[Federal Register Volume 76, Number 248 (Tuesday, December 27, 2011)]
[Rules and Regulations]
[Pages 80760-80777]
[FR Doc No: 2011-32821]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 52 and 97

[EPA-HQ-OAR-2009-0491; FRL-9609-9]
RIN 2060-AR01

Federal Implementation Plans for Iowa, Michigan, Missouri,
Oklahoma, and Wisconsin and Determination for Kansas Regarding
Interstate Transport of Ozone

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: In this final rule, EPA is concluding that emissions from
Iowa, Kansas, Michigan, Missouri, Oklahoma, and Wisconsin significantly
contribute to downwind nonattainment or interfere with maintenance of
the 1997 ozone National Ambient Air Quality Standards (NAAQS)in other
states. Each of these states except Oklahoma is already included in the
annual NOX program that was finalized in July 2011. However,
this rule does not affect that program.
    EPA is finalizing Federal Implementation Plans (FIPs) to address
the emissions in each of these states except for Kansas, for which EPA
is not finalizing a FIP at this time. The FIPs apply the requirements
of the ozone season NOX program in the Transport Rule
(Federal Implementation Plans to Reduce Interstate Transport of Fine
Particulate Matter and Ozone in 27 States; Correction of SIP Approvals
for 22 States) to sources in Iowa, Michigan, Missouri, Oklahoma, and
Wisconsin. In addition, this action finalizes the budgets; associated
variability limits, new unit set-asides, and Indian country new unit
set-asides; and unit-level allowance allocations for each state under
the FIPs.

DATES: This final rule is effective on January 26, 2012.

ADDRESSES: EPA has established a docket for this action under Docket ID
No. OAR-EPA-HQ-OAR-2009-0491. All documents in the docket are listed on
the http://www.regulations.gov Web site. Although listed on 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, is not placed on the Internet
and will be publicly available only in hard copy form. Publicly
available docket materials are available either electronically through
http://www.regulations.gov or in hard copy at the EPA Docket Center,
EPA West, Room B102, 1301 Constitution Ave. NW., Washington, DC. The
Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding legal holidays. The telephone number for the Public
Reading Room is<PHONE_NUMBER>, and the telephone number for the Air
Docket is<PHONE_NUMBER>. This Docket Facility is open from 8 a.m. to
5:30 p.m., Monday through Friday, excluding legal holidays. The Docket
telephone number is<PHONE_NUMBER>, fax<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: For general questions concerning this
action, contact Ms. Gabrielle Stevens, Clean Air Markets Division,
Office of Atmospheric Programs, Mail Code 6204J, Environmental
Protection Agency, 1200 Pennsylvania Avenue NW., Washington, DC 20460;
telephone number:<PHONE_NUMBER>; fax number:<PHONE_NUMBER>; email
address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Glossary of Terms and Abbreviations

    The following are abbreviations of terms used in final rule:

CFR Code of Federal Regulations
EGU Electric Generating Unit
FIP Federal Implementation Plan
FR Federal Register
EPA U.S. Environmental Protection Agency
ICR Information Collection Request
NAAQS National Ambient Air Quality Standards
NODA Notice of Data Availability
NOX Nitrogen Oxides
SIP State Implementation Plan
OMB Office of Management and Budget
PM2.5 Fine Particulate Matter, Less Than 2.5 Micrometers
PM Particulate Matter
RIA Regulatory Impact Analysis
SNPR Supplemental Notice of Proposed Rulemaking
SO2 Sulfur Dioxide
TSD Technical Support Document

II. General Information

A. Does this action apply to me?

    Regulated Entities. Entities regulated by this action primarily are
fossil fuel-

fired boilers, turbines, and combined cycle units that serve generators
that produce electricity for sale or cogenerate electricity for sale
and steam. Regulated categories and entities include:

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               Category                         NAICS code         Examples of potentially  regulated industries
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Industry..............................  2211, 2212, 2213.........  Electric service providers.
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    This table is not intended to be exhaustive, but rather to provide
a guide for readers regarding entities likely to be regulated by this
action. This table lists the types of entities which EPA is now aware
could potentially be regulated by this action. Other types of entities
not listed in this table could also be regulated. To determine whether
your facility, company, business, organization, etc., is regulated by
this action, you should carefully examine the applicability criteria in
Sec. Sec.  97.404, 97.504, and 97.604 of title 40 of the Code of
Federal Regulations. If you have questions regarding the applicability
of this action to a particular entity, consult the person listed in the
preceding FOR FURTHER INFORMATION CONTACT section.

B. Where can I get a copy of this document and other related
information?

    In addition to being available in the docket, an electronic copy of
this rule will also be available on the World Wide Web. Following
signature by the EPA Administrator, a copy of this action will be
posted on the EPA Web site at http://www.epa.gov/crossstaterule.

C. How is the preamble organized?

I. Glossary of Terms and Abbreviations
II. General Information
III. Executive Summary
    A. EPA's Authority for This Rule
    B. Finalizing FIPs To Address Significant Contribution to
Nonattainment and Interference With Maintenance in:
    i. Iowa
    ii. Michigan
    iii. Missouri
    iv. Oklahoma
    v. Wisconsin
    C. Kansas
    D. Allegan County, Michigan, Receptor
    E. Ozone Season NOX Emission Budgets for Five States
    F. Implementation of the Transport Rule NOX Ozone
Season Trading Program
IV. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From
Environmental Health and Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect
Energy Supply, Distribution or Use
    I. National Technology Transfer Advancement Act
    J. Executive Order 12898: Federal Actions to Address
Environmental Justice in Minority Populations and Low-Income
Populations
    K. Congressional Review Act
    L. Judicial Review

III. Summary

    In this final rule, EPA finalizes its conclusion that Iowa, Kansas,
Michigan, Missouri, Oklahoma, and Wisconsin significantly contribute to
nonattainment or interfere with maintenance of the 1997 ozone National
Ambient Air Quality Standards (NAAQS) in other states. These states'
final ozone-season NOX budgets are presented and discussed
in section III.E below, and more detailed information can be found in
the ``Determination of State Budgets for the Final Ozone Supplemental
of the Transport Rule'' TSD found in the docket for this rulemaking.
    In addition, EPA is finalizing FIPs to address the interstate
transport requirements of the relevant NAAQS using a program created in
the Transport Rule\1\ that was finalized on July 6, 2011 (76 FR 48208,
August 8, 2011). EPA is implementing the ozone season NOX
program in the Transport Rule (with minor revisions) as the FIPs for
Iowa, Michigan, Missouri, Oklahoma, and Wisconsin to address the
emissions identified as significantly contributing to nonattainment or
interfering with maintenance with respect to the 1997 ozone NAAQS. With
respect to Kansas, EPA is not finalizing the proposed FIP because we do
not have the authority to do so at this time, as discussed in section
III.C below.
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    \1\ Federal Implementation Plans to Reduce Interstate Transport
of Fine Particulate Matter and Ozone in 27 States; Correction of SIP
Approvals for 22 States: Final Rule. Available on the Web at http://www.epa.gov/crossstaterule.
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    As explained in the final Transport Rule preamble (76 FR 48208),
EPA improved and updated both steps of its significant contribution
analysis from the Transport Rule proposal. EPA updated its modeling
platforms and modeling inputs in response to public comments received
on the proposed Transport Rule and subsequent Notices of Data
Availability (NODAs), and performed other standard updates. It updated
and improved the modeling platforms and modeling inputs used to
identify states with contributions to certain downwind receptors that
meet or exceed specified air quality thresholds. It also updated and
improved its analysis for identifying any emissions within such states
that constitute the state's significant contribution to nonattainment
or interference with maintenance. Therefore, the results of the
analysis conducted for the final Transport Rule differed somewhat from
the results of the analysis conducted for the proposal.
    With respect to the 1997 ozone NAAQS, the analysis EPA conducted
for the Transport Rule proposal did not identify Wisconsin, Iowa, and
Missouri as states that significantly contribute to nonattainment and/
or interfere with maintenance of the ozone NAAQS in another state.
However, the analysis conducted for the final Transport Rule showed
that emissions from these three states interfere with maintenance of
the ozone NAAQS in another state. The analysis also showed that
emissions from Missouri significantly contribute to nonattainment in
another state. Additionally, the analysis identified two ozone
maintenance receptors that were not identified by the modeling
conducted for the proposal. These two ozone maintenance receptor sites
are located in Allegan County, Michigan and Harford County, Maryland.
Five states (Iowa, Kansas, Michigan, Oklahoma, and Wisconsin), which
EPA identified as interfering with maintenance problems at the Allegan
County and/or Harford County receptors, based on modeling for the final
rule, uniquely contribute to these receptors, i.e., absent these
receptors the states would not be covered by the Transport Rule ozone-
season program (although the states, except for Oklahoma, are covered
by the Transport Rule annual programs). EPA did not issue FIPs with
respect to the 1997 ozone NAAQS or finalize ozone season

NOX budgets for these states in the final Transport Rule.
Instead, EPA published a supplemental notice of proposed rulemaking (76
FR 40662) to provide an opportunity for public comment on our
conclusion that these states significantly contribute to nonattainment
or interfere with maintenance of the 1997 ozone NAAQS.
    EPA did not change its methodology between the proposed Transport
Rule and the final Transport Rule for identifying upwind states that
significantly contribute to nonattainment or interfere with maintenance
in other states; nor did EPA change its methodology for identifying
receptors of concern with respect to maintenance of the 1997 ozone
NAAQS. The final Transport Rule's air quality modeling identified the
new states and new receptors described above based on modeling using
updated input information (including emission inventories), much of
which was provided to EPA through public comment on the proposal and
subsequent NODAs.
    In the proposal for this supplemental rulemaking, EPA took comment
only on (a) its conclusions that the six states identified above have
emissions that significantly contribute to nonattainment and/or
interfere with maintenance of the 1997 ozone NAAQS and (b) its decision
to use the final Transport Rule programs as the FIPs to address these
emissions in the six states.
    EPA did not reconsider or take comment on any aspect of the final
Transport Rule, including any aspect of the methodology used to
identify receptors for nonattainment; the methodology used to identify
receptors for maintenance; the methodology used to identify any
specific state's significant contribution and interference with
maintenance; the methodologies used to establish state budgets,
variability limits, and state assurance levels; and the methodologies
used to allocate allowances to existing units, to establish new unit
set-asides and Indian country new unit set-asides, and to allocate
allowances in these set-asides. EPA provided an adequate opportunity
for public comment on all of these issues during the comment period for
the proposed Transport Rule and during the comment periods for the
associated NODAs.\2\ EPA received numerous comments on the proposed
Transport Rule and on the associated NODAs and considered all
significant comments received during the comment periods for these
actions before finalizing the Transport Rule. Responses to those
comments are available in the public docket for the final Transport
Rule.
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    \2\ Notice of Data Availability Supporting Federal
Implementation Plans to Reduce Interstate Transport of Fine
Particulate Matter and Ozone (75 FR 53613; September 1, 2010). This
NODA provided additional information on an updated version of the
power sector modeling platform and data inputs EPA proposed to use
to support the final Transport Rule.
    Notice of Data Availability Supporting Federal Implementation
Plans to Reduce Interstate Transport of Fine Particulate Matter and
Ozone: Revisions to Emission Inventories (75 FR 66055; October 27,
2010).
    Notice of Data Availability for Federal Implementation Plans to
Reduce Interstate Transport of Fine Particulate Matter and Ozone:
Request for Comment on Alternative Allocations, Calculation of
Assurance Provision Allowance Surrender Requirements, New-Unit
Allocations in Indian Country, and Allocations by States (76 FR
1109; January 7, 2011).
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    In the proposal for this rulemaking, EPA also did not reconsider or
take comment on the emission inventories used for the final Transport
Rule modeling, including the emission inventories for the six states
identified above. EPA provided ample opportunity for comment on these
inventories during the comment period for the proposed Transport Rule
and the comment periods for the NODAs associated with that proposal.
Inventories for all states included in the modeling domain were made
available for public comment during that process. The public had ample
reason to comment on the inventories for these six states, moreover,
not only because these inventories affect the modeling for all states
in the modeling domain, but also because EPA was proposing to include
all six states in at least one of the Transport Rule trading programs
and the inventories were used in the analysis supporting that proposal.
For instance, EPA proposed to include Kansas and Michigan in the ozone-
season NOX, annual NOX, and annual SO2
programs; proposed to include Oklahoma in the ozone-season
NOX program; and proposed to include Iowa, Missouri, and
Wisconsin in the SO2 and annual NOX programs.
Commenters therefore had reason to look closely at all of the emission
data for all six states that EPA made available in the proposal and the
NODAs. Ultimately, EPA made numerous changes to these inventories in
response to public comments.

