BryanW. Shaw, Ph.D., Chairman

Buddy Garcia, Commissioner

Carlos Rubinstein, Commissioner

MarkR.Vickery, P.G., ExecutiveDirector ----' 09 NOV 30 PM 3' 25

TEXAS COMMISSION ON ENVIRONMENTAL QUALITY

ProtectingTexas by ReducingandPreventing Pollution

November 23, 2009

Mr. Stanley M. Spruiell

U.S. Environmental Protection Agency, Region 6

Air Permits Section (6PD-R)

1445 Ross Avenue, Suite 1200

Dallas, TX 75202- 2733

Attn: Docket ID No. EPA-R06-0AR-2006-0133

Re: Title 40 Code ofFederal Regulations Part 52

Approval and Promulgation ofimplementation Plans; Texas; Revisions to the New Source

Review (NSR) State Implementation Plan (SIP); Prevention of Significant Deterioration

(PSD), Nonattainment NSR (NNSR) for the 1997 8-Hour Ozone Standard, NSR Reform,

and a Standard Permit

Dear Mr. Spruiell:

The Texas Commission on Environmental Quality (TCEQ) appreciates the opportunity to

respond to the U.S. Environmental Protection Agency's request for comments in the notice of

proposed rulemaking published in the September 23, 2009, edition of the Federal Register

entitled: "Approval and Promulgation ofImplementation Plans; Texas; Revisions to the New

Source Review (NSR) State Implementation Plan (SIP); Prevention ofSignificant Deterioration

(PSD), Nonattainment NSR (NNSR) for the 1997 8-Hour Ozone Standard, NSR Reform, and a

Standard Permit. "

Enclosed, please find TCEQ's detailed comments relating to EPA's action referenced above. If

you have comments or questions concerning the enclosed comments, please contact Mr. Steve

Hagle, P.E., Director, Air Permits Division, Office of Permitting and Registration, (512) 239-

5721 orshagle@tceq.state.tx.us.

Sincerely,

Mark R. Vickery, P.G.

Executive Director

Enclosure

P.O. Box 13087 Austin, Texas 78711-3087 512-239-1000 Internet address: www.tceq.state.tx.us

printed on recycled paper using 5uy-bst'u ink
Texas Commission on Environmental Quality Comments on

Approval and Promulgation oflmplementation Plans; Texas;

Revisions to the New Source Review (NSR) State Implementation Plan (SIP);

Prevention of Significant Deterioration (PSD), Nonattainment NSR (NNSR) for the 1997

8-Hour Ozone Standard, NSR Reform, and a Standard Permit

DocketIDNo. EPA-R06-0AR-2006-TX-0133

The Texas Commission on Environmental Quality (TCEQ) provides the following comments on

the U.S. Environmental Protection Agency's (EPA) proposed action referenced above. TCEQ's

comments are detailed below.

I. TCEQ's 2005 Submittal

A. Anti-backsliding (Section V.A., 74 Federal Register 48472)

As EPA discusses, the anti-backsliding issue associated with the status of the

requirements for compliance with the l-hour ozone National Ambient Air Quality

Standard (NAAQS) with the implementation of the 8-hour ozone NAAQS was

delayed by litigation that took several years to become [mal. TCEQ adopted

changes to 30 Texas Administrative Code (Tex. Admin. Code) § 116.12(18/ in

June, 2005, prior to the resolution of the litigation. After the South Coast

decision.' EPA subsequently stated it would conduct rulemaking to address the 1-

hour ozone NAAQS requirements.' The TCEQ commits to work with EPA to

ensure that the rule is revised to comply with current law.

I Specifically, Footnote 6 to Table I in the defmition of "major modification" at 30 Tex. Admin. Code §

116.12(18).

2 South Coast Air Quality Mgmt. Dist., v. E.P.A., 472 F.3d 882 (D.C. Cir. 2006).

3 (I) Robert Myers memorandum October 3, 2007 New Source Review (NSR) Aspects ofthe Decision of

the U.S. Court ofAppeals for the District of Columbia Circuit on the Phase I Rule to Implement the 8-Hour Ozone

National Ambient Air Quality Standards (NAAQS); (2) EPA satellite broadcast regarding 2008 revised S-hour

ozone NAAQS in which EPA staff indicated that four different rule projects to address the South Coast decision

were in process (April 21, 2008); (3) Notice regarding determination of attainment for Delaware, District of

Columbia, Maryland and Pennsylvania, noting that "[s]tates must continue to meet the obligations for l-hour NSR ..

