UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

WASHINGTON, D.C

. 20460



# APR 16 2013

Ms. Kathleen Waylett

Senior Deputy Attorney General

Environmental Division

North Carolina Department of Justice

P.O. Box629

Raleigh, North Carolina 27602-0629

Ms. Sheila C. Holman

Director, Division of Air Quality

North Carolina Department of

Environment and Natural Resources

1641 Mail Service Center

Raleigh, North Carolina 27699-1641

Re: North Carolina's Implementation of Visibility Impact Assessment Requirements for New

Major Stationary Sources and Major Modifications Subject to Clean Air Act Prevention

of Significant Deterioration Requirements

Dear Ms. Waylett and Ms. Holman:

This is in response to the enclosed March 20, 2012, letter from then-Senior Deputy James Gulick to

Brian Doster ofthe U.S. Environmental Protection Agency's Office of General Counsel (OGC)

summarizing North Carolina's understanding of the EPA's views regarding the evaluation of the

visibility impacts of new and modified sources on Class I areas under the Clean Air Act's Prevention of

Significant Deterioration (PSD) permitting program. It followed the enclosed March 9, 2011 letter from

Beverly Bannister, Director of the EPA Region 4 Air, Pesticides and Toxics Division to Sheila Holman,

Director of the Division of Air Quality of the North Carolina Department of Environment and Natural

Resources and the enclosed August 19, 2011 letter from Mr. Gulick to David Coursen of OGC. The

March 20, 2012 letter requested that the EPA review North Carolina's summary and determine whether

it accurately describes the EPA's position on the legal basis for requiring a comparison to natural

visibility conditions in determining whether emissions from a new or modified source will cause

visibility impairment in a Class I area. In addition, the letter requested confirmation that North

Carolina's summary accurately identifies the main elements of the two-step process necessary to

determine whether any visibility impacts rise to the ievel of an "adverse impact on visibility," which the

EPA described at our February 23, 2012, meeting with representatives from your office, the North

Internet Address (URL) http://www.epa.gov

Recycled/Recyclable o Printed with Vegetable Oil Based Inks on 100% Postconsumer, Process Chlorine Free Recycled PaperCarolina Division of Air Quality (NC DAQ), the U.S. Fish and Wildlife Service, and the U.S. Forest

Service. The March 2012 letter accurately summarizes the key components of the EPA's interpretation,

but the EPA is not in complete agreement with some of the details reflected in the letter's summary. We

clarify the EPA's views on these topics below.

The EPA agrees that North Carolina's summary accurately describes the substance of the "two-step

process" for determining whether a new or modified major stationary source that may affect visibility

will cause an "adverse impact on visibility." The first step requires an assessment of visibility

impairment based on how visibility would change from what would have existed in the absence of any

human-caused pollution, and this analysis must be provided to the appropriate Federal Land Manager(s)

regardless of whether the Class I increment is exceeded. The EPA also agrees that the second step in the

analysis, the determination of whether the source will have an adverse impact on visibility, requires a

more holistic evaluation of various factors affecting visibility, potentially including current visibility

conditions and whether the State is on track toward improving visibility.

The

. above interpretation is consistent with North Carolina's state implementation plan (SIP)-approved

regulations. Specifically, 15A NCAC 2D .0530, 1 provides that: (a) finding a "visibility impairment" is a

prerequisite to finding an "adverse impact on visibility;" 2 (b) the visibility analysis the State provides to

the Federal Land Manager( s) must assess whether the proposed new or modified source will cause

"visibility impairment;" 3 (c) "visibility impairment" refers to "any change in visibility

... from that

which would have existed under natural conditions;" and (d) "natural conditions" includes "naturally

occurring phenomena that reduce visibility" (and necessarily excludes human-caused factors impacting

visibility such as pollution from existing industrial sources). Because North Carolina's SIP already

incorporates by reference the key federal regulatory provisions underlying the EPA's interpretation, it is

not necessary for North Carolina to revise its SIP to meet PSD visibility requirements

