2152ss05

Supporting Statement

for

Information Collection Request

Clean Air Interstate Rule to Reduce Interstate Transport of Fine Particle Matter and Ozone (Renewal)

EPA ICR Number 2152.05; OMB Control Number 2060-0570

40 CFR Part 51

40 CFR Part 96

Clean Air Markets Division

Office of Air and Radiation

U.S. Environmental Protection Agency

1. IDENTIFICATION OF THE INFORMATION COLLECTION

1(a) Title of the Information Collection

Clean Air Interstate Rule to Reduce Interstate Transport of Fine Particle Matter and Ozone, ICR Number 2152.05, OMB Number 2060-0570.

1(b) Short Characterization/Abstract

In 2005, the United States (U.S.) Environmental Protection Agency (EPA) promulgated the Clean Air Interstate Rule (CAIR) to Reduce Interstate Transport of Fine Particle Matter and Ozone. CAIR combined its reporting requirements with existing requirements from the Emission Reporting Requirements for Ozone State Implementation Plan (SIP) Revisions Relating to Statewide Budgets for NO_x Emissions to Reduce Regional Transport of Ozone (NO_x SIP Call) and the Acid Rain Program (ARP) under Title IV of the CAA Amendments of 1990. These other requirements have approved ICRs in place. The ARP is covered under OMB Control Number 2060-0258 EPA ICR Number 1633.15. The NO_x SIP Call, OMB Control Number 2060-0445, EPA ICR Number 1857.05, was revised in 2008 and sources previously subject to the NO_x SIP Call requirements are now covered under CAIR. In 2009 an administrative change was made to include Delaware and New Jersey in the Clean Air Interstate Rule, EPA ICR Number 2184.03, OMB Control Number 2060-0584 in this ICR.

This supporting Statement and ICR is being submitted to account for the incremental burden associated with CAIR. As such, this supporting statement references the burden analysis included in the ICRs for the NO_x SIP Call and ARP and estimates the change in burden resulting from CAIR beyond the scope of these ICRs.

This ICR details the ongoing burdens associated with CAIR. These changes can be logically divided into two categories: 1) annualized startup/capital and operational costs associated with CAIR affected units that are not also affected by the ARP program and 2) incremental operational costs for ARP affected units that are also subject to the CAIR program. The previous 2009-2011 ICR period contained a number of one-time costs and burdens associated with facilities/units either transitioning into the CAIR program from the NOX SIP Call program or facilities/units previously affected by ARP that were required to make changes as part of CAIR. These one-time costs and burdens were fully realized in the 2009-2011 period.

Emission Reporting and Trading Requirements

For this ICR the burden associated with the relevant CAIR SO₂, annual NO_x and ozone season NO_x model trading rules is evaluated. The trading programs include paperwork burden related to: 1) transferring and tracking allowances; 2) allocation of allowances to affected units; 3) permitting; 4) annual year end compliance certification; and 5) monitoring and reporting. The monitoring and reporting requirements of the trading programs will require capital and labor expenditures by industry, and these are evaluated.

As with the Acid Rain Program and the NO_x SIP Call, the ability to buy and sell (or transfer) allowances is expected to provide substantial economic benefits by encouraging the greatest emissions reductions where costs of reductions are lowest. Allowance trading cannot be implemented, however, unless regulations governing emissions monitoring and permitting of sources are in place as well. To ensure compliance with the emissions reduction requirements and to provide the region wide consistency needed to foster the allowance market, the designated representative of the owners and operators of each source with affected units are required to have CAIR requirements integrated into their Title V permits for the affected source and to certify that an approved SO₂ and NO_x emissions monitoring system has been installed and is properly operated at each affected unit.

For affected units currently required to monitor using Part 75 provisions, information for the allocation methodology will be recorded and collected as part of the emissions monitoring and reporting process. While all participating sources have already installed necessary emissions monitoring equipment due to requirements under CAIR and other regulations, some sources will need periodically install new monitors or upgrade existing equipment. Capital costs include the annualized cost of initial certification of new or upgraded monitors as part of start-up costs.

Emissions monitoring and reporting by sources in the cap and trade program is fundamental to the allowance trading system. EPA will use the data contained in the reports to verify actual emissions. Without accurate monitoring and reporting of emissions, the integrity of the allowance system would be undermined, and there would be no assurance that the cap is achieved and emissions had been reduced. To meet the emissions monitoring, recordkeeping and reporting requirements, affected units are required to: 1) submit a monitoring plan and certification reports for each monitoring system; 2) record hourly emissions data; and 3) submit reports of their emissions and operating data to EPA. Sources with monitors already certified under Part 75 may be exempt from initial certification requirements.

All participants in the allowance transfer system are required either to complete and submit an allowance transfer form for each allowance transfer or to perform the transfer on-line. Participants in the transfer system that are not affected sources, such as allowance brokers, fuel suppliers and environmental groups are also required to file a onetime account information application to establish accounts in the allowance tracking systems.

2. NEED FOR AND USE OF THE COLLECTION

2(a) Need/Authority for the Collection

One of the original goals of this rulemaking was to consolidate the emission inventory reporting requirements found in several existing regulations and streamline the activities involved in submitting the emissions data to EPA. This will enable the EPA to achieve uniformity and completeness in emission inventories used to support national, regional, and local air quality planning and attainment.

While the CAA does not provide a specific authorization for a national emissions data base, the CAA provides the EPA ample legislative authority for acquiring such data. Emissions data are of vital importance to the EPA for fulfilling a host of monitoring, standard-setting, rulemaking, reviewing, and reporting duties. Section 110 and 301(a) of the CAA provide a primary authority for a national emissions data base. Section 110 requires each State to prepare a plan which provides for implementation, maintenance, and enforcement of the primary standard for each pollutant for which air quality criteria have been issued. This plan must include provisions for periodic reports identifying sources and listing amounts of emissions. Section 301(a) authorizes the Administrator to promulgate necessary regulations.

