however, was not approved as an
enhanced program, because the program did not satisfy all the
requirements in EPA's I/M rule for enhanced programs. An enhanced I/M
program became a requirement for the Phoenix area when the area was
reclassified from ``moderate'' nonattainment to ``serious''
nonattainment for the CO NAAQS effective August 28, 1996 (61 FR 39343,
July 29, 1996), and when the area was reclassified from ``moderate''
nonattainment to ``serious'' nonattainment for the 1-hour ozone NAAQS
effective February 13, 1998 (63 FR 7290 February 13, 1998).
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    \1\ The Phoenix metropolitan area is also a nonattainment area
for respirable particulate matter (PM10); however, the
VEI program plays a very minor role in the control strategy for this
pollutant. There is no CAA requirement for I/M programs in
PM10 nonattainment areas and no PM10 reduction
credited from EPA's emission models, MOBILE 6.2 or MOVES.
    \2\ VOC and NOX are precursors to ozone formation in
the atmosphere under the influence of sunlight and meteorology.
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    Since the Arizona VEI programs were originally approved in May
1995, EPA has amended the federal I/M rule several times to provide
states with more flexibility in designing their programs but also to
require testing of the on-board diagnostic (OBD) system. Since that
time, Arizona has also made a number of changes to its enhanced and
basic VEI programs.
    In January 2003, we approved changes to the Arizona VEI programs
submitted to us on July 6, 2001 and April 10, 2002, including the
incorporation of OBD testing, an exemption for the first five model
year vehicles from the programs on a rolling basis, replacement of the
previously-approved remote sensing program in Phoenix with an on-road
testing study, and legislative changes to the waiver provisions. See 68
FR 2912 (January 22, 2003). In our January 2003 final rule, we also
approved the VEI program in the Phoenix area as meeting the enhanced I/
M program performance standard.
    In our January 2003 final rule, we also approved an expansion of
the geographic area in which the VEI program in the Phoenix area
applies, an area referred to as ``Area A.'' Area A, as approved in
2003, includes all of the metropolitan Phoenix carbon monoxide and 1-
hour ozone nonattainment areas plus additional areas in Maricopa County
to the north, east, and west, as well as a small portion of Yavapai
County and the western portions of Pinal County. ``Area A'' is also
used by the State of Arizona to identify the applicable area for
implementation of a number of other air pollution control measures,
including but not limited to the EPA-approved cleaner burning gasoline
(CBG) and stage II vapor recovery programs. See, e.g., 69 FR 10161
(March 4, 2004) (approval of CBG program), and 77 FR 35279 (June 13,
2012) (approval of revised Stage II vapor recovery program). ``Area A''
is defined at Arizona Revised Statutes (ARS) section 49-541, subsection
(1).
    In April 2004, we published a final rule governing the transition
from the 1-hour ozone NAAQS to the 8-hour ozone standard that we
promulgated in 1997. See 69 FR 23951 (April 30, 2004).\3\ Under our
April 2004 final rule, we established certain ``anti-backsliding
requirements'' that would continue to apply to 8-hour ozone
nonattainment areas based on an area's designation and classification
for the 1-hour ozone standard at the time of designation for the 1997
8-hour ozone standard, even after revocation of the 1-hour ozone
standard. The I/M program requirement was included in the list of such
``anti-backsliding'' requirements. See 40 CFR 51.900(f)(2) and
51.905(a)(1)(i).
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    \3\ In 1997, EPA promulgated an 8-hour ozone standard [0.08
parts per million (ppm)] to replace the 1-hour ozone standard. The
1-hour ozone standard was revoked effective June 15, 2005.
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    In April 2004, we published a second final rule related to ozone,
and in this other rule, we designated the Phoenix-Mesa area as a
nonattainment area for the 1997 8-hour ozone standard, 69 FR 23858, at
23878 (April 30, 2004), and, later, classified the area as ``Subpart 2/
Marginal'' for that standard, 77 FR 28424 (May 14, 2012). Thus, the
requirement to continue to implement an enhanced I/M program continues
to apply in the Phoenix metropolitan area based the area's designation
and classification for the 1-hour ozone standard notwithstanding
revocation of the 1-hour ozone standard in June 2005.
    In 2005, we approved maintenance plans and redesignation requests
for both the carbon monoxide and 1-hour ozone standards in the Phoenix
area. See 70 FR 11553 (March 9, 2005) (carbon monoxide redesignation
request and maintenance plan approval), and 70 FR 34362 (June 14, 2005)
(1-hour ozone redesignation request and maintenance plan approval).
Both approved maintenance plans include ``Expansion of Area A
Boundaries'' as a contingency measure.\4\ In these plans, ``Expansion
of Area A Boundaries'' refers to an amendment to the definition of Area
A in ARS 49-541 that was made by the Arizona Legislature in 2001 to
expand the boundaries of this area beyond the boundaries approved by
EPA in 2003 to add portions of Maricopa County west of Goodyear and
Peoria and a small piece of land on the north side of Lake Pleasant in
Yavapai County. In light of the fact that the Legislature had already
acted, the two maintenance plans noted that ``Expansion of Area A'' was
an example of ``early implementation'' of a contingency measure.
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    \4\ See page ES-6 of the Maricopa Association of Government's
(MAG's) Carbon Monoxide Redesignation Request and Maintenance Plan
for the Maricopa County Nonattainment Area (May 2003) and page ES-9
of MAG's One-Hour Ozone Redesignation Request and Maintenance Plan
for the Maricopa County Nonattainment Area (March 2004).
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    In March 2007, we approved changes to the Arizona VEI programs
submitted to us on December 23, 2005 and October 3, 2006, including an
exemption for collectible vehicles from VEI testing in the Phoenix
metropolitan area, and collectible vehicles and motorcycles from VEI
testing in the Tucson metropolitan area. See 72 FR 15046 (March 30,
2007). In our March 2007 rule, we also approved an updated performance
evaluation standard for the VEI program in the Phoenix area; and new
contingency measures.
    On June 13, 2007, ADEQ submitted the Eight-Hour Ozone Plan for the
Maricopa Nonattainment Area (June 2007) (``Phoenix-Mesa Eight-Hour
Ozone Attainment Plan'') to demonstrate attainment of the 1997 8-hour
ozone standard in the Phoenix-Mesa nonattainment area by June 2009.
Similar to the carbon monoxide and 1-hour ozone maintenance plans, the
Phoenix-Mesa Eight-Hour Ozone Attainment Plan does not take emissions
reduction credit for ``Expansion of Area A Boundaries'' to demonstrate
attainment or maintenance but lists ``Expansion of Area A Boundaries''
as a contingency measure. We approved the plan at 77 FR 35285 (June 13,
2012). As a contingency measure, ADEQ estimated that ``Expansion of
Area A Boundaries'' would reduce VOC emissions by approximately 1.3
metric tons per day by increasing the number of vehicles subject to the
VEI program.\5\
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    \5\ See pages V-20 and V-21 of exhibit 2 (``Technical Support
Document for Ozone Modeling in Support of the Eight-Hour Ozone Plan
for the Maricopa Nonattainment Area'') of appendix A to the Phoenix-
Mesa Eight-Hour Ozone Attainment Plan.
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    In March 2009, ADEQ submitted the MAG Eight-Hour Ozone
Redesignation Request and Maintenance Plan for the Maricopa
Nonattainment Area (February 2009) (``Phoenix-Mesa Eight-Hour Ozone
Maintenance Plan'') to demonstrate the criteria for redesignation to
``attainment'' have been satisfied and to demonstrate maintenance of
the 1997 8-hour ozone standard through year 2025. Unlike the previous
plans, the Phoenix-Mesa Eight-Hour Ozone Maintenance Plan includes
``Expansion of Area A Boundaries'' as a measure for which credit is
taken to

