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Federal Register / Vol. 45,'No. 154 / Thursday, August 7, 1980 / Rules and Regulations E R N P C

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Parts 51, 52, and 124

[FRL 1538-2]

Requirements for Preparation,

Adoption, and Submittal of

Implementation Plans; Approval and

Promulgation of Implementation Plans

AGENCY: Environmental Protection

Agency.

ACTION: Final rules.

SUMMARY: In response to the decision of

the U.S. Court of Appeals for the D.C.

Circuit in Alabama Power Company v.

Costle, EPA is today amending its

regulations for the prevention of

significant deterioration of air quality,

40 CFR 51.24, 52.21. Today's

amendments also include regulatory

changes affecting new source review in

nonattainment areas, including

restrictions on major source growth (40

CFR 52.24) and requirements under

EPA's Emission Offset Interpretative

Ruling (40 CFR Part 51, Appendix S) and

Sectiori 173 of the Clean Air Act [40 CFR

51.18 0)).

DATES: The regulatory amendments

announced here come into effect on

August 7,1980. State Implementation

Plan revisions meeting today's

regulatory changes are to be submitted

to EPA within nine months after this

publication.

FOR FURTHER INFORMATION CONTACT.

James B. Weigold, Standards

Implementation Branch (ID-15), Office

of Air Quality Planning and Standards,

Research Triangle Park, N.C. 27711, 919/

541-5292.

SUPPLEMENTARY INFORMATION: The

contents of today's preamble are listed

in the following outline. A section

entitled Summary of PSD Program has

been added to provide a concise

narrative overview of this program.

Outline

I. Summary of PSD Program

A. PSD Allows Industrial Growth Within

Specific Air Qualtiy goals

B. Who is Subject to the PreventioA of

Significant Deterioration Regulations?

C. What Must a Source or Modification Do

to Obtain a PSD Permit?

II. Background -

IL Highlights

IV. Transition

A. Part 52 PSD Regulations

B. Part 51 PSD Regulations

C. Offset Ruling

D. Part 51 Nonattainment Regulations

E. Construction Moratorium

F. Pending SIP Revisions

G. Effective Date of Nonattainment

Provisions

H. Miscellaneous

V. Potential To Emit

A. Control Equipment

B. Continuous Operation

C. Additional Guidance

VI. Fifty-Ton Exemption

-VII. Fugitive Emissions

VIII. Fugitive Dust Exemption.

IX. Source

A. Proposed Definitions of "Source"

B. PSD: Comments on Proposal and . Responses

C. Nonattainment: Comments on Proposal

and Responses

X.Modification

A. Final Definition-of "Major Modification"

B. No Net Increase

C. Pollutant Applicability

D. Netting of Actual Emissions

E. Contemporaneous Increases and

Decreases

F. Otherwise Creditable Increases and

Decreases

G. The Extent to Which Increases and and

Decreases are Creditable

H. Accumulation

I. Restrictions on Construction

J. Reconstruction

K. Exclusions

L. Example of flow The Definitions Work

XI. De Minimis Exemptions

XII. Geographic and Pollutant Applicability

A. Background

B. PSD Applicability

C. Nonattainment Applicability

D. Case Examples,

E. Interstate Pollution

F. Geographic Applicability for VOC

Sources

G. Response to Comments

XIII. Baseline Concentration, Baseline Area,

and Baseline Date

A. Baseline Concentration

B. Baseline Area

C. Baseline Date

D. Pollutant-Specific Baseline

XIV. Increment Consumption ' A. Rationale for Use of Actual Emissions

B. Exclusions from Increment Consumption

C. Increment Expansion due to Emissions

Reductions

D. Gulf Coast Problem

E. Potential Increment Violations

XV. Best Available Control Technology

XVI. Ambient Monitoring

XVII. Notification

XVIII. PSD SIP Revisions

A. Equivalent State Programs

B. Baseline Area

C. State Monitoring Exemption

XIX. Additional Issues

A. InnoVative Control Technology

B. NIodified Permits

C. Nonprofit Institutions

D. Portable Facilities

E. Secondary Emissions

F. Baseline for Calculating Offsets under

Section 173(1)(A) \

G. Economic Impact Assessment

H. Consolidated Permit Regulations

L Summary of PSD Program

The purpose of this summary is to

help those people who are unfamiliar

with the PSD program gain an

understanding of it. Because this

summary seeks to condense the basic

PSD rules, it may not precisely reflect

the amendments announced in this

notice. Should there be any apparent

inconsistency between the summary and

the remainder of the preamble and the

regulations, the remaining preamble and

the. regulations shall govern.

A. PSD Allows Industrial Growth

Within Specific Air Quality Goals

The basic goals of the prevention of

significant air quality deterioration

(PSD) regulations are (1) to ensure that

economic growth will occur in harmony

with the preservation of existing clean

air resources to prevent the

development of any new nonattainment

problems; (2) to protect the public health

and welfare from any adverse effect

which might occur even at air pollution

levels better than the national ambient

air quality standards; and (3) to

preserve, protect, and enhance the air

quality in areas of special natural

recreational, scenic, or historic value,

such as ifational parks and wilderness

areas.

States are required to develop SIP

revisions for PSD pursuant to

regulations published today. See 40 CFR

51.24, "Requirements for Preparation,

Adoption and Submittal of

Implementation Plans." If EPA approves

the proposed PSD plan, the state can

then implement its own program, In the

absence of an approved state PSD plan,

another portion of today's regulations

will govern PSD review. See 40 CFR

52.21, "Approval and Promulgation of

Implementation Plans." EPA will

implement this regulation Itself if the

state does not submit an approvable

PSD program of its own.

States can Identify in their SIPs the

local land use goals for each clean area

through a system of area classifications.

A "clean" area is one whose air quality

is better than that required by the

National Ambient Air Quality

Standards. Each classification differs in

the amount of growth it will permit

before significant air quality

deterioration would be deemed to occur.

Significant deterioration Is said to occur

when the amount of new pollution

would exceed the applicable maximum

allowable increase ("increment"), the

amount of which varies with the

classification of the area. The reference

point for determining air quality

deterioration in an area is the baseline

concentration, which is essentially the

ambient concentration existing at the

time of the first PSD permit application

submittal affecting that area. To date,

only PSD increments for sulfur dioxide

and particulate matter have been

established. Increments or alternatives

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to increments are currently under

investigation for the other criteria

pollutants.

There are three types of area

classifications. Class I areas have the

smallest increments and thus allow only a small degree of air quality

deterioration, while Class II areas can accommodate normal well-managed

industrial growth. Class III designations

have the largest increments and are

appropriate for areas desiring a larger

amount of development. In no case

would the air quality of an area be

allowed to deteriorate beyond the

National Ambient Air Quality

Standards. Except for certain wilderness

areas and national parks, which are

mandatory Class I areas, all clean areas

of the country were initially designated as Class II. Flexibility exists under the

Act to adjust most of these designations,

except for those mandated by Congress.

The principal mechanism within the

SIP to implement the objectives of the

PSD program is the preconstruction

review process. These provisions

require that new major stationary

sources and major modifications are

carefully reviewed prior to construction

to ensure compliance with the National

Ambient Air Quality Standards, the

applicable PSD air quality increments,

and the requirements to apply the best

available control technology on the

project's pollutant emissions. In

addition, proposed SIP relaxations

which would limit further use of

increment must be reviewed for their

anticipated impact and not be approved

if the applicable increment would be

violated. The SIP must also contain PSD

provisions for periodically reviewing all

emissions increases, including those

which occur outside the SIP revision and

the new source review (NSR) process,

and for restoring clean air when such

increases cause violations of the

applicable PSD increment. This

corrective action may require additional

controls on existing emissions sources which contribute to the problem.

B. Who is Subject to the Prevention of

Significant Deterioration Regulations?

The requirements of today's PSD

regulations apply to major stationary

sources and major modifications which

meet certain criteria concerning the

geographic location, type of pollutants to

be emitted, and timing of proposed

construction. No source or modification

subject to today's rules may beconstructed without a permit which

states that the stationary source or

modification would meet all applicable

PSD requirements. This section

summarizes how PSD review as

modified in response to Alabama Power

will apply.

The primary criterion in determining

PSD applicability is whether the

proposed project is sufficiently large (in

terms of its emissions) to be a major

stationary source or major modification,

Source size, for applicability purposes,

is defined in terms of "potential to

emit." "Potential to emit" means the

capability at maximum design capacity

to emit a pollutant after the application

of all required air pollution control

equipment and after taking into account

all federally enforceable requirements

restricting the type or amount of source

operation. A "major stationary source"

is any source type belonging to a list of

28 source categories which emits or has

the potential to emit 100 tons per year or

more of any pollutant subject to

regulation under the Act, or any other

source type which emits or has the

potential to emit such pollutants in

amounts equal to or greater than 250

tons per year. A stationary source

generally includes all pollutant-emitting

activities which belong to the same

industrial grouping, are located on

contiguous or adjacent properties, and

are under common control. Pollutant

activities which belong to the same

major group as defined in a standard

industrial classification scheme

developed by the Office of Management

and Budget are considered part of the

same industrial grouping. [See

SOURCE).

A "major modification" is generally a

physical change in or a change in the

method of operatiod'of a major

stationary source which would result in

a significant net emissions increase in

the emissions of any regulated pollutant.

In determining if a proposed increase

would cause a significant net increase to

occur, several detailed calculations must

be performed. First, the source owner

must quantify the amount of the

proposed emissions increase. This

amount will generally be the potential to

emit of the new or modified unit.

Second, the owner must document and

quantify all emissions increases and

decreases that have occurred or will

occur contemporaneously (generally

within the past five years) and have not

been evaluated as part of a PSD review.

The value of each contemporaneous

decrease and increase is generally

determined by subtracting the old level

of actual emissions from the new or

revised one. Third, the proposed

emissions changes and the unreviewed

contemporaneous changes must then be

totalled. Finally, if there Is a resultant

net emissions increase that is larger

than certain values specified in the

regulations. the modification is major

and subject to PSD review.

Certain changes are exempted from

the definition of major modification.

These include: (1) routine maintenance,

rEpair, and replacement; (2) use of an

alternative fuel or raw material by

revision of an order under sections (2)(a)

and (b] of the Energy Supply and

Environmental Coordination Act of 1974

(or any superseding legislation); (3) use

of an alternative fuel by reason of an

order or rule under section 125 of the

Clean Air Act; (4) use of an alternative

fuel at a steam generating unit to the

extent it is generated from municipal

solid waste; (5) use of an alternative fuel

which the source is capable of

accommodating- and (6) an increase in

the hours of operation, or the production

rate. The last two exemptions can be

used ony if the corresponding change is

not prohibited by certain permit

conditions established after January 6,

1975.

If a source or modification thus

qualifies as major, its prospective

location or existing location must also

qualify as a PSD area, in order for PSD

review to apply. A PSD area is one

formally designated by the state as "attainment" or "unclassifiable" for any

pollutant for which a national ambient

air quality standard exists. This

geographic applicability test does not

take Into account what new pollutant

emissions caused the construction to be

major. It looks simply at whether the

source Is major for any pollutant and

will be located in a PSD area.

Once a source applicant has

determined that proposed construction

falls under PSD based on the above size

and location tests, it must then assess

whether the pollutants the project would

emit are or are subject to PSD. If a new

major stationary source emits pollutants

for which the area it locates in is

designated nonattainment then the

source is exempt from PSD review for

those pollutants. These sources must.

however, meet the applicable

requirements of NSR for each

nonattainment pollutant. Similarly, if a

major modification to be constructed in

a PSD area involves changes only for

nonattainment pollutants then the

source is not subject to PSD. These

modifications must meet the appropriate

nonattainment NSR under the SIP for

the pollutant. Once the question of NSR

jurisdiction is resolved, then the PSD

review applies to all sigificant

emissions increases of regulated air

pollutants. Specific numerical cutoffs

which define what emissions increases

are "significant" have been spelled out

in the regulations. These pollutant52677

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52678 Federal Register / Vol. 45, No. 154 / Thursday, August 7, 1980 / Rules and Regulations

specific cutoffs'can exempt i source

from PSD review for a particular

pollutant, except where the proposed

construction would adversely impact a

Class I area.-

If a proposed source or modification

would be subject to PSD review based

on size, location, and pollutants emitted,

then its construction schedule must meet

certain tests before the PSD rules

prdmulgated today would apply. All

major construction otherwise qualifying

for PSD review would not need a PSD

permit under these regulations if the

proposed construction: (1) was subject

to the old PSD rules, has submitted a

complete application under these rules

before today, and was 6r is

subsequently approved to construct

based on this application; or (2) was not

subject to the old PSD rules, has

receivedall federal, state, and local air

permits needed before today and

commences construction in a continuous

fashion at the proposed site within a

reasonable time.

Finally, the PSD regulations contain

some specific exceptions for some forms

of source construction. The

requirements of today's regulations do

not apply to any major stationary source

or major modification that is. (1) a

nonprofit health or educational

institution (only if such exemption is

requested by the governor]; or (21 a

portable source which has already

received a PSD permit and proposes

relocation.

C. What Must A Source or Modification

Do To Obtain A PSD Permit?

1. It must apply the best available

control technology.

Any major stationary source or major

modification subject to PSD must

conduct an analysis to ensure

application of best available control

technology (BACT). During each

analysis, which will be done on a caseby-case basis, the reviewing authority - will evaluate the energy, environmental,

economic and other costs associated

with each alternative technology, and

the benefit of reduced emissions that the

technology would bring. The reviewing

authority will then specify an emissions

limitation for the source that reflects the

maximum degree of reductioft

achievable for each pollutant regulated

under the Act. In no event can a:

technology be recommended which

would not meet any applicable standard

of performance under 40 CFR Parts 60

and 61.

In addition, if the reviewing authority

determines that there is no economically

reasonable or technologically feasible

way to accurately measure the

emissions, and hence to impose an

enforceable emissions standard, it may

require the source to use source design,

alternative equipment, work practices or

operational standards to reduce

emissions of the pollutant to the

maximum extent. For example, if an

immense pile of uncovered coal emits

coal dust into the atmosphere, it woud

make little sense to impose an emission,

standard, since measuring the amount of

coal dust rising off the pile is nearly,

impossible. A much more direct

approach to controlling emissions is, for

example, requiring the owner to wet the

coal pile' daily. This type of standard or

practice will be equivalent to an

emissions limitation for purposes of the

BACT requirement.

'2. It must conduct an ambient air

quality analysis. Each PSD source or modification must

perform anair quality analysis to

demonstrate that its new pollutant

emissions would not violate eithei the

applicable NAAQS or the applicable

PSD increment. This analysis ensures

that the existing air quality is better

than that reguired by national standards

and that baseline air quality will not be

degraded beyond the applicable PSD

increment.

Each proposed major construction

project suBject to PSD must first assess

the existing air quality for each

regulated air pollutant that it emits in

the affected area. This analysis

requirement does not apply to pollutants

for which the new emissions proposed

by the applicant would cause

insignificant ambient impacts. Today's

PSD regulations definepollutant-specific

impacts that are typically considered

inconsequential and that can be

exempted from analysis, unless existing

air quality is poor or adverse impacts to

a Class I area are in question. For

pollutants for which a NAAQS exists,

the applicant must provide ambient

monitoring data that represent air

quality levels in the year's period

preceding the PSD application. Where

no existing data are judged

representative or adequate, then the

source applicant must conduct its own

monitoring program. This is often the

case where the applicant will be

establishing the baseline concentration

for the affected area. Typically air

quality dispersion modeling is used by

applicants to support or extend the

assessment made with gathered

monitoring data. For pollutants for

which there is no NAAQS, the required*

analysis will normally be based on

dispersion modeling alone.

Source applicants who are subject to

the ambient analysis requirement for

sulfur dioxide or particulate matter must

also perform an analysis to compute

how much of the PSD increment remains

available to them. In general the amount

of increment that is available depends

on certain changes in actual emission.

First, actual emissions changes

occurring after January 6, 1975 which are'

associated with physical changes or

changes in the method of operation at a

major stationary source can affect the

available increment. Accordingly,

cleanup adds to the available growth

margin while new emissions diminish It,

Second, all changes in emissions,

including those from minor sources and

other types of changes at major sources,

affect the available increment provided

they occur after the baseline date. The

baseline date is essentially the time that

the first PSD application affecting the

area is filed.

Once the question of how much

increment remains is resolved; then the

applicant must demonstrate that his

proposed new emissions would not

exceed the remaining PSD increment.

Where a proposed project would cause

a new violation of the increment or

contribute to an existing violation, It

cannot be approved. Existing violations

must be entirely-corrected before PSD

sources which affect the area can be

approved. 3. It must analyze impacts to soils,

vegetation, and visibility.

An applicant is required to analyze

whether its proposed emissions

increases would Impair visibility, or

impact on soils or vegetation. Not only

must the applicant look at the direct

effect of source emissions on these

resources, but it also must consider the

impacts from general commercial,

residential, industrial and other growth

associated with the proposed source or

modification. The results of this analysis

may be used to determine if the project

would have an adverse impact on a

Class I area.

4. It must not adversely impact a

Class I area.

If the reviewing authority receives a

PSD permit application for a source that

could impact a Class I area, It will

immediately notify the Federal Land

Manager and the federal official charged

with direct responsibility for managing

these lands. These officials are

responsible for protecting the air

quality-related values in Class I areas

and for consulting with the reviewing

authority to determine whether any

proposed construction will adversely

affect such values. If the Federal Land

Manager demonstrates that emissions

from a proposed source or modification

would impair air quality-related values,

even though the emissions levels would

not cause a violation of the allowable air quality increment, the Federal Land

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Manager may recommend that the

reviewing authority deny the permit.

5. Its application must undergo

adequate public participation.

The regulations solicit and encourage

participation by the general public,

industry, and other affected persons

impacted by the proposed major source

or major modification. Specific public notice requirements and a public

comment period are required before the

PSD review agency takes final action on

a PSD application. The public notice

must indicate whether the reviewing

authority proposed permit approval,

denial, or conditional approval of a

proposed major source or major

modification. Consideration is given to

all comments received provided they are

relevant to the scope of the review.

Where requested, or at its own

discretion, the reviewing authority may

conduct a public hearing to help clarify

the issues and obtain additional

information to assist in making a final

permit decision.

6. It must start construction on time.

The source owner, once receiving a

PSD permit, must start construction

within a reasonable period of time

(typically within 18 months of approval)

and must stay on a continuous

construction schedule. Normally, long

delays will invalidate the permit.

H. Background

On August 7,1977, the President

signed the Clean Air Act Amendments

of 1977 (1977 Amendments) into law.

Those amendments established, in the

form of Part C of Title I of the Clean Air

Act (CAA], a set of requirements for the

prevention of significant deterioration

(PSD) of air quality in %lean air" areas.

Sections 160-69,42 U.S.C. 7470-79. The

requirements for preconstruction review

of new stationary sources and

modifications in Part C follow the

outline of the PSD regulations that EPA

promulgated in 1974, but are more

elaborate and in many ways more

stringent. Part C also requires that each

state implementation plan (SIP) contain

the new PSD requirements.

In response to Part C, EPA

promulgated two sets of PSD regulations

on June 19, 1978. One set specified the

minimum requirements that a PSD SIP

revision would have to contain in order

to warrant EPA approval. See 43 FR

26380 (codified at 40 CFR 51.24 (1979))

(hereinafter, the "1978 Part 51

regulations") The other set

comprehensively amended the 1974 PSD

regulations, incorporating into them the

new Part C requirements. 43 FR 26388

(codified at 40 CFR 52.21 (1979))

(hereinafter, the -1978 Part 52

regulations"). EPA intended that, until it

had approved a PSD SIP revision for a

state, the permitting of new sources and

modifications for PSD purposes would

continue under the 1978 Part 52

regulations.

On June 18,1979, the United States

Court of Appeals for the District of

Columbia Circuit issued a decision that

upheld some of the substantive

provisions of both the 1978 Part 51 and

Part 52 regulations and overturned

others. Alabama Power Company v.

Castle, 13 ERC 1225. In its opinion, the

court merely summarized its holdings,

but promised to issue supplemental

opinions after it had considered any

petitions for reconsideration. In an order

that accompanied the summary opinion.

the court stayed the effect of its decision

until it had issued the supplemental

opinion. The purpose of that procedure,

the court explained, was "to enable EPA

to proceed as soon as possible to

commence rulemaking or other

proceedings necessary to promulgate

those revisions in the PSD regulations

required by [the court's] rulings

Id. at 1227.

By a notice that appeared in the

Federal Register for September 5,1979.

EPA began the process the court had in

mind. 44 FR 51924. There EPA proposed

various amendments to the PSD

regulations that were to replace the

provisions the court had held Invalid, for

instance, the definitions of "source," "modification," and "potential to emit."

EPA also proposed amendments that

were to add entirely new provisions to

supplement the replacement provisions,

for instance, the de minimis exemptions.

Prior to September, EPA had issued,

also in response to the 1977

Amendments, various regulations and

guidelines relating to the construction of

new sources and modifications in and

near "nonattainment" areas. In January

1979, the Agency revised its Emission

Offset Interpretative Ruling ("Offset

Ruling"), which now appears at 40 CFR

Part 51, Appendix S [1979). Then, in

April 1979, EPA issued a guideline

entitled "General Preamble for Proposed

Rulemaking on Approval of Plan

Revisions for Nonattainmeut Areas." 44

FR 20372.' Finally, in July 1979, EPA

issued an interpretative rule concerning

certain statutory restrictions on new

construction in nonattainment areas. 44

FR 38471 ("construction moratorium").z

EPA also asked for comment on certain

IFor supplements to the General Preamble. See 44

FR 3883 (July 2. 1979): 44 FR 0371 (August 28.

1979); 44 FR 519-4. 519Z-29 (September 5, 1 M5 44

FR 53761 (September 17.199); and 44 FR Ml-

(November 23, 19n).

'For a fuller description of those norattainment

regulations and gudelines. See 44 FR 51925 and 45

FR 31304-05.

issues concerning new construction in

such areas. 44 FR 38583.

In the September Federal Register

notice, EPA also proposed various

changes to those nonattainment

regulations and guidelines. The purpose

of those changes generally was to

conform those regulations and

guidelines to the decisions inAlabama

Power concerning the statutory terms "source," "modification," and "potential

to emit"

On September 18,1979, EPA

announced that it would hold public

hearings on the September proposal on

October 15 and 16 in Washington, D.C.,

and on October 18 and 19 in San

Francisco. See 44 FR 54069. At the same

time, the Agency set November 18 as the

deadline for submitting information

rebutting or supplementing any

presentation at the hearings.

Subsequently, EPA held the public

hearings as scheduled.

On October 4,1979, EPA announced

various corrections to technical errors in

the September proposal. 44 FR 57107. At

the same time, it extended the period for

submitting written comments until

November 5.1979. It added that it would

hold the rulemaking docket open until

November 18,1979, not only for

information rebutting or supplementing

any presentation at the hearings, but

also for information rebutting or

supplementing any written comment.

On November 9,1979, EPA announced

that it had recently released for public

comment a draft of a revision of the

Ambient Monitoring Guidene for

PrevenLtion of Significant Deteriorafion (PSD) (OAQPS 1.2-096), which the

Agency had originally published in May

1978. 44 FR 65084. EPA also announced

that it would accept any written

comments on the draft until December

10.1979.

On December 14,1979, the Court of

Appeals handed down its final opinion

in Alabama Power. 13 ERC 1993.

Subsequently, in order to avoid the

uncertainty and confusion that would

occur in PSD permitting ff the final

opinion came into effect before EPA

completed the rulemaking, EPA and

many of the other parties to the

litigation petitioned the court to keep the

final opinion from coming into effect

until June 2,1980. On March 14,1980, the

court granted the request.

On May 30,1980. EPA and other

parties to the litigation again petitioned

the court, requesting a further extension

of time until July 18, 1980. The court

granted an extension, to July 28, on June

23,1980.

On January 30,1980. EPA announced

that it would reopen the rulemaking

docket for the receipt of written

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comments on various aspects of the

rulemaking, including the final opinion

of the court, certain issues that the

Agency described in the notice, the

redraft of the monitoring guidelines, and various meetings between EPA and

others. 45 FR 6802.

On February 5, 1980, EPA issued a

stay of the 1978 Part 52 PSD regulations

as to certain sources and modifications.

45 FR 7800. The stay was effective as of

January 30, 1980. Its purpose was "to

relieve from the permitting requirements

of the 1978 PSD regulations roughly

those sources and modifications that

would not be subject to the permitting

requirements of valid replacement

regulations that would comport with the

Alabama Power opinion." Id.

On May 13, 1980, EPA promulgated a

stay of the Offset Ruling and the

construction moratorium that is similar

to the PSD stay. See 45 FR 31304. On the

same day, EPA promnlgated certain

amendments to the Offset Ruling, the

regulations relating to new source

review at 40 CFR 51.18, and the

construction moratorium. Those

amendments established the geographic

applicability of the various

nonattainment requirements relating to

the construction of new sources and

modifications. 44 FR 31307. Those

amendments embody EPA's responses

to many 6f the comments on the

September proposal.

Finally, on May 19, 1980, EPA

promulgated regulations aimed at

consolidating and unifying various - permit requirements and procedures. 45

FR 33290. Those new regulations contain

provisions which will govern the

processing of applications for permits

under the new Part 52 PSD regulations.

During the course of the rulemaking

that EPA began in September, it

received approximately 375 written

comments. The discussion that follows.

summarizes the -proposals, the

comments on them, EPA's responses,

and the final provisions.

Il. Highlights

Several significant changes from the

September 5, 1979 proposal have

occurred. These changes include the

addition of certain provisions not

addressed by the September 5,1979

proposal but which are necessary under

the Act. Several regulatory provisions

which are unchanged in substance by

today's notice have also been reprinted

to clarify the effects of any revised

paragraph numbering.

A. Transition: The proposed transition

scheme for phasing in the additional

monitoring requirements has been

expanded to require no n~w monitoring

requirements for PSD applications *

submitted and complete within 10

months of the promulgation date. In

addition, today's rules allow less than a

full year of monitoring data to be

included with PSD applications filed

after the above times but before 18

months after the promulgation date. PSD

applications filed later than 18 months

from the date of promulgation will be

subject to the full new monitoring

requirements.

B. Potential To Emit: Potential to emit

is the maximum design capacity of the

source, except as constrained by

federally enforceable permit conditions.

This would include permit conditions

restricting hours or type of source

operation.

C. 50-Ton Exemption: Today's

regulations essentially delete the "50-

Ton Exemption" for both nonattainment

and PSD. The eligibility date for the

section 165(b) exemption has been

changed from August 7,1977 to March 1,

1978.

D. Fugitive Emissions: For the purpose

of PSD and nonattainment, "fugitive

emissions" now means those emissions

released directly into the atmosphere,

which could not reasonably pass

through a stack, chimney, vent or other

functionally equivalent opening. Fugitive

emissions are not to be considered in

determining whether a source would be

a major source, except when such

emissions come from specified source.

categories.

E. Fugitive Dust: Today's regulations

promulgate the proposed deletion of the

"fugitive dust exemption" from the

applicable provisions of both PSD and

the Offset Ruling.

F. Stationary Source: The definition of

source for PSD purposes has been made

more liberal than the previous

regulations. Under today's rules, a PSD

source is a grouping of all pollutant

emitting activities at one location "and

owned or under the control of the same

person or persons. This generally relates

to the common notion of a plant. Smaller

portions of such a plant no longer will

be examined for applicability purposes.

For added clarification, pollutantemitting activities will now be

considered part of the same "plant" if

they belong to the same "major group"

as described in the Standard Industrial

Classification Manual. At this time,

however, the Agency has decided not to

change its previous approach to defining

source for nonattainment purposes.

Therefore, today's rules continue to

incorporate the "dual definition"

concept of source which iequires

consideration of overall emissions from

a "plant" and from each "installation"

within that plant. Ina change from the

proposal, this dual definition will apply

to major sources in all nonattainment

areas designated under section 107 of

the Act, regardless of SIP approvability

or degree of completion.

G. Modification: The definition and

treatment of modifications have been

changed since the September 5, 1979

proposal. The concept of accumulating

minor changes made at an existing

minor source until the sum was

equivalent to a major stationary source

has been deleted. Rather, a source must

now qualify as a major stationary

source prior to making a modification to

become subject to review, unless the

change itself is greater than 100 or 250

tons per year. Contemporaneous

changes now generally refer to

emissions increases and decreases

occurring within the same 5-year time

period unless the state opts for a

different time period in its Part D SIP or

PSD program. Reductions, to be

creditable, must be enforceable under

the SIP before the contemporaneous

emission increase would begin

construction. Such reductions, as well as

significant increases, will be

quantitatively assessed on the basis of

an "actual emissions" baseline, rather

than a "potential to emit" baseline, as

was proposed. "Reconstruction" (i.e.,

509 or more capital replacement) has

been deleted from PSD but has been

retained for nonattainment NSR,

including the prohibition on

construction.

H. "De Minimis"Exemptions: Three

types of changes from the September 5

proposal appear in today's regulations:

(1) different numbers have been

developed for defining significant

emissions from new sources and

significant net emissions increases from

modifications; (2) new air quality do

minimis numbers have been generated

and can only be used to exempt PSD

sources from the ambient monitoring

requirements; and (3) a ten kilometer

proximity cutoff has been specified to

indicate when a source, regardless of

pollutant emissions, must be prepared to

demonstrate that no 24-hour impact

greater than I ug/m would occur in the

Class I area.

1. Geographic Applicability: PSD will

generally apply only if the otherwiso

subject major construction locates In a

section 107 area which is designated

attainment or unclassified under section

107 for any criteria pollutant (regardless

of what pollutants the proposed

construction would emit or what

pollutant qualified It as major). An

exception to this rule is that no PSD

permit is required for major construction

which emits only the pollutant for which

the area of location is nonattainment.

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J. Pollutant Applicability: Any net

significant emissions increase of any

pollutant subject to regulation under the

Act (not just those pollutants for which

the source is major) now qualifies as a

PSD modification. Nonattainment

review will continue to focus on only the

major nonattainment pollutant. No PSD

review will be required for a given

criteria pollutant, if a source would

construct in an area designated

nonattainment for that pollutant

K Baseline Area/Date: Baseline area

now refers to all section 107 areas which

are designated attainment or

unclassified for PM or SO, (as may be

redesignated) in which the PSD source

triggering the baseline date would locate

or would have an annual air quality

impact equal to or greater than 1 pg/ml.

Interstate impacts, however, do not

trigger baseline date. This differs from

the proposal, which focused on the

AQCR rather than the designated area.

Baseline dates are pollutant specific and

can be established by the first PSD

application of a source with significant

emissions of the applicable pollutant

States will have the flexibility to

redesignate clean or unclassified areas

under section 107 and thereby remove

baseline dates for certain areas.

However, no redesignation may

subdivide the impact area [>1 pg/mg) of

the source triggering a baseline date.

L. Best Available Control Technology:

Today's regulations reflect the proposal

with one exception. A provision has

been added that requires BACT for

modifications only when both a net

emissions increase ocdurs at the

changed unit(s) and a significant net

emissions increase occurs at the plant;,

BACT applies only to the units actually

modified.

M. Monitoring: The proposed

transition scheme for phasing in the

additional monitoring requirements will

provide relief for sources covered under

the existing regulations that are in the

process of monitoring and offer

allowances for setup time of monitors in

gathering the required data.

N. Notification: The notification

provisions appearing in the September 5,

1979 proposal have been deleted from

today's regulations.

0. PSD SIP Revisions: The

requirements proposed on September 5

for governing the development of PSD

SIP submittals are essentially

unchanged. These regulations allow

limited flexibility in the development of

different but equally effective state

plans.

P. Increment Consumption: A

discussion has been included in the

preamble to summarize the effects that

the Alabama.Power decision has had on

increment tracking. This section also

discusses how certain SIP related issues

are to be addressed, such as the Gulf

Coast problem (SIP shows a theoretical

increment violation in a clean area,

unrelated to actual air quality impact)

and temporary SIP relaxations. (SIP

would be relaxed and only temporary

emissions would occur.)

Q. Public Participation The

requirements of paragraph (r) of § 52.21

have been replaced with the public

participation procedures associated

with the consolidated permit regulations

(40 CFR 1 ).

IV. Transition

This section focuses on those

provisions of the final PSD and

nonattainment regulations which govern

the transition from the preexisting

requirements to the new ones. It begins

with a discussion of the new transition

provisions of the Part 52 PSD regulations

and then deals in turn with the

transition provisions of the Part 51 PSD

regulations, the Offset Ruling, the Part

51 nonattainment regulations, and

finally the construction moratorium.

A. Part 52 PSD Regulations

The new transition provisions of the

Part 52 PSD regulations fall into three

categories: those that relate to the new

coverage of the regulations, those that

relate to the new requirements for best

available control technology (BACT3

and air quality assessments, and those

that relate to the new procedural

requirements. The discussion which

follows deals with each in that order.

1. Coverage.

a. Proposed transition provisions: The

preconstruction permit requirements of

the 1978 Part 52 regulations applied to a

certain class of projects that emit or

would emit pollutants. The keystone of

those regulations, section 52.21(i)(1),

provided that "[n]o major stationary

source of major modification shall be

constructed unless the [permit]

requirements of [the Part 52 regulations]

have been met." It established the

general rule that the permit

requirements applied to any "major

stationary source" or "major

modification." The balance of section

52.21(i) then listed certain exceptions to

that general rule. The main exceptions

established various "grandfather"

exemptions. The permit requirements of

the regulations applied, therefore, to any

pollutant-emitting project that was "major" and had no "grandfather"

status.

In September 1979, EPA proposed to

establish new Part 52 PSD regulations

whose coverage would be substantially

different from that of the 1978

regulations. First, it proposed to define

"major stationary source" differently

than it had defined that term in the 1978

regulations. Under the 1978 regulations,

whether a "source" was "major"

depended upon whether its "potential to

emit" any pollutant regulated under the

Act would equal or exceed certain

thresholds. "Potential to emit" referred

largely to the maximum rate at which a "source" would emit a pollutant without

control equipment. Under the

amendments that EPA proposed in

September, "potential to emit" would be

the maximum rate at which a "source"

would emit a pollutant with control

equipment. Second. EPA proposed to

define "major modification" differently

than it had defined that term in the 1978

regulations. There, a "major

modification" was any change at a "source" that would increase the

"potential to emit" of the "source" by

100 tons per year of any pollutant

regulated under the Act, or 250 tons per

year, depending on source type and

ignoring any emission reductions. Under

the amendments that EPA proposed in

September, "major modification" would

have become any change at a "source"

that would result in a signficantnet

increase in the "potential to emit" of the "source." "Significant" is defined as

emissions greater than certain de

minimis values. Finally. EPA proposed

to limit the geographic applicability of

the PSD permit requirements by adding

an exception to section 52.21(i that

would exclude a "source" or

"modification" from PSD review on the

basis of its location. 3

Amendments of the sort that EPA

proposed in September would have left

many projects that previously fell or

would have fallen within the coverage

of the 1978 Part 52 regulations outside

the coverage of the resulting Part 52

regulation. For instance, many new "sources" that were 'major" under the

1978 regulations would not have been

"major" under the proposed

amendments, because while their

maximum uncontrolled emissions would

exceed the applicable thresholds, their

maximum controlled emissions would

not.

Of those projects that were or would

have been subject to the PSD permit

requirements under the 1978 PSD

regulations, but not under the proposed

3Specifically EPA proposed that the permit

requirements would apply only to any "maior

stationary source" or"majoc modification" that

would be located in an area designated under

section 107 of the Act as attainment or unclassifiable for a pollutant for which the "source" or "modficatlon" would be major or would

significantly impact an area in another state which

Is designated as attainment or unclassifiable for any such pollutant.

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amendments, some have already

received a PSD permit, while others

have not. In September, EPA proposed

to put both sets of projects outside the

reach of the permit requirements as

soon as possible by putting the new

definitions of "potential to emit" and "modification" and the new limitation

on geographic applicability into effect

immediately upon their promulgation.

See 44 FR 51927. But EPA also proposed

that any permit that had already been

issued would remain in effect, binding

and particular project to its terms, until

the permit had been rescinded under a

proposed paragraph (w) or had expired

under an existing paragraph (s). See id.

at 51927, 51956. Under paragraph (w), a

permittee would have been able to

obtain rescission only if the permittee

filed a complete application with the

issuing authority within 90 days after

paragraph (w) had come into effect.

Amendments of the sort that EPA

proposed in September would also have

brought some projects that previously

fell or would have fallen outside the

coverage of the 1978 regulations inside

the coverage of the Part t2 regulations.

For instance, many changes at a "source" that would result in a gross

increase in "potential to emit" well

below 100 or 250 tons per year might

nevertheless result in a significant net

increase.

In September, EPA proposed to

exempt from PSD review certain of

these projects that fell or would have

fallen beyond the reach of the PSD

permit requirements under the 1978

regulations, but not under the proposed

amendments. In particular, EPA

proposed to "grandfather" any such

project which before the promulgation of

the new amendments had received each

preconstruction permit that the state

implementation plan (SIP) required and

which will have "commenced"

construction within 18 months after

promulgation. See id. at 51928 (first

column), 51953 (proposed § 52.21(i)(7);)

44 FR 57108 (items B(1) and (C)(2)).

Finally, EPA proposed to add another

new grandfather provision to § 52.21(i).

That provision would have stated that

the permit requirements of those.

regulations do not apply to any "source"

or "modification" on which construction "commenced" before August 7,1977, the

date of enactment of the 1977

Amendments. See id. at 51928 (first

column), 51953 (proposed § 52.21(i)(3)).

The purpose of the proposal was merely

to state in regulatory form what section

168(b) of the Act, 42 U.S.C. 7478(b),

already provides.

* b. Comments andfinal action on the

proposed transition provisions relating

to coverage: EPA received no comments

on its proposal to put the new

definitions of "potential to emit" and

"modification" and the new limitation

on geographic applicability into effect

immediately upon promulgation. EPA

therefore has put those provisions into

effect as of the date this notice appears

in the Federal Register. Some projects

that were within the coverage of the

1978 Part 52 regulations, but have yet to

receive a PSD permit, are now outside

the coverage of the new Part 52

regulations, since the prohibition on

construction without a permit in

§ 52.21(i)(1)(i) no longer applies to them,

As a result, construction on them may

begin immediately. 4 Because further

delay is pointless, and might be harmful

in some cases, EPA finds that it has

"good cause" to put the new

applicability provisions into effect

immediately upon promulgation, within

the meaning of section 4(d)(3) of the

Aditfinistrative Procedure Act (APA), 5

U.S.C. 553(d)(3). See also APA 4(d)(1), 5

U.S.C. 553(d)(1).

EPA did receive numerous comments

on its proposal to rescind certain

permits, and to treat them as binding

unless and until rescinded. While one

commenter agreed with the proposal,

most did not. They objected primarily to

two aspects of the proposal: first, that it

would place on the permittee the dual

burden of coming forward with an

application for rescission and of

providing proof that the project in

question does fall outside the coverage

of the new Part 52 regulations and,

second, that it would bar rescission if

the permittee failed to file a complete

application within a certain period of

time. The commenters argued that EPA

had no authority originally to require a

permit for any project that falls outside

the coverage of the new regulations and

that it therefore has no authority now

either to place the burden of coming

forward and of proof on a permittee or

to keep a rescindable permit in effect

merely because of a failure to file a

complete application for rescission by a

certain time;

In response, EPA has promulgated a

new provision, § 52.21(w), which does

place the burden of coming forward and

of proof on the permittee, but imposes

no deadline for filing an application.

Whether EPA had authority originally to

require a permit for a project that falls

outside the coverage of the new

regulations is immaterial. EPA has

authority under section 301(a)(1) of the

Act, 42 U.S.C. 7601(a)(1), to fashion

4

The partial stay of the 1978 regulations that EPA

issued in January 1980 has probably already

relieved most of those projects from the permit

requirements of those regulations.

within reason the regulatory tools It

needs to carry out its tasks. Here EPA

has undertaken not only to release

certain PSD permittees from the

constraints of their PSD permits, but

also to settle as finally, as publicly, and

as quickly as possible which old permits

are binding and which are not.

Prospective applicants, in order to

prepare applications, and permitting

authorities, in order to meet their

obligations under the PSD regulations,

must assess increment consumption.

Confusion and uncertainty over whether

particular projects are subject to the

emissions limitations in their PSD

permits can only frustrate efforts to

assess increment consumption. Noiv

§ 52.21(w) maximizes EPA's ability to

perform satisfactorily the tasks i'has

undertaken.

First, by stating explicitly that a

permit generally remains In effect until

rescinded, § 52.21(w) gives each

permittee with a rescindable permit a

strong reason to bring it before the

reviewing authority as soon as possible.

Second, by putting the burdens of

*coming forward and of proof on the

permittes, § 52.21(w) ensures that the

reviewing authority will spend Its time

efficiently and will have adequate

information with which to make a sound

decision. Third, by establishing that only

the reviewing authority may rescind a

permit, the provision promotes the

soundness and therefore the finality of

the rescission, since the reviewing

authority will have thb expertise and

objectivity necessary to check

adequately whether the permittee has

applied the intricate applicability rules

correctly. Finally, by requiring that thq

reviewing authority publish each.

rescission, § 52.21(w) ensures that the

status of each permit will be In the

public record.

Certain commenters suggested two

alternatives to EPA's proposed

rescission provision. One alternative

was to declare upon promulgation that

any PSD permit for a project that falls

outside the coverage of the new

regulations is null and void as of that

time, but that any permittee which

concludes it holds such a permit must

send the reviewing authority a bare

notice of that conclusion. The other

alternative was to require any such

permittee to send the reviewing

authority an application for rescission

and to establish that the failure of the

reviewing authority to act on the

application within a certain period

would operate to grant the application.

EPA has decided to adopt neither

alternative. Under both, a project that

should not be able to escape PSD

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constraints would be able to escape

them merely because of an oversight or

a manpower deficiency. EPA, however,

has no authority to allow escape from

review on that basis.

Certain commenters also objected to

other aspects of the proposed rescission

provision. In particular, one commenter

asserted that proposed § 52.21(w)(3),

which would say that "[t]he permitting

authority may approve" an application

that does show that the permit is

rescindable, should state instead that

"[t]he permitting authority shall

approve" such an application.

(Emphasis added.) EPA agrees, and has

placed the necessary mandatory

language in the final provision. Other

commenters urged that the final

provision recognize the possibility that a

permittee may wish to obtain rescission

of only certain elements of'a permit. In

response, EPA has introduced language

under which the reviewing authority

may rescind only certain elements, if

that is appropriate in the particular case.

With respect to the rescission

provision, it should be noted that

rescission of a permit would in no way

affect any other limitations on the

project that may apply by virtue of the

SIP or a state permit. It should also be

noted that, if a source or modification

whose permit is rescinded were later

found to be causing or contributing to an

increment violation, additional controls

-might be necessary. See 40 CFR 51.24

(a)(3)(1979).

EPA received many comments on its

proposal to "grandfather" certain

projects that fall outside the coverage of

the 1978 regulations, but not the new

Part 52 regulations. Two commenters,

while not focusing specifically on that

proposal, expressed general opposition

to "grandfathering" any project that

would otherwise fall within the

coverage of the new regulations. In its

view, EPA should adhere to the

transitional rules that it established in

the 1978 regulations, so that in general a

project would escape PSD review under

the new Part 52 regulatioris only if

certain permits were obtained for it by

March 1,1978, and construction

"commenced" on it by March 19,1979.

EPA disagrees that it should or must

adhere to the transitional rules in the

1978 regulations in deciding which of the

projects in question here should have to

get a PSD permit. Part C of Title I of the

Act contains two provisions, sections

165(a) and 168, which describe how the

PSD permit requirements of Part C are to

be implemented. Those sections,

however, contradict each other

irreconcilably. See Citizens to Save

Spencer County v. EPA, 600 F.2d 844,

851-54, 860-73 (D.C. Cir., 1979). EPA has

authority under section 301 (a) (1) of the

Act, therefore, to set transitional rules

which accommodate reasonably the

purposes and concerns behind the two

contradictory provisions. See id. at 873-

74.

The court in Citizens to Save Spencer

County identified those "considerations" as follows:

(1) enhanced protection of the

environmental quality of the nation's air; (2)

minimization of economic dislocation and

loss as a result of such enhanced protection- (3) a heightened enforcement role for states

* * "; and (4) facilitation of an efficient

administrative transition from enforcement of

the "old" to "new" preconstructon review

requirements. (Id. at 889 (footnotes omitted).)

Here, the proposed grandfather

provision would reasonably

accommodate those considerations.

