## PART 231 StateImplementationPlan Equivalency Determination February

3,2009

The New York StateDepartment ofEnvironmental Conservation (Department)

hasdetermined

that its New SourceReview (NSR) program in 6 New York Codes Rules and Regulations(6NYCRR), Part23l- (New Source Revierv For New And Modified Facilities) is equivalentto the federal NSR program. The Environmental ProtectionAgency (EPA) in its December 31, 2002 NSR rule, stated at page 57 FR 80241that States can customizetheir NSR programs '\vith different but equivalent regulations". New York Statehas developeda customizedNSR program. Revised Part 231 does contain provisions that are "different but equivalent" to the provisions of the December 31,2002 NSR rule as amended

on December

21,2007 (Federal

NSR Rule).

The Departmenthas incorporatedinto revised Part23l the NSR applicability concepts provided in the FederalNSR Rule. Generally,theseconceptsinclude 1) Baseline period (look-back period) for determining baselineactual ernissions, 2) Baseline actual emissions-to-projected actual emissions

test for emission increases, 3) Plantwide Applicability Limits (PALs), and 4) Reasonable

Possibility Recordkeeping and Monitoring requirernents for insignificant modifications. In severalinstances the Department has expanded and strengthened

EPA's concepts

to provide additional safeguards.There are severalinstances where the requiranents of revised Part23l deviate from the FederalNSR Rule, however, the Departmentmaintains that revisedPartz3l is equivalent to the Federal

NSR Rule.

The discussion

below addresses

those instances

where the provisions of revised Part 231 are "different but equivalent" to the FederalNSR Rule.

1.) Baseline Period - The Departmenthas decidedto establisha uniform baselineperiod provision for eledtric utility steamgenerating units (EUSGUs) and non-EUSGUs. Revised Part 231 requiresthat all emission sources select a baselineperiod usingany twenty-four (24) consecutive

month period within the five (5) year period that precedes a proposedchange, adjusted to reflect current enforceable ernissions

limitations. Under the FederalNSR Rule, baseline actual emissions for non-EUSGUs are to be calculatedby taking an average of the annual ernissions

in any twenty-four (24) consecutive month period within the ten (10) year period that precedes

a proposedchange,

adjusted to reflect current enforceable emissions limitations. For EUSGUs, the FederalNSR Rule limits the baselineperiod to any twenty-four (24) consecutive

month period within the five (5) year period immediately precedingwhan a permittee begins actual constructionof a project or anothertwenty-four (24) consecutive month period that is demonstrated as being more representative of normal emission sourceoperations. Under revisedPart23l, both EUSGUs and non-EUSGUs are not allowedto go beyond the most recent five (5) year period in establishing their baseline emissions.

The Departmentbelievesthat the revised Part23l uniform baselineperiod using any twenty-four

Page 1 of 6(24) consecutive month period within the five (5) year period that precedes a proposedchange strikes the most appropriate balanceconsidering environmental protection, administrative burden, business

cycles and economic growth. The Departmentbelievesthat overall this approach

will still provide additional flexibility for facilities, which EPA concludescould result in additional economic growth. Lastly, the business cycle study relied upon by EPA to justifu its ten (10) year baselineperiod, found business cycles varied in the industries surveyed from three yearsto eight years. A five (5) year look-back period offers a baselineperiod that is approximatelythe average length of thesecycles,while providing further protection than the EPA allowed ten (10) year baselineperiod from the opportunity to use a non-representative and possibly infl ated baseline.

Basedon the.above,

the Departmentmaintains that a baselineperiod using any twenty-four (24) consecutive

month period within the five (5) year period that precedes a proposedchange, adjusted to reflect current enforceable emissionslimitations best represents the goals of the NSR program for the State,and although different than the federal requirements, is equivalent to the federal requirements.

2.) Sihgte Baseline For facilities Undergoing NSR Modifications - Revised Part 231 requires that facilities selecta single baselineperiod for all NSR pollutants when calculating'baseline actual emissions

for a specific prbject. The FederalNSR Rule, allows facilities to choose a different baselineperiod for each NSR pollutant. The Departmenthas determined that a single baselineperiod for a specific project is more protective of the public health and the environment and is the only reasonable altemative for the New York's NSR program.

The Departmentconsidered two alternatives

with respect

to the definition of BaselineActual Emissions: (,1)

adopt the federal definition or (2) adopt a definition based on the federal rule but tailored to the needs

of New York State. The Departmentbelieves that the federal definition has the potential to inflate the calculation of baselineactual emissions, thereby subjectingfewer projects to NSR review and potentially result in higher air emissionsin the State. Pursuant to the FederalNSR Rule, a facility could develop a baseline emissions profile which is not derived from a permitted operatingscenario, but is basedon pollutant-specific emissions achievedduring different operating scenarios and different baselineperiods. In practice,the facility would not have emitted at the two-year high levels for all the NSR contaminants during any consecutive twenty-four (24) month period. More importantly, the operating permit would not have authorizedsuch emission levels under either operating scenario.