demonstrate maintenance of the 1997 8-hour ozone standard through
2025.\6\ The maintenance demonstration in the Phoenix-Mesa Eight-Hour
Ozone Maintenance Plan specifically excludes motorcycles from the
calculated emissions reductions from the VEI.\7\
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    \6\ See page ES-4 of the Phoenix-Mesa Eight-Hour Ozone
Maintenance Plan.
    \7\ See page 3-12 of the Phoenix-Mesa Eight-Hour Ozone
Maintenance Plan.
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    We have not yet taken action on the Phoenix-Mesa Eight-Hour Ozone
Maintenance Plan and do not propose action related to that plan herein.
However, today's proposed approval of the expansion of Area A
boundaries, as codified in amended ARS 49-541(1) and submitted on May
25, 2012 in connection with the 2012 Phoenix Area PM-10 Five Percent
Plan (discussed in the following section of this document), provides
support for the Phoenix-Mesa Eight-Hour Ozone Maintenance Plan given
its reliance on the expansion of Area A boundaries in maintaining the
1997 8-hour ozone standard once the area is redesignated. EPA will take
action on the Phoenix-Mesa Eight-Hour Ozone Maintenance Plan in one or
more future rulemakings.
    Lastly, in March 2008, EPA revised the 8-hour ozone standard to
0.075 parts per million (ppm). See 73 FR 16436 (March 27, 2008). More
recently, we designated the Phoenix-Mesa area as a ``Marginal''
nonattainment area for the 2008 ozone standard, effective July 20,
2012. See 77 FR 30088 (May 21, 2012). Such ``Marginal'' nonattainment
areas must attain the standard as expeditiously as practicable but not
later than July 20, 2015 (i.e., 3 years from July 20, 2012, the
effective date of the nonattainment designation).

II. Summary of Arizona's SIP Submittals

    The Arizona Department of Environmental Quality (ADEQ) submitted
the most recent statutory changes to its Basic and Enhanced VEI
Programs as a revision to the Arizona State Implementation Plan (SIP)
on November 6, 2009 (``2009 VEI SIP Revision''). The 2009 VEI SIP
Revision submittal includes the SIP revision itself, divided into a
non-regulatory portion, ``Final Arizona State Implementation Plan
Revision, Exemption of Motorcycles from Vehicle Emissions Inspection/
Maintenance Requirements in Area A'' (October 2009), and a regulatory
portion, House Bill (HB) 2280, as well as supporting materials related
to legal authority, adoption, public process and technical analysis.
    HB 2280 amends the Arizona Revised Statutes (ARS) Section 49-542 by
exempting motorcycles from emissions testing in Area A (i.e., the
Phoenix area). Specifically, the amendments to ARS 49-542 are found in
paragraphs or subparagraphs (F)(2)(e), (F)(3), (J)(2)(l), and (K) of
that section of code. The changes to ARS Section 49-542 are self-
implementing, which means that they become effective upon EPA approval
as a revision to the Arizona SIP. Section 2 of HB 2280 provides that
the exemption becomes effective upon EPA approval of a SIP revision on
or before July 10, 2010.
    In consultation with EPA concerning the VEI SIP Revision, ADEQ
prepared additional information regarding the impacts of the motorcycle
exemption on attainment of the 2008 8-hour ozone NAAQS and the 1987
PM10 NAAQS. On January 11, 2011, ADEQ adopted and submitted
the additional information and a replacement measure in a supplemental
SIP revision, entitled, ``Addendum to the Arizona State Implementation
Plan Revision, Exemption of Motorcycles from Vehicle Emissions
Inspections and Maintenance Program Requirements in Area A, October
2009'' (December 2010) (``2011 VEI SIP Addendum''). In the cover letter
to the 2011 VEI SIP Addendum, ADEQ indicated that, through House Bill
2033 adopted in April 2010, the Arizona Legislature had extended the
date authorizing the motorcycle exemption to July 2012.\8\ Also, as
part of the submittal of the 2011 VEI SIP Addendum, ADEQ documented the
public participation process that was conducted by ADEQ prior to
adoption and submittal of the Addendum to EPA.
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    \8\ Through House Bill 2073 in 2012, the Arizona Legislature has
further extended the date authorizing the motorcycle exemption to
July 2014.
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    On May 25, 2012, ADEQ submitted the MAG 2012 Five Percent Plan for
PM-10 for the Maricopa County Nonattainment Area (May 2012) (``2012
Phoenix Area PM-10 Five Percent Plan''). The 2012 PM-10 Phoenix Area
Five Percent Plan was submitted to provide for attainment of the
PM10 standard and an annual reduction in PM10
emissions within the area of not less than five percent until
attainment of the standard. Among the statutes submitted as part of the
2012 Phoenix Area PM-10 Five Percent Plan for approval as part of the
Arizona SIP is ARS 49-541(1), which establishes the boundaries of Area
A as expanded by the Arizona Legislature in 2001.\9\ As noted, several
previous plans for the Phoenix area had included ``Expansion of Area A
Boundaries'' as a contingency measure, but the more recent submitted
plans, including the Phoenix-Mesa Eight-Hour Ozone Maintenance Plan and
the 2012 Phoenix Area PM-10 Five Percent Plan, rely on it as part of
the long-term control or maintenance strategy. With respect to ADEQ's
May 25, 2012 SIP revision submittal of the 2012 Phoenix Area PM-10 Five
Percent Plan, EPA is proposing action only on the amended statutory
provision that expands the boundaries of Area A [i.e., amended ARS 49-
541(1)]. EPA will take action on the rest of the 2012 Phoenix Area PM-
10 Five Percent Plan in one or more future rulemakings.
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    \9\ See exhibit 1 in Appendix C to the 2012 PM-10 Five Percent
Plan.
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III. EPA Review of the SIP Revisions

A. CAA Procedural Provisions

    CAA section 110(l) requires revisions to a SIP to be adopted by the
state after reasonable notice and public hearing. EPA has promulgated
specific requirements for SIP revisions in 40 CFR part 51, subpart F.
    On September 14 and 15, 2009, ADEQ published notices in newspapers
of general circulation in the Phoenix area of public hearings on
proposed revisions to the Arizona SIP to exempt motorcycles in Phoenix
from emissions testing requirements under the Arizona VEI programs
(i.e., a draft VEI SIP Revision). Public hearings were held on October
15, 2009 in Phoenix. On November 6, 2009, in accordance with Arizona
law, ADEQ adopted these exemptions as set forth in ``Final Arizona
State Implementation Plan Revision, Exemption of Motorcycles from
Vehicle Emissions Inspection/Maintenance Requirements in Area A''
(October 2009) as a revision to the Arizona SIP and submitted the
revision to EPA for approval.
    ADEQ followed a similar process in adopting and submitting the 2011
VEI SIP Addendum. ADEQ held a public hearing on December 15, 2010 in
Phoenix on a draft VEI SIP Addendum and adopted the VEI SIP Addendum on
January 11, 2011 in accordance with Arizona law prior to submittal to
EPA as a revision to the Arizona SIP.
    ADEQ also provided for public comment and hearing of the 2012
Phoenix Area PM-10 Five Percent Plan. Specifically, ADEQ published
notice of the start of a 30-day comment period on March 12, 2012. In
this notice, ADEQ also provided notice of a public hearing that was, as
scheduled, held on April 12, 2012. See exhibit 1 (``Public Hearing
Process Documentation'') to appendix E to the 2012 Phoenix Area PM-10
Five Percent Plan.

    ADEQ's 2009 VEI SIP Revision, 2011 VEI SIP Addendum, and 2012
Phoenix Area PM-10 Five Percent Plan submittal packages include
evidence of public notice and hearing, ADEQ responses to public
comments, and ADEQ adoption as described above, and, based on review of
these materials, we find that ADEQ has met the procedural requirements
of CAA section 110(l) and 40 CFR part 51, subpart F.

