[Federal Register Volume 78, Number 133 (Thursday, July 11, 2013)]
[Proposed Rules]
[Pages 41731-41735]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-16078]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 49

[EPA-R09-OAR-2013-0489; FRL-9830-5]


Source Specific Federal Implementation Plan for Implementing Best 
Available Retrofit Technology for Four Corners Power Plant; Navajo 
Nation; Extension of Notification Deadline

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: On August 24, 2012, EPA took final action to promulgate a 
Federal Implementation Plan (FIP) to implement the Best Available 
Retrofit Technology (BART) requirement of the Regional Haze Rule for 
the Four Corners Power Plant (FCPP), located on the Navajo Nation. 
EPA's final action required the owners of FCPP to choose between two 
strategies for compliance: compliance with the emission limits in EPA's 
final BART determination; or compliance with an alternative to BART, 
originally put forth by the owners of FCPP, that included closure of 
Units 1, 2, and 3 at FCPP and installation of new air pollution 
controls to meet BART limits on Units 4 and 5. EPA's final action 
required the owners of FCPP to provide notification to EPA by July 1, 
2013, of its selection of which BART compliance strategy it would 
implement at FCPP. On June 19, 2013, Arizona Public Service (APS), the 
operator and a co-owner of FCPP, requested that EPA extend the 
notification date from July 1 to December 31, 2013, due to new 
uncertainties that complicate its decision related to BART compliance. 
These uncertainties result from a recent decision by the Arizona 
Corporation Commission to explore retail competition of the electricity 
market in Arizona. Because the basis provided by APS for an extended 
notification date is reasonable and justified given the uncertainties 
in the electrical market in Arizona, EPA is proposing to extend the 
date by which APS must notify EPA of its BART compliance strategy, from 
July 1, 2013 to December 31, 2013. EPA is not proposing to amend any 
other requirements in the FIP for FCPP.

DATES: Comments must be postmarked no later than August 12, 2013.

ADDRESSES: Submit comments, identified by docket number EPA-R09-OAR-
2013-0489, by one of the following methods:
    (1) Federal eRulemaking Portal: www.regulations.gov. Follow the on-
line instructions.
    (2) Email: r9_airplanning@epa.gov.
    (3) Mail or deliver: Anita Lee (Air-2), U.S. Environmental 
Protection Agency Region 9, 75 Hawthorne Street, San Francisco, CA 
94105-3901.
    Instructions: All comments will be included in the public docket 
without change and may be made available online at www.regulations.gov, 
including any personal information provided, unless the comment 
includes Confidential Business Information (CBI) or other information 
whose disclosure is restricted by statute. Information that you 
consider CBI or otherwise protected should be clearly identified as 
such and should not be submitted through www.regulations.gov or email. 
www.regulations.gov is an ``anonymous access'' system, and EPA will not 
know your identity or contact information unless you provide it in the 
body of your comment. If you send an email directly to EPA, your email 
address will be automatically captured and included as part of the 
public comment. If EPA cannot read your comment due to technical 
difficulties and cannot contact you for clarification, EPA may not be 
able to consider your comment.
    Docket: The index to the docket for this action is available 
electronically at www.regulations.gov and in hard copy at EPA Region 9, 
75 Hawthorne Street, San Francisco, California. While documents in the 
docket are listed in the index, some information may be publicly 
available only at EPA Region 9 (e.g., maps, voluminous reports, 
copyrighted material), and some may not be publicly available in either

[[Page 41732]]

location (e.g., CBI). To inspect the hard copy materials, please 
schedule an appointment during normal business hours with the contact 
person listed in the FOR FURTHER INFORMATION CONTACT section.

FOR FURTHER INFORMATION CONTACT: Anita Lee, EPA Region 9, (415) 972-
3958, r9_airplanning@epa.gov.

SUPPLEMENTARY INFORMATION: Throughout this document, ``we'', ``us'', 
and ``our'' refer to EPA.