. currently, EPA is developing two proposed rules to address the Court's vacatur and remand with respect to these

three requirements. We will address in this proposed rule how the l-hour obligations that currently continue to

apply under EPA's anti-backsliding rule (as interpreted by the Court) apply where EPA has made a determination

that the area attained the l-hour ozone NAAQS by its attainment date." 73 Federal Register 22896,22897 (April

28,2008); (4) Notice regarding fmding of attainment for the Chicago/Gary/Lake County nonattainment area which

states "a separate NSR policy is being developed" regarding implementation of the South Coast decision." 73

Federal Register 38353, 38354 (July 7, 2008); (5) EPA proposed rule to revise the Phase I rule to implement the

South Coast decision reo classifications and removal of exceptions to anti-backsliding, which states "EPA plans to

issne a separate proposed rule providing further guidance on how the .., the l-hour NSR requirements apply as a

result ofthe Court's vacatnr. 74 Federal Register 2936,2941 (January 16,2009); and (6) EPA direct fmal rule to

determine attainment ofthe 1997 8-hour ozone standard for the Ventura County nonattainment area in California.

EPA reiterated its intention to issue a separate proposed rule providing further guidance on how the ... the l-hour

NSR requirements apply as a result of the Court's vacatur. 74 Federal Register 25153, 25154 (May 27, 2009).
Comments by Texas Commission on Environmental Quality

Docket ID No. EPA-R06-0AR-2006-0133

Page 2 018

II. TCEQ's 2006 Submittal

A. NSR Reform Rulemaking

l. Missing References III the PSD Program (Section IV.B. 74 Federal

Register 48472)

EPA expressed concern related to the lack of a specific definition of best

available control teclmology (BACT) in TCEQ rule; and the absence of a

requirement contained in 40 Code of Federal Regulations (CFR) §

52.21(rX4) concerning PSD review should the relaxation of an enforceable

limitation specifically cause a source to become a major source. Although

these references are currently missing from 30 Tex. Admin. Code §

116.160, in its permitting actions, the TCEQ does not circumvent federal

New Source Review (FNSR) requirements and does not allow a control

teclmology review to be conducted that results in a teclmology that is less

than BACT defined in federal rule. TCEQ agrees that if a project becomes

a major source through the relaxation of an enforceable limitation, PSD

review is required, and TCEQ complies with that requirement in its

permitting actions. The missing references are oversights, and will be

corrected at the next available rulemaking opportunity."

2. MajorNSR

a. Applicability (Section V.B., 74 Federal Register 48473)

TCEQ revised the rules to clarify and implement the EPA

interpretation that the applicability date is the date of permit

issuance, as well as provide for the possibility of new

nonattainment areas. We agree that this new bifurcated structure is

unclear. The TCEQ commits to work with EPA to comply with

current rule and practice.

b. Definition of "facility" (Sections V.B. and VI.B, 74 Federal

Register 48473 and 48475)

EPA specifically solicited TCEQ to comment on EPA's

interpretation of Texas law and the Texas NSR SIP with respect to

the term "facility" as this is critical to EPA's understanding ofthe

4 TCEQ plans to propose rulemaking regarding the federal defmition ofBACT at its January 13,2010,

Commission meeting.

5 30 Tex. Admin. Code § 116.150 (a).
Comments by Texas Commission on Environmental Quality

Docket !DNa. EPA-R06--0AR-2006-0I33

Page3 of8

Texas Permitting Program." The definition ofthe term "facility" is

one ofthe cornerstones ofthe Texas Permitting Program under the

Texas Clean Air Act. TCEQ appreciates the opportunity to

address this point as its interpretation of Texas law differs from

that of EPA as discussed below. In addition, to provide clarity and

consistency, TCEQ will provide similar comments here and in

regard to Docket ID No. EPA-R06-0AR-2005-TX-0025 and

Docket ID No. EPA-R06-0AR-2006-TX-0032.