B. I/M Program Requirements

    As noted in Section I, Introduction and Background, herein,
Arizona's VEI programs were most recently approved as meeting federal
I/M program requirements on March 30, 2007 (72 FR 15046). Although the
Phoenix and Tucson areas have been redesignated to ``attainment'' for
the CO NAAQS, the VEI programs continue to be relied upon to maintain
the CO standard in those areas. Moreover, ``enhanced'' I/M remains an
``applicable requirement'' for the Phoenix area under our final rule
implementing the 8-hour ozone NAAQS (see 40 CFR 51.900(f) and
51.905(a)(1)) based on the designation of that area as a nonattainment
area for the 8-hour ozone NAAQS (and designation as nonattainment for
the 1-hour ozone NAAQS at the time of designation for the 8-hour
standard). Thus, to be approved, the VEI programs, as amended and
evaluated herein, must continue to meet the relevant enforceability
requirements for I/M programs in subpart S of 40 CFR part 51 and, for
the Phoenix area with respect to ozone, the enhanced performance
standard in 40 CFR 51.351. In the following paragraphs, we review
ADEQ's 2009 VEI SIP Revision and 2011 VEI SIP Addendum to determine
whether the amended VEI programs continue to meet federal I/M program
requirements.
    The aspects of I/M affected by the submitted revisions to the VEI
programs and the expansion of Area A boundaries include geographic
coverage, vehicle coverage and exemptions, compliance enforcement, and
the performance standard evaluation.
1. Geographic Coverage
    EPA's I/M regulations require that state I/M programs be
implemented in the entire urbanized area, based on the 1990 census. See
40 CFR 51.350. We have found in our approvals of the Arizona VEI
program in 1995 and 2003 that the geographic coverage of the VEI
program in the Phoenix area meets the minimum requirements of EPA's I/M
regulations. Since then, no regulatory changes or new designations have
changed the minimum requirements with respect to the geographic
coverage of the I/M program in the Phoenix area, and thus, the
expansion of the boundaries of Area A, which define the area in which
the VEI program is implemented, is also acceptable.
2. Vehicle Coverage and Exemptions
    The performance standard for enhanced I/M programs (including
alternate low enhanced programs) assumes coverage of all 1968 and later
model year light duty vehicles and trucks. Light duty trucks are not
included in the performance standard for basic I/M programs. Other
levels of coverage may be approved if the necessary emission reductions
are achieved. See 40 CFR 51.356.
    The Arizona VEI programs approved by EPA in 1995 exempt several
categories of vehicles from the emissions testing requirements. Such
vehicle categories included, among others, vehicles manufactured in or
before the 1966 model year and vehicles being sold between motor
vehicle dealers. See 60 FR 22518, 22521 (May 8, 1995). In 2003, we
approved revisions to the VEI programs including an exemption for the
first five model year vehicles on a rolling basis. See 68 FR 2912
(January 22, 2003). In 2007, we exempted collectible vehicles from the
Phoenix and Tucson areas and motorcycles from the Tucson area. The SIP
revision we are acting on today would establish an additional vehicle
category that would be exempt from emissions testing requirements:
Motorcycles from the Phoenix area. Based on data for calendar year
2008, motorcycles make up approximately 38,100 (or 3.7 percent) of the
1,027,600 total number of vehicles subject to VEI in the Phoenix area.
See table 9 on page 17 of the 2009 VEI SIP Revision.
    Basic and enhanced I/M programs are not required to test any
particular category of motor vehicles so long as the performance
standard is met, and thus I/M programs are not required to test
motorcycles. The effect of the new exemption for motorcycles on the
continued ability of the VEI program in the Phoenix area to meet the
enhanced I/M program performance standard is discussed below in Section
III.B.3, ``Performance Evaluation,'' and the effect of the new
exemptions on emissions and ambient air quality in Phoenix is discussed
herein in Section III.C, ``Demonstrating Noninterference With
Attainment And Maintenance Under CAA Section 110(l).''
3. Compliance Enforcement
    Section 51.361 of title 40 of the CFR requires that denial of motor
vehicle registration be the method used to ensure compliance with
enhanced I/M programs. ARS Section 49-542(D) and Arizona Administrative
Code (AAC) R18-2-1007 requires that all vehicles must complete a
vehicle emissions inspection to obtain a vehicle registration.
    Exemption of motorcycles in the Phoenix area from emissions testing
would be straightforward from the standpoint of compliance enforcement
and would not undermine compliance enforcement for other types of
vehicles that continue to be subject to the emissions testing
requirements under the VEI program in the Phoenix area. Owners of
motorcycles registered in the Phoenix area will simply receive a
registration or re-registration form from the Arizona Department of
Transportation, Motor Vehicle Division that indicates ``emissions test
not required.''
    Therefore, we find that the Arizona VEI programs, as amended to
exempt motorcycles in the Phoenix area, would continue to meet the
compliance enforcement requirements of 40 CFR 51.361.
4. Performance Evaluation
    As part of the 2009 VEI SIP Revision submittal, ADEQ provided an
updated performance evaluation using the EPA's motor vehicle emissions
model, MOBILE6.2.\10\ The updated performance evaluation included a
summary report and paper copies of MOBILE6.2 input and output files.
The purpose of the updated performance evaluation is to determine
whether the VEI program, as amended to exempt motorcycles, would
continue to meet the federal enhanced I/M performance standard
(codified at 40 CFR 51.351) in the Phoenix area. The need for an
updated performance evaluation follows from the fact that the Phoenix
area, which was designated as nonattainment for the 1-hour ozone NAAQS
(at the time of designation for the 8-hour ozone nonattainment), is
designated as nonattainment for the 8-hour ozone NAAQS and that
enhanced I/M remains an ``applicable requirement'' for such areas under
our final rule implementing the 8-hour ozone NAAQS [see 40 CFR
51.900(f) and 51.905(a)(1)].
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    \10\ ADEQ submitted the 2009 VEI SIP Revision prior to the
availability and requirement to use EPA's Motor Vehicle Emissions
Simulator model ``MOVES2010''. While ADEQ's 2011 VEI SIP Addendum
was submitted after the availability of MOVES2010, we did not
require the use of the new MOVES2010 model because significant work
had already begun on the SIP revision. See 75 FR 9411 (March 2,
2010).
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    For the updated evaluation, ADEQ developed and applied reduction
factors

to exclude motorcycles from the fleet tested under the VEI program as
provided for in HB 2280. ADEQ then compared the emissions reduction
benefits from the revised VEI program with the corresponding benefits
that would be achieved under EPA's alternate low enhanced I/M
performance standard.
    The results of ADEQ's analysis are summarized in Table 1 below,
which shows that the emissions reduction benefits achieved by the
Phoenix VEI program as amended are higher than those achieved under the
performance standard. The amended Phoenix VEI program thus continues to
achieve greater emissions reductions than the federal model program
because the VEI program includes elements that go beyond federal I/M
requirements. These include a requirement for a one-time only waiver,
an implementation area beyond the nonattainment area boundaries, and
denial of waivers for grossly-emitting vehicles.

                                   Table 1--Results of ADEQ's Alternate Low Enhanced Performance Standard Modeling \a\
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                                                                               2002                                            2008
                                                         -----------------------------------------------------------------------------------------------
                                                                VOC             NOX             CO              VOC             NOX             CO
--------------------------------------------------------------------------------------------------------------------------------------------------------
I/M Benefits in Area A (grams/mile).....................           0.201           0.109           2.938           0.088           0.101           1.579
I/M Performance Standard benefits (grams/mile)..........           0.152           0.026           2.262           0.056           0.006           1.160
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\a\ The emission rates in this table represent the difference between the fleet-wide emission rate under the applicable program (i.e., amended Arizona
  VEI program or EPA's I/M model program) and the corresponding emission rate under the no-I/M scenario. See Table 8 on page 16 of the 2009 VEI SIP
  Revision.

    Based on our review of the 2009 VEI SIP Revision, we find ADEQ's
methods used to update the performance standard evaluation and use of
the alternate low enhanced I/M performance standard to be acceptable,
and we find that the VEI program, as amended to exempt motorcycles in
the Phoenix area from the emissions testing requirements, exceeds the
alternate low enhanced I/M performance standard in the Phoenix area as
required under 40 CFR 51.351 and 51.905(a)(1).