Table of Contents

I. Background
II. Today's Action
III. Administrative Requirements

I. Background

    FCPP is a privately owned and operated coal-fired power plant 
located on the Navajo Nation Indian Reservation near Farmington, New 
Mexico. Based on lease agreements signed in 1960, FCPP was constructed 
and has been operating on real property held in trust by the Federal 
government for the Navajo Nation. The facility consists of five coal-
fired electric utility steam generating units with a total capacity of 
2060 megawatts (MW). Units 1, 2, and 3 at FCPP are owned entirely by 
Arizona Public Service (APS) which serves as the facility operator, and 
are rated to 170 MW (Units 1 and 2) and 220 MW (Unit 3). Units 4 and 5 
are each rated to a capacity of 750 MW, and are co-owned by six 
entities: Southern California Edison (48 percent), APS (15 percent), 
Public Service Company of New Mexico (13 percent), Salt River Project 
(10 percent), El Paso Electric Company (7 percent), and Tucson Electric 
Power (7 percent).
    On August 24, 2012, EPA promulgated a final rule that established 
limits for oxides of nitrogen (NOX) emissions from FCPP 
under the BART provision of the Regional Haze Rule (77 FR 51620). The 
final rule required the owners of FCPP to choose between two strategies 
for BART compliance: (1) compliance with a plant-wide BART emission 
limit of 0.11 pounds of NOX per million British Thermal 
Units of heat input (lb/MMBtu) by October 23, 2017, or (2) retirement 
of Units 1, 2, and 3 by January 1, 2014 and compliance with a BART 
emission limit of 0.098 lb/MMBtu on Units 4 and 5 by July 31, 2018. The 
second BART compliance strategy, involving retirement of Units 1, 2, 
and 3, was based on a plan originally put forth by APS. This compliance 
strategy was proposed and finalized as an alternative emission control 
strategy that achieved greater reasonable progress than BART. For 
additional information regarding EPA's analyses regarding BART and the 
alternative emission control strategy, see EPA's BART proposal (75 FR 
64221, October 29, 2010), supplemental proposal (76 FR 10530, February 
25, 2011) and final rule (77 FR 51620, August 24, 2012).
    As discussed in our supplemental proposal published on February 25, 
2011, the choice to retire Units 1, 2, and 3, and comply with BART 
emission limits on Units 4 and 5 is contingent upon the resolution of 
several issues, including a renewed site lease with the Navajo Nation, 
a renewed coal contract, and regulatory approvals from the Arizona 
Corporation Commission (ACC), California Public Utilities Commission 
(CPUC), and Federal Energy Regulatory Commission (FERC). The ACC, CPUC, 
and FERC regulatory approvals were necessary because APS would purchase 
the 48 percent interest of Units 4 and 5 currently owned by Southern 
California Edison (SCE). Because the regulatory approvals, renewed site 
lease, and renewed coal contract were expected to require significant 
time and effort by APS, other owners, and the Navajo Nation, EPA's 
final rule included requirements for the owner or operator of FCPP to 
(1) update EPA by January 1, 2013, on the status of lease negotiations 
and regulatory approvals, and (2) notify EPA, by July 1, 2013, of the 
BART strategy it elects to implement, including a plan and schedule for 
compliance with its chosen strategy.\1\
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    \1\ See 40 CFR 49.5512(i)(4).
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    On December 31, 2012, APS provided an update to EPA regarding the 
status of the approvals required for implementing the alternative 