Congressional support for collecting and reporting emissions data is demonstrated in three sections of the CAA. Section 110(a)(2)(F) requires that each State provide for periodic reports on the nature and amounts of emissions of criteria pollutants from stationary sources. Sections 182(a)(3)(A) and 187(a)(5) of the CAA specify periodic inventory requirements for ozone and CO nonattainment areas, respectively. Section 182(a)(3)(A) requires States with ozone nonattainment areas to submit a current inventory of actual emissions of VOC, NO_x, and CO every three years. Section 187(a)(5) requires a similar inventory of actual CO emissions for CO nonattainment areas. Periodic inventories include emission estimates for all point, nonpoint, onroad mobile, nonroad mobile, and biogenic sources. Section 172(c)(3) also provides the Administrator with discretionary authority to require other emissions data as deemed necessary for State Implementation Plan (SIP) development in nonattainment areas to meet the NAAQS. In 1998, EPA promulgated the NO_x SIP Call which required the affected States and the District of Columbia to submit SIP revisions providing for NO_x reductions to reduce their adverse impact on downwind ozone nonattainment areas. (63 FR 57356, October 27, 1998). As part of that rule, codified in 40 CFR 51.122, EPA established emissions reporting requirements to be included in the SIP revisions required under that action

2(b) Practical Utility/Users of the Data

Emission Reporting Requirements

Emissions data and related information on stationary point and nonpoint sources, as well as non-road and on-road mobile sources, are routinely used by OAQPS and EPA Regional Offices in carrying out a variety of activities. These activities support regulatory functions as well as functions that are more programmatic in nature such as trends analyses. Such projects include:

● Evaluation of existing control strategies, such as CAIR, for States and larger areas;

● Evaluation of proposed control strategies for States and larger areas, including applications of regional scale models;

● Development of national control strategies and preparation of Regulatory Impact Analyses (RIA);

● Preparation and publication of national summaries of emissions including trend analyses;

● As a data base to assist in the identification of important source categories for future regulation; and

● Preparation of the stationary source portion of a report to Congress on SO₂ emissions. This report is required by Section 406 of the CAA and is due on a five-year cycle that began on January 1, 1995. The report must contain an inventory of national annual SO₂ emissions from industrial sources (as defined in Title IV of the CAA).

EPA's Office of Research and Development (ORD) uses emissions source data in determining priorities for control technology research and as a key data component in the application of regional scale models. EPA's Regional Offices use emissions and other source parameters to support source inspections and in the analyses of the impact of new or modified sources within an area. EPA's Emission Factor and Inventory Group (EFIG) use the data to assess and analyze trends in criteria pollutant emissions over time.

In addition to supporting projects and initiatives internal to EPA, both OAQPS and EPA's Regional Offices respond to numerous requests for reports on emission sources. Typically this is done under the Freedom of Information Act. Most requests come from contractors and consultants involved in special studies; a smaller number come from the press and universities and others involved in research.

The collection of emissions data specific to nonattainment areas for certain criteria air pollutants is necessary to comply with requirements specified in Title I of the CAA. States with nonattainment areas rely on current information for point, nonpoint, and mobile sources to revise their SIPs and to plan for emission reductions mandated by the CAA. In addition, a Statewide inventory compiled at least every three years for all point, nonpoint, and mobile sources is considered to be a key tool to assist States in meeting CAA requirements that address emissions tracking, compliance issues, and mid-course adjustments. Statewide emission inventories can be used by States affected by pollution transport from upwind areas to develop more efficient control strategies to meet the NAAQS. Statewide emission inventories that were developed by EPA (the NEI) are being used by the Regional Planning Organizations (RPOs) as the starting point for the development of Statewide emission inventories used in the regional haze program to define control strategies.

Emission Trading Requirements

Permit applications, including proposed compliance plans, will be used by States and EPA to issue operating permits and to allocate allowances. A permit application is legally binding on the owners, operators, and designated representative of a source until the actual permit is issued. Affected sources may rely on the permit for information on the requirements with which they must comply. Because permit applications and permits are public documents, they may be used by the public to examine activities undertaken by affected sources.

Data from emissions monitoring is indispensable to successful implementation of the trading programs for two reasons:

● The primary purpose of the trading programs is to assist States in the attainment of the ozone and fine particulate matter national ambient air quality standards (NAAQS) by reducing the adverse effects of the transport of ozone, ozone precursors and fine particles from upwind States by reducing annual emissions of sulfur dioxide and nitrogen oxides; and

● EPA can only enforce the program by comparing, for each affected unit, emissions data and the number of allowances held.

Information collected on allowance transfers is used by EPA or its designated agent to track allowances for the purpose of determining compliance with the NO_x and SO₂ Trading Programs. Information on allowance transfers is also used by participants in the allowance market and the public to evaluate the activities of affected sources, and by EPA for program evaluation.

Together, the allowance trading system, operating permits, and emissions data helps to provide the accountability needed so that the NO_x and SO₂ Trading Programs can function without more stringent command and control approaches.

3. NONDUPLICATION, CONSULTATIONS, AND OTHER COLLECTION CRITERIA

3(a) Nonduplication

Emission Reporting Requirements

EPA will allow the direct reporting of point source data from sources to EPA to satisfy this requirement if the sources are subject to the monitoring and reporting requirements of 40 CFR Part 75. The direct reporting of data from sources to EPA will minimize the reporting burden on States. Also, direct reporting will avoid duplication of effort for sources subject to the Part 75 requirements.

Emission Trading Requirements

Reporting requirements for affected sources for the CAIR NO_x and SO₂ Trading Programs are integrated with existing Part 75 reporting formats. The reporting formats are currently used by Acid Rain Program units under Title IV of the Act and through 2008 are being used by units subject to the NO_x SIP Call Trading Program implemented under Title I of the Act. Thus, for units subject to Acid Rain or the CAIR quarterly reporting requirements, or both, only one submission will need to be made on a quarterly basis.

3(b) Public Notice Required Prior to ICR Submission to OMB

An announcement of the public comment period for this ICR renewal was published in the Federal Register (77 FR 1930) on January 12, 2012. In addition, all documents associated with this ICR renewal are accessible on www.regulations.gov, under Docket # EPA-HQ-OAR-2003-0053. One non substantial comment was received in response to this ICR renewal.