As stated by EPA, it understands that the state uses a "dual

definition for the term facility." Under the Texas Clean Air Act'

and TCEQ rule," "facility" is defined as "a discrete or identifiable

structure, device, item, equipment, or enclosure that constitutes or

contains a stationary source, including appurtenances other than

emission control equipment. A mine,. quarry, well test, or road is

not considered to be a facility." A facility may constitute or

contain a stationary source -- a point of origin of a contaminant."

As a discrete point, a facility can constitute but cannot contain a

"major stationary source" as defmed by federal law. A facility is

subject to Major and Minor NSR requirements, depending on the

facts ofthe specific application.

Under Major NSR, EPA uses the term "emissions unit" (generally)

when referring to part of a "stationary source"; TCEQ translates

"emissions unit" to mean "facility'?" which is at least as stringent

as federal rule. TCEQ and its predecessor agencies have

consistently interpreted facility to preclude inclusion of more than

one stationary source, in contrast to EPA's stated understanding.

Likewise, TCEQ does not interpret facility to include "every

emissions point on a company site, even if limiting these emission

points to only those belonging to the same industrial grouping (SIC

code)." The federal definition of "major stationary source"ll is not

equivalent to the state definition of "source.,,12 A "major

stationary source" can include more than one "facility" as defined

under Texas law - which is consistent with EPA's interpretation of

a "major stationary source" including more than one emissions

unit.

6 Docket ill No. EPA-R06-0AR-2005-TX-0025

7 Tex. Health & Safety Code § 382.003(6).

8 30 Tex. Admin. Code § 116.10(6).

9 Tex. Health & Safety Code § 382.003(12).

10 30 Tex. Admin. Code § 116.160 (c) (3) "The term 'facility' shall replace the words 'emissions unit' in

the referenced sections ofthe CFR."

11 40 CFR § 51.166 (b)(1)(i)(a).

12 Tex. Health & Safety Code § 382.003(12).
Comments by Texas Commission on Environmental Quality

Docket ID No. EPA-R06-0AR-2006-0I33

Poge 4 of8

The above interpretation of the term "facility" has been

consistently applied by the TCEQ and its predecessor agencies for

more than 30 years. The TCEQ's interpretation of Texas statutes

enacted by the Texas Legislature is addressed by the Texas Code

Construction Act. More specifically, words and phrases that have

acquired a technical or particular meaning, whether by legislative

definition or otherwise, shall be construed accordingly.13

While Texas law does not directly refer to the two steps allowing

deference enunciated by Justice Stevens writing for a unanimous

Court in Chevron US.A., Inc. v. Natural Resources Defense

Council, Inc.,14 Texas law and judicial interpretation recognize

Chevron15 and follow similar analysis as discussed below.

The Texas Legislature intends an agency created to centralize

expertise in a certain regulatory area "be given a large degree of

latitude in the methods it uses to accomplish its regulatory

function.,,16 Further, Texas courts construe the text of an

administrative rule under the same principles as if it were a

statute.17 Texas administrative agencies have the power to

interpret their own rules, and their interpretation is entitled to great

weight and deference.'! The agency's construction of its rule is

controlling unless it is plainly erroneous or inconsistent.l" "When

the construction of an administrative regulation rather than a

statute is in issue, deference is even more clearly in order.,,2o This

is particularly true when the rule involves complex subject

13 Tex. Gov't Code § 311.01l(b).

14 Chevron US.A., Inc. v. Natural Resources Defense Cauncil, lnc., 467 U.S 837, 842-43 (1984). "When a

court reviews anagency's construction ofthe statute which it administers, it is confronted withtwo questions. First,

always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of

Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the

unarobiguously expressed intent ofCongress. If, however, the court determines Congress has not directly addressed

the precise question at issue, the court does not simply impose its own construction on the statute, as would be

necessary inthe absence of anadministrative interpretation. Rather, ifthe statute is silentorambiguous withrespect

to the specific issue,the question forthe court is whether the agency's answer is basedon a permissible construction

ofthe statute."

15 Phillips Petroleum Co. v. Tex. Comm'n on Envtl. Quality, 121 S.W.3d 502, 508 (Tex.App.-Austin 2003,

no pet.), which cites Chevron to support the following. "Our task is to determine whether an agency's decision is

based on a permissible interpretation ofits statutory scheme."