The use ofa single baselineperiod assures that a proposed

project is based

on an actual operating scenario

and not an artificially high emissions baseline. The use of multiple baselines could result in picking several baselineperiods to maximize emissions for severaldifferent pollutants. For example,a combustion facility permitted to burn both oil and natural gas could choose different baseline

periods when using natural gasto maximize VOC, CO, and PM-10 emissionsand oil to maximize PM, NOX and SO2 emissions. This would createan artificially high baselinenever actually experienced by the sourcenor emitted to the atmosphere surrounding

Page2of 6j* P:lttP Td, iL extreme cases, a baseline

that could never actually be achievedby the source. With higher baselineemissions during a particular twenty-four (24) month period, a proposed project could potentially avoid being subjectto NSR for those pollutants as-a result of selecting that baseline

period. At no time would the actual ernissions of the affected emissionssourcein any one operating scenario be honored, notwithstandingthat the Department's part 201 permitting program establishes emission limits for eachoperating scenario. The result of this is the potantial for a project that would otherwise be considered major exceptfor the artificially high baseline

to either "cap out" or "net out" of NSR. This would cause an irr"r"as" in emissions that would exacerbate

air quality problans in New york State.

The use of a single baselineperiod over five (5) yearsprovides the sourceowner sufficient flexibility to choose

an operatingscenario

that best reflects operating conditions during the normal business

cycle without unnaturally inflating emissions. por t-his reason, the Department believes a single baselineperiod is the only reasonable methodology to determinebaselineactual emissions. This single baseline period will be a scenario that has uitrutty occurred and was experienced

by the sourceand the environment. Basedon the above,the Oepartment believes that a single baselineperiod best represents the goals of the NSR program foi the State,and although different than the federal requiranents, is equivalentto the federal requirements.
3.) Reasonable

Possibility In Recordkeeping - RevisedPart23l expands upon the requirements

of EPA's December21,2007 final Reasonable Possibility In Recordkeeping rule by incorporating recordkeeping and/or monitoring requiremants for all insignificant 11odifi"oltiorrr.-

EPA's final rule only includes provisions applicableto: 1) modifications with a projected actual emissionsincrease

that equalsor exceeds

fifty (50) percentof the applicable NSR significance threshold, and2) modifications with a'projectedactual emissions increase that is less than fifty (50) percent of the applicable NSR significancethreshold but when ernissions attributable to independent

and unrelatedfactors such as dernand growth are added,

equalsor exceeds

fifty (50) percent of the applicable NSR significancethreshold. For the first scenario, EpA requires emission sources

to.comply with both pre-change and post-change

recordkeeping

and reporting requirements. For the second scenario,EPA requiresonly pre-change recordleeping requirernents.

Unlike EPA's December 21,2007 final Reasonable Possibility In Recordkeeping rule, revised part 231 expands

the reasonable

possibility in recordkeeping requiranents by:

I .)' requiring that any modification with a project emission potential (EPA's projectedactual emissions increase) which is less than 50 percent of the applicable significant project threshold,

or any modification with a project emission potential which when emissions from independent

and unrelated

factors such asdemand growth are added,

is lessthan 50 percent of the applicable significant project threshold, in addition to complying wiih any requirements

under Part2}l,maintain for a minimum of five years:(l) a description of thl modification; (2) an identification of each new or modified emissionsource(s) including the

Page 3 of 6associated processes,

and ernission

unit; (3) the calculation of the project emissionpotential for each modified emissionsource(s) including supportingdocumentation; and (4) the date the modification commenced operation. EPA's final Reasonable PossibilitvRule doesnot have this requirement

for modifications which are below the reasonable

possibilitv threshold.
2.) extendingthepost-changemonitorinsrequirementsto alsoinclude anymodificationwith
a project emissionpotential which is lessthan fifty (50) percent of the applicablesignificant project threshold,

but equals

orexceeds

fifty(50) percent

ofthe applicable

significantproject thresholdwhen emisbions from independent

and unrelatedfactors such as demand growth
are added. Foi such insignificant modifications, revised Part 231 requiresfacilities to keep records of their calculation of emission increases from independent

and unrelated factors suchasdernand

growth, monitor post-modification emissions, and submit annual reportsto veriff the accuracy of their calculations. Additionally, the final federal Reasonable Possibility rule only requires EUSGUs to notiff the Department, prior to beginning actual construction,

for any modification with a project onission potentialwhich equals or exceeds fifty (50) percantof the applicablesignificant project threshold. Revised Part23l extends the pre-construction

notification requiranent to any facility thatproposes a modification with
a project ernission potential which equals or exceeds fifty (50) percent of the applicable significant project threshold or proposesa modification with a project emission potantial which is less

than fifty (50) percent

ofthe applicable

significant project threshold, but equals
or exceeds

fifty (50) percentof the applicable significant project threshold when emissions from independent

and unrelatedfactors such as demandgrowth are added.