3(c) Consultations

Emission Reporting Requirements

During the development of emission reporting requirements for CAIR discussions were held with STAPPA/ALAPCO to clarify EPA's logic in developing the rule and to answer questions. The Agency has provided seven implementation workshops for state personnel and five additional workshops for sources, both of which were well attended with up to 200 participants. Average attendance at these workshops has been about 110 stakeholders. In addition, EPA holds bimonthly consultations with STAPPA as well as monthly monitoring conference calls with states, and the CAIR rule and related issues are an important component of those consultations and meetings.

Emission Trading Requirements

The requirements for the CAIR Trading Programs have been developed using both the methodology found in existing trading programs as well as consultations with interested parties. EPA built on the cap and trade strategy used in the Acid Rain Program, Ozone Transport Commission's NO_x Budget Program, and the NO_x SIP Call.

EPA held two workshops with States in the NO_x SIP Call or OTC programs to discuss lessons learned in those programs. Additionally, EPA has had frequent interaction with affected sources and States in the course of implementing the Acid Rain and NO_x SIP Call Trading Programs. EPA has received comments following the workshops and through these less formal interactions and considered and incorporated those comments into the final CAIR rule package. More recently, EPA held numerous consultations with stakeholders as EPA implemented the ECMPS data system for Part 75 reporting beginning of January 1, 2009. EPA has also held stakeholder workshops on CAIR implementation. EPA has considered and accounted for those interactions in preparing this renewal ICR.

Finally, as part of updating the previous ICR for the Acid Rain Program (Part 75) monitoring requirements, EPA contacted various affected parties to gather information on CEM capital costs, CEM operation and maintenance costs, fuel meter capital costs, and CEM/fuelmeter testing costs. That information has been used in this ICR where appropriate.

3(d) Effects of Less Frequent Collection

Emission Reporting Requirements

Quarterly collections of emissions data allows the opportunity to check data for errors and provide rapid feedback on needed adjustments to data collection systems, and thereby promotes accurate and reliable emissions data. For this same reason, existing federal and State emission monitoring programs often require quarterly reporting, or in some cases, monthly. Less frequent collection, such as semi-annually or annually, would increase the amount of preparation and review time at the end of the reporting period both for regulated sources and for EPA. This would slow down the process for the verification of compliance.

Emission Trading Requirements

Submittal of allowance trading information and emissions information on an annual basis provides necessary feedback on the requirements of the program, especially whether the program caps have been maintained. If this information collection were not carried out annually for sources being controlled to meet the SO₂ and NO_x budgets, EPA would not be able to verify that emission reductions necessary to meet each State's SO₂ and NO_x emission budgets were being achieved. Because the SO₂ and NO_x budgets prescribed have been deemed essential in order to aid downwind States in attaining the NAAQS in a timely manner, data collected less frequently would be of little or no use.

3(e) General Guidelines

This ICR does not violate any of OMB's guidelines for information collections.

3(f) Confidentiality

Any data that is submitted to EPA under this rule will be considered in the public domain and cannot be treated as confidential.

As required by Section 114 of the Clean Air Act, estimates or measurements of emissions must be treated as non-confidential. Under Agency procedures, data items relating to the computation of emissions may be identified as sensitive by a State and are then treated as "State-sensitive" by EPA. The potentially State-sensitive items include the following: Process rate, boiler design capacity, emission estimation codes, percent space heat, operating rate, and maximum operation rate/hour. Where Federal and State requirements are inconsistent, EPA Regional Office should be consulted for final reconciliation.

3(g) Sensitive Questions

This information collection does not ask any questions concerning sexual behavior or attitudes, religious beliefs, or other matters usually considered private.

4. THE RESPONDENTS AND THE INFORMATION REQUESTED

4(a) Respondents/Standard Industrial Classification (SIC) Codes

Emission Trading Requirements

This ICR also estimates a burden for affected industry sources to monitor SO₂ and NO_x mass emissions and demonstrate compliance with SO₂ and NO_x control measures. Sources may report data directly to EPA if a source is required to meet the monitoring and reporting requirements of Part 75. All affected States and Washington D.C. have chosen to control large electric utility sources to comply with their SO₂ and NO_x emissions budgets. Electric utility combustion sources are generally classified as either SIC 4911 - Electric Services, or 4931 - Electric and Other Services Combined [NAICS 221112 Electric Power Distribution]. In addition, the NO_x SIP Call trading program affected combustion sources across many industrial sectors. States previously subject to that trading program have the option to keep those sources in the CAIR ozone season NO_x program, and many States have elected to do so. Those sources include a wide range of SIC [NAICS] codes, including cement kilns, which fall primarily under SIC 327 - Concrete, Gypsum, and Plaster Products) [NAICS 3273 Cement Manufacturing and 3274 Gypsum Product Manufacturing] and large industrial combustion sources (e.g., boilers, turbines, and internal combustion engines), which are expected to fall under SIC codes for the manufacturing sector, i.e., SIC Major Groups 29-40 [NAICS 31-33 Manufacturing].

4(b) Information Requested

Emission Reporting and Trading Requirements

This section describes the data items requested from affected sources for the collections described in this ICR. This section also defines the activities in which respondents must engage to assemble, submit, or store these data items.

(i) Data Items, Including Recordkeeping Requirements

(a) Allowance Tracking

There are several data items required for allowance tracking activities. First, the affected source must submit account certificates of representation for the CAIR designated representative and (if desired) alternate CAIR designated representative. This documentation, the requirement for which is found in 40 CFR 96.113, .213 and .313, must include:

● Identification of the source and unit;

● Dates on which the unit commenced operation and commenced commercial operation;

● Name and contact information for the CAIR designated representative and alternate;

● A list of the owners and operators of each source and unit; and

● A certification Statement and signature of the CAIR designated representative and alternate.

Certification applications are to be kept for a period of five years pursuant to the general requirements imposed for Title V permitted facilities.

