UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

RESEARCH TRIANGLE PARK, NC 27711 

JUN 3 n 2015 

MEMORANDUM 

SUBJECT: 

FROM: 

TO: 

Proposed Approach for Demonstrating PM2.s PSD Compliance 

Tyler J. Fox, Group Leader '---?'~~ Air Quality Modeling Group, C439-01 ~ 1 

Office of Air Quality Planning and Standards 

Proposed Regulatory Docket No. EPA-HQ-OAR-2015-0310 

Introduction 

OFFICE OF 

AIR QUALITY PLANNING 

AND ST ANDA RDS 

To specifically assist the public in commenting on the "Revision to the Guideline on Air 

Quality Models: Enhancements to the AERMOD Dispersion Modeling System and Incorporation 

of Approaches to Address Ozone and Fine Particulate Matter" proposed rule within the overall 

context of the New Source Review (NSR) program, including Prevention of Significant 

Deterioration (PSD), the Environmental Protection Agency (EPA) has added two memoranda to 

the docket of this proposed rule. 1 

• 

2 These memoranda provide details on how a future approach 

to PSD compliance demonstrations will work for secondary fine particulate matter (PM2.s) and 

also describe our expectations for how such an approach might work for ozone based on future, 

separate actions to establish a Significant Impact Level (SIL) and Model Emissions Rates for 

Precursors (MERPs) for PM2.s and ozone. This memorandum will focus on PM2.s and the related 

precursors sulfur dioxide (S02) and nitrogen dioxide (N02). 

The complex chemistry of secondary formation of PM2.s is well-documented and has 

historically presented significant challenges with the identification and establishment of 

particular models for assessing the impacts of individual stationary sources on the formation of 

1 U.S. EPA, 2015. "Proposed Approach for Demonstrating PM25 PSD Compliance", Memorandum to Docket 

No. EPA-HQ-OAR-2015-0310 by Tyler J Fox, U.S. EPA/OAQPS, Research Triangle Park, NC. June 30, 2015. 

2 U.S. EPA, 2015. "Proposed Approach for Demonstrating Ozone PSD Compliance", Memorandum to Docket 

No. EPA-HQ-OAR-2015-0310 by Tyler J Fox, U.S. EPA/OAQPS, Research Triangle Park, NC. June 30, 2015. 

Recycled/Recyclable •Printed with Vegetable Oil Based Inks on 100% Recycled Paper (40% Postconsumer) 
2

this air pollutant.

3, 4, 5 Because of these considerations, the EPA's judgment in the past has been 

that it was not technically sound to assign with particularity specific models that must be used to 

assess the impacts of a single source on PM2.5 concentrations. Instead, the EPA has chosen to 

satisfy the requirements of Section 165(e) (3) (D) of the Clean Air Act (CAA) by determining 

particular models or other analytical techniques that should be used on a case-by-case basis.6 As 

stated in Section 5.2.2.1.c of the current Guideline on Air Quality Models (published as 

Appendix W to 40 CFR Part 51, hereafter Guideline), the “[c]hoice of methods used to assess the 

[PM2.5] impact of an individual source depends on the nature of the source and its emissions.” 

Under this approach, the appropriate methods for assessing PM2.5 impacts are determined in 

consultation with the appropriate EPA Regional Office and/or permit reviewing authority on a 

case-by-case basis. A modeling protocol should be developed by the permit applicant and 

approved by the appropriate permitting authority to ensure that the analysis conducted will 

conform to the recommendations, requirements, and principles of Section 10.2.1 of the current 

Guideline.

In the January 2012, Sierra Club petition grant,

7 the EPA committed to engage in 

rulemaking to evaluate whether updates to the Guideline are warranted and, as appropriate, 

incorporate new analytical techniques or models for ozone and secondarily formed PM2.5. The

EPA’s proposed revisions to the Guideline satisfies the EPA’s commitment in the petition grant. 