A. EPA's Authority for this Rule

    The statutory authority for this action is provided by the CAA, as
amended, 42 U.S.C. 7401 et seq. Section 110(a)(2)(D) of the CAA, often
referred to as the ``good neighbor'' provision of the Act, requires
states to prohibit certain emissions because of their impact on air
quality in downwind states. Specifically, it requires all states,
within 3 years of promulgation of a new or revised NAAQS, to submit
SIPs that prohibit certain emissions of air pollutants because of the
impact they would have on air quality in other states. 42 U.S.C. Sec.
7410(a)(2)(D). Section 301(a)(1) of the CAA gives the Administrator of
EPA general authority to prescribe such regulations as are necessary to
carry out her functions under the Act. 42 U.S.C. 7601(a)(1). Section
110(c)(1) requires the Administrator to promulgate a FIP at any time
within 2 years after the Administrator (a) finds that a state has
failed to make a required SIP submission or that such a submission is
incomplete or (b) disapproves a SIP submission, unless the state
corrects the deficiency and the Administrator approves the SIP
revision. 42 U.S.C. 7410(c)(1). Tribes are not required to submit state
implementation plans. However, as explained in EPA's regulations
outlining Tribal Clean Air Act authority, EPA is authorized to
promulgate FIPs for Indian country as necessary or appropriate to
protect air quality if a tribe does not submit and obtain EPA approval
of an implementation plan. See 40 CFR 49.11(a).
    For each FIP in this rule, EPA either (a) found that the state has
failed to make a required section 110(a)(2)(D)(i)(I) SIP submission or
(b) disapproved a SIP submission. In addition, EPA has determined, in
each case, that there has been no approval by the Administrator of a
SIP submission correcting the deficiency prior to promulgation of the
FIP. EPA's obligation to promulgate a FIP arose when the finding of
failure to submit or disapproval was made, and in no case has it been
relieved of that obligation. (The specific findings made and actions
taken by EPA are described in greater detail in the TSD entitled
``Status of CAA 110(a)(2)(D)(i)(I) SIPs Supplemental Rule TSD,'' which
is available in the public docket for this rule.)
    As noted in the SNPR, EPA proposed a SIP Call under CAA 110(k)(5)
for Kansas (76 FR 763, January 6, 2011), based on its conclusion that
Kansas significantly contributes to nonattainment or interferes with
maintenance of the 1997 ozone NAAQS. On March 9, 2007, EPA approved a
section 110(a)(2)(D)(i) SIP submission from the state of Kansas for the
1997 ozone and 1997 PM2.5 NAAQS (72 FR 10608, March 9,
2007). This SIP submission did not rely on compliance with the Clean
Air Interstate Rule

(CAIR) \3\ to satisfy the requirements of section 110(a)(2)(D)(i)(I).
The analysis for the proposed Transport Rule, however, demonstrated
that emissions from Kansas significantly contribute to nonattainment or
interfere with maintenance of the 1997 ozone NAAQS in other states.
Because the approved Kansas SIP does not prohibit these emissions, EPA
proposed to find it substantially inadequate to meet the requirements
of section 110(a)(2)(D)(i)(I) with respect to the 1997 ozone NAAQS. EPA
intends to take final action on this proposal concurrent with this
action or shortly thereafter. See section C below for more information
on Kansas.
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    \3\ Rule To Reduce Interstate Transport of Fine Particulate
Matter and Ozone (Clean Air Interstate Rule); Revisions to Acid Rain
Program; Revisions to the NOX SIP Call promulgated May
12, 2005 (70 FR 25162).
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    The five states addressed in this final rule for which EPA's
analysis identifies the state's full reduction responsibility under
section 110(a)(2)(D)(i)(I) with respect to the 1997 ozone NAAQS are
Iowa, Kansas, Michigan, Oklahoma, and Wisconsin. The one state
addressed in this final rule for which EPA's analysis identifies
reductions that are necessary but may not be sufficient to satisfy
section 110(a)(2)(D)(i)(I) with respect to the 1997 ozone NAAQS is
Missouri. This is because, in the final Transport Rule air quality
modeling control scenario in 2014, Missouri is estimated to be
significantly contributing to residual nonattainment and/or interfering
with residual maintenance at receptors in Brazoria and Harris Counties
(Houston) in Texas, and Houston is the only area projected to remain in
nonattainment in 2014. As described in the final Transport Rule (TR)
preamble (e.g., Page 48210) 76 FR 48208, August 8, 2011, only one area
(Houston) is projected to remain in nonattainment for the 1997 ozone
NAAQS in 2014 with the Transport Rule in place. For the upwind states
linked to the receptors in this area (including Missouri), additional
reductions may be necessary to fully eliminate each state's significant
contribution to nonattainment and/or interference with maintenance.
.Missouri was also found to contribute above the threshold to the new
maintenance receptor, Allegan County, Michigan.\4\
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    \4\ See the Air Quality Modeling Final Rule TSD (EPA-HQ-OAR-
2009-0491-4140). The estimated average and maximum design values for
the receptors in Brazoria and Harris Counties (monitor
identification numbers 480391004, 482010051, 482010055) in the final
air quality modeling of the control scenario were 84.4, 86.5 ppb;
84.1, 88.6 ppb; and 91.1, 93.2 ppb, respectively. Thus, the first
two receptors were estimated to have residual maintenance issues,
while the latter receptor is estimated to have a residual
nonattainment issue. Missouri contributes at or above the one
percent contribution threshold to all three of these receptors.
(Note that average design values are used to assess attainment/
nonattainment and maximum design values are used to assess
maintenance.)
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    EPA has not yet determined whether additional reductions in ozone-
forming emissions are necessary to address Missouri's significant
contribution to downwind nonattainment and interference with
maintenance, which may not be fully quantified in this rulemaking with
respect to the 1997 ozone NAAQS. Additional technical analysis will be
necessary to complete this determination. See section B.iii below for
further discussion.

B. Finalizing FIPs to Address Significant Contribution to Nonattainment
and Interference with Maintenance

    EPA concludes in this final rule that application of the
methodologies to identify nonattainment and maintenance receptors and
to determine significant contribution to nonattainment and interference
with maintenance with respect to the 1997 ozone NAAQS, as described in
the final Transport Rule, demonstrates that Iowa, Kansas, Michigan,
Missouri, Oklahoma, and Wisconsin significantly contribute to
nonattainment or interfere with maintenance of the 1997 ozone NAAQS in
other states. EPA also concludes in this final rule that the Transport
Rule NOX Ozone Season Trading Program set forth in the final
Transport Rule (with minor revisions discussed in section III.F of this
preamble) should be used as the FIP for five of the six states with
regard to the 1997 ozone NAAQS. As discussed below, EPA received
comments concerning whether, and in what amount, some of the states
significantly contribute or interfere with maintenance. EPA did not
receive any comments claiming that EPA should not use the Transport
Rule NOX Ozone Season Trading Program as the FIP if the
state is found to significantly contribute or interfere with
maintenance.
i. Iowa
    EPA is finalizing a FIP for Iowa that, through implementation of
the Transport Rule ozone season program, limits power plant
NOX emissions starting in the 2012 ozone season.
    The analysis for the final Transport Rule identified Iowa as a
state that interferes with maintenance of the 1997 ozone NAAQS only for
a newly-identified maintenance receptor in Allegan County, Michigan.
EPA specifically requested comment in the proposed notice for this
supplemental action on whether there are errors in the Agency's
application of the Transport Rule methodologies with respect to Iowa's
significant contribution to nonattainment and/or interference with
maintenance of the 1997 ozone NAAQS. There were no public comments that
identified any errors in EPA's determination of state budgets for Iowa,
which demonstrated EPA's quantification of emission reductions
necessary to eliminate significant contribution and interference with
maintenance.
    One commenter noted that inclusion of Iowa is justified. Another
commenter questioned the Allegan County, Michigan receptor. For more
information on the Allegan receptor, see section D below in this
preamble. Other comments concerning the 2005 baseline, and ``sunk
costs'', are outside the scope of the proposed rule in this rulemaking,
and, while these issues are not reopened in this rulemaking, EPA notes
the issues have been addressed in the record of the final Transport
Rule. See the docket for this rulemaking at www.regulations.gov, EPA-
HQ-OAR-2009-0491.
ii. Michigan
    EPA is finalizing a FIP for Michigan that, through implementation
of the Transport Rule ozone season program, limits power plant
NOX emissions starting in the 2012 ozone season.
    In its 2010 Transport Rule proposal, EPA proposed to determine that
Michigan significantly contributes to nonattainment or interferes with
maintenance of the 1997 ozone NAAQS and also proposed to include
Michigan in the Transport Rule ozone-season NOX program. In
the analysis conducted for the final Transport Rule, Michigan is linked
only to a newly-identified ozone maintenance receptor in Harford
County, Maryland. EPA specifically requested comment in the proposed
notice for this supplemental action on whether there are errors in the
Agency's application of the Transport Rule methodologies with respect
to Michigan's interference with maintenance of the 1997 ozone NAAQS.
    There were two major comments relating to Michigan. One comment
regarded the use of the FIP and requested a delay for a minimum of 18
months so the state could submit an approvable SIP. The matter of EPA's
authority under the Clean Air Act is discussed in detail in the final
Transport Rule and above in section III.A. The second comment addressed
the Indian country new unit set-aside and suggested that the state is
the appropriate authority to allocate new source allowances, even to
units located