(b) Permitting

The basic requirement for permitting is an application for a permit revision to a source's operating permit issued under Title V of the Act. Although there is some possibility that a non-Title V source could be affected under the CAIR Trading Program, all affected sources are assumed to be Title V sources for purposes of this ICR. Except for the permit revision application, all of the other monitoring, reporting or recordkeeping requirements associated with Title V permitting are either part of the baseline Title V requirements or are covered separately under section 4(c). Title V permit applications must be kept for five years pursuant to Title V recordkeeping requirements. In addition, some coal-fired units that are not part of the Acid Rain Program may have to apply for a permit to construct under Title I of the Act as part of a CAIR compliance strategy. For this ICR, most of this burden was expected to occur prior to the end of 2008 or during the previous 2009-2011 period. This ICR estimates that all sources affected by this change have been accounted for in the previous ICRs.

(c) Monitoring and Reporting

Affected trading program sources are required to monitor SO₂ and NO_x mass emissions, and record and report emissions data using the requirements of 40 CFR Part 75. The emissions monitoring requirements specify that affected sources must: 1) submit a monitoring plan for each affected unit at a source; 2) submit data for certification of each monitor; and 3) record hourly operational, pollutant monitor, and flow monitor data for each affected unit and submit quarterly reports of their emissions data to EPA.

Respondents are required by 40 CFR 75.64 to submit the quarterly SO₂ and NO_x mass emissions data electronically, by direct electronic submission to EPA, and must also include a certification Statement by the designated representative of the unit. All monitoring records are to be kept for three years, with one possible exception under a voluntary option for fuel flowmeter calibration testing.

(ii) Respondent Activities

The primary tasks that will be performed by trading program respondents to meet the emissions monitoring requirements are: 1) completing and submitting appropriate monitoring plan forms for each affected source and each affected unit at a source; 2) conducting tests to certify the operation of monitors, and submitting test results to EPA; 3) recording hourly emissions data (this activity generally is performed electronically); 4) operation and maintenance activities associated with the monitoring, including quality assurance activities; 5) assuring data quality, preparing quarterly reports of emissions data and submitting these reports to EPA; and 6) responding to error messages generated by EPA. In addition, some respondents will have to purchase the necessary monitoring hardware and purchase the electronic data reporting software (or software upgrades). Most of these purchases were assumed to occur prior to 2009 but this ICR continues to include annualized costs for sources that are likely to have incurred these expenditures through 2008.

5. THE INFORMATION COLLECTEDBAGENCY ACTIVITIES, COLLECTION METHODS, AND INFORMATION MANAGEMENT

5(a) Agency Activities

Emission Trading Requirements

The major EPA activities related to the CAIR Trading Program include: (1) maintenance and administration of the SO₂ and NO_x allowance tracking systems, (2) reviewing permit applications, (3) reviewing monitoring plans and certification applications, (4) processing, reviewing and evaluating reports of quarterly emissions data from affected units, (5) calculating/reviewing annual emissions from affected sources, and (6) reviewing total annual emissions data submitted to track each State's progress toward meeting its budgets and creating a summary report of emissions. EPA will use a computer system to track and maintain monitoring and emissions information. EPA will also answer respondent questions and conduct audits of data submissions.

5(b) Collection Methodology and Management

Emission Trading Requirements

To ensure consistency region wide and to expedite data entry, EPA requires that standard formats used for Part 75 reporting be used to submit the information collected for the CAIR Trading Programs.

Several computer systems and associated databases have been developed to (1) track allowances, (2) record quarterly emissions monitoring data, and (3) calculate the number of allowances to be deducted each year. The systems and databases are designed to coordinate the information for easy access and use by the Agency, States, regulated community, and the public. Beginning with the first quarter of 2009, all industry sources began using the Emissions Collection and Monitoring Plan System (ECMPS) to submit monitoring plan, quality assurance, certification test, and emissions data to EPA for the Acid Rain and CAIR programs.

The EPA also has established a Clean Air Markets Page on the Internet, which includes detailed information collected from emissions reports. Those without access to the Internet may use the Clean Air Markets Hotline to request information, including summary reports. The Agency expects to rely on these electronic means to disseminate information about the CAIR Trading Programs as the programs are implemented.

5(c) Small Entity Flexibility

Emission Reporting and Trading Requirements

The CAIR Trading Program includes fossil fuel-fired units (stationary boilers, combustion turbines, and combined cycle systems) that serve an electrical generator of capacity greater than 25 MWe. Units with a lower capacity are not included because of the high cost of monitoring emissions from these sources and the de minimis nature of their emissions.

There is one small unit provision applicable to the CAIR Trading Programs which provides for reduced monitoring. The low mass emissions provisions (40 CFR 75.19) allows optional reduced monitoring, quality assurance, and reporting requirements for units that combust natural gas and/or fuel oil and that emit no more than 100 tons of NO_x annually provided that no more than 50 tons of NO_x is emitted in the ozone season (May 1 - September 30) and no more than 25 tons of SO₂ annually and that calculate no more than the same amount based on specified procedures for calculating and reporting emissions. Utilities that qualify are not required to keep monitoring equipment installed on (or conduct fuel sampling for) low mass emissions units, nor are they required to perform quality assurance or quality control tests. Moreover, emissions reporting requirements are significantly simplified for these units.

Even if a gas- or oil-fired unit does not qualify for the "low mass emissions unit" provisions, the monitoring provisions of Part 75 do allow for the use of alternative methods to determine emissions. As discussed in the Regulatory Impact Analysis (RIA) of the final Acid Rain Implementation Regulations (October 19, 1992), smaller utilities are more likely to be dependent on these oil- and gas-fired units, especially very small utilities (see p. 5-14 of that RIA document). This analysis remains relevant under CAIR.

5(d) Collection Schedule

Collection frequency under CAIR will be on a quarterly basis. All affected industry sources will use ECMPS to submit monitoring plan, quality assurance, certification test, and emissions data to EPA on a quarterly basis.

6. ESTIMATING THE BURDEN AND COST OF THE COLLECTION

6(a) Estimating Respondent Burden

Emission Reporting and Trading Requirements

This section estimates the paperwork burden and cost of submitting permit applications, allowance tracking and transfer materials (including applications for early reduction credits), year-end compliance certifications, submittal of monitoring plans, obtaining certification of each monitoring system, conducting monitor quality assurance activities, and recording and reporting data from CEM systems (or approved alternatives).