As a part of this commitment and in compliance with CAA section 320, the EPA conducted the 

Tenth Modeling Conference in March 2012, where there were presentations of ongoing research 

of single-source plume chemistry and photochemical grid modeling techniques, as well as 

several public forums, and the EPA subsequently received written comments pertaining to such 

modeling. The EPA initiated Phase 3 of the Interagency Workgroup on Air Quality Modeling 

(IWAQM) process in June 2013 to inform this process to update the Guideline to address 

chemically reactive pollutants for near-field and long-range transport applications. Comments 

received from stakeholders at the Tenth Modeling Conference supported this collaborative effort 

to provide additional guidance for modeling single-source impacts of secondarily formed 

pollutants in the near-field and for long-range transport. Stakeholder comments also supported 

 3 NARSTO, 2004. Particulate Matter Assessment for Policy Makers: A NARSTO Assessment. P. McMurry, M. 

Shepherd, and J. Vickery, eds. Cambridge University Press, Cambridge, England. ISBN 0 52 184287 5.

4 Seinfeld and Pandis, 1998. Atmospheric Chemistry and Physics: From Air Pollution to Climate Change. J. 

Seinfeld and S. Pandis. Wiley Interscience. New York, New York. ISBN 0 47 117815 2.

5 Cohan and Napelenok, 2011. Atmospheric Response Modeling for Decision Support. D. Cohan and S. 

Napelenok. Atmosphere. 2011; 2(3): 407-425.

6 We note that this technical judgment has no effect on the obligation of sources subject to PSD to conduct a 

source impact analysis and demonstrate that a proposed source or modification will not cause or contribute to a 

violation of any NAAQS or applicable increment. 40 CFR 51.166(k); 52.21(k). That is, the inclusion of a process 

rather than a specific preferred model in Appendix W does not relieve the source of the requirement to make this 

demonstration, which necessarily involves an analysis.

7 U.S. EPA, 2012. Gina McCarthy Letter to Robert Ukeiley dated January 4, 2012, Washington, D.C. 20460. 

http://www.epa.gov/ttn/scram/10thmodconf/review_material/Sierra_Club_Petition_OAR-11-002-1093.pdf.
3

the idea of this collaborative effort occurring in parallel with stakeholders’ efforts to further 

model development and evaluation. The EPA’s recommended revisions to the Guideline are 

largely based on detailed review and assessment of this input.

The remainder of this memo provides a summary of the current approach, as described in 

more detail in the EPA’s Guidance for PM2.5 Permit Modeling,

8 and the proposed approach, as 

anticipated under the proposed revisions to the Guideline and other future EPA rulemakings and 

guidance, for demonstrating compliance with the PM2.5 National Ambient Air Quality Standards 

(NAAQS) and PSD increments.

Summary of Current Approach 

The EPA provided the Guidance on PM2.5 Permit Modeling on May 2014,8 based on a

previous March 2010, EPA guidance memorandum,

9 the National Association of Clean Air 

Agencies (NACAA) PM2.5 Modeling Implementation Workgroup final report 

recommendations,10 input from a mixture of stakeholders through numerous forums, comments 

received on the EPA’s March 2013, Draft Guidance for PM2.5 Permit Modeling,

11 and case-bycase involvement with recent applicant submitted PM2.5 compliance demonstrations. This

guidance document recommends appropriate technical approaches for conducting a PM2.5

NAAQS and increment compliance demonstration which includes more adequate accounting for 

contributions from secondarily formed PM2.5 concentrations resulting from a proposed new or 

modifying source’s precursor emissions. The EPA has historically allowed the use of 

demonstration tools to help facilitate the implementation of the PSD program by reducing the 

 8 U.S. EPA, 2014. Guidance for PM2.5 Modeling. May 20, 2014, Publication No. EPA-454/B-14-001. Office of 

Air Quality Planning & Standards, Research Triangle Park, NC. 

http://www.epa.gov/ttn/scram/guidance/guide/Guidance_for_PM25_Permit_Modeling.pdf.