on tribal lands. The comment, concerning the authority to allocate
allowances from the Indian country new unit set-aside, is outside the
scope of the proposed rule in this rulemaking, and, while issues
concerning the Indian country new unit set-aside are not reopened in
this rulemaking, EPA notes the issues have been addressed in the
preamble to the final Transport Rule at 76 FR 48317 and 48293.
iii. Missouri
    EPA is finalizing the FIP for Missouri that, through implementation
of the Transport Rule ozone season program, limits power plant
NOX emissions starting in the 2012 ozone season.
    The analysis for the final Transport Rule identified Missouri as a
state that significantly contributes to nonattainment and/or interferes
with maintenance of the 1997 ozone NAAQS in Harris County, Texas,
Brazoria County, Texas, and Allegan County, Michigan. EPA requested
comment in the proposed notice for this supplemental action
specifically on whether there are errors in the Agency's application of
the Transport Rule methodologies with respect to Missouri's significant
contribution to nonattainment and interference of the 1997 ozone NAAQS.
    One commenter challenged the methodology used by EPA to quantify
significant contribution, arguing that it was flawed because EPA's base
year does not include CAIR and does not represent current air quality.
As explained in the proposal, EPA did not reopen for comment the
methodology developed in the final Transport Rule to quantify emissions
that significantly contribute to or interfere with maintenance in
another state. These comments are outside the scope of the proposed
rule in this rulemaking, and, while these issues are not reopened in
this rulemaking, the issues have been addressed in the record of the
final Transport Rule.
    One commenter stated that the proposal for this action would not
require full elimination of Missouri's significant contribution. EPA
stated in the preamble to this rule's proposal that for Missouri, our
analysis identifies reductions that are necessary but may not be
sufficient to satisfy section 110(a)(2)(D)(i)(I) with respect to the
1997 ozone NAAQS. This is because Missouri is estimated to be
significantly contributing to nonattainment and/or interfering with
maintenance in Brazoria and Harris Counties in Texas, as demonstrated
in the final Transport Rule air quality modeling of the control
scenario in 2014 (see the Air Quality Modeling Final Rule TSD in the
docket to this rulemaking, for additional details).
    EPA intends to conduct further analysis and provide appropriate
guidance and/or rulemaking to address any remaining significant
contribution to nonattainment and interference with maintenance with
respect to the 1997 ozone NAAQS for any state (e.g., Missouri)
identified in the final Transport Rule and in the associated
supplemental notice, for which EPA was unable to fully quantify the
emissions that must be prohibited to satisfy the requirements of
section 110(a)(2)(D)(i)(I) with respect to the 1997 ozone NAAQS.
    A commenter questioned whether the compliance deadline established
by EPA in the FIP with regard to the 1997 ozone season NAAQS is
feasible or valid in light of, among other things, the commenter's
suggestion that the Transport Rule NOX ozone season
allowance market will not be viable. EPA has determined it is feasible
for sources in Missouri to meet the 2012 budget finalized in this rule.
The 2012 budget relies on control strategies that Missouri sources are
already preparing to implement for the annual NOX program.
These include running existing or already planned controls and making
changes in dispatch (how electricity is distributed across units at a
facility) that could include shifting generation from higher emitting
units to lower emitting units. Sources also have further flexibility
through the opportunity to purchase allowances. Twenty states have
already been finalized as participants in the Transport Rule ozone
season program and NOX ozone season allowances have already
been traded. Trading began prior to the formal distribution of
allowances, and trading volume has increased since distribution, with
prices steadily decreasing. This market is following a common pattern
of emission allowance markets in their introductory stages--prices are
initially high and then drop as parties become familiar with the
characteristics of the market through repeated iterations of bids,
offers, and trades. Observed market allowance prices for the
NOX ozone season program are trending toward the projected
equilibrium values included in EPA's analysis of the final Transport
Rule.\5\
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    \5\ Recent price estimates provided in the subscription
publication Argus Air Daily, an international provider of price data
related to the energy sector. Also see the Regulatory Impact
Assessment for the final Transport Rule at http://www.regulations.gov/#!documentDetail;D=EPA-HQ-OAR-2009-0491-4547.
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 iv. Oklahoma
    EPA is finalizing the FIP for Oklahoma that, through implementation
of the Transport Rule ozone season program, limits power plant
NOX emissions starting in the 2012 ozone season.
    In its 2010 Transport Rule proposal, EPA proposed to determine that
Oklahoma significantly contributes to nonattainment or interferes with
maintenance of the 1997 ozone NAAQS and also proposed to include
Oklahoma in the Transport Rule ozone-season program. In the analysis
conducted for the final Transport Rule, Oklahoma was linked only to a
newly-identified ozone maintenance receptor in Allegan County,
Michigan. Oklahoma was not linked to any nonattainment receptors. EPA
specifically requested comment in the proposed notice for this
supplemental action on whether there are errors in the Agency's
application of the Transport Rule methodologies with respect to
Oklahoma's significant contribution to nonattainment and/or
interference with maintenance of the 1997 ozone NAAQS.
    Several commenters generally question the validity of EPA's
conclusion that Oklahoma interferes with maintenance of the 1997 ozone
NAAQS in downwind states, especially regarding the Allegan County,
Michigan receptor. See the discussion of the Allegan receptor below in
section III.D. Other comments regarding the CAMx air quality model,
emissions inventory data, and choice of base year are outside the scope
of the proposed rule in this rulemaking, and, while these issues are
not reopened in this rulemaking, the issues have been addressed in the
record of the final Transport Rule and this supplemental rule.
    EPA also received comments regarding the size of the proposed ozone
season NOX budget for Oklahoma. Some commenters argued the
Oklahoma ozone season budget was incorrectly calculated because it
assumed reductions that could not be feasibly achieved by the 2012
ozone season. The analysis conducted for the proposal showed that
reductions in Oklahoma could be achieved through, among other actions,
installation of low-NOX burners (LNBs) at about 4.4
gigawatts (GW) of coal-fired generation capacity in the state, and the
shifting of dispatch to cleaner generators. Commenters disputed the
ability of sources in Oklahoma to effect sufficient reductions through
either of these strategies in time to meet the proposed 2012 state
budget. Each identified issue is addressed below.

    As to the LNBs, in the final Transport Rule, EPA found that it is
technically feasible to install LNBs within a 6-month period. The
shutdown of a unit and physical installation of LNBs at the unit
necessarily occurs near the end of the 6-month period. Because of the
timing of this final action, the units in Oklahoma would have to shut
down to install the LNBs during the ozone season--the summer peak
demand period for electricity in Oklahoma. Taking these units off-line
during the summer peak demand period would reduce the amount of
available capacity in the reliability subregion of the Southwest Power
Pool that includes Oklahoma. EPA's policy case modeling suggests that
this reduction in available capacity could shift this subregion below
its assured planning reserve margin which is based on North American
Electricity Reliability Corporation (NERC) planning reserve margins.
See ``Determination of State Budgets for the Final Ozone Supplemental
of the Transport Rule'' TSD. Because physical installation of the LNBs
during the 2012 summer peak on units in Oklahoma could potentially
cause the region to miss this important reliability target, EPA
concludes that installation of these LNBs during the ozone season is
not technically feasible.\6\ Therefore, EPA is assuming that no low-
NOX burners can be installed in Oklahoma prior to or during
the 2012 ozone-season and is setting the Oklahoma 2012 ozone season
NOX budget at a level that reflects emission reductions
achievable through actions (such as changes in generation unit
dispatch) that do not include additional LNB installations. EPA is
setting the Oklahoma ozone season NOX budget for 2013 and
beyond at the level that was proposed, i.e., to reflect NOX
levels achievable with additional LNB installations that can be
completed before the 2013 ozone season without necessitating the
shutdown of units during the summer peak demand period in 2012.
---------------------------------------------------------------------------

    \6\ Because, in the case of Oklahoma, physical installation of
LNBs during the latter portion of the 6-month period would occur
during the summer peak demand period, this conclusion concerning
Oklahoma is distinguishable from EPA's general conclusion that
installation of LNBs in 6 months is technically feasible. See EPA-
HQ-OAR-2009-0491-4529. Physical installation of LNBs near the end of
a 6-month period and outside of the summer peak demand period will
not threaten achievement of target planning reserve margins and,
thus, electric reliability.
---------------------------------------------------------------------------

    EPA does not believe that this issue relating to LNB installation
timing applies to the other four states for which EPA is finalizing a
FIP in this action. Because those four states are already required to
meet Transport Rule annual NOX reduction requirements (which
start January 2012), and were notified of that requirement with the
July 6, 2011 finalization of the Transport Rule, physical installation
of LNBs near the end of the 6-month period for LNBs are not expected to
occur during peak electricity demand periods. Moreover, information in
the record indicates that, for units in Iowa, Michigan, Missouri, and
Wisconsin, LNBs were already planned and are in the process of being
installed. Therefore, EPA believes that the issue raised is unique to
Oklahoma and does not justify adjusting the 2012 ozone season budgets
for the four other states subject to this final action. As discussed
below, EPA is finalizing the 2012 ozone season budgets as proposed for
the four states, except for a few corrections in the Michigan and
Wisconsin budgets addressed in section III.E, below.
    Some commenters also argued that EPA erred in assuming emissions
from oil/gas steam units could be significantly reduced by the 2012
ozone season. Including Oklahoma, there are a total of five ozone-
season-only states subject to the Transport Rule--that is, five states
that are subject to the ozone-season NOX program without
also being subject to the annual NOX program. The ozone-
season budgets for the four other states (Mississippi, Arkansas,
Florida, and Louisiana) were finalized in the final Transport Rule
which was signed and widely disseminated in July 2011. EPA did not
finalize an ozone-season budget for Oklahoma at that time. EPA is
finalizing the ozone-season budget for Oklahoma more than 5 months
after the budgets for the other states included in the ozone-season
program were finalized and less than six months before the start of the
2012 ozone season. In this respect, therefore, Oklahoma is uniquely
situated.
    EPA believes that units in Oklahoma will have sufficient time for
compliance planning to include modest adjustments of NOX
emissions at covered sources in Oklahoma (e.g., fine-tuning of existing
combustion controls). However, EPA agrees that Oklahoma utilities may
not have time between finalization of this rule and the 2012 ozone
season to realign firm power supply to dispatch cleaner, more cost-
effective sources of generation to meet local electricity demand that
is currently being met by oil/gas steam generators. Therefore, EPA is
adjusting the Oklahoma state budget for the 2012 ozone season
specifically on the basis of revised projected emissions at oil/gas
steam generators reflecting an immediate-term dispatch pattern that
maintains the firm power supply arrangements already in place to serve
local electricity demand. In light of Oklahoma's unique situation, EPA
is assuming for the purposes of this adjustment that projected 2012
emissions from oil/gas steam units in Oklahoma will be consistent with
recently observed dispatch of this class of units in the state. EPA
believes this situation is unique to Oklahoma due to the fact that
sources in the other states covered by this rulemaking are already
covered by a pre-existing Transport Rule FIP addressing NOX
emission control, and that these sources will have had substantially
more compliance planning time to consider adjustments to dispatch in
advance of the 2012 ozone season.
    EPA believes that the original projections of Oklahoma EGU
emissions of ozone-season NOX at the Transport Rule's
threshold cost-per-ton level remain achievable, through a combination
of reduction measures, including LNB installations and increased
dispatch of cleaner generating sources, in time for compliance in the
2013 ozone season and beyond, under the state budget as proposed. EPA
is only adjusting the final Oklahoma state budget for the 2012 ozone
season. See the technical support document, ``Determination of 2012
Ozone Season State Emission Budgets for the Final Transport Rule Ozone
Supplemental,'' in the docket to this rulemaking for more details.
v. Wisconsin
    EPA is finalizing the FIP for Wisconsin that, through
implementation of the Transport Rule ozone season program, limits power
plant NOX emissions starting in the 2012 ozone season.
    The analysis for the final Transport Rule identified Wisconsin as a
state that interferes with maintenance only for a newly-identified 1997
ozone NAAQS maintenance receptor in Allegan County, Michigan. EPA
specifically requested comment in the proposed notice for this
supplemental action on whether there are errors in the Agency's
application of the Transport Rule methodologies with respect to
Wisconsin's significant contribution to nonattainment and interference
of the 1997 ozone NAAQS. There were no comments with respect to
Wisconsin's significant contribution to nonattainment and/or
interference of the 1997 ozone NAAQS or with respect to EPA's proposed
use of the Transport Rule ozone season program as the FIP.