To estimate the burden and/or cost of each incidence of the various rule revisions, EPA had available prior estimates of the costs of various activities, estimates provided by affected utilities in comments to the Agency, and estimates based on the Agency's experience in implementing the trading programs under the NO_x SIP Call and the Acid Rain Program.

For the purposes of this analysis, the trading sources are grouped into the following categories:

● Acid Rain Program units located in any CAIR-affected State;

● Trading units (non-Acid Rain) located in a PM/O₃ State (AL, DE, FL, IA, IL, IN, KY, LA, MD, MI, MO, MS, NY, NC, NJ, OH, PA, SC, TN, VA, WI, WV, and DC) or a PM-only State (GA, MN and TX); and

● Trading units (non-Acid Rain) located in an O₃-only State (AR, CT, and MA).

The CAIR Trading Program requires all affected sources to monitor NO_x and SO₂ emissions, SO₂ emission rate, and heat input in order to determine NO_x mass emissions and SO₂ mass emissions. Coal-fired units use an SO₂, NO_x, and flow CEMS to meet those requirements. Oil and gas units have some alternatives. For SO₂, these units can use fuel sampling and analysis (or an SO₂ default factor for pipeline natural gas) combined with a fuel flowmeter. In addition, peaking units that burn natural gas and/or fuel oil may use an alternative method for calculating NO_x emission rates. EPA will also allow certain low mass emissions units to use assumed emissions factors together with operational data to calculate NO_x and SO₂ emissions.

For purposes of this ICR, it is important that the burdens and costs be calculated only in terms of incremental impacts for units subject to the Acid Rain Program. As such, the labor hour and cost estimates per unit or facility, as identified in this document, represent the weighted average burden and cost for all units and do not represent the actual burden and cost for a particular unit or facility. In addition, this ICR does not attempt to take into account the potential for sources to use monitoring equipment required under another program (such as a 40 CFR Part 60 New Source Performance Standard). As such, the weighting is a conservative estimate.

The following discussion highlights some of the basic differences for the categories of units. Included in this discussion is the consideration of monitoring and reporting activities that are currently completed by many of these sources under the Acid Rain Program.

Trading units subject to the Acid Rain Program that are located in a CAIR State will have the smallest overall impact with regard to monitoring and reporting. Acid Rain Program-affected units already monitor and report both SO₂ mass emissions and NO_x emission rates on a year round basis and will not incur additional burdens (or capital and operating and maintenance costs) as a result of CAIR since they have already installed and are operating a CEMS (or approved alternative).

Trading units not subject to the Acid Rain Program that are located in a CAIR State incur the largest impact with regard to monitoring. For the CAIR ozone season program, this ICR incorporates the monitoring burdens and annualized capital and start-up cost previously accounted for under the NO_x SIP Call ICR (ICR Number 1857.03). CAIR annual NO_x and SO₂ programs (in States not previously covered by the SIP Call or in the CAIR ozone season program), sources monitor and report NO_x emissions during the O₃ season and on an annual basis as well as SO₂ on an annual basis. The burdens are less in States that are subject only to the CAIR ozone season NO_x program. These units have additional burden associated with permit applications and certain allowance transactions. Monitoring depends on the type of fuel and the amount of time the unit is operated. Therefore, the costs vary depending on the appropriate monitoring alternative and the monitoring requirements. Table 6-1 shows the burden associated with monitoring SO₂ and NO_x under the CAIR trading programs at the various types of sources.

The primary tasks performed by owners and operators of affected units are: 1) permitting; 2) monitoring, recording, and reporting emissions data; 3) allowance trading activities; and 4) submittal of the year end compliance certification.

(i) Permitting

Each affected entity will have to submit a permit revision application to include in the source's Title V permit the necessary conditions related to compliance with the CAIR Trading Programs. The Agency included the burden for this application process in the 2006-2008 and 2009-2011 time periods. For this renewal ICR, covering 2012 through 2014, EPA estimates that approximately one percent of the sources may still need to complete some permit application steps (such as to correct issues/problems). EPA believes that this application should be relatively routine, and that a standard method of incorporating the requirements by reference or a standard set of permit conditions will be available. The Agency estimates that, on a per unit basis, about four managerial hours will be required to revise the Title V permit.

Some sources will also be required to construct additional facilities, and therefore will need to complete a permit to construct application. The Agency estimates that this requirement will be necessary for all coal-fired units that are not in the Acid Rain Program and that the task will take 20 hours of managerial and 20 hours of technician time, per permit. This action was previously accounted for in the 2006 through 2008 and 2009 through 2011 ICR periods, and EPA estimates that in 2012 through 2014, only one percent of the sources will need to undertake further steps in this process.

(ii) Monitoring.

For monitoring, the burdens differ greatly based on the amount and type of monitoring the unit is already subject to and the particular subtask of monitoring being conducted. The specific elements of burden are:

Start-up Activities. A large part of start-up activities involves capital and test contractor costs. However, the owner or operator will incur some labor burden for these activities, as applicable. For Acid Rain units that were also previously affected by the NO_x SIP Call, CAIR imposes no start-up burdens beyond existing programs. A small burden associated with DAHS upgrades for those ARP units not previously affected by the NO_x SIP Call was accounted for in the 2009-2011 time period. For the non-Acid Rain units, the burdens reflect arranging for SO₂ and NO_x CEMS purchase (as required) and oversight of the certification process. The non-Acid Rain units in O₃-only States would need to purchase and certify only NO_x monitoring systems. In the 2012 through 2014 time period, EPA anticipates that purchase and certification has already occurred for all NO_x and SO₂ systems. During this period, only new units will need to go through this process. Some units will also have to recertify their systems. Because capital costs are annualized in prior ICRs (see ICR Numbers 2152.01, 2152.02, and 2152.03), those annualized capital costs continue to occur in the 2012 through 2014 period. Owners and operators of Acid Rain units, non-Acid Rain units, and non-Acid Rain units in O₃-only States, will incur an insignificant certification cost increase due to the air emission test body competency requirements affecting RATAs, site-specific NOx LME tests, and Appendix E tests.