. Moreover,

applying the EPA's interpretation of the visibility impact assessment requirements would not in any

respect make North Carolina's requirements more restrictive than federallaw. 4

The EPA also wishes to clarify its views on two topics discussed in North Carolina's letter. First, the

EPA does not view the discussion of "natural conditions" in its 1999 Federal Register notice as

clarifying existing regulations, but instead as reiterating what already was clear from the plain language

ofthe federal regulations

. See 64 Fed. Reg

. 35714,35728/2 (July 1, 1999) (explaining that "[n]atural

1 See North Carolina SIP rule 15A NCAC 2D .0530(b) (incorporating by reference the federal

definitions at 40 C.F.R. § 51.301; 51 Fed. Reg. 2695, 2695 (Jan. 21, 1986) (stating that the federal

definitions of "adverse impact on visibility" and "visibility impairment" are incorporated into the North

Carolina SIP).

2 See 40 C.F.R. § 51.301 (defining "adverse impact on visibility," as "visibility impairment which

interferes with the management, protection, preservation, or enjoyment of the visitor's visual experience

ofthe Federal Class I area") (emphasis added).

3 Because a source cannot be found to have an "adverse impact on visibility" unless the source's

anticipated emissions would cause "visibility impairment," the analysis provided to the Federal Land

Manager(s) pursuant to 40 C.F.R. § 51.307(a)(l) must demonstrate whether the proposed source would

cause a "visibility impairment." See also North Carolina SIP rule 15A NCAC 2D .0530(q)(3) (providing

that the visibility impact analysis provided to the Federal Land Manager(s) should indicate whether the

source may cause "visibility impairment").

4 See Letter from James C. Gulick, North Carolina Department of Justice (NC DOJ), to David Coursen,

U

. S. EPA Office of General Counsel, dated August 19,2011, at 5.

2conditions" are "the visibility conditions that would be experienced in the absence of human-caused

impairment"). Second, while North Carolina's letter recognizes that the factors listed in the definition of

"natural conditions" at 40 C.F.R. § 51.301 are "not exhaustive," and the EPA believes that there may be

additional "natural" factors that would affect visibility under "natural conditions," the definition of

"natural conditions" cannot be extended to include unnatural factors such as pre-existing visibility

impairment caused by industrial sources.

Further, under 15A NCAC 2D .0530(q) 5

, it is North Carolina's obligation to identify proposed new or

modified sources that may affect visibility in a Class I area, and to provide the Federal Land Manager(s)

with timely notice of such proposed sources along with the required visibility analysis. This obligation

reflects the EPA regulations requiring that a state PSD implementation plan provide for "[w]ritten

notification of all affected Federal Land Manager(s) of any proposed new major stationary source or

modification that may affect visibility in any Class I area," that must "include an analysis of the

anticipated impacts on visibility in [the] Class I area." 40 C.F.R. § 51.307(a)(l). Such notification

reflects the statutory and regulatory recognition that "[t]he Federal Land Manager and the Federal

official charged with direct responsibility for management" of Class I lands" "have an affirmative

responsibility to protect the air quality related values (including visibility) of any such lands within a

class I area

.... " 42 U.S.C. § 7475(d)(2)(B); 40 C.F.R.§ 51.166(p); see also 40 C.F.R. Part 51, Appendix

W. The EPA strongly encourages North Carolina to work directly with the Federal Land Manager(s) to

establish mutually agreeable and effective procedures for both notifying the Federal Land Manager(s) of

those sources that may affect visibility and administering the visibility impact assessment requirements

in the manner described above.

The EPA appreciates the time that NC DOJ and NC DAQ have invested in addressing the EPA's

concerns rega,rding North Carolina's implementation of the PSD Class I visibility impact assessment

requirements. If the North Carolina Department of Environment and Natural Resources (NCDENR) has

any further questions, please feel free to contact Beverly Banister, Director of the EPA Region 4's Air,

Pesticides and Toxics Management Division, at (404) 562-9326.