C. Kansas

    EPA is finalizing its determination that Kansas significantly
contributes to

nonattainment or interferes with maintenance in another state with
respect to the 1997 ozone NAAQS. EPA is not finalizing the proposed FIP
for Kansas at this time. As explained below, EPA intends to take final
action on its proposed SIP Call for Kansas concurrent with this action
or shortly thereafter. If Kansas fails to submit a SIP that meets the
requirements of 110(a)(2)(D)(i)(I) with respect to the 1997 ozone
standards by any deadline established in any final SIP Call, EPA would
take action as appropriate to satisfy its obligation to promulgate a
FIP to address the statutory requirements.
    The analysis for the final Transport Rule and the analysis for the
2010 proposal both identified Kansas as a state that interferes with
maintenance of the 1997 ozone NAAQS in another state. In its 2010
Transport Rule proposal, EPA proposed to determine that Kansas
significantly contributes to nonattainment or interferes with
maintenance of the 1997 ozone NAAQS and thus proposed to include Kansas
in the Transport Rule ozone-season NOX program. The analysis
conducted for the final Transport Rule, demonstrated that Kansas is
linked only to a newly-identified ozone maintenance receptor in Allegan
County, Michigan. As noted above, EPA decided to provide an additional
opportunity to comment on its conclusions with respect to states that
were linked, in the final Transport Rule analysis, only to receptors
that were identified for the first time in that analysis. In that
supplemental proposal, EPA specifically requested comment in the
proposed notice to this supplemental action on whether there are errors
in the Agency's application of the Transport Rule methodologies with
respect to Kansas's significant contribution to nonattainment and
interference of the 1997 ozone NAAQS. After a review of comments
received, EPA has concluded that Kansas interferes with maintenance of
the 1997 ozone NAAQS in Allegan County, Michigan.
    This action does not take final action on the portion of the
proposal relating to whether to use the Transport Rule ozone season
program as the FIP for Kansas. In the 2010 Transport Rule proposal, EPA
summarized the status of the CAA section 110(a)(2)(D)(i)(I) SIP for the
state of Kansas with regard to the 1997 ozone NAAQS. As explained
therein, EPA had previously approved a section 110(a)(2)(D)(i) SIP
submission from the state of Kansas for the 1997 ozone and 1997
PM2.5 NAAQS on March 9, 2007 (72 FR 10608). That SIP
submission did not rely on the unlawful CAIR trading programs or rely
in any way on the conclusion in CAIR that compliance with CAIR was
sufficient to satisfy a state's 110(a)(2)(D)(i)(I) obligations with
respect to the 1997 ozone and PM2.5 NAAQS. Kansas is unique
in this regard because no other state covered by the Transport Rule or
this action has an approved SIP that did not rely on the CAIR
requirements, which the DC Circuit held were not sufficient to satisfy
the requirements of 110(a)(2(D)((I)(I) of the Act. For these reasons,
EPA does not have an obligation under section 110(c)(1) of the Act to
promulgate a FIP for Kansas at this time. Therefore, in a separate
action, EPA proposed a SIP Call under CAA section 110(k)(5) for Kansas
(76 FR 763, January 6, 2011), and proposed to find the Kansas SIP
substantially inadequate to meet the requirements of 110(a)(2)(D)(i)(I)
with respect to the 1997 ozone NAAQS. This proposal was based on the
proposed conclusion that emissions from Kansas are significantly
contributing to nonattainment or interfering with maintenance of the
1997 ozone NAAQS in another state. EPA intends to take final action on
the proposed SIP Call concurrently with this action or shortly
thereafter.

D. Allegan County, Michigan, Receptor

    The final Transport Rule air quality modeling identified a new
maintenance receptor in Allegan County, Michigan, to which upwind
states interfere with maintenance of the NAAQS.
    Some commenters noted that EPA took final action on September 24,
2010 to redesignate the Allegan County, Michigan nonattainment area to
attainment for the 1997 8-hour ozone standard. 75 FR 58312; September
24, 2010. Moreover, commenters noted that EPA in the same action
approved Michigan's ``maintenance plan'' for maintaining the 8-hour
ozone NAAQS through 2021 in the same area. Based on this observation,
these commenters asserted that EPA should not consider Allegan County
to be a ``maintenance receptor'' for purposes of the Transport Rule.
Accordingly, these commenters believed that EPA should not be requiring
emission reductions from upwind states on the basis of the
contributions to Allegan County, Michigan.
    EPA agrees that the nonattainment area containing Allegan County,
Michigan was redesignated by EPA on September 24, 2010, and that EPA
approved the state of Michigan's maintenance plan for the area. The
area, therefore, is currently considered to be a maintenance area and
not a nonattainment area.
    EPA, however, disagrees with commenters' conclusion that a
maintenance area (i.e., an area that has been redesignated and is thus
subject to a maintenance plan) should not be considered a maintenance
receptor in EPA's analysis for a number of reasons. First, EPA notes
that ozone values at the Allegan location, historically and in the
future, are strongly influenced by interstate transport. Second, the
methodology for identifying ``maintenance'' receptors relevant to
upwind state contributions in the Transport Rule is a unique test
designed to satisfy the ``interfere with maintenance'' prong of
110(a)(2)(D)(i)(I); EPA believes this methodology responds to the U.S.
Court of Appeals for the DC Circuit in the July 20, 2008 decision in
North Carolina v. EPA, 531 F.3d 896, ruling on the deficiency of CAIR
with regard to this 110(a)(2)(D)(i) obligation. Finally, as stated in
the preamble to the final Transport Rule, EPA's test for identifying
``maintenance receptors'' for the Transport Rule appropriately differs
from, and is not dependent on, recent monitoring data, including data
used to re-designate an area as being in attainment.
1. Nature of the Ozone Problem for the Allegan County, Michigan
Location
    Allegan County is a mostly rural county located in southwestern
Michigan along Lake Michigan. EPA source apportionment modeling for
2012 shows that for the ozone monitor in Allegan County, 96 percent of
ozone is attributable to out-of-state emissions. As such, Allegan
Country provides a particularly compelling example of the limited
ability of any individual state to unilaterally control air quality
outcomes within its borders. See Air Quality Modeling Final Rule TSD,
EPA-HQ-OAR-2009-0491-4140 for details.
    Table III.D-1 provides more information on the nature of ozone at
this site. In many years in the available data set, there are a few
days with markedly higher ozone values than are measured for the
remainder of the year. Whether those values lead to exceedances of the
8-hour ozone NAAQS is dependent on whether that phenomenon extends to
the 4th highest day of the season and on the degree to which this
occurs in consecutive years. Accordingly, this site's ozone design
value can experience significant variability from year to year.

   Table III.D-1--Recent Observed Ozone Concentrations at the Allegan County Ozone Monitor (AIRS ID 260050003)
----------------------------------------------------------------------------------------------------------------
                                                                                DV
                                                                                (average of
              Year                 1st High     2nd High     3rd High     4th High    Design Value     4th high
                                                                                (DV) Period    over  3-yr
                                                                                period)
----------------------------------------------------------------------------------------------------------------
2003...........................          106          102           97           95  ..............  ...........
2004...........................          107           84           81           79  ..............  ...........
2005...........................          113          107           95           94       2003-2005           89
2006...........................           99           91           91           91       2004-2006           88
2007...........................          109          108           98           94       2005-2007           93
2008...........................          100           77           74           73       2006-2008           86
2009...........................           92           83           79           76       2007-2009           81
2010...........................           77           76           75           73       2008-2010           74
2011...........................           98           96           96           87      *2009-2011          *78
----------------------------------------------------------------------------------------------------------------
* 2011 is based on preliminary data for year to date through 9/5/11; see: http://www.michigan.gov/documents/deq/deq-aqd-mm-ozone-8hrhighestcurrent_256060_7.pdf.

    Table III.D-1 shows that the 1st high annual measured value over
the last 9 years has ranged from 92-113 ppb, except in 2010 when the
1st high value was only 77 ppb. The 4th high values have ranged between
73 and 95 ppb. There were three consecutive years with low 4th high
values below 80 ppb (2007-2009) and there was one period (2005-2007)
with consecutive 4th high values greater than 90 ppb. The fact that the
4th high value dropped from 94 ppb in 2007 to 73 ppb 2008, and then
increased again from 73 ppb in 2010 to 87 ppb in 2011 shows that the
pattern of regional transport and meteorology are the primary factors
in the year to year variability of the observed design value at this
site. The magnitude of the year-to-year changes is too large to be
caused solely by emission reductions or increases in Allegan County, or
even in upwind states. Based on EPA's CAMx source apportionment
modeling, if emission reductions were solely responsible for the
improvement in ozone concentrations in Allegan County from 2007 to
2008, all of the NOX emissions in the upwind states of
Illinois, Indiana, and Missouri would have to have dropped by greater
than 50 percent between those years. Since that is clearly not the
case, the data show that meteorological conditions and regional
transport patterns may still effect substantial changes in ozone in
Allegan County, which supports its identification as a receptor whose
maintenance of the NAAQS may be jeopardized without further emission
reductions in upwind states.
2. Emission Analysis Conducted in Approving Michigan's Maintenance Plan
for Allegan
    EPA's rationale for approving the maintenance plan for Allegan
County is described in the proposed approval notice (75 FR 42018; July
20, 2010). A number of tables in that proposed approval compared
current emissions to future emissions for VOC and NOX
sources located within the Allegan County nonattainment area. The
analysis concluded that projected emission levels, for sources within
the nonattainment area, were decreasing throughout the maintenance
period. The ozone redesignation and maintenance plan analysis completed
by Michigan meets EPA guidance but uses a different test and data that
are less current than what were applied in the Transport Rule. The
maintenance plan test for the local SIP requires an analysis to show
that emissions in the local area will not increase, thereby showing
that the area will be able to maintain the ozone NAAQS. The
redesignation is based on having current air quality data which shows
that the area is attaining the NAAQS and the area meets all other Clean
Air Act requirements for redesignation.
3. Maintenance Approach in the Transport Rule
    In the North Carolina decision concerning CAIR, the Court directed
EPA to give independent meaning to the ``interfere with maintenance''
prong of CAA section 110(a)(2)(D)(i)(I) and to separately identify
upwind sources that interfere with downwind maintenance. In particular,
the Court expressed concern that CAIR did not adequately protect areas
that find themselves barely in attainment by the statutory deadline and
suggested that EPA needed to take into account the historic variability
of a downwind area's ozone levels in determining whether an upwind
source would cause that downwind area to have trouble maintaining the
NAAQS.
    Accordingly, EPA in the Transport Rule explicitly gave independent
meaning to the ``interfere with maintenance'' prong of section
110(a)(2)(D)(i)(I) by evaluating contributions to maintenance receptors
as well as contributions to identified nonattainment receptors. The
maintenance methodology used an approach that examined multiple design
value periods (from 2003-2007) projected to 2012. This allowed an
estimate of variability in future design values, based on past measured
variability. A detailed discussion of EPA's new approach, rationale,
and responses to comments on the approach, including the methodology
for identifying maintenance receptors, is found in section V.C.2 of the
preamble to the final Transport Rule (76 FR 48227).
    In the application in the final Transport Rule of that approach,
Allegan County was identified as a maintenance receptor but not as a
nonattainment receptor. That is, for Allegan County, EPA projected
that, under ``average'' conditions that would take place in the
relevant area in the future, Allegan County would not exceed the ozone
NAAQS in 2012. On the other hand, EPA projected, under conditions
reflecting the maximum design values in the relevant area during 2003-
2007, that Allegan County could exceed the ozone NAAQS. EPA's analysis
took into account the fact that previously experienced meteorological
conditions (e.g., dominant wind direction, temperatures, and air mass
patterns) promoting ozone formation may reoccur in the relevant area in
the future. Consistently applying this approach throughout the relevant
area, EPA found that Allegan County exceeded the threshold for
inclusion as a maintenance receptor.