Most of the projects in question are

modifications that would result in a

significant net increase in the maximum

controlled emissions of the "source," but

not in a gross increase in uncontrolled

emissions equal to or above 100 or 250

tons per year. This discrete group of

small modifications, even in the

aggregate, have a relatively minor effect

on air quality. But, because they are

numerous, delaying them by imposing

new PSD requirements could frustrate

economic development. The proposed

provision would strike a rough balance

between the benefits and the cost of

applying PSD to those projects by

allowing any company that has already

obtained each of the preconstruction

permits otherwise necessary under the

SIP to proceed to construction without

delay. To require such a company to

obtain a PSD permit could mean

substantial delays. To impose such

delays here would be excessive.5

One commenter urged EPA to

promulgate a grandfather provision that

would use the date of complete

application instead of the date of permit

issuance. The commenter was

concerned that the proposed provision

would treat unfairly a company that

obtained the last permit necessary

under the SIP just a day or two after the

date this notice appeared in the Federal

Register. Use of such a date, however,

might exempt many more projects from

review. Hence, in EPA's view, it would

fail to give adequate expression to the

interests behind section 165, especially

the goal of protecting air quality.

$Even if the conflict between sections 165(a) and

168 had not conferred on EPA the discretion to

exempt certain projects that would otherwise be

subject to PSD review for the first time, EPA would

have authority under section 301(a](1) to exempt

those projects in order to phasein new requirements on a reasonable schedule.

Certain commenters pointed out that a

company might be unable to "commence

construction" within the proposed 18-

month period, because it might be

unable to get sufficiently in advance any

preconstruction permits that federal or

state law outside the SIP might require.

They recommended that EPA set the

deadline 18 months from issuance of the

last necessary federal authorization.

That recommendation parallels a

proposal EPA made in July 1979 to

amend the grandfather provisions of the

1978 regulations so as to extend the *"commence" construction deadlines in

those provisions generally to a date nine

months from the issuance of the last

necessary federal authorization. See 44

FR 42722. EPA has not yet completed

that rulemaking. When it does, it will

decide whether to accept the

recommendation of the commenters

here.

EPA has decided to promulgate the

grandfather provision basically as

proposed. See § 52.21(i)(4)(v). The final

provision contains the following clause:

"the owner or operator * * obtained

all final federal, state and local

preconstruction approvals or permits

necessary" under the SIP by a certain

date. EPA intends that clause to refer

only to the date on which the reviewing

authority issues the permit. For

emissions increases as a result of SIP

relaxations, the appropriate date is the

effective date of final EPA approval.

Because of the construction moratorium,

40 CFR 52.24,44 FR 38471, some SIP

permits may be issued before the time

that the owner or operator is allowed to

begin construction. Nevertheless, in

EPA's view, the owner or operator "obtains" the permit when the reviewing

authority issues it, even if permission to

begin construction takes effect

subsequently. EPA received no comments on its

proposal to put into regulatory language

the provision in section 168(b) of the Act

that only the PSD regulations in effect

before August 7,1977, apply to any

project on which construction "commenced" by then. Hence, EPA is

promulgating that provision basically as

proposed. See section 52.21(i[4)(i].

2. Substantive Provisions Relating to

BACT.

a. Proposed transition provisions: In

September, EPA proposed certain new

substantive requirements. One of the

new requirements was that a project

apply BACT for each pollutant regulated

under the Act that the project would

emit in a significant, but "minor"

amount. Under the 1978 Part 52

regulations, a project has to apply BACT

only for each pollutant regulated under

the Act that the project would emit in a

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"major" amount. EPA added that it

intended to put the new BACT

requirement into effect immediately

upon its promulgation.

In proposing the new BACT

requirement, EPA also proposed to

exempt certain projects from it. In

particular, the Agency proposed not to

apply the requirement to any project

whose application for a PSD permit was

complete before the requirement came

into effect. See 44 FR 51928, 51954

(proposed § 52.21j)(2)).

b. Comments and final action on

proposed transition provisions relating

to BACTrequirements In general, those

commenting on the proposal to -

grandfather any project whose

application was complete before the

date of publication of this notice from

the new BACT requirement favored

such an exemption for at least those

projects. Only two commenters, the

same two who opposed'the grandfather

provision discussed abdve, opposed

such an exemption for any project. They

argued that EPA should adhere to the.

transitional rules that it established in

the 1978 regulations, so that the new

BACT requirements would apply to any

project that fell or would fall within the

coverage of those regulations, even to

those which have already received a

PSD permit.

EPA disagrees that it should or must

adhere to the 1978 transitional rules in

applying the new BACT requirements.

As discussed above, the court in

Citizens to Save Spencer County held

that EPA has a "responsibility to

harmonize the statutory provisions

[sections 165(a) and 168] so as to

implement the congressional mandate

that new federal preconstructionreview

requirements be instituted promptly but

with minimum economic dislocation."

600 F.2d at 851. Requiring a company

which has already received a permit, or

completed application-for one, to amend

project designs and permit applicationi"

to include BACT for pollutants to be

emitted in "minor" amounts would

hardly minimize economic dislocation,

To the contrary, it would delay

construction substantially in many

cases. The benefits of that delay in

those cases would probably fail to

counterbalance its cost, since the new

BACT requirements would apply only to

pollutants this discrete group of projects

would emit in "minor" amounts. Thus,

applying the new BACT requirements

retroactively toprojects that already

have a permit or a complete application would fail to give adequate expression

to the economic considerations behind

section 168.

Another commenter argued that the

proposal did not go far enough, in--that it.

would require companies which on the

date of promulgation were just about to

file a complete application to amend

project designs and applications. The

commenter urged EPA to apply the new

BACT requirement only to projects

whose applications were not complete

within one year after the date of -- publication of this notice in the Federal

Register. That alternative, however,

would fail to give adequate expression

to the environmental considerations

behind section 165(a). EPA therefore has

rejected it, too.

Instead, EPA has decided to adopt a

provision like the proposal which

exempts from the new BACT -

requirements any project whose

application was complete before this

notice appears in the Federal Register.

See § 52.21(i)(9). EPA believes that the

final provision reasonably

accommodates the purposes and

concerns behind sections 165(a) and 168.6

The final provision differs from the

proposed provision sombwhat. First, it

appears in paragraph (i), instead of

paragraph (j); the provision that sets

forth the general BACT requirement.

EPA has sought to gather each of the

exemption provisions into paragraph (i).

Second, the new exemption provision

exempts-an eligible project from the new

BACT requirement entirely, but adds

that the project is subject to the BACT

requirements of the 1978 regulations, if

they would otherwise have applied. The

purpose of that structure is in part to

assure that BACT would apply to a

pollutant for which the project would be "major" under the'1978 regulations, but

"minor" under the new Part 52

regulations due to the new concepts of

"potential to emit" and "modification."

The final Part 52 regulations contain a

definition of the term "complete" in

reference to an application, Under that

definition an application becomes "complete" when it contains all of the

information necessary for application

processing.

It should be noted, finally, that the

date an application was complete will

generally differ from the date on which

the reviewing authority makes its

completeness determination, since the

filing of the last necessary piece of

information will typically occur before

the determination is made. When EPA

makes a completeness determination, it

will specify the date as of which the

application was "complete." That date

6Even if the conflict between sections 165[a) and

168had not conferred onEPA the discretion to

exempt projects with a complete application. EPA

wouldihave authority undersection 301(a)(1) to.

exempt them..since applying the new BACT

requirements tosuch projectswould beunfair.

will be the date on which the last

necessary piece of information was

received. One of the provisions of the

Consolidated Permit Regulations, 40

CFR 124.3(0 (discussed below), refers to

the "effective date" of an application.

Generally, the "effective date" of an

application will follow the date it Is "complete."

3. Substantive Provisions Relating to

Air QualityAnalyses.

a. Proposed transition provisions:

Another new substantive requirement

that EPA proposed in September was

that an applicant provide an analysis of

air quality in the area the project wyould

affect for each pollutant regulated under

the Act that the project would emit in

"minor," but still significant, amounts.

Under the 1978 regulations, an applicant

had to provide such an analysis only for

those pollutants for which the project

would be "major" and for which EPA

had.set a national ambient air quality

standard (NAAQS). The remaining new

requirement was that, if the project

would emit particulate matter or sulfur

dioxide in a significant amount, the

analysis focus on the extent to which

ambient concentrations of the particular

pollutant had consumed the applicable

PSD increments.

In proposing the new requirements for

air quality analyses, EPA also proposed

to exempt certain projects from them, In

particular, EPA proposed not to apply

the new requirements to any project

whose application was complete before

the requirements came into effect. See

44 FR 51928, 51954 (proposed § 52.21(n)(1)li)).

The 1978 Part 52 regulations contained

a requirement that any air quality

analysis for a pollutant for which a

NAAQS exists ("criteria pollutant")

must generally include monitoring data

gathered over and relating to the year

preceding the submission of a complete

application. In September, EPA

proposed a reformulation of that

requirement. That requirement,

however, when coupled with the new

requirement for an analysis for each

critera pollutant emitted in "minor"

amounts, could cause a prospective

applicant substantial delay. As a result,

EPA also proposed to require any

applicant who does not file a complete

application before the date of

promulgation to gather monitoring data

for any such "minor" pollutant only over

the period (up to one year) from the date

of promulgation and the date the

applicant would file an otherwise

complete application. See id. at 51920,

51954 (proposed § 52.21(n)(1)(it)).

b. Comments and final action on

transition provisions relating-to air

quality analysis requirements. Two

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commenters argued that EPA should

adhere to the transitional rules of the

1978 regulations with respect to the new

requirements for air quality analyses. In

their view, the monitoring requirements

should apply in general to any "major"

project for which certain permits were

not obtained by March 1, 1978, and on

which construction had not commenced

by March 19, 1979. Certain other

commenters objected to any application

of the new monitoring requirements to a

company which, although it had not

filed a complete application by the date

of promulgation, had nevertheless

previously undertaken a program of

monitoring the EPA or a state had

approved.

Some additional comments were

directed to the proposed phase-in

provision. Those comments contended

that a prospective applicant would find

it impossible to satisfy that provision,

since the purchase, installation, and

"debugging" of new monitoring

equipment, together with the analysis of

any new data, would require at least

several months. Many commenters did

note that the draft of the revision of the

monitoring guideline would allow three

months for those tasks, but asserted that

even three months would generally be

insufficient. See U.S. EPA, (Draft)

Ambient Monitoring Guidelines for

Prevention of Significant Deterioration

(PSD), (October 1979). Some

recommended an allowance of 2-5

months, others 6-9 months, and still

others more than 10 months.

A number of commenters observed

that the proposed regulatory language

failed to embody the intent that the

preamble had described. First, the

proposed exemption for each "major"

project whose application was complete

before the date of promulgation focused

only on the new requirement for an

analyses for each pollutant that the

project would emit in a "minor" amount.

Hence, it would have failed to shield

each such project from the new

requirement for an analysis for each

non-criteria pollutant that the project

would emit in a "major" amount.

Second, the provision that would have

phased-in any new monitoring

requirements focused only on projects

whose applications were complete by

the date of promulgation. Consequently,

it specified no phase-in rules for projects

whose applications were not complete

by then, the very projects that EPA

intended the rules to benefit.

Finally, one commenter pointed out an

anomaly in the proposed phase-in

provision: it focused only on the new

requirement, in proposed

§ 52.21(n)(1)(iii), that an applicant

provide monitoring data for any criteria

pollutant that the project would emit in "minor" amounts. As a result, the

proposed provision would have required

a company with a project that Is "major"

under the new regulations, but was not

under the 1978 regulations, to gather the

full amount of monitoring data for each

of its "major" pollutants, but none of its

"minor" pollutants. But, since the

monitoring requirements would have

been new for the "major" pollutants, as

well as the "minor" pollutants, such a

company should have protection with

respect to the "major" pollutants, too.

The final transition provisions relating

to the new requirements for air quality

analyses adhere to the spirit of the

proposed provisions, but differ

substantially in structure and

articulation. One of the four final

provisions, § 52.21(i)(9), exempts certain

sources and modifications from the new

requirements with respect to monitoring

entirely. It provides that those

requirements shall not apply to a source

of modification that was subject to the

1978 Part 52 regulations, if its

application becomes complete on or

before the date this notice appears in

the Federal Register. Instead, the air

quality analysis requirements in the 1978

regulations apply to the source or

modification.

Two of the three remaining provisions

exempt certain other sources and

modifications from the new monitoring

requirements for criteria and noncriteria pollutants. One of those

provisions, § 52.21(i)(10)(i), exempts a

source or modification that would have

been subject to the 1978 Part 52

regulations from those new monitoring

requirements, if its application becomes

complete with respect to the

requirements of the new Part 52

regulations, other than the new

monitoring requirements, on or before a

date ten months from the date of

promulgation. The provision adds the

clarification that the monitoring

requirements of the 1978 regulations

apply instead to the source or

modification. The other exemption

provision, § 52.21(i)(10(ii), Is similar. It

exempts a source or modification that

would not have been subject to the 1978

Part 52 regulations, if its application

becomes complete with respect to the

requirements of the New Part 52

regulations, other than those for

monitoring, on or before a date ten

months from the date this notice

appears in the Federal Register.

The remaining provision,

§ 52.21[m)(1)(v), phases-in the

monitoring requirements of new

§ 52.21(m)(l)(iv) to the extent that they

place monitoring burdens on an

applicant that the 1978 Part 52

regulations would not have imposed.

Section (m)(1)(iv) provides in general

that any required air quality analysis for

a criteria pollutant must include

monitoring data gathered over a period

of at least one year. However, the new

phase-in provision establishes the

general rule that for certain applications

the required monitoring data shall have

been gathered over a period at least

equal to the period from the date six

months from the date of promulgation to

the date the application becomes

complete, except as to the monitoring

requirements of the new Part 52

regulations. The applications to which

this provision applies are those which

become complete, except as to those

monitoring reqi~rements, between the

date ten months from promulgation and

the date eighteen months from

promulgation. The new phase-in

provision then states three exceptions to

that general rule. First, an applicant with

a project that would have been subject

to the 1978 Part 52 regulations must

provide at least whatever monitoring

data the 1978 Part 52 regulations would

have required the applicant to provide.

Second, if the Administrator determines

that a complete and adequate analysis

can be accomplished with monitoring

data gathered over a shorter period (not

to be less than four months), the

required data may be gathered over at

least that shorter period. Finally, if the

monitoring data would relate

exclusively to ozone and would not

have been required under the 1978

regulations, the Administrator may

waive the otherwise applicable

requirements of the phase-in provision

to the extent that the applicant shows

that the monitoring data would be

unrepresentative of air quality over a

full year.

The following example illustrates how

the proposed phase-in provision works.

A company proposes to construct a new

plant that would emit sulfur dioxide and

particulate matter. Under both the new

Part 52 regulations and the 1978

regulations, the plant would be "major"

for sulfur dioxide and "minor" for

particulate matter. The emissions of

particulate matter would not be de

minimis. But for the phase-in provision,

the new Part 52 regulations would

require an application for a permit for

the plant to contain a year's worth of

monitoring data for both sulfur dioxide

and particulate matter. (This assumes

that the Administrator does not

determine that a complete and adequate analysis could be accomplished with

data gathered over a shorter period.)

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The 1978 regulations would-have

required the application to contain ayear's worth of data for just sulfur

dioxide. The company submits an, -

application which becomes complete,

except with respect to monitoring, at the

end of the fifteenth month after

promulgation. Under the phase-in

provision, the application must contain

(1) a year's worth of monitoring data for

sulfur dioxide'and (2) nine months'

worth of data for particulate matter.

The four final provisions embody

EPA's resp'onse'to the comments on the

proposalsFirst, EPA has-adopted the

fundamental approach of the proposal,

which was to apply the-new monitoring

requirements prospectively only. EPA

has concluded. that that approach

reasonably accommodates the purposes

and concerns of sections 165(a) -and

(el(2), on the one hand, and section 168,

on the other. In brief, the approach

institutes the new requirements promptly, but with minimum economic.

dislocation. See Citizens. To Save

Spencer County v. EPA, 600 F.2d at 851.

Full and. immediate application of the--

new monitoring requirements.would

have caused substantial delays in. the

submission of complete applications and

hence the issuance of permits, but

provided little direct environmental

benefit in return. As for applicants who

undertook an approved program of

monitoring before the date of this notice,

the phase-in provision affords them

adequate protection from delay, while at,

the same time generally demanding as

much compliance with the new

monitoring requirements as possibler In

short, EPA disagreed with the

commenters who complained that the

proposals would have instituted the new

requirements too late, and with those

who .complained that the proposals

would have instituted them too soon.

Second, with respect to thenew

monitoring requirements for criteria and

non-criteria pollutants, EPA has

established a grace period of ten months

in the final grandfather provisions. It has

done so because it agrees with the

commenters who asserted that

instituting a new monitoring program

and analyzing the data it generates

requires more than three months in

many, if not most, circumstances. EPA

has selected a grace period of ten

months with respect to monitoring for

both criteria and non-criteria pollutants,

first, because six months is an estimate

7

Even if the conflict between sections 165(a).

165(e)(2]. and 168 had not conferred on EPA the

discretion to exempt certain proJects from the new air quality analysis requirements, EPA would have

had authority under-section 301(a)[1) to exempt

those projects, because application of those

requirements would have been unfair..

of the amountof time that would

generally baneeded to complete those'

tasks and.. second, because there is little

usefulnessto less than four months of

data for most pollutants.

The promulgated provisions cure the

ambiguities in the proposal observed by

some connenters. Section 52.21(i)[10)

exempts an eligible project from the

requirements relating, not only to any

non-criteria pollutant that It would emit

in 'minor" amounts, but also to any noncriteria pollutant that it would emit in

"major" amounts. In addition, the phasein provisions-now deal explicitly with

projects-whose applications were not

complete by the applicable deadline.

Finally, § 52.21(i)(10) protects not only

projects that were subject to the 1978

regulations, but also projects that were -

not subject to them.

4. Comments on the effective date of

the substantive provisions.

,In proposing the new substantive -

provisions relating.to BACT and air.

quality analyses the, Agency stated that

it intended to put those-new provisions

into-effect immediately upon their

promulgation. One -commenter

contended that EPA should put the new

provisions into effect 30 days after

promulgation, rather than immediately

on the date of promulgation, so that

"potential applicants [would'have]

sufficient lead time in planning

modifications and new sources." With

respect to the new provisions relating to

air quality monitoring, the 10-month

grace period and phase-in provision

described above should satisfy the

concerns of the commenter. With

respect to the new BACT provisions,

.however; EPA disagrees. Prospective

applicants have had ample warning of

the new BACT provisions. The court in

Alabama Power held in June of 1979 that

Congress intended them to be imposed

and in September 1979 EPA specified

when it intended to impose them.

Therefore, there is-good cause to make

these requirements immediately

effective. The Administrative Procedure

Act (APA), moreover, would not require

a 30-day delay in implementation, since

the provisions amount to legal

interpretations. See APA section,4[d)(2),

5 U.S.C. section 553(d)(2).

5. ffewProvisions Governing

Procedure.

EPA recently promulgated regulations

aimed at consolidating and unifying

various permit requirements and

procedures. See 45 FR 33290 (May 19,1979) (the "Consolidated Permit

Regulations"). Those new regulations

contain provisions which will govern the

processing of applications for permits

under the Part 52 PSD regulations. Those

provisions appear as_40: CFR 124.1-"

124.21. and 124.41-124.42,45 FR 33485-93.

Paragraph (r) of the 1978 Part 52

regulations has governed the processing

of PSD permit applications under those

1978 regulations.

The Consolidated Permit Regulations

contain a provision, section 124.21,

which describes the transition from the

procedures of paragraph (r) to the now

consolidated permit procedures. It

provides that those new procedures

shal "apply to PSD proceedings in

progress on July 18,1980." 45 FR 33402. It

adds that the requirements of sections

124.9 and 124.18, which would require

the preparation of a formal

administrative record, shall apply only

to "PSD permits for which draft permits

[i.e., preliminary determinations] were

prepared after the effective date of these

regulations." Id.

In promulgating the new Part 52

regulations, EPA has adopted a new

paragraph (q). It states that the new

consolidated permit procedures govern

the processing of PSD permit . applications to the extent that they

apply. It adds that the procedures of the

1978 Part 52 regulations continue to

apply to the extent that the new

procedures have not yet displaced them.

In time, the new procedures will

displace the old ones entirely.

B. Part 51 PSD Regulations

In September, EPA did not propose an

amendments to the 1978 Part 51

regulations that paralleled the proposed

Part 52 transition provisions. The Part 51

amendments that EPA did propose

paralleled only the-Part 52 provisions

that would affect coverage and

substance. The few comments that were

submitted focused on this gap.

One commenter asked that EPA state

in the Part 51 regulations that a state

which has already adopted and

obtained EPA approval of its own PSD

program may, in conforming that

program to the new Part 51 regulations,

adopt a rescission provision like new

§ 52.21(w) into Its plan. EPA believes

that It i unnecessary to make such a

statement in regulatory form. A state is

free, in any event, to adopt such a

provision and EPA would approve It.

Another commenter asked EPA to

establish in the Part 51 regulations that a

state with Its own PSD program, In

adopting new, more stringent

requirements for BACT and air quality

assessments in accordance with the new

Part 51 regulations, may also adopt

grandfather provisions that would apply

the new requirements prospectively. In

response, EPA had added a new section

51.24(a)(6) to the Part 51 regulations. The

new section provides that PSD SIP

revision may operate prospectively,

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thereby establishing that a state may adopt grandfather provisions of that

sort. It adds, however, that the revision

must take effect no later than the date of

its approval. EPA has also added a new

section 51.24(i)(9] to the Part 51

regulations. It provides that an approval

revision to a state PSD program, which

program EPA has already approved,

may contain transition provisions that

parallel the new Part 52 transition

provisions. The new section also

establishes that the proposed transition

provisions must operate at least as

stringently as their Part 52 counterpart

would in the context of the state PSD

program.

Finally, a third commenter urged EPA

to require a state with its own PSD

program to delete these aspects of the

plan that go beyond the requirements of

the new Part 51 regulations within nine

months after the date of promulgation of

those new regulations, unless the state

within that period of time submits "to

EPA written acknowledgment that it is

not required by federal law to include

such provisions in its state plan, but has

nevertheless elected to do so under state

law pursuant to section 116 of the Act,"

The commenter feared that absent such

a requirement, inertia and lack of

resources might prevent some states

from deleting the provisions in question.

Such a requirement, however, would

interfere unnecessarily in the affairs of a

state. EPA, moreover, doubts that it

would have the authority in any event to

repeal the more stringent aspects of a

state plan simply because the state

failed to say by a certain time that it

wanted to retain those aspects. EPA

therefore has not promulgated the

requirement sought by the commenter.

After examining the Part 51

regulations in response to those

comments, EPA has decided to add two

new provisions. The first, section

51.24(a) (6), merely states in regulatory

form what section 406(d)(2)(B) of the

Clean Air Act Amendments of 1977

already states: any PSD SIP revision

required by the new Part 51 regulations

must be adopted and submitted within

nine months of the date this notice

appears in the Federal Register. The

second provision, § 51.24(a)(6)(ii],

establishes explicitly that any PSD SIP

revision must contain provisions which

describe when and as to what sources

and modifications the revision is to take

effect. The purpose of that requirement

is merely to minimize confusion and

uncertainty during the transition from

any old to new PSD SIP requirements.

C. OffsetRuling

The amendments to the Offset Ruling

which EPA is announcing in this notice

expand its coverage, just as the

amendments to the Part 52 PSD

regulations expand its coverage. In

EPA's view, the expansion of the

coverage of the Offset Ruling should

operate prospectively only. Hence, it has

inserted into the Ruling a grandfather

provision that parallels the relevant PSD

grandfather provision. It provides that

the Ruling does not apply to any source

or modification that was not subject to

the version of the Ruling in effect prior

to the date this notice appears in the

Federal Register, if all necessary SIP

permits were obtained for the source or

modification by that date and if

construction commences within 18

months of that date.

D. Part 51 Nonattainment Regulations

Pursuant to section 406(d)(2) (B) of the

Clean Air Act Amendments of 1977,

states will have nine months after the

date of this notice appears in the

Federal Register in which to adopt and

submit any new definitions and other

regulatory provisions required by new

40 CFR 51.180). States need not adopt

verbatim the definitions in section

51.180)(1). but they must demonstrate

that any different definitions they retain

or adopt have the effect of being at least

as stringent as those set out in

§ 51.180)(1). If a state plan currently

includes definitions or regulatory

provisions which are more stringent

than the nonattainment definitions and

other provisions contained in these final

rules, the state has the choice of

retaining its current regulations or of

revising them so as to conform to EPA's

rules. If a state does not submit any

necessary revisions to its plan within

nine months after the date this notice

appears in the Federal Register, the

construction moratorium will go into

effect 15 months after this date in all

nonattainment areas in that state. The

additional 6 months is consistent with

the review period allotted for Part D

submitted under section 110(a](2)W1) and

129(c) of Pub. L 95-95.

EPA received only one comment on

transitional requirements for § 51.180).

This commenter requested that EPA

allow states which have already

adopted NSR regulations pursuant to

section 173 of the Act be permitted to

adopt a rescission provision like that of

§ 52.21(w). EPA believes that to make

such a statement in regulatory form is

unnecessary. A state is free to adopt

such a provision, and EPA will approve

it, provided that the state's NSR program

meets the requirements of section 173

and that permit rescission will not

interfere with reasonable further

progress or attainment of ambient air

quality standards.

E. Construction Moratorium

The amendments to the construction

moratorium expand its coverage in some

ways, too. Hence, EPA has promulgated

a grandfather provision patterned after

the relevant PSD and Offset Ruling

provisions. It appears as § 52.24(g).

F. Pending SIP Revisions

By the date this notice appears in the

Federal Register, EPA will not have

taken final action on many PSI) and

nonattainment SIP revisions that states

have already submitted. EPA intends to

review those pending revisions under

the requirements that applied to them

before the date of promulgation. To wait

until a state had revised its revisions to

bring them into line with the new PSD

and nonattainment requirements would

cause the state and its industry to suffer

a heavy and undue burden, particularly

in those cases where approval of a Part

D plan is needed to lift the construction

moratorium.

G. Effective Date of the Nonattainment

Provisions

EPA has made all of the new

nonattainment provisions announced

here effective immediately upon their

promulgation. EPA finds that it has

"good cause" within the meaning of the

relevant provisions of the

Administrative Procedure Act to do so.

First, the new provisions in the main

provide relief from pre-existing

regulatory burdens. Second, the decision

in Alabama Power and the September

1979 proposal provided ample warning

of the new changes. Finally, it is

important for planning and management

by EPA, the states and industry that

these new provisions come into effect as

soon as possible.

H. Miscelaneous

Under the amendments announced in

this notice, each set of PSD and

nonattainment regulations uses the

phrase "this section" at some points and

phrases such as "40 CFR 52.21" at other

points. EPA intends "this section," when

used in a particular set of regulations to

refer only to the version of the

regulations which has resulted from the

amendments announced here. For

example, the phrase "this section" in

new § 52.21(i)(l)(i) refers only to the Part

52 PSD regulations as newly constituted.

EPA intends phrases such as "40 CFR

52.21" to refer to any version of the

particular regulations which has

appeared or is to appear at the

particular location in the Code of

Federal Regulations. For example, "40

CFR 52.21" refers to each version of the

Part 52 PSD regulations that has ever

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existed, including the version that has

resulted from the amendments

announced here.

V. Potential to Emit

The preconstruction review

requirements of section 165 of the Act

apply to any "major emitting facility." 42

U.S.C. 7475. Pursuant to section 169(1),

that term includes any stationary source

which emits or has the "potential to

emit" 100 tons per year or more of any

pollutant, for sources included in one of

28 specified source categories, or 250

tons per year or more of any pollutant

for any other type of source. 42 U.S.C.

7479(1).

A. Control Equipment

Obviously, many more sources would

be affected if the term "potential to

emit'! referred to the amount of pollution

that a source would emit without

controls than if it took the operation of

control equipment into account. In the

PSD regulations promulgated on June 19,

1978, EPA took the former approach and

defined "potential to emit" as "the

capability at maximum capacity to emit

a pollutant in the absence of air

pollution control equipment." 40 CFR

51.24(b)(3), 52.21(b)(3) (1979). This

approach was rejected by the Alabama

Power decision which held that

Congress intended that, in determining a

facility's potential to emit, EPA "must

look to the facility's 'design capacity' a

concept which not only includes a:

facility's maximum productive capacity

(a criterion employed by EPA) but also

takes into account the anticipated

functioning of the air pollution control

equipment designed into the facility." 13

ERC 1993, 2003.

In response to the court's decision,

EPA proposed, on September 5,1979, a

revised definition under which the

application of control equipment would

be taken into account in computing

potential emissions. That approach,

which was very strongly supported by

public comments, is now being

promulgated. 40 CFR 51.24(b)(5) and

52,21(b)(5).

The proposal noted that EPA will

assume that a facility's air pollution

control equipment will function in the

manner reasonably anticipated. In this

promulgation the Administrator is

implementing the proposed approach by

requiring that operation of control

equipment be an enforceable

requirement. In other words, a company

may receive credit for the application of

control equipment only to the extent - that the resulting reduction in emissions

is federally enforceable (see below).

This provision is necessary, as a

practical matter, to ensure that sources

will perform the propef operation and

maintenance for the control equipment.

Thus, a source installing control

equipment that would reduce emissions

more than that required by generally

applicable emissions limitations cannot

receive credit for the additional

increment of pollution reduction, unless

it-is federally enforceable. The definition

of "potential to emit" is being modified

appropriately.

Under the definition being

promulgated, the potential to emit of

existing sources with respect to the

treatment of enforceable in-place

control equipment shall be defined in

the same fashion as discussed above for

new sources. This responds to

commenters who complained of this

discrepancy in the-September 5

proposal. Accordingly, potential.to emit

for all sources means the ability at

maximum design capacity to emit air

pollution, taking into account any inplace control equipment. Design

capacity, and thus potential to emit, may

be further limited if control equipment

better than that normally required by

the applicable SIP is installed and a

correspondingly more stringent level of

emissions control is included as an

enforceable permit conditon. Finally, it

should be noted that the potential to

emit of a stationary source in toda's

rule is of primary importance in defining

when a source would be major, it is not

generally used in determining increment

consumption or the baseline for

assessing emission increases and

decreases at a source (see Modification).

B. Continuous Operation

Under the existing definition of. "potential to emit," a source can avoid

PSD review if it binds itself, in a

federally enforceable permit, to

sufficiently limited hours of operation.

40 CFR 51.24(v)(5), 52.21(b)(5) (1979). In

the September 5, 1979 proposal, EPA

proposed to delete the clause which

allows such adjustments and to presume

continuous (24 hours per day, 365 days

per year) operation. Consistent with that

change, EPA also proposed to delete,

from the same regulation, the words "or

amount"; those words at present allow

permit limitations on amount of

materials combusted, processed, or

stored to be considered in computing potential to emit. In making this

proposal; the Administrator also

requested comment on the need to

adjust the assumption of continuous

operation, in the case of sources which

are physically incapable of such

operation.

Many commenters (169 of 173) have

strongly criticized this proposal, the

most frequent response being that few

sources operate constantly, and most

cannot do so. These commenters also

advised the Agency of certain benefits

which would accrue from allowance of

permit conditions in computing potential

to emit. For example, a benefit noted is

that such an approach would better

relate the PSD permit applicability of

new sources to the offset potential of

existing sources, and to how the

increment would be consumed. This

approach was also claimed to be

consistent with EPA's stated goal of

developing PSD requirements which will

fit into state programs in such a way as

to minimize disruption of those ..programs and promote PSD SIP

development by the states. Additionally,

insignificant reviews would be

minimized and PSD applicability would

be more reflective of emissions actually

produced by the source.

There was some comment in support

of the proposal. A state environmental

agency noted that emissions limits

calculated from less than continuous

operation are less easily enforceable

than those which are based on

continuous opertion. An environmental

group supported the proposal on the

grounds that it is consistent with the

interpretation of "full design capacity,"

that it would be appropriately

technology-forcing, and that It is

necessary to protect the short term

increment. These concerns are

addressed below.

The court based its definition of

"potential to emit" on the source's fulldesign capacity. Id. at 2003. The June

opinion in Alabama Power did not

directly address the acceptability of

legal limitations on operation but did

stress design capacity in the sense of

physical and technological, as opposed

to operational, limitations. However, In

the final opinion, released on December

14, 1979, the court stated:

The design capacity of a facility rarely contemplates uninterrupted operation 24

hours per day, 385 days per year. Projected downtime for repairs and maintenance or

otherfactors may reduce the hours of

operation that are appropriately considered

in the calculation of a facility's "potential to

emit." (Id. at 2005, n. 73.) (Emphasis added)

EPA interprets this language as not

precluding permit conditions, that are'

federally enforceable under the

applicable SIP, from circumscribing a

source's potential to emit. In view of the

above, the Agency believes It has

discretion to adopt the most reasonable

approach to this Issue and has,

therefore, reconsidered its proposal.

Today's regulations recognize the ability

of all federally enforceable limitations

to constrain the potential to emit of a

stationary'source.

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The Administrator believes that the

policy concerning "enforceable permit

conditions" is responsive to most of the

concerns raised by commenters who

were critical of EPA's proposal. New

sources are now allowed to avoid NSR

for PSD and nonattainment areas by

limiting their type or amount of

operation. Moreover, potential to emit is

now defined in the same way for new

and existing stationary sources. The use

of certain permit conditions also

addresses the concerns raised regarding

physical incapability and peak load or

standby units. This is, source owners or

operators can now agree to sourcespecific permit conditions to limit their

operation as appropriate. Such

conditions can make infrequent

operation and other physically limiting

factors outside the design capacity of an

emissions unit legally enforceable and

can thereby limit the applicability of

NSR.

The final policy concerning

enforceable permit conditions has also

taken in account the concerns of those

favoring the proposal. One commenter

noted that limited operation conditions

would require greater enforcement

attention. The Administrator agrees, but

he believes that such conditions can be

reasonably enforced. Another

commenter also noted the need to

minimize any air quality threats to short

term increments by sources with

intermittent operation but high short

term rates of emission. No commenter

presented a solution to this problem.

EPA believes, however, that short term

emissions limitations can be computed

to address threats to short term,

increments, should any problems

actually arise. It would be the

responsibility of the reviewing authority

to identify, in periodic evaluations, any

sources causing such problems and

apply appropriate limitations on their

emissions. The Administrator will

consider rulemaking to develop short

term applicability thresholds, if

necessary, after a reasonable amount of

review experience has been developed.

Finally, as a result of today's policy, a

potential problem exists concerning the

future relaxation of a preconstruction

permit that previously caused a

proposed stationary source to enjoy

minor rather than major status. For

example, a source might evade NSR

through agreement to unrealistically

stringent operating limitations in its

permit, and later obtain a relaxation of

the condition. The Agency believes that

the problem can be dealt with by 40 CFR

52.21(r)(4), entitled "Source Obligation."

That paragraph provides that any owner

or operator of a source, who would

receive a relaxation of a permit

condition that had enabled avoidance of

NSR, would then become subject to

review for all units subject to the

original permit, as if they were new

sources. In other words, if operational

limitations are to be considered as an

aspect of a source's design, it is

reasonable that the permit accurately

incorporate that design. If such

operation is changed, the permit, and

concomitant obligations, should be

correspondingly changed.

C. Additional Guidance

Fugitive emissions under today's

regulations are applicable in defining

potential to emit. (See Fugitive

Emissions.) However, like the proposal,

such emissions do not count in assessing

permit applicability unless a specified

type of source category is involved. To

accomplish this a specific exemption

has been added to the final regulations

by which fugitive emissions will be

included in determining potential to emit

only for specified source categories.

The definition of "potential to emit" is

important not only to PSD

preconstruction review, but also to NSR

under the Offset Ruling (44 FR 3274), the

statutory requirements for

nonattainment areas, and the

restrictions on construction in sections

110(a)(2)(1I and 173(4) of the Act. EPA is

promulgating for each of those

nonattainment programs the same

definition of "potential to emit" that it is

promulgating for the PSD program, as

well as a provision like § 52.21(r)(4).

EPA also intends this definition to be

implemented for those programs in the

same way as for PSD.

EPA has traditionally distinguished,

for the purpose of NSR, between the

direct emissions of a source and its "secondary emissions." (See Additional

Issues.) In revising the Offset Ruling in

January 1979 the Agency added a

definition of "secondary emissions" and

a provision describing for what purposes

and under what circumstances those

emissions are to be taken into account.

See 44 FR 3281, 3283-84 (January 16,

1979). EPA is now adding that concept to

the PSD regulations and to the

nonattainment provisions relating to

NSR and the restrictions on

construction. For each of those sets of

provisions "secondary emissions" are to

be excluded in determining whether the

regulations apply to a source (i.e.,

whether a source or modification is

"major"). Similarly, the control

technology requirements of BACT and

lowest achievable emission rate (LAER)

do not apply to secondary emissions.

How the Agency would treat those

emissions for other purposes, including

PSD air quality impact analysis, is

described in Additional Issues.

VI. 50-Ton Exemption

Under the 1978 PSD regulations,

stationary sources or modifications with

allowable emissions of less than 50 tons

per year, 1000 pounds per day, or 100

pounds per hour were in general

exempted from the BACT and ambient

air quality analysis PSD requirements.

40 CFR 51.240)(2), (k), and 52.21)12), (k)

(1979). In its preliminary per cuiam

decision the court thought that its ruling

on "potential to emit" made a ruling on

the 50-ton exemption "academic," since

no 50-ton source would ever be major if

"potential to emit" referred to controlled

emissions. 13 ERC at 1228-29.

Nevertheless, it remanded the

exemption to the Agency for

reconsideration and noted that the

Agency had exceeded its authority in

establishing the exemption. In response,

EPA proposed to delete the provisions

which embodied the exemption, and to

delete parallel provisions in the Offset

Ruling. EPA, however, proposed adding

to the PSD regulations a 50-ton

exemption for certain modifications. The

proposed exemption tracked section

165(b) of the Act closely, but not

exactly. Essentially it provided that a

source qualifying for the exemption

would face a limited air quality review

for S0 2 and PM. Use of the exemption

would be restricted to modifications, at

a plant existing as of August 7,1977,

entailing emissions increases of 50 tons

or less of any pollutant after application

of BACT and which would impact no

Class I area or interfere with the

attainment of PM or S02 standards. All

net emission changes since August 7,

1977 would be aggregated in applying

the exemption.

All of the seventeen commenters who

focused on the proposed provision

expressed general agreement with this

approach, but some commenters stated

that the exemption should be broader.

For example, four commenters wanted

an additional 50-ton exemption after

each full review. Five' commenters

requested a special, more lenient,

review for pollutants whose emissions

rates fall between 50 tons per year and

the de mianis level in those cases

where the exemption would not apply.

The Administrator finds no grounds for

providing additional exemptions after

each review. Similarly, there is no

justification or authority under section

165(b) for a special limited review for

emissions increases falling between de

minimis amounts and the 50-ton level. A

few commenters suggested that other

eligibility values than 50 tons be used.

EPA responds that section 165 of the Act

52689

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mandates the 50-ton figure, but that

much of these commenters' concerns are

dealt with by the de minimis provisions

being promulgated today. Two other

commenters requested that the

exemption be governed by net emissions

increases. Today's regulations provide

that review is applicable to net

emissions increases, thus addressing the

concerns of the two commenters cited

above. With this exception, and the two

noted below, the 50-ton exemption is

being promulgated as proposed.

Some commenters pointed out that

EPA's proposed 50-ton exemption dlause

was more linted in its application than

the Clean Air Act language of section

165(b), in that the September 5 proposal

contained additional consideration of

Class I area impacts (e.g., 44 FR 51949,

40 CFR 51.24(k)(2)(i)).-EPA agrees with

these commenters and has eliminated

that portion of the 50-ton exemption

language dealing with Class I areas. See

40 CFR 51.24(i)(7) and 52.21(i)(7).

The 50-toi exemption contained in the

Act made those sources existing as of

August 7, 1977, eligible for the

exemption; the same applicability date

was proposed in September 1979 for this

revised exemption. The Alabama Power

final opinion suggested that EPA had

authority to conform the eligibility date

for the section 165(b) exemption to the "effective date" of the preconstruction

permit requirements of the 1978

regulatiqns, i.e., March 1, 1978. In the

January 30, 1980 Federal Register notice

EPA sought comment on changing the

eligibility date and on whether March 1,

1978 would be the appropriate choice.

Twenty-four commenters addressed

the issue of the eligibility date. Nineteen

of these favored a date of March 1 or 19,

1978. Four wanted the date to be that of

the final promulgation of these

regulations. One commenter disagreed

with the date change because it

considers the exemption itself to be

,unauthorized; however, the Act clearly

provides for the exemption, as explained

elsewhere in this section. One industrial

group alleged that the date of

promulgation would be the proper

eligibility date for the specific case of

fugitive emissions, in that fugitives were

not regulated as of March 1, 1978. This is

apparently a reference to the fact that

rulemaking relative to potential to emit

(see Potential To Emit) had not yet been

performed. In fact, though, fugitive

emissions were-covered by the 1978

regulations and the calculation of

potential to emit does not change that

circumstance. The commenters

preferring March 19 to March I referred

to a statement in Alabama Power that

March 19,1978 is the "effective date" of

the regulations. 13 ERC at 2006, n.79. The

"effective date" of those regulations is,

however, March 1, 1978. See Citizens to

Preserve Spencer County v. EPA, 12

ERC 1961,1978; and Preamble to 1978

Regulations, 43 FR 26380,26390.

Concerning the comments favoring the

date of this promulgation as the

eligibility date, the Administrator notes

that section 165(b) of the Act limits

eligibility for the 50-ton exemption to

those sources in existence on the date of

enactment of the 1977 Admendments to

the Act. For the reasons noted in the

Alabama Power decision, EPA has

authority to extend eligibility to March

1, 1978. However, the Agency cannot

extend this deadline to today's

promulgation. For these reasons March

1, 1978 is now promulgated as the

eligibility date for the 50-ton exemption.

VII. Fugitive Emissions

For PSD determinations prior to the

Alabama Power decision, EPA

considered all reasonably quantifiable

emissions of a pollutant-including both

point emissions (e.g., from a stack or

chimney) and fugitive emissions-on the

ground that the emissions deteriorate air

quality regardless of how they emanate.

This practice applied to calculations of a

source's emissions and potential

emissions of a given pollutant both: (1)

for the threshold determination under

section 169[1) of whether the source was

a "major emitting facility" subject to

section 165, and (2) for the permitting

requirements of section 165 itself.

The Alabama Power court upheld

EPA's practice for the latter purpose,

and confirmed that

The terms of section 165, which detail the

preconstruction review and permit

requirements for each new or modified

"major emitting facility" apply with equal

force to fugitive emissions and emissions

from industrial point sources.

EPA is correct that a major emitting facility

is subject to the requirements of section 165

for each pollutant it emits irrespective of the

manner in which it is emitted. [13 ERC at

2016-2017.]

However, as to the first practice, the

court held that section 169(1) is

controlled by the rulemaking provision

of section 302(j), and that fugitive

emissions of a given pollutant may be

included in the threshold calculationunder section 169(1) only if the

Administrator first determines, by rule,

that they are to be included.

Accordingly, as part of the September

5, 1979 rulemaking proposal, the

Administrator identified 27 categories of

stationary sources for which he

proposed to include fugitive emissions in

threshold calculations of "major

emitting facility" status for purposes of

both section 165 and new source review

regulations. Numerous commenters

responded that the Administrator's

proposal did not constitute "adequate"

rulemaking, and that fugitive emissions

could not be included in threshold

calculations unless the rulemaking also

established, on an industry-by-Industry

basis, methods for quantification of

fugitive emissions and for analysis of

their impacts on air quality, and

included the identification of effective

techniques for their control. EPA has

considered these comments, but

believes that Congress intended the

rulemaking provision of section 302(j) to

serve a much simpler and ndrrowor

purpose.

As the court itself noted, "[t]he

legislative history of this rulemaking

provision is sparse," and it is therefore

particularly difficult to discern

Congress' motivation for including It. 13

ERC at 2017. In general, section 302(j)

sets out the criteria for determining

whether a source is "major" and hence

subject to the stringent requirements of

certain key provisions of the Act.

Congress clearly intended such

determinations to always include point

emissions, the type most commonly

associated with major polluters. It also

expressed its affirmative intent not to

exclude "non-point" or "fugitive"

emissions from those determinations:

[Tlhe "major stationary source" definition

Is clarified to indicate the inclusion of major

sources of fugitive emissions (last year's bill

was unclear in this respect) * * *.[H.R. Rep.

95-294, 95th Cong. 1st Sess, 4 (1977).]

Rather than include fugitive emissions

across-the-board, however, Congress

left it to the Administrator to determine

for which particular categories of

sources fugitive emissions will be

included in threshold calculations.

