UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

REGION 5

AIR AND RADIATION DIVISION

77 WEST JACKSON BOULEVARD

CHICAGO, IL 60604-3590

REPLY TO THE ATIENTION OF:

DATE: February 22,2012

SUBJECT: Technical Support Document for Wisconsin's Proposed Revisions to its State

Implementation Plan Relating to Redesignation ofForest County Potawatomi

Reservation Community as a Non-Federal Class I Area Pursuant to the Prevention

of Significant Deterioration Program

FROM: Danny Marcus ~(It~ Illrrlev~ Air Permits Section (f

Air Programs Branch

TO: Files

THRU: Genevieve Damico, Chief

Air Permits Section

Air Programs Branch

See attached Technical Support Document
Technical Support Document for Wisconsin's Proposed Revisions to its State

Implementation Plan Relating to Redesignation of

Forest County Potawatomi Reservation Community as a Non-Federal Class I Area

Pursuant to the Prevention of Significant Deterioration Program

February 22, 2012

Background:

On April 29, 2008, The Administrator granted the application ofthe Forest County Potawatomi

Community (FCP Community) to obtain Class I redesignation of certain reservation lands from

"Class II" to "Class I" under the Clean Air Act's (CAA or the Act) Prevention of Significant

Deterioration (PSD) Program. EPA, Final Rule, "Approval and Promulgation ofAir Quality

Implementation Plans; Wisconsin; Redesignation ofthe Forest County Potawatomi Community

Reservation to a PSD Class I Area," 73 Fed. Reg. 23086 (April 29, 2008). This rulemaking

redesignated to Class I status 10,818 acres oflands held in trust for the FCP Community. At the

same time, EPA published two notices resolving disputes with Wisconsin and Michigan under

the Act, in which those states had challenged the FCP Community's application for Class I

redesignation. The history ofthese· dispute resolutions is discussed in detail in EPA's notices for

the resolution ofthese two matters. EPA, Notice, "Redesignation ofthe Forest County

Potawatomi Community Reservation to a PSD Class I area; Dispute Resolution with the State of

Michigan," 73 Fed. Reg. 23107 (April 29, 2008); Notice, "Redesignation ofthe Forest County

Potawatomi Community Reservation to a PSD Class I area; Dispute Resolution with the State of

Wisconsin," 73 Fed. Reg. 23111 (April 29, 2008). The dispute resolution reached by Wisconsin

and the FCP Community was formalized in a Memorandum ofAgreement (MOA) which was

signed in 1999.

1. The FCP Commuuity and the State of Wisconsin Memorandum of Agreement

The 1999 MOA provided a framework for establishing how the state and FCP Community would

implement the Class I area under their respective authorities. The provisions ofthe agreement

became effective upon EPA's final action to approve the FCP Community's request for Class I

redesignation. While EPA also was a signatory to the agreement, EPA's role in the process was

to acknowledge the agreement entered into by the parties on their own respective authorities.

Section 164(e) ofthe CAA provides that' 'the results ofthe agreements reached through other

means, shall become part ofthe applicable plan and shall be enforceable as part ofsuch plan."

CAA § 164(e), 42 U.S.C. § 7474(e). The PSD program is implemented in Wisconsin under an.

EPA approved State Implementation Plan (SIP) that excludes all ofIndian country within the

state. Because the terms ofthe MOA do not apply to the effects ofthe Class I redesignation on

the redesignated area, it was inappropriate to include them in the Federal Implementation Plan

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(FIP) EPA issued rulemaking. Rather, the agreement establishes certain special provisions

regarding the effects ofthe Class I redesignation on potential sources outside the redesignated

area. EPA explained that these provisions needed to be implemented through revisions to the

Wisconsin SIP. 73 Fed. Reg. 23111 at 23114. These revisions are the subject oftoday's

proposal.

Pursuant to the MOA, all major sources in Wisconsin that are located within a 10-mile radius of

any redesignated FCP land must perform a Class I increment analysis and must meet the

increment consumption requirements applicable to a Class I area. Major sources located beyond

the 10-mile distance from redesignated lands must perform a Class II increment analysis and

comply with the consumption requirements applicable to a Class II area. Additionally, all

major sources within 62 miles ofthe FCP Community's Class I redesignated area must conduct

an analysis ofwhether their emissions would have an adverse impact on those Air Quality

Related Values associated with that Class I area. As these special provisions differ from

Wisconsin's currently approved SIP for the PSD program, for this portion ofthe MOA to

become enforceable requires revision ofthe Wisconsin SIP, which otherwise would not

recognize a limitation ofthe area in which the Class I increment analysis must be conducted.