4. Relationship between EPA's ``Maintenance Receptor'' Analysis for the
Transport Rule and EPA's Approval of Michigan's ``Maintenance Plan''
    EPA's methodology for identifying nonattainment and maintenance
receptors is based on modeled projections of measured air quality at
specific monitors, not on the designation status of an area.\7\ EPA
believes this approach is appropriate for the reasons explained in
section V.C.2 of the preamble to the final Transport Rule. 76 FR 48230.
EPA does not believe it would be appropriate to rely on the designation
status of an area to determine air quality or for determining whether
one state is contributing significantly to nonattainment or interfering
with maintenance of another state under CAA section 110(a)(2)(D)(i)(I).
The CAA does not require EPA to do so. As EPA explained in the proposal
to designate Allegan County as an attainment area, an area's transport
requirements under section 110(a)(2)(D) are not linked to an area's
attainment designation and continue to apply regardless of an area's
designation status. 75 FR 42018, 42023. The U.S. Court of Appeals for
the DC Circuit's decision in Michigan v. EPA, 213 F.3d 663 (2000),
further supports the position that determinations of significant
contribution or interference with maintenance under CAA section
110(a)(2)(D)(i)(I) is most appropriately based on current air quality
and modeling, rather than an area's attainment designation. In fact, it
would be impractical given the timing of when designations are made and
nonattainment SIPs due to base such a determination on an area's
attainment or maintenance designation, suggesting that Congress did not
intend section 110(a)(2)(D)(i)(I) SIPs to be linked in any way to
designation status. Further, even areas that have never been in
nonattainment or have been re-designated to attainment (including those
where the majority of pollution comes from out of state) continue to be
at risk for falling into nonattainment as a result of emissions from
upwind states, as the North Carolina court recognized, 531 F.3d at 910.
---------------------------------------------------------------------------

    \7\ This issue was discussed in the preamble to the
NOX SIP Call (see 63 FR 57375, October 27, 1998, footnote
25), and the U.S. Court of Appeals for the DC Circuit's decision in
Michigan v. EPA, 213 F.3d 663 (2000), further supports the position
that determinations of significant contribution or interference with
maintenance under CAA section 110(a)(2)(D)(i)(I) should not be based
on an area's attainment designation.
---------------------------------------------------------------------------

    Generally, in judging whether to re-designate a given area, EPA
evaluates local emissions as part of the ``maintenance plan.'' However,
if EPA proposes to re-designate areas to attainment, this does not
remove the need to address emissions in upwind states which could
interfere with the maintenance plan. Without a cap on emissions in
upwind states with a significant impact, upwind state emissions might
in fact grow, increasing the possibility that the area being evaluated
will not be able to maintain attainment. Furthermore, since upwind
states are not required to have contingency measures under a downwind
state's SIP, it is incumbent on EPA to ensure that states with
significant impacts are appropriately controlled.
    Additionally, EPA notes that the Transport Rule was based upon
newer and more extensive information than was available at the time of
our approval of Michigan's ``maintenance plan'' for Allegan County, and
the more recent information suggests Allegan County may have difficulty
maintaining attainment, notwithstanding its 2010 redesignation. EPA
believes that the maintenance requirements in the Transport Rule serve
to reinforce and supplement the state's maintenance plan, providing
important support by greatly decreasing the probability that emissions
from upwind states could lead to future nonattainment. As discussed
above, EPA's projections for 2012 indicate that 96 percent of ozone at
the Allegan County receptor is created by precursor emissions
originating from states other than Michigan. Clearly, the ability to
maintain the ozone NAAQS in Allegan Country is largely influenced by
upwind state emissions.
5. Recent Air Quality Data
    Commenters in Oklahoma noted that EPA should use actual monitoring
data, ``which reflects CAIR reductions,'' to demonstrate that Allegan
County would remain in attainment. They cited ambient measurements of
74 ppb for the 3-year average for 2008-2010. Recent preliminary air
quality data for 2011 serve to reinforce EPA's view that the
variability in meteorology is a significant issue for the Allegan
receptor's ability to maintain the NAAQS. In 2011, there were four
ambient values exceeding the 85 ppb level of the 1997 NAAQS, with a
high value of 98 ppb. In other words, the 4th high value for 2011
exceeded the NAAQS. These values do not yet lead to a conclusion that
the area is in nonattainment because the preliminary 2009-2011 design
value--the average of the 4th high values for 2009, 2010, and 2011
\8\--remains below 85 ppb. However, if the 4th high ambient values for
2012 and 2013 were the same as the preliminary values for 2011, the
area would be in violation of the NAAQS. But even with relatively lower
ozone concentrations across much of the country in the 2008-2010
period, the preliminary 2011 data show that Allegan County clearly
continues to experience high ozone days, suggesting that this location
may have maintenance problems that may eventually lead to violations of
the 1997 ozone NAAQS. The data illustrate the highly variable nature of
ozone at the Allegan location and reinforce the wisdom of taking
variability into account in our ``maintenance'' analysis.
---------------------------------------------------------------------------

    \8\ Data for 2011 is incomplete at the time of finalization of
this rulemaking.
---------------------------------------------------------------------------

E. Ozone Season NOX Emission Budgets for Five States

    EPA is finalizing state ozone season NOX emission
budgets for covered units (generally large electric generating units)
\9\ in Iowa, Michigan, Missouri, Oklahoma, and Wisconsin under the FIPs
for the 1997 ozone NAAQS. As noted above, EPA is not taking final
action on the proposed Kansas FIP at this time.
---------------------------------------------------------------------------

    \9\ The applicability provisions for determining covered units
in the named six states for the Transport Rule ozone season
NOX program are the same as those described in section
VII.B, ``Applicability,'' of the preamble to the final Transport
Rule.
---------------------------------------------------------------------------

    EPA is finalizing these budgets, adjusted if necessary based on
comments received, as part of the FIPs for these five states. These
budgets and the associated variability limits are presented in Table
III.E-1. Note that EPA has proposed, in a separate rulemaking (76 FR
63860), to revise the effective date of the assurance penalty
provisions so that they start on January 1, 2014 instead of January 1,
2012. If EPA finalizes that revision, the assurance provisions and
variability limits below would not apply for 2012 and 2013. The new
unit set-asides and Indian country new unit set-aside, if applicable,
for these five states are presented in Table III.E-2. For illustrative
purposes only, in order to provide a complete picture of the Transport
Rule ozone season program,

Tables III.E-1 and III.E-2 also include information concerning the
other states in that program. However, the proposed rule did not
reconsider or request comment on any issues concerning the other
states, and neither the proposed rule nor this final rule reopens any
issues concerning these other states.

           Table III.E-1--State Budgets \10\ and Variability Limits for 2012-2013, 2014 and Thereafter
----------------------------------------------------------------------------------------------------------------
                                                       NOX Ozone Season
                                   NOX Ozone Season   trading budget for      Variability         Variability
              State               trading budget for       2014 and         limits for 2012     limits for 2014
                                     2012 and 2013     thereafter (tons)       and 2013         and thereafter
                                       (tons) *                *
----------------------------------------------------------------------------------------------------------------
Alabama.........................              31,746              31,499               6,667               6,615
Arkansas........................              15,037              15,037               3,158               3,158
Florida.........................              27,825              27,825               5,843               5,843
Georgia.........................              27,944              18,279               5,868               3,839
Illinois........................              21,208              21,208               4,454               4,454
Indiana.........................              46,876              46,175               9,844               9,697
Iowa............................              16,532              16,207               3,472               3,403
Kentucky........................              36,167              32,674               7,595               6,862
Louisiana.......................              13,432              13,432               2,821               2,821
Maryland........................               7,179               7,179               1,508               1,508
Michigan........................              28,041              27,016               5,889               5,673
Mississippi.....................              10,160              10,160               2,134               2,134
Missouri........................              22,762              21,073               4,780               4,425
New Jersey......................               3,382               3,382                 710                 710
New York........................               8,331               8,331               1,750               1,750
North Carolina..................              22,168              18,455               4,655               3,876
Ohio............................              40,063              37,792               8,413               7,936
Oklahoma **.....................       36,567 21,835              21,835         7,679 4,585               4,585
Pennsylvania....................              52,201              51,912              10,962              10,902
South Carolina..................              13,909              13,909               2,921               2,921
Tennessee.......................              14,908               8,016               3,131               1,683
Texas...........................              63,043              63,043              13,239              13,239
Virginia........................              14,452              14,452               3,035               3,035
West Virginia...................              25,283              23,291               5,309               4,891
Wisconsin.......................              14,784              14,296               3,105               3,002
----------------------------------------------------------------------------------------------------------------
* Variability limits are discussed in the preamble to the final Transport Rule, section VI.E.
** Data in this table is presented for Oklahoma separately for the years 2012 and 2013, as its state budget and
  variability limits are not the same in each of those years.

    In section III.B.iv, EPA explained that this final rule adjusts the
Oklahoma state budget only for the 2012 ozone season, reflecting
revised emission projections that do not include LNB installation or
the redispatching of oil/gas steam units by the 2012 ozone season. For
2013 onwards, the Oklahoma ozone season budget remains at the level EPA
proposed.
---------------------------------------------------------------------------

    \10\ This table reflects ozone-season NOX budgets and
variability limits as currently effective based on finalization of
the Transport Rule published on July 6, 2011 and finalization of
this supplemental action. In a separate action, EPA has proposed
revisions to certain state budgets and new unit set-asides that are
not reflected in these tables, as they are not yet finalized. That
action may be reviewed at 76 FR 63860, October 14, 2011.
---------------------------------------------------------------------------

    In the October 6, 2011 proposed Revisions to the Transport Rule
(also known as the Cross-State Air Pollution Rule), EPA proposed, and
invited comment on, adjustments to the annual NOX emission
budgets for both Michigan and Wisconsin. For both states, the budget
was proposed to be increased based on revised assumptions regarding
Selective Catalytic Reduction (SCR) technology previously assumed to be
installed and operating at specific units in 2012. In the case of
Michigan, the budget was proposed to be increased to account for Monroe
Unit 2 not having a SCR in 2012 or 2014. For Wisconsin, a similar
adjustment was proposed to account for JP Madgett Unit 1 not having a
SCR in 2012 or 2014. EPA recognized that these revised input
assumptions would also affect the calculation of the states' ozone-
season budgets, and EPA is now applying that information to the
determination of these states' ozone season NOX budgets in
this final rule. Applying the updated information regarding Monroe Unit
2 in Michigan and JP Madgett Unit 1 in Wisconsin results in budgets for
Michigan and Wisconsin that are 2,289 tons and 1,080 tons,
respectively, larger than the proposed budgets for these states. The
final budgets are reflected in Table III.E-1.
    As noted above, EPA is finalizing for the five states the ozone
season new unit set-asides for allowance allocations to new units,
determined in the same manner as for the other states covered in the
Transport Rule ozone season NOX program. This approach is
described in section VII.D.2, ``Allocations to New Units,'' of the
preamble to the final Transport Rule. Table III.E-2 shows the new unit
set-aside for Iowa, Michigan, Missouri, Oklahoma, and Wisconsin as a
percent of state ozone season NOX emissions. Table III.E-3
shows the new unit set-aside and Indian country new unit set-aside, as
appropriate, for the five states and, for the reasons discussed above,
the other states in the Transport Rule ozone season program.
    In addition, as described in section VII.D.2, ``Allocations to New
Units,'' of the preamble to the final Transport Rule, EPA is providing
a mechanism to make allowances available in the future for new units
built in Indian country. Table III.E-3 shows the Indian country set-
asides EPA is finalizing to set aside Transport Rule ozone-season
allowances from the budgets of the states addressed in this final rule
that have Indian country within their borders (i.e., Iowa, Michigan,
Missouri, and Wisconsin). As explained in the final Transport Rule,

EPA will administer these Indian country new unit set-asides regardless
of whether a state replaces its Transport Rule FIP with an approved
SIP. EPA received one comment from a state regarding the size of its
Indian Country new unit set-aside. However, there was no information
submitted showing that EPA's calculations or methodologies were in
error. Therefore, EPA is finalizing the new unit set-asides and Indian
country new unit set-asides, as proposed, with adjustments to reflect
any revisions to the appropriate budgets, for the five states in this
final action.