EPA therefore believes that the

purpose of the rulemaking under section

302(j) is to afford members of affected

categories of sources an opportunity to

comment on the Administrator's

determination to include fugitive

emissions in the threshold calculation,

and to allow them to present factual or

policy arguments in support of claims

that it would not be appropriate to do

so. Although many such presentations

will be technically oriented, EPA does

not agree that section 3020) requires the

formal promulgation of measurement,

modeling or control techniques or

guidelines, because the fundamental

decision which the Administrator Is

making under section 302(j) is whether

fugitive emissions should be included In

threshold calculations.

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EPA finds support for this

interpretation of section 302(j) in the fact

that section 165 does not contain any

rulemaking provision governing the

substantive regulation of fugitive

emissions. As explained earlier, the

Alabama Power court confirmed that

once a source is determined to be a

major emitting facility under section

169(1), the substantive preconstruction

review and permitting requirements of

section 165 "apply with equal force to

fugitive emissions and emissions from

industrial point sources." In other

words, even if fugitive emissions remain

excluded from threshold calculations,

section 165 requires that fugitive

emissions be taken into account in

determinations of whether NAAQS or

allowable increments will be violated

(section 165(a)(3)) and that fugitive

emissions be subjected to BACT

requirements (section 165(a)(4)). But

these substantive provisions do not

require EPA's prior promulgation of

technical rules governing measurement,

analysis or control such as those which

the commenters suggest are necessary

under section 3020). Since the

determination to include fugitive

emissions in threshold applicability

calculations is discretionary under

sections 302W) and 169(1), while the

substantive regulation of fugitive

emissions from all major emitting

facilities is mandatory under section

165, EPA does not believe that the

rulemaking provision of section 302(j)

was intended to require the

promulgation of such technical

guidelines or regulations.

EPA therefore concludes that the

rulemaking which it conducted was "adequate" under section 302(j) since

affected sources were afforded the

opportunity to comment upon the

proposed inclusion of fugitive emissions

in their threshold calculations. EPA's

responses to more specific comments

are set out below. Several commenters

objected that the first 26 specific

categories of sources identified in the

proposal (as sources whose fugitive

emissions would be taken into account

in threshold calculations) were virtually

identical to the 28 categories of sources

identified in section 169(1) as sources

with threshold tonnages of 100 tons per

year (rather than 250 tons per year) for

determinations of "major emitting

facility" status.8 The commenterb

complained that by merely copying the

28 sources without any other supporting

gThe apparent discrepancy in the number of

categories (i.e.. 26 versus 28] is explained by the fact

that the September 5.1979 proposal listed

hydrofluoric, sulfuric and nitric acid plants together

in a single subheading.

rationale, EPA failed to conduct proper

rulemaking.

Although it is true that the two lists

are virtually identical, it is not true that

EPA failed to conduct proper

rulemaking. To the contrary, the

Administrator recognized that in

specifically identifying 28 categories of

sources in section 169(1), "Congress'

intention was to identify facilities

which, due to their size, are financially

able to bear the substantial regulatory

costs imposed by the PSD provisions

and which, as a group, are primarily

responsible for emission of the

deleterious pollutants that befoul our

nation's air." 13 ERC at 2003. In light of

that intent, the Administrator Initially

determined that as a matter of policy, it

would be appropriate to count all

emissions-including fugitive

emissions-in threshold calculations of

applicability for those 28 categories. The

proposal reflected that determination as

well as the Administrator's observation

that, because those sources have

traditionally been considered the major

polluters in the country, EPA's

experience in quantifying fugitive

emissions from them is, in general,

greater than its experience in doing so

for other sources.'

Source Category and Reference Primary zinc smelters

Technical Guidance for Control of

Industrial Process Fugitive Particulate

Emissions-March 1977 (EPA-450/3-77-

010)

Portland cement plants (EPA-450/3-77--O)

Iron and steel mill plants Particulate Emission Factors Applicable to

Iron and Steel Industry (EPA-45014-7-.

028) (EPA-450/3-77-OlO)

Primary aluminum ore reduction plants (EPA-450/3-77--010)

Primary copper smelters

(EPA-450/3-77-1o)

Petroleum refineries

Compilation of Air Pollutant Emission

Factors CAP-42)

Lime plants (NSPS) (AP-42) (EPA-40/3-77.-00)

Phosphate rock processing plants (EPA-450/3--77-010)

Coke oven batteries

(EPA-450/4-79-028]

Carbon black plants (AP-42) Primary lead smelters

(AP-.42) (EPA-450-3-77-010)

Sintering plants (See Iron and steel mill plants)

Fossil fuel-fired boilers

(See Fossil fuel-fired steam electric plants)

Petroleum storage and transfer units

(AP-42) Fossil fuel-fired steam electric plants

'For example. EPA has preiously published

fugitive emissions data for many of the identified

categories of sources:

(EPA-450/3-77--Om)

Several commenters pointed out,

however, that the two lists were not

identical insofar as certain restrictions

or limitations for six categories of

sources in the section 169(1] list were

not reflected in the proposed section

302(j) list. Specifically, the section 169(1)

list includes only the following (the

italicized portions were omitted from the

proposal): fossil-fuel fired steam electric

plants of more than two-hundred-andfifty million British thermal units per

hour heat input; coal cleaning plants

(thermal dryers); municipal incinerators

capable of charging more than twohundred-and-fifty tons of refuse per day;

carbon black plants (fumaceprocess];

fossil-fuel boilers of more than twohundred-and-fifty million British

thermal units per hour heat input; and

petroleum storage and transfer facilities

with a capacity exceeding threehundred-thousand barrels. These

discrepancies are the result of an

inadvertent administrative error, since

EPA intended to identify in-the proposed

section 302(j) list the same categories of

sources identified by Congress in the

section 169(1) list. Accordingly, the final

list promulgated today reflects the

qualifying descriptions specified above

for the six categories of sources. Several

commenters objected to the last

category on the list of sources for which

the Administrator proposed to include

fugitive emissions in threshold

calculations-namely, "any other

stationary source category which, at the

time of the applicability determination,

is being regulated under section 11 or

112 of the Act." Section 111 concerns the

establishment of standards of

performance for new stationary sources

(new source performance standards or

NSPS) and section 112 concerns the

establishment of national emissions

standards for hazardous air pollutants

(NESHAP). The commenters argued that

the focus of these provisions is on

emissions controls rather than on

ambient air quality, and that there is

therefore no logical link to support the

automatic inclusion of fugitive emissions

from a source for PSD threshold

calculation purposes simply because the

source is being regulated under section

111 or section 112. EPA disagrees with

some of the commenters' assumptions

and characterizations of NSPS and

NESHAP regulation, but concludes for

other reasons that the last category

should be revised to apply only to

sources which are being regulated under

section II or section 112 as of the

effective date of the amended PSD and

NSR regulations.

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The commenters contend that since an

NSPS under section 111 merely reflects,

fora category of sources, an emissions

limitation which is achievable through

the best system of continuous emissions

reduction which "the Admilstrator

deterniines has been adequately

demonstrated," the establishment of an

NSPS for a source is unrelated to the

ambient air quality considerations

which are at the heart of PSD review.

What the commenters overlook,

however, is that under section

111(b)(1)(B), NSPS are only promulgated

for categories of stationary sources

which have been included in a list under

section 111(b)[1)(A); and section

111[b)(1)(A) directs the Admiiistrator-to

"include a category of sources in such

list if in his judgment it causes, or

contributes significantly to, air-pollution

which may reasonably be anticipated to

endanger public health or welfare." In

other words, although the NSPS itself

may be based on technological

considerations, the decision to deyelop

the NSPS is clearly based on ambient air

quality concerns. Moreover, under

section 112, ambient air quality is

clearly a compelling concern because a

hazardous air pollutant to which a

NESHAP will apply is one "which in the

judgment of the Administrator causes, or

contributes to, air pollution which may

reasonably be anticipated to result in an

increase in mortality or an increase in

serious irreversible, or incapacitating

reversible, illness."

In short, categories of sources are

regulated under section 111 or section

112 on the basis of determinations by

the Administrator that their emissions

seriously and adversely impact ambient

air quality, and the Administrator

therefore determined that it would be

appropriate to include their fugitive

emissions in their threshold calculations

for purposes of PSD and NSR review

and regulation. That basic policy

determination is being finalized today.

At the same time, however, EPA

believes that the comments about' "automatic" inclusion of categories of

sources which are not now regulated

under section 111 or section 112, but

which may be regulated thereunder at

some point in the future, raise valid

concerns. Although EPA believes that

the same basic policy considerations

would support the inclusion of fugitive

emissions for such categories of sources,

EPA recognizes that unless a source had

affirmative notice during this rulemaking

that it will be regulated in the future

under section 111 or section 112, it will

not really have been afforded a

meaningful opportunity to comment on,

the proposed inclusion of its fugitive

emissions in its threshold calculations,

Accordingly, EPA has determined to

limit the scope of the last category on

the proposedlist to sources which are

being regulated under section 111 or

section 112 as of the effective date of -

these amended PSD and NSR

regulations. At the time of any future

rulemaking under section 111 or section

112 proposing to regulate additional

categories of sources, EPA will conduct

parallel section 302(j) rulemaking

concerning the proposed inclusion of

fugitive emissions in threshold

calculations. On the issue of the

appropriateness of including fugitive

emissions in threshold calculations for

particular categories of sources, the

basic objection expressed by most

commenters was that fugitive emissions

data were either unavailable or

inadequate, and that it would therefore

be inappropriate to include fugitive

emissions in threshold calculations for a

particular category.

In response, EPA notes that such

concerns should and will be addressed

in the context of particular applicability

-determinations, but that they have not

changed the basic policy decision made

by the Administrator under section

302tj]. As explained earlier, fugitive

emissions must be taken into account

under section 165 in determining the

impact on ambient air quality of a.

proposed new source and the BACT

requirements which will apply to-it,

even if there are no existing fugitive

emissions data, or if the available data

are crude. Obviously, the nature and

extent of the available data and

technologies are important factors in

determining how fugitive emissions

should be taken into account and how

they should be regulated under the

review and permitting process of section

165; but those factors will not avoid or

eliminate the consideration of fugitive

emissions under that process. Similarly,

although the issue of quantification may

be relevant to particular applicability

determinations, EPA does not believe

that that issue alone is critical in

determining whether, as a general policy

matter, it is appropriate to include

fugitive emissions in threshold

calculations for a particular category of

sources.

EPA emphasizes, however, that

fugitive emissions from a source in one

of the listed categories will only be

included in threshold calculations "to

the extent quantifiable." EPA's intent

was and is to provide sources the

flexibility to explore with the reviewing authority in the context of a particulaf

applicability determination, issues of

quantification which might be peculiar

to an individual source. (Of course,

fugitive emissions will not have to be

quantified for threshold purposes If the

source would qualify as a "major

emitting facility" on the basis of point

emissions alone, a situation which EPA

believes will occur more often than not.)

As indicated above, EPA has in the past

published data and other information

relating to the quantification of fugitive

emissions for various categories of

sources and, as some commenters noted,.

additional data and Information are

currently under development, EPA

considers these publications concerning

quantification of fugitive emissions as

guidance to be used as the starting point

for analysis, not as methodology or data

which must be rigidly adhered to in all

circumstances.

EPA encourages the development of

more sophisticated or precise methods

or models for quantification of fugitive

emissions, and will accept any estimate

of a source's fugitive emissions If the

source can support the accuracy and

reliability of the methodology which it

has developed or employed. In

situations where there are no published

emissions factors or other fugitive

emissions data for a particular category

of sources, EPA will consider

quantification estimates developed by a

source which have any reasonable and

rational basis, including-estimateo based

on the transfer of technology or based

on principles of material balance.

Moreover, if a source satisfactorily

demonstrates that all such

methodologies are inappropriate in Its

circumstances and that there Is

absolutely no basis for reasonably

estimating its fugitive emissions, EPA

would be willing to discount fugitive

emissions in the threshold calculation

for that individual source,

In short, sources will have an

opportunity to discuss the

appropriateness and reasonableness of

fugitive emissions-estimates for

purposes of both the threshold

calculation, as well as the requirements

of section 165. EPA is therefore

finalizing today the proposed list of

categories of sources whose fugitive

emissions will be included in threshold

calculations. EPA has considered

-comments with respect to the proposed

definition of "fugitive emissions," and

has determined that one change is

appropriate. Instead of defining fugitive

emissions as "those emission which do

not pass through a stack, chimney, vent,

or other functionally equivalent

opening," EPA believes that the term

should apply to "those emissions which

couldnot reasonably pass through a . stack, chimney; vent or other,

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functionally equivalent opening." This

change will ensure that sources will not

discharge as fugitive emissions those

emissions which would ordinarily be

collected and discharged through stacks

or other functionally equivalent

openings, and will eliminate

disincentives for the construction of

ductwork and stacks for the collectibn

of emissions. Emissions which could

reasonably pass through a stack,

chimney, vent, or other functionally

equivalent opening will be treated the

same as all other point emissions for

threshold calculation purposes.

In addition, in light of EPA's action

today deleting the fugitive dust

exemption (see Fugitive Dust

Exemption), EPA is finalizing the

proposed deletion of the existing

definition of "fugitive dust" at 40 CFR

51.24(b)(6) and 52.21(b](6) (1979).

VIII. Fugitive Dust Exemption

The 1978 PSD regulations provided

that "fugitive dust" from a major

stationary source or major modification

be excluded from air quality impact

assessment, 40 CFR 51.24(k)(5),

52.21(k)(5](1979). Because of its decision

regarding inclusion of fugitive emissions

in threshold chculations, and because it

questioned EPA's authority to establish

the exemption in the manner in which it

did, the court in Alabama Power

vacated EPA's generalized excemption

for fugitive dust and remanded it to the

Agency for further consideration. 13

ERC at 1231 and 13 ERC at 2017.

In response to the court's opinion,

EPA proposed deletion of the fugitive

dust exemption. It also proposed to

delete a parallel provision in the Offset

Ruling (44 FR 3274). The majority of the

public commenters directly opposed this

proposal. The primary reasons were that

fugitive dust allegedly has little impact

on health and that techniques of

evaluating its air quality impacts are

unreliable.

As indicated above, the Alabama

Power court vacated EPA's partial

exemption of fugitive dust from the

requirements of section 165 because the

exemption was premised on the

erroneous assumption that "the statute

of its own momentum subjects major sources of fugitive emissions to PSD

preconstruction review and permit

requirements" 13 ERC at 2017. However,

the court also expressed serious doubt

that EPA had the statutuory authority to

establish such an exemption by

regulation, because (1) section 165 does

not distinguish between fugitive

emissions and point emissions, but

applies "with equal force" to both types

of emissions, 13 ERC at 2016, and (2) in

the absence of explicit statutory

exemption authority, EPA's "general'

exemption authority is narrow in reach.

13 ERC at 2005-2010.

The court did outline, though, a

mechanism which it indicated is

available under the statutory scheme for

acccomplishing the objective of partially

exempting fugitive dust emitted by

major emitting facilities from the

requirements of section 165. That

approach would involve defining the

pollutant "particulate matter" "to

exclude particulates of a size or

composition determined not to present

substantial health or welfare concerns,"

13 ERC at 2018, n. 134, and then

regulating such "excluded particulates"

under section 111. Pursuant to section

109, EPA is currently reviewing the

criteria document for the particulate

matter NAAQS, and particle size is a

factor being considered in this review. If

the standard is revised, the rulemaking

requirements of section 307(d) will

apply.

EPA today is adopting its proposed

deletion of the existing "fugitive dust

exemption" and is deferring further

action on any such "exemption" pending

completion of the standard review

process.

IX. Source

A. Proposed Definitions of "Source"

In the 1978 PSD regulations, EPA

defined "source" as "any structure,

building, facility, equipment,

installation, or operation (or

combination thereof) which is located

on one or more contiguous or adjacent

properties and which is owned or

operated by the same person (or by

persons under common control)." The

Offset Ruling contained the same

definition of "source."

In its June 1979 opinion in Alabama

Power, the Court of Appeals rejected the

definition of "source" in the PSD

regulations. It concluded that Congress

intended section 111(a)(3) of the Act to

govern the definition of "source" for

PSD purposes. That section defines

"source" as "any building, structure,

facility, or installation which emits or

may emit any air pollutant." In defining "source," EPA used the terms

"building," "structure," "facility," and

"installation," but then added "equipment," "operation," and

"combination thereof." The court held

that EPA, in adding those terms,

exceeded its authority. It stated,

however, that the Agency has

substantial discretion to define one or

more of the four terms in section

111(a)(3) to include a wide range of

pollutant-emitting activities.

In its June opinion, the court also

focused on the clause "which is located

on one or more contiguous or adjacent

properties and which is owned or

operated by the same person (or persons

under common control)" The court held

that the approach, which that clause

embodied, of grouping pollutant-emitting

activities solely on the basis of

proximity and control is generally

acceptable, since the Agency had "evidenced an intention to refrain from

unreasonable literal applications of the

definition and instead to consider as a

single source only common sense

industrial groupings." 13 ERC at 1230.

In September 1979, EPA proposed to

define "building, structure, facility and

installation" for PSD purposes as "any

grouping of pollutant-emitting activities

which are located on one or more

contiguous or adjacent properties and

which are owned or operated by the

same person (or by persons under

common control)." As the preamble to

the September proposal explains in

detail, EPA concluded that the proposed

definition would serve the purposes of

PSD adquately by requiring review of

those major projects that would cause

air quality deterioration. At the same

time, the definition would operate to

avoid review of projects that would not

increase deterioration significantly. In

EPA's view, the dominant purpose of

PSD review is to maintain air quality

within the applicable increments.

In September, EPA proposed to define

the four component terms differently for

nonattainment purposes. Specifically,

the Agency proposed to define

"building, structure and facility" as it

had proposed to define them for PSD

purposes, and "installation" as "an

identifiable piece of process

equipment." One effect of that proposal

would be the application of

nonattainment requirements to a new

piece of equipment that would emit

significant amounts of a pollutant for

which the area had been designated

nonattainment, regardless of any

accompanying emissions offsets at the

plant. The preamble to the proposal

explained: "Unlike the PSD provision,

the nonattainment provisions are

primarily intended not merely to prevent

excessive increases in emissions, but to

reduce emissions. This fundamental

difference in purpose requires a

different approach to defining the

sources that will be subject to NSRt" 44

FR 51932. EPA proposed to apply this

definition to "incomplete" SIPs, i.e.,

those which did not demonstrate

attainment based exclusively on

currently approved requirements. Fully

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"complete" SIPs could, under EPA's

proposal, use the PSD definition.

In December 1979, the court issued its

final opinion on the 1978 PSD

regulations, which opinion superseded

the June 1979 opinion. In the December

opinion, the court reaffirmed its earlier

-conclusions that EPA must adhere to

section 111(a)(3) in defining "source" for

PSD purposes and that EPA has

discretion to define the component

terms "reasonably to carry out" the

purposes of PSD. 13ERC at 2039. The

court added that "a plant is to be

viewed as a source" and that the

Agency "should" provide for the

aggregation of polluting-emitting

activities "according to considerations.

such as proximity and ownership." Id. at

2039 and 2040. But it warned that "EPA

cannot treat contiguous and commonly

owned units as a single source unless

they fit within the four permissible

statutory terms." Finally, the court said

that any new definitions "should also

provide explicit notice as to whether

(and on what statutory authority) EPA

construes the term source, as divided

into its constituent units, to include the

unloading of vessels at marine terminals

and 'long-line' operations such as

pipelines, railroads, and transmission

lines. We agreed with Industry Groups

that EPA has not yet given adequate

notice as to whether it considers those

industrial activities to be subject to

PSD." Id. at 2040.

In January 1980, EPA solicited

comment on the September proposals in

light of the December opinion of the

court. 45 FR 6803. EPA specifically

asked for comment on whether factors

other than proximity and control, such

as the functional relationship of one

activity to another, should be used. The

Agency also asked for specific examples

of cases where a literal application of

the proposed definition would be

unreasonable.

B. PSD: Comments on Proposal and

Responses

Most commenters agreed that for PSD

purposes EPA should adopt definitions

of "building," "structure," "facility," and

"installation' that would aggregate

pollutant-emitting activities, instead of

definitions that would restrict one or

more of those terms to an individual

activity. One commenter, however,

argued that EPA should adopt for PSD

purposes the same definitions ofthose

terms that it had proposed to adopt for

nonattainment purposes. The,

commenter asserted that the decision of

the court inASARCO v. EPA, 578 F.2d

319 (D.C. Cir. 1978), required the Agency

to impose BACT on a new unit at a

plant, even if the unit would result in no

net increase in emissions. The

,commenter also asserted that.the Allencompassing definition * * * destroys

the intent of the PSD program by letting

opportunities for reducing increment

consumption disappear before control

technology standards (i.e., NSPS) can be

in place." (Emphasis addedJ

EPA has decided to adopt for PSD

purposes the sort of "all-encompassing"

definitions that the commenter opposed.

First in its December 1979 opinion in

Alabama Power, the court explicitly

held thatASARCO "does not prevent'

aggregation of individual units of a plant

Into a single source." la ERG at 2040.

Second, the dominant purpose of PSD

review is not to reduce increment

consumption, but rather to maintain air

quality deterioration below an

applicable increment A definitional

structure that aggregates pollutantemitting activities into one "source"

would serve that purpose, since it would.

allow only those changes at the "source" that would not significantly

worsen-air quality to escape review.

Some of the commenters who agreed

that each of the component terms of "source" should aggregate pollutantemitting activities also supported the

use of proximity and control as the sole

criteria for aggregating then. Most of

those commenters, however, objected to

the use of proximity and control as the

sole criteria, some on-the ground that

the proposed definitions would be too

inclusive and others on the ground that

the definitions would not be inclusive

enough.

The commenters who thought the

definitions would be too inclusive

asserted that they would group sets of

activities at one site and under common

control that are functionally or

operationally distinct. Typical of the

examples they gave are the following

activities at one site and under common

control: (1) a surface coal mine and coalburning electrical generators that the

mine supplies with coal; (2) a rock

quarry and theportland cement plant

that the quarry supplies with raw . material; (3) a primary aluminum ore

reduction plant, an aluminum

fabrication plant and an aluminum

reclamation plant; (4) a refinery, a

service station, a research laboratory, a

fertilizer factory, and a pesticide factory;

and (5) a uranium mill and an oil field.

With the language of the June 1979

opinion in mind, the commenters

contended generally that to group the

nominally different activities in each of

those examples would violate any

commonwsense notion of "plant." The commenters who thought the

proposed definitions would be too

inclusive suggested a wide range of

alternative definitions. For example, one

group proposed that activities at onlesite

and under common control should be

combined only if: (1) they share the first

three digits under the Standard

Industrial Classification Code of the U.S.

Department of Commerce, (2) they are

dependent upon or affect the process of

each other, (3) they use a common raw

product or produce a common product,

and (4) the proponent of the project In

question does not show that the

activities have entirely separate air

quality impacts.

The commenters who thought the

proposed definitions would not be

inclusive enough urged the Agency to

abandon control as a factor and adopt

function in its place. Some of them

described a plan by a group of

independent companies to construct

jointly a single coal-burning power plant

to replace oil-burning power plants at

various manufacturing sites belonging to

those companies near to the site of the

coal-burning plant. The commenters

contended that EPA should treat the old

plants and the new plant as being within

one "source ' so that the new plant

might escape PSD review. They argued

that the new plant would-not deteriorate

air quality, since presumably the

decrease in emissions from the

shutdown of the old plants would offset

the increase from the new plant, and

that to allow it fo escape review would

facilitate the national switch from oil to

coal.

After considering the comments of

those who objected to the use of

proximity and control only, EPA has

decided to adopt for PSD purposes a

definition of "building, structure, facility,

and installation" that is different from

the one it proposed in September, The

final definition provides that those

component terms each denote "all of the

pollutant-emitting activities which

belong to the same industrial grouping,

are located on one or more contiguous

or adjacent properties, and are under

the control of the same person (or

persons under common control).

Pollutant-emitting activities shall be

considered as part of the same industrial,

grouping if they belong to the same

'Major Group' (i.e., which have the same

two-digit code) as described In the

.Standard Industrial Classification

Manual, 1972, as amended by the 1977

Supplement (U.S. Government Printing

Office stock numbers 4101-0066 and

003-005-00176-0, respectively)."

In EPA's view, the December opinion

of the court in Alabama Power sets the

following boundaries on the definition

for PSD purposes of the component

terms of "source": (1) it must carry out

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reasonably the purposes of PSD; (2) it

must approximate a common sense

notion of "plant"; and (3) it must avoid

aggregating pollutant-emitting activities

that as a group would not fit within the

ordinary meaning of "building." "structure," "facility," or "installation."

The comments on the proposed

definition of "source" have persuaded

EPA that the definition would fail to

approximate a common sense notion of

"plant," since in a significant number of

cases it would group activities that

ordinarily would be considered as

separate. For instance, a uranium mill

and an oil field would ordinarily be

regarded as separate entities, yet the

proposed definition would treat them as

one.

In formulating a new definition of "source," EPA accepted the suggestion

of one commenter that the Agency use a

standard industrial classification code

for distinguishing between sets of

activities on the basis of their functional

interrelationships. While EPA sought to

distinguish between activities on that

basis, it also sought to maximize the

predictability of aggregating activities

and to minimize the difficulty of

administering the definition. To have

merely added function to the proposed

definition as another abstract factor

would have reduced the predictability of

aggregating activities under that

definition dramatically, since any

assessment of functional

interrelationships would be highly

subjective. To have merely added

function would also have made

administration of the definition

substantially more difficult, since any

attempt to assess those

interrelationships would have embroiled

the Agency in numerous, fine-grained

analyses. A classification code, by

contrast, offers objectivity and relative

simplicity.

EPA has chosen the classification

code in the StandardIndustrial

Classification Manual, 1972, as

amended in 1977 ("SIC'), because it is

both widely-known and widely-used.

EPA has also chosen to use just one set

of categories in the manual, those that

describe each "Major Group" in the

classification system and that bear a

two-digit classification number,

although the commenter who suggested

that EPA use such a code also suggested

that the Agency use the categories at the

three-digit level. On the one hand, the

two-digit categories are narrow enough

to separate sets of activities into

common sense groupings. In fact, most

of the nominally different sets of

activities in the examples given above

would fall into a different two-digit

category; only the fertilizer factory and

the pesticides factory would fall into the

same category. On the other hand, the

categories are broad enough to minimize

the likelihood of artificially dividing a

set of activities that does constitute a

"plant" into more than one group and

-the likelihood of disputes over whether

a set of activities falls entirely into one

category or another.

Each source Is to be classified

according to Its primary activity, which

is determined by its principal product or

group of products produced or

distributed, or services rendered. Thus,

one source classification encompasses

both primary and support facilities, even

when the latter includes units with a

different two-digit SIC code. Support

facilities are typically those which

convey, store, or otherwise assist in the

production of the principal product.

Where a single unit is used to support

two otherwise distinct sets of ictivities,

the unit Is to be included within the

source which relies most heavily on its

support. For example, a boiler might be

used to generate process steam for both

a commonly controlled and located kraft

pulp mill and plywood manufacturing

plant. If the yearly boiler output is used

primarily by the pulp mill, then the total

emissions of the boiler should be

attributed to the mill.

In adopting the new definition of "source," EPA rejected the requests of

those commenters who thought that the

proposed definition would not be

inclusive enough. As noted above, they

urged that EPA formulate a definition

that looked only to proximity aid

function. But such a definition by

looking to function would unnecessarily

increase uncertainty and drain the

Agency's resources. In addition, such a

definition would present groupings, such

as the example the commenters gave,

that would severely strain the

boundaries of even the most elastic of

the four terms, "building." "structure,"

"facility," and "installation."

Many commenters urged EPA to

clarify the extent to which the final

definition of those terms encompasses

the activities along a "long-line"

operation, such as a pipeline or

electrical power line. For example, some

urged EPA to add to the definition the

provision that the properties for such

operations are neither contiguous nor

adjacent. To add such a provision is

unnecessary. EPA has stated in the past

and now confirms that It does not intend

"source" to encompass activities that

would be many miles apart along a longline operation. For instance, EPA would

not treat all of the pumping stations

along a multistate pipeline as one

"source."

EPA is unable to say precisely at this

point how far apart activities must be in

order to be treated separately. The

Agency can answer that question only

through case-by-case determinations.

One commenter asked, however,

whether EPA would treat a surface coal

mine and an electrical generator

separated by 20 miles and linked by a

railroad as one "souce," if the mine, the

generator, and the railroad were all

under common control. EPA confirms

that it would not. First, the mine and the

generator would be too far apart.

Second. each would fall into a different

two-digit SIC category.

Three commenters focused on

whether and to what extent the

emissions from each ship that would

dock at a proposed marine terminal

should be taken into account in

determining whether the terminal would

be "major" for PSD purposes. One

commenter argued in effect that the

emhissions of each such ship that are

quantifiable and occur while the ship is

coming to, staying at or going from the

terminal should be taken into account.

In the view of that commenter, all of

those activities would be "integral" to

the operation of the terminaL Another

commenter asserted that none of the

emissions of any such ship should be

taken Into account, because ships are

mobile sources. The remaining

commenter contended that only the

emissions that- (1) come from a ship

which is under the proprietary control of

the owner or operator of the terminal

and (2) occur while the ship is atthe

dock should be included in an

applicability determination. That

commenter viewed the ability of the

terminal owner or operator to regulate

the behavior of a ship as the critical

consideration.

The permit requirements of the final

Part 52 PSD regulations apply to a

collection of pollutant-emitting activities

according to the "potential to emit" of

just those activities in that collection

which constitute a "stationary source."

Whether and to what extent the

emissions of ships that would dock at a

terminal are to be taken into account in

determining PSD applicability depends,

therefore, on whether and to what

extent the term "stationary source'" in

the final regulations encompasses not

only the activities of the terminal itself.

but also the activities of the ships while

they are coming to, staying at, or going

from the terminal.

The final definition of"building.

structure, facility, and installation"

resolves that question. EPA intends the

term "stationary source" under that

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definition to encompass the activities of

a marine terminal and only those •

dockside activities that would serve the

purposes of the terminal directly and

would be under the control of its owner

or operator. The term "dockside

activities" means those activities in

which the ships would engage while

docked at the terminal. While "stationary source" encompasses

combinations of activities, it is limited to

combinations that would be "stationary," that is, fixed to the

particular site. The activities of a

terminal itself would be stationary, but

all ship activities would not be. Only

those that would directly serve the

purposes of the terminal, such as

loading and unloading, would be

stationary since they alone would be in

a sense fixed to the particular site.

Hence, "stationary source"

encompasses the activities of a marine

terminal and only those dockside

activities that would directly serve its

purposes.

In addition, while "stationary source"

encompasses combinations of stationary

activities, it is further limited to those

that would locate on "contiguous or

adjacent properties." In EPA's view,

only dockside activities would be

located on "property" that is contiguous

or adjacent to the terminal. Next, "stationary source" is also limited to

those combinations of activities that

would-be "under the control" of one

person or one group of persons who are

themselves under common control.

Hence, "stationary source"

encompasses only the activities at a

terminal and those dockside activities

over which the owner or operator of the

terminal would have control. Finally, the

activities at a terminal and any such

dockside activities fall under a single

two-digit SIC category, namely "Water

Transportation" (number 44).

Whether a particular dockside

activitiy would directly serve the

purposes of a terminal and would be

under the control of its owner or

operator depends upon the .

circumstances of a specific situation.

Presumably, however, the activity of

loading or unloading a ship would in

every case directly serve the purposes of

the terminal andwould be under the

control of its owner or operator to a

substantial extent. In particular, the

Agency would expect that no loading or

unloading could occur without the

consent of the owner or operator and

consequently that the owner or operator

would set, or at least have a significant

say in the setting of, the schedule for

loading or unloading.

In adopting this interpretation of "stationary source," EPA in large

measure has rejected the arguments of

the commenters on the ship emissions

issue. First, to treat all of the activities

of a ship while it is coming to, staying at,

and going from a terminal would violate

any common sense notion of "building," "structure," "facility," or "installation."

To group just those activities occurring

at the terminal that are essential to its

functioning entirely comports with

common sense. Second, an activity such

as loading and unloading is certainly

stationary, even if the ships that engage

in it have mobility. Ships, moreover, are

not "mobile sources" within the meaning

of section 110[a)(5) of the Act, the

provision restricting indirect source

review. Finally, the fact that a terminal

owner or operator does not own a

particular ship does not mean that the

owner or operator has no control over

behavior of the ship at the terminal.

In deference to the position taken in

Alabama Power, EPA has decided to

treat the definition of "source" in the

1978 PSD regulations as not

encompassing any ship or ship activity.

As a result, ship emissions are not to be

taken into account at all in determining

whether a marine terminal is subject to

review under the 1978 PSD regulations.

A terminal which would not be subject

to review under the 1978 regulations if

ship emissions are not included in the

determination of potential to emit can

also be excluded from review under the

new regulations provided certain

conditions are met. These conditions are

that the owner or operator of such a

source has obtained each of the permits

required under the SIP for the terminal

before the date this notice appears in

the Federal Register and commences

construction on it within 18 months after

that date.

The final definition of the component

terms of "stationary source" differs from

the proposed definition in one

significant respect. The proposed

definition used the phrase "any grouping

of pollutant-emitting activities." The

final definition uses the phrase "all of

the pollutant-emitting activities." Taken

literally, the proposed definition would

haye referred not only to all of the

activities at a plant, but also to any

subgroup of those activities. EPA,

however, intended it to refer only to all

of the activities. The final definition

merely makes that explicit.

C. Nonattainment: Comments on

Proposal and Response

Many commenters objected to EPA's

proposed definition of "source" for

nonattainment areas. Several

commenters argued that there was no

statutory basis for the distinotion drawn

in the proposal between "complete" and

"incomplete" SIPs. Most of the

commenters further claimed that the

"dual definition" (i.e., treating a source

as both a plant and an individual piece

of process equipment at the plant) both

was illegal under the statute and

Alabama Power and was wrong as a

matter of policy.

The legal arguments presented by the

commenters fell into two broad

categories. First, they argued that the

dual definition really defined "source"

as a combination of surces, which had

been forbidden by both Alabama Power

and ASARCO. EPA therefore could, In

these commenters' view, define "source"

as either the entire plant or an

individual piece of process equipment,

but not both. These commenters opted

for the former approach.

The second legal argument challenged

EPA's contention that use of the plantwide definition would be improper in

nonattainment areas, because the

purpose of the nonattainment new

source review program is to reduce

emissions, not to hold emissions

constant. The commenters claimed that

the Act gives primary responsibility for

assuring reasonable further progress to

the states, and the states therefore can

choose whatever mix of strategies they

want to achieve reasonable further

progress. This suggested to the

commenters that EPA had no authority

to ban a plant-wide definition for new

source review if the state could

otherwise demonstrate reasonable

further progress.

Several commenters also pointed to a

variety of policy concerns which they

felt militated against EPA's proposed

dual definition. First, they argued that

the definition would discourage

technological innovation that could

actually reduce emissions, because

sources would be reluctant to modernize

for fear that such requirements as LAER

would be applied to them, In particular,

they felt sources would be unwilling to

retire old inefficient facilities and

replace them with efficient cleaner ones,

Second, some commenters claimed that

there was no point to reviewing a

facility where offsetting emissions could

be obtained, since on the whole ambient

air quality would not get any worse.

Finally, many commenters complained

that the definitional structure as a whole

was far too complex, and they urged

that EPA simplify the system both by

eliminating the distinction between

"complete" and "incomplete" SIPs and

by adopting one definition for both PSD

and nonattainment areas. Most

commenters preferred the PSD

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definition, although some urged that the

dual definition be used.

In revising the Offset Ruling in

January 1979, EPA adopted definitions

of "source" and "modification" which

had the effect of requiring any increase

greater than 100 tons in the potential to

emit of a plant to undergo

nonattainment new source review, even

if offsetting reductions at the plant were

to accompany the change. The effect of

the proposed definitions of "source" and

"modification" which are being

promulgated today would be basically

the same as those in the Offset Ruling.

Adoption of the proposed definitions

would constitute, therefore, a

continuation of an established approach

to nonattainment new source review.

The comments on the dual definition

have failed to persuade EPA that it

should abandon the established

approach at this time. As a result, the

agency has decided to adopt the dual

definition in each set of nonattainment

regulations. For the reasons given

below, EPA does not agree that the dual

definition is either illegal or unsound

from a policy standpoint. In addition,

the agency has decided that the dual

definition should be used regardless of

whether the SIP is complete or

incomplete. EPA agrees with the

commenters that there is little support in

the statute for defining "source"

according to the complete or incomplete

status of the SIP, and that the proposed

definition was complicated.

The dual definition, by defining

individual units as a "source," will bring

more units in for review in areas with

unhealthy air and thereby result in

reducing emissions from the status quo.

The legislative history of the Act

indicates that new source review was

intended to be an important tool in the

drive towards attainment of ambient air

quality standards. As the House Report

stated-

[Maximum pollution control from new

sources is necessary in order to permit room

for maximum potential economic growth. This is particularly true in light of the

requirement for reasonable further progress and the indications that emissions from many existing sources in nonattainment areas will

be increasing (due to fuel switching, natural

gas curtailments) or remaining static (due to

delayed compliance orders. et cetera).

Finally, the technology forcing purpose of the

act is best served by requiring maximum

feasible pollution control from these new

sources in dirty air areas. For all these

reasons, the committee adopted the

requirement for proposed new or modified

major stationary sources in nonattainment areas to meet the lowest achievable emission

rate requirement.

H. Rep. No. 95-294, 95th Congress, Ist

Sess. 215 (1977). In addition, after

hearing testimony that no steel sources

owned by five major steel companies

were in compliance, the House inserted

into section 173 a requirement that the

owner of a proposed source or

modification demonstrate that all other

sources owned, operated, or controlled

by him in the state are in compliance

with the applicable SIP. Id. at 210-213.

In this way, Congress meant to use new

source review as a means of cleaning up

existing sources as well

To realize this goal fully, Congress

intended that new source review be

applied to the greatest extent possible.

For example, Senator Muskle, in

presenting the Clean Air Act

Amendments of 1977 to the Senate,

spoke of reviewing "any physical

change which increases [emissions] * * ," and he went on to note:

Thus, [under the offset ruling and Part D

NSR requirements] a new source Is still

subject to such requirements as "lowest

achievable emission rate" even if it is

constructed as a replacement for an older

facility resulting In a new reduction from

previous emission levels. 123 Cong. Rec. at S

13702 (daily edition, August 4,19M7).

Since the dual definition would bring in

more sources or modifications for

review than would the plant-wide

definition used for PSD purposes

(including many replacement facilities

which would not be reviewed under a

plant-wide definition), use of the dual

definition clearly is more consistent

with Congressional intent

The dual definition also is consistent

with Alabama Power and ASARCO.

Alabama Power held that EPA had

broad discretion to define the

constituent terms of "source" so as best

to effectuate the purposes of the statute.

Different definitions of "source" can

therefore be used for different sections

of the statute. See 13 ERG at 2039. As

EPA discussed in detail in Its proposal,

the purpose of the nonattainment

provisions is to "positively reduce

emissions," not merely to hold emissions

constant. In addition, unrestricted use of

meeting emissions at an entire plant in

nonattainment areas would make

attainment more difficult, since many of

the limited number of cost-effective

opportunities to reduce emissions will in

fact be used to avoid review. See 44 FR

51932. The dual definition therefore

comports with the purposes of Part D of

the Act.

Moreover, Alabama Power and

ASARCO takentogether suggest that

there Is a distinction between Clean Air

Act programs designed to enhance air

quality and those designed only to

maintain air quality. InASARCO, the

Court of Appeals for the District of

Columbia Circuit struck down the

definition of "source" for new source

performance standards (NSPS), which

had employed a "bubble" concept. An

important element in the court's decision

was its belief that the "bubble" by

allowing sources to escape NSPS, was

inconsistent with the purpose of NSPS,

which was to improve air quality. See

578 F2d at 327-28. But in Alabama

Power, the same court held that for PSD

purposes, EPA must use a "bubble"

approach, precisely because PSI) is

designed to maintain air quality and

therefore deals with "a significantly

different regulation and statutory

purpose." 13 ERO at 2044.

Under this analysis, use of a plantwide definition to avoid new source

review would appear to be

inappropriate in nonattainment areas,

since the purpose of nonattainment SIPs

Is to improve existing air quality so as to

attain the ambient air quality standafds.

EPA therefore believes that it would be

more consistent with the purposes of the

Act not to permit states to choose a

plant-wide definition of source.

Promulgation of the dual definition

follows the mandate of Alabama Power,

which held that, while EPA could not

define "sburce" as a combination of

sources, EPA had broad discretion to

define "building," "structure," "facility,"

and "installation" so as to best

accomplish the purposes of the Act. 13

ERC at 2039. This holding contemplates

that one term (such as "building") may

be more inclusive than another term

(such as "installation"), and so a

"building" may include many

'Installations." In this way, a "source"

can, under Alabama Powe, be

composed of smaller "sources," yet not

be a combination of sources. The dual

definition fits into Alabama Power,

since under EPA's definitional scheme, a "source" is either an individual piece of

process equipment or the entire plant; it

is not a combination of sources. That is,

when deciding whether a source must

undergo new source review, the

reviewing authority must deteninine

whether there was a significant increase

in emissions at either a 'major"

individual piece of equipment or at the

plant as a whole. Wherever such an

increase occurs is a "source." Thus the

plant itself is a source, not a

combination of sources, although it may

contain smaller sources.

EPA recognizes that use of different

definitions for PSD and nonattainment

areas adds to the complexity of the

permitting process. But this additional

complexity Is outweighed by the need

for a more inclusive definition of source

in nonattainment areas in order to

assure attainment of standards.

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Although it is claimed that some

sources may not be willing to modernize

their facilities due to the perceived

added expense of LAER and the need to

demonstrate statewide compliance, EPA

believes that its approach is justified by the fact that the dual definition will

bring in more sources and modifications

for review and will require better

pollution control technology in

nonattaininent areas.10

EPA disagrees that iuse of a plantwide definition would allow a plant

with a new installation to achieve the

same emissions reductions as LAER, but

in a less expensive nianner by finding

offsets elsewhere in the plant. This

argument assumes that LAER is

markedly more costly than the

requirements that would otherwise

apply. EPA believes that its own past

actions, and those of the states, indicate

that LAER need not and is not generally

being interpreted in this manner.

EPA believes, and most commenters

agreed, that new facilities should install

state-of-the-art control technology. Such

a requirement is imposed by the Clean

Air Act for major new sources in PSD

areas (BACT), for major new sources in

nonattainment areas (LAER), and

whenever EPA has set new source

performance standards (NSPS). EPA

therefore intends to interpret the LAER

requirement in a reasonable manner, as

it believes it has in the past, and to take

a close look whenever LAER would be

substantially stricter than these other

requirements. EPA intends that its interpretation of

"building, structure, and facility" be

identical to that for "building, structure,

facility, or installation" used for PSD

purposes.

11

X. Modification

This section discusses the final PSD

and nonattainment definitions of "major

modifications" and "net emissions

increase" which EPA is promulgating in

this notice. The section first describes

those final provisions. It then focuses on

each of their major aspects, giving in - particular the relevant proposal, the

comments on it and EPA's responses.

An example of how the definitions work

appears at the end of the section. The

'

0Contrary to one commenter's argument, EPA

believes that the dual definition will not cause sources to locate In clean areas. Any such source would be subject to PSD review in any event.

11 One commenter requested EPA define "source as one emitting the criteria pollutants, and not "any

pollutant regulated under the Act." EPA has decided

to retain its definition, since It comports with

section 302(j) of the Act. However, pursuant to

section 172(b)(6), EPA will require new source revlbw permits only for those pollutants for which an area has been designated nonattainment and for

which the source Is major.

section also discusses a provision which

appears in the PSD and nonattainment

definitions of "major stationary source,"

but which stems from the final

formulation of "major modification."

That provision establishes that a

physical change at a "minor" stationary

source which change by itself would

constitute a "major stationary source"

shall be treated as a "major stationary

source."

A. .Final Definitions of "Major

Modification" and "Net Emissions

Increase"

With the. final amendments

announced here, the Part 51 and Part 52

PSD regulations now define "major

modification" as any 'hysical change"

or "change in method of operation" tt a

major stationary source which would

result in a 'ignificant net emissions

increase in any pollutant subject to

regulation under the Act. See

§§ 51.24(b)(2) and 52.21(b)(2).

While the ne* PSD regulations do not

define "physical change" or "change in

nmethod of operation," they provide that

those phrases do not encompass certain

specific types of events. Those types

are: (1) routine maintenance, repair and

replacement; (2] a fuel switch due to an

order under the Energy Supply and

Environmental Coordination Act of 1974

(or any superseding legislation] or dde

to a natural gas curtailment plan under

the Federal Power Act; (3) a fuel switch

due to an order or rule under section 125

of the Clean Air Act; (4) a switch at a

steam generating unit to a fuel derived

in whole or in part from municipal solid

waste; (5) a switch to a fuel or raw

material which (a) the source was

capable of accommodating before

January 6, 1975, so long as the switch

would requireno change in any

preconstruction permit condition

established after that date under the SIP

(including any PSD permit condition) or

(b) the source is approved to make

'under a PSD permit; (6) any increase in

the hours or rate of operation of a

source, so long as the increase would

require no change in any

preconstruction permit condition

established after January 6, 1975 under

the SIP; and (7) a change in the

ownership of a stationary source.

