[Federal Register Volume 76, Number 76 (Wednesday, April 20, 2011)]
[Rules and Regulations]
[Pages 22038-22044]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-9460]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[EPA-R09-OAR-2010-1078; FRL-9293-6]
Revision to the South Coast Portion of the California State
Implementation Plan, CPV Sentinel Energy Project AB 1318 Tracking
System
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: The Environmental Protection Agency (EPA) is taking final
action to approve a source-specific State Implementation Plan (SIP)
revision for the South Coast Air Quality Management District (District)
portion of the California SIP. This source-specific SIP revision is
known as the CPV Sentinel Energy Project AB 1318 Tracking System. The
SIP revision consists of enabling language and the AB 1318 Tracking
System to revise the District's SIP approved New Source Review (NSR)
program. The SIP revision allows the District to transfer offsetting
emission reductions for particulate matter less than 10 microns in
diameter (PM10) and one of its precursors, sulfur oxides
(SOX), to the CPV Sentinel Energy Project, which will be a
natural gas fired power plant.
DATES: This final rule is effective on May 20, 2011.
Docket: The index to the docket for this action is available
electronically at http://www.regulations.gov and in hard copy at EPA
Region IX, 75 Hawthorne Street, San Francisco, California. While all
documents in the docket are listed in the index, some information may
be publicly available only at the hard copy location (e.g., copyrighted
material), and some may not be publicly available in either location
(e.g., CBI). To inspect the hard copy materials, please schedule an
appointment during normal business hours with the contact listed in the
FOR FURTHER INFORMATION CONTACT section.
FOR FURTHER INFORMATION CONTACT: Laura Yannayon, EPA Region IX, (415)
972-3524, [email protected].
SUPPLEMENTARY INFORMATION: Throughout this document, ``we'', ``us'',
and ``our'' refer to EPA.
Table of Contents
I. Background
II. Evaluation of Source-Specific SIP Revision
A. What action is EPA finalizing?
B. Public Comments and Responses to Comments
III. EPA Action
IV. Statutory and Executive Order Reviews
A. Executive Order 12866, Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
13563
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
D. Unfunded Mandates Reform Act
E. Executive Order 13132, Federalism
F. Executive Order 13175, Coordination With Indian Tribal
Governments
G. Executive Order 13045, Protection of Children From
Environmental Health Risks and Safety Risks
H. Executive Order 13211, Actions That Significantly Affect
Energy Supply, Distribution, or Use
I. National Technology Transfer and Advancement Act
J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Population
I. Background
The proposed Sentinel Energy Project is designed to be a nominally
rated 850 megawatt electrical generating facility covering
approximately 37 acres within Riverside County, adjacent to Palm
Springs, California. EPA's proposal for this action contained a
detailed description of the project and the Clean Air Act's (CAA)
requirements for offsets during New Source Review permitting. 76 FR
2294 (January 13, 2011) With our proposal to approve this SIP revision,
EPA attached the complete list of PM10 and SOX
offsetting emission reductions that are being transferred in the AB
1318 Tracking System to our Technical Support Document (TSD).
Documentation for each of the offsetting emission reductions listed in
the attachment to the TSD was included in the docket for the proposal
in hard copy at EPA's offices as well as other locations. For
additional background information please see the January 13, 2011
proposed notice for this action. (76 FR 2294)
II. Evaluation of Source-Specific SIP Revision
A. What is the rule that EPA is finalizing?
EPA is finalizing a SIP revision for the South Coast portion of the
California SIP. The SIP revision will be codified in 40 CFR 52.220 by
incorporating by reference the Offset Requirements for the Proposed CPV
Sentinel Power Plant, including the CPV Sentinel Energy Project AB 1318
Tracking System, as adopted by the District.
The SIP revision provides a federally approved and enforceable
mechanism for the District to transfer PM10 and
SOX offsetting emissions reductions from the District's
internal bank to the Sentinel Energy Project and to track those
emissions credits through the AB 1318 Tracking System.
B. Public Comment and Final Action
In response to our January 13, 2011 proposed rule, we received four
comments, one each from the South Coast Air Quality Management District
(District), Michael Carroll of Latham & Watkins LLP, the Natural
Resources Defense Council (NRDC), and the Law Offices of Angela
Johnson-Mezaros on behalf of California Communities Against Toxics and
Communities for a Better Environment (jointly referred to herein as
``CCAT''). Copies of each comment letter have been added to the docket
and are accessible at regulations.gov. The comment from the District
supported EPA's analysis and proposed source-specific SIP revision and
provided an errata sheet correcting minor typos and the amount of
SOX offsets available in the AB1318 Tracking System (reduced
the quantity by 92 lbs). The comment from Latham & Watkins was also
supportive of our proposed action. The comment from NRDC generally
opposed the SIP revision but did not provide any specific grounds for
its opposition or raise any specific issues. To the extent that NRDC
generally opposes the SIP revision, our response to its general
opposition is included below with our response to CCAT's more specific
comments. We have summarized CCAT's comments (based on the structure of
their comment letter) and provide our response to each comment below.