emission control strategy.\2\ APS stated that on March 7, 2011, APS and 
the Navajo Nation executed an agreement to extend the lease for FCPP to 
July 6, 2041. The lease renewal must be reviewed and approved by the 
U.S. Bureau of Indian Affairs, which triggers review under the National 
Environmental Policy Act (NEPA), and other related reviews, including 
under Section 7 of the Endangered Species Act. NEPA review is underway 
and expected to conclude in time to allow for a Record of Decision by 
January 2015. EPA is a cooperating agency in the NEPA process. In its 
December 31, 2012 update letter, APS also stated that it is in on-going 
negotiation for a new coal supply agreement with its coal supplier. 
Finally, APS confirmed that it had obtained regulatory approvals to 
purchase SCE's 48 percent interest of Units 4 and 5.\3\
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    \2\ See Letter from Susan Kidd, Director Environmental Policies 
and Programs, Arizona Public Service, to Jared Blumenfeld, Regional 
Administrator, EPA Region 9, dated December 31, 2012.
    \3\ APS received approval from the ACC on April 24, 2012; from 
FERC on November 27, 2012; and from the Department of Justice/
Federal Trade Commission on July 2, 2012. As discussed in our final 
rulemaking dated August 24, 2012, EPA already understood that the 
CPUC approved the sale of SCE's shares of Units 4 and 5 at FCPP to 
APS on March 22, 2012.
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    However, in a letter dated June 19, 2013, APS requested that EPA 
extend the date by which APS must provide notification of its BART 
implementation strategy for FCPP.\4\ APS explained that it had 
previously expected to meet the July 1, 2013 notification date because 
it had completed the processes to obtain regulatory approvals to 
purchase SCE's shares of Units 4 and 5, and renewal of the lease and 
coal contract were underway. Then, unexpectedly, in May 2013, the ACC 
voted to re-examine deregulation of the retail electric market in 
Arizona.\5\ In its June 19, 2013 letter, APS explains that, depending 
on its structure and reach, a deregulated retail electric market could 
significantly change the BART compliance strategy for FCPP. Thus, APS 
is no longer able to make an informed decision by July 1, 2013. APS 
states that its decision requires more certainty regarding the 
likelihood of deregulation in Arizona. APS also filed a Form 8-K with 
the United States Securities and Exchange Commission disclosing the 
uncertainty caused by the ACC decision to examine deregulation.\6\
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    \4\ See letter from Ann Becker, Vice President, Environmental 
and Chief Sustainability Officer, Arizona Public Service, to Jared 
Blumenfeld, Regional Administrator, EPA Region 9, dated June 19, 
2013.
    \5\ http://www.azcc.gov/Divisions/Administration/About/Letters/5-23-13%20Retail%20Competition%2013-0135.pdf.
    \6\ Form 8-K was appended to the June 19, 2013 letter from Ann 
Becker to Jared Blumenfeld.
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    APS has requested that EPA extend the notification date for its 
selection of the BART compliance strategy to December 31, 2013. APS 
noted that the potential for deregulation of the retail electric market 
in Arizona was not foreseen at the time of our final rulemaking in 
2012. APS also noted that extending the notification date by six months 
will not affect public health or the environment because the BART 
compliance dates, in 2017 or 2018, depending on the compliance strategy 
selected, are not linked to the notification date and remain unchanged.