C. Demonstrating Noninterference With Attainment and Maintenance Under
CAA Section 110(l)

    Revisions to SIP-approved control measures must meet the
requirements of Clean Air Act section 110(l) to be approved by EPA.
Section 110(l) states in relevant part: ``The Administrator shall not
approve a revision of a plan if the revision would interfere with any
applicable requirement concerning attainment and reasonable further
progress (as defined in section 171), or any other applicable
requirement of this Act.''
    We interpret section 110(l) to apply to all requirements of the CAA
and to all areas of the country, whether attainment, nonattainment,
unclassifiable, or maintenance for one or more of the six criteria
pollutants. We also interpret section 110(l) to require a demonstration
addressing all pollutants whose emissions and/or ambient concentrations
may change as a result of the SIP revision. Thus, for example,
modification of a SIP-approved measure may impact NOX
emissions, which may impact ozone and PM2.5. The scope and
rigor of an adequate section 110(l) demonstration of noninterference
depends on the air quality status of the area, the potential impact of
the revision on air quality, the pollutant(s) affected, and the nature
of the applicable CAA requirements.
    The 2009 VEI SIP Revision submittal that seeks exemption of
motorcycles from the Phoenix enhanced I/M program includes an
evaluation of the effects of the revision to the VEI programs on ozone,
carbon monoxide, PM2.5, and PM10 within the
Phoenix metropolitan area. The details of ADEQ's evaluation of the
emissions effects and related ambient air quality impacts of the new
exemptions are contained in ``Technical Support Document for Evaluating
Emissions Impacts of Exempting Motorcycles from Vehicle Emissions
Inspections and Comparing Inspection and Maintenance (I/M) Emission
Reduction Benefits in Area A with the EPA Enhanced I/M Performance
Standard (August 19, 2009)'' (``2009 Report''), which was included as
Appendix B to the 2009 VEI SIP Revision.
    The 2009 report indicates that ADEQ used the EPA's motor vehicle
emissions model program, MOBILE6.2, to estimate the emissions effects
of the new exemptions. The methods used to gather data included
acquisition of data from the State vehicle emissions inspections
programs, other state agencies, air quality planning agencies and
relevant air quality plans. We find that ADEQ used reasonable methods
and appropriate models in estimating the emissions effects of the new
exemptions. Table 2 below summarizes ADEQ's estimates by pollutant in
units of metric tons per day (mtpd). Table 2 also shows the emissions
impact as a percentage of the overall pollutant-specific inventory in
the applicable area.

              Table 2--VOC and CO Emissions Increases Associated With the 2009 VEI SIP Revision \a\
----------------------------------------------------------------------------------------------------------------
                                                                                I/M benefit
                                                                     Area-wide         from         Percent of
                            Pollutant                                  total        motorcycle    areawide total
                                                                     emissions       test and        emissions
                                                                      (mtpd)       repair (mtpd)     inventory
----------------------------------------------------------------------------------------------------------------
Volatile Organic Compounds......................................           606.7           0.056           0.009
Carbon Monoxide.................................................           912.3           0.246           0.027
----------------------------------------------------------------------------------------------------------------
\a\ I/M Benefit = the reduction in on-road emissions due to the motorcycle exemption in Area A. See pages 7 and
  12 of 2009 VEI SIP Revision.

1. Ozone
    Ozone is formed by the interaction of directly-emitted precursor
emissions, volatile organic compounds (VOC) and oxides of nitrogen
(NOX), as influenced by the meteorological and topographical
features of an area.
    As noted above, in 2004, EPA designated the Phoenix area as a
nonattainment area for the 1997 8-hour ozone standard, 69 FR 23858
(April 30, 2004), and in 2012, designated the Phoenix area as a
nonattainment area for the 2008 8-hour ozone standard, 77 FR 30088 (May
21, 2012).
    As indicated in Table 2 above, based on ADEQ's estimates, the
revision to the 2009 VEI program in Phoenix would increase VOC
emissions by approximately 0.056 metric tons per day, which represents
approximately 0.009% of the overall VOC emissions inventory in this
area under existing conditions. ADEQ did not estimate NOX
emissions, but we agree with ADEQ's assertion that repairs to vehicles
to reduce VOC and CO emissions often result in an incremental increase
in NOX emissions and, thus, discontinuance of such repairs
(e.g., through an exemption) could result in an incremental decrease in
such emissions.
    While minor, the incremental increase in VOC emissions due to the
motorcycle exemption would occur in an area that is violating the 2008
ozone standard based on the design value for 2008-2010.
    ADEQ's 2011 VEI SIP Addendum includes a measure that is intended to
substitute for the foregone VOC emissions reductions from the
motorcycle exemption and to thereby provide a basis to find that the
2009 VEI SIP Revision would not interfere with attainment of the 2008
ozone standard. The measure identified as the substitute is a 2008 EPA
rule for aerosol coatings (spray paints and coatings) (``coatings
rule''). See 73 FR 15604 (March 24, 2008) 74 FR 29595 (June 23, 2009).
The compliance date for the 2008 EPA coatings rule was July 1, 2009.
The designation of the Phoenix-Mesa area as a ``marginal''
nonattainment for the 2008 ozone NAAQS reflects ambient data from
calendar years 2008-2010, and thus reflects in part the VOC emission
reduction benefit from the 2008 EPA coatings rule and still the Phoenix
area appears to be violating the 2008 ozone standard. Thus, with the
information available at the present time, we cannot conclude that the
coatings rule would offset the VOC emissions increases estimated to
occur due to the motorcycle exemption. However, we find that the
expansion of the boundaries of Area A, as submitted in regulatory form
in ADEQ's submittal dated May 25, 2012, would more than offset the
incremental increase in VOC emissions.
    As noted above, the estimated benefit of ``Expansion of Area A
Boundaries'' would be approximately 1.3 metric tons per day of VOC due
to the extension of the applicability of the VEI program to areas not
otherwise subject to the program.\11\ In contrast, the incremental
increase in VOC emissions due to the motorcycle exemption is estimated
by ADEQ to be less than 0.1 metric tons per day (or more specifically,
0.056 mtpd). Thus, we find that exempting motorcycles from emissions
testing under the VEI program, together with expanding the boundaries
of Area A, would not interfere with attainment or maintenance of the
ozone NAAQS in the Phoenix area.
---------------------------------------------------------------------------

    \11\ See page 5-16 of the approved Phoenix-Mesa Eight-Hour Ozone
Attainment Plan, and footnote 5 included in this action.
---------------------------------------------------------------------------

2. Carbon Monoxide
    Carbon monoxide (CO) is a product of incomplete combustion of
fuels. In most urban areas, most of the CO comes from motor vehicle
exhaust.
    In 2005, EPA redesignated the Phoenix area for CO, and approved a
maintenance plan that provides for maintenance of the CO NAAQS in that
area through 2015. See 70 FR 11553 (March 9, 2005) and 70 FR 52926
(September 6, 2005).
    As indicated in Table 2 above, based on ADEQ's estimates, the
motorcycle exemption would increase CO emissions by approximately 0.246
metric tons per day, which represents approximately 0.027% of the
overall CO emissions inventory in this area under existing conditions.
This incremental increase would be more than offset by the expansion of
Area A boundaries.\12\ Moreover, the net reduction in CO emissions due
to these SIP revisions would occur in an area where overall CO
emissions are expected to remain relatively constant over the next 10
years and where ambient CO levels are well below the NAAQS.
---------------------------------------------------------------------------

    \12\ On page ES-8 of MAG's Carbon Monoxide Redesignation Request
and Maintenance Plan for the Maricopa County Nonattainment Area (May
2003), MAG estimates that Area A Expansion would reduce area-wide CO
emissions by 0.1%.
---------------------------------------------------------------------------

    Specifically, overall CO emissions are expected to decrease by only
1% between 2006 and 2015,\13\ and the highest second-highest value
(i.e., the basis for the NAAQS) collected among the 14 stations
comprising the CO monitoring network in the Phoenix area is 4.6 ppm,
eight-hour average, or less than 55% of the 8-hour CO NAAQS (based on
2006-2007 data).\14\
---------------------------------------------------------------------------

    \13\ See MAG's Carbon Monoxide Redesignation Request and
Maintenance Plan for the Maricopa County Nonattainment Area (May
2003), page 3-10.
    \14\ See page 13 of the 2009 VEI SIP Revision.
---------------------------------------------------------------------------