The new PSD regulations define "significant" in terms of de minimis

thresholds for each pollutant subject to

regulation under the Act. Those

thresholds appear in §§ 51.24(b)(21) and

52.21(b)(21). For example, the threshold

for sulfur dioxide is 40 tons per year. A "net emissions increase" in sulfur

dioxide below that level is not "significant." For a fuller discussion of

the thresholds, see the section entitled

De Minimis Exemptions.

Finally, the new PSD regulations

contain definitions of "net emissions

increase," which appear as

§ § 51.24(b)(3) and 52.21(b) (3) Under

those definitions, "net emissions

increase" denotes the positive sum of

any increase in "actual emissions" from

a particular physical or operational

change at a source and any other

increases and decreases in "actual

emissions" that are contemporaneous

,with the particular change and

otherwise creditable.

The first step in determining whether

a "net emissions increase" would occur

is to determine whether the physical or

operational change in question would

itself result in an increase in "actual

emissions." If it would not, then It could

not result in a "net emissions Increase,"

If it would, the second step is to Identify

and quantify any other prior increases

and decreases in "actual emissions" that

would be contemporaneous with the

particular change and otherwise

creditable, The third Qtep, finally, is to

total the increase from the particular

change with the other contemporaneous

increases and decreases. If the total

would exceed zero, then a "net

emissions increase" would result from

the change.

The definitions of "net emissions

increase" specify which increases and

decreases in "actual emissions" are

contemporaneous, Under the definition

in the Part 52 PSD regulations, increases

or decreases are contemporaneous with

a proposed change only if they occur

between two dates: first, the date five

years before construction "commences"

on the proposed physical or operational change in question and, second, the date

the increase from that change "occurs."

An increase from a physical change "occurs" when the affected emissions

unit becomes operational and begins to

emit a particular pollutant. Any unit that

requires shakedown becomes

operational only after a reasonable

shakedown period (not to exceed 180

days). Under the definition in the Part 51

regulations, a state in revising its SIP

may set a period other than the five-year

period of the Part 52 regulations to

define what is contemporaneous and

what is not, so long as the period Is not

unreasonably long. The definitions of "net emissions

increase" in the PSD regulations also

specify which contemporaneous

increases and decreases in "actual

emissions" are creditable. A

contemporaneous increase or decrease

is creditable only if the relevant

reviewing authority has not relied on it

in issuing a PSD permit for the source,

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and that permit is still in effect when the

increase in "actual emissions" from the

particular change occurs. A reviewing

authority "relies" on an increase or

decrease when, after taking the increase

or decrease into account, it concludes

that the proposed project would not

cause or contribute to a violation of an

increment or ambient standard. A

contemporaneous increase or decrease

in "actual emissions" of sulfur dioxide

or particulate matter that occurs before

the applicable baseline date is

creditable only if, in addition, it is

required to be considered in calculating

how much of a particular increment

remains available.

Finally, the definitions of "net

emissions increase" in the new PSD

regulations specify the extent to which

any contemporaneous and otherwise

creditable increase or decrease is

creditable. Any such increase is

creditable to the extent that the new

level ef "actual emissions" exceeds the

old level of "actual emissions." Any

such decrease is creditable only to the

extent that (1) the old level of "actual

emissions" (or the old level of

"allowable emissions," if it is lower)

exceeds the new level of "actual

emissions," (2) the decrease is federally

enforceable at the time construction

begins on the proposed physical or

operational change which it is intended

to offset, and (3) the decrease has

roughly the same health and welfare

significance as the increase from the

proposed change.

Under the final PSD regulations, the

phrase "actual emissions" means the

rate at which an emissions unit actually

emits a particular pollutant. See

§§ 51.24(b)(21) and 52.21(b)(21). In

general, that rate as of a particular date

equals the average rate in tons per year

'at which the unit actually emitted the

pollutant during a two-year period

which precedes the particular date and

is representative of normal source

operation. The reviewing authority may

presume that any "source-specific

allowable emissions" for the unit is

equivalent to the actual emissions of the

unit. For any unit which has yet to begin

normal operations on the date in

question, its actual emissions equal its

"potential to emit" on that date. For a

fuller discussion of the concept of "actual emissions" and in particular of

what constitutes "source-specific

allowable emissions," see the section on

Increment Consumption.

The final PSD regulations also

describe in detail the concept of

"allowable emissions." See

§ § 51.24(b)(16) and 52.21(b)(16). That

phrase means in essence the maximum

rate at which an emissions unit under

the most stringent of certain legal

constraints may emit a particular

pollutant. The legal constraints are (1)

any applicable standards in 40 CFR

Parts 60 and 61, (2) any applicable SIP

limitations, including any with a future

compliance date, and (3) any applicable

condition in a permit issued under the

SIP that is federally enforceable, also

including any condition with a future

compliance date.

The final amendments to the Offset

Ruling, 40 CFR 51.18 and 40 CFR 52.24

which are announced here also include

new definitions of "major modification," "significant," "net emissions increase," "actual emissions," and "allowable

emissions." In general those definitions

follow the pattern of the PSED definitions,

Only the definitions of "net emissions

increase" in those nonattainment

provisions vary significantly. They add

that a decrease in "actual emissions"

which is contemporaneous with the

increase in question may be credited

only if and only to the extent that the

relevant permitting authority has not

already accepted it as a satisfactory "offset" in issuing a preconstruction

permit under the SIP.

B. No Net Increase

The Alabama Power decision rejected

EPA's regulatory approach of requiring

PSD review of potential emissions

increases at existing stationary sources

only when such increases would equal

or exceed the 100/250 ton threshold

used in the review of new sources. It

held instead that a change in a major

stationary source is subject to review

only if it would result in any significant

net increase. In response, EPA proposed

on September 5,1979, an approach that

would subject to new source review

(NSR) under the relevant PSD or

nonattainment provisions only each

significant net increase that would occur

in the potential to emit or a major

stationary source. Under the proposal, a

significant net increase was to be an

overall increase in the potential to emit

of the source equal to or greater than a

pollutant-specific emissions cutoff (see

De Minimis Exemptions), taking into

account contemporaneous emissions

increases and decreases at the same

source. An exception to this general rule

of netting contemporaneous increases

and decreases was to be the case of

construction restrictions under sections

110(a)2)(1) and 173(4). There,

accumulated increases would count

toward triggering the growth

prohibitions, without regard to any

contemporaneous reductions occurring

at the same source.

Public comment supported this

proposal (except with respect to the

construction restrictions) as the clear

and proper interpretation of the

Alabama Power decision. Sixty-two of

sixty-three commenters endorsed the

general netting approach to modification

taken in the proposal, although several

took Issue ith certain of the specific

rules relating to the concept (see

discussion below). Several commenters

felt that requiring any significant net

increase to undergo review was too

strict on existing sources as compared

with new sources, since new sources

can emit up to 100/250 tons per year and

still not be subject to review. The terms

of the Act and the court decision

preclude allowing such a general

exemption for existing sources. Pursuant

to Alabama Power, the Administrator is

today promulgating the netting concept

for determining the review applicability

of changes at existing major stationary

sources (consistent with each program's

definition of source). This promulgation

affects regulations for PSD (40 CFR 52.21

and 40 CFR 51.24), nonattainment NSR

(Emissions Offset Interpretative Ruling

and 40 CFR 51.18(j), Review of New

Stationary Sources and Modifications),

and the construction restrictions under

sections 110(a](2]W1] and 173(4), (40 CFR

52.24, Statutory Restriction on new

Stationary Sources). Allowance of

netting for determining the applicability

of 40 CFR 52.24 is a change from the

proposal and is discussed below.

C. Pollutant Applicability

EPA proposed to require

preconstruction review only if the

increase in potential to emit would be

for a pollutant which the source emits in

major amounts. Once an increase in the

major pollutant triggered PSD review

then review would be required for all

regulated pullutants emitted in greater

than de minimis amounts as a result of

the modification. Review would also be

required if the emissions change itself

were equivalent to a majorstationary

source.

Only limited comment was received

on EPA's proposal to require review

where major changes in emissions of

minor pollutants or greater than de

minimis changes in emissions of a major

pollutant would occur. While a few

groups endorsed the September 5

proposal, one group argued that

Alabama Power did not restrict PSD

applicability to just modifications

involving the pollutant[s) which the

source emits in major amounts. That

group pointed out that section 111(a)(4)

of the Act defines "modification!' as "any physical change in. or change in

the method of operation of, a stationary

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source which increases the amount of

any air pollutant emitted by such source

or which results in the emissions*of any

air pollutant not previously emitted."

(Emphasis added.)

.The Administrator agrees that

requiring review for a net emissions

increase in any pollutant subject to

regulation under the Actis consistent

with the Alabama Power decision.

Consequently, EPA is promulgating a

final rule that requires PSD

preconstruction review for net emissions

increases in greater than de minimis

amounts at a major stationary source for

any pollutant subject to regulation under

the Act emitted by the source,

regardless of whether the source is

major for that pollutant.

The Administrator is not changing the

September 5 proposal with respect to

pollutant applicability in nonattainment

areas. See Geographic and Pollutant

Applicability. The source must be major

for the nonattanent pollutant(s) and

must make a greater than de minuzmis

emissions change in such a pollutant in

order to trigger nonattainment review

for that pollutant(s). A PSD review,

however, would be triggered if a greater

than de minimis change occurs at that

major source for any regulated pollutant

emitted by the source other than the

nonattainment pollutant(s).

D. Netting of Actual Emissions

EPA proposed on September 5 that an

activity be deemed a major modification

when the "potential to emit" of the

major stationary source experiences a

net increase greater than a de mninis

amount, taking into account all

contemporaneous changes. EPA also

proposed that a reduction would be -

creditable only if the physical capability

of the source to emit a pollutant were

actually reduced. In addition, where "allowable emissions" for a source, as

defined in. the 1978 PSD regulations and

the Offset Ruling would be less than its "potential to emit," no credit would be

given for reducing potential emissions to "allowable emissions." "Allowable

emissions," as defined in those

regulations, meant the emissions rate

calculated using the maximum ratedcapacity of the source and is

represented by the most stringent than

any of the following: (1) any applicable

standards in 40 CFR Parts 60 and 61; (2)

any applicable SIP emissions

limitations; and (3) any emissions rate

specified as a permit condition under

the SIP. The applicable SIP limitation in

the case of designated nonattainment

areas included the emissions rate that

was assumed for the source in the

attainment demonstration and in the

schedule for making reasonable further

progress.

Forty of forty-two commenters

favored an allowable emissions,

baseline, for determining whether anet

emissions increase would occur, instead

of one using "potential to emit" The

other two commenters endorsed EPA's

proposal. Many also complained of the

different criteria for determining

"potential to emit" from new and

existing sources. (Under the proposal,

"allowable emissions" and physical

incapability could have constrained the "potential to emit" of existing but not

new stationary sources.)

There are problems with using a

baseline for netting that is based on the

existing source's "potential to emit." A

computation of an existing source's

potential emissions could give a figure considerably higher than what it is

actually emitting. This would be

especially true if the source operated

only a small part of'the time or used

considerably cleaner fuels than it is

allowed to burn.Such an approach

would therefore create a "paper offset"

that could permit actual air quality to

deteriorate seriously, while the change which increased actual emissions

avoided NSR. Similarproblems would

arise if offsets were based on allowable

emissions, as recommended by most

commenters. -

In the June 1979 opinion in Alabama

Power, the court held that the definition

of "modification" in section 111(a)(4)

governs the definition of that term for

PSD purposes. Section 111(a) provides

that a "modification" is "any physical

change in, or change in the method of

operation of, a stationary source which

increases the amount of any air

pollutant emitted by such source or

which results in the emissions of any air

pollutant not previously emitted."

(Emphasis added.) Although the

uiderl'ned words in the definition

appear to refer to what the source is'

actually emitting at a particular time, the

court in the June opinion described the

concept of "modification" in terms of

changes in the "potential to emit" of a

source. As a result, EPA proposed

definitions which also referred to

changes in "potential to emit."

In its December 1979 opinion,

however, the court used an entirely

different set of terms to describe

"modification." Instead of using "potential to emit," it used language

which, like the section 111(a)(4)

definition, suggest changes in actual

emissions. For example, at one point the

court states: "If these plants increase

pollution, they will generally need a

permit. Exceptions to this rule will occur

when the increases are de minimis, and,

when the increases are offset by

contemporaneous decreases of

pollutants, as we discuss below *

(Emphasis added.)

Following the lead of the court, EPA

has also shifted the focus of its

regulatory definitions from "potential to

emit" to "actual emissions." For both

PSD and nonattainment purposes, a "major modification" is now any

significant "net emissions increase" at a

major stationary source that results from

certain changes. "Net emissions

increase" is, in turn, roughly any net

increase in "actual emissions." Not only

-are those definitions consistent with the

court's view of section 111(a)(4), but

they also avoid the "paper offset"

problem described above, thereby better

serving PSD and nonattainment

purposes.

E. Contemporaneous Increases and

Decreases

Under Alabama Power, a modification

is any net increase in emissions that

would result form "contemporaneous"

changes at a major stationary source,

The court decision left to EPA the task

of defining what changes should be

considered "contemporaneous."

A narrow interpretation of the term "contemporaneous" would restrict

creditable decreases in emissions to

those occurring at the same time as the

emissions increases to be offset. The

administrator decided against proposing

such an interpretation, since it might

promote the continued operation of old

or obsolete equipment in order to

preserve offset credit. Instead, EPA

proposed a system that would grant

credit for any post-promulgation

emissions reduction and for certain propromulgation emissions reductions

involving recent shutdowns or

production curtailments. In order to be

creditable, the reductions were to be

enforceable before operation of the - emissions unit(s) that would result in the

emissions increases (except that a 180-

day shakedown period could be granted

-for replacements). A preconstruction

notice was also proposed as a

mandatory means to record any

reduction credit. (For a discussion of

that proposed notice requirement, see

the section entitled Notification.)

On January 30, 1980 (45 FR 6802), EPA

solicited additional comment on its

proposal for "contemporaneous." In

particular, the Administrator asked

whether a three-year time limit should

be imposed for qualifying reductions as "contemporaneous." The proposed

three-year time cap would have run

from the time.of the emissions reduction

to the time that the source would have

filed any necessary permit application

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for the prospective emissions

increase(s). Where a permit would have

not been required, the reference time

would instead be the date on which

construction commenced on the change

resulting in the emissions increase.

Several comments were received on

the September 5 proposal. Many

confused the dates for accumulation at

minor stationary sources (see discussion

below) with the time limits for "contemporaneous" changes at major

stationary sources. The majority of

commenters on the January 30 Federal

Register notice were from the industrial

sector and they urged EPA to treat any

emissions decrease which occurs before a proposed increase as being

"Contemporaneous" with that increase.

EPA however, has rejected those

urgings. To credit any decrease that

occurs before a proposed increase

would violate any common sense notion

of what is "contemporaneous," since a

period of contemporaneity must have

some definite boundaries.

EPA agrees with those industry

commenters, however, to the extent that

they contended that the period of

contemporaneity should be fairly large.

In particular, EPA believes that the

period should be wide enough so as to minimize any incentive for keeping old

or obsolete equipment in operation

beyond its usefulness. As a result, EPA

has set five years, plus time for

construction, as the period of

contemporaneity for the purposes of the

Part 52 PSD regulations, the Offset

Ruling and the construction moratorium.

Specifically, the definition of "net

emissions increase" in each of those

regulations provides that a decrease in

"actual emissions" may be credited only

if it occurs between the date five years

before construction "commences" on a proposed physical or operational change

and the date the increase in "actual

emissions" from that change occurs. A

five-year limit was selected for those

regulations rather than a three-year

value, since five years is frequently used

as the time duration over which

corporate expansion planning is

conducted.

For the purposes of the Part 51 PSD

and nonattainment regulations, EPA has

established that each state may set the

period of contemporaneity for its own

NSR regulations. The state may not,

however, set a period of unreasonable

or undefined length.

F. Otherwise Creditable Increases and

Decreases

Whether an increase or decrease in

"actual emissions" is creditable for PSD

or nonattainment purposes depends, not

only on whether it is contemporaneous

with the increase in question, but also

on certain other factors. First, under

each of the PSD and nonattainment

definitions, a prior increase or decrease

is creditable only if the relevant

reviewing authority has not relied upon

it in issuing a permit under the relevant

NSR program. As stated earlier, a

reviewing authority "relies" on an

increase or decrease when, after taking

the increase or decrease into account, it

concludes that the proposed project would not cause or contribute to a

violation of an increment or ambient

standard. The purpose of that rule is to

"wipe the slate clean." Once the

reviewing authority has evaluated a

significant net increase in issuing an

NSR permit the net increase should not

be a factor in deciding whether

subsequent events should undergo

scrutiny, too.

Second, under the PSD definition of "net emissions increase," an increase or

decrease in actual emissions of sulfur

dioxide or particulate matter which

occurs before the baseline date is

creditable only if it would be considered

in calculating how much of an increment

remains available. In formulating that

definition, EPA sought to establish as

close a correspondence as possible

between what consumed increment and

what must undergo NSR for PSD.

Without that rule, some changes that

would consume increment could escape

review because of a prior decrease that

was subsumed in the baseline

concentration. In addition, without that

rule, some changes that wouldnot

consume increment could have to

undergo review because of a prior

increase that was also subsumed in the

baseline concentration.

0. The Extent to Which Increases and

Decreases are Creditable

Each of the definitions of "net

emissions increase" in the PSD and

nonattainment regulations contains

provisions which govern the extent to

which a creditable increase or decrease

in "actual emissions" may be credited.

The rules in each of those definitions

relating to increases are simple. An

increase is creditable to the extent that

the new level of "actual emissions" at

the emissions unit in question exceeds

the old level. The old level of "actual

emissions" is that which prevailed just

prior to the physical or operational

change which caused the increase. The

new level is that which prevails just

after the change.

The rules relating to decreases that

are common to each of the definitions

are more complex. First. a decrease is

creditable only to the extent that "the

old level of actual emissions or the old

level of allowable emissions, whichever

is lower exceeds the new level of actual

emissions." (Emphasis added.) Since

"allowable emissions" encompasses any

federally enforceable requirement.

including any with a future compliance

date, the underlined language prevents a

company from taking credit for

decreases that it has had to make or wll

have to make in the future. EPA

concluded that to give credit for a

decrease a company has had to make in

order to bring an emissions unit into

compliance was unwise, since together

with the five-year "contemporaneous"

period it would create an incentive to

stay out of compliance. Furthermore, it

would be contrary to the purposes of the

Act and good sense to provide what is

in essence a benefit for recalcitrance.

Similarly, EPA concluded that to give

credit for a decrease a company will

ultimately have to make anyway in

order to meet a requirement by a certain

date would also be unwise, since it

would encourage procrastination.

Further, allowing decreases which fulfill

preexisting requirements to be used to

avoid review would undermine the

purposes of the PSD and nonattainment

programs by interfering with efforts to

preserve or achieve attainment.

Second, a decrease is creditable only

to the extent that it is "federally

enforceable" from the moment that

actual construction begins on the

physical or operational change which

causes the "actual emissions" increase

in question. The purpose of that rule is

to ensure that the decrease is real and

that it remains in effect. The term

"federally enforceable" is defined in the

regulations as any limitation or

conditions which EPA can enforce, such

as any permit requirements established

pursuant to 40 CFR 52.21 or under

regulations approved under 40 CFR 51.18

and 40 CFR 51.24.

Finally, a decrease is creditable only

to the extent that it has the same health

and welfare significance as the

increases in question. By this provision,

EPA seeks mainly to prevent an

increase in emissions with considerable

health and welfare significance from

escaping review merely because of a

contemporaneous decrease in less

harmful emissions. The basic health and

welfare protection purposes of the Act

mandate this provision.

The definitions of 'net emissions

increase" in the nonattainment

regulations contain a restriction on

crediting decreases that the PSD

regulations do not contain. Specifically,

they provide that a permitting authority

may not credit a decrease to the extent

that any permitting authority has

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already accepted the decrease in

satisfaction of the offset requirements of

the applicable nonattainment

regulations and consequently has issued

a preconstruction permit to any source

or modlification, including the source at

which the decrease occurred. The

purpose of that rule is to prevent any

"double crediting" of decreases in "actual emissions." Double crediting

would allow air quality to deteriorate

without prior review.

EPA is considering whether to

introduce a provision to prevent double

crediting in the PSD context. A

discussion of the problem appears in the

section on Increment Consumption. -

H. Accumulation

On September 5,1979, EPA proposed

to continue the current policy of

requiring PSD and nonattainment NSR

when aggregate new emissions from

individually minor units at the same

stationary source, which itself was

minor as of a certain date, are sufficient

to require the series of changes to be

treated as a major stationary source. In

addition, the Administratofrproposed to

make the current policy consistent with

the Alabama Power decision by applying NSR when the aggregate net

increase in potential to emit after the

applicable date qualifies it as a major

stationary source (the existing rules

accumulate only emissions increases

and do not take decreases in account).

For PSD review, the date from which

emissions increases were to be

aggregated was August 7,1977, the date

found in the 1978 PSD regulations. The

proposed December 21, 1976 date for

each of the nonattainment regulations,

including the construction moratorium,

marks the time when sources

constructing in nonattainment areas

were placed on notice that accumulation

could later subject them to review.

EPA also proposed that, once a series

of individually minor changes or one

major change at a minor stationary

sourcb had qualified for review, the

control technology assessment would

focus on the last changed unit triggering review while the air quality assessment

would consider all aggregated

emissions.

Finally, the Administrator proposed

on September 5 that accumulation

would also govern the review of

individual de minimis changes at major

stationary sources. Once a source had

aggregated enough emissions to make it

major, a subsequent emissions increase

of any size at the source would have to

undergo review, unless the increase

together with any contemporaneous

increases or decreases of any size

would qualify as a de minimis increase..

, Twenty of the twenty-three comments

received did not favor retaining the

accumulation concept, even with theaddition of netting. Two other

commenters endorsed accumulation, but

with different starting dates. Two

industrial commenters claimed that

accumulation cannot be legally required,

since section 111(a)(4) defines

modification in terms of any change and

not a series of changes at a stationary

source. Most other commenters agreed

that neither the court nor the Act takes a

position on accumulation, but they

requested that the Agency not adopt or

maintain such a concept. These

commenters claimed that both major

and minor source accumulation

complicates the regulations and could

eventually subject the most minor of

emissions changes to r'eview. The

increase in paperwork, and the

administrative strain of trying to

document and report de minimis

emissions changes, were claimed to be

overwhelming, costly, and

counterproductive.

Thdse concerns might have had merit

if the proposed de minimis emission

levels had not been raised in the final

regulations and the accumulation of de

minimis changes was to continue even

after a preconstruction permit had been

issued. It was suggested that the general

NSR'procedures found in all SIPs be

relied upon to effect good control for the

de minimis or minor emissions changes,

instead of accumulation. Commenters

stressed that, in any event,

accumulation of de minimis increases

should run over the same time period for

crediting contemporaneous reductions.

The Administrator has reconsidered

the need for an accumulation rule and

has decided to retain accumulation to

determine if a greater than de minimis

increase would occur at a major

stationary source and to delete

accumulation for aggregating changes at

minor stationary sources. The primary

reason for proposing accumulation at

minor sources was to prevent

circumvention of the regulations by the

systematic construction of cf.refully

sized emissions units which only in the

aggregate would trigger review. Even

though all signficant changes at a source

would face reveiw once the source

became major, a significant loophole

was thought to exist. For example,

absent an accumulation rule, a company

could construct a 498-ton source without

havingto get a PSD permit by

constructing first one-half of it and then

subsequently the other half. The

Administrator, however, does not find

adequate support in the Act for applying

PSD review to the change at a minor

source which would make the source

major. Section 165 applies only to major

emitting facilities on which "construction" commences after a

specified date, where the term "construction" includes "modification."

Similarly, section 172(b)(6) requires

permits for the construction of new or

modified major stationary sources. EPA

believes that, in general, PSD and

nonattainment review cannot be applied

to a modification unless A would occur

at a source that is already major. The

one exception'to this rule is where a

proposed addition to an existing minor

staionary source would be major In its

own right. Such construction is

equivalent to a new major stationary

source and should therefore be subject

to PSD and nonattainment review. A

new subsection in each of the PSD and

nonattainment regulations embodies

that view.

In general, under the promulgation

announced here a series of minor

changes at the same minor stationary

source will not be accumulated. On the

other hand, a series of individually do

minimis changes at a major stationary

source would be accumulated within a

contemporaneous time frame to see If a

review would be required, This is

reflected in the definitions of "net

emissions increase" in the PSD and

nonattainment regulations. Plainly, a

series of individually de minimis

increases in emissions in the aggregate

deteriorate air quality significantly.

L Restrictions on Construction

EPA proposed that the netting of

emissions changes would not be

permitted in areas subject to

construction restrictions under section

110(a)(2)(I) or 173(4). EPA based this

proposal on an interpretation that

Congress intended all forms of offsets to

cease after June 30, 1979, in the absence

of an approved Part D plan, This policy would also have promoted the timely

submittal of attainment plans and

prevented the nonattainment problem

from growing worse while the plan was

being developed. The Administrator

believed that sources might convert

reductions later needed for attainment

into offsets before the plan requiring

those reductions could be adopted and

approved.

Thirty-two of thirty-five commenters

said that the proposed "increase only"

approach was unacceptable. No

substantial support was giveil by the

three that favored it Several questioned

the legality of the proposed

interpretation and claimed that

Alabama Power authorized only a

netting approach, despite any

programmatic sense that another

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approach might have. Several asserted

that EPA's proposal would discourage

early cleanup and actually perpetuate

the existing air quality problem.

The Administrator has reconsidered

the interpretation that led to the

proposal of the "increase only"

approach for carrying out the growth

restrictions and concluded that the

Alabama Power decision does not

support it. Thus, in the final rules

promulgated today, a major stationary

source can construct in a growth

restricted area, if sufficient

contemporaneous, creditable net

reductions are found (subject to the

limitations on reconstruction described

below).

.Reconstruction

In the September 5,1979 proposal, a

reconstruction (roughly, improvements

at an existing source which equal 50% or

more of the capital cost for replacing the

source) was to be treated as if it were a

new source for purposes of NSR under

both PSD and nonattainment rules.

Under the proposal, a reconstructed

major stationary source would be

subject to review regardless of any

contemporaneous emissions reductions

that would occur at the same source.

The Administrator proposed this

approach in accordance with

Congressional intent to subject new

construction in nonattainment areas to

requirements such as meeting the lowest

achievable emission rate (LAER). even

though a replacement of an older unit

would result in a net reduction from

previous emission levels (see 123

CONG. REC. 13702, col. 2 (daily ed.

August 4,1977) (statement of Senator

Muskie)). In the agency's view

nonattainment areas require very

stringent NSR Procedures to overcome

the inertia of the nonattainment

problem. Having a reconstruction

provision would promote maximum air

quality improvements from an area's

limited reduction capability by requiring

more construction projects to meet

LAER and bring other sources in the

State under common control into

compliance with the SIP.

The reconstruction rule was also

proposed for PSD in an effort to be

consistent with nonattainment NSR.

Although the Administrator recognized

that the air quality rationale for having

reconstruction in nonattainment areas

was considerably stronger than that for

PSD inclusion, it was believed that less

confusion would result with a parallel

application of the reconstruction rule.

All ten commenters on the

reconstruction topic voiced general

disapproval for the proposal. Eight of

the ten favored dropping the concept

entirely from both sets of regulations,

with the remaining two requesting that

its applicability be restricted. They

advised that EPA should rely instead on

the reconstruction provisions of NSPS

and NESHAP to ensure such

construction would apply adequate

control technology. Commenters

complained that review criteria based

solely on the replacement cost of

equipment regardless of air quality

improvements make little sense for NSR

rules charged with safeguarding air

quality. They further argued that the

added regulatory complexity inherent to

the inclusion of a reconstruction

provision was not warranted and its

addition to NSR would not be consistent

with the "no net increase" exemption

under Alabama Power.

The Administrator agrees that the

reconstruction requirqment makes only

limited air quality sense for PSD and has

reconsidered the need to retain this

concept for the program. It Is true that a

reconstructed source not otherwise

subjected to PSD review as a major

modification (i.e., such source would not

cause a significant net emissions

increase) would not interfere with the

PSD air quality objective of allowing

only limited deterioration of existing air

quality. On the other hand, the PSD

objective of maximizing future use of the

allowable increments through

application of best available control

technology (BACT) would not be strictly

met Nevertheless, the Administrator

believes that the general PSD objective

of safeguarding existing air quality from

significant degradation will not be

undermined by deleting the requirement

for review of reconstructions.

The proposal would have

implemented reconstruction for PSD

only on a plant wide basis. Thus, an

entire plant would have to be

reconstructed in order for it to be

subjected to PSD review as a

reconstruction. Few instances of

plantwide reconstruction are expected.

The limited applicability under PSD

brings further doubt as to the real need

for the added complexity that a

reconstruction provision would bring to

determining the permit applicability of

construction projects. Furthermore, the

deletion of reconstruction from PSD

would avoid some increment tracking

problems; treating reconstruction as

new PSD sources could lead to

increment consumption unrelated to

actual air quality changes.

The Administrator does not agree

with the commenters who argued that

applying "reconstruction" in

nonattainment areas would bring

unwarranted complexity and no air

quality benefits. As explained in the

proposal. EPA believes that the

reconstruction provision within

nonattainment NSR rules is consistent

with stated Congressional intent and

programmatic goals to get reasonable air

quality improvements from each major

construction activity. Since Alabama

Power did not strictly bind EPA in

nonattainment concerns and sinc! the

reconstruction concept was not

expressly precluded, the Administrator

has determined that reconstruction is

warranted in nonattainment areas and

is today promulgating this concept as

proposed for nonattainment NSR rules.

Commenters also asked that several

exemptions be considered if a

reconstruction rule were promulgated.

Among the exemptions suggested were:

(1) current NSPS exemptions for

modifications, (2) Fuel-Use Act

exemptions, (3) involuntary replacement

of damaged equipment, and [4)

voluntary fuel switches. The

Administrator is not promulgating any

of these exemptions into the

reconstruction provision. First, the

current NSPS exemptions and

involuntary replacement of damaged

equipment do not avoid applicability of

NSPS under 40 CFR 60.15 when a unit

would have been reconstructed.

Therefore, it would be inconsistent to

establish such a concept under

nonattainment NSR. In addition, 40 CFR

60.15, which governs how the

reconstruction rule will apply in the

affected NSR programs (see e.g., 40 CFR

Part 51 Appendix S, section I. A(12)1,

allows the Administrator, in paragraph

(0, some case-by-case discretion in

determining when a reconstruction

would occur. Thus, no specific

exemptions such as those suggested

appear warranted at this time.

K Exclusions

In September, EPA proposed to

exclude "routine maintenance, repair

and replacement" from the category "physical change" which appeared in

the proposed PSD and nonattainment

definitions of "major modification." At

the same time EPA proposed to exclude

the following events from the category

"change in method of operation." unless

previously limited by enforceable permit

conditions: (1) a fuel switch due to an

order under the Energy Supply and

Environmental Coordination Act of 1974

ESECA) (or any superseding legislation)

or due to a natural gas curtailment plan

under the Federal Power Act; (2] a

voluntary switch to an alternative fuel

or raw material that the source prior to

January 6,1975, was capable of

accommodating; (3) a fuel switch due to

an order or rule under section 125 of the

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Clean Air Act; (4) a switch to "refuse

derived fuel generated from municipal

solid waste" (RDF), and (5) a change in

the ownership of a source.

EPA received few comments on the

proposed exclusions. Certain

commenters expressed reservations

about the legal and policy basis of the

RDF exclusion. Another commenter

urgedcEPA to expand the exclusion for

voluntary switches to an alternative fuel

or raw material. Specifically, the

commenter urged the Agency to drop the

provisions which limited the exclusion

to switches that would not require a

change in permit conditions and to

sources that were capable of

accommodating the fuel or material

before January 6,1975. The commenter

agreed with the position EPA took in the

preamble to the 1978 Part 52 PSD

regulations that Congress in enacting

section 169(2)(C) intended that

voluntary switches to an alternative fuel

or raw material should be treated in the

same way that they were being treated

under section 111. See 43 FR 26396 (June

19,1978). At the time Congress enacted

section 169(2](e), the regulations

promulgated under section 111 excluded

any such switch if the source could

accommodate the fuel or material before

the relevant NSPS applied to the source

type. Whether a permit condition would

restrict the switch was immaterial. See

40 CFR 60.14(e)(4) (1979). In view of this,

the commenter argued that Congress

intended the exclusion in the PSD and

nonattainment regulations to look only

at whether the source was capable of

accommodating the fuel or material

before those regulations first applied to

it.

After considering the comments on

the RDF exclusion, EPA has-decided to

promulgate it. The Resource

Conservation and Recovery Act of 1974,

42 U.S.C. 3251 et seq., firmly supports

the exclusion. In that statute, Congress

expressed a strong interest in the

development and use of RDF. In

addition, the exclusion has a sound

policy basis, in view of the importance

of reducing the nation's dependence on

foreign oil.

In proinulgating the exclusion,

however, EPA has drawn it, by way of

clarification, somewhat more tightly. It

now excludes only a switch to RDF by a "steam generating'unit." EPA intends

that term to have the same meaning for

the purposes of PSD and nonattainment

NSR as it does for the purposes of the

new NSPS for certain electric utility "steam generating units." For the NSPS

definition of that term, see 40 CFR 60.41a

(1979).

In response to the comment on the

voluntary fuel and raw material switch

provision, EPA has retained the

language which limited it to sources

'which were capable of accommodating

the fuel or material before January 6,

1975 (or December 21, 1976, for the

Offset Ruling and 40 CFR 5118; or July 1,

1979, for the construction moratorium)

and the language which limited the

exclusion to those not requiring a permit

alteration. First, EPA disagrees that the

cutoff date in the counterpart NSPS.

exclusion is analogous to the date the

particular preconstruction permit

regulations applied to a particular

source. To the contrary, the NSPS

counterpart is more broadly drawn; it

focuses on the date the NSPS first

applied to the source type. Second, EPA

disagrees that the counterpart governs

whether the NSR exclusions must ignore

permit conditions. The NSPS program

does not involve assessments of the

impact of a source on air quality. In

EPA's view, any switch to another fuel

or raw material that would distort a

prior assessment of a source's air

quality impact should have to undergo

scrutiny.

It should be noted that EPA has added

a new clause to the exclusion for

voluntary fuel switches. It provides that

a switch which the relevant reviewing

authority has already approved is not a

"physical change" or "change in the

method of operation" for NSR purposes.

Obviously, a second evaluation of the

air quality impact of the switch would

be unnecessary..

The comment relating to voluntary

switches has prompted EPA to add one

more exclusion. It would exclude any

increase in hours or rate of operation, as

long as the increase would not require a

change in any preconstruction permit

condition established under the SIP

(including PSD permits) after the

relevant date of concern.

This exclusion stems largely from

EPA's decision that the definitions of

"major modification" should focus on

changes in "actual emissions." While

EPA has concluded that as a general

rule Congress intended any significant

net increase in such emissions to

undergo PSD or nonattainment review, it

is also convinced that Congress could

not have intended a company to have to

get a NSR permit before it could

lawfully change hours or rate of

operation. Plainly, such a requirement

would severely and unduly hamper the

ability of any company to take

advantage of favorable market

conditions. The emphasis of the relevant

statutory provisions on "construction"

strongly supports EPA's interpretation of

Congress' intent. See, e.g., section 165(a),

42 U.S.C. 7475. At the same time, any

change in hours or rate of operation that

would disturb a prior assessment of a

source's environmental impact should

have to undergo scrutiny.

Because of the absence of any

significant comments on the other four

exclusions, EPA has promulgated them

as proposed.

L. Example of How the Definitions

Work

The way in which the definition of

modification works is best illustrated by

an example. The example also

demonstrates the relationship among a

source's potential to emit, its actual

emissions, and its allowable emissions,

In December 1980, a new source

(Source A) that will emit SO and PM

files a PSD applicatibn to locate in an

area that is attainment for SO2 and PM,

At maximum operating capacity

including application of best available

control technology, and assuming yearround continuous operation, the source

can emit 700 tons of SO2 per year. Seven

hundred tons per year (tpy) is the

source's physical potential to emit SO2.

Its physical potential to emit PM Is 15

tpy. Provided that the 15 tpy of PM

emissions is made federally enforceable,

PM emissions will not be significant

(i.e., less than 25 tpy) and are, therefore,

not subject to PSD review.

In the course of review, modeling

reveals the SO2 increment will be

violated in the source's area of impact If

it emits 700 tons SO2 per year. The

source, therefore, decides to limit its

operation so as to decrease its

emissions to 600 tons SO2 per year. This

reduction proves sufficient to eliminate

the predicted violation. The source Is

issued a PSD permit that sets an SO2

emissions limitation of 600 tpy, which

reflects the revised source operation

(approximately 20 hours a day, seven

days a week). This emissions rate is the

source's legal potential to emit. It is also

the -source's allowable emissions, since

it is the emissions rate specified as a

federally enforceable permit condition.

See e.g., § 52.21(b)(15)(iii).

During the first three years of

operation, from March 1982 to March

1985, the demand for the source's

product is less than anticipated. As a

result, the source's actual emissions are

250 tpy during-the first year and 300 tpy

during the next two years.

In April 1985, another new source of

SO2 (Source B) proposes to locate in the

area of impact of Source A.

Consequently, in calculating its impact

on ambient standards and its increment

consumption, Source B is required to

model the emissions of Source A. Under

EPA's increment consumption policy

(see Increment Consumption), Source

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A's actual emissions should be modeled.

Because Source A has an individuallytailored PSD permit, the definition of

actual emissions allows the reviewing

authority to presume that the allowable

emissions in Source A's PSD permit

reflects its actual emissions, unless the

reviewing authority or source applicant

has reason to believe that allowable

emissions are not representative of

actual source emissions.

In the case of Source A, allowable

emissions, in fact, differ from actual

emissions. Assuming that the reviewing

authority is aware of this difference as a

result of its periodic assessment or

because Source B has presented this

information in its application, Source A

is modeled at its actual emissions rate

representative of normal source

operation during a two-year period

preceding the date of concern. In this

case, the date of concern would be

approximately the date Source B

submits its application. The reviewing

authority should, therefore, look to the

two-year period preceding that date

unless that period of time was atypical

of normal source operation. For Source

A, the two-year period preceding Source

B's application can be considered

representative of normal source

operation. Source A's actual emissions

during that period, on an average annual

basis, are approximately 300 tpy. The

modeling of increment consumption for

Source B should assume that emissions

rate for Source A.

Unless Source A's permit is revised at

this point to reflect its actual emissions

rate of 300 tpy, Source A could attempt

to use the decrease in its actual

emissions in the future to offset a future

emissions increase of its own. This

would result in a large net increase in

actual emissions for the area which

could violate the applicable PSD

increment. The potential problem of

double counting of emissions decreases

is discussed in more detail in Increment

Consumption.

Assume that in June 1987, Source A

decides to modify its facility. Demand

for its product has increased and Source

A wants to add a new emissions unit

that will emit 60 tpy SO2. In addition,

Source A plans to increase the hours of

operation at the units which began

production in March 1982, to result in an

actual emissions increase of 75 tpy at

those units. If no contemporaneous

decreases have occurred, both.changes

will result in significant net increases in

actual emissions. Both changes then

qualify as modifications. The addition of

a new unit is a physical change. The

increase in hours of operation is a

change in the method of operation,

assuming that the reviewing authority

revised Source A's permit to reflect its

actual emissions of 300 tpy at the time

Source A's actual emissions were used

by Source B in modeling increment

consumption.

If Source A was able to decrease

sufficiently its actual emissions at

another unit at the source, it would be

able to avoid PSD review for one or both

modifications. Assume, for example,

that in April 1988, Source A applied

additional control equipment and

decreased actual SO emissions across

the facility by 100 tpy. In June 1987

Source A can use those decreases to

offset its proposed contemporaneous

increases provided the decreases are

made federally enforceable. If Source

A's proposed increase in hours of

operation for the units which began

operation in March 1982 would result in

an emissions increase of 75 tpy and the

emissions from the proposed new unit

are 60 tpy, Source A can use Its 100 tpy

decrease to avoid PSD review for both

changes. Seventy-five tons of the

decrease can be used to offset the

increase in hours of operation and 25

tons of the decrease can offset 25 tons of

the increase due to the new unit. Since

the net emissions increase of 35 tons is

not significant, it would not be a major

modification requiring PSD review.u

Suppose Source A then plans to

increase its emissions by 150 tpy in

November 1990 and to decrease

emissions by 80 tpy in February 1989.

The increases and decreases since April

1986 are all contemporaneous because

they occurred within the same five-year

period. Now, assume Source A revises

its permit to reflect only 50 tons of the

80-ton decrease in February 189. Source

A can receive credit for only 50 tons of

the 80-ton decrease, siffce only this

amount was made federally enforceable.

However, Source A does receive credit

for the April 1988 decrease of 100 tpy,

assuming that decrease was made

federally enforceable at the time of the

June 1987 increase, or is made federally

enforceable prior to commencement of

construction on the November 1990

increase. Source A's total creditable

decreases are then 150 tpy. Its increases

are 135 tpy in June 1987 and 150 tpy in

November 1990, for a total increase of

285 tpy. The net emissions increase is

135 tpy, which is significant for SO,.

Source A must get a PSD permit for the

change leading to the 150 tpy increase in

November 1990. However, It Is not

"Under the provisions of40 CFR Pazt 51

Appendix S,40 CFR 51.18(J), and 40 CRUX5.,4 tke

emissions bceases at Source A would probably be

subject to reviewas modlcatloas notwithtanding

the contemporanmou decreae at the sourc.

required to get a PSD permit for the June

1987 increases.

If, from March 1982 to March 1985,

Source A had exceeded its allowable

rate of 700'tpy, Source A could not

receive full credit for its April 1986

decrease. For example, assume Source

A's actual emissions from March 1982 to

March 1988 were 800 tpy, 100 tpy over

Its allowed rate. None of the 100 tpy

reduction in April 196 would then be

creditable. The amount of Source A's

creditable decrease could also be

reduced if the designation of the area

where Source A is located were changed

from attainment to nonattainment in

March 195 and Source A became

subject to a new, more stringent SIP

requirement in March1988. If. for

example, the SIP required Source A to

reduce emissions from 700 to 600 tpy by

December 198, none of the 100 tpy

decrease in April 1986 would again be

creditable.

X. Da Minixnis Exemptions

In the Alabama Power decision, the

court indicated that emissions from

certain small modifications, and

emissions of certain pollutants at new

sources, could be exempted from some

or all PSD review requirements on the

grounds that such emissions would be

de mhzlims In other words, the

Administrator may determine levels

below which there is no practical value

in conducting an extensive PSD review.

The court also indicated that the Agency

could establish exemptions based on

administrative necessity (e.g., the

inability of reviewing authorities to

provide the necessary work force to

properly review a very large number of

permit applications]. The September 5

proposal incorporated the de mnimis

concept and requested comments on the

approach taken. At that time, the

Administrator noted that because of the

urgency associated with the proposal.

the de minimis numbers published were

not supported by extensive analysis,

and that a more thorough analysis

would be undertaken prior to

promulgation.

The proposal included two tables, one

for defining significant emissions

changes (in tons per year) and one for

defining significant air quality changes

(in micrograms per cubic meter]. Values

lower than those in the proposed tables

were recommended as being deminmns.

These tables, with respect to criteria

pollutants, were generally based on the "significance" levels published in the

preamble to the June 19,1978 PSD

regulations (43 FR 25398) and in the

Offset Ruling (44 FR 3283]. These

significance levels in turn were derived

from the Class I increment values listed

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in Part C of Title I of the Clean Air Act.

For noncriteria pollutants, a similar

approach was taken: the Agency

extrapolated emissions rates from

documented air quality guideline

numbers, where available.

In the proposal, the tables were

presented as preamble guidelines to be

used in the following manner. For PSD,

any new source subject to review was to

be analyzed for the applicatioh of BACT

for each pollutant whose emissions

would exceed the value in Table 1. In

addition, an air quality analysis to

determine the impact of these pollutants

was required. For modifications, any

pollutant for which the source was

major and for which there was a

contemporaneous net increase equal to

or greater than the applicable value(s) in

Table 1 would trigger PSD review of the

modification; as in the case of new

sources, BACT and air quality impact

analyses were required for each

pollutant whose net emissions increased

by greater than a de minimis amount.