Sincerely,

Director

Air, Pesticides and Toxics Management Division

U.S. Environmental Protection Agency, Region 4

5 North Carolina has requested that the EPA approve a newer version of this regulation as part ofNorth

Carolina's SIP, but the EPA has not yet granted approval. The new version of the regulation (stateeffective date January 2, 2011) includes substantially the same regulatory language at 15A NCAC 2D

.0530(t).

3

# ~ Mane

Wood

Director, Air Quality Policy Division

Office of Air Quality Planning and Standards

U.S. Environmental Protection Agency

Brian Doster, Esq.

Assistant General Counsel

Office of General Counsel

U.S. Environmental Protection Agency

Enclosure(s)

cc: Mr. Stephen T. Smith, Chairman

Environmental Management Commission, NCDENR

Ms. Sandra Silva, Chief '

Branch of Air Quality '

U.S. Fish Wildlife Service '

Mr. Bret Anderson '

U.S. Forest Service '

4 '

## State of North Carolina

Department of Justice Sender's Contact lnfonnation: ROY COOPER James C. Gulick P.O.BOX 629

ATTORNEY GENERAL jgulick@ncdoj.gov RALEIGH, NC 27602-0629 (919) 716-6940



### August 19, 2011



### VIA EMAIL (coursen.david@epa.gov) and USPS

David F. Coursen

Office of General Counsel

USEP A Headquarters

Ariel Rios Building

1200 Pennsylvania Avenue, N. W.

Mail Code: 2322A

Washington, DC 20460

Re: Modeling impacts to Class I areas for PSD permits

Dear Mr. Coursen:

On March 9, 2011, Sheila Holman, the Director of North Carolina's

Division of Air Quality, received the attached letter from Ms. Beverly H. Banister

at Region 4. The letter discusses modeling procedures under the Prevention of

Significant Deterioration ("PSD") program regarding Class 1 areas. The timing of

this letter was unfortunate, as it was received one business day prior to the

Environmental Management Commission's consideration of the issue in a

particular contested case. However, my larger concern is that the letter appears to

conflict with prior EPA rulemaking and EPA's earlier approvals of the North

Carolina approach. To our knowledge, the letter represents the first and only

statement by EPA setting out this new interpretation of federal requirements

. with

respect to Class 1 areas.

I write to you in an effort to clarify North Carolina's position and seek

EPA's assistance to resolve this matter. The matter, of course, concerns modeling

by which the "Federal Land Manager [may] demonstrate[] to the satisfaction of the

State" that a new or modified source ''will have an adverse impact on the air

quality-related values (including visibility)" of any Class 1 areas. Clean Air Act

§ 165(d)(2)(D)(ii), 42 U.S.C. 7475(d)(2)(C)(ii). Specifically, should the impacts ofDavid F. Coursen

August 19, 2011

Page 2 of6



### the modeled source be measured against existing air quality conditions ("existing

background") or against an ideal, "natural" baseline ("natural background")?

At the suggestion of Stan Meiburg, Deputy Administrator of Region 4, last

week I had a telephone conversation on this subject with Vera Kornylak and Keri

Powell in the Regional Counsel's office at Region 4. In that conversation, Ms.

Powell indicated that the views expressed in Ms. Banister's letter were the

considered views of EPA headquarters. Following the conversation, I asked for a

contact at EPA Headquarters with whom I could discuss the matter and she

suggested that I contact you, as you were involved in preparation of the March 9

letter. As 

# y ou are on vacation until August 26th 

### and I will be 

### on vacation from

August 25 to September 8th, 

### I thought it would be helpful to summarize my thoughts in a letter to you so you can be considering them before we talk.

During my conversation with Region 4, I was told that the March 9 letter

reflects EPA's view that the plain language of the federal rules requires the use of

natural background for Class 1 PSD modeling. (In other words, impacts should be

compared to circumstances in which only "natural conditions" impact visibility.)