Table III.E-2--State New Unit Set-Asides as a Percent of State NOX Ozone
                         Season Trading Budgets
------------------------------------------------------------------------
                                                              NOX ozone
                                                              season new
                                                              unit set-
                                                                aside
                                                              (percent)
------------------------------------------------------------------------
Iowa.......................................................            2
Michigan...................................................            2
Missouri...................................................            3
Oklahoma...................................................            2
Wisconsin..................................................            6
------------------------------------------------------------------------

  Table III.E-3--New Unit Set-Asides and Indian Country New Unit Set-Asides for 2012-2013; 2014 and Thereafter
                                                      \11\
----------------------------------------------------------------------------------------------------------------
                                                                          Indian country new  Indian country new
                                  New unit set-aside  New unit set-aside  unit set-aside for  unit set-aside for
              State                for 2012 and 2013     for 2014 and        2012 and 2013         2014 and
                                        (tons)        thereafter  (tons)        (tons)        thereafter  (tons)
----------------------------------------------------------------------------------------------------------------
Alabama.........................                 635                 630  ..................  ..................
Arkansas........................                 301                 301  ..................  ..................
Florida.........................                 529                 529                  28                  28
Georgia.........................                 559                 366  ..................  ..................
Illinois........................               1,697               1,697  ..................  ..................
Indiana.........................               1,406               1,385  ..................  ..................
Iowa............................                 314                 308                  17                  16
Kentucky........................               1,447               1,307  ..................  ..................
Louisiana.......................                 390                 390                  13                  13
Maryland........................                 144                 144  ..................  ..................
Michigan........................                 533                 513                  28                  27
Mississippi.....................                 193                 193                  10                  10
Missouri........................                 683                 632  ..................  ..................
New Jersey......................                  68                  68  ..................  ..................
New York........................                 242                 242                   8                   8
North Carolina..................               1,308               1,089                  22                  18
Ohio............................                 801                 756  ..................  ..................
Oklahoma........................             731 437                 437  ..................  ..................
Pennsylvania....................               1,044               1,038  ..................  ..................
South Carolina..................                 264                 264                  14                  14
Tennessee.......................                 298                 160  ..................  ..................
Texas...........................               1,828               1,828                  63                  63
Virginia........................                 723                 723  ..................  ..................
West Virginia...................               1,264               1,165  ..................  ..................
Wisconsin.......................                 872                 844                  15                  14
----------------------------------------------------------------------------------------------------------------

    Finally, EPA is finalizing the unit-level allocations of Transport
Rule NOX ozone season allowances under the FIP to existing
covered units in Iowa, Michigan, Missouri, Oklahoma, and Wisconsin.
These allocations are presented in the TSD entitled ``Final Unit-Level
Ozone Season NOX Allowance Allocations to Existing Units in
Five States: Supplemental Final Rule TSD,'' which is available in the
public docket for this rule and on the Web at http://www.epa.gov/crossstaterule. The methodology and procedures used for allocations to
existing units covered by the Transport Rule ozone season
NOX program are specified in section VII.D, ``Allocation of
Emission Allowances,'' of the preamble to the final Transport Rule and
in the TSD entitled ``Allowance Allocation Final Rule TSD,'' which is
available in the public docket for this rule. The TSD entitled ``Final
Unit-Level Ozone Season NOX Allowance Allocations to
Existing Units in Five States: Supplemental Final Rule TSD'' also
describes how to access publicly available downloadable Excel
spreadsheets with the unit-level allowance allocations and the
supporting data EPA used in applying the final Transport Rule existing
unit allocation methodology to eligible units in each of the five
states in this final rule on the Web at http://www.epa.gov/crossstaterule.
---------------------------------------------------------------------------

    \11\ This table reflects ozone-season NOX budgets and
variability limits as currently effective based on finalization of
the Transport Rule published on July 6, 2011 and finalization of
this supplemental action. In a separate action, EPA has proposed
revisions to certain state budgets and new unit set-asides that are
not reflected in these tables, as they are not yet finalized. That
action may be reviewed at 76 FR 63860, October 14, 2011.
---------------------------------------------------------------------------

F. Implementation of the Transport Rule NOX Ozone Season
Trading Program

    As discussed above, EPA concludes in this final rule that the
Transport Rule NOX Ozone Season Trading Program set forth in
the final Transport Rule should be used as the FIP for Iowa, Michigan,
Missouri, Oklahoma, and Wisconsin with regard to the 1997 ozone NAAQS.
In the SNPR, EPA proposed that the implementation of the Transport Rule
ozone season program be identical for these five states to
implementation for the other states subject to this program. Under this
final rule, the implementation of this program for these five states is
the same as for the

other states, except for the deadlines for submission of allocations
for existing units for 2013.
    Under the Transport Rule, states have the option of submitting
three types of SIP revisions that, if approved, change certain
provisions of the Transport Rule NOX Ozone Season Trading
Program. First, a state may submit a SIP revision setting forth
allocations to existing units for 2013. Second, a state may submit an
abbreviated SIP that replaces the allowance allocation provisions in
the FIP to existing and new units starting in 2014 or any year
thereafter. Third, a state may submit a full SIP that replaces the FIP
entirely (except for any provisions concerning units in any Indian
country within the borders of the state) but substantively changes only
the allowance allocation provisions starting in 2014 or any year
thereafter.
    With regard to the first type of SIP revision, involving only 2013
allocations to existing units, the final Transport Rule set a series of
deadlines concerning submission, approval, and implementation of state-
determined 2013 existing-unit allocations. Specifically, states under
the final Transport Rule were required to inform EPA of their intent to
submit 2013 allocations for existing units by November 7, 2011 and must
submit these allocations by April 1, 2012, and the Administrator will
record the allocations, if approved, by October 1, 2012. Because this
series of sequential deadlines began about six months before the
issuance and the publication of this final rule, EPA is revising the
final Transport Rule (including the Transport Rule NOX Ozone
Season Trading Program) to establish an analogous series--only for
Iowa, Michigan, Missouri, Oklahoma, and Wisconsin--of deadlines for
2013 allocations of Transport Rule NOX Ozone Season
allowances using dates that are about six months later than the dates
in the generally applicable series of 2013 allocation-related
deadlines. For example, the five states must inform EPA of their intent
to submit 2013 allocations for existing units by the date 70 days after
publication of this final rule in the Federal Register and must submit
these allocations by October 1, 2012, and the Administrator will record
the allocations, if approved, by April 15, 2013.\12\
---------------------------------------------------------------------------

    \12\ Similarly, the deadline for recordation by the
Administrator of 2012 existing-unit allocations and, in the absence
of a notice by a state of intent to submit a SIP revision with 2013
allocations, of 2013 existing-unit allocations is moved for the five
states to the date 90 days after publication of this final rule in
the Federal Register. The analogous deadline for the other states in
the Transport Rule ozone season program was November 7, 2011, which
was set as the date 90 days after publication of the final Transport
Rule and precedes the issuance and publication of this final rule.
---------------------------------------------------------------------------

    With regard to the other two types of SIP revisions (abbreviated
SIPs and full SIPs), all of the deadlines for SIP submission and for
submission of allocations (or results of auctions, if any) for the
other states in the Transport Rule ozone season program are about 11
months or more after the issuance or the publication of the final
Transport Rule, and no commenters suggested changing these deadlines
for Iowa, Michigan, Missouri, Oklahoma, and Wisconsin. Consequently,
EPA is finalizing these deadlines related to abbreviated SIPs and full
SIPs. The submission deadlines and process for abbreviated SIPs and
full SIPs for all states (including the five states covered by this
final rule) in the Transport Rule ozone season program are found in
section X, ``Transport Rule State Implementation Plans,'' of the
preamble to the final Transport Rule.
    Finally, under the final Transport Rule, the first Transport Rule
ozone season trading program runs from May 1, 2012 through September
30, 2012. For the reasons discussed above, the FIPs for Iowa, Michigan,
Missouri, Oklahoma, and Wisconsin apply the Transport Rule ozone-season
NOX requirements to sources in those states in the same
manner the requirements are applied to sources in other states covered
by Transport Rule ozone-season provisions.

IV. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this
action is a ``significant regulatory action.'' Accordingly, EPA
submitted this action to the Office of Management and Budget (OMB) for
review under Executive Orders 12866 and 13563 (76 FR 3821, January 21,
2011) and any changes made in response to OMB recommendations have been
documented in the docket for this action. This action has also been
determined to be economically significant. EPA's regulatory impacts
analysis (RIA) of the July 2011 final Transport Rule included modeling
of ozone-season NOX reductions for the states covered in
this final rulemaking. While the results of that analysis cannot be
disaggregated to isolate the impacts of this rulemaking alone, that
analysis does include a comprehensive and fully detailed accounting of
the costs and benefits of the Transport Rule programs, inclusive of the
impacts of this rulemaking.\13\
---------------------------------------------------------------------------

    \13\ For more information, please see the final Transport Rule
Regulatory Impact Analysis in the docket for this rulemaking (EPA-
HQ-OAR-2009-0491-4409).
---------------------------------------------------------------------------

B. Paperwork Reduction Act

    EPA is required to document the information collection burden
imposed by the Transport Rule program on industry, States, and EPA in
an information collection request (ICR). The ICR describes the
information collection requirements associated with the final Transport
Rule program inclusive of this proposal and estimates the incremental
costs of compliance with all such requirements, such as the requirement
for industry to monitor, record, and report emissions data to EPA.
    The ICR for the Transport Rule Program inclusive of this
supplemental rule was submitted for approval to OMB under the Paperwork
Reduction Act, 44 U.S.C. 3501 et seq., and was approved under OMB
control number 2060-0667. EPA believes that there are no information
collection requirements or burden beyond those reported in the
Transport Rule program inclusive of this supplemental rule.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency
to prepare a regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements under the Administrative
Procedure Act or any other statute unless the agency certifies that the
rule will not have a significant economic impact on a substantial
number of small entities. Small entities include small businesses,
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of this final rule on small
entities, small entity is defined as:
    (1) A small business as defined by the Small Business
Administration's (SBA) regulations at 13 CFR 121.201. For the electric
power generation industry, the small business size standard is an
ultimate parent entity defined as having a total electric output of 4
million megawatt-hours (MW-hour) or less in the previous fiscal year.
    (2) A small governmental jurisdiction that is a government of a
city, county, town, school district or special district with a
population of less than 50,000; and
    (3) A small organization that is any not-for-profit enterprise
which is

independently owned and operated and is not dominant in its field.

     Table IV.C-1--Potentially Regulated Categories and Entities \a\
------------------------------------------------------------------------
                                                        Examples of
           Category              NAICS Code \b\    potentially regulated
                                                         entities
------------------------------------------------------------------------
Industry......................            221112  Fossil-fuel-fired
                                                   electric utility
                                                   steam generating
                                                   units.
Federal Government............        \c\ 221112  Fossil-fuel-fired
                                                   electric utility
                                                   steam generating
                                                   units owned by the
                                                   federal government.
State/Local Government........        \c\ 221112  Fossil-fuel-fired
                                                   electric utility
                                                   steam generating
                                                   units owned by
                                                   municipalities.
Tribal Government.............            921150  Fossil-fuel-fired
                                                   electric utility
                                                   steam generating
                                                   units in Indian
                                                   Country.
------------------------------------------------------------------------
\a\ Include NAICS categories for source categories that own and operate
  electric generating units only.
\b\ North American Industry Classification System.
\c\ Federal, state, or local government-owned and operated
  establishments are classified according to the activity in which they
  are engaged.