Table 2 was proposed to provide an

exemption from air quality impact

analysis (including monitoring) for those

sources and modifications which could

demonstrate that their maximum

expected air quality impact would be

less than the values listed. Sources,

including modifications, claiming to be

exempt from reviews on the basis of de

minimis emissions would be required to

so notify the Administrator. The de

minimis requirements also would apply

to nonattainment sources, but would be

restricted to the pollutant(s) for which

the area is nonattainment.

The Agency received extensive

comments on the proposed de minimis

approach. In all there were 121

comments addressing this issue. While

there was almost universal endorsement

of the concept, a large numbier of

commenters (65) criticized the proposed

values as being too low. Some of these

commenters stated that there was a lack

of support for the numbers presented

and felt that the emissions table was

more restrictive than the table of air

quality concentrations; others claimed

that the low de minimis levels made the

applicability of the review process

inequitable for modifications i

comparison to new sources. A

consistent theme was that the proposed

values would necessitate unproductive

review in terms of environmental benefit

while consuming applicant and

reviewing authority resources. Although

there were suggestions concerning how

big the emissions numbers should be

(100 tons per year was a popular

choice), littl e specific guidance was

given on how to develop alternative

numbers. Suggestions generally were

limited to using various percentages of

the national ambient air quality

standards or the amount of existing

emissions. One commenter did suggest

the use of an equation that accounted

for variability in stack height.

Only one commenter criticized the de

minimis levels for being too high. This

commenter also believed that

exemptions from review because of

emissions less than the de minimis rate

should not be automatic, but should be

allowed only after a case-by-case

review of source impact. In addition, the

commenter stated that in areas where

the increment is almost entirely

consumed, sources should be subject to

PSD review for any increase in

emissions.

A frequently addressed aspect was

the perceived need to incorporate any

de minimis values in the regulations, as

opposed to leaving them as guidelines in

thd preamble. Forty-eight of fifty-six

commenters favored such a change. The

general concern was that since the ' preamble is omitted from the Code of

Federal Regulations, the regulations as

written would appear to be ambiguous

as to the term "significant." Those that

favored leaving the tables as guidelines

did so generally to provide more

flexibility either for sources to

demonstrate that they should be exempt

or for states to develop alternative de

minimis values.

There were several other meaningful

comments. Sixteen commenters

recommended that de minimis coverage

be limited to criteria pollutants. Eighteen

commenters contended that the need to

accumulate de minimis changes was

burdensome, environmentally

unnecessary, and should be dropped;

some questioned the legislative basis for

this requirement.Several commenters

cited the difficulty, if not impossibility,

of monitoring for all regulated

pollutants. These commenters were

especially concerned regarding

monitoring for noncriteria pollutants,

indicating that the requisite technology

was not available in some cases. Other

commenters questioned how the term

"no impact," which is used in the

regulations to protect Class I areas,

relates to the Table 2 de minimis values. -

Mindful of the comments received, the

Administrator has undertaken a

reassessment of the de minimis issue.

This reassessment is decribed in two

'documents. One is a report entitled

"Impact of Proposed and Alternative De

Minimis Levels for Criteria Pollutants,"

EPA-450/2-80-072, and the other is a

staff paper entitled "Approach to

Developing De Minimis Values for

Noncriteria Air Pollutants." These are

available for examination in the

rulemaking docket. In addition, copies

may be obtained by writing to the Air

Information Center, U.S. EPA Library

Services', MD-35, Research Triangle

Park, NC 27711.

Obviously, a significant part of the

reassessment involved the use of

reasonable judgment. The task requires

consideration of an area in which not

only is data limited, but criteria for

decision making is almost non-existent,

The first task of the reevaluation was to

identify the basic objectives to be met in

selecting de minimis values. The

primary objectives'Identified were: (1)

provide effective Class I area protection'

(2) guard against excessive "unreviewed" consumption of the Class

II'or III increments, and (3) assure

meaningful permit reviews.

"Meaningful" in this context Implies that

there would be a possibility of obtaining

useful air quality information or

obtaining greater emission reductions as

a result of BACT analysis than would be

expected from normal state permit or

NSPS/NESHAP processing.

The proposed de minimis air quality

values, which stemmed from the

legislated Class I increments, caused

concern for two reasons, First, If a

modification occurs near enough to a

Class I area, almost any de minimis

emissions level could impact the area.

Thus, proximity rather than emissions

level appears to be more important In

Class I area protection. Second, the

general imposition of Class I criteria on

the eview process for Class II and IMI

areas may be overly stringent. These

concerns were examined as part of the

de minimis reassessment.

As a result of this examination, the

Administrator has decided that higher

de minimis emissions rates than those

used in the proposal could apply to

review of sources which would not

construct within a specified dlstance of

a Class I area. However, a proposed

source or modification that would

construct close to a Class I area must be

prepared to demonstrate for each

regulated pollutant that it would emit

that it would not have a significant

impact on such area (defined as one

microgram per cubic meter ([tg/m3) or

more, 24-hour average), even If the

proposed emissions increases are below

the applicable de minimis threshold,

The effect of this change is to require

less review for many sources through

higher de minimis values (compared to

the proposal), while adding a limited air

quality analysis requirement for only a

few sources, Such a change is consistent

with the objectives of protecting Class I

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areas while limiting PSD review to

projects with significant impact.

There were three basic alternatives

available for specifying de minimis

cutoffs-one based solely on air quality

impact, one based solely on emissions

rate, and one based on a'combination of

these, such as was proposed on

September 5. The Administrator has

chosen to specify de minimis cutoffs in

terms of emissions rate for applicability,

BACT and air quality analysis purposes,

with no provisions for case-by-case

demonstration of a source's air quality

impact. This is a departure from the

proposal in that, as proposed, a source

could avoid air quality analysis

requirements for a given pollutant by

demonstrating that it would produce a

maximum impact less than the air

quality concentrations listed for that

pollutant. An air quality concentration

de minimis level for each pollutant for

which measurement methods are

available is included in the regulations

only for the purpose of providing a

possible exemption from monitoring

requirements. This approach has been adopted for

several reasons. First, the Congress

specified emissions rates, not projected

air quality impacts, in the Clean Air Act

as the criteria for determining which

sources are major and therefore subject

to PSD review. Moreover, the court, in

.the Alabama Power decision,

continually refers to emissions rate

rather than air quality concentration in

its discussion of the de minimis issue.

Therefore, it would be inconsistent with

the existing guidance to abandon the

emissions rate concept. Second, ff applicability decisions

depended on confirming a

demonstration by the source that its

impact would be less than a given air

quality level, it is the Administrator's

opinion that the review process would

become excessively complex and

greatly increase the resources needed by

reviewing authorities to carry out fie

program. In addition, such an approval

would create and atmosphere of

uncertainty as to whether individual

sources needed to apply for a permit or

not and could lead to uneven

application of the regulations from state

to state. Third. the task of establishing

de minimis air quality levels for

noncriteria pollutants, with proper

consideration of threshold levels and

factors of safety (if any), is very

complex and could not be done in the

time available.

Finally, given the inclusion of a de

minimis exclusion for monitoring, it

serves little purpose to have a separate table to permit an exclusion from the

remaining air quality impact analysis

requirement. (A separate table would be

required because monitoring capability

and concern for potential effects are

unlikely to be associated with the same

air quality concentrations.) Besides

making the regulations more

complicated, this resultant

demonstration necessary to earn an

exemption from air quality impact analysis would in itself be an air quality

impact analysis.

In analyzing the basis for de minimis

emissions rates, it was apparent that

two distinct classes of pollutants were

involved. The first consists of the

criteria pollutants for which extensive

health and welfare information has been

developed and documented in the

respective criteria documents. The other

class consists of the noncriteria

pollutants for which, as the name

implies, no criteria on ambient effects

exist. Rather, these pollutants are

covered by either New Source

Performance Standards (NSPS) or

National Emission Standards for

Hazardous Air Pollutants (NESHAP),

both of which are based on a national

emissions standard, rather than an air

quality management approach. That Is,

the regulations developed pursuant to

both these legislative requirements

generally specify emissions limitations

and/or equipment performance

standards as opposed to threshold air

quality levels that must be achieved as

for the criteria pollutants. Thus, it

appeared reasonable to develop de

minimis cutoffs from separate

perspectives-to base criteria pollutant

de minimis emissions cutoffs on air

quality "design values" and to base the

noncriteria pollutant de minimis values

on the emissions rates embodied in the

NSPS and NESHAP.

The first step in developing de

minimis emissions rates for the criteria

pollutants, therefore, was the

establishment of air quality "design

values." Such design values were then

converted to emission rates in

accordance with EPA modeling

procedures, 13 using data on sources

permitted under the PSD program. The

latter provided modeling parameters

associated with sources of the type

expected to be most affected by the de

minimis requirements. Ambient

concentations representing percentages

of the primary 24-hour air quality

standard, as well as percentages of the

Class 1H increment, were evaluated for

particulate matter (PM) and sulfur

dioxide (SO.). Similarly, various

UGuidelines for Air Quality Maintenance

Planning and Analysis. Volume 10 fRevised]:

Procedures for Evaluating Air Quality Impact of

New Stationary Sources. OAQPS No. 1.2-O=R.

October L977.

percentages of the primary standard for

the other criteria pollutants were

examined.

The primary standard was chosen as

the basis for design values because,

except for PM and SO, none of the

criteria pollutants have a secondary

standard that is different than the

primary standard. The 24-hour standard

instead of the annual standard was used

for PM and SOz since short term rather

than the long term impact tends to be

the controlling factor in determining

whether air quality increments are

exceeded. In addition, levels higher than

five percent of the primary standard

were not seriously considered because

that percentage equates to

approximately 35 percent of the TSP

Class I increment. The Administrator

does not believe that a source which,

due to its own emissions, could

potentially consume more than that

amount of increment should be exempt

from review.

Two factors had an important

influence on the choice of de mbiis

emissions levels within the resulting

range of annual emissions rates. The

primary one was the cumulative effect

on increment consumption of multiple

sources in an area each making the

maximum de miznims emissions

increase (thereby going unreviewed

under PSD at the time of the change].

The other, and secondary one, was the

projected consequence of a given de

minimis level on administrative burden.

To determine the cumulative effect on

increment consumption expected from

several sources, all making maximum de

minimis increases (a rather unlikely

event) in the same area, actual source

distributions in the Dayton, Ohio, area

were used. Dayton was chosen because

it is a fairly representative industrialized

community, and source data suitable for

modeling was readily available. To

check the impact of the various de

mirdmis levels on administrative

burden, data from past permitting

experience were again used, in this case

to prepare curves showing the number

of sources expected to require review at

various de migjnis emissions levels. A

description of these analyses is found in

the de minimis report on criteria

pollutants cited earlier.

As a result of the reevaluation, the

Administrator has decided to use four

percent of the 24-hour primary standard

as a design value for both PM and SO2.

These ambient levels correspond to

emissions rates of 25 tons per year for

PM and 40 tons per year for SO2 (except

for lead, all emissions rates predicted

from the modeling for criteria pollutants

were rounded to the nearest five tons).

52707

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52708 Federal Register / Vol. 45, No. 154 / Thursday, August 7, 1980 / Rules and Regulations

Four percent of the lead standard was

also used, yielding an emissions rate of

0.6 tons per year. The emissions rate for

carbon monoxide (CO) in all cases was

greater than 100 tons per year, the limit

set in the Clean Air Act to define major

for many source categories. Therefore,

as proposed, the deminas emissions

rate for CO is established at100 tons per

year.

Because the nitrogen dioxide standard

is expressed only as an annual average,

a factor of two percent was used to

determine the design value. There were

two reasons for this decision. First, for a

given level of emissions, a predicted

aniual concentration will be smaller

than a short-term value. Conversely,

therefore, alower percentage for the

annual standard than for a shorter term

standard is indicated if one is to

maintain a reasonably consistent

rationale for emissions rates. Second,

the emissions rate corresponding to two

percent of the standard is 40 tons per

year, which is comparable to the rate

established for SO. Both these

pollutants are frequently emitted from

the same source, in roughly equivalent

amounts; for exampple, a typical power

plant meeting the NSPS with low sulfur

coal would emit about 1300 tons per

year of nitrogen oxides andabout 1500

tons per year of SO2.

Finally, models for use in establishing

a relationship betweenindividualsource

hydrocarbon [VOC) emissions and

ozone concentrations are not-presently

available. Thus, it was not possible to

model an emissions rate from an air

quality design value. However, in view

of the link between VOC and NO.

emissions in the formation of ozone, the

emissions rate for VOC was also set at

40 tons per year.

It should be recognized that several

sources or modifications can be allowed

in the same area even though each might

consume up to four percent of the

standard (about 16 percent of the Class

II increment for S02 and about 28

percent for PM). This is because the

source specific concentration occurs in

only a limited area (often one point) and

the temporal and spatial conditions

which lead to maximum consumption by

one source are seldom the same for

other sources that may be making

similar de minimis changes. To reinforce

this understanding, a-modeling analysis

of 37 sources in the Dayton area was

conducted. The maximum aggregate

increment consumption projected to

occur as a result of all majorsources

each making a de minimds emissions

ificrease equal to 40 tons per year (e.g.,

that for SO2) was less than 1.5 lg/m3 on

a 24-hour basis. While representative of

only one set of conditions, this result

could probably be expected in most

industrialized areas.

Excessive increment consumption is.

unlikely, given the safeguards existing in

the regulations. Although such sources

would not get PSD permits, they do not

go unreviewed. Most, if not all, will be

permitted under ongoing state NSR

programs pursuant to 40 CFR 51.18.

Moreover, their contribution to

increment consumption will be

evaluated either by the next major

source undergoing PSD review, or during

the periodic assessment of source

growth. Nevertheless, in atypical situations there might still be concern

with the de minimis levels causing

accelerated increment consumption.

This can be controlled by a state, upon

taking the program, through the

establishment of smaller de minimis

levels.

To determine a proximity cutoff that

gives assurance of protection of Class I

areas, a modeling analysis was

performed to identify the effect of the de

minimis emissions levels on such areas

using Volume 10 screening procedures.

For the purpose of this analysis, the

effect of varying stack height and

meteorology, as well as the influence of

terrain features, was considered.

Significant impact was taken to be one

ig/m3, 24-hour average. The results

indicate that sources locating more than

10 kilometers from a Class I area would

not have such an impact as a result of

making de mLimis changes. Therefore,

the regulations promulgatedhhere require

that any new or modified major

stationary source within that distance

from a Class I area will be subject to

review if the source would have an

impact on the area equal to or greater

than one pg/m3

, 24-hour average. It must

be pointed out that while the preceding

responds to those commenters

concerned about how to judge whether a

source has "no impact" on a Class I

area, the analysis of impact on such an

area from major sources subject to PSD

review must be done on a case-by-case

basis. Further, such sources may be

subject to an evaluation by the

appropriate Federal Land M~fanager as

described in theregulations.

Noncriteria pollutant emissions rates

were developed from the existing

emission standards (NSPS and

NESHAP). In general, a fraction of the

applicable standard was used. In the

Administrator's judgment, since the

NSPS represents the best adequately

demonstrated control technology, on a

nationwide basis, and the NESHAPs are

established -ith an ample margin of

safety to prevent unreasonable risk to

the public health from hazardous

pollutants, a small percentage of these

standards would, for PSD purposes,

prevent a significant change from

escaping review.

Levels generally representing 20

percent of a NSPS emissions standard

and, because of their greater impact on

health, ten percent of a NESHAP

emissions standard, were evaluated.

The air quality impacts of the resulting

NSPS emissions rates were then

calculated in a manner similar to that

used for the criteria pollutants. These

concentrations were compared to

available health and welfare data to

assure that significant adverse effects

were avoided. In the case of fluorides,

this check resulted in a reduction of the

emissions rate originally indicated, No

adjustment based on resultant effect

was made for the hazardous pollutants

since the NESHAP emissions rate, as

noted above, is itself intended to protect

the public health with an ample margin

of safety; therefore, ten percent of such

a value is in the Administrator's

judgment sufficiently stringent for use as

a de minimis level.

A brief discussion of the rationale for

each noncriteria pollutant emissions

rate is given below. For more

information, see the staff paper cited

earlier.

Hazardous Pollutants (NESHAP:

Asbestos-Reevaluation of existing

data indicates that trying to establish a

quantitative link between emissions and

potential effects is not possible. No level

of exposure can be presumed de

minimis. Therefore, a theoretical do

minimis emissions rate of zero was

considered. Such a value is not

practical, however, since changes of any

kind at sources using materials

contaiing even traces of asbestos could

trigger review regardless of the amount

of asbestos emitted. Therefore, an

estimate-was made of the emissions

from well controlled sources from which

asbestos can be emitted. Although data

s very limited, rough estimates of

emissions from four souice categories

were developed. Three categories are

covered by the NESHAP regulations:

asbestos milling, manufacturing using

asbestos in the process (e.g., textiles,

asbestos tile), and asbestos asphalt

manufacture. Rock crushing, a fourth

category not covered by the NESHAP,

was also examined. Emissions rates

from these four categories, using

available data, were respectively 0.2

tons per year (TPY), 0.07 TPY, 0.04 TPY,

and'0.06 TPY. Because asbestos Is

carcinogenic, a conservative approach

to establishing the de minimis emissions

rate has been taken. The de minimis

level is based on a source category

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which has relatively small asbestos

emissions, and which includes the

majority of asbestos emitting sourcesmanufacturing operations using

asbestos. Therefore, the promulgated

asbestos de minis rate is 0.007 TPY,

based on ten percent of the emissions

estimated from asbestos manufacturing

sources.

Beryllium-The NESHAP emissions

rate is ten grams per day or 0.004 tons

per year. Ten percent of this yields a de

minhis emission rate of 0.0004 tons per

year.

Mercury-The NESHAP emissions

rate is 2300 grams per day which

equates to approximately one ton per

year. At ten percent the promulgated de

mkinids emissions rate is 0.1 tons per

year.

Vinyl chloride-The NESHAP

standard is expressed in parts per

million of the effluent stream. It was

therefore necessary to assume model

plant characteristics in order to develop

expected emissions from a well

controlled plant. As in the case of

asbestos, the Administrator believes

that it is prudent to base these

calculations on a small model plant

considering the suspected carcinogenicity of this pollutant. Such

plants, well controlled, emit about 10

tons per year. Based on this value, the

promulgated de mzinimis emissions rate

is one ton per year.

NSPS PoHutants:

FluPrides-The proposed de minimis

emissions rate for fluorides was

extremely conservative, and was

strongly criticized as being too low by

several commenters. Upon reevaluation,

the Administrator agrees with the

comments. A de m~inmis emissions rate

based on the NSPS for aluminum plants is 30 tons per year-a well controlled,

moderate sized, plant emits about 150

tons per year of fluorides. At a rate of 30

tons per year, the predicted maximum

24-hour ambient concentration is

approximately ten micrograms per cubic

meter. That concentration is about ten

times the level that has been observed

to produce effects on vegetation (about

one microgram]. In order to limit the

potential for such damage, a de minimis

emissions rate of three tons per year,

corresponding to a one microgram

impact is promulgated. An alternative would have been to

base the emissions rate on the NSPS for

phosphate fertilizer plants. Fertilizer

plants typically emit much less than

aluminum plants (i.e., about two tons

per year controlled). A 20 percent de

minkis value would then be less than

0.5 tons, which is unrealistic in view of

other sources such as aluminum plants.

Moreover, changes at a fertilizer plant

that resulted in a fluoride emissions

increase of 0.5 tons per year would

probably get reviewed under state new

source review and/or NSPS

requirements.

Sulfuric Acid-A model plant of 130C

tons per day of production was used.

The NSPS-emissions limit is 0.15 pound

of sulfuric acid per ton of product

processed. Thus, the model plant woulc

emit about 35 tons per year. This yielde

a de minimis emissions rate of seven

tons per year using the 20 percent facto

Total Reduced Sulfur, Reduced

Sulfur-These pollutant classes includc

hydrogen sulfide (H:S) and are regulate

primarily to avoid nuisance (odor)

problems. Total reduced sulfur (TRS)

emissions are based on a representativ

kraft pulp mill (900 tons of pulp per day

which at 20 percent yields a de nzmniu

emissions rate of 10 tons per year.

Similarly, using a model refinery of

about 100 long tons per day, the reduce

sulfur (RS) compound emissions rate is

10 tons per year.

(The emissions rates calculated on tb

above model plants were 8.3 tons per

year for TRS and 9.4 tons per year for

RS. Both values were rounded to 10 ton

per year for administrative purposes.)

Hydrogen Sulfide-Regulated under

the refinery NSPS only. Specified as on

thirtieth of reduced sulfur emissions, in

major part as a check on control

efficiency, Since concern, at the NSPS

emissions levels, for TRS, RS, and HzS 1

the same (nuisance rather than health

impact) the de minimis emissions rate

for 1-hS alone is set at ten tons per year

Methyl Mercaptan, Dimethyl Sulfide,

Dimethyl Disulfide, Carbon Disulfide,

Carbonyl Sulflde-De minimis

emissions rates were proposed for thesi

compounds. However, none of them arc

individually regulated under the Act.

Rather, they are described as

constituents of either TRS or RS.

Therefore, since de minimis emissions

rates are promulgated for TRS and RS,

individual de minimis for the five

compounds have been dropped.

The complete list of the emissions

levels promulgated today, and where

applicable, the de minimis air quality

design values from which they are

derived, is given below in Table A:

Table A.--De Mkirins Values

ermom rae

Carbon monoxide 100

Nitrogen o dd e 40. sta cl - 40

Tota s d 25

Ozone (volaft 40

organi compounds).

Design a whkA -

Table A.-De Uknis Values-Coninued

Do WIiis; Design ai quaity erasons rale Vafti W_

Lead 0.6 0.06 (3 mront).

Asbestos 0.007

Bayjkx, 0.0004

SUercY V' -ode 0.11.0

d SAxcd " .... 7 Total duced m .vsd 10 -ic~fn H.5 r. e&cd P r 10

(Wi~ H4

I+J*cgen Kolfde 10

The air quality design values are not

included in the regulations. De mirdms

e emissions levels are included for use in

defining the term "significant." As in the

proposal, these values determine the

need to review modifications and

determine which pollutants require

d BACT and air quality impact analyses

for any new source or modification

requiring review.

ie The Administrator does not believe

that the promugated de mulmi s levels

will produce an extraordinary

s administrative burden on reviewing

authorities. Based on the data available,

it is estimated that approximately 700

e more sources will be subject to PSD

review annually, all for small

modifications not heretofore reviewed.

The regulations also include a list of

is air quality concentrations for each

pollutant as criteria for exempting

sources from the monitoring

requirements at the discretion of the

reviewing authority. Table B

summarizes the applicable air quality

values by pollutant type.

e Table B.-Mondodng Exemption

Akqaity vake 4a'eraging

Carbon moode_ _ 575 WhCX4

Utog0en 6oed__-_ 14 (244-t*~~ Sfw . -.. .13 (24-htn).

Tota suspended pertcMle; 10 (24-'-t).

terody . .. 0.1 (24-hor).

VO4 chMoie_____ 1 (24-how).

Toride_ _ 025 (24-ho Wat$ acid mist -......... (1)

Tota reduced *tr Rludrg 10 (1-hv)

Reduced SAXm (W4ckt KS,).- 10 (U~ox)4

Rydrogen *Auds____ 0.=2 (1-hts)

'Al cae twhe enajeeons o( VOC am lew ss 100 lons

tio satetaclory rnouloftg tdrique wraiable at Ws MtneL

2 ~Several Table B values are somewhat

14.6 (244w different from the design air quality 1L4 (2"4vw. numbers shown in Table A. This is

because the Table B values are based on

the current capability to provide a

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meaningful measurement of the

pollutants. The values promulgated

represent five times the lowest

detectable concentration in ambient air

that can be measured by the instruments

available for monitoring each pollutant.

The factor of five was chosen after

reviewing test data for the various

methods considered reasonably

available. The decision was based in

part on considerations of instrument

sensitivity, potential for sampling error,

problems with instrument variability

(e.g., zero drift) and the capability to

read recorded data. For a more thorough

discussion of this determination, see the

memorandum from K. Rehme to W.

Peters dated May 20, 1980, which is

available in the rulemaking docket and

from the address given for the other

reports:

There also are several changes in the

use of Table B from the Table 2

proposed on September 5. First, a source

deemed subject to review may claim the

de minimis air quality impact exemption

from only the monitoring requirement

for the reasons noted earlier. Next,

under the proposal, a source had to

demonstrate that its ambient impact

would be de minimis to obtain an

exemption from monitoring. As

promulgated, the regulation allows a

source to be exempted from the

preapplication monitoring requirement if

it shows either that existing air pollution

in the source impact area or its

projected-impact in the affected area is

de minimis. In most cases, little is to be

gained from preconstruction monitoring

in situations where either condition

applies.

Finally, because there will be

situations where monitoring will be

necessary even if modeling predicts de

minimis conditions, the exemption is not

automatic but rather must be with the

approval of the reviewing authority. For

example, Table B values should not be

used when (1] there is an apparent

threat to an applicable PSD increment or

NAAQS based on modeling alone or (2)

when there is a question of adverse

impact on a Class I area.'Questions of

adverse impact on a Class I area are to

be decided on a case-by-case basis with

the objectives of the affecied Federal

Land Manager in mind.

Some of the suggestions made in the

comments have not been adopted. For

the reasons stated earlier, many of the

de minimis values have been increased.

The automatic exemption on the basis of

emiisions rate is retained, although the

exemption from monitoring has been

made discretionary. The Administrator

believes that a clearindication of

applicability is necessary. It is not

reasonable to expect a potential

applicant to have continuous knowledge

of thestatus of increment consumption

and thus know when an application is

required and when it.is not. Nor have

the de minimis values been promulgated

as a guide only, with a screening review

of all sources made mandatory as

suggested by one commenter. The

Administrator does not believe that

there is a substantial programmatic

benefit to be derived from such a

stringent requirement.

Accumulation of de minimis values.

has not been dropped, because for most

pollutants the promulgated deminimis

emissions levels are now substantially

higher than those proposed. The

suggestion to allow sources with greater

than de minimis emissions-to make a

showing that their air quality impact

was de minimis and escape review was

considered and then rejected. The higher

emissions levels promulgated will offer

much of the requestel relief. Moreover,

such an approach would not streamline

the review process (i.e., a detailed air

quality analysis would still be

necessary), and several sources with

taller stacks might avoid review and the

BACT requirement. Variations in actual

impact because of stack height can be afactor in the BACT review. Similarly, an

equation considering stack height to

determine the de minimis emissions rate

cutoff has not been promulgated. It is

questionable whether such an equation

could be developed for application

nationwide that would be any less

judgmental than the fixed de minimis

emissions rates promulgated. Moreover,

that approach would be little more than

a case-by-case applicability assessment

which the Administrator believes is

inadvisable for reasons already

described.

Other suggestions not accepted were

to raise the de minimis emissions levels

to 100/250 tons per year for the criteria

pollutants, and to limit the de miinu's

concept to only the criteria pollutants. In

developing an approach to defining de " minimis for PSD purposes and

consequently calculating the specific de

minimis values under the guidance

given within the Act and Alabama

Power, emissions levels as high as 100

tons per year could not be justified for

most criteria pollutants. Use of the de

minimis concept with respect to only the

criteria pollutants suggests that any

increase (i.e., a zero de minimis value)

would be significant for noncriteria

pollutants and must be reviewed. As

mentioned earlier, a zero de minimis is

not practical-for this program.

XII. Geographic and Pollutant

Applicability

A. Background

Alabama Power held that in

determining the applicability of PSD

review, EPA must look to whether a

source locates in an area to which Part

C of the Act applies, rather than to the

impact the source would have upon such

an area. Accordingly, EPA proposed on

September 5 to apply PSD review to a

source if the source locates in an area

designated attainment or unclassifiable

for a pollutant which the source emltq In

major amounts. Each pollutant emitted

by the source would be subject to PSD

review, unless the pollutant was one for

which an area is designated

nonattainment and the source emitted

that pollutant in major amounts. A

modification to a source would be

subject to PSDreview under the

September 5 proposal if it would result

in a significant net increase in the

emissions of any regulated pollutant for

which the source Is major and for which

the area is designated attainment or

unclassifiable. In addition, EPA

proposed on September 5 to apply PSD

review to a source or modification that

would significantly affect an area in

another state designated as attainment

or unclassifiable for a pollutant for

which the source or modification would

be major. See 44 FR 5190-41, 51949

(§ 51.24(i)(2)), 5193-54 (§ 52.21(i)(8)).

On January 30, 1980, EPA stated that It

intended not to apply PSD review based

solely on interstate impact, because the

court's final interpretation of the Act in

AlabamaPower suggested that PSD

review was not appropriate In such

circumstances. EPA also noted that

under its September 5 proposal, a source

or modification would be exempt from

PSD review if it emitted in major

amounts only pollutants for which an

area had been designated

nonattainment. EPA solicited comments

on whether this exclusion should be

retained, as well as on its proposal to

delete PSD review based solely on

interstate impacts. See 45 FR 6803

(January 30,1980).

B PSD Applicability

After further evaluation of its

proposed approach, and consideration

of the comments submitted In response

to the September 5,1979, and January

30, 1980, notices (see discussion below),

EPA has decided to modify the

September 5 proposal somewhat. Under

today's action, except with respect to

nonattainment pollutants, PSD review

will apply to any source that emits any

pollutant in major amounts, if the source

would locate in an area designated

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attainment or unclassifiable for any

criteria pollutant. If the source is subject

to PSD review, then PSD review will be

applied to each pollutant the source

emits in greater than de minimis

amounts, unless the area is designated

as nonattainment under section-107(d)(1)

for the particular pollutant. It should be

noted that in order for PSD review to

apply to a source, the source need not

be major for a pollutant for which an

area is designated attainment or

unclassifiable; the source need only emit

any pollutant in major amounts (i.e., the

amounts specified in section 169(1) of

the Act) and be located in an area

designated attainment or unclassifiable

for that or any other pollutant.

Therefore, sources that are major only

for pollutants for which an area is

designated nonattainment will not be

exempt from PSD review unless the

source is located in an area which is

designated nonattainment for all criteria

pollutants or unless all of the regulated

pollutants emitted by the source in

greater than de mnimis amounts are

nonattainment pollutants.

The applicability of the PSD

regulations to modifications mirrors that

for new sources (see Modification). PSD

review will apply to any modification to

a source which emits any pollutant

subject to regulation under the Act in

major amounts, if the modification

would result in a significant net increase

in the emissions of any pollutant, and if

the source is located in an area

designated attainment or unclassifiable

for any criteria pollutant. PSD review

would riot apply to any nonattainment

pollutant. Unlike the approach proposed

on September 5. in order for PSD review

to apply, the modification need not

increase emissions of a pollutant for

which the source is major, nor need the

source be major for a pollutant for

which the area is designated attainment

or unclassifiable.

EPA believes that this approach is

required by Alabama Power and

sections 165(a) and 169(1) of the Act.

Section 165(a) states that "[n]o major

emitting facility on which construction is

commenced after the date of the

enactment of [Part C of the Act], may be

constructed in any area to which this

part applies unless" the conditions set

out in section 165(a) are met. Alabama

Power held that this provision must be

interpreted literally and that, in

particular, EPA should focus on the

location of the source, not its impact.

See 13 ERC at 2012-2016. Today's action

provides the necessary literal

interpretation. A "major emitting

facility" is defined in section 169(1) as a

source which would emit at lea"st 100 or

250 tons per year (tpy) (depending on

the type of source) of"any" pollutant.

This would cover both critiera

pollutants, for which national ambient

air quality standards have been

promulgated, and non-criteria pollutants

subject to regulation under the Act.

Section 165 refers to an "area to which

this part [part C] applies," which the

Court in Alabama Power interpreted to

mean "clean air areas," i.e. areas

designated pursuant to section 107 as

attainment or unclassifiable for a

particular air pollutant 13 ERC at 2013.

See also sections 161,162, and 167 of the

Clean Air Act. But neither section 165

nor section 169(1) links the pollutant for

which the source is major and the

pollutant for which an area is

designated attainment or unclassifiable.

Read literally, section 165(a) applies

PSD preconstruction review to all

sources that are major for any pollutant

subject to regulation under the Act and

locate in an area designated attainment

or unclassified for any pollutant.

Section 165(a) also does not link

review of a particular pollutant to the

attainment status for that pollutant or

limit review to pollutants for which a

source is major. Rather, read literally,

section 165(a) applies PSD review to all

pollutants subject to regulation under

the Act emitted by the source provided

that the source is major for some

pollutant and is located in a clean air

area for some pollutant. However,

implicit in Alabama Power and the

structure of the Act is a recognition that

where nonattainment pollutants are

emitted in major amounts (i.e., where a

source emits in major amounts a

pollutant for which the area in which the

source would locate is designated

nonattainment), Part D NSR rather than

Part C PSD review should apply to these

pollutants (see below). PSD review does

not apply to the nonattainment

pollutants emitted by the source

otherwise subject to review.

C. Nonattainment Applicability

On May 13.1980,45 FR 31307, EPA

promulgated a final rule setting out the

applicability of nonattainment review of

new and modified sources. In brief, EPA

clarified that the construction

moratorium under section 110(a)[2] (I]

and NSR under the Offset Ruling and

section 173 apply to all major

construction proposed in such areas.

This applicability is unaffected by the

particular air quality levels within the

designated nonattainment area which

would be caused or impacted by the

proposed major source or major

modification. States still are required

under section 10(a)(2)(D) to review new

or modified sources locating outside of

nonattainment areas, but causing or

contributing to a violation of an ambient

air quality standard; however, review

need not meet all of the nonattainment

requirements under section 173 and the

offset policy.

The current regulations concerning

pollutant applicabilityJn nonattainment

areas have not been changed. These

rules are different from the PSD

pollutant applicability rules. Major

sources are subject to review under the

Offset Ruling. section 173, and the

construction moratorium only if they

emit in major amounts the pollutant(s)

for which the area is designated

nonattainment. In addition, only those

nonattainment pollutants which the

source emits in major amounts are

subject to review or the construction

moratorium. Similarly, only if a

modification increases emissions of a

pollutant for which the source is major

and for which the area is designated

nonattainment do nonattainment

requirements apply. The basic rationale

for these restrictions is that section

110(a](2), which contains the

construction moratorium, restricts the

construction moratorium to pollutants

for which the source is major and for

which the area is designated

nonattainment. Since there is no

requirement similar to the one in section

105(a) that subjects a source to review

for all regulated pollutants it emits once

it is subject to review for one pollutant,

preconstruction review under the Offset

Rulina and section 173 is restricted in

the same manner as the construction

moratorium.

For example, construction of a new

plant with potential emissions of 500 tpy

PM and 50 tpy SO2 in an area designated

nonattainment for both PM and SO2

would be subject to nonattainment

requirements for P1 only, since the

sottrce is minor for SO2. Similarly,

modification of this plant resulting in a

net increase in emissions of 50 tpyin

SO. would not be subject to

nonattainment requirements. See also

examples (3), (4), and (7).

D. Case Evamples

The following additional examples

illustrate how applicability of PSD

requirements will work under today's

final regulations: (1) Construction of a new plant with

potential emissions of 500 tpy PMN and 50

tpy SO in an area designated

attainment for both PM and SO2 would

be subject to PSD review for both PM

and SO.

(2) Construction of the same plant as

in example (1), but in an area designated

attainment for SO and nonattainment

for PM. would be subject to PSD review

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for SO and nonattainment requirements

for PM.

(3) Construction of the same plant as

in example (1), but in an area designated

attainment for PM and nonaltainment

for S02, would be subject to PSD review

for PM only. PSD ieview would not

apply for SO2, since S02 is a

nonattainment pollutant. (4) Construction of the same plant as

in example (1), but in an area designated

nonattainment for both PM and SO.

would be subject to no PSD review and'

to nonattainment requirements for PM.

This would be the case even if the S0 2

emissions would have an impact on a

nearby Class I area for SO2 or on an

area located in another state which is

designated attainment or unclassifiable

for PM.

(5) Modification to the plant in

example (1), where the plant is located

in an area designated attainment for

both PM and SO2 resulting in a 30 tpy

net increase in PM emissions, would be

subject to PSD review for PM.

(6) Modification to the plant in

example (1), where the plant is located

in an area designated attainment for S02

and nonattainment for PM, resulting in

increased emissions of 50 tpy in SO2, would be subject to PSD review for SO2 .

(It is a significant increase at a major

source located in an attainment area.)

But if the modification only were to

increase the emissions of PM by 30 tpy,

only nonattainment requirements would

apply, since this is a modification of a

major source for a nonattainment

pollutant.

(7) Modification to the plant in

example (1), where the plant is located

in an area designated attainment for PM

and nonattainment for SO2 , resulting in

increased emissions of 50 tpy S02,

would be subject to neither PSD review,

nor the nonattainment NSR , requirements. Nonattainment NSR

would not apply since the 50 tpy

increase in the nonattainment pollutant

does not occur at an existing major stationary source for that pollutant. PSD

does not apply since the only change is

to a nonattainment pollutant. Instead,

the general NSR under the SIP would

typically apply to this pollutant, and the

new emissions of SQ2 would be

accommodated in the SIP's allowance

for area and minor source growth.

(8) Construction of a new plant with

potential emissions of 500 tpy hydrogen

sulfide (H2S) in an area designated

attainment for PM would be subject to

PSD review for H2S. If, in addition, the

plant had potential emissions of 50 tpy

PM, PSD review would be applied to

both H1S and PM.

(9) Construction of a new plant with

potential emissions of 500 tpy CO and 50

tpy H2S in an area designated

nonattainment for CO and attainment

for SO2 would be subject to PSD review

for 142S and to nonattainment

requirements for CO. If this plant were

later modified, resulting in a net

increase in emissions of 30 tpy in H2S,

PSD (10) review would apply for H2S. Construction of a new plant with

potential emissions of 500 tpy H2S in an area designated nonattainment for all

criteria pollutants would not be subject

to either PSD review or nonattainment

requirements. Part D applies only to

criteria pollutants, and the area here is

not subject to Part C, since it is not

designated attainment or unclassifiable

for any criteria pollutant.

E. Interstate Pollution

The September 5 proposal, in

response to the per curiam Alabama

Power decision issued on June 18, 1979,

would have required PSD review for a

major source locating or modifying in a

designated nonattainment area only if

such construction would substantially

impact a clean air area in another state.

In its final opinion issued on December

14, 1979, the court reversed its earlier

position regarding the need for a PSD

review of all interstate impacts to a

neighboring state's clean air area. Under

both rulings, PSD review would apply-in

all cases where the construction would

take place in a clean area. Pursuant to

the court's revised ruling in Alabama

Power, EPA will not apply PSD review

to a pollutant emitted by a source

locating in an area designated . nonattainment for that pollutant, even

where the source would impact a PSD

area in another state. Sixteen of the

nineteen comments received by EPA

supported this decision. Three

commenters requested EPA to propose

regulations to control interstate

pollution pursuant to sections

110(a)(2)(E) and 161. EPA is now

evaluating how best to control interstate

pollution, and may propose regulations

some time in.the future.

F. Geographic Applicability for VOC

Sources

On September 5, EPA proposed to

delete the "36 hour rule," which

subjected a source of volatile organic

compounds (VOC) to review, if the

source proposed construction within 36

hours pollutant traver time of an ozone

nonattainment area. Pollutant travel

time was to be calculated using wind

conditions associated with

concentrations exceeding the ambient

standard for ozone. Most commenters

agreed with the proposal to delete this

requirement. One commenter who

disagreed focused on the need for the

rule as a means of determining which

sources locating outside a designated

nonattainment area should be subject to

nonattainment review. Another argued

that without the rule EPA will end up

unnecessarily reviewing sources in

remote rural areas whose impact on the

ozone nonattainnent problem Is

insignificant, since ozone is a regional

problem.

For the reasons expressed on

September 5 (44 FR 51940), EPA has

decided to delete the 38 hour rule. The

commenters' concerns are taken care of

by the rules on geographic applicability

for nonattainment areas, as set out at 45

FR 31307 (May 13, 1980]. Thus, all major

VOC sources locating in a designated

ozone nonattainment area will be

subject to review under section 173.

Major VOC sources locating outside a

designated nonattainment area will be

subject to PSD review and will be

required to monitor for ozone, If the

monitoring indicates that the area of

source location is nonattainment, then

the.provisions of the Offset Ruling or

State plans adopted pursuant to section

110(a)(2)(D) of the Act shall apply until

the area is redesiginated as

nonattainment and a SIP revision has

been approved. Of course, a source of

VOC may choose to accept

nonattainment review requirements

immediately (i.e., LAER, offsets,

statewide compliance of other sources

under the same ownership) and conduct

post-approval monitoring as presently

permitted under the PSD regulations.

G. Response to Comments

Additional responses to comments

regarding applicability of nonattainment

requirements can be found at 45 FR

31307. Comments concerning interstate

pollution and the geographic

applicability of VOC sources, are

responded to above.

With regard to PSD review, several

commenters argued that EPA's approach would be overly complex and would

impose great administrative burdens

with few corresponding benefits to air

quality. EPA does not agree.

Applicability of PSD review as outlined

above is raquired by the Act. Congress

believed that such broad applicability

was needed to adequately guard against

significant deterioration in existing

clean areas. EPA cannot restrict

applicability and override Congressional

intent simply because of an added

administrative burden such applicability

might impose. For similar reasons, EPA

disagrees with the suggestion that It

should restrict PSD review to only those

pollutants that a source emits In major

amounts.

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Fourteen commenters argued that EPA

should not apply PSD review to

noncriteria pollutants, because the lack

of NAAQS and increments for

noncriteria pollutants indicates that

Congress did not consider these

pollutants to be able to cause significant

deterioration and felt that the extent of

harm by these pollutants has yet to be

demonstrated. They claimed noncriteria

pollutant sources are already subject to

NSPS and NESHAP regulation.

However, as other commenters have

correctly noted, section 169(1) refers to

sources with the potential to emit "any"

pollutant above certain amounts.

Moreover, section 165(a)(4) states that

BACT must apply to "each polluant

subject to regulation under this Act"

emitted by a source. Neither of these

provisions is limited to criteria

pollutants. See also Alabama Power, 13

ERC at 2045.

Two commenters urged that if EPA

decides.to regulate sources with minor

but significant emissions of criteria

pollutants and sources of noncriteria

pollutants, it should do so only if there

already exists a SIP emission limit for

the "minor" pollutants or only if section

111 or 112 CNSPS and NESHAP,

respectively) has been made applicable

after appropriate rulemaking to such

sources of noncriteria pollutants. The

difficulty with this approach is that the

Act requires PSD review, regardless of

whether another rule already applies to

the source except in the case of

nonattainment pollutants (see above].

Moreover, the suggested approach could

allow an unacceptably large number of

sources to escape review, since many

sources may not have an applicable SIP

emissions limit or NSPS or NESHAP"

limit.

While most commenters endorsed the

September 5 proposal that PSD

permitting should be limited to instances

where greater than de minimis changes

in a major pollutant would occur, one

commenter argued that Alabama Power

did not restrict PSD applicability to

modifications involving the pollutant(s)

which the source emits in major

amounts. This commenter claimed that

section 111(a) (4) of the Act defines "modfication" as "any physical change

in, or change in the method of operation

of a stationary source which increases

the amount of any air pollutant emitted

by such source or which results in the

emission of any air pollutant not

previously emitted." (Emphasis added.)

As mentioned above in the Modification

section, the Administrator agrees with

this interpretation. Thus, today's final

rule, with the exception of

nonattainment pollutants, requires a

PSD preconstruction review for greater

than de minimis net increases in the

potential to emit of a major stationary

source for any pollutant subject to

regulation under the Act

Twenty-three commenters supported

exempting nonattainment pollutants

from PSD review. However, three

commenters argued that PSD review

should apply to nonattainment

pollutants emitted in minor amounts,

claiming that review in nonattainment

areas should be as broad as that in PSD

areas. EPA agrees with the former

comments. As noted earlier, sections

165(a) and 169(1) apply to "any"

pollutant regulated under the Act. The

only restraint on PSD review, then, is

section 173 in Part D, which governs the

specific review of sources emitting

nonattainment pollutant(s) in major

amounts. In addition, sources emitting

the nonattainment pollutants in minor

amounts are subject to the general NSR

contained in SIPs, and the impacts of

such sources are accounted for in

demonstrations of reasonable further

progress and within the growth

allowance provisions of the SIP. Thus,

there is no need to apply PSD review to

either type of nonattainment pollutant

which already faces adequate review.

Twenty-three commenters also

supported exempting from PSD review

sources which emit only nonattainment

pollutants in major amounts, but PSD

pollutants in minor amounts, citing

Alabama Power for support. Neither

Alabama Power nor the Act support

such an exemption. Alabama Power

held that, at a minimum, PSD review

does not apply to major sources which

locate in an area designated

nonattainment for all criteria pollutants.