Comment I: CCAT comments that EPA did not allow meaningful public
participation on the SIP revision for several reasons and that approval
of the SIP revision based on the available information would be
arbitrary and capricious.
Comment I.A: CCAT contends the regulatory text of the SIP revision
is too
[[Page 22039]]
vague and incomplete to be federally enforceable. CCAT contends that
the SIP revision consists of preambular or background language and that
the list of emissions credits being transferred is not included in the
SIP revision.
Response I.A: CCAT is incorrect on both points. EPA's proposed
approval quoted the text of the proposed source-specific revision in
the section of the proposal entitled ``What is in the SIP Revision?''
(76 FR at 2295) and also posted the text in the docket at Index No. I-
B. Upon finalizing the approval, EPA will codify this revision at 40
CFR 52.220. The SIP revision, therefore, consists of the regulatory
text that was quoted in EPA's proposed rule. Before quoting the
language in the proposed approval, we identified the language stating:
``The text of the proposed source-specific SIP revision is * * *'' 76
FR at 2295. This is the language that will be incorporated by reference
in 40 CFR 52.220. Therefore it is not preambular or background language
as stated by CCAT. The SIP revision language was available to the
public. This comment contains other conclusory statements such as
characterizing the SIP revision as being too vague to be enforceable
because it does not provide an enforceable mechanism for generating
emissions credits. These additional statements are generally repeated
elsewhere in the comment letter with more specificity. We have
responded to the more detailed comments rather than the very general
and conclusory statements in this section of the comment letter.
The full list of the credits that will be transferred is
incorporated by reference into the SIP revision. Incorporation by
reference of materials such as the list of the emissions credits being
transferred is permissible and there is no requirement for EPA to
include the list of credits in the regulatory text that will be
published in the Code of Federal Regulations. See Use of Incorporation
by Reference as a Mechanism for Shortening Federal Register Notices,
from Gerald H. Yamada, Principal Deputy General Counsel to Regulatory
Policy Group, dated Jan. 12, 1995. See also 1 CFR part 51.
The comment also contends that the SIP revision is insufficient
because it does not contain a ``mechanism for generating and validating
the credits''. The SIP revision does not purport to provide a mechanism
for generating credits. This SIP revision provides an enforceable
mechanism for the District to transfer previously generated emissions
credits and incorporates the list of those emissions credits. The
Sentinel Energy Project is a source that is not authorized to receive
emissions credits from the District's internal accounts in the absence
of this SIP revision because it is not a source category or type of
project listed in Rule 1304 as exempt or in Rule 1309.1 as a priority
reserve source. Thus, the general assertions submitted by CCAT that the
public did not have adequate notice for a variety of reasons does not
provide any basis for EPA to alter its proposed approval of this SIP
revision.
Comment I.B: CCAT contends the Federal Register Notice and TSD are
unclear and provide an inconsistent description of the proposed SIP
revision.
Response I.B: EPA disagrees with the comment and notes that CCAT
has not provided any specific examples in which the proposal and TSD
are vague or inconsistent. CCAT also contends that AB 1318 is of minor
relevance to this action. EPA agrees with this comment. EPA did not
propose approval of this action based on the State legislation and has
discussed that action only as background. EPA proposed to approve this
SIP revision because it complies with the requirements of the CAA.
Within this comment, CCAT also asserts that EPA's record for
proposing approval of the District's SIP revision provides an
inadequate justification. CCAT contends that EPA's record is deficient
because it does not acknowledge or explain that the proposed SIP
revision purportedly does three separate things: first, codify in
Federal law an entirely new method for the SCAQMD to generate emission
credits; second, apply that generation method to specific reductions
dating back to 1999; and third, transfer the credits out of the
SCAMQD's internal bank. See CCAT Letter at 3.
CCAT's first contention is that EPA does not explain or acknowledge
that it is codifying into Federal law a new method for the District to
generate emissions credits. The problem with CCAT's comment is that EPA
is not codifying a new method for the District to generate emissions
credits.\1\ The emissions credits the District is transferring pursuant
to its AB 1318 Tracking System are emission credits that existed in the
District's internal accounts. The AB 1318 Tracking System contains the
District's accounting of these specific credits and a mechanism for
transferring these emissions credits from the District's internal
account to Sentinel. The SIP revision does not establish a new method
for the District to generate emission credits. EPA reviewed the
submitted documentation demonstrating that a sufficient number of these
specific emissions credits being transferred meet the Federal integrity
criteria required by section 173 of the CAA.