We respectfully disagree; until now, EPA's consistent interpretation, in formally

promulgated rules, has been just the opposite. EPA's previous positions would

have to be changed, if at all, by a formal rule-making. Ms. Banister's letter cannot

override a consistent history of formal pronouncements. 

### See NRDC v. EPA, 643

F.3d 311 (D.C. Cir. 2011).

.

Ms. Banister's letter (p. 2) asserts that under the plain language of EPA's

rules, particularly 40 C.F.R. §§51.301 and 51.307, ''the required assessment of a

proposed new or modified source's visibility impacts must involve an analysis of

how the project's emissions would impact natural conditions." As Ms. Banister

observes, "'natural conditions' is defined as 'naturally occurring phenomena that

reduce visibility as measured in terms of light extinction, visual range, contrast, or

coloration"' (quoting 40 C.F .R. §51.30 1 (definition of "natural conditions")).

North Carolina agrees, as Ms. Banister notes, that modeling must assess the

"humanly perceptible change in visibility (light extinction, visual range, contrast,

coloration) from that which would have existed under natural conditions." 40

C.F.R. §5.1.301 (definition of ''visibility impairment"). That is to say, modeling

must account for "naturally occurring phenomena" such as humidity and ambient

light conditions, ''that reduce visibility."David F. Coursen

August 19, 2011

Page 3 of6



### But the question with which we are confronted is not whether "natural

conditions" such as humidity and ambient light levels must be considered, but to

what extent emissions from other anthropogenic sources are to be considered. The

rule text cited in Ms. Banister's letter does not address the latter issue.

Nevertheless, on that question EPA's rules are also clear: Visibility modeling

under the PSD permitting program must include existing background conditions as

encumbered by current manmade pollutant loadings including other permitted

sources.

In 1985, EPA promulgated a final rule designed to "implement the existing

new source review arid consultation requirements in §51.307" and "not

... to

modify these requirements or the definitions in §51.301 associated with them."

State Implementation Plans for Visibility New Source Review Monitoring

Strategy, 50 Fed. Reg. 28,544, 28,547 (1985). There, EPA stated plainly that "[i]n

assessing a proposed source's impact on visibility, the reviewing authority must



### necessarily review that impact in the context of 

### existing background visibility.

This point does not seem debatable." /d. 

### at 28,548 (emphasis added). During my

conversation with Ms. Powell, she asserted that North Carolina took this statement

out of context. We disagree. EPA concluded the same paragraph of the rule with

this statement: "The EPA concludes that the proposed language on assessing

whether a proposed source will cause an adverse impact on visibility requires the

reviewing authority to review the new source's 

### impact in the context of

background visibility impacts caused by both existing and previously permitted

sources. /d. (emphasis added).

Moreover, in a later, separate rulemaking, EPA reiterated this conclusion:

"[A]n assessment of whether a proposed source would cause an adverse impact on visibility 

### requires the permitting authority to review the new source's impact 

### in

the context of background impacts caused by both existing and previously

permitted (not yet constructed) sources." Prevention of Significant Deterioration

(PSD) and Nonattainment New Source Review (NSR), 61 Fed. Reg. 38,249,

38,284 n.57 (1986) (citing 45 Fed. Reg. at 28,548).

Most particularly, on January 21, 1986, EPA by rule approved North

Carolina's proposed SIP changes to implement the required consultation with

Federal Land Managers regarding impacts to Class 1 areas, and to provide for

visibility monitoring in the context of making permit decisions. In that formally

promulgated rule, EPA stated:David F. Coursen

August 19, 2011

Page 4 of6



### The visibility monitoring program meets the criteria for an approvable

. plan, as it will provide the State with reliable background visibility

data for making permit decisions and for assessing visibility trends.

It 

### has been reviewed and been found to meet the provisions contained

in 40 CFR 51.305.