But the court did not take into account

the fact that the same source may emit

both PSD and nonattainment pollutants.

Since, as noted above, section 165(a)

does not link the pollutant for which the

source is major and the pollutant for

which an area is designated attainment

or unclassifiable, EPA interprets section

165(a) as requiring PSD review for each

source that is major for some pollutant

and locates in an area designated

attainment or unclassifiable for that or

any other pollutant and that this review

encompasses PSD pollutants whether or

not emitted in major amounts.

Finally, some commenters perceived

an inconsistency in requiring broader

pollutant applicability for PSD review

than for nonattainment review, yet using

a broader definition of "source" for

nonattainment areas than for PSD areas.

However, EPA's actions are consistent

with the Act The scope of PSD review

applicability and the nonattainment

definition of source are separate issues

and there is no basis for requiring that

they be resolved in such a way as to in

some manner equalize their effects.

XII. Baseline Concentration, Baseline

Area, and Baseline Date

EPA's'June 1978 PSD regulations

generally define baseline concentration

as the ambient concentration level

reflecting actual air qualitk as of August

7,1977, including projected emissions of

major sources commencing construction

or modification before January 6,1975,

but not in operation by August 7,1977,

and excluding emissions from major

sources commencing construction

(including modification) after January 6,

1975. (40 CFR 51.24(b](11). 52.21(b(11)

(1979).) Emissions from major source

construction commencing after January

6,1975, as well as most emissions

increases occurring from existing

sources after the baseline date are

counted against the applicable PSD

increments. (A more detailed discussion

of the relationship between baseline

concentration and increment

consumption is provided in Increment

Consumption.) Actual air quality

includes emissions increases after the

baseline date at existing sources whose

emissions are counted in the baseline

concentration, if the increases are due to

increased hours of operation or capacity

utilization authorized under the SIP and

reasonably anticipated to occur on the

baseline date. The baseline

concentration also includes emissions

increases allowed under a SIP

relaxation pending final EPA approval

on the baseline date, if the allowable

emissions under the revision were

higher than the source's actual

emissions on the baseline date. The June

1978 regulations established a uniform

baseline date of August 7.1977 for all

clean air areas. A definition of baseline

area was unnecessary since all PSD

areas were covered by the August 7,

1977 baseline date.

The Alabama Power decision held

that a uniform baseline date was not

authorized by section 169(4). It required

the baseline date to be established at

the time of the first application for a

permit in an area subject to PSD

requirements. EPA's regulations were

consequently remanded for change.

The Alabama Power decision,

however, supports EPA's definition of

baseline concentration. In holding that

monitoring data is required under

section 165(e)(2), the court confirmed

that actual air quality data should be

used to determine baselineconcentrations. See 13 ERC 2022. Since

monitoring data provide information on

actual air quality concentrations from

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existing sources and since section 169(4)

explicitly states that required monitoring

data should be used in establishing

baseline concentrations, the court's

decision supports EPA's requirement

that baseline concentrations reflect

actual air quality. In addition, the court.

implicitly affirmed EPA's approach in

ruling that EPA correctly excluded from

baseline concentrations emissions

increases due to voluntary fuel switches

after the baseline date. Since actual air

quality on the baseline date would not

reflect these increases, their exclusion

from baseline concentrations is

consistent with EPA's actual air quality

approach to baseline concentrations.

Finally, the court noted Congress'

rejection of a House bill that would have

allowed certain source emissions to be

included in baseline concentrations,

even though the emissions have not

occurred by the baseline date. See 13

ERC 2026. The court concluded that

Congress considered and rejected an

approach that would depart from actual

air quality in calculating baseline

concentrations, except in the limited

circumstances set forth in section 16914).

In its September 5, 1979 response to

the court's decision, EPA proposed to

delete the uniform August 7,1977

baseline date and to define baseline

date as the date of the first complete

application, after August 7, 1977, for a

PSD permit to construct or modify a

major stationary source in -n area

subject to PSD requirements. As part of

that definition, EPA proposed to define

baseline area as all parts of an Air

Quality Control Region (AQCR)

designated as attainment or

unclassifiable under section 107(d) of

the Act. Under that definition, an

application of a major stationary source

to construct in any part of an AQCR

designated as attainment or

unclassifiable would trigger the baseline

date for both SO and PM in all portions

of the AQCR.

EPA's proposed definition of baseline

area was based in part on its

consistency with the term "area" as

used in section 107, which requires air

quality designations for AQCRs or

portions thereof. The definition was also

intended to avoid implementation

problems that might rdsult from having

different baseline areas and dates

within the same AQCR. EPA proposed,

however, to allow states some flexibility

in defining baseline area. See discussion

at 44 FR 51942.

EPA further proposed to retain its

current definition of baseline

concentration but asked for comment on

a particular problem specific to the Gulf

Coast areas (see 44 FR 57107, October 4,

1979 and discussion in Increment,

Consumption). EPA's September 5

proposal specifically asked for comment

on two aspects of its proposal: (1)

whether baseline area should be defined

as clean portions of the AQCR in which

a source applies for a permit, and (2)

whether a permit application should

trigger the baseline date only in the

clean portions of the AQCR in which the

source would locate or also in clean

areas of any AQCR which would be

impacted by the source.

After issuance of the court's full

opinion in December, EPA proposed and

asked for comment on three changes to

its September 5 proposal (45 FR 6802,

January 30,1980). First, EPA stated it

was considering defining baseline area

as any area designated attainment or

unclassifiable under section 107(d) in

which a source subject to PSD

requirements would locate or impact,

rather than all clean portions of an

AQCR in which a source would locate

or impact. Second, EPA's solicited

comment on whether states should be

allowed to redefine the boundaries of

areas designated as attainment or

unclassifiable. EPA suggested, however,

that states should be limited to

redesignations no smaller than the

source's area of impact. Third, EPA

indicated it was considering adoption of

a pollutant-specific baseline date and

area. Under that approach, a source

would trigger the baseline only for the

pollutants it emitted. Thus, if the source

would emit neither SO2 nor PM, it would

not trigger any baseline. EPA also

requested comment on whether a source

which would be major for SO2 and

minor for PM would trigger a baseline

date only for S02 or for both pollutants.

EPA's final action and response to

comments on each of the issues is

discussed below. For simplification, the

discussion focuses on the four basic

issues of baseline concentration,

baseline area, baseline date, and

pollutant-specific baseline. Issues

related to increment consumption are

discussed in the next.section.

A. Baseline Concentration

As proposed, EPA is continuing its

current definition of baseline

concentration as the ambient

concentration levels at the time of the

first permit application in an area

subject to PSD requirements. Baseline

concentration generally includes actual

source emissions from existing sources

but excludes emissions from major

sources commencing construction after

January 6,1975. Actual source emissions

are generally estimated from source

records and any other informationreflecting actual source operation over

the two-year time period precedingthe

baseline date. The baseline

concentration also includes projected

emissions from major sources

commencing construction (including

modification) before January 6, 1975, but

not in operation by August 7,1977.

'Unlike the June 1978 policy, baseline

concentration will no longer routinely

include those emissions increases after

the baseline date from sources

contributing to the baseline

concentration, which are due to

increased hours of operation or capacity

utilization. Existing policy permitted this

grandfathering, provided such Increases

were allowed under the SIP and

reasonably anticipated to occur as of the

baseline date. Today's policy which

normally excludes such increases Is

consistent with using actual source

emissions to calculate baseline

concentrations. An actual emissions.

policy, however, does allow air quality

impacts due to production rate increases

to sometimes be considered as part of

the baseline concentration. If a source

can demonstrate that its operation after

the baseline date is more representative

of normal source.operation than Its

operation preceding the baseline date,

the definition of actual emissions allows

the reviewing authority to use the more

representative period to calculate the

source's actual emissions contribution to

the baseline concentration. EPA thus

believes that sufficient flexibility exists

within the definition of actual emissions

to allow any reasonably anticipated

increases or decreases genuinely

reflecting normal source operation to be

included in the baseline concentration.

EPA is also promulgating a change in

its current policy on SIP relaxations,

Under that policy, emissions allowed

under SIP relaxations pending on

August 7, 1977 are included In the

baseline concentration if the allowed

source emissions were higher than

actual source emissions. EPA adopted

that policy in June 1978 in recognition of

the fact that some states with SIP

revisions pending on August 7,1977 had

allowed sources to increase emissions

prior to final EPA approval of the

relaxations, while other states with

pending relaxations had required -

sources to comply with the lower

emissions limitations in the existing SIP

until final approval occurred. See 43 FR

26401 col. 3. To avoid penalizing sources

in states that did not allow increases

prior to approval, EPA provided that

baseline concentrations include the

allowable emissions under revised SIPs,

if the relaxation was pending on August

7, 1977 and the allowed emissions

exceeded the source's actual emissions.

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The effect was to allow sources to avoid

increment consumption analyses for the

emissions increase allowed in the

revision. EPA considered the exemption

justified because states and sources

were unaware that EPA would establish

a uniform baseline date of August 7.

1977, and those emissions increases

after that date would consume

increment.

EPA believes this exemption from

increment consumption analyses is no

longer necessary. States and sources

have been on notice since June 1978 that

emissions increases at existing sources

due to SIP relaxations must be

evaluated for possible increment

consumption. No state or source has

been uncertain as to the applicable

baseline date, or been placed in an

inequitable position as to other states or

sources. Therefore, today's regulations

do not exempt from increment

consumption analyses those SIP

relaxations not finally approved by EPA

prior to the baseline date in the affected

area.

One commenter suggested that EPA

extend the transition provision within

the June 1978 regulations for assessing

increment consumption. 43 FR 26401 col.

2. This provided that increased

emissions from plan relaxations

received after the August 7, 1977

baseline date but before the June 19,

1978 promulgation would consume the

applicable increment but could be

reviewed as part of the periodic

assessment rather than assessed

individually for increment consumption

prior to plan approval.

EPA does not believe that a similar

exception is required under today's regulations. EPA considered the

exception necessary in June 1978 due to

uncertainty as to how the 1977

Amendments would affect pending SIP

relaxations. Such uncertainty no longer

exists, since sources have been on

notice since June 1978 that SIP

relaxations after that date must be

individually reviewed for increment

consumption. Therefore, emissions

increases due to plan relaxations

received after June 19, 1978 must be

individually evaluated for increment

consumption prior to EPA approval. EPA is concerned, however, that the

new definition of baseline concentration

may work a hardship on states with SIP

relaxations pending when a PSD

application is filed in an area. A state

may submit a SIP relaxation affecting a

source, or group of sources, located in

an area where the baseline date has not

been set, and would not be required to

provide an increment consumption

analysis. If prior to final EPA approval,

a source filed a PSD application in the

area, the application would establish a

baseline date and the state would have

to withdraw the revision until it has

conducted the necessary increment

analysis. To prevent such burdensome

delays, EPA is exempting from

individual increment analyses SIP

relaxations pending at the time a

baseline date is established in the area

affected by the revision. However,

increment consumption due to emissions

from these relaxations must be

evaluated as part of a state's periodic

assessment Exemptions from individual

analyses is analogous to the previous

relief provided for sources subject to SIP

relaxations submitted after August 7,

1977, but before EPA's June 1978

promulgation. The exemption is

therefore consistent with prior EPA

policy.

B. Baseline Area.

In response to the September 5, 1979

proposal, fifty-three commenters felt

that an AQCR definition of baseline

area would not produce a great deal of

administrative relief and would,

simultaneously, limit an area's growth

options. These commenters favored

defining baseline area as the area of

significant source impact, based on

required modeling and monitoring

analysis. Such an approach was claimed

to provide just as much administrative

relief, more growth options, and

elimination of the problem of a small

PSD source triggering the baseline date

for a large area. Seventeen commenters

favored a baseline area definition

geared to areas designated as clean or

unclassified under section 107. Those

favoring this alternative strongly

preferred a "redesignation" procedure to

accompany this option. Other

commenters objecting to the AQCR

approach suggested: county boundary

lines (three), and the entire state (one).

In response to EPA's January 30

notice, fourteen of sixteen commenters

favored a source impact area definition

of baseline area. One of the remaining

two commenters favored retention of the

AQCR approach while the other

commenter desired a county or some

other legal boundary approach. All

eighteen comments received favored

triggering a baseline only in the area in

which a source would locate, and not in

those other areas which it would impact.

Nineteen of twenty-nine commenters

favored permitting state redesignation

but to areas no smaller than a source

impact area. Seven other commenters

favored no limitations on the

redesignation procedure. The remaining

three commenters opposed allowing

states to redefine baseline areas through

redesignation.

EPA has determined that baseline

area should be defined as the area

designated as attainment or

unclassifiable under section 107(d) in

which a source or modification subject

to PSD review would construct or on

which it would have an impact equal to

or greater than 1 j.g/m3 on an annual

basis. EPA has concluded that "an area

subject to this part." as used in section

169(4), refers to areas designated

attainment or unclassifiable under

section 107(d).

This view is strongly suggested by

Judge Robinson's opinion oh baseline

concentration in the December 1979

Alabama Power ruling. Referring to

Congress' intent to use actual air quality

data to establish baseline

concentrations, Judge Robinson states

that "the task of monitoring existing

ambient pollution levels in attainment

areas is assigned to the first permit

applicant, who will provide the

information essential to calculation of

the baseline." (Emphasis added) 13 ERC

1993. 2022. The footnote which follows

that sentence discusses a state's

obligation under section 107(d](1) to

submit area designations to EPA and the

fact that section 107 lists submitted to

date by the states indicate that many

areas lack acceptable air quality

information. Id. The references to

attainment areas and section 107(d)

designated areas indicate that the court

interprets the statute as requiring that

baseline concentrations be calculated

for each clean area designated under

section 107(d)(1).

EPA thus believes that neither the

statute nor the court opinion support the

proposed AQCR approach. The majority

of comments-also opposed defining

baseline area as AQCR. Opposition was

based on the view that it would do little

to alleviate administrative problems,

offered no flexibility in states, and

would often limit an area's growth

options by encompassing too large an area.

EPA has also determined that aPSD

source should trigger the baseline in all

intrastate clean areas that it impacts as

well as the area it lbcates in. One

objective of PSD is to track air quality

changes in clean air areas. If a major

source significantly affects any clean air

area in the same state the purposes of

PSD will be served if air quality

deterioration from minor/area source

growth and actual changes in baseline

source emissions are tracked from the

time significant SO2 or PM emissions

from a new or modified major source

impact a clean area. Such a policy is

also consistent with the language of

section 165(e)(1) of the Act which

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requires an air quality analysis of the

affected area, not just the area of

immediate location. The Administrator

does not believe that such a policy

should transcend state boundaries.

Since triggering baseline dates is an

important factor in managing growth,

EPA has concluded that states-should

have jurisdiction over their own

baseline dates. On the other hand,

establishment of baseline dates does not

affect increment consumption across

state borders by major source

construction commencing after January

6, 1975.

EPA has concluded that baseline

areas may be redefined by the states

through area redesignations. Section

107(d) specifically authorizes states to

submit redesignations to the

Administrator. Consequently, states

may submit redefinitions of the

boundaries of attainment or

unclassifiable areas at any time. If EPA

agrees that the available data support

the change, it will redefine the areas as

requested. As long as no PSD source has

located in, or significantly impacted on a

clean area being considered for

redesignation, the area. can be

redesignated as a new attainment or

unclassifiable area, even if the area

were previously part of a larger clean

area in which the baseline date had

been set.

Area redesignations are subject to

certain restrictions. The boundaries of

any area redesignated by a state cannot

intersect the area of impact of any major.

stationary source or major modification

that established or would have

established a baseline date for the area

proposed for redesignation or that is

otherwise requiredto obtain a PSD

permit. In addition, area redbsignations

can be no smaller than the area of

impact of such sources. These-"

restrictions comport with the PSD

objective of tracking air quality effects

in an area once a major source or

modification has affected an area. By

setting the baseline date at the time a

major source or modification impacts an

area and preventing the date from being

changed by subsequent area

redesignations, the system ensures that

future growth in the area wilf be

assessed for its air quality effects from

that date forward. Moreover, if states

could define baseline areas as small as

the immediate area in which a source is

located and not include the source

impact area, air quality could

deteriorate or increments could be

violated in a nearby area impacted by

the source, but neither the state nor EPA

would review the air quality impact. The

source could therefore affect air quality

but the reviewing authority would be

unaware of the deterioration. In addition

to jeopardizing air quality, "postage

stamp" baseline areas would be difficult

to administer.

A source will be considered to impact

an area if it has an impact of I g/m 3 or

more of S02 orPM on an annual basis.

This figure has been selected because it

corresponds to levels of significance

used in previous Agency determinations

for SO2 and PM. The annual average

was selected over the short term value

due to its ease of implementation. That

is, the shape of source impact areas is

less complex and the 1 1g/m annual

average provides ample area coverage

of the soutce impact area.

The Administrator believes that

defining baseline area as section 107

areas and allowing state redesignation

will satisfy most of the commenters who

objected to the proposed AQCR

definition andfavored state flexibility in

designations. The redesignation process

partially meets the concerns of

commenteirs who preferred defining

baseline area as source impact area.

Where abaseline date is established for

an area that is large relative to the

impact area of the triggering source, the

state has the option of redefining the

area to reflect more accurately the area

affected by the source.

C. Baseline Date

Consistent with the Agency's

proposal, today's promulgation defines

baseline date as the date after August 7,

1977 on which the first complete

application for a PSD permit is filed with

the appropriate reviewing authority.

Section 51.24(b)(14), 52.21(b)[I4]. As

discussed in the September 5 notice,

EPA has determined that this definition

is mandated by the court's interpretation

of section 169(4], which requires a. , baseline concentration to be set on the

date, after August 7,1977, "of the first

application for a permit in an area

subject to this part." See 44 FR 51941 col.

3. Consequently, the first complete PSD

permit application by a major source to

construct in a baseline area, as that term

is defined in § 51.24(b)[15) and

52.21(b)(15), and explained above, will

trigger a baseline date.

As discussed below, under PollutantSpecific Baseline, the regulation further

requires that a baseline date be set for

each pollutant emitted by the applicant

source in greater than de minimis

amounts, if increments oir other

equivalent measures under section 166

have been established for the pollutant.

At present'increments are established.

only for SO2 and PM, and no-increments

or equivalent measures for other

pollutants have been established.

Section 166 requires EPA to adopt

regulations establishing increments or

other equivalent measures for other

criteria pollutants. Section 166 does not

by its terms require EPA to apply

section 169(4) in determining baseline

dates for criteria pollutants other than

S02 and PM. EPA is now conducting

rulemaking under section 106 to develop

increments or equivaldnt measures for

the other criteria pollutants, As part of

that rulemaking. EPA is considering how

to establish baseline dates for those

pollutants.

While comments supported EPA's

proposal to establish the time of the first

complete application In an area as the

baseline date, eight commenters

suggested that'the date be set at the

time of the first application after August

7, 1978, rather than August 7,1977. This

review is consistent with other

comments noting that section 165(e)(2)

requires permit applicants after August

7, 1978 to provide one year's monitoring

or other equivalent air quality analysl

to determine a baseline concentration

for the area. These commenters claimed

that since baseline concentration Is to

be established through actual ambient

air quality data and no applicant can

gather the necessary monitoring data

before one year after the effective date

of the part, the baseline date should not

be triggered by applications filed before

that date.

EPA understands the commenter's

concerns. However, EPA believes

Congress was aware that prior to

August 7,1978, applicants could not

provide a full year of monitoring data,

as evidenced by the fact that the

monitoring requirement in section

165(e)(2) is not effective until August 7,

1978. Congress nonetheless provided

that baseline concentrations be

established by the first permit

application, an event which could occur

at any time after August 7, 1977.

Congress therefore considered that

baseline concentrations and increment

consumption could be determined with

less than a full year's monitoring data.

The need to accept less data is reflected

in the provision of section 169(4) that

baseline concentrations be based on

available, air quality data and on such

monitoring data as the applicant Is

required to submit. The provision

suggests that calculationb of baseline

and increment use may have to be made

with limited data, if available data, such

as that from the state agencies, Is not

appropriate. EPA interprets the

requirements for monitoring data after

August 7,1978, and not August 7, 1977,

as intended to provide a grace period for

sources, rather than evidencing Intent to

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postpone the establishment of baseline

dates.

One commenter questioned whether

baseline dates would be triggered by

permit applications previously filed by

sources that were major under the June

1978 PSD regulations, but no longer

major under the regulations promulgated

today, even if the permit applicant failed

to apply for-a permit rescission. EPA

concurs in the commenter's suggestion

that a subsequent permit applicant in

any area may inform the permitting

authority that the baseline date was not

triggered on the date that a source

which no longer qualifies as major

applied for a PSD permit. As the

commenter points out, this eliminates

the need for an immediate rescission of

all past permits affecting sources no

longer subject to PSD review. It also

avoids penalizing permit applicants if a

source that is no longer major fails to

apply for a permit rescission.

The Administration wishes to clarify

another point related to a change in

review status for the source which has

triggered the baseline date. If the

applicant that established the baseline

date is later denied a PSD permit or

voluntarily withdraws its PSD

application, a question arises as to

whether the baseline date has been

triggered. In the Administrator's

judgment the applicable baseline date

remains in place, since no change in

date is authorized under the Act. Section

169(4) establishes source application as

the baseline triggering mechanism and

does not qualify this by the later

issuance of a permit. This policy is

consistent with the establishment of a

baseline concentration which is based

on the available monitoring data,

typically that gathered by the source

applicant. The data to establish the

baseline concentration would be

available regardless of the eventual

permit status of the baseline triggering

application. Using source application

also stabilizes the NSR permitting

process. Later applicants can determine

whether a baseline date has been set in

an area by looking to whether a

previous application has been filed,

rather than needing to determine if the

permit has been or will be issued.

Finally, the Administrator wishes to

point out that it is the first PSD

application submitted under either 40

CFR 52.21 or state PSD regulations

developed pursuant to 40 CFR 51.24

which triggers a baseline date. When

states assume responsibility for

implementing the PSD program, several

PSD baseline dates may well have been

triggered. However, as mentioned

above, states can minimize the impact of

early baseline dates by redesignating

the size of the baseline area which is

affected by a previously established

baseline date.

D. Pollutant-Specific Baseline

The Agency has concluded that a

pollutant-specific baseline is consistent

with section 169(4) and the statutory

structure. Section 169(4) requires that a

baseline concentration be established

"with respect to a pollutant * * in an

area subject to (Part C)." Therefore, by

the terms of the statute, a baseline

concentration is established for

individual pollutants. Moreover, such

concentrations are established for areas

subject to PSD. Section 107(d), which

provides that areas designated

attainment or unclassifiable are subject

to PSD, requires designations to be

made on a pollutant-specific basis.

Section 107(d}{1}(D) and (E). To be

consistent, both baseline date and

baseline area (and any subsequent

redesignations under section 107 of the

Act) must also be pollutant-specific.

The comments that favored a

pollutant-specific baseline generally did

so on two grounds: the reference to

"pollutant" in section 169(4) and the

statutory requirement to use monitoring

data to establish baseline concentration.

Since monitoring and increment

consumption are pollutant-specific,

baseline concentrations must be as well.

The Administrator agrees that the

monitoring requirement supports

pollutant-specific baselines. Four of the

thirty-eight commenters that opposed

pollutant-specific baselines did so

priinarily for implementation reasons.

Although pollutant-specific baselines

may add some complexity to the PSD

program, EPA has concluded that the

statutory structure contemplates

pollutant-specific area designations.

The following example illustrates the

concept of pollutant-specific baseline

dates. If a major source of NO. that

would also emit SO, in significant

amounts and PM in less than significant

amounts submits a complete application

for a permit to construct in an area

designated under section 107(d)(1) as

attainment for all pollutants, and no

previous source has triggered any

baseline dates, the source would

establish the baseline date for SO but

not PM. If a later modification to the

source results in a significant net

increase in PM emissions and no other

application previously triggered the PM

baseline date, the proposed PSD

application for the modification would

then establish the PM baseline date.

XIV. Increment Consumption

There are two basic issues in the area

of increment consumption: (1) which

source emissions consume increment

and (2) how to calculate the amount of

increment consumed by those emissions.

The Alabama Power decision addressed

neither question. EPA, therefore,

proposed in September to continue its

current approach. Under the approach,

four categories of source emissions

affect increment: (1) as provided by

section 169(4), emissions from major

source construction (including

modification) commencing after January

6,1975. This group includes emissions

from sources issued PSD permits and

state new source review (NSR) permits

(including those issued in accordance

with section 51.180) and the Offset

Ruling) as well as emissions from nonpermitted sources; (2] emissions changes

occurring after the baseline date at

sources whose previous emissions on

the baseline date are included in the

baseline concentration (3) emissions

changes due to SIP revisions that are

approved after the baseline date: and (41

minor and area source growth occurring

after the baseline date. EPA's current

regulations provide that the first and

third category of sources affect

increment on the basis of emissions

allowed under the permit and emissions

allowed under the SIP as revised,

respectively. The second and fourth

categories affect increment on the basis

of actual emissions changes from the

emissions included in the baseline

concentration.

Since its proposal, EPA has

reevaluated its current policy in light of

both the December opinion of the court

and the Gulf Coast problem (discussed

below). EPA has concluded that

increment consumption and expansion

should be based primarily on actual

emissions increases and decreases.

which can be presumed to be allowable

emissions for sources subject to sourcespecific emissions limitations. Thischange principally affects increment

calculations for major source

construction not subject to sourcespecific permits or SIP requirements and

for sources whose allowable limits are

demonstrated not to reflect actual

emissions. PSD applications pending

today before EPA or a state agency

authorized to review or issue PSD

permits will be reviewed for increment

consumption on the basis of the revised

policy.

A. Use of Actual Fmissions

1. Rationale for Use of Actual

Emissions.

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- As discussed in the Baseline

Concentration section, the Alabama

Power decision supported EPA's

requirements that baseline

concentrations reflect actual air quality in an area. Increment consumption or

expansion is directly related to baseline

concentration. Any emissions not

included in the baseline are counted

against the increment. The

complementary relationship between

the concepts supports using the same

approach for calculating emissions

contributions to each. Since the

Alabama Power decision and the statute

both provide that actual air quality be

used to determine baseline

concentrations, but provide no guidance

on increment consumption calculations,

EPA has concluded that the most

reasonable approach, consistent with

the statute, is to use actual source

emissions, to the extent possible, to

calculate increment consumption or

expansion.

EPA's decision is also based on

concerns raised by the Gulf Coast

problem, discussed below. In that area,

and possibly others, source emissions

allowed under p.ermits and SIP

provisions in many cases are higher

than actual source emissions. Sources

could therefore increase their emissions

without being subject to PSD review or

the SIP revision process. However, if

increment calculations were based on

allowable emissions, EPA believes

increment violations would be

inappropriately predicted and proposed

source construction would be delayed or

halted. In practice, EPA expects that

few, if any, sources will increase their

emissions to allowable levels.

EPA believes it is unwise to restrict

source growth based only on emissions

a source is permitted to emit but which,

in many instances, have not been and

are not likely to ever be emitted.

Increment calculations based on the

best prediction of actual emissions links

PSD permitting more closely to actual

air quality deterioration than

calculations based on allowable "paper"

emissions. In addition, use of actual

emissions for increment consumption is

consistent with using an actual

emissions baseline for defining a major

modification and for calculating

emissions offset baselines.

2. Calculation of Increment

Consumption Using Actual Emissions.

To determine how much increment

remains available to a pl'oposed major

source or modification, the source owner

or operator must analyze several types

of emissions changes as of its

application date. These changes

generally include: (1) emissions changes

that have occurred at baseline sources

and emissions from new minor and area

sources since the baseline date; (2)

emissions that have occurred or will

occur at sources which have submitted

complete PSD applications as of thirty

days prior to the date that the proposed

source files its application; and (3)

emissions changes reflected in SIP

relaxations submitted after August 7,

1977, and pending as of thirty days prior

to the date the source files its

application, or emissions changes

reflected in SIP relaxations which have

been approved since August 7,1977, but

which have not yet occurred. (See,

discussion below on calculation of

increment consumption for SIP

relaxations.) The thirty-day cutoffs are

specified tor stabilize the review process

by preventing new applications and SIP

relaxation proposals from invalidating

otherwise adequate increment

consumption analyses without warning.

Increment calculations will generally

be based on actual emissions as

reflected by normal source operation for

a period of two years. EPA has selected

two years based on its recent - experience in reviewing state-NSR

programs for nonattainment areas. The

state submittals use periods of between

one and three years to evaluate source

emissions. In EPA's judgment, two years

represents a reasonable period for

assessing actual source operation, Since

the framework for nonattainment NSR

programs will generally form the basis

for a state's PSD plan, EPA believes it is

appropriate to use the same time period

for evaluating actual source emissioris in

the PSD program. Two years is also

being used to calculate the emissions

offset baseline for modifications in

nonattainment areas.

The two-year period of concern

should generally be the two years

preceding the date as of which

increment consumption is being

calculated, provided that the two-year

period is representative of normal

source operation. The reviewing

authority has discretion to use another

two-year period, if the authority

determines that some other period of

time is more typical of normal source

operation than the two years

immediately preceding the date of

concern. In general, actual emissions

estimates will be derived from source

records. Actual emissions may also be

determined by source tests or other

methods approved by the reviewing

authority. Best engineering judgments

may be used in the absence of

acceptable test data.

EPA believes that, in calculating

actual emissions, emissions allowed

under federally enforceable sourcespecific requirements should be

presumed to represent actual emission

levels. Source-specific requirements

include permits that specify operating

conditions for an individual source, such

as PSD permits, state NSR permits

issued in accordance with § 51,18(J) and

other § 51.1a programs, including

Appendix S (the Offset Ruling), and SIP

emissions limitations established for

individual sources. The presumption

that federally enforceable sourcespecific requirements correctly reflect

actual operating conditions should be

rejected by FEPA or a state, if reliable

evidence is available which shows that

actual emissions differ from the level

established in the SIP or the permit.

EPA believf.two factors support the

presumption that source-specific

requirements represent actual source

emissions. First, since the requirements

are tailored to the design and operation

of the sourcewhich are agreed on by the

sourde and the reviewing authority, EPA

believes it is generally appropriate to

presume the source will operate hnd

emit at the allowed levels. Second, the

presumption maintains the Integrity of

the PSD and NSR systems and the SIP

process. When EPA or a state devotes

the resources necessary to develop

source-specific emissions limitations,

EPA believes it Is reasonable to presume

those limitations closely reflect actual

source operation. EPA, states, and

sources should then be able to rely on

those emissions limitations when

modeling increment consumption. In

addition, the reviewing authority must at

least initially rely on the allowed levels

contained'in source-specific permits for

new or modfied units, since these units

are not yet operational at a normal level

of operation. EPA, a state, or source

remains free to rebut the presumptibn by

demonstrating that the source-specific

requirement is not representative of

actual emissions. If this occurs,

however, EPA would encourage states

to revise the permits or the SIP to reflect

actual source emissions. Such revisions

will reduce uncertainty and complexity

in the increment tracking system, since

it will allow reviewing authorities and

sources to rely onpermits and SIP

emissions limitations to model

increment consumption.

Review of increment usage due to SIP

relaxations will also be based initially

on emissions allowed under the SIP as

revised (provided this allowed level Is

higher than the source emissions

contributing to the baseline

concentration). Calculations will

generally be made on the difference

between the source emissions Included

in the baseline concentration and the

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emissions allowed under the revised

SIP. Initial use of allowable emissions is

necessary because the increment

calculation generally occurs before the

source has actually increased its

emissions. Therefore, at the time the

revision is reviewed, increment

consumption must be based on the

predicted source operation under the

revision. In addition, since SIP revisions

are commonly based on source requests,

it is reasonable to assume such sources

will actually emit at levels permitted by

the relaxation.

Subsequent to the initial review

process, increment calculations for SIP

relaxations may depart from allowable

emissions under the SIP, if the source

has not actually increased its emissions.

For example, three years after approval

of a SIP relaxation, if it is found that the

source has not increased its emissions

to levels allowed in the SIP, estimates of

increment usage should be revised to

reflect actual source emissions. If this

occurs, EPA would also encourage

states to revise the emissions levels

allowed in the SIP to represent the

source's actual emissions.

Finally, the required increment

consumption analysis can be amended

by the applicant after the PSD review

process has begun. For example, an

applicant would normally revise its

analysis to reflect increment made

available by the withdrawal of PSD

applications previously considered in

the applicant's calculation of increment

consumption. In no event, however, will

the source be required to take account

of emissions changes or changes due to

pending PSD applications or SIP

relaxations that could increase the

amount of increment consumed by other

sources.

B. Exclusions From Increment

Consumption

1. Exclusions Requested by

Governors.

Section 163(c) authorizes four

exclusions from increment consumption

upon the request of a governor.

Exemptions are available for federallyordered fuel switches under the Energy

Supply and Environmental Coordination

Act of 1974 or superseding legislation,

fuel switches due to natural gas

curtailment plans under the Federal,

Power Act, temporary emissions of

particulate matter due to construction

and related activities, and new sources

constructing outside the United States.

In the cases of the federally-ordered

switches and natural gas curtailment

plans, the exclusion is limited to a

maximum of five years after the

effective date of the order or plan.

Th; statute provides that these

exclusions are available only if the state

has an EPA-approved PSD plan. Section

163(c). In its June 1978 regulations,

however, EPA permitted governors to

use the exclusions during the ninemonth period between promulgation of

the regulations and the date plan

revisions were required to be submitted.

See § 52.21(fl(3) (1979). As discussed in

the preamble to the June 1978

regulations, EPA concluded that

prohibiting use of the exclusions after

the nine-month period would be an

adequate incentive to states to submit

PSD plans. See 43 FR 28402 (Col. 1).

EPA has decided to extend this policy

to today's regulations. In view of the

many changes in the regulations

resulting from the court's decision,

states which have already submitted

plans will have to submit revised

provisions and states which have not

yet submitted plans will have to develop

plans based on the new regulations. As

with the June 1978 requirements, EPA

believes that disallowing the exclusions

nine months from today will provide

sufficient encouragement to states to

submit plans, and will offer states more

flexibility for growth in this interim

period. Therefore, governors may

request the exclusions until nine months

from today's promulgation, even if no

PSD plan has been submitted to or

approved by EPA. Thereafter, the

exclusions will be unavailable unless

the state has submitted an approvable

PSD plan to EPA.

2. Temporary Emissions

EPA's June 1978 regulations and the

September 1979 proposal provided that

temporary emissions from new sources

or modifications would be exempt from

impact analysis requirements

§§ 51.24(k)(iii), 52.21(k)(Wii) (1979);

51.24(k)(1), 52.21(k)(1) (proposed).

Temporary emissions typically include,

but are not limited to, emissions from a

pilot plant, a portable facility, construction or exploration activities.

Similarly, EPA proposed to exempt from

increment analyses the impacts on the

PSD increments from the temporary

emissions associated with the

development of an approved innovative - control technology system, provided the

applicable ambient standards were not

jeopardized. The regulations, however,

did not provide a comparable exemption

for temporary emissions resulting from

short-term SIP relaxations.

Only three commenters addressed the

concern of temporary emissions and

increment consumption. These

commenters offered suggestions in light

of the proposed position on innovative

control systems. These commenters

supported the existing policy of

exempting temporary emissions from

increment air quality analyses when no

Class I areas or areas with known

increment violations would be impacted.

Temporary SIP relaxations are

comparable to temporary emissions

from new and modified major stationary

sources since both affect air quality for

a limited period of time. Therefore, the

Administrator has decided that the

existing policy of exempting temporary

emissions should be extended to those

associated with certain SIP relaxations.

A SIP relaxation will be eligible for such

relief if it meets the following five

conditions. These conditions are

intended to ensure that the emissions

increase associated with the SIP

relaxation will be limited in duration

and that no residual harm will occur to

the environment as a result of the

relaxation. (1) The SIP revision allows

an emissions increase for a temporary

period only. As stated in the preamble

to the June 1978 regulations, temporary

emissions generally would last no more

than two years at one location, although

emissions for a longer period of time

may be considered temporary if an

appropriate demonstration is made. See

43 FR 26394 col 2. (2) The revision is

nonrenewable. This conitionfis

intended to prevent sources from

indefinitely postponing compliance with

emissions limitations necessary to

prevent PSD increment violations. (3)

The temporary emissions will not cause

or contribute to the violation of any

applicable NAAQS. (4) At the expiration

of the temporary SIP relaxation, the

source must be required to comply with

an emissions limitation that ensures the

post-exemption emissions will be equal

to or less than the emissions existing

before the exemption was granted. (5)

The temporary emissions from the

revision do not impact any Class I area

and any area where an increment is

known to be violated. Restricting the

exemption to sources impacting Class H

or M areas conforms to Congress' intent

to provide maximum protection of air

quality values in Class I areas and

meets the commenter's concerns.

In addition to SIP relaxations for

individual sources, the exemption will

be available for temporary emissions

due to SIP relaxations that apply to

several sources, if the state provides

adequate assurances that no standards

will be violated.

C. Increment Epansion Due to

Emissions Reductions Prior to the

Baseline Date

EPA's policy under the June 1978

regulations is unclear as to whether

emissions reductions prior to the

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baseline date increase the amount of

available incredients. The policy allows

decreases after January 6, 1975, and

prior to the baseline date, to be used bysources to offset subsequent increases

and exempt the increases from the

requirement for an ambient air quality

assessment. In effect, EPA treats such

decrease as expanding available

increments, since the decreases permit

later emissions increases at the same

source-to avoid the otherwise required

air quality assessment. The policy did

not state, however, whether isolated

decreases not made in conjunction with

intrasource increases were considered

to expand available increments. In

contrast, the policy is clear that

emissions reductions after the baseline

date increase available increments.

As a result of the revised definition of

modification which permits offset credit

for emissions reductions occurring

within a moving five-year period, EPA

has decided to clarify its existing policy.

All emissions reductions prior to the

baseline date at major stationary

sources will now be considered to

expard available increments. Since

contemporaneous emissions reductions

accomplished before the baseline date

can be used by a source to offset a

contemporaneous post-baseline

emissions increase, and thereby avoid

PSD review, it is also reasonable to

allow these contemporaneous prebaseline date reductions to expand the

Increment. Without this change, source

owners that'reduce emissions by retiring

or controllifig old equipment before the

baseline date willbe penalized by

having increases after the baseline date

count against increments even though

the pre-baseline decrease might offset

the later increase and eliminate the need

for PSD review. In contrast, source

owners that postpone the reductions

and increases until after the baseline

date is set would both secure

contemporaneous offsets and avoid

increment consumption.

EPA believes that this inequity should

be eliminated to encourage early

retirement of old equipment. Section

169(4) provides that emissions from

major emitting facilities that commenced

construction after January 6, 1975, shall

be counted against available

increments. The provision implies that

both emissions increases and decreases

should be considered for their impact on

available increments. In view of the

statutory language and policy

considerations, EPA has determined that

decreases made prior to a baseline date

can expand available increments in the

same manner as decreases made after a

baseline date. However, to ensure that

the emissions reductions remain

effective, reductions will add to

available increments only if the lower

emissions limitations are federally

enforceable.

The changed policy is reflected in a

new definition of "construction" which

is any physical change or change in the

method of operation of a stationary

source resulting in a change in the

actual emissions of the source (including

fabrication, erection, installation,

demolition, or modification). Any

construction commencing at a major

source since January 6, 1975, may result

in an increase or decrease in actual

source emissions. If an actual decrease

involving construction at a major

stationary source occurs before the

baseline date, the reduction will expand

the available increment if it is included

in a federally enforceable permit or SIP

provision. An actual increase associated

with construction activities at a major

stationary source will consume

increment.

The Administrator would also like to

clarify that changes in fugitive emissions

levels (to the extent quantifiable) at

major stationary sources, resulting from.

construction commenced since January

6,1975, will consume or expand the

available increment. This is true even if

such changes o-ccurred prior to the

baseline date.

D. Gulf Coast Problem.

In the September 5 proposal, and in an

October 4, 1979 correction notice, EPA

solicited comments on how to calculate

increment consumption by gas-fired

boilers in the Gulf Coast area that had

received state approval to burn oil in the

event of a future natural gas shortage.

See 44 FR 51942 (September 5, 1979), and

44 FR 57107 (October 4,1979). The

affected units include both boilers that

could accommodate such a fuel-switch

before January 6,1975 and boilers that

were altered to accommodate the fuelswitch after that date. All affected units

were permitted to switch fuel before

August 7, 1977, the earliest possible

baseline date. Assuming the baseline

date is set in the area where these

sources are located, which EPA believes

is.the case for most of the sources, each

group of sources may cause increment

violations.

For sources that could burn

alternative fuels prior to January 6, 1975,

the problem is posed by the fact that if

all sources made the switch to oil

allowed under their permits, S02

increment violations would occur. Since

neither a SIP revision nor a PSD Permit

would be required for the sources to

make the fuel switches, EPA and the

state could be unaware of the violations

until another source applied for a PSD

permit or until a periodic assessment

was made..If pctual Increment violations

were discovered during the PSD review

process for the proposed source, the

source would not be permitted to build

or modify until the violations were

corrected. If violations were found

during a periodic assessment, the state

would have to suspend further growth

until its plan was revised to correct the

violations. Consquently, the inadequacy

of the exiting permits to prevent

increment violations could result In

increment violations which would delay,

and possibly prevent, additional growth

in the area.

A similar problem is posed by sources

that could not accommodate oil before

January 6, 1975. Since these sources

increased their potential to emit after

January 6,1975, under EPA's June 1978

policy, this change would have

constituted "construction" at a major

stationary source after January 6, 1975,

Therefore, under section 169(4), any

emissions increases caused by the "construction" would have consumed

increment. As noted,above, EPA's June

1978 policy required increment

calculations to be based on emissions

allowed under a permit or SIP and not

on actual source emissions. If a PSD

source applied to locate In an area and

these Gulf Coast sources were modeled

based on emissions increases due to fuel

switches allowed by their permits, EPA

believes several 502 increment

violations would be predicted. Under

existing policy, the proposed PSD source

would then be required to correct the

violations prior to receiving construction

approval. Future growth in the area

could, therefore, be delayed or

prevented.

The problem posed by the second

group of sources is reduced to some

extent by the increment consumption

policy promulgated today. Since

increment usage will now be based on

changes in actual source emissions,

increment violations will not occur In

the area unless the sources actually

switch to oil from natural gas. Because

natural gas Is expected to remain less

expensive and more available than oil,

EPA believes few, if any, switches are

likely. Therefore, while the increments

may still be jeopardized due to

inadequate permit conditions, PSD

review can proceed as long as actual

emissions increases at existing sources

and actual emissions from sources with

PSD or NSR permits are not predicted to

cause increment violations.

If an actual increment violation has

occurred, EPA's June 1978 policy

imposes a PSD permit moratorium until

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the violation is corrected. 43 FR 26401

(col. 1), June 19, 1978. This policy is

continued in today's regulations.

Therefore, if an increment violation is

predicted to occur within the significant

impact area of a proposed source

(1 1Lg/m3 on an annual average), a PSD

permit cannot be issued to the source,

unless the state or source obtains

sufficient emissions reductions to

restore the increment. The issue of how

to deal with potential increment

violations due to inadequate permit

conditions is addressed in the next

discussion.

Several comments were received in

response to EPA's request for comments

on the Gulf Coast problem. Although

EPA believes its revised policy of using

actual emissions to calculate increment

consumption resolves the immediate

Gulf Coast dilemma, and similar

potential problems in other states, EPA

is responding below to suggestions

made by commenters.

EPA's notices questioned whether the

Agency should or may include in the

baseline concentration emissions

increases due to fuel switches. Twelve

of thirteen commenters on the issue

supported including increases due to

fuel switches in the baseline

concentration and the majority of the

commenters favored including in the

baseline concentration other emissions

increases approved prior to the baseline

date but not occurring by that date.

Commenters also proposed using

allowable emissions in all cases to

calculate baseline concentrations.

As discussed above and in Baseline

Concentration, EPA has determined that

both baseline concentrations and

increment consumption should be based

on actual air quality impacts. This

decision is consistent with the

suggestion of some commenters that

EPA consider increment consumption to

occur only when actual emissions

increase and not when the permit or SIP

allowing the increase is approved. As a

result of EPA's revised policy, emissions

increases due to fuel switches cannot be

included in the baseline concentration

unless the increase occurred prior to the

baseline date and at a source which

could accommodate this switch prior to

January 6, 1975 without physical change

or received approval under a PSD permit

to make the switch.

One commenter was particularly

concerned that unless allowable

emissions were included in the baseline

concentration, utilities with SIP

relaxations approved shortly before the

baseline date would be penalized if the

utilities were unable to make the

allowed increase by the baseline date.