    Therefore, based on the net reduction in CO emissions due to the
VEI SIP Revision and expansion of Area A boundaries, the relatively
constant level of overall CO emissions, and monitoring data that shows
that ambient CO levels remain well below the CO NAAQS, we find that
exempting motorcycles from emissions testing under the VEI program,
together with expanding the boundaries of Area A, would not interfere
with continued attainment of the CO NAAQS in the Phoenix area.
3. Particulate Matter
    EPA has promulgated different NAAQS for particles with a nominal
aerodynamic diameter of 10 microns or less (PM10) and for
particles with a nominal aerodynamic diameter of 2.5 micrometers
(microns) or less (PM2.5). Ambient PM10 and
PM2.5 levels consist of directly-emitted particles as well
as secondary particles formed through atmospheric reactions involving
such precursors as NOX and sulfur dioxide (SO2).
    In 1990, the Phoenix area was designated as a ``moderate''
nonattainment for the PM10 NAAQS by operation of law under
the CAA Amendments of 1990. EPA reclassified the area as ``serious'' in
1996. See 61 FR 21372 (May 10, 1996). In 2002, EPA approved the
``serious area'' PM10 plan, which was intended to provide
for attainment of the PM10 NAAQS in the Phoenix area by
2006. See 67 FR 48718 (July 25, 2002); certain plan elements re-
approved at 71 FR 43979 (August 3, 2006). In 2007, EPA finalized its
finding that the Phoenix area had failed to attain the PM10
NAAQS by the applicable attainment date. See 72 FR 31183 (June 6,
2007). Finally, on February 14, 2011, EPA finalized its finding that
the Phoenix area had failed to submit an attainment demonstration SIP
for its PM10 nonattainment area. See 76 FR 8300 (February
14, 2011). PM10 emissions in the Phoenix area are largely
attributable to coarse particles, composed primarily of geologic
material.\15\
---------------------------------------------------------------------------

    \15\ ``PM-10 Source Apportionment and Deposition Study Prepared
for Maricopa Association of Governments by Sierra Research, Inc.'',
2008, p. 2.
---------------------------------------------------------------------------

    In 2005, EPA designated Maricopa County as ``unclassifiable/
attainment'' for the 1997 PM2.5 NAAQS. See 70 FR 944, at 954
(January 5, 2005). More recently, EPA designated Maricopa County as
``unclassifiable/attainment''

for the 2006 PM2.5 NAAQS. See 76 FR 6056 (February 3, 2011).
Local monitoring by co-located PM10 and PM2.5
monitors confirms that PM2.5 on high PM10 days is
a small fraction of the PM10 concentrations.
    PM10 emissions are emitted as a product of incomplete
combustion along with such other pollutants as CO and VOC, and because
the exemption of motorcycles from emissions testing requirements of the
VEI program in the Phoenix area would incrementally increase emissions
of the latter pollutants, it would also likely result in the
incremental increase of the former as well.
    Neither the MOBILE6.2 nor the MOVES2010 emissions models provide
any PM10 emission reduction credit for the I/M program. In
light of its failure to attain the PM10 NAAQS, however, EPA
requested ADEQ to attempt to quantify the PM10 emissions
impact of this new exemption. ADEQ used the MOBILE6.2 model to estimate
the I/M impact on PM10 emissions from motorcycles based on
the gaseous hydrocarbon emissions. ADEQ's estimated PM10
emissions in Area A due to the exemption of motorcycles from the VEI
program is equivalent to approximately 0.000361% of the total
PM10 emissions in Area A.\16\ However, similar to our
evaluation for ozone, we find that the expansion of the boundaries of
Area A would more than offset the minimal estimated increase in
PM10 emissions due to the motorcycle exemption. As a result,
we conclude that the motorcycle exemption, combined with the expansion
of the boundaries in Area A, would be consistent with attainment of the
PM10 standard in the Phoenix area.
---------------------------------------------------------------------------

    \16\ See pages 11-13 of the 2011 VEI SIP Addendum.
---------------------------------------------------------------------------

    With respect to the PM2.5 standard, all of the
PM10 from exhaust can be assumed to be PM2.5. We
believe that the motorcycle exemption, considered together with the
expansion of Area A boundaries, would not interfere with attainment or
maintenance of the PM2.5 standard because there would be a
net decrease in emissions and because the area is currently attaining
the standard.
4. Air Toxics
    Since the CAA does not have ambient air quality standards for air
toxics, the EPA's interpretation of section 110(l) is that an area's
compliance with any applicable Maximum Achievable Control Technology
(MACT) standards, as well as any Federal Motor Vehicle Control Programs
(FMVCP) under sections 112 or 202(l) of the CAA constitutes an
acceptable demonstration of noninterference for air toxics. Motor
vehicles are not subject to MACT standards, and the VEI SIP Revision,
together with the expansion of Area A boundaries, will not interfere
with any Federal Motor Vehicle Control Programs that apply in the area.
For these reasons, the State thus concludes, and EPA concurs, that the
VEI SIP Revision and expansion of Area A boundaries would not interfere
with any applicable CAA requirements relative to air toxics.
5. Conclusion
    Based on the evaluation presented above, we find that the exemption
of motorcycles in the Phoenix area from the VEI program, coupled with
the expansion of the boundaries of Area A would not interfere with
reasonable further progress or attainment of any of the NAAQS, and
thus, we propose to approve the 2009 VEI SIP Revision, 2011 VEI SIP
Addendum, and the expansion of the boundaries of Area A [i.e., amended
ARS section 49-541(1)] as consistent with the requirements for SIP
revisions under CAA section 110(l).

D. Contingency Provisions of CAA Section 175A(d)

    In 2005, EPA redesignated the Phoenix area from nonattainment to
attainment for the CO NAAQS and approved a maintenance plan. See 70 FR
11553 (March 9, 2005) and 70 FR 52926 (September 6, 2005). The CO
maintenance plan includes contingency elements or plans that we
approved as meeting the requirements of CAA section 175A(d).
    The contingency plan establishes an action (or trigger) level
protective of the NAAQS and identifies several measures, including
expansion of ``Area A'' (the area in which certain control measures
apply), for early implementation as well as consideration of additional
measures on a set schedule following the triggering event. At the time
of redesignation of the Phoenix area to attainment for the CO NAAQS,
the VEI programs were adopted and approved into the Arizona SIP and
were assumed to continue in effect throughout the maintenance periods.
Moreover, the VEI programs at the time of redesignation of these areas
did not exempt motorcycles from the emissions testing requirements.
    Generally, contingency plans should clearly identify the measures
to be adopted, a schedule and procedure for adoption and
implementation, and a specific time limit for action by the State and
should also identify specific indicators, or triggers, which will be
used to determine when the contingency measures need to be implemented.
See EPA Memorandum from John Calcagni, Office of Air Quality Planning
and Standards, entitled ``Procedures for Processing Requests to
Redesignate Areas to Attainment,'' dated September 4, 1992. At a
minimum, CAA section 175A(d) requires that the State adopt as
contingency measures all control measures that had been approved in the
SIP for the area prior to redesignation but that the State subsequently
repeals or relaxes. In this instance, because the EPA-approved VEI
emissions testing requirements applied to motorcycles at the time of
redesignation for the Phoenix area, reinstatement of emissions testing
for this newly-exempt vehicle category must be adopted as contingency
measures for the Phoenix CO maintenance areas to comply with CAA
section 175A(d).
    ADEQ's 2009 VEI SIP Revision includes a new contingency measure
establishing a binding commitment on ADEQ to request Legislative action
to reinstate emissions testing for motorcycles in the Phoenix area
should the applicable area experience a violation of the CO
standards.\17\ Specifically, ADEQ's contingency measure involves
notification to the Legislature by the October following a violation of
the CO standard in the Phoenix area. After notifying the Legislature,
ADEQ will request that the Arizona Legislature enact new legislation to
reinstate the motorcycle exemption during the General Legislative
Session that begins in January. ADEQ's request to the Legislature will
call for testing to be renewed for the newly exempt vehicle category in
the Phoenix testing area beginning the January following the General
Legislative Session.
---------------------------------------------------------------------------

    \17\ See page 19 of the 2009 VEI SIP Revision.
---------------------------------------------------------------------------

    We view ADEQ's contingency measure in the context of the existing
EPA-approved CO contingency plans for the Phoenix area, and as such, we
find that the plans, as amended to include these new contingency
measures, continue to meet the requirements of CAA section 175A(d), and
that the new contingency measure itself is consistent with all
applicable requirements.