9 U.S. EPA, 2010. Modeling Procedures for Demonstrating Compliance with PM2.5 NAAQS. Tyler Fox 

Memorandum dated March 23, 2010, Office of Air Quality Planning & Standards, Research Triangle Park, North 

Carolina 27711. 

http://www.epa.gov/ttn/scram/guidance/clarification/Official%20Signed%20Modeling%20Proc%20for%20Demo%

20Compli%20w%20PM2.5.pdf.

10 NACAA, 2011. PM2.5 Modeling Implementation for Projects Subject to National Ambient Air Quality 

Demonstration Requirements Pursuant to New Source Review. Report from NACAA PM2.5 Modeling 

Implementation Workgroup dated January 7, 2011. Washington, District of Columbia 20001. 

http://www.epa.gov/ttn/scram/10thmodconf/review_material/01072011-NACAAPM2.5ModelingWorkgroupReportFINAL.pdf.

11 U.S. EPA, 2013. Draft Guidance for PM2.5 Permit Modeling. March 4, 2013. EPA-454-/B-11-001. U.S. 

Environmental Protection Agency, Research Triangle Park, North Carolina 27711. 

http://www.epa.gov/ttn/scram/guidance/guide/Draft_Guidance_for_PM25_Permit_Modeling.pdf.
4

permit applicant’s burden and streamlining the permitting process for de minimis circumstances. 

These tools include a significant emissions rate (SER) and a SIL.

12

As shown in Figure 1 and Figure 2, once it is determined that the proposed new source or 

modification is significant for PM2.5 based on the respective SER, an air quality impact analysis 

must be carried out. The SIL helps to determine the scope of the required air quality analysis that 

must be carried out to demonstrate that the source’s emissions will not cause or contribute to a 

violation of any NAAQS or increment. Historically, sources have been allowed to model their 

proposed emissions increase to predict ambient impacts associated with that emissions increase 

and to compare this predicted ambient concentration of PM2.5 to the applicable SIL, which is also 

expressed as an ambient PM2.5 concentration over a prescribed averaging time consistent with 

the NAAQS and increments. If the source’s modeled impacts are found to be at or below the 

level of the applicable SIL and those impacts would not otherwise cause or contribute to a 

violation of any NAAQS or increment, then the source impact analysis is considered sufficient to 

demonstrate compliance. If the source’s modeled impacts are found to be greater than the level 

of the applicable SIL, then a cumulative impact analysis is deemed necessary to determine 

compliance.

Under the current permit modeling guidance, to use SILs as a demonstration tool to 

determine whether it is necessary to conduct a cumulative analysis of NAAQS compliance, the 

permitting authority must first examine background air quality concentrations to determine 

whether a substantial portion of the NAAQS has been consumed. If the difference between the 

PM2.5 NAAQS and the measured PM2.5 background concentrations in the area is greater than or 

equal to the applicable SIL then the EPA believes it would be sufficient in most cases for 

permitting authorities to conclude that a source with an impact equal to or below that SIL value 

will not cause or contribute to a violation of the NAAQS. The above comparison of background 

air quality concentrations and the NAAQS would not by itself provide adequate justification for 

the PM2.5 increments. Such an approach would be inappropriate because it would not ensure that 

there is sufficient “headroom” within the allowable increment to absorb a source contribution 

equal to the SIL. As indicated in Figure 2, under this situation, a permitting authority may have 

sufficient reason to conclude that the impacts of the new or modified source may be compared 

directly to the allowable increments, without the need for a cumulative modeling analysis. Such a 

situation would involve the new or modified source representing the first PSD application in the 

area after the trigger date, which establishes the minor source baseline date and baseline area, 

and confirmation that no relevant major source construction has already occurred since the major 

source baseline date.