II. EPA's Proposed Action

    EPA is proposing to extend the date by which the owner or operator 
of FCPP must notify EPA of its selected BART compliance strategy from 
July 1, 2013 to

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December 31, 2013. This action proposes to revise one provision in the 
existing source-specific federal implementation plan for FCPP, codified 
at 40 CFR 49.5512(i).

A. Justification for Proposing to Extend Notification Date

    EPA's final rule required the owner or operator of FCPP to notify 
EPA by July 1, 2013, regarding whether it would elect to comply with 
BART or the alternative emission control strategy. Specifically, 40 CFR 
49.5512(i)(4) requires the owner and operator of FCPP to provide EPA 
with updates and additional information regarding the status of various 
approvals and processes that must be resolved in order for the owner 
and operator to determine which BART strategy it will implement to 
comply with the FIP. The notification date is not a substantive 
requirement of our BART determination, nor is it a requirement related 
to the emission limit constituting BART or the timeframe for BART 
compliance, as defined in the CAA or the Regional Haze Rule. EPA notes 
that the FIP continues to require FCPP to meet the emission limits 
required under BART or the alternative emission control strategy by the 
compliance dates specified in our final rulemaking, codified at 40 CFR 
49.5512(i)(2) and (3), regardless of the extension of the notification 
date in (i)(4).
    EPA recognizes that the potential re-examination of a competitive 
retail electric market in Arizona represents new uncertainties for APS 
and the other owners of FCPP regarding decisions related to the closure 
of Units 1, 2, and 3, and capital investments to install new air 
pollution controls to meet BART limits for Units 4 and 5. EPA 
understands that the ACC has opened a docket to accept comments on 
deregulation until August 16, 2013, and plans to convene an Open 
Meeting, after it has reviewed written comments, to discuss issues and 
information filed to the docket. EPA recognizes that uncertainty may 
still exist after the Open Meeting, depending on the direction the ACC 
takes regarding further examination of deregulation. Therefore, EPA is 
proposing to find that a December 31, 2013 notification date is 
necessary to provide APS with the needed flexibility in determining 
whether to implement BART or the alternative emission control strategy 
to reduce FCPP's NOX emissions by 80-87 percent.

B. Notification Date Extension Does Not Interfere with Attainment or 
Reasonable Further Progress

    The CAA requires that any revision to an implementation plan shall 
not be approved by the Administrator ``if the revision would interfere 
with any applicable requirement concerning attainment and reasonable 
further progress . . . or any other applicable requirement of [the 
CAA].'' \7\
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    \7\ See section 110(l) of the CAA.
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    EPA has promulgated health-based standards, known as the national 
ambient air quality standards (NAAQS), for seven pollutants, including 
NO2, a component of NOX, and pollutants such as 
ozone and particulate matter with a diameter less than or equal to 2.5 
micrometers (PM2.5), that are formed in the atmosphere from 
reactions between NOX and other pollutants.\8\ Using a 
process that considers air quality data and other factors, EPA 
designates areas as ``nonattainment'' if those areas cause or 
contribute to violations of a NAAQS. Reasonable further progress, as 
defined in section 171 of the CAA, is related to attainment and means 
``such annual incremental reductions in emissions of the relevant air 
pollutant . . . for the purpose of ensuring attainment of the 
applicable [NAAQS].''
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    \8\ The other pollutants are sulfur dioxide, carbon monoxide, 
lead, and PM10.
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    FCPP is located on the Navajo Nation, in the northeastern corner of 
New Mexico. This area is not designated nonattainment with any NAAQS. 
Regardless of the decision to implement BART or the alternative 
emission control strategy, emissions of NOX from FCPP will 
be reduced as a result of EPA's FIP implementing the BART provisions of 
the Regional Haze Rule. EPA's proposed extension of the notification 
date does not affect the compliance dates associated with BART or the 
alternative emission control strategy. Therefore, a six-month extension 
of the notification date will not interfere with attainment or 
reasonable further progress for any air quality standard.

C. Notification Date Extension Does Not Interfere With Any Other 
Applicable Requirement of the CAA

    The other requirement of the CAA that is applicable to FCPP is the 
BART provision under the visibility protection requirements for class I 
Federal areas under section 169A(b)(2)(A). In our final rulemaking in 
August 24, 2012, EPA promulgated a finding, under the Tribal Authority 
Rule (TAR), that it was necessary or appropriate to promulgate a 
source-specific FIP for FCPP to achieve emission reductions required by 
the BART provision of the CAA.\9\ As stated previously, the 
notification requirements included in our final FIP do not affect or 
change the compliance dates for BART or the alternative emission 
control strategy. Therefore, the six-month extension of the 
notification date that we are proposing will not interfere with the 
BART requirement of the CAA.
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    \9\ See CAA section 169A(b)(2)(A) and our final rulemaking dated 
August 24, 2012 (77 FR 51620) for additional information related to 
the TAR. In our FCPP rulemaking, EPA did not propose or finalize a 
finding that it was necessary or appropriate under the TAR to 
promulgate a FIP to implement a long-term strategy for making 
reasonable progress toward the national visibility goal under 
section 169A(b)(2)(B) of the CAA.
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III. Administrative Requirements

