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 ofSignificant 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 of Implementation 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 StandardPermit. " 

### 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 ofSignificant Deterioration (PSD), Nonattainment NSR (NNSR) for the 1997 8-Hour Ozone Standard, NSR Reform, and a Standard Permit Docket 

### IDNo. 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 FederalRegister48472) 

### 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 ofattainment for the Chicago/Gary/Lake County nonattainment area which states "a separate NSR policy is being developed" regarding implementation ofthe 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 ofexceptions 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 FederalRegister 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 ofa specific definition ofbest available control teclmology (BACT) in TCEQ rule; and the absence ofa requirement contained in 40 Code of Federal Regulations (CFR) § 

### 52.21(rX4) concerning PSD review should the relaxation ofan 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 ifa 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 Register48473) 

### 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 ofTexas 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 ofEPA 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 ofmore 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 iflimiting 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 intheabsence ofanadministrative interpretation. Rather, ifthe statute is silentorambiguous withrespect to the specific issue,thequestion forthe court is whether the agency's answer is basedon apermissible construction ofthe statute." 15Phillips 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." 16Reliant 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. 19Id.
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 ofStartup, Shutdown, and Malfunction (SSM) Emissions in the Definition of"Baseline Actual Emissions" (Section VLB. 74 Federal Register48475) 

### 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 ofthe 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.). 22ReliantEnergy, 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 ofthe 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 ofrules submitted by Florida, 73 Federal Register 18466, 18470-71, (April 4, 2008), fmal rule approval 73 FederalRegister 36435 (June 27,2008); proposed approval ofrules submitted by South Carolina, 73 Federal Register 52031, 52035 (SeptemberComments by Texas Commission on Environmental Quality DocketID No. EP A-R06-0AR-2006-0133 Page 6 of8

exclusion ofmalfunction 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, ofa 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 ofmonitoring systems (and associated definitions); and a provision which limits applicability ofa 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 FederalRegister 

### 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 ofall 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 ofthe PSD Program (EPA's definition of BACT, and addressing relaxation ofan 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 FederalRegister48480, in Section V.F., at 48490-91.Comments by Texas Commission on Environmental Quality Docket 1DNo. EP**A~R06-0AR-2006-0** 133 Page 8 of8



### • clarify the definition ofbaseline 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 ofthe 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 FederalRegister48480, in Section V.F., at 48490-91.