A cumulative impact analysis accounts for the combined impacts of the new or 

modifying source emissions, emissions from other nearby sources, and representative 

 12 On January 22, 2013, the D.C. Circuit Court of Appeals vacated the portions of two PSD regulations (40 CFR 

51.166 and 40 CFR 52.21) that established a PM2.5 SMC. Pending additional rulemaking or interim guidance, SMCs 

are not discussed further in the Draft Guidance for PM2.5 Permit Modeling.
5

background levels of PM2.5 within the modeling domain. The cumulative impacts are then 

compared to the NAAQS to determine whether the new or modifying source will cause or 

contribute to a violation of the NAAQS. Several aspects of the cumulative impact assessment for 

PM2.5 will be comparable to assessments conducted for other criteria pollutants, while other 

aspects will differ due largely to its secondary formation. For PSD increment, cumulative 

assessment accounts for the combined impact of the new or modifying source’s emissions and 

those emissions changes from sources that affect the increment. The cumulative impacts are then 

compared to the PSD increments to determine whether the new or modifying source emissions 

will cause or contribute to a violation of the PSD increments.

The EPA’s Guidance for PM2.5 Permit Modeling8 provides more details on the 

recommended approaches for assessing the impacts of precursor emissions on secondary PM2.5

formation including: 

• a qualitative assessment; 

• a hybrid of qualitative and quantitative assessments utilizing existing technical work; and

• a full quantitative chemical transport modeling exercise.

The EPA anticipates only a few situations would require explicit full chemical transport

modeling.
6

Figure 1. Overview of NAAQS Compliance Demonstration for New or Modifying Sources 

under NSR/PSD Programs: Under Current EPA Rulemakings & Guidance

New or Modified

Source

Nonattainment

Area?

Attainment or Unclassified 

Area

Source Emissions

Greater Than or 

Equal to SER(s)?

Analysis of Ambient Air Quality 

Impacts Not Required for the 

Particular Pollutant

Source Impact 

Above SIL? Satisfies NAAQS AQ Analysis

Projected

NAAQS 

Violations?

Satisfies NAAQS AQ Analysis

Source Impact Greater 

Than or Equal to SIL 

at Projected 

Violations?

Compliance Demonstration is Not 

Adequate.

Y

Y

Y

N Y

N

Source Impact Analysis

N

N

Difference Between 

NAAQS and Measured

Background Greater 

Than or Equal to SIL?

Y

Cumulative Impact Analysis

Direct or Interpollutant Offsets

Please reference the PM2.5

NSR Implementation

final rule (73 FR 28321)

N

Nonattainment Area

N

Y

May Satisfy NAAQS AQ 

Analysis. Please reference 

Section IV.4
7

Figure 2. Overview of PSD Increments Compliance Demonstration for New or Modifying 

Sources under NSR/PSD Programs: Under Current EPA Rulemakings & Guidance

Compliance Demonstration is Not 

Adequate.

New or Modified

Source

Nonattainment

Area?

Attainment or Unclassified 

Area

Source Emissions

Greater Than or 

Equal to SER(s)?

Analysis of Ambient Air Quality 

Impacts Not Required for the 

Particular Pollutant

Source Impact 

Above Increment? Satisfies PSD Increment Analysis

Projected

Increment 

Violations?

Satisfies PSD Increment Analysis

Source Impact Greater 

Than or Equal to SIL 

at Projected 

Violations?

Compliance Demonstration is Not 

Adequate.

Y

Y

Y

N Y

N

Source Impact Analysis

N

N

First PSD 

Application in Area 

After Trigger Date?

Cumulative Impact Analysis

Increment Does Not Apply

N

Nonattainment Area

N

Y

May Satisfy PSD Increment 

Analysis. Please reference 

Section V.5

Major Source 

Construction Since 

Major Source Baseline 

Date?