    After considering the economic impacts of the Transport Rule
program inclusive of this supplemental rule on small entities, as
described in section XII.C of the preamble to the final Transport Rule,
EPA certifies that this action will not have a significant economic
impact on a substantial number of small entities (No SISNOSE). This
certification is based on the economic impact of the final Transport
Rule inclusive of this supplemental rule on all affected small entities
across all industries affected. EPA assessed the potential impact of
the final Transport Rule on small entities and found that there are
about 660 potentially affected small units (i.e., greater than 25 MW
and generating less than 4MM MWh) out of 3,625 existing units in the TR
region. The majority of these EGUs are owned by entities that do not
meet the small entity definition. The remaining 271 of the 660 EGUs are
owned by 108 potentially affected small entities and are likely to be
affected by this rule. EPA estimates that 24 of the 108 identified
small entities will have annualized costs greater than 1 percent of
their revenues, and the other 84 are projected to incur costs less than
1 percent of revenues. Eleven small entities out of 108--only about 10
percent--are estimated to have annualized costs greater than 3 percent
of their revenues, which factors into EPA's finding of no SISNOSE. EPA
believes that the provisions of the Regulatory Flexibility Act are
covered by and reported in section XII.C of the preamble to the final
Transport Rule.
    Although this final rule will not have a significant economic
impact on a substantial number of small entities, EPA nonetheless has
tried to reduce the impact of this rule on small entities. In EPA's
modeling, most of the cost impacts for these small entities and their
associated units are driven by lower electricity generation relative to
the base case. Another main driver of small entity impacts are higher
fuel costs, which the affected units would incur irrespective of
whether they had to comply with this rule. In addition, EPA's decision
to exclude units smaller than 25 MWe has already significantly reduced
the burden on hundreds of small entities. Hence, EPA has concluded that
there is no SISNOSE for this rule.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2
U.S.C. 1531-1538, requires federal agencies, unless otherwise
prohibited by law, to assess the effects of their regulatory actions on
state, local, and tribal governments and the private sector. The
Transport Rule program inclusive of this supplemental rule contains a
Federal mandate that may result in expenditures of $100 million or more
for state, local, and tribal governments, in the aggregate, or the
private sector in any one year. Accordingly, EPA has prepared under
section 202 of the UMRA a written statement that is summarized in
section XII.D of the preamble to the final Transport Rule.
    Consistent with the intergovernmental consultation provisions of
section 204 of the UMRA, EPA held consultations with the governmental
entities affected by the final Transport Rule and this supplemental
rule. As detailed in section XII.D of the preamble to the final
Transport Rule, EPA participated in informational calls with the
Environmental Council of the States (ECOS) and the National Governors
Association to provide information about the January 7, 2011 NODA \14\
directly to state and local officials and conducted consultations with
federally recognized tribes prior to finalizing the final Transport
Rule and issuing the supplemental notice of proposed rulemaking for the
action being finalized here for inclusion of six additional states (of
which only three being finalized today--Iowa, Michigan, and Wisconsin--
have Indian country within their boundaries).
---------------------------------------------------------------------------

    \14\ 76 FR 1109 (January 7, 2011).
---------------------------------------------------------------------------

    EPA believes that no unfunded mandates have been created by the
Transport Rule program inclusive of this action. Neither the final
Transport Rule nor the provisions in this SNPR have regulatory
requirements that might significantly or uniquely affect small
governments.

E. Executive Order 13132: Federalism

    As described in section XII.E of the preamble to the final
Transport Rule, EPA has concluded that the Transport Rule program
inclusive of this supplemental rule does not have federalism
implications. Thus, Executive Order 13132 does not apply to the final
Transport Rule or to this SNPR.

F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments

    Under Executive Order 13175 (65 FR 67249, November 9, 2000), EPA
may not issue a regulation that has tribal implications, that imposes
substantial direct compliance costs, and that is not required by
statute, unless the Federal government provides the funds necessary to
pay the direct compliance costs incurred by tribal governments, or EPA
consults with tribal officials early in the process of developing the
proposed regulation and develops a tribal summary impact statement. EPA
has concluded that this action may have tribal implications. As
described in section XII.F of the preamble to the final Transport Rule,
EPA believes that there has been proper consultation and coordination
with Indian tribal governments for the Transport Rule program inclusive
of this supplemental rule.

    As required by section 7(a) of the Executive Order, EPA's Tribal
Consultation Official has certified that the requirements of the
Executive Order have been met in a meaningful and timely manner. A copy
of the certification is included in the docket for the final Transport
Rule.

G. Executive Order 13045: Protection of Children From Environmental
Health and Safety Risks

    Executive Order 13045 (62 FR 19,885, April 23, 1997) applies to any
rule that: (1) Is determined to be ``economically significant'' as
defined under EO 12866, and (2) concerns an environmental health or
safety risk that EPA has reason to believe may have a disproportionate
effect on children. If the regulatory action meets both criteria, the
Agency must evaluate the environmental health or safety effects of this
planned rule on children, and explain why this planned regulation is
preferable to other potentially effective and reasonably feasible
alternatives considered by the Agency.
    As described in section XII.G of the preamble to the final
Transport Rule, the Transport Rule program inclusive of this
supplemental rule is not subject to Executive Order 13045 because it
does not involve decisions that increase environmental health or safety
risks that may disproportionately affect children. The EPA believes
that the emissions reductions from the strategies in the Transport Rule
program inclusive of this action will further improve air quality and
will further improve children's health.

H. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use

    Executive Order 13211 (66 FR 28355, May 22, 2001) provides that
agencies shall prepare and submit to the Administrator of the Office of
Regulatory Affairs, OMB, a Statement of Energy Effects for certain
actions identified as ``significant energy actions.'' Section 4(b) of
Executive Order 13211 defines ``significant energy action'' as ``any
action by an agency (normally published in the Federal Register) that
promulgates or is expected to lead to the promulgation of a final rule
or regulation, including notices of inquiry, advance notices of
proposed rulemaking, and notices of proposed rulemaking: (1)(i) That is
a significant regulatory action under Executive Order 12866 or any
successor order, and (ii) is likely to have a significant adverse
effect on the supply, distribution, or use of energy; or (2) that is
designated by the Administrator of the Office of Information and
Regulatory Affairs as a significant energy action.'' This rule is a
significant regulatory action under Executive Order 12866, and this
rule is likely to have a significant adverse effect on the supply,
distribution, or use of energy. EPA prepared a Statement of Energy
Effects for the Transport Rule program inclusive of this supplemental
rule which appears in section XII.H of the preamble to the final
Transport Rule.
    EPA believes that there is no impact to the energy supply beyond
that which is reported for the Transport Rule program inclusive of this
supplemental rule in the final Transport Rule.

I. National Technology Transfer Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Public Law 104-113, 12(d) (15 U.S.C. 272 note)
directs EPA to use voluntary consensus standards in its regulatory
activities unless to do so would be inconsistent with applicable law or
otherwise impractical. Voluntary consensus standards are technical
standards (e.g., materials specifications, test methods, sampling
procedures, and business practices) that are developed or adopted by
voluntary consensus standards bodies. NTTAA directs EPA to provide
Congress, through OMB, explanations when the Agency decides not to use
available and applicable voluntary consensus standards. As described in
section XII.I of the preamble to the final Transport Rule, the
Transport Rule program inclusive of this supplemental rule will require
all sources to meet the applicable monitoring requirements of 40 CFR
part 75. Part 75 already incorporates a number of voluntary consensus
standards.

J. Executive Order 12898: Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income Populations

    Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes
federal executive policy on environmental justice. Its main provision
directs federal agencies, to the greatest extent practicable and
permitted by law, to make environmental justice part of their mission
by identifying and addressing, as appropriate, disproportionately high
and adverse human health or environmental effects of their programs,
policies, and activities on minority, low-income, and Tribal
populations in the United States. During development of this Transport
Rule program inclusive of this supplemental rule, EPA considered its
impacts on low-income, minority, and tribal communities in several ways
and provided multiple opportunities for these communities to
meaningfully participate in the rulemaking process. As described in
section XII.J of the preamble to the final transport Rule, EPA believes
that the final remedy in the Transport Rule program inclusive of this
supplemental rule addresses potential environmental justice concerns
about localized hot spots and reduces ambient concentrations of
pollution where they are most needed by sensitive and vulnerable
populations.
    EPA believes that the vast majority of communities and individuals
in areas covered by the Transport Rule program inclusive of this
action, including numerous low-income, minority, and tribal individuals
and communities in both rural areas and inner cities in the eastern and
central U.S., will see significant improvements in air quality and
resulting improvements in health. EPA's assessment of the effects of
the final Transport Rule program inclusive of this supplemental rule on
these communities is detailed in section XII.J of the preamble to the
final Transport Rule. Based on this assessment, EPA concludes that we
do not expect disproportionately high and adverse human health or
environmental effects on minority, low-income, or tribal populations in
the United States as a result of implementing the Transport Rule
program inclusive of this action.

K. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. EPA will submit a report containing this rule and other
required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. A Major rule cannot
take effect until 60 days after it is published in the Federal
Register. This action is a ``major rule'' as defined by 5 U.S.C.
804(2). This rule will be effective February 27, 2012.

L. Judicial Review

    Petitions for judicial review of this action must be filed in the
United States Court of Appeals for the District of Columbia Circuit by
February 27, 2012. Section 307(b)(1) of the CAA indicates which Federal
Courts of Appeal have venue for petitions of review of final

actions by EPA. This section provides, in part, that petitions for
review must be filed in the Court of Appeals for the District of
Columbia Circuit if (i) the agency action consists of ``nationally
applicable regulations promulgated, or final action taken, by the
Administrator,'' or (ii) such action is locally or regionally
applicable, if ``such action is based on a determination of nationwide
scope or effect and if in taking such action the Administrator finds
and publishes that such action is based on such a determination.''
    Any final action related to the Transport Rule is ``nationally
applicable'' within the meaning of section 307(b)(1). Through this
rule, EPA interprets section 110 of the CAA, a provision which has
nationwide applicability. In addition, the Transport Rule applies to 27
States. The Transport Rule is also based on a common core of factual
findings and analyses concerning the transport of pollutants between
the different states subject to it. For these reasons, the
Administrator also is determining that any final action regarding the
Transport Rule is of nationwide scope and effect for purposes of
section 307(b)(1). Thus, pursuant to section 307(b) any petitions for
review of final actions regarding the Transport Rule must be filed in
the Court of Appeals for the District of Columbia Circuit within 60
days from the date final action is published in the Federal Register.
    Filing a petition for reconsideration of this action does not
affect the finality of this rule for the purposes of judicial review
nor does it extend the time within which a petition for judicial review
may be filed and shall not postpone the effectiveness of such rule or
action. In addition, pursuant to CAA section 307(b)(2) this action may
not be challenged later in proceedings to enforce its requirements.

List of Subjects

40 CFR Part 52

    Administrative practice and procedure, Air pollution control,
Intergovernmental relations, Nitrogen oxides, Ozone, Particulate
matter, Regional haze, Reporting and recordkeeping requirements, Sulfur
dioxide.

40 CFR Part 97

    Administrative practice and procedure, Air pollution control,
Electric utilities, Nitrogen oxides, Reporting and recordkeeping
requirements, Sulfur dioxide.

    Dated: December 15, 2011.
Lisa P. Jackson,
Administrator.
    For the reasons set forth in the preamble, parts 52 and 97 of
chapter I of title 40 of the Code of Federal Regulations are amended as
follows:

PART 52--[AMENDED]

0
1. The authority citation for Part 52 continues to read as follows:

    Authority: 42 U.S.C. 7401, et seq.

Subpart A--General Provisions

Sec.  52.38  [Amended]

0
2. Section 52.38 is amended by:
0
a. In paragraph (b)(2), add, after the word ``Indiana'', the word
``Iowa'', add, after the word ``Maryland'', the word ``Michigan'', add
after the word ``Mississippi'', the word ``Missouri'', add after the
word ``Ohio'', the word ``Oklahoma'', and remove the words ``and West
Virginia'' and add, in their place, the words ``West Virginia, and
Wisconsin'';
0
b. In paragraph (b)(3)(v)(A), add, after the words ``October 17,
2011'', the words ``or, for Iowa, Michigan, Missouri, Oklahoma, and
Wisconsin, March 6, 2012'' and add, after the words ``April 1, 2012'',
the words ``or, for Iowa, Michigan, Missouri, Oklahoma, and Wisconsin,
October 1, 2012''; and
0
c. In paragraph (b)(3)(v)(B), add, after the words ``April 1, 2012'',
the words ``or, for Iowa, Michigan, Missouri, Oklahoma, and Wisconsin,
October 1, 2012''.