The Departmentbelievestheseadditional requiranents are necessary to ensure

that facilities take into account

the emissions

from all insignificant modifications in any future Part'231applicability determination such as netting, and best represents the goals of the NSR program for the State,and although different than the federal requiranents, is equivalentto the federal requirements.
4.) Plantwide Applicability Limits (PALs) - The Department's revised Part 231 allows facilities to establish

a PAL for an initial term not to exceed l0 years consistent with the provisions of the FederalNSR Rule. The Department's rule, however, aligns the PAL term with
a facilities Title V permit so that the PAL expires when the renewed Title V permit which includes the PAL expires. This may cause, in some instances,

the duration of the initial PAL term to be lessthan 10 years. For example, if a PAL is established two years into the Title V permit term, the PAL will expire in eight yearsrather than 10 years. This will enable the PAL to be renewedin conjunction with the Title V permit rather than in a separate proceedingas a major modification to the Title V permit. The Departmentbelievesthat a singlg permit process will facilitate public review of the PAL and the Title V permit and also eliminate the additional costs

. associated

with a separate

permit application and review process.

Unlike the FederalNSR Rule, the Department's revised Part 231 requiresa reduction in the PAL of up to 25 percentor implementation of best achievable control technology (BACT), whichever is less stringent,by the end of the fifth year of the initial PAL. The Departmentrecognizes that a

Page 4 of 6sourceoperating under a PAL is free to undertake plant changes

that might otherwisetrigger NSR emission reduction requirernents. Therefore,the implanentation of a PAL can have the effect of allowing a facility to avoid the imposition of controls that would result in reduced emissions. Requiring a reduction in the PAL level by the end of the fifth year of the PAL ensures that environmental benefits will be achieved by the implementation of the PAL. Although the Department acknowledges that fewer facilities may opt for a PAL because of the emission reduction requiranent, the PALs that would not go forward because of the reduction requirement

are necessarily

those PALs that would not result in substantial emission reductions.
gur"a on the above,the Departmentmaintains that the PAL provisions of revised Part 231 best balancethe goals of improving air quality in New York State while reducing the burden of NSR compliance on industry, and although different than the federal requirements, is equivalent to the federal requironents.

5.) Projected Actual Emissions

Revised Part23lincorporates important safeguards, not found in the FederalNSR rule, to address the federal rule's lack of enforceability of a facility's projected actual emissions. These include: (1) a requirementfor facilities which net out of major NSR or proposea significant modification, to obtain a modified permit with an enforceable emission cap based

on their prqjected actual emissions;(2) a requirement that facilities maintain detailed records for a period of five (5) yearsfor all insignificant modifications, including all relevant documentation supporting their emissionscalculations; and (3) monitoring of emissions to ensure

compliance with the enforceable

projected actual emissionslimit for facilities which net out of major NSR or proposea significant modifi cation.

As in the FederalNSR rule, revised Part23l includes in calculating projected actual emissions,

an exernptionfor emissions from independent

and unrelated

factors such as dernand growth, however, revised Part23l includes additional safeguards not required by the FederalNSR Rule to ensure

that facilities do qot misusethe independent and unrelated

factors exemption. First, the rule requires all facilities undertaking modifications to keep recordsof their projected actual ernissions,

including all supporting documentation. This would include the emissionsa facility excluded from the calculation of projected actual emissions due to independent

and unrelated factors such as demandgrowth. Revised Part23l also requires that in order for a facility to include such emissionsin determining future compliance, the applicant must have documented their emissions

due to independent

and unrelatedfactors such as demandgrowth as part of their permit application. Part 231 requiresthat any compliancecertification include, if applicable, documentation

that actual measured

emissionslessthose attributedto actual demandgrowth emissions

are below the permitted and enforceable projected actual emissions limit. If a facility cannot clearly distinguish emissionsresulting from the project and those attributableto demand growth, the facility will have to'attribute all emissions to the project and demonstrate compliance with permit limits.

Page 5 of 6The Department maintains that the additional safeguardsnoted above, although different that the

federal requirements,

are equivalent to the federal requiranents.

Page 6 of 6