Regulatory Review. The previous ICR included an allocation of time for the managerial and technical staff to review the regulatory requirements and the reporting formats and instructions. This ICR assumes no burden due to the established nature of this program.

Response to Error Messages. The Agency provides feedback to affected sources for errors that are found in monitoring plans or other reports. The Agency estimates that for each unit not affected by the Acid Rain Program, an owner or operator will spend approximately four hours of managerial time and eight hours of technician time responding to these error messages each year. (The time for the other sources is accounted for in other ICRs.)

DAHS Debugging. Based on experience with the Acid Rain Program, some effort will be involved to fix problems with the DAHS software used to report in the Part 75 formats. This burden is assumed to fall primarily on units that are not affected under the Acid Rain Program or previously affected under the NO_x SIP Call. Consistent with the existing Part 75 ICR, the Agency estimates that about 16 managerial and 88 technician hours will be spent on this task in the first year of implementation (2009), and then one managerial and four technician hours will be required in the second and subsequent years of implementation.

Monitoring Plans. The regulations require submittal of monitoring plans. Because most of the monitoring plan elements are now part of the EDR format, the effort involved in developing and maintaining the plans are incorporated into the overall reporting burden estimate.

Monitor Certification/Recertification. Initial certification burdens and costs for new monitoring equipment are addressed above under start-up activities since these costs are often part of the overall purchase expense for the equipment. For some non-Acid Rain units, however, there will be burdens associated with certifying existing monitors used under other programs for this program, as well as burdens for recertification to the extent a change in a monitoring system requires recertification. EPA estimates that approximately ten percent of all units will have to recertify each year following the year in which the initial certification occurs. The ICR incorporates a labor burden estimate generally consistent with existing Agency models for the labor burdens associated with certification. However, note that the ICR reduces the labor hours for this activity to avoid double counting hours that are already accounted for in the quality assurance activity area (see the following subsection). The double counting would occur because a portion of the labor incurred for the certification or recertification event replaces the labor burden that is generally allocated to the annual relative accuracy test audit (RATA) in the year in which the certification event occurs. Owners and operators of Acid Rain units, non-Acid Rain units, and non-Acid Rain units in O₃-only States, will incur an insignificant certification cost increase due to the air emission test body competency requirements affecting RATAs, site-specific NO_x LME tests, and Appendix E tests.

Quality Assurance. Quality assurance (QA) activities and other routine maintenance for monitoring systems is the largest burden item under the CAIR Trading Programs. These requirements generally include daily, quarterly, and annual QA requirements, depending on the monitoring approach being used. For reporting units that use a CEMS, the Agency has assumed a per unit labor burden based on a variety of sources, including the existing Acid Rain Program ICR, the NO_x SIP Call ICR, information provided by Acid Rain Program sources, a CEM cost model developed by EPA, and comments submitted in response to the section 110 SIP Call for ozone transport. For units that rely on alternative methodologies, reduced labor burden estimates apply because the quality assurance activities for the excepted methods are less than for a CEMS. Consistent with the existing Acid Rain Program ICR, the labor burden is expected to be almost entirely technician labor. Owners and operators of Acid Rain units, non-Acid Rain units, and non-Acid Rain units in O₃-only States, will incur an insignificant certification cost increase due to the air emission test body competency requirements affecting RATAs, site-specific NO_x LME tests, and Appendix E tests.

Quarterly Reports. Tasks performed by utilities in preparing quarterly reports include: (1) assuring the quality of the data, (2) preparing the quarterly report, (3) revising the monitoring plan, if necessary, (4) preparation of hard copy documentation accompanying the quarterly reports, and managerial review. The existing Acid Rain program ICR was used as the basis for these estimates.

Fuel Sampling. To calculate heat input where the source is using the fuel flowmeter option for an oil or gas-fired unit, the source must obtain gross calorific value data from sampling in accordance with Appendix D of Part 75. For purposes of this ICR, it is assumed that the GCV data would be collected as part of standard business operating procedures to assure compliance with contractual specifications. Thus no additional fuel sampling burdens or costs should be incurred.

(iii) Allowance transaction activities

The Agency anticipates the average number of additional allowance transactions will be approximately 7,500 per year based on the 2011 transaction data. A portion of all units will likely conduct transactions in each year solely as a result of this program. The Agency believes that each transaction will involve about one hour each of managerial and technician time.

6(b) Estimating Respondent Costs

Table 6-1 summarizes the annual industry respondent costs. The following discussion describes how the costs were derived.

(i) Estimating Labor Costs

For estimating labor costs for industry respondents in ICR, EPA used the following amounts: $97.30 per hour for managers and $60.01 per hour for technicians. These rates reflect the rates used in the existing Acid Raid Program ICR, adjusted for inflation using the Bureau of Labor Statistics Employment Cost Index.

Federal Agency labor rates were assumed to be $49.49 per hour. This labor rate was derived from the federal government's General Schedule dated January 2012 published by the U.S. Office of Personnel Management (see: http://www.opm.gov/oca/12tables/pdf/gs.pdf) using the factors in the following table.

Determination of Federal Wage Rates

Annual Salary of Technical Staff, GS 11 Step 3		$53,639
Annual Cost of Supervisory Staff, GS 13, step 3	$76,452
Factor (1/11)	0.09
		$6,5881
Annual Cost of Support Staff, GS 6, step 6	$35,672
Factor (1/8)	0.13
		$4,637
Annual Applicable Salary of Permit Staff		$65,157
Benefits (at 16%)		$10,425
Sick Leave/ Vacation (at 10%)		$6,516
General Overhead (at 32%)		$20,850
Total Cost per FTE		$102,948
Total Hourly Cost (total per FTE dividend divided by 2,080 hours per year)		$49.49

(ii) Estimating Capital and Operations and Maintenance Costs

Emission Reporting and Trading Requirements

Capital/start-up costs include the cost of installing required CEMS or alternatives. Operation and maintenance costs (exclusive of labor costs) reflect ongoing costs to a unit and include both contractor costs for the required recertification, diagnostic, and quality assurance (QA) testing, and other direct maintenance-related expenses (e.g., spare parts and calibration gases). These cost estimates have been derived from EPA CEM cost models, existing ICRs, Agency staff experience under the Acid Rain and NO_x SIP Call programs, and supplemental estimates provided by affected utilities and others related to the various cost items.