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

    This action proposes to extend the date for a single source to 
notify EPA regarding its decision to implement BART or an alternative 
emission control strategy. This type of action for a single source is 
exempt from review under Executive Orders (EO) 12866 (58 FR 51735, 
October 4, 1993) and EO 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). Because the proposed action 
merely extends a compliance date, it does not impose an information 
collection burden and the Paperwork Reduction Act does not apply.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedure Act or any other statute unless the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. Small entities include small businesses, 
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of today's proposed rule on 
small entities, small entity is defined as: (1) a small business as 
defined by the Small Business Administration's (SBA) regulations at 13 
CFR 121.201; (2) a small governmental jurisdiction that is a

[[Page 41734]]

government of a city, county, town, school district or special district 
with a population of less than 50,000; and (3) a small organization 
that is any not-for-profit enterprise which is independently owned and 
operated and is not dominant in its field.
    After considering the economic impacts of this proposed action on 
small entities, I certify that this proposed action will not have a 
significant economic impact on a substantial number of small entities. 
The owners of FCPP are not a small entities. See Mid-Tex Electric 
Cooperative, Inc. v. FERC, 773 F.2d 327 (D.C. Cir. 1985). Additionally, 
the extended notification date being proposed today was requested by 
the operator and co-owner of FCPP. We continue to be interested in the 
potential impacts of the proposed rule on small entities and welcome 
comments on issues related to such impacts.

D. Unfunded Mandates Reform Act (UMRA)

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 
U.S.C. 1531-1538, requires Federal agencies, unless otherwise 
prohibited by law, to assess the effects of their regulatory actions on 
State, local, and tribal governments and the private sector. Federal 
agencies must also develop a plan to provide notice to small 
governments that might be significantly or uniquely affected by any 
regulatory requirements. The plan must enable officials of affected 
small governments to have meaningful and timely input in the 
development of EPA regulatory proposals with significant Federal 
intergovernmental mandates and must inform, educate, and advise small 
governments on compliance with the regulatory requirements.
    This proposed rule does not contain a Federal mandate that may 
result in expenditures of $100 million or more for state, local, and 
tribal governments, in the aggregate, or the private sector in any one 
year. This rule merely proposes a six-month extension of a notification 
date in an existing federal implementation plan for FCPP. Thus, this 
rule is not subject to the requirements of sections 202 or 205 of UMRA.
    This proposed rule is also not subject to the requirements of 
section 203 of UMRA because it contains no regulatory requirements that 
might significantly or uniquely affect small governments. This proposed 
rule does not impose regulatory requirements on any government entity.

E. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have 
substantial direct effects on the states, on the relationship between 
the national government and the states, or in the distribution of power 
and responsibilities among the various levels of government, as 
specified in Executive Order 13132. This action proposes a six-month 
extension of a notification date. Thus, Executive Order 13132 does not 
apply to this action.
    In the spirit of Executive Order 13132, and consistent with EPA 
policy to promote communications between EPA and State and local 
governments, EPA specifically solicits comment on this proposed action 
from State and local officials.