IV. EPA's Proposed Action and Request for Public Comment

    Under section 110(k) of the CAA, EPA is proposing to approve the
revisions to the Arizona SIP submitted by ADEQ on November 6, 2009 and
January 11, 2011 concerning the exemption of motorcycles from the
Arizona VEI program in the Phoenix area, because we find that the
revisions meet all

applicable requirements, and together with the expansion of the
geographic area to which the VEI and other air pollution control
measures apply, would not interfere with reasonable further progress or
attainment of any of the national ambient air quality standards. EPA is
also proposing to approve the revised statutory provision [amended
Arizona Revised Statutes (ARS) section 49-541(1)], submitted by ADEQ on
May 25, 2012,\18\ that expands the boundaries of Area A, i.e., the area
in which the various air pollution control measures (including the VEI,
and cleaner burning gasoline and stage II vapor recovery programs) in
the Phoenix area apply.
---------------------------------------------------------------------------

    \18\ Final approval of the amendment to ARS 49-541(1) that
expands the boundaries of ``Area A'' to those promulgated by the
Arizona Legislature in 2001 would supersede the previous versions of
ARS 49-541(1) approved into the Arizona SIP and would expand the
applicability under the Arizona SIP of the VEI program, the CBG
program, the Stage II vapor recovery program and any other Arizona
SIP control measure that relies on the definition of ``Area A'' in
ARS 49-541(1).
---------------------------------------------------------------------------

    We will accept comments from the public on this proposal for the
next 30 days.

V. Statutory and Executive Order Reviews

    Under the Clean Air Act, the Administrator is required to approve a
SIP submission that complies with the provisions of the Act and
applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a).
Thus, in reviewing SIP submissions, EPA's role is to approve state
choices, provided that they meet the criteria of the Clean Air Act.
Accordingly, this action merely proposes to approve state law as
meeting Federal requirements and does not impose additional
requirements beyond those imposed by state law. For that reason, this
proposed action:
     Is not a ``significant regulatory action'' subject to
review by the Office of Management and Budget under Executive Order
12866 (58 FR 51735, October 4, 1993);
     Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
     Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the Clean Air Act; and
     Does not provide EPA with the discretionary authority to
address, as appropriate, disproportionate human health or environmental
effects, using practicable and legally permissible methods, under
Executive Order 12898 (59 FR 7629, February 16, 1994).

    In addition, this proposed rule does not have tribal implications
as specified by Executive Order 13175 (65 FR 67249, November 9, 2000),
because the SIP is not approved to apply in Indian country located in
the state, and EPA notes that it will not impose substantial direct
costs on tribal governments or preempt tribal law.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide,
Incorporation by reference, Intergovernmental relations, Oxides of
nitrogen, Ozone, Reporting and recordkeeping requirements, Volatile
organic compounds.

    Dated: October 22, 2012.
Jared Blumenfeld,
Regional Administrator, Region IX.
[FR Doc. 2012-26977 Filed 11-2-12; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 79, Number 25 (Thursday, February 6, 2014)]
[Notices]
[Pages 7246-7250]
[FR Doc No: 2014-02500]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71454; File No. SR-NYSE-2014-06]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Amending Its Price List To (i) Increase the Credit for Agency Cross
Trades; (ii) Increase the Fee for Certain Executions at the Close;
(iii) Increase the ``Tier 1 Adding Credit;'' (iv) Increase the Fee for
Certain Floor Broker Discretionary e-Quotes; (v) Increase the Credit
for Certain Floor Broker Executions That Add Liquidity; (vi) Increase
the Credit for Certain Supplemental Liquidity Provider Executions; and
(vii) Increase the Fee for Executions in Crossing Session II

January 31, 2014.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on January 23, 2014, New York Stock Exchange LLC (``NYSE''
or the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I,
II, and III below, which Items have been prepared by the self-
regulatory organization. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend its Price List to (i) increase the
credit for agency cross trades; (ii) increase the fee for certain
executions at the close; (iii) increase the ``Tier 1 Adding Credit;''
(iv) increase the fee for certain Floor broker

discretionary e-Quotes (``d-Quotes''); (v) increase the credit for
certain Floor broker executions that add liquidity; (vi) increase the
credit for certain Supplemental Liquidity Provider (``SLP'')
executions; and (vii) increase the fee for executions in Crossing
Session II. The Exchange proposes to implement the fee change effective
February 1, 2014. The text of the proposed rule change is available on
the Exchange's Web site at www.nyse.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its Price List to (i) increase the
credit for agency cross trades; (ii) increase the fee for certain
executions at the close; (iii) increase the ``Tier 1 Adding Credit;''
(iv) increase the fee for certain d-Quotes; (v) increase the credit for
certain Floor broker executions that add liquidity; (vi) increase the
credit for certain SLP executions; and (vii) increase the fee for
executions in Crossing Session II. The Exchange proposes to implement
the fee change effective February 1, 2014.\4\ The proposed change would
have no impact on pricing for transactions in securities priced below
$1.00.
---------------------------------------------------------------------------

    \4\ The Exchange notes that it has previously filed with the
Securities and Exchange Commission a proposed rule change to amend
the Price List (File No. SR-NYSE-2014-05). Exhibit 5 to SR-NYSE-
2014-05 specified an effective date for the revised Price List of
January 27, 2014 (changed from December 18, 2013). Exhibit 5 to the
instant proposed rule change specifies an effective date of February
1, 2014 (changed from December 18, 2013). On January 27, 2014,
subject to effectiveness of SR-NYSE-2014-05, the Exchange will
update the Price List to reflect the fee change reflected in SR-
NYSE-2014-05, with an effective date of January 27, 2014. On
February 1, 2014, the Exchange will further update the Price List to
reflect the changes set forth in the instant proposed rule change,
with an effective date of February 1, 2014.
---------------------------------------------------------------------------

Agency Cross Trades
    A credit of $0.0003 per share is currently provided for an agency
cross trade, which is a trade where a member organization has customer
orders to buy and sell an equivalent amount of the same security. The
Exchange proposes to increase this credit to $0.0006 per share.
Executions at the Close
    A fee of $0.0001 per share currently applies to executions at the
close (except for market at-the-close (``MOC'') and limit at-the-close
(``LOC'') orders) and Floor broker executions swept into the close if a
member organization executes an average daily volume (``ADV'') on the
Exchange during the billing month of at least 1,000,000 shares in such
orders. The Exchange proposes to increase the fee to $0.0002 per share.
Such executions would continue to be free of charge if the member
organization does not reach the 1,000,000-share threshold.
Tier 1 Adding Credit
    The Tier 1 Adding Credit currently provides for a credit of $0.0018
per share (or $0.0010 for a Non-Displayed Reserve Order or $0.0015 for
a Midpoint Passive Liquidity (``MPL'') Order).\5\ The Exchange proposes
to increase this credit to $0.0020 per share.\6\
---------------------------------------------------------------------------

    \5\ A member organization qualifies for the Tier 1 Adding Credit
when adding liquidity to the Exchange if (i) the member organization
has ADV that adds liquidity to the Exchange during the billing month
(``Adding ADV,'' which excludes any liquidity added by a Designated
Market Maker (``DMM'')) that is at least 1.5% of consolidated ADV
(``CADV'') in NYSE-listed securities during the billing month,
excluding odd lots through January 31, 2014 (``NYSE CADV''), and
executes MOC and LOC orders of at least 0.375% of NYSE CADV, (ii)
the member organization has Adding ADV that is at least 0.8% of NYSE
CADV, executes MOC and LOC orders of at least 0.12% of NYSE CADV,
and adds liquidity to the NYSE as an SLP for all assigned SLP
securities in the aggregate (including shares of both an SLP
proprietary trading unit (``SLP-Prop'') and an SLP market maker
(``SLMM'') of the same member organization) of more than 0.15% of
NYSE CADV, or (iii) the member organization has ADV that adds
liquidity in customer electronic orders to the NYSE (``Customer
Electronic Adding ADV,'' which shall exclude any liquidity added by
a Floor broker, DMM, or SLP) during the billing month that is at
least 0.5% of NYSE CADV, executes MOC and LOC orders of at least
0.12% of NYSE CADV, and has Customer Electronic Adding ADV during
the billing month that, taken as a percentage of NYSE CADV, is at
least equal to the member organization's Customer Electronic Adding
ADV during September 2012 as a percentage of CADV in NYSE-listed
securities during September 2012 plus 15%.
    \6\ The applicable credit of $0.0010 for a Non-Displayed Reserve
Order or $0.0015 for an MPL Order would not change as a result of
this proposal.
---------------------------------------------------------------------------

d-Quotes
    A fee of $0.0010 per share currently applies to d-Quotes of a Floor
broker that executes an ADV of at least 500,000 shares of d-Quotes that
remove liquidity from the Exchange during the month. The Exchange
proposes to increase this fee to $0.0015. Such executions would
continue to be charged a fee of $0.0005 per share if the member
organization does not reach the 500,000-share threshold.
Floor Broker Executions That Add Liquidity
    A credit of $0.0019 per share (or $0.0015 for an MPL Order)
currently applies to executions of orders sent to a Floor broker for
representation on the Exchange when adding liquidity to the Exchange.
The Exchange proposes that the applicable credit for a Floor broker
that is part of a member organization that qualifies for the Tier 1
Adding Credit would be the same rate that applies to the Tier 1 Adding
Credit.\7\ This would be the $0.0020 per share credit proposed above.
For Floor brokers that are not part of a member organization that
qualifies for the Tier 1 Adding Credit, the current $0.0019 rate would
continue to apply.
---------------------------------------------------------------------------