Y N

Y
8

Summary of Proposed Approach under Future EPA Rulemakings

For the proposed revisions to the Guideline, the EPA has determined that advances in 

photochemical modeling science indicate it is now reasonable to provide more specific, 

generally-applicable guidance that identifies particular models or analytical techniques that may 

be used under specific circumstances for assessing the impacts of an individual source on 

secondary PM2.5. For assessing secondary pollutant impacts from single sources, the degree of 

complexity required to assess potential impacts varies depending on the nature of the source, its 

emissions, and the background environment. In order to provide the user community flexibility 

in estimating single-source secondary pollutant impacts and given the emphasis on the use of 

chemical transport (e.g., photochemical grid) models for these purposes, the EPA is proposing a 

two-tiered demonstration approach for addressing single-source impacts on secondary PM2.5, i.e., 

• First tier involves use of technically credible relationships between precursor 

emissions and a source’s impacts that may be published in the peer-reviewed 

literature; developed from modeling that was previously conducted for an area by a 

source, a governmental agency, or some other entity and that is deemed sufficient; or 

generated by a peer-reviewed reduced form model. 

• Second tier involves application of more sophisticated case-specific chemical 

transport models (e.g., photochemical grid models) to be determined in consultation 

with the EPA Regional Office and conducted consistent with new EPA single-source 

modeling guidance.13

To fully implement these proposed changes to the Guideline related to addressing 

secondary PM2.5 impacts, the EPA intends to pursue a separate rulemaking to establish a 

technical basis and new values for PM2.5 Significant Impact Levels (SILs) and to introduce a new 

demonstration tool for PM2.5 precursors referred to as Model Emissions Rates for Precursors 

(MERP). As shown in Figure 3 and Figure 4, when completed, this rule would differ from the 

current process recommended in the EPA’s Guidance for PM2.5 Permit Modeling.

8 A MERP 

would neither replace the existing Significant Emissions Rates (SERs) for these pollutants nor 

serve as the basis for the applicability of PSD requirements to sources with emissions above the 

SER. However, a MERP would represent a level of emissions of precursors that is not expected 

to contribute significantly to concentrations of secondarily-formed PM2.5. Our present 

understanding of the atmospheric science of secondary PM2.5 formation indicates that MERP 

values for NOx and SO2 will likely be higher than their SERs as criteria pollutants and more 

appropriate for evaluating their impacts as precursor pollutants to PM2.5 formation. As part of the 

separate rulemaking, the EPA intends to demonstrate that a source with precursor emissions of 

NOx or SO2 below the MERP level will have ambient impacts that will be less than the SIL and, 

 13 U.S. EPA, 2015. Guidance on the use of models for assessing the impacts from single sources on secondarily 

formed pollutants ozone and PM2.5. Publication No. EPA 454/P-15-001. Office of Air Quality Planning & 

Standards, Research Triangle Park, North Carolina 27711.
9

thereby, provide a sufficient demonstration that the source will not cause or contribute to a 

violation of the PM2.5 NAAQS or PSD increments. 

As noted above, the EPA’s Guidance for PM2.5 Permit Modeling8 provides for a threetiered approach to address secondary PM2.5 that includes:

1) a qualitative assessment; 

2) a hybrid qualitative/quantitative assessment utilizing existing technical work; and 

3) a full quantitative modeling exercise.

The EPA expects that MERPs as a demonstration tool will replace the first tier of a qualitative 

assessment as sources that currently would provide a qualitative assessment are expected to have 

precursor emissions levels below the MERP. The second and third tier of assessment will then be 

consistent with the EPA’s proposed two-tiered demonstration approach for PM2.5 reflected in 

Section 5.4.2 of today’s proposed revisions to the Guideline.

While the development of MERPs for secondary PM2.5 precursors is expected to address 

a number of PSD permitting situations, the EPA believes that most of the remaining situations in 

which a source must demonstrate compliance under the proposed Guideline will be addressed 

sufficiently under the proposed first tier where existing technical information could be used in 

combination with other supportive information and analysis for the purposes of estimating 

secondary impacts from a particular source. The existing technical information should provide a 

credible and representative estimate of the secondary impacts from the project source. In these 

situations, a more refined approach for estimating secondary pollutant impacts from project 

sources may not be necessary. The EPA has been compiling and reviewing screening approaches 

that are based on technically credible tools (e.g., photochemical grid models) that relate source 

precursor emissions to secondary impacts. In review of existing approaches detailed in peer 

reviewed journal articles and non-peer reviewed forms (e.g., technical reports, conference 

presentations), it is not clear that a single approach has been clearly proposed to and evaluated by 

the modeling community for estimating screening level secondary impacts from single sources. 