The commenter argued that some

utilities would be unable to make the

technical changes necessary to

accommodate the fuel switch prior to

the baseline date. Such utilities would,

therefore, be required to do an

increment consumption analysis, in

contrast to other sources that made the

switch before the baseline date. The

commenter suggested that accounting

for the allowed emissions increase in

the bqseline concentration would

resolve this inequity and would be

consistent with EPA's June 1978 policy

of including in the baseline

concentration emissions allowed under

SIP relaxations pending before EPA on

the baseline date.

While appreciating the commenter's

concerns, EPA has concluded that no

exemption from increment consumption

analyses is appropriate in these cases.

First, as discussed in Baseline

Concentration, EPA has changed its

June 1978 policy to provide that

increment is consumed by emissions

increases due to SIP relaxations pending

EPA approval on the baseline date.

Therefore, the exemption cited by the

commenter no longer applies. Second.

the June 1978 exemption was provided

for sources whose emissions increases

were delayed by the administrative

process and not by physical limitations

at the source. Therefore, the June 1978

exemption would not have applied to

these utilities. Third, under the

regulations promulgated today, if

significant construction Is necessary to

make the allowed emissions increase,

the change is a modification and would

be subject to PSD review, including

increment consumption analysis, in any

case.

Other commenters suggested that

prospective application of the

definitions of major emitting facility and

modification promulgated today would

resolve the Gulf Coast problem. Under

this approach, emissions increases that

occurred after January 6,1975, and

would otherwise be considered

modifications that consume increment

under today's regulations, would not be

evaluated under the new definitions.

These commenters argued that the Gulf

Coast problem is due to increment

consumption from emissions increases

not subject to the PSD permitting

process at the time the increases were

approved. The commenters stated that

EPA has flexibility in deciding the

effective date of the definitions.

EPA believes that section 169(4)

requires emissions from all major

emitting facilities (as defined in the Act

and not as defined in the old PSD

regulations commencing construction

after January 6, 1975 to count against

increment. The statute provides no

discretion to exempt these emissions

from increment consumption. EPA also

notes that under the PSD regulations

effective from January 6,1975 to August

7,1977, emissions increases at such

sources would have consumed

increment to the extent the fuel switches

occurred. (See 39 FR 42510).

E. PotentLal Increment Violaflons

1. Inadequate SIP and Permit

Provisions. While the use of actual

emissions to calculate increment

consumption partially resolves the Gulf

Coast problem, the potential for

increment violations remains, due to

inadequate SIP and permit provisions.

As stated in the preceding discussion,

many sources in the Gulf Coast area,

and in other states as well, have permits

or SIP requirements that allow actual

emissions increases ,.ithout subjecting

the source to PSD review or the SIP

revision process. For example, sources

may be allowed to burn fuels with

higher sulfur contents, as in the Gulf

Coast area, or may have high allowable

limits that would permit sources to relax

existing pollution controls. If all sources

in an area increased actual emissions to

levels allowed under the SIP or permits,

EPA believes increment violations

would occur. Because no PSD review or

SIP revision would be required, neither

the state nor EPA would know of the " violations until a PSD application was

filed or a periodic assessment occurred.

Growth would be halted until the

violation was corrected.

At present, increment violations due

to allowed but unreviewed emissions

increases, and consequent construction

delays, are only potential problems. EPA

has therefore concluded that it is

premature to promulgate remedial

regulations to prevent such theoretical

violations. EPA, however, encourages

states to be alert to emissions increases

that affect the increment. EPA urges

states to closely monitor emissions

increases from baseline sources and

from new or modified sources not

subject to PSD review which affect the

available increment. States should

consider requiring sources to report any

emissions increases after the baseline

date, including increases reflecting

changed operating conditions that will

continue for an extended period of time,

perhaps six months. States would then

learn of increases that consume

increments and could take those

increases into account in PSD permit

reviews and periodic increment

assessments. In addition, states are

encouraged to revise SIPs and/orissue

operating permits so that SIP

requirements and permits reflect actual

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source operating conditions. This will

protect against large unreviewed

emissions increases. While EPA is not

promulgating a reporting requirement

today, it will reconsider the need for a

notification system if it finds that

unreviewed emissions increases are

causing or contributing to increment

violations.

2. Double Counting of Emissions

Decreases.

EPA is concerned about another

potential problem: double counting of

emissions decreases. The problem could

arise if an existing source (Source A)

reduces its actual emissions and a new

source (Source B) seeking to locate in

the area proposes to use the decrease

when modeling increment consumption.

Source B would do this by including the

emissions decrease in its modeling of

actual emissions from Source A. If the

reviewing authority does not require

Source B to ensure that the decrease at

Source A is federally enforceable and

does not record Source B's use of the

decrease at the time Source B conducts

its modeling, Source A may well use the

same decrease to offset a future

contemporaneous increase at Source A

and thereby avoid PSD review for the

increase. The use of one emissions

decrease to offset two emissions

increases could lead to air quality

deterioration, and possible increment

violations that would require correction

before more PSD permits could be

issued.

While EPA believes double counting

of decreases should not be permitted, it

is not promulgating regulations today to

address the problem. EPA is Uncertain

how often, if ever, the problem will

arise. Certainly it will be difficult for a

new source to prove to the satisfaction

of the reviewing authority the value of

an emissions decrease accomplished at

another source. Moreover, while EPA

believes double counting of decreases

should not occur, It is uncertain what

solution is equitable for affected

sources. In the absence of a formal'

increment banking system, or other • provisions regulating increment

allocation, the reviewing authority

would have no basis for denying Source

B use of any available increment. This

could result in hardship to Source A if it

deprives Source A of use of its decrease

as an offset for future increases.

The issue of double counting is part of

the broader question of increment

management and allocation of air

quality rights. EPA intends to develop

banking regulations, which will include

guidance to states on methods of

increment allocation and regulating use

of emissions decreases. To this end,

EPA solicits suggestions on how to

prevent double counting of decreases

and on methods of increment allocation

and management.

XV. Best Available Control Technology

Section 165 of the Act provides in part

that any "major emitting facility"

constructed in a PSD area must apply

best available control technology

(BACT) "for each pollutant subject to

regulation under this Act emitted frpm,

or which results from, such facility."

Section 169(3) of the Act defines BACT

and specifically requires that it not be

applied in a manner so as to result in

emissions in excess of those that are

allowed by standards established

pursuant to sections 111 or 112 of the

Act. 42 U.S.C. 7479(3). The Agency's

existing regulations required BACT only

for each pollutant for which a source or

modification would be "major." 40 CFR

51.24(i)(1), 52.21(i)(1J(1978).

The Alabama Power decision held

that the Act requires that BACT be

applied to all pollutantsi subject to

regulation under the Act, not only those

for which the source is major, and that

EPA is with out authority to circumscribe

the requirement in this manner. 13 ERC

1993,2046. The court did conclude,

however, that EPA has authority to set

de minimis thresholds for BACT

applicability, in order to alleviate

economic and administrative burdens.

Id.

In response to the court's decision,

EPA proposed and is now promulgating

regulations regarding application of

BACT. 40 CFR 51.24(k)(1), 52.21(k)(1).

With respect to new major stationary

sources, BACT.will be required for each

regulated pollutant emitted in excess of

specified de minimis amounts.

Application of BACT is also required, in

,the case of major modifications, for each

regulated pollutant emitted for which

there is a significant net emission

increase (greater than de minimis

amounts) at the source. The BACT

requirement applies to only the modified

units and added units at the source

whose construction results in a sourcewide significant net increasb in the

emissions of the regulated pollutant. The

new BACT requirements apply only to

the owner or operator of a PSD source

or modification whose application for a

PSD permit was not complete before

today's promulgation. (See Transition).

The de minimis emissions rates

promulgated bj, the Administrator (see

De Minimis Exemption) will apply to

both BACT and LAER requirements. The

Agency specifically solicited comments

on the need to specify de minimis levels

for BACT, since the case-by-case BACT

determinations would presumably take

de minimis levels and such related

issues as cost into account. Twenty-si

commenters addressed this Issue.

Seventeen agreed in principle but

generally considered the proposed

levels too low and requested special

consideration for pollutants emitted In

less than major amounts. Eight of nine

dissenters preferred case-by-case BACT

determinations, with no de minimis

values.

The Administrator is implementing

the proposed de minimis approach for

determining BACT applicability,

although several values have been

increased. (See De Minimis

Exemptions.) This action should

alleviate the concerns of those

commenting about the need for BACT

review of those pollutants emitted in

small amounts. The Agency also

solicited comments on the potential

problem of a source obtaining lenient

BACT'determinations and later applying

better controls to offset additional

expansion plans. Twelve of thirteen

commenters addressing this issue

concluded that no such problem would

arise. They claimed that it would be

implausible to suppose that state

programs and EPA regional offices

would evade such responsibility,

especially since loose BACT

determinations would result in

accelerated consumption of increment.

The Administrator agrees that there

appears to be adequate protection

against loose BACT determinations.

Each of the three comments that

addressed a need to phase in the BACT

requirement favored a six month to one

year grace period because of the

complexity of the program. However,

the Administrator believes that the caseby-case flexibility of BACT

determinations is sufficient to phase In

these regulations. Moreover, sources

have effectively had a one year notice,

in that the original Alabama Power

decision, published June 18, 1979,

informed them of the new BACT

requirements. (See Transition,)

An additional issue, regarding the

pollutant applicability of the BACT

requirement, arose during the comment

period. The proposal required BACT for

the new or modified emissions units

which were associated with the

modification and not for those

unchanged emissions units at the same

source. Thus, if an existing boiler at a

source were modified or a new boiler

added in such a way as to significantly

increase particulate emissions, only that

boiler would be subject to BACT, not

'the other emissions units at the source,

However, the proposal could be

interpreted as requiring BACT for

certain pollutants where the

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Administrator did not intend to require

BACT. For example, the proposal could

be interpreted as requiring BACT review

for any pollutant emitted from a source

that was modified, regardless of

whether the emissions of the pollutant

increased. However, that was not the

Agency's intent.

If a new unit were added or if a

modification were made to a unit at a

source, but there are contemporaneous

decreases in emissions elsewhere at the

source, BACT is required only for the

pollutants for which there is a net

significant plant-wide increase. For

example, consider the addition of a

boiler whose emissions of PM, SO,, and

NO. each exceed de minimis levels. If,

at the same time, an emission unit of

S02 elsewhere at the source were shut

down, such that plant-wide emissions of

S02 either do not increase or increase

by less than a de minimis amount.

BACT is required for the new boiler only

for PM and NO,. Of course, BACT will

not be required if there is no significant

plant-wide increase in emissions of any

pollutant. Similarly, if an existing

emissions unit of a source were

modified such that there is an emissions

increase for one or more pollutants, but

not all, BACT is required only for the

pollutants for which there is both a net

increase at the unit and a net significant

plant-wide increase.

The above final policy governing the

applicability of BACT to modifications

is also consistent with existing policy

under section 111. which the court said

should govern modification concerns.

The applicable regulation, 40 CFR

60.14(a), states that "any physical or

operational change to an existing facility

which results in an increase in the

emissions rate to the atmosphere of any

pollutant to which a standard applies

shall be considered a modification

within the meaning of section 111 of the

Act. Upon modification, an existing

facility shall become an affected facility

for each pollutant to which a standard

applies and for which there is an

increase in the emissions rate to the

atmosphere." (Emphasis added.)

The regulation cited above makes two

important statements about the

applicability requirements. First, the

BACT requirements apply only with

regard to those pollutants for which

there has been a net significant increase.

This was emphasized by the Alabama

Power decision: "Congress wished to

apply the permit process, then only

where industrial changes might increase

pollution in an area, not where an

existing plant changed its operations in

ways that produced no pollution

increase * * *. The interpretation of

'modification' as requiring a net increase

is thus consistent with the purpose of

the Act * * *. The EPA has properly

exempted from best available control

technology (BACT) and ambient air

quality review those 'modifications' of a

source that do not produce a net

increase in any pollutant." 13 ERC at

2043.

Second, BACT is required for net

significant'increases of any pollutant

regulated under the Act. regardless of

the category of source involved or the

emissions standards generally

applicable to it. Section 165(a)(4) of the

Act requires application of BACT "for

each pollutant subject to regulation

under this Act" emitted from a subject

facility. 42 U.S.C. 7475(a)(4). This

includes not only criteria pollutants but

also all pollutants regulated under NSPS

or NESHAP. In this manner, BACT can

complement the NSPS process by

extending coverage to additional source

types and units and perhaps identifying

candidates for future NSPS and

NESHAP regulations.

XVL Monitoring

In Alabama Power, the court held that

section 165(e)(1) of the Act requires an

ambient air quality analysis for each

pollutant subject to regulation under the

Act that a proposed source or

modification would emit, prior to

applying for a PSD permit. Since existing

PSD regulations require monitoring only

for criteria pollutants emitted in major

amounts, EPA responded to the June 18,

1979 per curiam opinion by proposing to

require, for criteria and noncriteria

pollutants, an air quality analysis that

would generally include monitoring

data. In order to gather and analyze the

appropriate data necessary to apply for

a PSD permit, a proposed source would

have to establish an appropriate

monitoring network or would have to

gather and analyze representative air

monitoring data resulting from ongoing

monitoring activities.

As proposed, preconstruction

monitoring data was required as part of

the air quality analysis when: (1) the

estimated ambient impact of any new

pollutant emissions from the stationary

source or modification would be larger

than the pollutant specific de minimis

air quality concentration (Table B); or

(2) the new emissions or net emissions

increases for the pollutant would be

major (100/250 tons per year). In

addition to this rule, EPA proposed that

a case-by-case analysis of the proposed

stationary source or modification which

would impact on a Class I area be

conducted even though the anticipated

impact would fall below the de minimis

level. Later, in October 1979, EPA

provided further guidance for applying

these requirements in the draft revision

of the Ambient Monitoring Guidelines

for Prevention of Significant

Deterioration (PSD), OAQPS 1.2-096,

U.S. EPA, Office of Air Quality Planning

and Standards and Office of Research

and Development, RTP, NC 27711.

The proposal stated that certain

noncriteria pollutants (sulfuric acid mist.

carbon disulfide, carbonyl sulfide,

methyl mercaptan. dimethyl disulfide,

and dimethyl sulfide) were lacking

measurement methods approved by

EPA. Until such time as approved

techniques would become available, the

Agency proposed to use mathematical

modeling to estimate the air quality

resulting from the emissions of these

pollutants. Considering these limitations

and the general lack of experience in

monitoring on a routine basis, the

Administrator proposed to implement

noncriteria pollutant monitoring

requirements on a case-by-case basis.

In addition to the pre-application

monitoring requirements already

described, EPA's proposal included

discretionary authority for requiring

post-construction monitoring to

determine the effects of the new

emissions on existing air quality. For

cases in which larger pollutant emission

impacts are anticipated, postconstruction monitoring can be a

particularly useful aid in adjusting

modeling results used to predict

concentrations resulting from the

source's operation. The approach was

thought to be responsive to the Alabama

Power decision which required EPA to

use monitors to help refine modeling

techniques. Accordingly, EPA proposed

to generally require post-construction

monitoring from large sources of

particulate matter and sulfur dioxide.

Other sources whose emissions are

estimated to result in air quality levels

approaching an allowable increment or

a NAAQS could also be required to

submit post-construction monitoring

data. The rule promulgated today is

consistent with the proposal.

The Administrator believed that the

required monitoring data would be most

productive in checking the accuracy of

models and, in some cases, could be

used to calculate increment

consumption. If an applicant or other

party believes that a model required by

EPA had either overpredicted or

underpredicted the air quality impact of

a source, EPA stated that monitoring

data would be evaluated to the extent

possible to determine whether

adjustments would be necessary. EPA

anticipated that the future development

of more sophisticated monitoring

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techniques may permit increased use of

monitoring data to track'increment

consumption and establish ambient

baselines, as well as improve the level

of confidence in modeling.

Lastly, EPA considered the approach

needed to smoothly usher in the new • monitoring requirements. The September

5 Federal Register indicated that EPA

intended to require any additional

monitoring requirements, as now

necessary under Alabama Power, to be

phased in. Later, in October 1979, the

draft ambient monitoring guidelines

specified that a three-month allowance

would be subtracted from the time

interval over which the owner must

monitor to allow for procuring and

setting up the necessary monitoring

equipment. (See Transition).

There was a large response to EPA's

proposal and draft monitoring

guidelines-nearly 100 public comments

and over 800 requests for the guidance

document were received. The comments

indicated general agreement with EPA's

interpretation of the court's preliminary

opinion. But some concern was

expressed over certain specific portions.

of the proposal: (1) the limited

* technology available to monitor the

noncriteria pollutants in the ambient air;

(2) the large cost associated with

gathering all the required air quality

data for all regulated pollutants; (3) the

identification process for "representative" data; and (4) the need

f6r post-construction monitoring.

Subsequent to the publication of the

September 5,1979 proposal and the

receipt of the public comment, the court

issued its final decision on December 14,

1979. One important change the court

made upon reconsideration of the June

18 opinion was "that section 165(e)(1]

requires that an analysis be conducted,

and that it be conducted for each

pollutant regulated under the Act. But

* * * that section 165(e)(1), standing

alone does not require monitoring as the

method of analysis to be employed in

the fulfillment of its requirements." 13

ERC 1993,2019. This ruling gave EPA

more flexibility in defining'the minimum

requirements for a proper analysib of the

noncritera pollutants. "EPA might * * * choose either monitoring or modeling as

the method of analysis * * *" Id. In

other monitoring issues the court

essentially affirmed its prelii'inary opinions.

Today, the Administrator is

promulgating the proposed monitoring

requirements with the noted exceptions.

(See 40 CFR 51.24(m), 52.21(m)). EPA

will generally require one year's worth

of monitoring data as part of the air

quality analysis for only the criteria

pollutants. For the noncriteria and

hazardous pollutants, modeling, not

monitoring, will be the mechanism used

to perform most detailed air quality

analyses. However, there may be

certain circumstances where monitoring

may be the only option available to

perform an adequate analysis for the

noncriteria pollutants (e.g., when little or

no data on emission inventories for the

area of concern exist). In that case, EPA

will require ambient monitoring for the

noncriteria pollutants if there is an,

acceptable method for the monitoring of

that pollutant. Presently, the

Administrator has acceptable methods

for measuring ambient concentrations

of: (1) all the criteria pollutants; (2)

mercury; (3) beryllium; (4) vinyl chloride;

(5) fluorides; and (6) hydrogen sulfide. A

list of acceptable methods and copies of

the method description are available by

writing to: U.S. EPA, Environmental

Monitoring Systems Laboratory, Quality

Assurance Division (MD-77), Research

Triangle Park, N.C. 27711. Also,

techniques to measure ambient total

reduced sulfur and reduced sulfur

compounds have been chosen and will

be added to thelist within the next

several months. At this time there are no

acceptable methods for measuring

ambient levels of asbestos and sulfuric

acid mist.

As EPA ghins more experience from

the PSD program with respect to

noncriteria pollutant analysis and as the

technology develops, the Administrator

will consider an increased role for

ambient monitoring within the required

air quality analysis.

In addition to the exemptions given in

the de minimis section of this Federal

Register publication, EPA may not

always require a source owner to

establish a monitoring network when

the data would not validate or improve

the estimates made by the mathematical

models. When the existing air pollution

levels are conservatively estimated to

be quite small and a monitoring network

could notreliably measure the predicted

background concentrations, EPA will - generally not require thke source owner

to generate preconstruction monitoring

data. Also, if the source owner has

submitted preconstruction data for the

source-site, and the post-construction

monitoring network could not measure a

predicted degradation in the air quality,

then EPA will generally not require the

source owner to collect further

monitoring data. More guidance for

meeting all the monitoring requirements

is given in the Ambient Monitoring

Guidelines for Pre vention of Significant

Deterioration (PSD), EPA-450/4--80-012,

July 1980, available from the Monitoring

and Data Analysis Division, OAQPS,

RMD-14), U.S. EPA, Research Triangle

Park, N.C. 27711.

In the September 5, 1979 proposed

regulations and the October 1979 draft

of Ambient Monitoring Guidelines for

Prevention of Significant Deterioration

(PSD), EPA solicited comments on the

use of representative air quality data to

satisfy PSD monitoring requirements.

Thirty-nine comments were received on

the various aspects of the use of

representative air quality data. The

major responses were as follows:'

twenty-four commenters supported the

use of existing representative air quality

data, especially for remote areas, Five

commenters wanted EPA to allow the

use of bubbler data in lieu of continuous

monitoring data, seven respondents

believed that data older than two years

should be allowed, and three objected to

the quality assurance requirements for

the representative data.

EPA has considered all of the

comments and has taken the following

actions:

(1) The use of existing representative

air quality data will be permitted In lieu

of monitoring, provided that the data

meet the criteria in the above referenco

guideline.

(2) No bubbler data will be permitted

because the data should be of the same

quality as that obtained if the applicant

monitored according to the requirements

in the above referenced guideline. This

guideline specifies monitoring must be

done with continuous instruments to

eliminate measurement biases

associated with bubbler data.

Continuous measurements are also more

suitable for routine monitoring purposes

in checking for compliance with short-'

term standards.

(3) EPA will allow the use of data, for

preconstruction purposes'only, collected

in the three-year period preceding the

permit application provided reference/

equivalent quality assurance procedures

were followed during the measurement

period. The draft guideline has

previously specified a two-year

requirement.

(4) EPA reaffirms the intent that all

monitoring data collected must have

been collected in accordance with

acceptable quality assurance

procedures. The specifics of the

minimum qluality assurance program

needed for collecting air quality data are

contained in the referenced guideline.

Finally, the court held that EPA had

failed to provide concrete guidance to

the states for designating when less than

one year of monitoring data would meet

the required air quality analysis, as

specifically allowed under section

165(e)(2). Such guidance is given under

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PSD SIP Revisions located elsewhere in

today's Federal Register publication.

XVII. Notification

The proposal contained a requirement

that certain construction projects

exempt from PSD permit rules file a

report at least 90 days in advance of the

time that the exempted construction

would commence. Notification

requirements similar to those in the PSD

proposal were also included in the

proposed nonattainment rules, under 40

CFR 51.180j) and 52.24, and Appendix S

of Part 51 (the Emission Offset

Interpretative Ruling). These notice

requirements would apply to source

construction which would not be subject

to NSR solely because (1) the increase in

emissions was offset by a

contemporaneous decrease so as not to

cause a significant net increase at the

source (see Modification), or (2) the

application of air pollution controls not

generally required by the applicable SIP

or 40 CFR 60 or 61, would lower the

"potential to emit" of the source below

the applicable threshold for permitting.

The proposal would have required the

submittal of comprehensive data for

both new and existing emissions units at

the stationary source and all other

information needed by the reviewing

authority to determine if the exemption

reported by the source was proper. No

formal applicability determination,

however, was to be made and no major

delays in the construction program of

any such source were intended.

The Administrator believed such

reporting was necessary because of the

additional complexity of such

determinations and the decreased

number of sources subject to PSD due to

changes in applicability rules. A need was apparent to record unreviewed

emission increases and reductions

occurring years apart at the same plant,

in order to assess their impacts on air

quality as well as to simply register in

advance claims for reduction credits.

For these reasons the Administrator

proposed to use his authority under

section 114 to monitor these

determinations of offsetting emissions

reductions and increased control

efficiency. Section 114 authorizes the

Administrator to require a source owner

to provide such information as he may

reasonably require in order to carry out

Part C of the Act or to determine if a

source owner is in violation of a SIP

requirement.

Fifty-nine comments were received on

the notification requirements. Only two

comments completely supported the

Agency proposal. Thirty-eight of the

commenters felt that the requirements

were unnecessary and not authorized by

the Clean Air Act. Many stated that the

requirements were burdensome and

equivalent to a preconstruction permit

process. Twenty-four commenters

specifically stated that section 114 does

not allow such a comprehensive data

gathering requirement, although

reasonable data gathering is allowed.

Those who thought the requirements

unnecessary cited the adequacy of

existing state permitting programs to

deal with these problems and the

possibility of post-construction

recordkeeping to accomplish the same

objectives. EPA was advised to take

enforcement action against the few

source owners who would incorrectly

exempt a source from review and then

construct the source without obtaining a

permit, rather than risk pervasive

construction delays of properly

exempted sources. Many commenters

felt that the administrative burden to

both the reviewing agency and the

source outweighed its benefits.

Seventeen commenters specifically

stated that the extra cost to source

owners would remove the real

incentives for early cleanup and would

act to perpetuate the operation of older

units with high air pollutant emissions.

The Administrator maintains that

reporting similar to the preconstructon

notice is needed and can be required

under section 114. However, the

comments, particularly those concerning

the potential of existing state programs

to accomplish this function, have caused

EPA to reconsider the need at this time

for a preconstruction notification

requirement. State comments and

meetings with several state

representatives in Atlanta (see Docket

account of 11I-D-4) indicate that all

states currently learn of all proposed

emission units and changes before such

would coinmence construction. Most

states acquire such knowledge through

their existing general NSR procedures,

approved under 40 CFR 51.18, even if a

net decrease would occur at the source.

Other states learn of proposed emission

increases through notification letters

filed by the source pursuant to a formal

applicability determination.

Many states do not routinely require

sources to record emission decreases,

especially when such would occur well

in advance of related emission

increases. While a preconstruction

notice would be desirable to document

these decreases, the requirements for

contemporaneous emission reduction

credit (see Modification) are sufficient

to fulfill this need. That is, emission

reductions, in order to be creditable in

offsetting any contemporaneous

increase at the same stationary source,

must be enforceable before the

associated unit(s) with the emissions

increase(s) commence construction.

Such reductions, to be enforceable, must

generally be made part of an

enforceable operating or construction

permit or be processed as a formal SIP

revision. Although the Administrator is

still concerned that sufficient

information may not be available when

a source owner wishes to document

previous emissions reductions, he is

opting for a "wait-and-see" approach in

order to alleviate the concerns of the

majority of the commenters who felt the

notification requirements were

unjustified and burdensome.

Also, since states will soon be

administering the PSD program, it is best

to allow them the flexibility to integrate

notification requirements into their

existing permit programs. The

notification requirements in each state

will be different, depending upon

whether the state has an emission

banking system and how it operates, the

type of emission inventory system, and

the information available from operating

and construction permits. PSD

increment tracking systems will also be

set up by states, which can tailor

informational requirements to their own

tracking systems.

While today's regulations do not

contain a formal preconstruction notice

requirement owners and operators are

hereby put on notice for the following:

(1) Sufficient records regarding the

details of contemporaneous emission

increases and decreases or applicable

sourcb determinations of "potential to

emit" should be maintained so as to

verify that no permit was required

should the Administrator so require

under section 114; (2) If experience in

implementing the "no net increase"

provisions of PSD applicability indicates

that a more comprehensive notification

system is required, the Administrator

will promulgate an amendment to PSD

and nonattainment regulations similar to

the deleted provisions of the September

5 proposal: and (3) Any source which

improperly avoids review and

commences construction will be

considered in violation of the applicable

SIP and will be retroactively reviewed

under the applicable NSR regulation.

XVII. PSD SIP Revisions

Comments have been solicited on

three aspects of the development of

acceptable PSD plans by states. The

issues are: (1) the authority of states to

submit different but equally effective

PSD programs, (2) state flexibility in

defining baseline areas, and (3) state

flexibility in allowing monitoring

exemptions.

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A. Equivalent State Programs. Under

existing regulations, the Administrator

cannot approve proposed state PSD

regulations unless the state

requirements are identical to or

individually more stringent than the

corresponding 40 CFR 51.24 regulations.

While the Act does contain specific

requirements for several major aspects

of PSD programs, it does not prohibit

states from using, in other areas,

approaches equivalent to those of the

federal regulations in order to meet the

statutory objectives. Accordingly, the

Administrator proposed on September 5,

1979 that states be given some flexibility

in preparing PSD plans. The

Administrator requested comment on

such an approach and suggested

portions of the PSD requirements for

which equivalent approaches might be

acceptable, and others for which

alternative regulations would not be

approvable. Where SIPs were allowed

to differ, a test of overall equivalence

was to be used based on the ability of

the state "system to capture as many

emissions as would the 40 CFR 51.24

regulations.

All forty-nine comments on this topic

strongly endorsed the general approach

of giving states flexibility in developing

PSD programs, although several

commenters expressed the desire for a

more extended area for SIP flexibility.

Among those areas are: (1) the entire

PSD program, (2) fugitive dust

applicability, (3) modeling techniques,

and (4) treatment of minor modifications

and exempted sources. Another

commenter asserted that EPA could hold

the states responsible only for plans that

addressed minimal requirements, such

as maximum increment consumption.

After consideration of the comments.

the Administrator has decided to treat

PSD SIP revisions generally in the

manner proposed. This means that

states will be permitted to meet the

following requirements of 40 CFR 51.24

with different but equivalent

regulations, or implement the federal

regulations with considerable discretion:

a. Baseline area.

b. Type and amount of data needed

for monitoring purposes.

c. Temporary exclusions from

increment consumption.

d. Defining "contemporaneous" as a

reasonable period that may be greater

or shorter than 5 years.

e. Banking of emissions reductions for

future offsets.

£ Source information and analysis

required of the applicant.

g. Public participation after providing

the opportunity for public hearing.

h. Alternatives to first-come-firstserved permit processing.

State PSD programs must follow the

federal regulations in other matters. This

includes, but is not limited to the

following:

a. Maximum allowable increments.

b. Modeling techniques.

c. Class I area protection.

d. Notice to the Administrator or the

applicable Federal Land Manager for

prospective permit actions.

e. New (grass roots) major stationary

source applicability.

f. NSPS, NESHAP minimum

-requirements for BACT determinations.

g. Definitions generally as contained

in 40 CFR 51.24(b). (State definitions

need not be verbatim translations, but

must have the same effect).

The Agency is not expanding the area

of state program flexibility to those four

areas, noted earlier, that were suggested

by the commenters. First, the

Administrator does not believe that

complete program flexibility is

allowable under the Act, nor does he

find a basis for the comment that EPA is

without authority to require that SIPs

include more than skeletal program

components. The second suggestion,

regarding fugitive dust is not feasible at

this time for reasons detailed elsewhere

(see Fugitive Dust Exemption). With

regard to the third comment, the Act

specifically directs the Administrator to

specify air quality models. Section

165(e)(3), 42 U.S.C. 7475(e)(3). In

addition, national consistency is

important for such air quality impact

analysis in order to standardize how

increment would be consumed or

enhanced across the country. With regard to the degree of state

flexibility in exempting additional types

of new and modified sources, EPA

believes that adequate exemptions have

been provided in today's regulations

and no further ones are authorized

under the Act. The Administrator

wishes to note that today's rules allow a

state the opportunity to change the time

period defining contemporaneous

emissions increases. This change affects

the definition of major modification and

thereby affects the number of PSD

reviews.

The opportunity for states to change

the time period within which emissions

changes would be considered

contemporaneous is not constrained by

a test of equivalency. Rather, it should

be considered by states in developing

PSD SIPs in conjunction with their

deliberations on alternatives to firstcome-first-served permitting and

emission offset banking. The

Administrator believes these issues are

related t5 the state's inherent flexibility

under the Act to manage increment

consumption.

B. Baseline Area

This aspect of the equivalent state

program issue deals with the definition

of the area for which the baseline data Is

triggered by a PSD permit application

and, specifically, with whether this

definition must be the same under a PSD

SIP as it is in 40 CFR 52.21. The proposal

defined baseline area for both 40 CFR 51

and 52'as every part of an affected

AQCR designated attainment or

unclassified on the baseline date.

Comments were solicited concerning the

desirability of allowing states to define "area" as any portion of an AQCR that

had been designated as attainment or

unclassifiable, or, conversely, to allow

states to define "area" as the entire

state.

All commenters specifically

addressing the issue of allowing states

to have flexibility in defining baseline

area were in favor of that approach.

Many were more specific, suggesting

that 107 designated areas or source

impact areas be used.

The Administrator has decided to

allow flexibility to states, not by

accepting alternative definitions In SIPs,

but by defining baseline area in such

manner as to allow flexibility. This'

change in definition arises from a

revised legal interpretation of what

meaning "area" may be given under the

Act. (see Baseline Concentration).

Basaline area is now defined as all

areas (and every part therein) within the

state that are designated attainment or

unclassified under section 107(d)(1) (D)

or (E) of the Act in which the source

establishing the baseline date would

locate or would have an air quality

impact equal to or greater than 1 ug/ms

(annual average) for the pollutant (SO2

and/or TSP) for which the baseline date

is established. Flexibility is inherent in

state authority to redesignate areas

under section 107. Thus, large tracts of

land belonging to one clean or

unclassified PSD area can later be

divided into several smaller PSD

baseline areas with potentially different

baseline dates. Other than the

limitations associated with processing

107 area redesignations as SIP revisions,.

EPA requires that area redesignations

under section 107 cannot intersect or be

smaller than the area of impact of any

mdjor stationary source or major

modification which establishes a

baseline date or is subject to PSD and

would be constructed in the same state

as the state proposing the redesignation,

A baseline date will, therefore, be

triggered for the entire designated

section 107 area unless nonimpacted

portions are redesignated to smaller

areas.

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This approach allows the flexibility

requested by the commenters, but

precludes "postage-stamp" designations

designed to trigger baseline only in the

immediate vicinity of the source. It also

avoids the difficult area boundary

problems which would arise from

defining area as the PSD source impact

area. States are cautioned to carefully

weigh any inclination to postpone

baseline dates through area

redesignations against increased

difficulties associated with tracking

increment consumption. %

C. State Monitoring Exemption

Alabama Power remanded to EPA

that portion of the monitoring

requirements which allowed states to

accept less than one year of

preconstruction monitoring data for

cases in which a shorter period would

be sufficient to perform a complete and

adequate analysis. The court ruled that

EPA had not provided adequate

guidance to the states for making this

determination. 13 ERC 1993, 2020.

The proposal contained concrete

guidance for use by states in

determining if less than one year of

monitoring data is sufficient. That

guidance provided that as little as four

months of monitoring data for the

criteria pollutants was acceptable if the

applicant demonstrated that the

maximum pollutant concentrations

would occur within that time.

Fourteen comments were received on

various aspects of this proposal.

Thirteen commenters supported the

flexibility of requiring less than one year

of monitoring data under specified

circumstances. Two commenters

addressed ozone monitoring

requirements where there were more

than four months with average daily

maximum temperatures greater than

20°*C P°F).

The Administrator has decided to

promulgate the proposed regulations

except for the following- (1) Less than one year of monitoring

data will be permitted for all regulated

pollutants, rather than for just the

criteria pollutants. However, it must be

demonstrated through historical data or

dispersion models that the data for such

shorter periods of time, but not less than

four months, will be obtained during a

time period when maximum air quality

levels can be expected. , (2) Guidance for monitoring ozone

during the warmest four months of the

year has been deleted. Monitoring for

ozone, as well as other pollutants, will

still be required during the time period

when maximum air quality levels can be

expected. Ozone concentrations will

generally be higher during the warmest

four months of the year. However, ozone

monitoring must also be conducted

when the yearly maximum ozone

concentrations are likely to occur during

months other than the warmest four

months of the year. This will ensure that

ozone monitoring will cover the

expected maximum concentrations.

XIX. Additional Issues

A. Innovative Technology

In the September 5,1979, Federal

Register the Agency proposed a new

paragraph (u) which sets out specific

requirements for reviewing sources that

wish to utilize innovative control

technologies. The new paragraph sets

out criteria to be used by the

Administrator in determining whether a

proposed control technology is

innovative, in addition to establishing

specific provisions for implementing the

BACT and modeling requirements. All of the commenters recognized the

need to encourage'the development of

technology and generally approved of

EPA's approach. One large

environmental group commented that

while it approved of the added

flexibility in specifying BACT for

innovative technologiesrit was

concerned that Class I areas might be

compromised if increment violations

were allowed to occur during the period

of testing. We share this concern of the

environmental group and are today

promulgating a regulation which ensures

full protection of Class I areas.

Today's amendments provide that for

a source whose technology has been

designated as "innovative" by the

Administrator, the BACT requirement

should insure the installation of the

innovative system and the adoption of a

compliance schedule for meeting a final

emission limitation. This final emission

limitation must at least represent the

BACT level that would have been

initially defined under § 52.210],

assuming the use of proven state-of-theart technology. The compliance schedule

may extend no more than 7 years after

permit issuance or 4 years after startup

of the source. The regulations also

provide that the Administrator may

withdraw his approval if a source: (1)

fails to meet the final emissions

limitation by the specified date, (2) fails

to protect the public health, welfare, or

safety, or (3) shows an indication that

the innovative control system will not

be successful. The source will then be

given a period of no more than 3 years

to come into compliance with the BACT

level determined with the use of the

demonstrated system of control

The September 5 Federal Register

proposed that with the consent of the

governor an "innovative technology"

source could conduct the increment

impact analysis using the final emission

limitation specified in the permit,

provided that no interference with

applicable NAAQS would result during

the interim period. EPA reasoned that

any increased level of emissions which

might occur during the interim period

would be temporary and would not

significantly impact the increments.

However, one of the commenters

pointed out that Class I areas require

protection even from temporary

violations. We agree with the concerns

of this commenter and cite § 52.21[i)[7)

in their support. That section exempts

temporary sources from the modeling

requirements except when they impact

Class I areas or areas where the

increment is known to be violated.

Today's regulations allow an

"'innovative" source to use its final

emission limitation for increment

modeling purposes, but only if there is

no impact on any Class I area or any

area with a known increment violation.

As in the proposal, the final rules

requiring modeling for the purpose of

evaluating the impact on NAAQS must

take into account interim emission

projections. Under no condition may a

source be approved if it would cause a

violation of the NAAQS, even a

temporary violation.

B. AMod1fied Permits

In the September 5,1979 Federal

Register, EPA proposed to add a new

paragraph (t) entitled "Modified

Permits." The new paragraph provided a

simplified approval procedure for

sources that make minor changes in

design capacity or in the nature of

process equipment between the time

they obtain a PSD permit and the time

they complete construction. It also

required prior approval, through permit

modifications, of increases in hours of

operation.

The comments on this section were

mixed. Some commenters felt that the

new paragraph was redundant and

superfluous, while others generally approved of it but asked for

clarification. Upon further

consideration, the Agency believes that

there is a need to distinguish between

situations in which permits would be

changed for primarily administrative

reasons, such as a change to reflect a

revised construction schedule, and

situations in which the permit change

involves a significant increase in

emissions. In the latter case a new

permit must be issued: in the former,

however, an abbreviated procedure -

involving modification of the permit

might be preferable. There are numerous

issues to be considered in implementing

52727

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such an approach. These include the

means to differentiate between

significant and nonsignificant changes,

and the specific procedural

requirements for modifying a permit.

Those issues were not adequately

addressed in the proposal and for that

reason the Agency has decided that it

does not have a sufficient basis for

completing rulemaking at this time.

However, further rulemaking is being

considered for future proposal and

comment will be requested on the issues

at that time.

C. Nonprofit Institutions

EPA proposed on September 5 to

exempt modifications of nonprofit

institutions from PSD review

requirements as is already done for new

construction of this type. This would

mean that, upon written request by the

governor.of the state, a PSD permit

would not be required of a major

stationary, source or major modification

that qualities as a nonprofit health or

educational institution. Today the

Administrator promulgates this

exemption as proposed since no

signficant public comment was received.

It should be noted that although such

major new or modified sources would

not require a PSD permit, the emissions

from these sources would consume the

applicable PSD increment(s) after

January 6, 1975..

D. Portable Sources

With regard to portable sources, EPA

prqposed to change the 30 day notice to

a 10 day notice for previously permitted

PSD sources wishing to relocate. Based

on experience in implementing the PSD

regulations, and having received no

adverse public comments on this

proposal, the Administrator is adopting

this proposal with one bxception.

Sources with PSD permits must provide

a notice to the reviewing authority not

less than ten days before relocation

activities would commence, unless the

Administrator has previously approved

a different minimum time for relocation

notice.

The Administrator would also like to

clarify that a source is portable only if it

would have temporary location and

temporary emissions. Existing EPA

policy defines temporary emissions as

emissions from a stationary source that

would be less than two years in

duration, unless the Administrator

determines that a longer time period

would be appropriate. Thus, for a

portable source to qualify for the above

exemption, it must typically be located

at the new location less than two years.

E. Secondary Emissions

Desiring to make the PSD review

requirements similar to nonattainment

requirements wherever possible, the

Administrator proposed to add the

definition of secondary emissions found

in the offset ruling (44 FR 3274) to the

PSD regulations. See 43 FR 26403.

Secondary emissions would mean

emissions from new or existings sources

which occur as a result of the

construction and/or operation of a

major source or major modification, but

do not necessarily come from the source.

itself. Secondary emissions would

include:

(a] emissions from ships or trains

coming to or from a source or

modification; or

(b) emissions from off'site support

sources which would otherwise increase

emissions as a result of construction or

operation of a major source. Although

reasonably quantifiable secondary

emissions would be reviewed in the air

quality anaylsis, such emissions would

not be included in determining

"potential" emissions.

Public reaction to the September 5,

1979 proposal and the final Alabama

Power opinion regarding EPA's

treatment of secondary emissions was

small. Generally the commenters

favored the exclusion of secondary

emissions from the PSD permit process

altogether. Their objections centered on

the availability and reliability of the

emission factor data to "reasonably"

quantify secondary emissions. Also the

'possibility of redundant reviews was

highlighted by several commenters. The

Administrator, in weighing these

comments, has decided to promulgate

the regulations addressing secondary

emissions as proposed on September 5,

1979. See 40 CFR 51.24(b)(3), 52.21(b)(3),

51.24(b)(20), and 52.21(b)(20).

The Clean Air Act clearly calls for a

detailed and extensive air quality

impact assessment. For instance, each

permit application must include impacts

from the growth projectdd in the area

that would occuras a result of the

proposed source's construction. See

section 165(a)(6). Also, once the baseline

-date is set,'such emissions would

consume the maximum allowable

increments, so each permit decision

must give consideration to all the

possible ramifications of allowing a

source or modification to construct. See

section 165(a](3) ("cause or contribute'.

Secondary emissions must be

considered when those emissions are

specific, well defined, reasonably

quantifiable, and impact the same

general area.

F. Baseline for Calculating Offsets

Under Section 173(1)(A)

Thb Offset Ruling sets out rules and

guidance for determining the baseline

for calculating emissions offset credit, as

well as guidance on the location of

offsetting emissions. See 40 CFR Part 51,

Appendix S, Sections IV.C. and D. To

aid the states in developing their NSR

regulations for nonattainment areas, or in revising those regulations, EPA has

decided to promulgate those rules and

"guidance in § 51.180) (3). 14 The langauge

promulgated today is identical to that

used in the Offset Ruling, except as

-explained below.

On January 16, 1979, EPA modified the

Offset Ruling to conform to section

129(a)(1) of the Act by setting the

baseline for determining emissions

offset credit at the emissions level

specified for the source in the applicable

SIP. EPA is retaining this baseline level

for the Offset Ruling. However, the

approach for NSR programs adopted

pursuant to section 173 is slightly

different. Section 173(11(A) sets the

baseline as the "allowable" emissions of

the source, but it further specifies that

the offsets obtained by the source must

be sufficient to represent reasonable

further progress (RFP). Some Part D SIP

revisions approved by EPA have

demonstrated attainment and RFP based

on the allowable emissions of sources In

a nonattainment area. However, many

Part D SIP revisions have based their

demonstrations on the actual emissions

of the sources in a nonattainment area,

rather than the sources' allowable

emissions, This means that to be

consistent with RFP, sources must

reduce their actual, rather than their

allowable, emissions. Otherwise,

sources could claim credit for offsets In

situations where the offset would

actually interfere with RFP 1"

Ta accommodate the different

approaches to RFP, EPA has provided

that the baseline for deternilning

emissions offset credit shall be the

1

4

0n January 16, 1979, EPA solicited comments on'

certain aspects of the Offset Ruling, none of which

directly concerned the matters published today, EPA will respond to those comments after today's

promulgation. 15

For example, suppose a source's allowable

emissions are 1,000 tpy, and Its actual emissions are 500 tpy. Now suppose It wants to add a new emissions unit, thereby adding 100 tpy, and the SIP

requires a 100 tpy reduction for RFP. The source might achieve both objectives by decreasing Its

total allowable emissions to 000 tpy. iLe., it adds the

100 tpy for the new facility, but makes other

reductions in allowable emissions of 200 tpy, This Is

adequate If the RFP demonstration relies upon allowable emissions, since the source started at

1,000 typ and now is at 900 tpy. But if RFP Is based on actual emissions, then there is a loss of 100 tpy,

because RFP assumed 500 ipy and now the source

emits 600 tpy.

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allowable emissions of the source.

where the SIP relies upon allowable

emissions to demonstrate RFP; but the

baseline must be actual emissions

where the demonstration is based on

reductions in actual emissions. EPA

believes for the reasons discussed

above that this approach is necessary to

assure RFP towards attainment of

ambient air quality standards.