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\1\ On February 4, 2011, the District adopted Rule 1315--Federal
New Source Review Tracking System--which does provide a general rule
for the District to credit and debit emissions credits in its
internal accounts. The District has submitted Rule 1315 to EPA as a
SIP revision. EPA will be acting on the Rule 1315 submittal in a
separate Notice of Proposed Rulemaking and will provide a 30 day
comment period with that action. Some of CCAT's comments on this
proposal may be more properly directed to any action that EPA
proposes to take on District Rule 1315.
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CCAT's second contention is that the District is now generating
credits from emissions reductions that occurred up to two decades ago
and also that the District's internal bank accounts have negative
balances. While some of the emissions credits that the District is
transferring arose from events in 1999, most occurred after 2003,
therefore characterizing 1999 as being two decades ago may be
technically correct but somewhat misleading. CCAT also states that no
evidence of the actual dates of when the reductions occurred is
contained in the public record. This is incorrect. The support
documentation, which is voluminous and was available for review in hard
copy, explicitly contains this information. In any event, we have
reviewed the documentation for the emissions reductions, including
those associated with events that occurred in 1999 and consider those
1999 emissions credits to meet the requirements of section 173 of the
CAA.
CCAT also contends the District has ``negative balances'' in its
internal accounts. For the purposes of this SIP revision, the balance
of the District's internal accounts is not relevant, since EPA examined
each of the specific emission reduction actions that are the basis for
the credits being transferred pursuant to this SIP revision and found a
sufficient quantity--compared to the amount needed for the CPV Sentinel
Energy Project, to meet the CAA offset requirements.
CCAT, NRDC and associated groups raised the same issue in a
Petition to the Administrator in December 2010. In responding to the
Petition, the Administrator examined the emission credits in the
District's internal accounts following passage of SB 827. SB 827 was a
companion bill to AB 1318 which directed the District to transfer
emissions credits from their internal accounts to exempt sources
covered by Rule 1304 and priority reserve sources covered by Rule
1309.1 beginning in January 2011. A copy of the Administrator's
petition response letter
[[Page 22040]]
is attached to and incorporated into this Response to Comments because
the same general issues arise with respect to AB 1318 and SB 827. The
Administrator's letter details the Agency's determination that the
District may use emissions reductions from previously shutdown sources,
including minor source orphan shutdowns, to fund its internal accounts.
The Administrator's letter also disagrees with assertions that the
District's internal accounts have negative balances. Thus, for all of
the reasons set forth in the Administrator's letter, EPA disagrees with
CCAT that this SIP revision constitutes codifying a new system of
generating emissions credits, that the District's internal accounts
have negative balances or that the emission credits are invalid because
they were created more than two decades ago.
CCAT's third contention is that this SIP revision allows the
District to transfer ownership of emission credits out of the
District's internal bank. EPA agrees with this contention but CCAT has
not raised any specific reason that such a transfer is contrary to the
requirements of the CAA and this comment does not provide any basis for
EPA to alter its proposal to approve the SIP revision providing a
Federal mechanism to enforce the transfer of ownership of these
emission credits. The District's decision to transfer valid emission
credits is a policy decision.
CCAT states that the project description of the SIP revision is
confusing because it does not ``admit'' that EPA is approving a
revision to SIP-approved Rules 1303 and 1309.1. CCAT's assertion that
this action constitutes a revision of either Rule 1303 or 1309.1 is
incorrect. Instead, as stated in the actual SIP revision, the action is
providing an additional federally enforceable mechanism for the
District to transfer emission credits from its internal bank to the
Sentinel project. But the District has not revised and EPA is not
approving a revision to Rules 1303 and 1309.1.
Comment I.C: CCAT asserts that EPA did not include critical
documents in the docket for this proposed rulemaking.
Response I.C: CCAT appears to be criticizing the fact that scanned
copies of voluminous records documenting the validity of each pound of
emissions credits being transferred from the District bank to Sentinel
were not provided in electronic form on the regulations.gov Web site.
These documents consist of the ``Offset Source Calculation/Verification
Form'' and supporting documentation for each form. The District's
submittal consisted of a CD, with 62 separate documents, comprising
more than 1,000 pages. The forms show a facility's name, the type of
equipment that had been operated, the emission inventory data for the
two years prior to shut down, the date when the facility's permit was
inactivated, verification of the shutdown and various emissions
calculations using this data. EPA's proposed approval of the SIP
revision relied on these documents to demonstrate that a sufficient
number of the emissions credits the District transferred met the
integrity criteria in Section 173 of the CAA.