Most Acid Rain affected units are not expected to incur any non-labor costs associated with this program. The total non-labor cost for capital/start-up items was estimated at $4,000 per unit for most Acid Rain units that were not in the NO_x SIP Call region (to account for a DAHS upgrade to provide NO_x mass reporting under Part 75, Subpart H). This one time upgrade cost was accounted for in the 2009-2011 ICR period. Most non Acid Rain units will require some combination of a NO_x, diluent, SO₂ and/or flow CEMS depending on the fuel type, whether the unit is an LME or peaking unit, and whether the source is subject to CAIR for PM_2.5 and/or ozone. The costs for these units range from $15,000 to $192,000. The cost for an SO₂ analyzer has been estimated at $42,525. The variance in unit cost is due to the monitoring methodology used and what monitoring equipment may already be in place at the unit.

Note that testing contractor costs for certification, recertification, and annual relative accuracy test audits (RATAs) are presented as other direct costs and are not converted to equivalent source labor hours. This approach is consistent with the common business practice for obtaining outside contractors to conduct certification/recertification tests and annual RATAs. For initial certification, the certification test costs are commonly bundled with equipment purchase contracts, according to information provided by a range of CEMS equipment vendors. For RATAs that are conducted either as part of the annual quality assurance requirements or as part of recertification, industry contacts have indicated that RATA testing is usually performed under a fixed price contract basis, except for travel costs that may be billed on an hourly basis beyond the basic contract cost.

The Agency also notes that this ICR does not include a cost for the purchase of monitoring equipment for units. Many sources covered by the CAIR Trading Programs are already required to have CEMS under that program. Therefore, to the extent that no new equipment is needed by these sources, capital costs are not included because those costs were included in the Acid Rain Program ICR. Thus, the capital and other costs included in Table 6-1 represent weighted average costs for each respondent, not the total individual cost for any particular respondent.

(iii) Capital/Start-up vs. Operating and Maintenance (O & M) Costs

Capital costs for emissions trading reflect one-time costs for purchase of equipment which will be used over a period of years. Conversely, operating and maintenance costs are those costs which are incurred on an annual or other scheduled basis. For instance, costs associated with quality assurance activities, such as spare parts or contractor costs for work, will be incurred on an annual basis.

(iv) Annualizing Capital Costs

The relevant capital costs for the emissions trading portion of this ICR were annualized at a rate of seven percent (i.e., the annualized capital cost was calculated assuming money to purchase the capital equipment was borrowed at a seven percent annual interest rate). The cost of the loan was amortized over the life of the loan to repay original borrowed amount plus interest. The result is the annualized capital cost reported. The annualized cost of the necessary capital purchases varies from $2,250 to $22,500, per year, per unit, depending on the type of monitoring methodology. Table 6-1 contains a breakdown of annual costs by monitoring methodology.

6(d) Estimating the Respondent Universe and Total Burden and Costs

Emission Trading Requirements

The number of industry respondents varies depending on the activity in question. Activities such as processing allowance transfers can involve over one thousand sources. The number of units that will be required to install a particular type of monitoring equipment will be less since many already have monitoring equipment under the Acid Rain Program. Table 6-1 provides estimates of industry burden for 2012 through 2014. The total number of respondents and the total labor and cost for all respondents are summarized in the following tables in Section 6(e) below. This burden includes monitoring, reporting, and other activities involved in participating in the CAIR emissions trading programs. The total number of industry respondents is estimated to be 1,077 based on 2012 facility data.

6(e) Bottom Line Burden Hours and Cost Tables

Total Estimated Respondent Burden and Cost Summary

	Number of Respondents	Total Hours Per Year (All Respondents)	Total Costs Per Year (All Respondents)
Industry Respondents	1077	265,292	$40,819,163

6(f) Reasons for Change in Burden

The burden and cost is lower than the previous CAIR Renewal ICR due to three major differences. 1) The previous ICR included a number of one-time transition burdens associated with the incorporation of NO_x SIP Call sources and incremental changes for ARP sources. Those one time burdens were fully accounted for in the previous ICR and are not included in the 2012-2014 period. 2) The previous ICR also included a State and local reporting burden associated with annual and triennial emissions inventory reporting. This reporting requirement was removed with changes to 40 CFR Part 51.125 published in 76 FR 48353 on August 8, 2011. 3) The overall number of facilities slightly declined despite the previous administrative change to include Delaware and New Jersey.

Emission Trading Requirements

The large burden associated with this rule is a result of the costs of monitoring, certifying, quality assuring and reporting emissions data from large electric generating units regulated under CAIR. The burden is significantly lower than the previous ICR since the NO_x Budget Program was phased-out at the end of 2008, and the affected sources in all CAIR-affected States were covered under CAIR starting in 2009. Affected sources for which the burden was previously included in the NO_x SIP Call ICR are now included in the burden estimate for this ICR. All of these before mentioned changes increased the one-burden in the previous ICR and are not included in the 2012-2014 time periods.

6(g) Burden Statement

The annual public reporting and recordkeeping burden for this collection of information is estimated to average 22 hours per response. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR Part 9 and 48 CFR Chapter 15.

To comment on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, including the use of automated collection techniques, EPA has established a public docket for this ICR under Docket ID Number EPA-HQ-OAR-2003-0053, which is available for online viewing at www.regulations.gov, or in person viewing at the Air and Radiation Docket in the EPA Docket Center (EPA/DC), EPA West, Room 3334, 1301 Constitution Avenue, NW, Washington, D.C. The EPA Docket Center 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 Reading Room is (202) 566-1744, and the telephone number for the Air and Radiation Docket is (202) 566-1742. An electronic version of the public docket is available at www.regulations.gov. This site can be used to submit or view public comments, access the index listing of the contents of the public docket, and to access those documents in the public docket that are available electronically. When in the system, select “search,” then key in the Docket ID Number identified above. Also, you can send comments to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW, Washington, D.C. 20503, Attention: Desk Officer for EPA. Please include the EPA Docket ID Number (EPA-HQ-OAR-2003-0053) and the OMB Control Number (2060-0570) in any correspondence.