EPA takes the position that it generally will not interfere with the agreements reached between

tribes and states through the CANs Section 164(e) dispute resolution process. However, to the

extent that the agreement reached under the terms ofthe MOA allows for restricting the

requirements normally associated with Class I areas, as these apply to sources located outside a

10-mile radius ofthe redesignated reservation lands, EPA takes the position that a revision ofthe

Wisconsin SIP is necessary to implement these provisions for potential sources located outside

the boundaries ofthe redesignated parcels. In the absence ofsuch modification to the Wisconsin

SIP, the current PSD rules codified at 40 CFR Part 52 will apply to the FCP Community's Class

I area and the State of Wisconsin as approved in EPA's final action.

Between 2008 and 2010, representatives from the FCP Community, the Wisconsin Department

ofNatural Resources, and EPA met and held discussions to determine how to translate the

general principles ofthe MOA into implementable regulations. These discussions covered

defining the areas within which sources would be required to conduct the Class I and Class II

increment analyses, notification procedures, and a state-tribal dispute resolution mechanism.

Representatives for the FCP Community and WDNR then worked together to develop the

necessary regulatory provisions.

Action: On May 12,2011, John Melby, Director, Wisconsin Department of Natural Resources,

submitted a revision request to EPA for its SIP approved PSD rules. The State's submittal

includes the following:

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(I) Wis. Admin. Code NR § 400.02(66m) was created to define the "Forest County

Potawatomi Community Class I area" and designate a geographic center ofthe

reservation.

(2) Wis. Admin. Code NR § 405.19 was created to provide the following (1) the opportunity

for the FCP Community to present a demonstration that emissions from a proposed

source would have an adverse impact on AQRVs ofthe FCP Community's Class 1area;

(2) that proposed new major sources or major modifications of existing sources locating

within 22.25 miles ofthe geographic center ofthe Class I area conduct a Class I

increment analysis and be subject to Class I consumption limits; (3) provide that

proposed new major sources or major modifications of existing sources locating outside

22.25 miles ofthe geographic center ofthe Class I area must conduct a Class II increment

analysis and be subject to Class II consumption limits;

(3) Wis. Admin. Code NR § 406.08(4) provides the FCP Community with the opportunity to

review best available control technology and maximum achievable control technology

determinations made by the State within the areas prescribed in Wis. Admin. Code § NR

405.19, and provide a dispute resolution mechanism for resolving disagreements

regarding BACT or MACT determinations for any new or modified sources covered in

Wis. Admin. Code § 405.19.

The State of Wisconsin published a notice ofthese proposed regulatory revisions on April 28,

2010, and held public hearings on June 7 and June 9, 2010. The Wisconsin Paper Council and

the Wisconsin Manufacturers & Commerce group submitted comments questioning the manner

in which WDNR established the center point for the radius within which the Class I increment

modeling would be implemented, both organizations arguing that the dimensions ofthe affected

area for which a Class 1increment analysis is required had been improperly expanded beyond the

1O-mile radius (for increment modeling) and 62-mile radius (for notification) described in the

MOA (Letter from Edward J. Wilusz, Wisconsin Paper Council (WPC), to Steve Dunn, WDNR,

June 11,2010; Letter from Scott Manley, Wisconsin Manufacturers & Commerce (WMC), to

Steve Dunn, June 14, 2010). The State responded that no facility located beyond 62 miles from

any portion ofthe FCP Class I parcels will be subject to the requirements ofthe revised State

rule:

Written comments on the proposed rule were also received from the Wisconsin Paper

Council (WPC) and Wisconsin Manufacturers and Commerce (WMC). These comments

concerned the dimensions ofthe "22.25 mile" and "74.25 mile" affected facility circles

included in the proposed rule. Both WPC and WMC stated that each ofthe circles

encompasses too large of an area and are not consistent with the "10 mile" radius and

"62-mile" distance contained in the 1999 Final Agreement between the state and the FCP

Community. In response to these comments, a change has been made to the final rule to

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clarify that no facility located further than 62 miles from any portion ofthe FCPC Class I

area will be subject to the requirements ofthe final rule. The Department is not proposing

to change the dimensions ofthe "22.25 mile" circle because a drawing of an essentially

identical circle is included in the Final Agreement. Therefore, the Department believes

that the "22.25" mile circle included in the final rule is consistent with the terms ofthe

Final Agreement.