The Weather Service provides visibility measurements in units of

distance, or visual range, which are recorded three times a day for

every day of the year. This data is appropriate for use in modeling

potential visibility impacts of new sources

....

[Existing] National Weather Service Stations

. . should provide

acceptable regional background data to use in making visibility

related permit decisions

.... The State will use this visibility data

in making fits} permit decisions.

Approval Promulgation of Implementation Plans; N.C. Visibility SIP, 51 Fed.

Reg. 2695, 2696 (1986) (emphasis added). This rule shows EPA's specific intent

and understanding that North Carolina use existing conditions gleaned from

current monitoring data in permitting decisions. Together, these formal documents

unmistakably. evidence EPA's considered opinion that existing background

visibility data are to be used to evaluate impacts to visibility when issuing permits

under the PSD program.

Further, EPA's Guidelines on Air Quality Models

- 

### another formally

promulgated authority

- indicates that "[b ]ackground air quality includes pollutant

concentrations due to: (1) Natural sources; (2) nearby sources o ther than the one(s)

currently under consideration; and (3) unidentified sources." 40 C.F .R. Part 51,

Appx. W, §8.2.1 (July 1, 2010). Finally, EPA's Interagency Workgroup on Air

Quality Modeling Phase 2 Summary Report and Recommendations for Modeling

Long Range Transport Impacts (Dec. 1998) ("IW AQM"), also eschews the use of

natural background. Instead, it allows for "estimates of background visibility

conditions at Class I areas" to be "derived from the IMPROVE (Interagency

Monitoring of PRotected Visual Environments) network." /d. 

### at 27. IWAQM

establishes background as "the average of the cleanest 20% of the data from

IMPROVE" at a given site. But IW AQM recognizes that although it refers toDavid F. Coursen

August 19, 2011

Page 5 of6



### these data as "clean conditions," they are not indicative of a natural background

because "[ e ]ven the data from the cleanest days usually exhibit some made-made

influence." !d

.

These authorities point unerringly to the use of existing background data in

the modeling of source impacts to Class 1 areas under the PSD program. North

Carolina has adhered to these authorities, including the recommendation in

IWAQM to use "the average of the cleanest 20% of the data," and does not require

the use of natural background. We believe this is consistent with EPA's historical

and longstanding reading of its own rules.

For all the foregoing reasons, North Carolina respectfully disagrees with

EPA's assertion that its rules, as written, plainly require the use of natural

background. EPA's position appears out of step with the range of authorities

discussed above.

Before this summer, the Environmental Management Commission



### ("EMC")- North Carolina's air quality rulemaking body- could have decided to

alter North Carolina's rules to require the use of natural background for PSD

modeling purposes regardless of whether the views expressed in the Banister letter

are correct or not. There has recently been at least some support for requiring the

use of natural background expressed by some EMC members. Such a change

would have resolved the conflict without the need to clarify the basis for EPA's

recent interpretation further. However, new North Carolina legislation, enacted just

this summer over the Governor's veto, puts new restrictions on adoption of state

environmental rules that are "more restrictive" than EPA rules on the same subject.

2011 N.C. Sess. Laws 398, §2 (codified in relevant part at N.C. Gen. Stat. §150B19.3). This makes it vital that we resolve this matter.

Therefore, I request that you review these matters again. I would appreciate

the opportunity for further discussion to get a better understanding of EPA's legal

position and also to see if there is a way to resolve this matter to allow North

Carolina to determine the best path forward in compliance with the requirements of

the Clean Air Act, EPA's regulations and North Carolina's rules. I look forward to

discussing this with you after September 8, 2011.

# .

David F : Coursen

August 19, 2011

Page 6 of6



### Sincerely,

s/ James 

### C. Gulick



### James C. Gulick

Senior Deputy Attorney General

Copies: Vera Kornylak, EPA Region 4

Keri Powell, EPA Region 4

Sheila Holman, NC DAQREPLYTO: 

## State of North Carolina

JAMES C. GULICK

ENVIRONMENTAL DIVISION ROY COOPER 

### Department of Justice

PHONE: 919.716.6940

AT T ORNEY GENERAL PO BOX 629 FAX: 919

. 716.6767

RALEIGH, NORTH CARO LI NA E-MAIL: JGULICK@NCDOJ

. GOV

27602-0629

March 20, 2012

Brian Doster, Esq.