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

    Under Executive Order 13175 (65 FR 67249, November 9, 2000), EPA 
may not issue a regulation that has tribal implications, that imposes 
substantial direct compliance costs, and that is not required by 
statute, unless the federal government provides the funds necessary to 
pay the direct compliance costs incurred by tribal governments, or EPA 
consults with tribal officials early in the process of developing the 
proposed regulation and develops a tribal summary impact statement.
    EPA has concluded that this proposed rule may have tribal 
implications because the Four Corners Power Plant is located on 
reservation lands of the Navajo Nation. However, it will neither impose 
substantial direct compliance costs on tribal governments, nor preempt 
tribal law.
    EPA consulted with tribal officials early in the process of 
developing BART regulations for the Four Corners Power Plant to permit 
them to have meaningful and timely input into its development. During 
the comment period for prior EPA actions related to the EPA's BART FIP 
for FCPP, the Navajo Nation raised concerns to EPA about the potential 
economic impacts of our BART determination on the Navajo Nation. EPA 
consulted the Navajo Nation regarding these concerns. Additional 
details of our consultation with the Navajo Nation are provided in 
sections III.H and IV.F of our final rulemaking published on August 24, 
2012 (77 FR 51620). For this proposed action to extend the notification 
date by six months, we will consult with the Navajo Nation if requested 
as we proceed with this action. EPA notified the Navajo Nation 
Environmental Protection Agency regarding the request from APS to 
extend the notification date on June 25, 2013.
    EPA specifically solicits additional comment on this proposed 
action from tribal officials.

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

    EPA interprets EO 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 EO has the 
potential to influence the regulation. This action is not subject to EO 
13045 because it does not establish an environmental standard intended 
to mitigate health or safety risks. This proposed action addresses 
regional haze and visibility protection.

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

    This action is not subject to Executive Order 13211 (66 FR 28355 
(May 22, 2001)), because it is exempt under Executive Order 12866.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (NTTAA), Public Law 104-113, 12 (10) (15 U.S.C. 272 note) 
directs EPA to use voluntary consensus standards (VCS) in its 
regulatory activities unless to do so would be inconsistent with 
applicable law or otherwise impractical. VCS are technical standards 
(e.g., materials specifications, test methods, sampling procedures and 
business practices) that are developed or adopted by the VCS bodies. 
The NTTAA directs EPA to provide Congress, through annual reports to 
OMB, with explanations when the Agency decides not to use available and 
applicable VCS.
    This proposed rulemaking does not involve technical standards. 
Therefore, EPA is not considering the use of any VCS.

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

    Executive Order 12898 (59 FR 7629, February 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,

[[Page 41735]]

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 has determined that this proposed rule, if finalized, will not 
have disproportionately high and adverse human health or environmental 
effects on minority or low-income populations because it does not 
affect the level of protection provided to human health or the 
environment. This proposed rule does not change any applicable emission 
limit for FCPP. This proposed rule merely extends a notification date 
by six months.

List of Subjects in 40 CFR Part 49

    Environmental protection, Air pollution control, Indians, 
Intergovernmental relations, Nitrogen Dioxide.

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

    Dated: June 25, 2013.
Alexis Strauss,
Acting Regional Administrator, Region 9.
    For the reasons stated in the preamble, Title 40, chapter I of the 
Code of Federal Regulations is proposed to be amended as follows:

PART 49--[AMENDED]

0
1. The authority citation for part 49 continues to read as follows:

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

0
2. In Sec.  49.5512, revise paragraph (i)(4) to read as follows:


Sec.  49.5512  Federal Implementation Plan Provisions for Four Corners 
Power Plant, Navajo Nation.

* * * * *
    (i) * * *
    (4) By January 1, 2013, the owner or operator shall submit a letter 
to the Regional Administrator updating EPA of the status of lease 
negotiations and regulatory approvals required to comply with paragraph 
(i)(3) of this section. By December 31, 2013, the owner or operator 
shall notify the Regional Administrator by letter whether it will 
comply with paragraph (i)(2) of this section or whether it will comply 
with paragraph (i)(3) of this section and shall submit a plan and time 
table for compliance with either paragraph (i)(2) or (3) of this 
section. The owner or operator shall amend and submit this amended plan 
to the Regional Administrator as changes occur.
* * * * *
[FR Doc. 2013-16078 Filed 7-10-13; 8:45 am]
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