(Memorandum from Matt Frank, WDNR, to Natural Resources Board Members, July 12, 2010,

at 2.) The MOA specifies that major sources "within a ten (l0) mile radius ofthe Reservation

will be subject to the increment analysis and consumption requirements applicable to the

Reservation as a Class I area," and that "For all PSD major source permit applications for

sources located within a sixty-two (62) mile radius ofthe Reservation, the state agrees to provide

[certain notifications]. ..." (MOA §§ ILl; lILA). Pursuant to MOA § II.3, the parties agreed

that "Within six months after this agreement becomes effective, the parties will develop a final

map that identifies the ten mile radius from the proposed Class I area." EPA's approval ofthe

Class I area included the identification ofthose parcels included in the Class I area. 40 C.F.R.

52.258 1(t)(2). The MOA is silent on what method the parties will use to develop a final map;

therefore EPA believes the parties may establish their own method ofmaking this determination.

Accordingly, EPA believes WDNR's definition ofthe reservation and areas within which Class I

modeling and notification requirements apply is appropriate.

Additionally, WPC commented that pursuant to the MOA, WDNR might exceed permit issuance

deadlines, otherwise applicable to WDNR's actions on permit applications. In response to this

concern, WDNR explained that, "No portion ofthe proposed rule allows the Department to

exceed the pennit issuance timelines contained in s. 285.61, WI Stats. (i.e. WI Act 118).

Therefore, all statutory permit issuance deadlines will be met for permits for facilities affected by

this rule and for facilities not affected by this rule.

(Memorandum from Matt Frank, WDNR, to Natural Resources Board Members, July 12, 2010,

at 2.) WDNR has explained that the proposed SIP revision will not alter the time frames

specified for permit issuance in Wis. Admin. Code NR §§ 285.61 (time frame for WDNR to

process major source permits located in an attaimnent area is one year for WDNR "to complete

its responsibilities"); 285.62 (WDNR has eighteen months (with the possibility of extension) to

complete approval or denial on a complete operating permit application)..EPA does not find the

time frames set forth in these regulations to be inconsistent with the time frames provided in the

SIP revision for notification of and comment by the FCPC. Accordingly, EPA believes WDNR

has appropriately addressed the commenter's concern.

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Recommendation: The proposed SIP revision should be approved. EPA's 2008 Redesignation

Rulemaking anticipates that the PSD portion ofthe Wisconsin SIP must be revised to codify and

implement the provisions ofthe MOA.

We do not anticipate that this rulemaking will be controversial. The FCP COlmnunity and the

State have already agreed to the principles laid out in their original memorandum of agreement

on implementing the PSD program with respect to a non-Federal Class I area. In 2009, the 7th

Circuit upheld EPA's redesignation rulemaking and its unilateral resolution ofthe dispute

invoked by Michigan. EPA's resolution ofthe dispute invoked by Wisconsin was not the subject

ofjudicial challenge. Michigan v. U.S. Envt'l Protection Agency, 581 F.3d 524 (7th CiI. 2009).

Attachments:

I. Class I Final Agreement Between the State of Wisconsin and the Forest County

Potawatomi Community, regarding Class I Designation ofthe Forest County Potawatomi

Reservation under the Clean Air Act," October 12, 1999.

2. EPA, Final Rule, "Approval and Promulgation of Air Quality Implementation Plans;

Wisconsin; Redesignation ofthe Forest County Potawatomi Community Reservation to a

PSD Class I Area," 73 Fed. Reg. 23086 (April 29, 2008).

3. EPA, Notice, "Redesignation ofthe Forest County Potawatomi Community Reservation

to a PSD Class I area; Dispute Resolution with the State of Michigan," 73 Fed. Reg.

23107 (April 29, 2008).

4. Notice, "Redesignation ofthe Forest County Potawatomi Community Reservation to a

PSD Class I area; Dispute Resolution with the State of Wisconsin," 73 Fed. Reg. 23111

(April 29, 2008).

5. Letter from Edward J. Wilusz, Wisconsin Paper Council, to Steve Dunn, WDNR, June

11,2010

6. Letter from Scott Manley, Wisconsin Manufacturers & Commerce, to Steve Dunn, June

14,2010

7. Memorandum from Matt Frank, WDNR, to Natural Resources Board Members, July 12,

2010.

8. Letter from Jolm H. Melby, JI. WDNR, to Susan Hedman, May 12, 2011, enclosing

proposed SIP revision package.

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