Office of General Counsel

US EPA Headquarters VIA EMAIL (doster.brian@epa.gov) and USPS

Ariel Rios Building

1200 Pennsylvania Avenue, N.W.

Mail Code: 2322A

Washington, DC 20460

Re: Modeling impacts to Class I areas for PSD permits

Dear Brian:

Our meeting on February 23, 2012 was very helpful. Thank you for your help. The purpose of this letter, as we discussed, is to summarize North Carolina's

understanding of EPA's position with regard to the evaluation of the visibility

impacts of new sources in Class I areas under the PSD permitting program. This

summary is not intended necessarily to represent DAQ's agreement with any particular EPA position or statement.

We would appreciate your review of our summary to determine whether it

accurately summarizes EPA's positions, first, on the legal basis for requiring a comparison to natural background in determining visibility impairment, and,

second, with regard to describing the main elements of the two-step process

necessary to complete the PSD visibility review that EPA described at our meeting.

### • '

Brian Doster, Esq., Office of General Counsel, US EPA

March 20, 2012

Page 2

Summary of EPA's View of Legal Requirement for

Comparison Against Natural Background in Determining Visibility

Impairment"

The definition of "visibility impairment," read in the context of the

statutory goal,l necessarily requires a comparison of the source's emissions against

natural background:



### Visibility impairment means any humanly perceptible change in

visibility (light extinction, visual range, contrast, coloration) from that

which would have existed under natural conditions.

40 CFR § 51.301.

The te

. rm "natural conditions" is defined in the rules as including naturally

occurring phenomena such as light extinction, visual range, contrast, or coloration.

However, the definition of the term is not exhaustive:



### Natural conditions 

### includes naturally occurring phenomena that

reduce visibility as measured in terms of light extinction, visual range,

contrast, or coloration.

40 CFR 

### § 51.301 (emphasis added). EPA believes that its 1999 rulemaking

concerning the regional haze program clarified that "natural conditions" as used in

the definition of "visibility impairment" means natural background (which includes

naturally occurring phenomena).

A plain reading of the definition of "adverse impact on visibility''

demonstrates that a finding of "visibility impairment" must be made prior to a finding of adverse impact:



### Adverse impact on visibility means, for purposes of section 307,



### visibility impairment which interferes with the management,

protection, preservation, or enjoyment of the visitor's visual experience

of the Federal Class I area. This determination must be made on a case-by-case basis taking into account the geographic extent

, intensity,

duration, frequency and time of visibility impairments, and how these

factors correlate with (1) times of visitor use of the Federal Class I

1 The statutory goal is "the pre vention of any future, and the remedying of any existing, impairment

of visibility in mandatory class I Federal areas which impairment results from manmade air

pollution." 42 U.S.C. § 7491(a)(l).Brian Doster, Esq., Office of General Counsel, US EPA

March 20, 2012

Page 3

area, and (2) the frequency and timing of natural conditions that

reduce visibility. This term does not include effects on integral vistas.

40 CFR § 51.301 (emphasis added). The term "visibility impairment" precedes the

other considerations in the rule. Thus, in order to find that an adverse impact

exists, there must be a threshold finding of "visibility impairment."

Summary of EPA's Two Step Process

Step 1 - Is there "visibility impairment"?

The first step in the PSD visibility inquiry is determining whether there is a "visibility impairment" as defined in 40 C.F.R. § 51.301. In making this

determination, the proposed source's visibility impacts must be compared to the

visibility in the Class 1 area in the absence of any man-made pollution, or, as North

Carolina has referred to it, "natural background."2 This determination must be

made and provided to the FLM regardless of whether the increment is exceeded.