Subpart Q--Iowa

0
3. Section 52.840 is amended by adding a new paragraph (b) to read as
follows:

Sec.  52.840  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (b)(1) The owner and operator of each source and each unit located
in the State of Iowa and Indian country within the borders of the State
and for which requirements are set forth under the TR NOX
Ozone Season Trading Program in subpart BBBBB of part 97 of this
chapter must comply with such requirements. The obligation to comply
with such requirements with regard to sources and units in the State
will be eliminated by the promulgation of an approval by the
Administrator of a revision to Iowa's State Implementation Plan (SIP)
as correcting the SIP's deficiency that is the basis for the TR Federal
Implementation Plan under Sec.  52.38(b), except to the extent the
Administrator's approval is partial or conditional. The obligation to
comply with such requirements with regard to sources and units located
in Indian country within the borders of the State will not be
eliminated by the promulgation of an approval by the Administrator of a
revision to Iowa's SIP.
    (2) Notwithstanding the provisions of paragraph (b)(1) of this
section, if, at the time of the approval of Iowa's SIP revision
described in paragraph (b)(1) of this section, the Administrator has
already started recording any allocations of TR NOX Ozone
Season allowances under subpart BBBBB of part 97 of this chapter to
units in the State for a control period in any year, the provisions of
subpart BBBBB of part 97 of this chapter authorizing the Administrator
to complete the allocation and recordation of TR NOX Ozone
Season allowances to units in the State for each such control period
shall continue to apply, unless provided otherwise by such approval of
the State's SIP revision.

Subpart X--Michigan

0
4. Section 52.1186 is amended by adding a new paragraph (e) to read as
follows:

Sec.  52.1186  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (e)(1) The owner and operator of each source and each unit located
in the State of Michigan and Indian country within the borders of the
State and for which requirements are set forth under the TR
NOX Ozone Season Trading Program in subpart BBBBB of part 97
of this chapter must comply with such requirements. The obligation to
comply with such requirements with regard to sources and units in the
State will be eliminated by the promulgation of an approval by the
Administrator of a revision to Michigan's State Implementation Plan
(SIP) as correcting the SIP's deficiency that is the basis for the TR
Federal Implementation Plan under Sec.  52.38(b), except to the extent
the Administrator's approval is partial or conditional. The obligation
to comply with such requirements with regard to sources and units
located in Indian country within the borders of the State will not be
eliminated by the promulgation of an approval by the Administrator of a
revision to Michigan's SIP.
    (2) Notwithstanding the provisions of paragraph (e)(1) of this
section, if, at the time of the approval of Michigan's SIP revision
described in paragraph (e)(1) of this section, the Administrator has

already started recording any allocations of TR NOX Ozone
Season allowances under subpart BBBBB of part 97 of this chapter to
units in the State for a control period in any year, the provisions of
subpart BBBBB of part 97 of this chapter authorizing the Administrator
to complete the allocation and recordation of TR NOX Ozone
Season allowances to units in the State for each such control period
shall continue to apply, unless provided otherwise by such approval of
the State's SIP revision.

Subpart AA--Missouri

0
5. Section 52.1326 is amended by adding a new paragraph (b) to read as
follows:

Sec.  52.1326  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (b)(1) The owner and operator of each source and each unit located
in the State of Missouri and for which requirements are set forth under
the TR NOX Ozone Season Trading Program in subpart BBBBB of
part 97 of this chapter must comply with such requirements. The
obligation to comply with such requirements will be eliminated by the
promulgation of an approval by the Administrator of a revision to
Missouri's State Implementation Plan (SIP) as correcting the SIP's
deficiency that is the basis for the TR Federal Implementation Plan
under Sec.  52.38(b), except to the extent the Administrator's approval
is partial or conditional.
    (2) Notwithstanding the provisions of paragraph (b)(1) of this
section, if, at the time of the approval of Missouri's SIP revision
described in paragraph (b)(1) of this section, the Administrator has
already started recording any allocations of TR NOX Ozone
Season allowances under subpart BBBBB of part 97 of this chapter to
units in the State for a control period in any year, the provisions of
subpart BBBBB of part 97 of this chapter authorizing the Administrator
to complete the allocation and recordation of TR NOX Ozone
Season allowances to units in the State for each such control period
shall continue to apply, unless provided otherwise by such approval of
the State's SIP revision.

Subpart LL--Oklahoma

0
6. Section 52.1930 is added to read as follows:

Sec.  52.1930  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    (a) The owner and operator of each source and each unit located in
the State of Oklahoma and Indian country within the borders of the
State and for which requirements are set forth under the TR
NOX Ozone Season Trading Program in subpart BBBBB of part 97
of this chapter must comply with such requirements. The obligation to
comply with such requirements with regard to sources and units in the
State will be eliminated by the promulgation of an approval by the
Administrator of a revision to Oklahoma's State Implementation Plan
(SIP) as correcting the SIP's deficiency that is the basis for the TR
Federal Implementation Plan under Sec.  52.38(b), except to the extent
the Administrator's approval is partial or conditional. The obligation
to comply with such requirements with regard to sources and units
located in Indian country within the borders of the State will not be
eliminated by the promulgation of an approval by the Administrator of a
revision to Oklahoma's SIP.
    (b) Notwithstanding the provisions of paragraph (a) of this
section, if, at the time of the approval of Oklahoma's SIP revision
described in paragraph (a) of this section, the Administrator has
already started recording any allocations of TR NOX Ozone
Season allowances under subpart BBBBB of part 97 of this chapter to
units in the State for a control period in any year, the provisions of
subpart BBBBB of part 97 of this chapter authorizing the Administrator
to complete the allocation and recordation of TR NOX Ozone
Season allowances to units in the State for each such control period
shall continue to apply, unless provided otherwise by such approval of
the State's SIP revision.

Subpart YY--Wisconsin

0
7. Section 52.2587 is amended by adding a new paragraph (e) to read as
follows:

Sec.  52.2587  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

* * * * *
    (e)(1) The owner and operator of each source and each unit located
in the State of Wisconsin and Indian country within the borders of the
State and for which requirements are set forth under the TR
NOX Ozone Season Trading Program in subpart BBBBB of part 97
of this chapter must comply with such requirements. The obligation to
comply with such requirements with regard to sources and units in the
State will be eliminated by the promulgation of an approval by the
Administrator of a revision to Wisconsin's State Implementation Plan
(SIP) as correcting the SIP's deficiency that is the basis for the TR
Federal Implementation Plan under Sec.  52.38(b), except to the extent
the Administrator's approval is partial or conditional. The obligation
to comply with such requirements with regard to sources and units
located in Indian country within the borders of the State will not be
eliminated by the promulgation of an approval by the Administrator of a
revision to Wisconsin's SIP.
    (2) Notwithstanding the provisions of paragraph (e)(1) of this
section, if, at the time of the approval of Wisconsin's SIP revision
described in paragraph (e)(1) of this section, the Administrator has
already started recording any allocations of TR NOX Ozone
Season allowances under subpart BBBBB of part 97 of this chapter to
units in the State for a control period in any year, the provisions of
subpart BBBBB of part 97 of this chapter authorizing the Administrator
to complete the allocation and recordation of TR NOX Ozone
Season allowances to units in the State for each such control period
shall continue to apply, unless provided otherwise by such approval of
the State's SIP revision.

PART 97--[AMENDED]

0
8. The authority citation for Part 97 continues to read as follows:

    Authority:  42 U.S.C. 7401, 7403, 7410, 7426, 7601, and 7651, et
seq.

0
9. Section 97.510 is revised to read as follows:

Sec.  97.510  State NOX Ozone Season trading budgets, new
unit set-asides, Indian country new unit set-aside, and variability
limits.

    (a) The State NOX Ozone Season trading budgets, new unit
set-asides, and Indian country new unit set-asides for allocations of
TR NOX Ozone Season allowances for the control periods in
2012 and thereafter are as follows:

----------------------------------------------------------------------------------------------------------------
                                                                     NOX Ozone                    Indian country
                                                                  Season trading   New unit set-   new unit set-
                              State                                budget (tons)   aside (tons)    aside (tons)
                                                                  * for 2012 and   for 2012 and    for 2012 and
                                                                       2013            2013            2013
----------------------------------------------------------------------------------------------------------------
Alabama.........................................................          31,746             635  ..............
Arkansas........................................................          15,037             301  ..............
Florida.........................................................          27,825             529              28
Georgia.........................................................          27,944             559  ..............
Illinois........................................................          21,208           1,697  ..............
Indiana.........................................................          46,876           1,406  ..............
Iowa............................................................          16,532             314              17
Kentucky........................................................          36,167           1,447  ..............
Louisiana.......................................................          13,432             390              13
Maryland........................................................           7,179             144  ..............
Michigan........................................................          28,041             533              28
Mississippi.....................................................          10,160             193              10
Missouri........................................................          22,762             683  ..............
New Jersey......................................................           3,382              68  ..............
New York........................................................           8,331             242               8
North Carolina..................................................          22,168           1,308              22
Ohio............................................................          40,063             801  ..............
Oklahoma........................................................          36,567             731  ..............
                                                                          21,835             437  ..............
Pennsylvania....................................................          52,201           1,044  ..............
South Carolina..................................................          13,909             264              14
Tennessee.......................................................          14,908             298  ..............
Texas...........................................................          63,043           1,828              63
Virginia........................................................          14,452             723  ..............
West Virginia...................................................          25,283           1,264  ..............
Wisconsin.......................................................          14,784             872              15
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
                                                                     NOX Ozone                    Indian country
                                                                  Season trading   New unit set-   new unit set-
                              State                                budget (tons)   aside (tons)    aside (tons)
                                                                  * for 2014 and   for 2014 and    for 2014 and
                                                                    thereafter      thereafter      thereafter
----------------------------------------------------------------------------------------------------------------
Alabama.........................................................          31,499             630  ..............
Arkansas........................................................          15,037             301  ..............
Florida.........................................................          27,825             529              28
Georgia.........................................................          18,279             366  ..............
Illinois........................................................          21,208           1,697  ..............
Indiana.........................................................          46,175           1,385  ..............
Iowa............................................................          16,207             308              16
Kentucky........................................................          32,674           1,307  ..............
Louisiana.......................................................          13,432             390              13
Maryland........................................................           7,179             144  ..............
Michigan........................................................          27,016             513              27
Mississippi.....................................................          10,160             193              10
Missouri........................................................          21,073             632  ..............
New Jersey......................................................           3,382              68  ..............
New York........................................................           8,331             242               8
North Carolina..................................................          18,455           1,089              18
Ohio............................................................          37,792             756  ..............
Oklahoma........................................................          21,835             437  ..............
Pennsylvania....................................................          51,912           1,038  ..............
South Carolina..................................................          13,909             264              14
Tennessee.......................................................           8,016             160  ..............
Texas...........................................................          63,043           1,828              63
Virginia........................................................          14,452             723  ..............
West Virginia...................................................          23,291           1,165  ..............
Wisconsin.......................................................          14,296             844              14
----------------------------------------------------------------------------------------------------------------
* Each trading budget includes the new unit set-aside and, where applicable, the Indian country new unit set-
  aside and does not include the variability limit.

    (b) The States' variability limits for the State NOX
Ozone Season trading budgets for the control periods in 2012 and
thereafter are as follows:

------------------------------------------------------------------------
                                                            Variability
                                            Variability     limits for
                  State                     limits for       2014 and
                                           2012 and 2013    thereafter
------------------------------------------------------------------------
Alabama.................................           6,667           6,615
Arkansas................................           3,158           3,158
Florida.................................           5,843           5,843
Georgia.................................           5,868           3,839
Illinois................................           4,454           4,454
Indiana.................................           9,844           9,697
Iowa....................................           3,472           3,403
Kentucky................................           7,595           6,862
Louisiana...............................           2,821           2,821
Maryland................................           1,508           1,508
Michigan................................           5,889           5,673
Mississippi.............................           2,134           2,134
Missouri................................           4,780           4,425
New Jersey..............................             710             710
New York................................           1,750           1,750
North Carolina..........................           4,655           3,876
Ohio....................................           8,413           7,936
Oklahoma................................           7,679           4,585
                                                   4,585
Pennsylvania............................          10,962          10,902
South Carolina..........................           2,921           2,921
Tennessee...............................           3,131           1,683
Texas...................................          13,239          13,239
Virginia................................           3,035           3,035
West Virginia...........................           5,309           4,891
Wisconsin...............................           3,105           3,002
------------------------------------------------------------------------

Sec.  97.521  [Amended]