    \7\ The applicable credit of $0.0015 for an MPL Order would not
change as a result of this proposal.
---------------------------------------------------------------------------

SLP Credits
    A credit of $0.0025 per share (or $0.0020 for a Non-Displayed
Reserve Order or $0.0015 for an MPL Order) currently applies to SLP
transactions in securities with a per share price of $1.00 or more that
add liquidity on the Exchange if the SLP (i) meets the 10% average or
more quoting requirement in an assigned security pursuant to NYSE Rule
107B (quotes of an SLP-Prop and an SLMM of the same member organization
are not aggregated), (ii) adds liquidity for all assigned SLP
securities in the aggregate (including shares of both an SLP-Prop and
an SLMM of the same member organization) of an ADV of more than 0.22%
of NYSE CADV, (iii) adds liquidity for all assigned SLP securities in
the aggregate (including shares of both an SLP-Prop and an SLMM of the
same member organization) of an ADV during the billing month that is at
least equal to the SLP's September 2012 Adding ADV (``SLP Baseline
ADV'') plus 0.18% of NYSE CADV, and (iv) has a minimum provide [sic]
ADV for all assigned SLP securities of 12 million shares. The Exchange
proposes to increase this credit to $0.0027 per share

or $0.0022 per share if a Non-Displayed Reserve Order.\8\
---------------------------------------------------------------------------

    \8\ The applicable credit of $0.0015 for an MPL Order would not
change as a result of this proposal.
---------------------------------------------------------------------------

Crossing Session II
    A fee of $0.0002 per share currently applies to executions in
Crossing Session II. The Exchange proposes to increase the fee to
$0.0004. Fees for executions in Crossing Session II would continue to
be capped at $100,000 per month per member organization.
    The proposed change is not otherwise intended to address any other
issues, and the Exchange is not aware of any problems that member
organizations would have in complying with the proposed change.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\9\ in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\10\ in
particular, because it provides for the equitable allocation of
reasonable dues, fees, and other charges among its members, issuers and
other persons using its facilities and does not unfairly discriminate
between customers, issuers, brokers or dealers.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed increase in the credit for
agency cross trades is reasonable because such trades are typically
large block orders, and providing a higher credit would encourage their
submission to a public exchange, thereby promoting price discovery and
transparency. The Exchange believes that the proposed increase is
equitable and not unfairly discriminatory because all member
organizations that engage in agency trading would be eligible to
receive the higher credit, and all market participants would benefit
from the price discovery and transparency provided by large block
orders.
    The Exchange believes that it is reasonable to increase the fee for
executions at the close (other than MOC and LOC orders) and Floor
broker executions swept into the close if a member organization
executes an ADV of at least 1,000,000 of such executions on a combined
basis. Specifically, the Exchange's closing auction is a recognized
industry benchmark,\11\ and member organizations receive a substantial
benefit from the Exchange in obtaining an ADV of 1,000,000 or more of
such executions at the Exchange's closing price on a daily basis. In
that respect, this fee increase is designed in part to offset the
reduced fees that the Exchange collects from executions of MOC and LOC
orders, which were lowered effective August 1, 2013.\12\ The Exchange
also believes that the proposed fee is equitable and not unfairly
discriminatory. Specifically, while member organizations that reach the
threshold of an ADV of at least 1,000,000 combined executions are
generally larger member organizations that are deriving a substantial
benefit from this high volume of executions, the Exchange must
nonetheless encourage liquidity from multiple sources. Allowing member
organizations with lower execution volumes to continue to obtain
executions at the close at no charge would encourage them to continue
to send orders to the Exchange for the closing auction. The Exchange
believes that the threshold it has selected would continue to incent
order flow from multiple sources and help maintain the quality of the
Exchange's closing auctions, which benefits all market participants.
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    \11\ For example, the pricing and valuation of certain indices,
funds, and derivative products require primary market prints.
    \12\ See Securities Exchange Act Release No. 70193 (August 14,
2013), 78 FR 51251 (August 20, 2013) (SR-NYSE-2013-56).
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    The Exchange believes that the proposed increase in the Tier 1
Adding Credit is reasonable because it would further contribute to
incenting member organizations to provide additional amounts of
liquidity on the Exchange. The Exchange believes that the proposed
increase is equitable and not unfairly discriminatory because all
member organizations would benefit from such increased levels of
liquidity and because the Tier 1 Adding Credit would continue to
provide a higher credit to member organizations that is reasonably
related to the value to the Exchange's market quality associated with
higher volumes of liquidity. As is currently the case, member
organizations would continue to have three distinct methods of
qualifying for the Tier 1 Adding Credit.\13\
---------------------------------------------------------------------------

    \13\ See supra note 6.
---------------------------------------------------------------------------

    The Exchange believes that the proposed increase in the d-Quote
rate for Floor brokers executing an ADV of at least 500,000 d-Quotes
that remove liquidity from the Exchange is reasonable because a
substantial benefit is derived from obtaining executions for such a
high volume of d-Quotes. The Exchange also believes that the proposed
rate is equitable and not unfairly discriminatory. Specifically, while
Floor brokers that reach the threshold of an ADV of at least 500,000
combined executions are generally larger member organizations that are
deriving a substantial benefit from this high volume of executions, the
Exchange must nonetheless encourage liquidity from multiple sources.
Allowing Floor brokers with lower execution volumes to continue to use
d-Quotes to remove liquidity, but at the lower fee of $0.0005, would
further incent order flow from multiple sources and help maintain the
quality of order execution on the Exchange, which benefits all market
participants. The Exchange further believes that it is reasonable to
continue to maintain d-Quote take rates that are lower than the take
rate that applies to Floor broker transactions not otherwise specified
on the Price List (i.e., the $0.0022 and $0.0020 per share rates)
because d-Quotes, in particular, encourage additional liquidity during
the trading day and incent Floor brokers to provide additional intra-
quote price improved trading, which contribute to the overall quality
of the Exchange's market.
    The Exchange believes that the proposed increase in the credit for
Floor brokers that are part of a member organization that qualifies for
the Tier 1 Adding Credit is reasonable. Without this proposed change,
and due to the proposed increase in the Tier 1 Adding Credit from
$0.0018 to $0.0020, a Floor broker's transactions that add liquidity
would receive a credit that would be inferior to that of the non-Floor
broker transactions of the same member organization. The Exchange
believes that this result would disincentivize member organizations
from sending orders to a Floor broker and could therefore decrease the
amount of liquidity-adding volume available on the Exchange's Floor.
The Exchange believes that the proposed change is equitable and not
unfairly discriminatory because a Floor broker would only receive the
Tier 1 Adding Credit rate if it is part of a member organization that
qualifies for the Tier 1 Adding Credit and because Floor broker volume
is counted when determining whether a member organization has reached
the applicable Tier 1 Adding Credit thresholds.
    The Exchange believes that the proposed increase in the credit for
SLPs that add liquidity to the Exchange with a per share price of $1.00
or more if the SLP meets certain requirements is reasonable because it
would create added incentive for SLPs to provide liquidity in assigned
securities. This is further reasonable because the added incentive
created by the availability of the increased credit is reasonably
related to an SLP's liquidity obligations on the Exchange. The
corresponding

increase in the credit applicable to Non-Displayed Reserve Orders is
also reasonable because it would maintain the existing $0.0005
difference between these order types and all other order types
(excluding MPL Orders).\14\ The Exchange believes that the proposed
increase in the credit is equitable and not unfairly discriminatory
because, as is currently the case under the existing rate, the credit
is available to all qualifying SLPs on an equal basis and because the
credit is reasonably related to the value to the Exchange's market
quality associated with higher volumes.
---------------------------------------------------------------------------