Our proposed approval of this SIP revision stated that we had
attached a ``complete list of PM10 and SOx
offsetting emissions reductions'' to our Technical Support Document and
that ``[d]ocumentation for each of these offsetting emission reductions
is included in the docket for this proposal.'' EPA's proposed approval
also stated: ``While all documents in the docket are listed in the
index, some information may be publicly available only at the hard copy
location (e.g., copyrighted material), and some may not be available in
either location (e.g., CBI). To inspect the hard copy materials, please
schedule an appointment during normal business hours with the contact
listed in the FOR FURTHER INFORMATION CONTACT section.'' (76 FR 2294)
Therefore, the proposed approval provided notice to the public to
contact EPA to inspect the documentation for each offsetting emission
reduction listed in the attachment to our Technical Support Document.
EPA is not required to post all of the documents in its docket for
a proposed rulemaking to the regulations.gov Web site, otherwise known
as the ``EDOCKET''. The hard copy documents in the Region's office are
the official docket for the rulemaking. We post many documents from the
official docket to the EDOCKET for the convenience of the public but
there is no requirement to post all of the documents. EPA did not post
the voluminous Offset Source Calculation/Verification Forms on the
EDOCKET although a hard copy was readily available in our offices. A
copy of the documents was also available at the District and CARB
offices.
CCAT also contends that EPA was required to specifically list the
Offset Source Calculation/Verification Forms in the index to the
docket. There is no legal requirement for EPA to provide an index to
the docket. We frequently provide an index as a courtesy to the public.
If we provide an index, we are not required to identify every
background or supporting document provided in a submitted SIP revision.
Because EPA cannot anticipate every question the public may have on
our proposed rulemakings, EPA's Federal Register notice proposing to
approve this SIP revision contained contact information for EPA staff
who would be knowledgeable about the proposal and could provide copies
of the specific documents in our docket. CCAT did not try to contact
any EPA staff to obtain a copy of the Offset Source Calculation/
Verification Forms or request EPA to provide further specificity in the
docket index. Finally, the same records were provided to CCAT by the
District long before our proposed approval was published. (South Coast
Public Records Response 61991 and 61991B)
In summary, CCAT has not provided any authority indicating that the
Offset Source Calculation/Verification Forms were required to be
identified in the index we posted on the EDOCKET or posted
electronically in the EDOCKET. These documents were available in hard
copy at the District's office, at the offices of the California Air
Resources Board as part of the SIP submission and EPA's office in San
Francisco.
CCAT suggests that EPA may be treating some of the information in
the records as confidential. The suggestion is incorrect. None of the
information in the record for this SIP revision approval is
confidential and all of the information on which EPA based its proposed
approval has been available to the public. EPA does acknowledge that
some information, such as the individual evaluation record for each
emission reduction, was only available in hard copy. However, if CCAT
had requested copies of these records, EPA would have made them
available in our office for review, as the Federal Register stated, or
we could have mailed a CD with the documents, since they were too large
to send by e-mail.
Comment II: CCAT asserts that EPA's approval of the SIP revision
would be arbitrary and capricious because EPA fails to explain the
basis for its decision.
Response II: CCAT in this comment points to a background paragraph
in EPA's TSD and argues that EPA's proposal to approve this SIP
revision constitutes approving a ``new but equivalent'' process for
generating offsets. EPA disagrees. The ``new but equivalent'' method
referred to in the Federal Register notice was not a new process for
generating credits, but instead an additional way for a source to
comply with the Rule 1303 requirements that offsets be provided
pursuant to Rule 1309 or by allocations from the Priority Reserve in
accordance
[[Page 22041]]
with the provisions of Rule 1309.1. That is the intent of a source-
specific SIP revision: to revise the existing SIP to account for an
action that only applies to a single source. See, e.g. 76 FR 2263
(January 8, 2011) CCAT also cites a NRDC v. EPA, 571 F.3d 1245 (D.C.
Cir. 2009). However, nothing in the decision or in this SIP revision
can provide a basis for CCAT to challenge EPA's action in 1996 on
Regulation XIII. The time for challenging EPA's action in 1996 has past
and our action in this SIP revision does not change or revise
Regulation XIII.
Comment III: CCAT asserts that the SIP revision is a violation of
CAA section 173(c) and 40 CFR 51.165(a)(3)(ii)(C)(1)(i)-(ii).
Comment III (1): CCAT contends the District's emission credits are
not real because the District's internal accounts are ``balanced in the
aggregate'' and there is a ``negative balance''.