If there is no visibility impairment, the applicant does not need to proceed

further, because there can be no "adverse impact" without visibility impairment.

Step 2 - Is there an adverse impact on visibility?

If there is a finding of visibility impairment, it must then be determined

whether that impairment "interferes with the management, protection,

preservation, or enjoyment of the visitor's visual experience of the Federal Class I

area," such that there is an adverse impact on visibility 

### Id. § 51.301. This process

involves taking a more holistic approach. In determining whether the visibility

impairment rises to the level of an adverse impact on visibility, the FLM will then

consider a number of factors potentially including current conditions, and whether

the State is on the "glide path" toward improved visibility. This is a case-by-case

evaluation.s

Here, cumulative impacts and the State's regional haze SIP, progress and

planned progress toward the statutory goal may be considered. For example,

where, as part of a larger emissions reduction program, a proposed new source will

2 Beverly Banister's March 9, 20llletter to Sheila Holman indicates that the impacts of the

proposed source on a Class I area are for permitting purposes to be "compared against what visibility

would be in [the] Class I area under natural conditions."

3 Additionally, an understanding of the degree or intensity of any visibility impairment, while not

dispositive, assists in evaluating whether there is an adverse impact on visibility.Brian Doster, Esq., Office of General Counsel, US EPA

March 20, 2012

Page 4

be replacing older, more polluting sources such that there will be a net reduction in

emissions, this net reduction would be considered in evaluating whether there is

any adverse impact on visibility.

EPA's March 9 letter (at p. 2) indicates that current visibility conditions

"may" be relevant to the FLM's determination of visibility impacts. Neither the

statute nor EPA's rules require the FLM to consider "current visibility'' conditions.

However, current visibility conditions are properly considered by the FLM or the

State in order to evaluate whether the visibility impairment "interferes with the

management, protection, preservation, or enjoyment of the visitor's visual

experience of the Federal Class I area."

The preambles to EPA's rulemakings in 1985 said, for example, that "[i]n

assessing a proposed source's impact on visibility, the reviewing authority must

necessarily review that impact in the context of existing background visibility."

This language reflects EPA's view that under the second step it is appropriate, if

not necessary as a practical matter, for the reviewing State to consider current

conditions in evaluating adverse impact. Thus, even if the FLM does not consider

current conditions, the State can find that it is not satisfied by the FLM's decision

and base its own determination as to whether the proposed source will have an

"adverse impact on visibility" at least in part on its consideration of the proposed

source's visibility impacts in light of current conditions.4

With regard to the adverse impact analysis and determination, the burden

shifts between DAQ and the FLM depending on whether increment analysis shows

that the increment is exceeded. See CAA § 165(d), 42 U.S.C. § 7475(d).

(a) If the increment is not exceeded, the burden is on the FLM to demonstrate

that there is an adverse impact. If DAQ disagrees with the FLM, DAQ

can still issue the permit. Of course, DAQ's action must be consistent with

applicable administrative law principles governing review of agency

decisions

.

(b) If the increment is exceeded, the burden is on the owner or operator or the

State to convince the FLM that there is no adverse impact. If the FLM

concurs, then DAQ may issue the permit.

4 NC's understanding is that EPA does not believe that it would be correct to aggregate all manmade

emissions, including those from the proposed source, and compare the aggregate result together to

natural background. This would not fulfill the statutory and regulatory mandate to determine the

visibility impacts of "such facility." See, e.g., 42 U.S.C. §7475(d)(2)(C)(ii).Brian Doster, Esq., Office of General Counsel, US EPA

March 20, 2012

Page 5

Sincerely,

Is

James C. Gulick

Senior Deputy Attorney General

C: David F. Coursen, EPA Headquarters

Vera Kornylak, EPA Region 4

Keri Powell, EPA Region 4

Sheila Holman, NC DAQ.

Brian Doster, Esq., Office of General Counsel, US EPA

March 20, 2012

Page 6