    \14\ MPL Order fees and credits apply equally to all market
participants and MPL Orders are not eligible for any tiered or
additional credits or reduced fees. See SR-NYSE-2014-05.
---------------------------------------------------------------------------

    The Exchange believes that the proposed increase in the fee for
Crossing Session II transactions is reasonable because it would more
closely align the rate with the other rates within the Price List. The
Exchange also believes that the proposed increase in the fee for
Crossing Session II transactions is equitable and not unfairly
discriminatory because such fees would apply to executions of all
member organizations in Crossing Session II and because such fees would
continue to be capped at $100,000 per member organization per month.
    Finally, the Exchange believes that it is subject to significant
competitive forces, as described below in the Exchange's statement
regarding the burden on competition.
    For these reasons, the Exchange believes that the proposal is
consistent with the Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\15\ the Exchange
believes that the proposed rule change would not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

    Specifically, the Exchange believes that the proposed increase in
the credit for agency cross trades would further encourage the
submission of what are typically large block orders to a public
exchange and thereby allow the Exchange to more effectively compete
with alternative trade reporting facilities for market share.
    The proposed increased fee for executions at the close and Floor
broker executions swept into the close would continue to apply only to
member organizations that obtain high volumes of executions at the
close on a daily basis. The Exchange believes that this small fee would
not result in a burden on competition for these member organizations in
light of the substantial benefit that they obtain from these
executions. Participation in the closing by member organizations with
relatively lower closing activity is also important to the quality of
the closing, and the Exchange therefore believes that continuing to not
charge member organizations with executions below the 1,000,000-share
monthly ADV threshold would not result in a burden on competition.
    The proposed increase in the Tier 1 Adding Credit would not burden
competition, but rather would encourage member organizations to submit
additional amounts of liquidity on the Exchange. In addition, the
method of qualifying for the Tier 1 Adding Credit would continue to not
burden competition, in that the qualification parameters encourage
multiple sources of liquidity, including from those member
organizations without an SLP or Floor broker unit.
    The Exchange believes that Floor brokers that are removing higher
volumes of liquidity via d-Quotes from the Exchange would not be
burdened by paying a higher fee for such executions, especially because
a substantial benefit is derived from obtaining executions for such a
high volume of d-Quotes. The Exchange also believes that continuing to
charge Floor brokers below the 500,000-share monthly ADV threshold a
lower rate of $0.0005 per share would continue to not result in a
burden on competition, because such rate would continue to incent order
flow from multiple sources and help maintain the quality of order
execution on the Exchange, which benefits all market participants.
    The Exchange believes that applying the Tier 1 Adding Credit rate
to Floor broker executions that add liquidity if the Floor broker is
part of a qualifying member organization would not burden competition.
Rather, the Exchange believes that the proposed change would eliminate
a potential disincentive to sending orders to Floor brokers and would
therefore prevent decreased levels of available liquidity on the Floor
of the Exchange.
    The increase in the credit for certain SLP executions would not
burden competition because all SLPs would have the opportunity to
qualify for the credit. The increased credit would create an added
incentive for SLPs to provide liquidity on the Exchange, thereby also
contributing to the Exchange's competitiveness with other markets.
    The increase in the fee for executions in Crossing Session II would
not burden competition because it would apply to all member
organizations and because fees for member organizations that are
particularly active in Crossing Session II would continue to be capped
at $100,000 per member organization per month.
    Finally, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues if they deem fee levels at a particular venue to be
excessive or rebate opportunities available at other venues to be more
favorable. In such an environment, the Exchange must continually adjust
its fees and rebates to remain competitive with other exchanges and
with alternative trading systems that have been exempted from
compliance with the statutory standards applicable to exchanges.
Because competitors are free to modify their own fees and credits in
response, and because market participants may readily adjust their
order routing practices, the Exchange believes that the degree to which
fee changes in this market may impose any burden on competition is
extremely limited. As a result of all of these considerations, the
Exchange does not believe that the proposed changes will impair the
ability of member organizations or competing order execution venues to
maintain their competitive standing in the financial markets.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \16\ of the Act and subparagraph (f)(2) of Rule
19b-4\17\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78s(b)(3)(A).
    \17\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings

under Section 19(b)(2)(B) \18\ of the Act to determine whether the
proposed rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSE-2014-06 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2014-06. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Section, 100 F Street NE.,
Washington, DC 20549-1090, on official business days between the hours
of 10:00 a.m. and 3:00 p.m. Copies of the filing will also be available
for Web site viewing and printing at the NYSE's principal office and on
its Internet Web site at www.nyse.com. All comments received will be
posted without change; the Commission does not edit personal
identifying information from submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSE-2014-06 and should be submitted on
or before February 27, 2014.
---------------------------------------------------------------------------

    \19\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-02500 Filed 2-5-14; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 172 (Friday, September 4, 2015)]
[Notices]
[Page 53512]
[FR Doc No: 2015-21983]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. EL15-96-000]

Backyard Farms Energy LLC, Devonshire Energy LLC: Notice of
Petition for Declaratory Order

    Take notice that on August 27, 2015, in accordance with section
35.42(a)(2) of the regulations of the Federal Energy Regulatory
Commission (Commission), 18 CFR 35.42(a)(2), Order No. 652,\1\ and
Order No. 697,\2\ Backyard Farms Energy LLC and Devonshire Energy LLC
(MBR Entities), filed a petition for declaratory order requesting that
the Commission find that the MBR Entities are not affiliates of or
under ``common control'' with the Fidelity Accounts or FIL Limited
(FIL), or, in the alternative, that even if such an affiliation is
deemed to exist, investments by the Fidelity Accounts or FIL would not
affect the conditions relied upon by the Commission when granting
market-based rate authorization to the extent such investments are
passive investments, as more fully described in the petition.
---------------------------------------------------------------------------

    \1\ Reporting Requirement for Changes in Status for Public
Utilities With Market-Based Rate Authority, Order No. 652, 70 FR
8253 (Feb. 18, 2005), reh'g, 111 FERC ] 61,413 (2005).
    \2\ Market-Based Rates for Wholesale Sales of Electric Energy,
Capacity and Ancillary Services by Public Utilities, Order No. 697,
72 FR 39904 (July 20, 2007), clarified, 72 FR 72239 (Dec. 20, 2007),
reh'g, Order No. 697-A, 73 FR 25832 (May 7, 2008) (``Order No. 697-
A''), reh'g, 124 FERC ] 61,055 (2008), reh'g, Order No. 697-B, 73 FR
79610 (Dec. 30, 2008), reh'g, Order No. 697-C, 74 FR 30924 (June 29,
2009), reh'g, Order No. 697-D, 57 FR 14342 (March 25, 2010),
clarified 131 FERC ] 61,021 (2010), reh'g denied, 134 FERC ] 61,046
(2011), reh'g denied, 143 FERC ] 61,126 (2013).
---------------------------------------------------------------------------

    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211, 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. Such notices,
motions, or protests must be filed on or before the comment date.
Anyone filing a motion to intervene or protest must serve a copy of
that document on the Petitioner.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper using the ``eFiling'' link at http://www.ferc.gov. Persons unable to file electronically should submit an
original and 5 copies of the protest or intervention to the Federal
Energy Regulatory Commission, 888 First Street NE., Washington, DC
20426.
    This filing is accessible on-line at http://www.ferc.gov, using the
``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC. There is an ``eSubscription''
link on the Web site that enables subscribers to receive email
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please email
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For
TTY, call<PHONE_NUMBER>.
    Comment Date: 5:00 p.m. Eastern time on September 28, 2015.

    Dated: August 28, 2015.
Kimberly D. Bose,
Secretary.
[FR Doc. 2015-21983 Filed 9-3-15; 8:45 am]
 BILLING CODE 6717-01-P