Response III (1): EPA disagrees that the District's internal
accounts are balanced in the aggregate. Instead, a more accurate
description is that the District demonstrates that their local NSR
program provides at least as many offsets ``in the aggregate'' as would
otherwise be required under a strictly Federal NSR program, on a
project by project basis. The emissions credits that are the subject of
this action represent ``real'' emissions reductions that occurred from
sources in the District. The District provided comprehensive
documentation for each emission credit, including documentation of when
the source was shutdown, verification that it was actually shutdown,
actual emission inventory data for each source for the two years prior
to shutdown, and other supporting information. The emission credits
transferred to the AB 1318 Tracking System were individually subtracted
from the District's internal accounts and are not included in the
District's annual ``in the aggregate'' equivalency demonstration. CCAT
also alleges that the District's accounts have a negative balance. This
allegation has been thoroughly addressed in EPA Administrator Jackson's
letter dated September 23, 2010, which we are incorporating by
reference into this response. Administrator Jackson's letter sets forth
the background during which EPA requested the District to remove pre-
1990 emission credits for which the District did not have adequate
documentation from its internal accounts. However, the District could
replace those subtractions with previously uncounted emissions
reductions from minor source orphan shutdowns. See p. 7-8. Therefore,
the District's internal bank is adequately funded and does not have
``negative balances.'' The support cited by CCAT for the proposition
that the District's balances are insufficient is an opinion in CCAT's
State court litigation pertaining to the California Environmental
Quality Act (CEQA), which is not relevant to EPA's evaluation of this
SIP revision. Finally, CCAT contends that there is insufficient
documentation to demonstrate the emission reductions occurred. EPA
disagrees. The District's documentation provides the name and location
of the source that made the reduction, when the source was shutdown,
verification that it was actually shutdown, the amount of the
reduction, including documentation of actual emission inventory data
for each source for the two years prior to shutdown, and other
supporting information.
Comment III (2): CCAT contends that the emission reductions are not
quantifiable.
Response III (2): EPA disagrees. The District provided documents
with the SIP revision showing precisely how many pounds of pollutant
had been reduced or eliminated to support each emission credit. These
amounts were based on actual emission inventory data or production
records for each source. This issue was also raised in conjunction with
SB 827 and the Administrator's letter dated September 23, 2011 contains
our further response.
Comment III (3): CCAT alleges that the emissions reductions are not
surplus.
Response III (3): EPA disagrees. Emission credits would need to be
adjusted to ensure they are surplus to any new or modified standards
for PM10 and/or SOx emissions from power plants,
aggregate operations, spray booths, etc. The District has not
promulgated new rules or standards that would apply to these types of
sources, and thus no adjustments to the credits were required.
Comment III (4): CCAT contends that the emission reductions are not
enforceable, citing the Ninth Circuit's decision in El Comite para el
Bienestar de Earlimart v. Warmerdam, 539 F.3d 1062 (9th Cir. 2008).
Response III (4): EPA disagrees. In this action the emission
reductions will be enforceable because EPA's SIP revision has
incorporated by reference the transfer of a specific amount of emission
credits. In Warmerdam, EPA had not incorporated by reference certain
letters between CARB and EPA into the SIP. Here, the language that EPA
is placing into the SIP clearly incorporates by reference all the
individual emission reductions being transferred to the Sentinel Energy
Project. While ultimately the Director of the Federal Register Office
must determine that incorporation by reference complies with the
requirements of 1 CFR 51.7, this type of material is generally within
the type accepted for such treatment. See Use of Incorporation by
Reference as a Mechanism for Shortening Federal Register Notices, from
Gerald H. Yamada, Principal Deputy General Counsel to Regulatory Policy
Group, dated Jan. 12, 1995. CCAT can enforce the District's transfer of
the emission credits and can also confirm that the permit from which
the emission credit was created has been inactivated or review the
conditions of a permit revised to create the emission reductions.
Comment III (5): CCAT asserts that some of the emissions reductions
are not creditable.
Response III (5): EPA disagrees. Emission reductions are considered
creditable if they have not been relied upon to demonstrate attainment,
RFP or any other permit action. The District accounts for the use
credits from their internal accounts by adding the average annual
quantity of ERCs used over the last eight years to the projected
inventory for years 2014 and 2020, i.e., the AQMP assumes that these
emissions are in the air. By including such emissions in the inventory,
the attainment plan has not relied on these emission reductions, thus
they remain creditable for other purposes, such as NSR offsets. In
addition, these emission reductions are being transferred from the
Districts internal offset account and are therefore not available for
any other permit action.
Comment IV: CCAT contends that EPA cannot approve the District's
transfer of the emission credits to the Sentinel Energy Project because
the emission reductions have been relied upon in other permitting
actions and for demonstrating attainment.
Comment IV.A.1: CCAT asserts that the offsets being transferred do
not meet the requirements of Federal law because the District's
internal accounts have negative balances.