16 Reliant Energy, Inc. v. Public Util. Comm'n, 62 S.W.3d 833, 838 (Tex.App.-Austin 2001, no pet.) (citing

State v. Public UtiI. Comm'n, 883 S.W.2d 190, 197 (Tex.1994)).

17 Texas Gen. Indem. Co. v. Texas Workers' Camp. Comm'n, 36 S.W.3d 635, 641 (Tex.App.-Austin 2000,

no pet.).

l'Id.

19 Id.

20 Udallv. Tallman, 380 U.S. I, 17 (1965).
Comments by Texas Commission on Environmental Quality

Docket ID No. EPA-R06--0AR-2006-0I33

Poge50f8

matter.i' Texas courts recognize that the legislature intends an

agency created to centralize expertise in a certain regulatory area

"be given a large degree of latitude in the methods it uses to

accomplish its regulatory function.,,22

In sunnnary, TCEQ translates "emissions unit" to mean "facility."

Just as an "emissions unit" under federal law is construed by EPA

as part of a major stationary source, a "facility" under Texas law

can be part of a major stationary source. However, a facility

carmot include more than one stationary source as defined under

Texas law.

c. Inclusion of Startup, Shutdown, and Malfunction (SSM) Emissions

in the Definition of "Baseline Actual Emissions" (Section VLB. 74

Federal Register 48475)

EPA points out that the use of "baseline actual emissions" must

include SSM emissions. The TCEQ includes maintenance, startup

and shutdown emissions in the development of "baseline actual

emissions" to the extent that the permit reviewer can verify that

these emissions occurred, were properly quantified and reported as

part of the baseline, and were creditable. Otherwise, startup and

shutdown, as well as maintenance, emissions are treated as

unauthorized and, as such, have a baseline actual emission rate of

zero. Further, the TCEQ does not authorize malfunction emissions.

The TCEQ has concerns about crediting a major source with an

emission associated with malfunctioning of equipment when the

source determines baseline actual emissions. The TCEQ is

concerned that including malfunction emissions would inflate the

baseline and narrow the gap between baseline actual emissions and

the plarmed emission rate. Therefore, the number of "major"

sources or modifications would be reduced. It is unclear how

emissions that are not authorized would be considered creditable

within the concept ofFNSR applicability.

EPA has approved the exclusion of malfunction emissions from

the baseline calculation in other states' ruIes.23 TCEQ considers the

21 See Equitable Trust Co. v. Finance Comm'n, 99 S.W.3d 384,387 (Tex.App.-Austin 2003, uo pet.).

22 Reliant Energy, Inc. v. Public Vtil. Comm'n, 62 S.W.3d 833, 838 (Tex.App.-Austin 2001, no pet.) (citing

Statev. Public Vtil. Comm'n, 883 S.W.2d 190, 197 (Tex.1994)).

23 EPA has approved the omission of the phase "malfunction emissions" from the defmition of "baseline

actual emissions" as adopted by three states, based on its analysis that such an exclusion is acceptable for fmding

that the rules are at least as stringent as the federal rule. See proposed proposal approval of rules submitted by

Florida, 73 Federal Register 18466, 18470-71, (April 4, 2008), fmal rule approval 73 Federal Register 36435 (June

27,2008); proposed approval ofrules submitted by South Carolina, 73 Federal Register 52031, 52035 (September
Comments by Texas Commission on Environmental Quality

DocketID No. EPA-R06-0AR-2006-0133

Page 6 of8

exclusion of malfunction emissions from baseline actual emissions

to be at least as stringent as the federal rule. TCEQ is willing to

work with EPA to clarify the inclusion of startup and shutdown

emissions when determining baseline actual emissions.

d. Definition of "baseline actual emission rate" (Sections VLA. and

VLB. 74 Federal Register 48474 - 48475)

The TCEQ does not use a rate that differs from the FNSR

requirement. The TCEQ definition of "actual emissions'S" includes

the modifier "average," and "actual emissions" are included in the

definition of "baseline actual emissions rate.,,25 In practice, the

TCEQ contends that a reading of the entire definition, including

parts (a) - (d), results in an average emission rate being used to

establish a baseline actual emission rate. This is because to

determine an actual emission rate in tons per year from a

consecutive 24 month period requires averaging the emissions over

24 months to obtain an annual emission rate (an average annual

emission rate).

