EPA Seeks to Increase Emissions Budgets For 10 States Under Cross-State Rule

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The Environmental Protection Agency Oct. 6 released a proposed rule that would increase emissions budgets for 10 states under the Cross-State Air Pollution Rule, which is designed to reduce interstate transport of sulfur dioxide and nitrogen oxides.

The adjustments for individual states vary, but EPA said the overall emissions budget increases amount to 1 percent. The agency also said it is easing the limits on market-based compliance options.

The changes amount to "technical adjustments," according to EPA.

The proposal would increase state emissions budgets for Florida, Louisiana, Michigan, Mississippi, Nebraska, New Jersey, New York, Texas, and Wisconsin and raise budgets for individual generating units in Arkansas and Texas, according to an EPA fact sheet.

The revisions include various changes to emissions budgets for annual nitrogen oxides, ozone-season nitrogen oxides, and sulfur dioxide.

EPA downplayed the significance of the proposed rule, calling it a “routine rulemaking that will maintain the extensive public health benefits” of the final rule.

EPA said the changes were necessary because of new data it has received from states and companies.

The cross-state rule requires power plants in 27 states to reduce transport of nitrogen oxides and sulfur dioxide. The rule was released July 7 and is intended to help states downwind of power plant emissions meet national ambient air quality standards for ozone and fine particulate matter (76 Fed. Reg. 48,208).

Among other things, the rule allows regulated power plants to trade emissions allowances to help them achieve their required emissions reduction targets.

Environmental Advocate Not Concerned.

The proposed changes did not cause concern for Frank O'Donnell, president of Clean Air Watch.

“These appear to be some technical fixes to the rule based on better information,” O'Donnell told BNA in an e-mail Oct. 6. “We want EPA to be making decisions based on the best available information.”

Scott Segal, an attorney with Bracewell & Giuliani who represents power companies affected by the rule, told BNA that “the changes are likely insufficient to fix all the problems with the rule.” Specifically, Segal said in an e-mail that EPA should have delayed the Jan. 1, 2012, compliance date.

Rep. Ralph M. Hall (R-Texas), chairman of the House Science, Space, and Technology Committee, issued a statement Oct. 6, saying the revisions show that the final rule “lacked sufficient scientific analysis and economic consideration. EPA's process is broken. As we have seen in Texas and throughout the United States, pursuing an ‘EPA-knows-best’ approach to compliance will unquestionably result in increased unemployment, power plant shut-downs, and more expensive, less reliable energy.”

EPA had been in discussions with Luminant, the largest power company in Texas, regarding modifications to the Cross-State rule. EPA Deputy Administrator Robert Perciasepe wrote a letter Sept. 11 to David Campbell, Luminant chief executive officer, saying EPA would make technical adjustments to give Texas additional pollution allowances, which would reduce the amount of emissions the state is required to cut.

In the proposed rule, EPA said it would increase Texas's emissions budgets for sulfur dioxide, ozone-season nitrogen oxides, and annual nitrogen oxides. The proposal would increase Texas's sulfur dioxide budget by 70,067 tons and its seasonal and annual nitrogen dioxide budgets each by 1,375 tons.

Additional Changes in Proposal.

In addition to changing the state and unit budgets, the proposed rule also would delay the effective date for imposing penalties if states exceed the assurance level set out in the rule. The assurance level is a state's budget plus a variability limit. The effective date for penalties would be pushed back from 2012 to 2014 , “to promote the development of allowance market liquidity,” according to EPA.

Assurance provisions are in the rule “to provide sources within each state with limited, but necessary, flexibility so that they can continue to comply with this rule in years in which more fossil fuel generation occurs than projected in the average base case year,” according to EPA.

The proposed rule also would revise unit allocations in Alabama, Indiana, Kansas, Kentucky, Ohio, and Tennessee that are subject to consent decrees, “to prevent CSAPR allocations from exceeding the terms of these judicial actions,” EPA said.

EPA will accept comment on the proposal for 30 days after publication in the Federal Register unless a hearing is requested, in which case the deadline would be extended. Comments may be submitted at http://www.regulations.gov under Docket No. EPA-HQ-OAR-2009-0491.

If requested, EPA will host a public hearing 9 a.m. Oct. 28 at EPA offices, 1310 L St., N.W., in Washington, D.C.

By Jessica Coomes

Information about EPA's proposed changes to the Cross-State Air Pollution Rule is available at http://www.epa.gov/airtransport/actions.html.

For additional information, contact Gabrielle Stevens in the agency's Clean Air Markets Division at (202) 343-9252 or stevens.gabrielle@epa.gov.

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