Response IV.A.1: This portion of CCAT's comment letter is a
repetition of prior comments. With respect to the purported negative
balance, EPA has responded previously. We repeat that the District does
not have a negative balance. As fully set forth in the Administrator's
petition response letter dated September 23, 2010, EPA requested the
District to remove any pre-1990 emission credits for which the District
did not have adequate documentation. The District did so and
[[Page 22042]]
then added in credits from minor source orphan shutdowns that it had
not previously counted. EPA has determined that funding the District's
bank with minor source orphan shutdowns complies with the CAA. The
District's balance of credits for each pollutant is positive when
credits from minor orphan shutdowns are included.
Comment IV.A.2: CCAT also contends that the emissions credits being
transferred that were based on shut-down equipment may not be used if
they were shut down before the base year for the SIP planning process.
Response IV.A.2: CCAT contends that the District has relied on the
emission reduction credits generated from shutdown sources which
occurred before the 2002 baseline in the 2007 AQMP. EPA disagrees. As
explained in Response III (5), the District adds in a portion of the
pre-baseline banked emission credits into the inventory for each future
year. The amount added for each pollutant is determined based on
historical usage of offsets in the basin. Since the baseline inventory
is adjusted to account for an adequate number of pre-baseline emission
reductions due to shutdowns, the District is complying with the
requirements of 40 CFR 51.165(a)(3)(ii)(C)(1)(ii) and may use such
reductions as current offsets.
Comment IV.A.3: CCAT contends that ``crediting these purported
emission reductions to the SCAQMD's Offset Accounts Violates CCA [sic]
section 110(l)''.
Response IV.A.3: Under section 110(l) of the CAA, EPA may not
approve any SIP revision that would interfere with attainment,
reasonable further progress (RFP) or any other CAA requirement.
In our proposed approval, EPA stated that this revision will not
interfere with attainment or RFP because the emission credits in the AB
1318 Tracking System are not relied on for attainment or RFP in the
District's most recent attainment demonstrations. We also indicated
that this revision did not interfere with any other CAA requirement. In
addition, we stated that the District supplied a copy of its air
quality analysis for the CPV Sentinel Energy Project which shows that
operation of the facility will not interfere with the ability of the
District to reach attainment.\2\ CCAT has provided no specific
information to refute this discussion regarding CAA 110(l) from our
proposal.
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\2\ Air Quality Demonstration: SIP Revision for CPV Sentinel
Energy Project.
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Comment IV.A.3.i: CCAT again contends that the emission reductions
have been relied upon by the District in past permitting actions and in
its 2007 AQMP, therefore not making them available for the Sentinel
Energy Project.
Response IV.A.3.i: Please see earlier responses on these same
points in responses III(5) and IV.A.2.
Comment IV.A.3.ii: CCAT contends that it is inadequate for EPA to
meet its burden for rational decision-making regarding compliance with
section 110(l) by not being aware of interference the proposed action
would have with other CAA requirements.
Response IV.A.3.ii: EPA disagrees. The TSD (pages 5-6) discusses
how the project complies with the CAA requirements that this SIP action
is subject to, and this statement is simply affirming that there are no
other CAA requirements for which the action is subject.
Comment IV.A.3.iii: CCAT contends that EPA fails to describe the
``new but equivalent mechanism * * * for satisfying the offset
requirements of CAA Sec. 173'', and that the record does not provide
any proof, facts or analysis that EPA engaged in a rational
consideration of all facts for its decision.
Response IV.A.3.iii: EPA disagrees. The TSD (pages 5-6) provides a
discussion of all five of the CAA Sec. 173 offset integrity criteria,
and explains the rationale for EPA's conclusion that the proposed
offsets meet these criteria. The ``new but equivalent mechanism'' EPA
was referring to in the FR notice was not for generating credits, but
instead refers to the ability of the source to provide emission
reduction credits for their project which were not provided pursuant to
Rule 1309 or allocations from Rule 1309.1.
Comment IV.A.3.iii: CCAT contends that in an analysis undertaken by
the California Energy Commission, staff concluded that the Sentinel
facility would contribute to existing exceedences in the area, and
supplied the text from the CEC analysis.
Response IV.A.3.iii: The submitted CEC modeling does not evaluate
the impacts of the project on the District's ability to attain the
PM10 standard, which is the required evaluation criteria,
but instead models a worst case scenario assuming the highest
background concentrations, the highest PM10 emission rate
from the plant and the worst meteorological conditions would all occur
at the same time and at the same location. CEC staff acknowledges that
all of these worst case conditions are ``not likely to occur.'' In
addition, the modeling did not take into account the reductions
expected from other District control measures or the offsets provided
for this project. The air quality analysis prepared by the District is
consistent with EPA guidance for determining the impacts of projects on
an area's ability to attain a NAAQS.
Comment IV.A.3.iv: CCAT contends that EPA must analyze this
submission together with the District's recently approved Rule 1315.