Other screening level alternatives to chemical transport model application may include the use of 

existing credible photochemical model impacts for sources deemed to be similar in terms of 

emission rates, release parameters, and background environment. The EPA will continue to 

engage with the modeling community to identify credible alternative approaches for estimating 

single-source secondary pollutant impacts which provide flexibility and are less resource 

intensive for permit demonstration purposes.
10

Figure 3. Overview of NAAQS Compliance Demonstration for New or Modifying Sources 

Under NSR/PSD Programs: Under Future EPA Rulemakings & Guidance

New or Modified

Source

Nonattainment

Area?

Attainment or Unclassified 

Area

Source Emissions

Greater Than or 

Equal to SER(s)?

Analysis of Ambient Air Quality 

Impacts Not Required for the 

Particular Pollutant

Source Impact 

Above SIL? Satisfies NAAQS AQ Analysis

Projected

NAAQS 

Violations?

Satisfies NAAQS AQ Analysis

Source Impact Greater 

Than or Equal to SIL 

at Projected 

Violations?

Compliance Demonstration is Not 

Adequate.

Y

Y

Y

N Y

N

Source Impact Analysis

N

N

Cumulative Impact Analysis

Nonattainment NSR 

Requirements Apply

Nonattainment Area

N

Y

Satisfies NAAQS AQ Analysis

Source Emissions 

Above MERP(s)?

Y

Y

Satisfies NAAQS AQ Analysis

N
11

Figure 4. Overview of PSD Increments Compliance Demonstration for New or Modifying 

Sources under NSR/PSD Programs: Under Future EPA Rulemakings & Guidance

New or Modified

Source

Nonattainment

Area?

Attainment or Unclassified 

Area

Source Emissions

Greater Than or 

Equal to SER(s)?

Analysis of Ambient Air Quality 

Impacts Not Required for the 

Particular Pollutant

Projected

Increment 

Violations?

Satisfies PSD Increment Analysis

Source Impact Greater 

Than or Equal to SIL 

at Projected 

Violations?

Compliance Demonstration is Not 

Adequate.

Y

Y

N Y

N

N

Cumulative Impact Analysis

Increment Does Not Apply

Nonattainment Area

N

Y

Satisfies PSD Increment Analysis

Source Emissions 

Above MERP(s)?

Y

Satisfies PSD Increment Analysis

N

Source Impact 

Above SIL? Satisfies PSD Increment Analysis

Y

Source Impact Analysis

N

Y
12

Summary

To summarize, the EPA is providing this memorandum to the docket of the “Revision to 

the Guideline on Air Quality Models: Enhancements to the AERMOD Dispersion Modeling 

System and Incorporation of Approaches to Address Ozone and Fine Particulate Matter”

proposed rule to specifically assist the public in providing comment. This memoranda provides

details within the overall context of the NSR program, including PSD, on how a future approach 

to PSD compliance demonstrations will work for secondary PM2.5 based on a future action to 

establish a SIL and MERPs for PM2.5 and its precursors. If you have additional questions 

regarding this memorandum or the proposed rulemaking, please feel free to contact me, (919) 

541-5562 or fox.tyler@epa.gov, or contact George Bridgers, (919) 541-5563 or 

bridgers.george@epa.gov.

cc: Air Program Managers

Regional Office Modeling Contacts

Richard Wayland, C304-02

Anna Wood, C504-01

Raj Rao, C504-01

Brian Doster, OGC

Melina Williams, OGC

George Bridgers, C439-01