The TCEQ is willing to work with EPA to address any changes

necessary to clarify the definition, and specifically reference that a

baseline actual emission rate is an average emission rate, in tons

per year, of a federally regulated new source review pollutant.

3. Plantwide Applicability Limitation (PAL) Program (Section VIA 74

Federal Register 48474 - 48475)

a. Missing and Unclear PAL Requirements

EPA commented that the TCEQ rules do not include provisions for

PAL re-openings; requirements concerning the use of monitoring

systems (and associated definitions); and a provision which limits

applicability of a PAI. only to an existing major stationary source.

In addition, the current TCEQ rule, concerning emissions to be

included in a proposed PAL, does not require that all facilities at a

major source, emitting a pollutant for which a PAL is being

requested, be included in the PAL. EPA also commented thata

12, 2007), [mal rule approval 73 Federal Register 31369 (June 2, 2008); and proposed approval ofrules submitted

by Georgia, 73 Federal Register 51606, 51609 (September 4,2008), [mal rule approval 73 Federal Register 79653

(December 39, 2008).

24 30 Tex. Admin. Code § 116.12(1)

25 30 Tex. Admin. Code § 116.12(3)
Comments by Texas Commission on Environmental Quality

Docket ID No. EPA-R06-0AR-2006-0J33

Poge 70[8

PAL can include every emissions point at a site, without limiting

these emissions points to only those belonging to the same

industrial grouping (SIC) code. Notwithstanding the "lack of

explicit limitation," i.e., defining facility to equal emissions unit;

that is how the rule is applied and that will be addressed in

rulemaking.

b. Public Participation

The TCEQ will address EPA's concerns regarding public

participation for PALs in a separate rulemaking regarding public

participation for the NSR £ermitting program at its December 9,

2009, Commission agenda. 6

B. Pollution Control Projects (PCP) Standard Permit (74 Federal Register

48476)

The TCEQ PCP Standard Permit has been used to implement control technologies

required by regulatory changes, statutory changes, and/or EPA consent decree

provisions. As such, control devices may be applied to numerous different

facility types and industry types, ranging from storage tanks to fired units. TCEQ

understands EPA's comments and will work with EPA to develop an approvable

authorization(s) that will achieve the same goals and emission reductions.

III. TCEQ's Plan to Correct Deficiencies

The TCEQ understands that EPA's review was conducted by applying the current

applicable law. The Executive Director will conduct a review of all EPA comments and

propose changes to the rules proposed for disapproval.

The TCEQ understands EPA's concerns with issues regarding, among other things,

applicability, clarity, enforceability, replicable procedures, recordkeeping, and

compliance assurance. Specifically, the Executive Director will consider rulemaking to

address the following concerns:

• re-adopt the missing sections of the PSD Program (EPA's definition of BACT,

and addressing relaxation of an enforceable limitation);

• clarify references for major stationary sources and major modifications to EPA

rules for nonattainment and maintenance area defmitions and removing rule

language indicating that the l-hour thresholds and offsets are not effective unless

the EPA promulgates rules, and clarifying the applicability of nonattainment

permitting rules;

26 As discussed in 74 Federal Register 48480, in Section V.F., at 48490-91.
Comments by Texas Commission on Environmental Quality

Docket 1DNo. EPA~R06-0AR-2006-0133

Page 8 of8

• clarify the definition of baseline actual emission rate, and clarify the inclusion of

maintenance, startup, and shutdown emissions when determining baseline actual

emissions; and

• add missing items and clarify the existing requirements to obtain and comply with

a PAL to meet FNSR requirements.

New and amended rules will be subject to the statutory and regulatory requirements for a

SIP revision, as interpreted in EPA policy and guidance on SIP revisions, as well as

applicable Texas law. The revised program will ensure protection of the NAAQS, and

demonstrate noninterference with the Texas SIP control strategies and reasonable further

progress.

In addition, and as noted, TCEQ will address EPA's concerns regarding public

participation in a separate rulemaking action/"

27 As discussed in 74 Federal Register 48480, in Section V.F., at 48490-91.