Response IV.A.3.iv: EPA disagrees. We note that the District has
submitted and EPA will be taking action in the future on District Rule
1315. Rule 1315 provides in regulatory language the District
methodology for debiting and crediting offsets for sources that qualify
under Rules 1304 and 1309.1. Rule 1315 is not the subject of, nor is it
related to this rulemaking in anyway. The merits of Rule 1315 will be
considered in a separate action which will be subject to public notice
and comment.
CCAT has not provided any specific comments showing that the
factual statements in our proposed approval were incorrect or
insufficient. CCAT merely repeats general and conclusory allegations of
violations of section 110(l). That provision is not a general bar to
revising a SIP. Accordingly, section 110(l) does not prevent us from
taking final action to approve this source-specific SIP revision
independent of action on Rule 1315.
Comment V.: CCAT contends that through this source-specific SIP
revision EPA has re-opened its 1996 approval of the California SIP's
creation of a SCAQMD internal bank, and how the credits in the bank are
generated, tracked and validated.
Response V: EPA approved Regulation XIII in 1996. Regulation XIII
comprised the District's comprehensive new source review program,
including two provisions that allowed the District to provide offsets
from its internal bank of emission credits to certain exempt and
priority reserve sources which would otherwise be required to obtain
offsets for meeting Federal CAA requirements. Our approval of
Regulation XIII was not challenged following our rulemaking action in
1996.
CCAT's contention that our approval of this source-specific SIP
revision re-opens our 1996 approval of Regulation XIII is without
merit. This source-specific SIP revision allows the District to
transfer certain emissions credits to one stationary source, the
Sentinel Energy Project. The action does not modify or revise any
provision of Regulation XIII. CCAT notes that it has litigation in the
Court of Appeals regarding its belief that District Rule 1309 applies
to the District's internal bank. This source-specific SIP revision is
unrelated. In this action, we have found that the specific amount of
emission credits the District is
[[Page 22043]]
transferring to Sentinel meet the integrity criteria of Federal law in
the amounts calculated to offset Sentinel's emissions increases.
CCAT's comment also contends that this action is establishing ``an
alternate generation system.'' We disagree, as noted previously.
Comment V.1.: CCAT lastly alleges that the source-specific SIP
revision violates CAA section 172(e).
Response V.1.: CCAT has not explained how this source-specific SIP
revision triggers the requirements in section 172(e) that apply to the
Administrator following promulgation of a national ambient air quality
standard. CCAT states that any emission credits that are not
``generated'' according to Rule 1309 ``must accrue to the benefit of
air quality'' apparently based on section 172(e). EPA does not agree
that section 172(e) establishes such an obligation.
III. EPA Action
This source-specific SIP revision complies with all relevant CAA
requirements and is consistent with EPA's guidance for NSR. Therefore,
as authorized in section 110(k)(3) of the Act, EPA is fully approving
this source-specific SIP revision into the California SIP.
IV. Statutory and Executive Order Reviews
A. Executive Order 12866, Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review 13563
This action will approve the source-specific SIP revision known as
the CPV Sentinel Energy Project AB 1318 Tracking System into the
California SIP. This type of action is exempt from review under
Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR
3821, January 21, 2011).
B. Paperwork Reduction Act
This action does not impose an information collection burden under
the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.
Burden is defined at 5 CFR 1320.3(b).
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) generally requires an agency
to conduct a regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements 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 not-for-profit enterprises, and small governmental
jurisdictions.
This rule will not have a significant impact on a substantial
number of small entities because SIP approvals under section 110 and
subchapter I, part D of the CAA do not create any new requirements but
simply approve requirements that the State is already imposing.
Therefore, because the Federal SIP approval does not create any new
requirements, I certify that this action will not have a significant
economic impact on a substantial number of small entities.
Moreover, due to the nature of the Federal-State relationship under
the CAA, preparation of flexibility analysis would constitute Federal
inquiry into the economic reasonableness of State action. The CAA
forbids EPA to base its actions concerning SIPs on such grounds. Union
Electric Co., v. U.S. EPA, 427 U.S. 246, 255-66 (1976); 42 U.S.C.
7410(a)(2).
D. Unfunded Mandates Reform Act
Under sections 202 of the Unfunded Mandates Reform Act of 1995
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA
must prepare a budgetary impact statement to accompany any proposed or
final rule that includes a Federal mandate that may result in estimated
costs to State, local, or tribal governments in the aggregate; or to
the private sector, of $100 million or more. Under section 205, EPA
must select the most cost-effective and least burdensome alternative
that achieves the objectives of the rule and is consistent with
statutory requirements. Section 203 requires EPA to establish a plan
for informing and advising any small governments that may be
significantly or uniquely impacted by the rule.