Table 6-1 Annual Industry Respondent Burden and Cost by Activity, 2012 and subsequent years
Information Collection Activity					Annual Capital
	Manager Per Hour (2011)	Technical Per Hour (2011)	Respondent Hours/Year	Respondent Labor Cost/Year	Startup Costs	O&M Cost	Number of Respondents	Total Hours/Year	Total Cost/Year
	$97.30	$60.01
Title V permit application (facilities)	4	0	4	$389.20			10	40	$3,892
Permit to Construct (units)	20	20	40	$3,146.20			15	600	$47,193
Startup/Capital Items
~ Non-ARP Sources in PM/O3 and PM Only States
a. Solid Fuel: SO2, NOx, and Flow CEMS (units)	34	23	57	$4,688.43	$28,900		114	6,498	$3,829,081
b. Gas-Oil: NOx CEMS and Appendix D fuel monitoring (units)	64	10	74	$6,827.30	$18,750.00		133	9,842	$3,401,781
c. Gas-Oil Peaking Units: Appendix D fuel sampling, Appendix E, or LME methods (units)	20	10	30	$2,546.10	$2,250.00		669	20,070	$3,208,591
(Cont.)
Startup/Capital Items (cont.)
~ Non-ARP Sources in O3 Only States
a. Solid Fuel: NOx, and Flow CEMS (units)	24	3	27	$2,515.23	$22,500.00		0	0	$0
b. Gas-Oil: NOx CEMS and Appendix D fuel monitoring (units)	64	10	74	$6,827.30	$18,750.00		17	1,258	$434,814
c. Gas-Oil Peaking Units: Appendix D fuel sampling, Appendix E, or LME methods (units)	20	10	30	$2,546.10	$2,250.00		43	1,290	$206,232
Review Instructions and Requirements
~ ARP PM and O3 Sources (facilities)	1	1	2	$157.31			919	1,838	$144,568
(Cont.)
Review Instructions and Requirements (cont.)
~ Non-ARP Sources in PM/O3 and PM Only States (facilities)	1	1	2	$157.31			135	270	$21,237
~ Non-ARP Sources in O3 Only States (facilities)	1	1	2	$157.31			23	46	$3,618
Respond to EPA Generated Error Messages
~ Non-ARP Sources in PM/O3 and PM Only States (facilities)	4	8	12	$869.28			135	1,620	$117,353
~ Non-ARP Sources in O3 Only States (facilities)	4	8	12	$869.28			23	276	$19,993
Debug Computer Software
~ ARP PM and O3 Sources (facilities)	1	4	5	$337.34			919	4,595	$310,015
(Cont.)
Debug Computer Software (cont.)
~ Non-ARP Sources in PM/O3 and PM Only States (facilities)	1	4	5	$337.34			135	675	$45,541
~ Non-ARP Sources in O3 Only States (facilities)	1	4	5	$337.34			23	115	$7,759
Certify Monitors
~ Non-ARP Sources in PM/O3 and PM Only States
a. Solid Fuel: SO2, NOx, and Flow CEMS (units)	15	48	63	$4,339.98		$2,800	114	7182	$813,958
b. Gas-Oil: NOx CEMS and Appendix D fuel monitoring (units)	10	32	42	$2,893.32		$2,800	133	5586	$757,212
(Cont.)
Certify Monitors (cont.)
c. Gas-Oil Peaking Units: Appendix D fuel sampling, Appendix E, or LME methods (units)	8	24	32	$2,218.64		$10,000	669	21408	$8,174,2706
~ Non-ARP Sources in O3 Only States
a. Solid Fuel: NOx, and Flow CEMS (units)	10	32	42	$2,893.32		$2,800	0	0	$0.00
b. Gas-Oil: NOx CEMS and Appendix D fuel monitoring (units)	10	32	42	$2,893.32		10	17	714	$49,356
c. Gas-Oil Peaking Units: Appendix D fuel sampling, Appendix E, or LME methods (units)	8	24	32	$2,218.64		8	43	1376	$95,746
(Cont.)
Perform QA Testing and Maintenance
~ Non-ARP Sources in PM/O3 and PM Only States
a. Solid Fuel: SO2, NOx, and Flow CEMS (units)	50	600	650	$40,871.00		31,200	114	74100	$8,216,094
b. Gas-Oil: NOx CEMS and Appendix D fuel monitoring (units)	20	375	395	$24,449.75		$17,400	133	52535	$5,566,017
c. Gas-Oil Peaking Units: Appendix D fuel sampling, Appendix E, or LME methods (units)	5	30	35	$2,286.80		$1,800	669	23415	$2,734,069
~ Non-ARP Sources in O3 Only States
a. Solid Fuel: NOx, and Flow CEMS (units)	40	400	440	$27,896.00		$20,800	0	0	$0
(Cont.)
Perform QA Testing and Maintenance (cont.)
b. Gas-Oil: NOx CEMS and Appendix D fuel monitoring (units)	20	375	395	$24,449.75		$17,400	17	6715	$711,445.75
c. Gas-Oil Peaking Units: Appendix D fuel sampling, Appendix E, or LME methods (units)	5	30	35	$2,286.80		$1,800	43	1505	$175,732
Assure Data Quality, Prepare Reports, Submit Reports
~ Non-ARP Sources in PM/O3 and PM Only States (facilities)	16	42	58	$4,077.22			135	7830	$550,425
~ Non-ARP Sources in O3 Only States (facilities)	16	42	58	$4,077.22			23	1334	$93,776
(cont.)
Assure Data Quality, Prepare Reports, Submit Reports (cont.)
~ Year end compliance activities (facilities)	2	0	2	$194.60			1,077	2154	$209,584
~ Allowance Transfers	1	1	2	$157.31			7,500	15000	$1,179,825
TOTAL								265,292	$40,819,163

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