EPA has determined that the approval action proposed does not
include a Federal mandate that may result in estimated costs of $100
million or more to either State, local, or tribal governments in the
aggregate, or to the private sector. This Federal action proposes to
approve pre-existing requirements under State or local law, and imposes
no new requirements. Accordingly, no additional costs to State, local,
or tribal governments, or to the private sector, result from this
action.
E. Executive Order 13132, Federalism
Federalism (64 FR 43255, August 10, 1999) revokes and replaces
Executive Orders 12612 (Federalism) and 12875 (Enhancing the
Intergovernmental Partnership). Executive Order 13132 requires EPA to
develop an accountable process to ensure ``meaningful and timely input
by State and local officials in the development of regulatory policies
that have federalism implications.'' ``Policies that have federalism
implications'' is defined in the Executive Order to include regulations
that have ``substantial direct effects on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government.'' Under Executive Order 13132, EPA may not issue a
regulation that has federalism 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 State and local governments, or EPA
consults with State and local officials early in the process of
developing the proposed regulation. EPA also may not issue a regulation
that has federalism implications and that preempts State law unless the
Agency consults with State and local officials early in the process of
developing the proposed regulation.
This rule will not have substantial direct effects on the States,
on the relationship between the national government and the States, or
on the distribution of power and responsibilities among the various
levels of government, as specified in Executive Order 13132, because it
merely approves a State rule implementing a Federal standard, and does
not alter the relationship or the distribution of power and
responsibilities established in the CAA. Thus, the requirements of
section 6 of the Executive Order do not apply to this rule.
F. Executive Order 13175, Coordination With Indian Tribal Governments
Executive Order 13175, entitled ``Consultation and Coordination
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000),
requires EPA to develop an accountable process to ensure ``meaningful
and timely input by tribal officials in the development of regulatory
policies that have tribal implications.'' This proposed rule does not
have tribal implications, as specified in Executive Order 13175. It
will not have substantial direct effects on tribal governments, on the
relationship between the Federal government and Indian tribes, or on
the distribution of power and responsibilities between the Federal
government and Indian tribes. Thus, Executive Order 13175 does not
apply to this rule.
[[Page 22044]]
G. Executive Order 13045, Protection of Children From Environmental
Health Risks and Safety Risks
EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997)
as applying only to those regulatory actions that concern health or
safety risks, such that the analysis required under section 5-501 of
the Executive Order has the potential to influence the regulation. This
rule is not subject to Executive Order 13045, because it approves a
State rule implementing a Federal standard.
H. Executive Order 13211, Actions That Significantly Affect Energy
Supply, Distribution, or Use
This rule is not subject to Executive Order 13211, ``Actions
Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use'' (66 FR 28355, May 22, 2001) because it is not a
significant regulatory action under Executive Order 12866.
I. National Technology Transfer and Advancement Act
Section 12 of the National Technology Transfer and Advancement Act
(NTTAA) of 1995 requires Federal agencies to evaluate existing
technical standards when developing a new regulation. To comply with
NTTAA, EPA must consider and use ``voluntary consensus standards''
(VCS) if available and applicable when developing programs and policies
unless doing so would be inconsistent with applicable law or otherwise
impractical.
The EPA believes that VCS are inapplicable to this action. Today's
action does not require the public to perform activities conducive to
the use of VCS.
J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Population
Executive Order 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 populations and low-income
populations in the United States.
EPA lacks the discretionary authority to address environmental
justice in this rulemaking.
List of Subjects in 40 CFR Part 52
Environmental protection, Air pollution control, Incorporation by
reference, Intergovernmental relations, Particulate matter, Reporting
and recordkeeping requirements.
Dated: April 4, 2011.
Jared Blumenfeld,
Regional Administrator, Region IX.
Part 52, Chapter I, Title 40 of the Code of Federal Regulations is
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 F--California
0
2. Section 52.220 is amended by adding paragraph (c)(384) to read as
follows:
Sec. 52.220 Identification of plan.
* * * * *
(c) * * *
(384) New and amended regulations for the following APCD's were
submitted on September 10, 2010 by the Governor's designee.
(i) Incorporation by Reference
(A) South Coast Air Quality Management District
(1) Resolution No. 10-20, dated July 9, 2010.
(2) ``Revision to the State Implementation Plan for the South Coast
Air Quality Management District, State of California: Sulfur Oxides and
Particulate Matter Offset Requirements for the Proposed CPV Sentinel
Power Plant to be Located in Desert Hot Springs, California, Including
AB 1318 Offset Tracking System'', which is incorporated by reference in
Resolution No. 10-20, dated July 9, 2010.
(3) ``CPV Sentinel Energy Project AB 1318 Tracking System'', which
is incorporated by reference in Resolution No. 10-20, dated July 9,
2010.
* * * * *
[FR Doc. 2011-9460 Filed 4-19-11; 8:45 am]
BILLING CODE 6560-50-P