G. Economic Impact Assessment

In the September 5 proposal, it was

stated that the Agency would prepare

an economic impact assessment of the

proposed changes after the final court

opinion was issued, which took place on

December 14,1979. The Agency further

indicated that it would make the report

available for public comment prior to

promulgation, and that any resulting

comments would be taken into account

in the promulgated regulations.

Although the results of the impact

assessment released today have been

considered in developing the

regulations, primarily for understanding

de mihimis effects, it has not been

possible to complete the assessment in

time to get comments prior to

promulgation. In fact, because of the

inherent complexity of the program, it

has not been possible to do a true

economic impact assessment (i.e., one

which considers impacts on market

positions, prices, closures, etc.).

The document made available today

presents as assessment of the overall

impact of the proposed regulations with

respect to several of the major issues or

changes in-the proposed regulations.

The assessment does not attempt to

quantify the impact of every issue nor

does it attempt to assess the overall

impact associated with the

implementation of the PSD regulations

in general. It is designed to provide a

relative assessment of the impact of the

September 5 proposal versus the June

1978 regulations in terms of the: sources

to be affected, their associated

emissions, major requirements which

must be met (or which are no longer

required to be met), and estimated cost

savings for sources no longer subject to

PSD review as a result of the proposed

regulations. In short, the analysis

provides an estimate of differential cost

impact of the 1978 versus the proposed

PSD regulations and an assessment of

the major issues associated with the

proposed PSD regulations. As noted, the assessment focused on

the difference between the June 1978

regulations and those proposed on

September 5. However, there are

significant changes in the promulgated

regulations compared to those proposed,

especially with regard to the de minimis

values. Since these values have a major

impact on expected cost, a projection of

the impact of the final regulations was

also made.

It is estimated that there will be a

savings as a result of the promulgation

for sources which would have been

subject to the old regulations but which

would not be subject to the new. This

would represent an annual savings of

$2.2 to 6.1 million assuming the sources

which have received permits from April

1978 to November 1979 are

representative of those which will

receive permits in the future.

Although there is an overall savings

for sources which would not longer be

subject to PSD review, the new

regulations require more extensive

review for some sources, as well as

review of sources which were not

previously covered; that is, modified

sources with uncontrolled emissions of

less than 100 or 250 tons per year but

which have controlled emissions greater

than de minimis. Since these sources are

not now subject to PSD review, they

would be required to prepare a PSD

permit, conduct the necessary air quality

impact assessments, incur some delays

in construction as a result of undergoing

PSD review in addition to state NSR

review, and install BACT Instead of just

meeting the emissions limits required by

the State Implementation Plan or New

Source Performance Standards as

applicable. As a result of the additional

cost incurred because of more extensive

review and by the sources not currently

subject to PSD, the overall effect of the

promulgated regulations (including the

savings described above) is an increase

of approximately $12.4 to 24.5 million

per year.

The complete analysis is contained in

the document entitled Regulatory

Impact Assessment for the September 5,

1979 Proposed Prevention of Significant

Deterioration Regulations, EPA-450/2-

80-073. This document is available for

inspection in the rulemaking docket.

Copies may be obtained by writing to

the Air Information Center, U.S. EPA

Library Services, (MD-35), Research

Triangle Park, NC 27711.

H. Consolidated Permit Regulations

As mentioned in the section on

TRANSITION, EPA recently

promulgated regulations, known as the

Consolidated Permit Regulations, which

now generally govern the processing of

applications for permits under Part 52

PSD regulations. Among the regulatory

amendments announced here are three

minor changes to the Consolidated

Permit Regulation. First, EPA has

deleted the substantive language of 40

CFR 124.3(b) and put "Reserved" in its

place. Section 124.3(b) related primarily

to the 50-ton exemptions of the 1978

Part 52 regulations. With the deletion of

those exemptions, § 124.3(b) would have

become superfluous. Second. EPA has

conformed 40 CFR 124.5(g)(2) to the

numbering in the new Part 52

regulations. Finally, the agency has

corrected 40 CFR 124.42(b) by

substituting "submitted" for

"requested."

Final Action

The following regulatory amendments

are nationally applicable, and this

action is based upon determinations of

nationwide scope and effect. Therefore,

under section 307(b)[1) of the Act,

judicial review may be sought only in

the United States Court of Appeals for

the District of Columbia CircuiL

Petitions for judicial review must be

filed on or before October 6,1980.

(Sections 1010b[11. 110,160-169,171-178, and

301(a) of the Clean Air Act as amended (42

U.S.C. 7401*b](1). 7410.7470-7479.7501-7508,

and 781(a)); Section 129(a) of the Clean Air

Act Amendments of 1977 (Pub. L No. 9-9-

91 Stat. 685 (August. 7. IM7)))

Dated. July 31. i9g.

Douglas K. Coatle,

Administrator.

State Plans For New Source Review For

PSD Purposes

1. Section 51.24 of Title 40 of the Code

of Federal Regulations is amended by

deleting paragraph [k) and redesignating

paragraphs (1) through (s) as (k) through

(r) and then by revising paragraphs

(a](2), [b). (If, (i}-{k. (im) and (r) and

adding new paragraphs (a)(6) and (s) to

read as follows:

151.24 Prevention of significant deterioration of air quality.

(a)(1) Plan Requirements

(2) Plan Revisions. If a State

Implementation Plan revision would

result in increased air quality

deterioration over any baseline

concentration, the plan revision shall

include a demonstration that it will not

cause or contribute to a violation of the

applicable increment(s). If a plan

revision proposing less restrictive

requirements was submitted after

August 7. 1977 but on or before any

applicable baseline date and was

pending action by the Administrator on

that date, no such demonstration is

necessary with respect to the area for

which a baseline date would be

established before final action is taken

on the plan revision. Instead, the

assessment described in paragraph

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(a)(4) shall review the expected impact

to the applicable increment(s).

(6) Amendments. (i) Any state

required to revise its implementation

plan by reason of an amendment to this

section, including any amendment

adopted simultaneously with this

paragraph, shall adopt and submit such

plan revision'to the Administrator for

approval before May 7, 1981.

(ii) Any revision to an implementation

plan that would amend the provisions

for the prevention of significant air

quality deterioration in the plan shall

specify when and as to what sources

and modifications the revision is to take.

effect.

(iii) Any revision to an

implementation plan that an amendment

to this section required shall take effect

no later than the date of its approval

and may operate prospectively.

(b) Definitions. All state plans shall

use the following definitions for the

purposes of this section. Deviations from

the following wording will be approved

only if the state specifically

demonstrates that the submitted

definition is more stringent, or at least

as stringent, in all respects as the

corresponding definitions below:

(1)(i) "Major stationary source"

means:

(a) Any of the following stationary

sources of air pollutants which emits, or

has the potential to' emit, 100 tons per

year or more of any pollutant subject to

regulation under the Act: Fossil fuelfired steam electric plants of more than

250 million British thermal units per hour

heat input, coal cleaning plants (with

thermal dryers), kraft pulp mills,.

portland cement plants, primary zinc

smelters, iron and steel mill plants,

primary aluminum ore reduction plants,

primary copper smelters, municipal

incinerators capable of charging more

than 250 tons of refuse per day,

hydrofluoric, sulfuric, and nitric acid

plants, petroleum refineries; lime plants,

phosphate rock processing plants, coke

oven batteries, sulfur recovery plants,

carbon black plants (furnace process),

primary lead smelters, fuel conversion

plant , sintering plants, secondary metal

production plants, chemical process

plants, fossil fuel boilers (or

combinations thereof) totaling more

than 250 million British thermal units per

hour heat input, petroleum storage and

transfer units with a total storage

capacity exceeding 300,000 barrels,

taconite ore processing plants, glass

fiber processing plants, and charcoal

production plants;

(b) Notwithstanding the stationary

source size specified in paragraph

(b)(1)(i)(a) of this section, any stationary

source which emits, or has the potential

to emit, 250 tons per year or more of any

air pollutant subject to regulation under

the Act; or

(c) Any physical change that would

occur at a stationary source not

otherwise qualifying under paragraph

(b)(1) as a major stationary source if the

change would constitute a major

stationary source by itself.

(ii) A major source that is major for

volatile organic compounds shall be

considered major for ozone.

(2)(i) "Major modification" means any

physical change in or change in the

method of operation of a major

stationary source that would result in a

significant net emissions increase of any

pollutant subject to regulation under the

Act.

(ii) Any net emissions increase that is

significant for volatile organic

compounds shall be considered

significant for ozone.

(iii) A physical change or change in

the method of operation shall not

include:

(a) Routine maintenance, repair, and

replacement; (b) Use of an alternative fuel or raw

material by reason of any order under

sections 2 (a) and (b) of the Energy

Supply and Environmental Coordination

Act of 1974 (or any superseding

legislation) or by reason of a natural gas

curtailment plan pursuant to the Federal

Power Act;

(c) Use of an alternative fuel by

reason of an order or rule under section

'125 of the Act;

(d) Use of an alternative fuel at a . steam generating unit to the extent that

the fuel is generated from municipal

solid waste;

(e) Use of an alternative fuel or raw

material by a stationary source which:

(1) The source was capable of

accommodating before January 6,1975,

unless such change would be prohibited

under any federally enforceable permit

condition which was established after

January 6,1975 pursuant to 40 CFR 52.21

or under regulations approved pursuant

to 40 CFR 51.18 or 40 CFR 51.24; or

(2) The source is approved to use

under any permit issued under 40 CFR

52.21 or under regulations approved

pursuant to 40 CFR 51.24;

(f) An increase in the hours of

operation or in theproduction rate,

unless such change would be prohibited

under any federally enforceable permit,

condition which was established after

January 6, 1975, pursuant to 40 CFR 52.21

or under regulations approved pursuant

to 40 CFR 51.18 or 40 CFR 51.24.

1g) Any change in ownership at a

stationary source-

(3)(i) "Net emissions increase" means

the.amount by which the sum of the

following exceeds zero:

(a) Any increase in actual emissions

from a particular physical change or

change in the method of operation at a

stationary source; and

(b) Any other increaseg and decreases

in actual emissions at the source that

are contemporaneous with the particular

change and are otherwise creditable,

(ii) An increase or decrease In actual

emissions is contemporaneous with the

increase from the particular change only

if it Occurs within a reasonable period

(to be specified by the state) before the

date that the increase from the

particular change occurs.

(ii) An increase or decrease In actual

emissions is creditable only if the

reviewing authority has not relied on It

in issuing a permit for the source under

regulations approved pursuant to this

section, which permit is in effect when

the increase in actual emissions from

the particular change occurs.

(iv) An increase or decrease in actual

emissions of sulfur dioxide or

particulate matter which occurs before

the applicable baseline date is

creditable only if it is required to be

considered in calculating the amount of

maximum allowable increases

remaining available.

(v) An increase in actual emissions Is

creditable only to the extent that the

new level of actual emissions exceeds

the old level.

(vi) A decrease in actual emissions Is

creditable only to the extent that:

(a) The old level of actual emissions

or the old level of allowable emissions,

whichever is lower, exceeds the new

level of actual emissions;

(b) It is federally enforceable at and

after the time that actual construction

on the particular change begins; and

(cl It has approximately the same

qualitative significance for public health

and welfare as that attributed to the

increase from the particular change.

(vii) An increase that results from a

physical change at a source occurs when

the emissions unit on which

construction occurred becomes

operational and begins to emit a

particular pollutant. Any replacement

unit that requires shakedown becomes

operational only after a reasonable

shakedown period, not to exceed 180

days.

(4) "Potential to emit" means the

maximum capacity of a stationary , source to emit a pollutant under its

physical and operational design. Any

physical or operational limitation on the

capacity of the source to emit a

pollutant, including air pollution control

equipment and restrictions on hours of

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operation or on the type or amount of

material combusted, stored, or

processed, shall be treated as part of its

design if the limitation or the effect it

would have on emissions is federally

enforceable. Secondary emissions do

not count in determining the potential to

emit of a stationary source.

(5) "Stationary source" means any

building, structure, facility, or

installation which emits or may emit

any air pollutant subject to regulation

under the Act.

(6) "Building, structure, facility, or

installation" means all of the pollutantemitting activities which belong to the

same industral grouping, are located on

one or more contiguous or adjacent

properties, and are under the control of

the same person (orpersons under

common control). Pollutant-emitting

activities shall be considered as part of

the same industrial grouping if they

belong to the same "Major Group" (i.e.,

which have the same two-digit code) as

described in the Standard Industrial

Classification Manual, 1972, as

amended by the 1977 Supplement (U.S.

Government Printing Office stock

numbers 4101-0066 and 003-005-00176-

0, respectively).

(7) "Emissions unit" means any part of

a stationary source which emits or

would have the potential to emit any

pollutant subject to regulation under the

Act

(8) "Construction" means any physical

change or change in the method of

operation (including fabrication,

erection, installation, demolition, or

modification of an emissions unit] which

would result in a change in actual

emissions.

(9) "Commence" as applied to

construction of a major stationary

source or major modification means that

the owner or operator has all necessary

preconstruction approvals or permits

and either has:

(i) Begun, or caused to begin, a

continuous program of actual on-site

construction of the source, to be

completed within a reasonable time; or

(ii) Entered into binding agreements or

contractual obligations, which cannot be

cancelled or modified without

substantial loss to the owner or

operator, to undertake a program of

actual construction of the source to be

completed within a reasonable time.

(10) "Necessary preconstruction

approvals or permits" means those

permits or approvals required under

federal air quality control laws and

regulations and those air quality control

laws and regulations which are part of

the applicable State Implementation

Plan.

(11) "Begin actual construction"

means, in general, initiation of physical

on-site construction activities on an

emissions unit which are of a permanent

nature. Such activities include, but are

not limited to, installation of building

supports and foundations, laying of

underground pipework, and construction

of permanent storage structures. With

respect to a change in method of

operation this term refers to those onsite activities, other than preparatory

activities, which mark the initiation of

the change.

(12) "Best available control

technology" means an emissions

limitation (including a visible emissions

standard) based on the maximum degree

of reduction for each pollutant subject to

regulation under the Act which would

be emitted from any proposed major

stationary source or major modification

which the reviewing authority, on a

case-by-case basis, taking into account

energy, environmental, and economic

impacts and other costs, determines is

achievable for such source or

modification through application of

production processes or available

methods, systems, and techniques,

including fuel cleaning or treatment or

innovative fuel combination techniques

for control of such pollutant. In no event

shall application of best available

control technology result in emissions of

any pollutant which would exceed the

emissions allowed by any applicable

standard under 40 CFR Parts 60 and 61.

If the reviewing authority determines

that technological or economic

limitations on the application of

measurement methodology to a

particular emissions unit would make

the imposition of an emissions standard

infeasible, a design, equipment, work

practice, operational standard or

combination thereof, may be prescribed

instead to satisfy the requirement for the

application of best available control

technology. Such standard shall, to the

degree possible, set forth the emissions

reduction achievable by implementation

of such design, cquipment, work practice

or operation, and shall provide for

compliance by means which achieve

equivalent results.

(13)(i) "Baseline concentration" means

that ambient concentration level which

exists in the baseline area at the time of

the applicable baseline date. A baseline

concentration is determined for each

pollutant for which a baseline date is

established and shall include:

(a) The actual emissions

representative of sources in existence on

the applicable baseline date, except as

provided in paragraph (b)(13)(ii);

(b) The allowable emissions of major

stationary sources which commenced

construction before January 6,1975, but

were not in operation by the applicable

baseline date.

(ii) The following will not be included

in the baseline concentration and will

affect the applicable maximum

allowable increase(s):

(a) Actual emission from any major

stationary source on which construction

commenced after January 6,1975; and

(b) Actual emissions increases and

decreases at any stationary source

occurring after the baseline date.

(14)(i) "Baseline date" means the

earliest date after August 7,1977, that:

(a) A major stationary source or major

modification subject to 40 CFR 52.21

submits a complete application under

that section; or

(b) A major stationary source or major

modificatioin subject to regulations

approved pursuant to 40 CFR 51.24

submits a complete application under

such regulations.

(ii) The baseline date is established

for each pollutant for which increments

or other equivalent measures have been

established iff

(a) The area in which the proposed

source or modification would construct

is designated as attainment or

unclassifiable under section 107(d](i (D)

or (E) of the Act for the pollutant on the

date of its complete application under 40

CFR 52.21 or under regulations approved

pursuant to 40 CFR 51.24; and

(b) In the case of a major stationary

source, the pollutant would be emitted

in significant amounts, or, in the case of

a major modification, there would be a

significant net emissions increase of the

pollutant.

(15)(i) "Baseline area" means any

intrastate area (and every part thereof)

designated as attainment or

unclassifiable under section 107(d](1)

(D) or [E) of the Act in which the major

source or major modification

establishing the baseline date would

construct or would have an air quality

impact equal to or greater than 1 ug/m 3

(annual average) of the pollutant for

which the baseline date is established.

(1i) Area redesignations under section

107(d)(1) (D) or (E) of the Act cannot

intersect or be smaller than the area of

impact of any major stationary source or

major modification which.

(a) Establishes a baseline date; or

(b) Is subject to 40 CFR 52.21 or under

regulations approved pursuant to 40 CPR

51.24, and would be constructed in the

same state as the state proposing the

redesignation. (10) "Allowable emissions" means the

emissions rate of a stationary source

calculated using the maximum rated

capacity of the source (unless the source

is subject to federally enforceable limits

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which restrict the operating rate, or

hours of operation, or both) and the

most stringent of the following:

(i) The applicable standards as set

forth in 40 CFR Parts 60 and 61;

(ii) The applicable State

Implementation Plan emissions

limitation, including those with a future

compliance date; or

(III) The emissions rate specified as a

federally enforceable permit condition.

(17) "Federally enforceable" means all

limitations and conditions which are

enforceable by the Administrator,

includ ing those requirements developed

pursuant to 40 CFR Parts 60 and 61,

requirements within any applicable

State Implementation Plan, and any

permit requirements'establish~d

pursuant to 40 CFR 52.21 or under

regulations approved pursuant to 40 CFR

51.18 or 40 CFR 51.24.

(18) "Secondary emissions" means

emissions which occur as a result of the - construction or operation of a major

stationary source or major modification,

but do not come from the major

stationary source or major modification

itself. For the purposes of this section,

secondary emissions must be specific,

well defined, quantifiable, and impact

the same general areas the stationary

source modification which causes the

secondary emissions. Secondary

emissions may include, but are not

limited to:

(i) Emissions from ships or trains

coming to or from the new or modified

stationary source; and

(ii) Emissions from any offsite support

facility which would not otherwise be

constructed or increase its emissions as

a result of the construction or operation

of the major stationary source or major

modification.

(19) "Innovative,control technology"

means any system of air pollution

control that has not been adequately

demonstrated in practice, but would

have a substantial likelihood of

achieving greater continuous emissions

reduction than any control system in

current practice or of achieving at least

comparable reductions at lower cost in

terms of energy, economics, or nonair

quality environmental impacts.

(20) "Fugitive emissions" means those

emissions which could not reasonably

pass through a stack, chimney, vent, or

other functionally equivalent opening.

(21)(i) "Actual emissions" means the'

actual rate of emissions of a pollutant

from an emissions unit, as determined in

accordance with subparagraphs (ii)-(iv)

below.

(ii) In general, actual emissions as of a

particular date shall equal the average

rate, in tons per year, at which the unit

actually emitted the pollutant during a

two-year period which precedes the

particular date and which is

representative of normal source

operation. The reviewing authority may

allow the use of a different time period

upon a determination that it is more

representative of normal source

operation. Actual emissions shall be

calculated using the unit's actual

operating hours, production rates, and

types of materials processed, stored, or

combusted during the selected time

period. (iii) The reviewing authority may

presume that source-specific allowable

emissions for the unit are equivalent to

the actual emissions of the unit.

(iv) For any emissions unit which has

not begun normal operations on the

particular date, actual emissions shall

equal the potential to emit of the unit on

that date.

(22] "Complete" means, in reference

to an application for a permit, that the

application contains all the information

necessary for processing the application.

Designating an application complete for

purposes of permit processing does not

preclude the reviewing authority from

requesting or accepting any additional

information.

(23)(i) "Sipnifcant" means, in

reference to a net emissions increase or

the potential of a source to emit any of

the following pollutants, a rate of

emissions that would equal or exceed

any of the following rates:

Pollutant andEmissions Rate

Carbon monoxide: 100 tons per year (tpy) Nitrogen oxides: 40 tpy

Sulfur dioxide: 40 tpy Particulate matter. 25 tpy Ozone: 40 tpy of volatile organic compounds Lead: 0.6 tpy Asbestos: 0.007 tpy

Beryllium: 0.0004 tpy

Mercury: 0.1 tpy Vinyl chloride: I tpy

Fluorides: 3 ty Sulfuric acid mist: 7 tpy Hydrogen sulfide (HSJ: 10 tpy Total reduced sulfur (including H2S): 10 tpy

Reduced sulfur compounds (including HI-SJ:

10 tpy

(ii) "Significant' means, in reference

to a net emissions increase or the

potential of a source to emit a pollutant

subject to regulation under the Act that

paragraph (b)(23)(i) does not list, any

emissions rate.

(iii) Notwithstanding paragraph

(b)(23)(i),-"significant" means any

emissions rate or any net emissions

increase associated with a major

stationary source or major modification,

which would construct within 10

kilometers of a Class I area, and have an

impact on such area equal to or greater

than 1 jxg/m 3 (24-hour average).

(24) "Federal Land Manager" means,

with respect to any lands in the United

States, the Secretary of the department

with authority over such lands.

(25) "High terrain" means any area

having an elevation 900 feet or more

above the base of the stack of a source,

(26) "Low terrain" means any area

other than high terrain.

(27) "Indian Reservation" means any

federally recognized reservation

established by Treaty, Agreement,

Executive Order, or Act of Congress.

(28) "Indian Governing Body" means

the governing body of any tribe, band, or

group of Indians subject to the

jurisdiction of the United States and

recognized by the United States as

possessing power of self-government.

(f) Exclusions from increment

consumption. (1) The plan may provide

that the following concentrations shall

be excluded in determining compliance

with a maximum allowable increase:

(i) Concentrationls attributable to the

increase in emissions from stationary

sources which have converted from the

use of petroleum products, natural gas,

or both by reason of an order in effect

under sections 2 (a) and (b) of the

Energy Supply and Environmental

Coordination Act of 1974 (or any

superseding legislation) over the

emissions from such sources before the

effective date of such an order;

(ii) Concentrations attributable to the

increase in emissions from sources

which have converted from using

natural gas by reason of natural gas

curtailment plan in effect pursuant to

the Federal Power Act over the

emissions from such sources before the

effective date of such plan;

(iII) Concentrations of particulate

matter attributable to the increase in

emissions from construction or other

temporary emission-related activitid's of

new or modified sources;

(iv) The increase in concentrations

.attributable to new sources outside the

United States over the concentrations

attributable to existing sources which

are included in the baseline

concentration; and

(v) Concentrations attributable to the

temporary Increase in emissions of

sulfur dioxide or particulate matter from

stationary sources which are affected by

plan revisions approved by the

Administrator as meeting the criteria

specified in paragraph ffl(4),

(2) If the plan provides that the

concentrations to which paragraph (f)(1)

(i] or (ii) refers shall be excluded, it shall

also provide that no exclusion of such

concentrations shall apply more than

five years after the effective date of the

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order to which paragraph (f)(1)(i) refers

or the plan to which paragraph (f)(1)(ii)

refers, whichever is applicable. If both

such order and plan are applicable, no

such exclusion shall apply more than

five years after the later of such

effective dates.

(3) No exclusion under paragraph (f)

of this section shall occur later than 9

months after August 7,1980, unless a

State Implementation Plan revision

meeting the requirements of 40 CFR

51.24 has been submitted to the

Administrator.

(4) For purposes of excluding

concentrations pursuant to paragraph

[f)(1)(v), the Administrator may approve

a plan revision that-

(i) Specifies the time over which the

temporary emissions increase of sulfur

dioxide or particulate matter would

occur. Such time is not to exceed two

years in duration unless a longer time is

approved by the Administrator;

(ii] Specifies that the time period for

excluding certain contributions in

accordance with paragraph (f)(4)(i] is

not renewable;

(iii] Allows no emissions increase

from a stationary source which would:

(a) Impact a Class I area or an area

where an applicable increment is known

to be violated; or

(b) Cause or contribute to the

violation of a national ambient air

quality standard;

(iv) Requires limitations to be in effect

the end of the time period specified in

accordance with paragraph [f)[4](iJ]

which would ensure that the emissions

levels from stationary sources affected

by the plan revision would not exceed

those levels occurring from such sources

before the plan revision was approved.

(i) Review of Major Stationary

Sources and Major ModificationsSource Applicability and Exemptions.

(1) The plan shall provide that no

major stationary source or major

modification shall begin actual

construction unless, as a minumum,

requirements equivalent to those

contained in paragraphs (0) through (r) of

this section have been met.

(2] The plan shall provide that the

requirements equivalent to those

contained in paragraphs (j] through (r) of

this section shall apply to any major

stationary source and any major

modification with respect to each

pollutant subject to regulation under the

Act that it would emit, except as this

section would otherwise allow.

(3] The plan shall provide that

requirements equivalent to those

contained in paragraphs (j) through (r) of

this section apply only to any major

stationary source or major modification

that would be constructed in an area

which is designated as attainment or

unclassifiable under section 107(a)(1)

(D) or (E) of the Act; and

(4) The plan may provide that

requirements equivalent to those

contained in paragraphs (j) through (r) of

this section do not apply to a particular

major stationary source or major

modification ifi

(i) The major stationary source would

be a nonprofit health or nonprofit

educational institution or a major

modification that would occur at such

an institution; or

(ii) The source or modificatiofi would

be a major stationary source or major

modification only if fugitive emissions,

to the extent quantifiable, are

considered in calculating the potential to

emit of the stationary source or

modification and such source does not

belong to any following categories:

(a) Coal cleaning plants (with thermal

dryers);

(b] Kraft pulp mills;

(c) Portland cement plants;

(d) Primary zinc smelters;

(e) Iron and steel mills; (n Primary aluminum ore reduction

plants;

(q) Primary copper smelters;

(h) Municipal incinerators capable of

charging more than 250 tons of refuse

per day;

(z) Hydrofluoric, sulfuric, or nitric acid

plants;

(j) Petroleum refineries;

(k) Lime plants;

(i) Phosphate rock processing plants;

(m) Coke oven batteries;

(n) Sulfur recovery plants;

(o) Carbon black plants (furnace

process);

(p) Primary lead smelters;

(q) Fuel conversion plants;

(r) Sintering plants;

(s) Secondary metal production

plants; (t) Chemical process plants;

(u) Fossil-fuel boilers (or combination

thereof) totaling more than 250 million

British thermal units per hour heat input;

(v) Petroleum storage and transfer

units with a total storage capacity

exceeding 300,000 barrels

(w) Taconite ore processing plants;

(x) Glass fiber processing plants;

(y) Charcoal production plants;

(z) Fossil fuel-fired steam electric

plants of more than 250 uiaillion British

thermal units per hour heat input;

(aa) Any other stationary source

category which, as of August 7.1980, is

being regulated under section 111 or 112

of the Act or

(iii) The source or modification is a

portable stationary source which has

previously received a permit under

requirements equivalent to those

contained in paragraphs (U through (r] of

this section, if-

(a) The source proposes to relocate

and emissions of the source at the new

location would be temporary;, and

(b) The emissions from the source

would not exceed its allowable

emissions; and

(c) The emissions from the source

would Impact no Class I area and no

area where an applicable increment is

known to be violated; and

(d) Reasonable notice is given to the

reviewing authority prior to the

relocation identifying the proposed new

location and the probable duration of

operation at the new location. Such

notice shall be given to the reviewing

authority not less than 10-days in

advance of the proposed relocation

unless a different time duration is

previously approved by the reviewing

authority.

(5) The plan may provide that

requirements equivalent to those

contained in paragraphs 01 through (r) of

this section do not apply to a major

stationary source or major modification

with respect to a particular pollutant if

the owner or operator demonstrates

that. as to that pollutant, the source or

modification is located in an area

designated as nonattainment under

section 107 of the Act.

(6) The plan may provide that

requirements equivalent to those

contained in paragraphs (k), (m), and (o)

of this section do not apply to a

proposed major stationary source or

major modification with respect to a

particular pollutant, if the allowable

emissions of that pollutant from a new

source, or the net emissions increase of

that pollutant from a modification.

would be temporary and impact no

Class I area and no area where an

applicable increment is known to be

violated.

(7) The plan may provide that

requirements equivalent to those

contained in paragraphs (k), (m), and (o)

of this section as they relate to any

maximum allowable increase for a Class

II area do not apply to a modification of

a major stationary source that was in

existence on March 1,1978, if the net

increase in allowable emissions of each

pollutant subject to regulation under the

Act from the modification after the

application of best available control

technology would be less than 50 tons

per year.

(8) The plan may provide that the

reviewing authority may exempt a

proposed major stationary source or

major modification from the

requirements of paragraph (m) with

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respect to monitoring for a particular

pollutant, if:

(I) The emissions increase of the

pollutant from a new stationary source

or the net emissions increase of the

pollutant from a modification would

cause, in any area, air quality impacts

less than the following amounts:

(a) Carbon monoxide-575 ug/m3, 8-

hour average; (b) Nitrogen dioxide-14 ug/ i , annual average; I

(c) Total suspended particulates-10

ug/m 3, 24-hour average; (d) Sulfir dioxide--13 ug/m3, 24-hour

average;

(e) Ozone'

Wf) Lead-0.1 ug/m s

, 24-hour average; (g) Mercury-0.25 ug/m 3, 24-hour

average;

(h) Beryllium-0.0005 ug/m3, 24-hour

average;

(i) Fluorides-0.25 ug/m 3

, 24-hour

average; () Vinyl chloride-15 ug/m 3

, 24-hour

average;

(k) Total reduced sulfur-10 ug/m 3, Jhour average;

(1) Hydrogen sulfide--0.04 ug/m, 1-

hour average;

(m) Reduced sulfur compounds-10

ug/m 3, 1-hour average; or

(ii) The concentrations of the pollutant

in the area that the source or

modification would affect are less than

the concentrations listed in (i)(8)(i]; or

(iii) The pollutants is not listed in

paragraph (i)(8](i).

(9) If EPA approves a plan revision

under 40 CFR 51.24 as in effect before

August 7, 1980, any subsequent revision

which meets the requirements of this

section may contain transition'

provisions which parallel the transition

provisions of 40 CFR 52.21(i)(9), (i)(10)

and (m)(1)(v) as in effect on that date,

which provisions relate to requirements

for best available control technology

and air quality analyses. Any such

subsequent revision may not contain

any transition provision which in the

context of the revision would operate

any less stringently than would its

counterpart in 40 CFR 52.21.

{j) Control Technology Review. The

plan shall provide that:

(1) A major stationary source or major

modification shall meet each applicable

emissions limitation under the State

Implementation Plan'and each

applicable emission standards and

standard of performance under 40 CFR

Parts 60 and 61.

'No deminimis air quality level is provided for ozone. However, any net increase of 100 tons per

year or more of volatile organic compounds subject

to PSD would be required to prerform and ambient

Impact analysis, including the gathering of ambient

air quality data.

(2) A new major stationary source

shall apply best available control

technology for each pollutant subject to

regulation under the Act that it would

have the potential to emit in significant

amounts.

(3) A major modification shall applybest available control technology for

each pollutant subject to regulation

under the Act for which it would be a

significant net emissions increase at the

source. This requirement applies to each

proposed emissions unit at which a net

emissions -increase in the pollutant

would occur as a result of a physical

change or change in the method of

operation in the unit..

(4) For phased construction projects,

the determination of best available

control technology shall be reviewed

and modified as appropriate at the least

reasonable time which occurs no later

than 18 months prior to commencement

of construction of each independent

phase of the project. At such time, the

owner or operator of the applicable

stationary source may be required to

demonstrate the adequacy of any

previous determination of best available

control technology for the source.

[k) Source Impact Analysis. The plan

shall provide that the owner or operator

of the proposed source or modification

shall demonstrate that allowable

emission increases from the proposed

source or modification, in conjunction

with all other applicable emissions

increases or reduction (including

secondary emissions) would not cause

or contribute to air pollution in violation

of:

(1) Any national ambient air quality

standard in any air quality control

region; or

(2) Any applicable maximum

allowable increase over the baseline

concentration in any area.

(1) Air Quality Models. * *t *I * *t

(in) Air Quality Analysis. (1)

Preapplication analysis.

(i) The plan shall provide that any

application for a permit under

regulations approved pursuant to this

section shall contain an analysis of

ambient air quality in the area that the

major stationarysource or major

modification would affect for each of the

following pollutants:

(a) For the source, each pollutant that

it would have the potential to emit in a

significant amount;

(b) For the modification, each

pollutant for which it would result in a

significant net emissions increase.

(ii) The plan shall provide that, with

respect to any such pollutant for which

no National Ambient Air Quality

Standard exists, the analysis shall

contain such air quality monitoring data

as the reviewing authority determines Is

necessary to assess ambient air quality

for that pollutant in any area that the

emissions of that pollutant would affect.

(iii) The plan shall provide that with ' respect to any such pollutant (other than

nonmethane hydrocarbons) for which

such a standard does exist, the analysis

shall contain continuous air quality

monitoring data gathered for purposes of

determining whether emissions of that

pollutant would cause or contribute to a

violation of the standard or any

niaxiumum allowable increase.

(iv) The plan shall provide that, in

general, the continuous air monitoring

data that is required shall have been

gathered over a period of one year and

shall represent the year preceding

receipt of the application, except that, if

the reviewing authority determines that

a complete and adequate analysis can

be accomplished with monitoring data

gathered over a period shorter thah one

year (but not to be less than four

months), the data that is required shall

have been gathered over at least that

shorter period.

{v) The plan may provide that the

owner or operator of a proposed major

stationary source or major modification

of volatile organic compounds who

satisfies all conditions of 40 CFR Part 51

Appendix S, section IV may provide

postapproval monitoring data for ozone

in lieu of providing preconstruction data

as required under paragraph (m)(1).

(2) Post-construction monitoring. The

plan shall provide that the owner or

operator of a major stationary source or

major modification shall, after

construction of the stationary source or

modification, conduct such ambient

nionitoring as the reviewing authority

determines is necessary to determine

the effect emissions from the stationary

source or modification may have, or are

having, on air quality in any area.

(3) Operation of monitoring stations.

The plan shall provide that the owner or

operator of a major stationary source or

major modification shall meet the

requirements of Appendix D to Part S8 of

this chapter during the operition of

monitoring stations for purposes of

satisfying paragraph tnf) of this section,

(n) Source Information. * * * * *#

(o) Additional Impact Analyses.

(p) Sources Impacting Federal Class I

Areas-AdditionalRequirements.

(q) Public Participation. S * *# * •

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(r) Source Obligation. (1) The plan

shall include enforceable procedures to

provide that approval to construct shall

not relieve any owner or operator of the

responsibility to comply fully with

applicable provisions of the plan and

any other requirements under local,

state or federal law.

(2) The plan shall provide that at such

time that a particular source or

modification becomes a major

stationary source or major modification

solely by virtue of a relaxation in any

enforceable limitation which was

established after August 7,1980, on the

capacity of the source or modification

otherwise to emit a pollutant, such as a

restriction on hours of operation, then

the requirements of paragraphs (j)

through (s) of this section shall apply to

the source or modification as though

construction had not yet commenced on

the source or modification.

(s) Innovative Control Technology. (1)

The plan may provide that an owner or

operator of a proposed major stationary

source or major modification may

request the reviewing authority to

approve -a system of innovative control - technology.

(2) The plan may provide that the

reviewing authority may. with the

consent of the governor(s) of other

affected state(s), aetermine that the

source or modification may employ a

system of innovative control technology,

if-.

(i) The proposed control system would

not cause or contribute to an

unreasonable risk to public health,

welfare, or safety in its operation or

function;

(ii) The owner or operator agrees to

achieve a level of continuous emissions

reduction equivalent to'that which

would have been required under - paragraph {)(2) by a date specified by

the reviewing authority. Such date shall

not be later than 4 years from the time

of startup or 7 years from permit

issuance;

(iiI) The source or modification would

meet the requirements equivalent to

those in-paragraphs (j) and (k] based on

the emissions rate that the stationary

source employing the system of

innovative control technology would be

required to meet on the date specified

by the reviewing authority; (iv) The source or modification would

not before the date specified by the

reviewing authority:

(a) Cause or contribute to any

violation of an applicable national

ambient air quality standard; or

(b) Impact any Class I area; or

(c) Impact any area where an

applicable increment is known to be

violated; -

(v) All other applicable requirements

including those for public participation

have been met.

(3) The plan shall provide that the

reviewing authority shall withdraw any

approval to employ a system of

innovative control technology made

under this section, if:

(i) The proposed system fails by the

specified date to achieve the required

continuous emissions reduction rate; or

(ii) The proposed system fails before

the specified date so as to contribute to

an unreasonable risk to public health,

welfare, or safety, or

(iii) The reviewing authority decides

at any time that the proposed system is

unlikely to achieve the required level of

control or to protect the public health.

welfare, or safety.

(4) The plan may proilde that if a

source or modification fails to meet the

required level of continuous emissions

reduction within the specified time

period, or if the approval Is withdrawn

in accordance with paragraph (s)(3), the

reviewing authority may allow the

source or modification up to an

additional 3 years to meet the

requirement for the application of best

available control technology through use

of a demonstrated system of control.

New Source Review For PSD Purposes

2. (a) Section 52.21 of Title 40 of the

Code of Federal Regulations is amended

by deleting paragraph (k) and

redesignating paragraphs 0) through (v)

as (k) through (u) and then by revising

paragraphs (b), (), (i), (j). (k) and (g) and

adding new paragraphs (r)(4), (v) and

(w) as follows:

§ 52.21. Prevention of significant deteroratUon of air quality.

(b) Definitions. For the purposes of

this section:

(1)(i) "Major stationary source"

means:

(a) Any of the following stationary

sources of air pollutants which emits, or

has the potential to emit, 100 tons per

year or more of any pollutant subject to

regulation under the Act: Fossil fuelfired steam electric plants of more than

250 million British thermal units per hour

heat input, coal cleaning plants (with

thermal dryers), kraft pulp mills,

portland cement plants, primary zinc

smelters, iron and steel mill plants,

primary aluminum ore reduction plants,

primary copper smelters, municipal

incinerators capable of charging more

than 250 tons of refuse per day,

hydrofluoric, sulfuric, and nitric acid

plants, petroleum refineries, lime plants,

phosphate rock processing plants, coke

oven batteries, sulfur recovery plants,

carbon black plants (furnace process),

primary lead smelters, fuel conversion

plants: sintering plants. secondary metal

production plants, chemical process

plants, fossil fuel boilers (or

combinations thereofl) totaling more

than 250 million British thermal units per

hour heat input petroleum storage and

transfer units with a total storage

capacity exceeding 300,000 barrels,

taconite ore processing plants, glass

fiber processing plants, and charcoal

production plants;

(b) Notwithstanding the stationary

source size specified in paragraph

(b)(1)(i) of this section, any stationary

source which emits, or has the potential

to emit. 250 tons per year or more of any

air pollutant subject to regulation under

the Act; or

(c) Any physical change that would

occur at a stationary source not

otherwise qualifying under paragraph

(b)(1) as a major stationary source, if the

changes would constitute a major

stationary source by itself.

(Ii) A major stationary source that is

major for volatile organic compounds

shall be considered major for ozone.

(2)(i) "Major modification" means any

physical change in or change in the

method of operation of a major

stationary-source that would.result in a

significant net emissions increase of any

pollutant subject to regulation under the

Act.

(ii) Any net emissions increase that is

significant for volatile organic

compounds shall be considered

significant for ozone.

(iii) A physical change or change in

the method of operation shall not

include:

(a) Routine maintenance, repair and

replacement:

(b) Use of an alternative fuel or raw

material by reason of an order under

sections 2 (a) and (b) of the Energy

Supply and Environmental Coordination

Act of 1974 (or any superseding

legislation) or by reason of a natural gas

curtailment plant pursuant to the

Federal Power Act;

(c) Use of an alternative fuel by

reason of an order or rule under section

125 of the Act;

(d) Use of an alternative fuel at a

steam generating unit to the extent that

the fuel is generated from municipal

solid waste;

(e) Use of an alternative fuel or raw

material by a stationary source which:

(1) The source was capable of

accommodating before January 6,1975,

unless such change would be prohibited

under any federally enforceable permit

condition which was established after

January 6,1975 pursuant to 40 CFR 52.21

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or under regulations approved pursuant

to 40 CFR 51.18 or 40 CFR 51.24; or

(2) The source is approved to use

under any permit issued under 40 CFR

52.21 or under regulatiqns approved

pursuant to 40 CFR 51.24;

(f) An increase in the hours of

operation or in the production rate,

unless such change would be prohibited

under any federally enforceable permit

condition which was established after

January 6, 1975, pursuant to 40 CFR 52.21

or under regulations approved pursuant

to 40 CFR 51.18 or 40 CFR 51.24.

(g) Any change in ownership at a

stationary source.

(3)(i) "Net emissions increase" means

the amount by which the'sum of the

following exceeds zero:

(a) Any increase in actual emissions

from a particular physical change or

change in method of operation at a

stationary source; and

(b) Any other increases and decreases

in actual emissions at the source that

are contemporaneous with the particular

change and are otherwise creditable.

(ii) An increase or decrease in actual

emissions is contemporaneous with the

increase from the particular change only

if it occurs between:

(a) The date five years before

construction on the particular'change

commences; and

(b) The date that the increase from the

particular change occurs.

(iii) An increase or decrease in actual

emissions is creditable only if the

Administrator has not relied on it in

issuing a permit for the source under this

section, which permit is in effect when

the increase in actual emissions from

the particular change occurs.

(iv) An increase or decrease in actual

emissions of sulfur dioxide or

particulate matter which occurs before

the applicable baseline date is

creditable only if it is required to be

considered in calculating the amount of

maximum allowable increases

remaining available.

(v) An increase in actual emissions is

creditable only to the extent that the

new level of actual emissions exceeds

the old level.

(vi) A decrease in actual emissions is

creditable only to the extent that:

(a) The old level of actual emissions

or the old'level of allowable emissions,'

whichever is lower, exceeds the new

level of actual emissions;

• (b) It is federally enforceable at and

after the time that actual construction

on the particular change begins; and

(c) It has approximately the same

qualitative significance for public health

and welfare as that attributed to the

increase from the particular change.

(viii) An increase that results from a

physical change at a source occurs when

the emissions unit on'which

construction occurred becomes

operational and begins to emit a

particular pollutant. Any replacement

unit that requires shakedown becomes

operational only after a reasonable

shakedown period, not to exceed 180

days.

(4) "Potential to emit" means the

maximum capacity of a stationary

source to emit a pollutant under its

physical and operational design. Any

physical or operational limitation on the

capacity of the source to emit a

pollutant, including air pollution control

equipment and restrictions on hours of

operation or on the type or amount of

material combusted, stored, or

processed, shall be treated as part of its

design if the limitation or the effect it

would have on emissions is federally

enforceable. Secondary emissions do

not count in determining the potential to

emit of a stationary source.

(5) "Stationary source" means any

building, structure, facility, or

installation which emits or may emit

any air pollutant subject to regulation

under the Act.

(6) "Building, structure, facility, or

installation" means all of the pollutantemitting activities which belong to the

same industrial grouping, are located on

one or more contiguous or adjacent

properties, and are under the control of

the same person (or persons under

common control). Pollutant-emitting

activities shall be considered as part of

the same industrial grouping if they

belong to the same "Major Group" (i.e.,

which have the same first two digit

code) as described in the Standard

Industrial Classification Manual, 1972,

as amended by the 1977 Supplement (U.

S. Government Printing Office stock

numbers 4101-0066 and 003-005-00176-

0, respectively).

(7) "Emissions unit" means any part of

a stationary source which emits or

would have the potential to emit any

pollutant subject to regulation under the

Act.

(8) "Construction" means any physical

change or change in the method of

operation (including fabrication,

erection, installation, demolition, or

modification of an emissions unit) which

would result in a change in actual

" emissions.

(9) "Commence" as applied to

construction of a major stationary

source or major modification means that

the owner or operator has all necessary

preconstruction approvals or permits.

and either has:

(i) Begun, or caused to begin, a

continuoug program of actual on-site

construction of the source, to be

completed within a reasonable time or

(ii) Entered into binding agreements or

contractual obligations, which cannot be

cancelled or modified without

substantial loss to the owner or

operator, to undertake a program of

actual construction of the source to be

completed within a reasonable time.

(10)"Necessary preconstruction

approvals or permits" means those

permits or approvals required under

federal air quality control laws and

regulations and those air quality control

laws and regulations which are part of

the applicable State Implementation

Plan.

(11) "Begin actual contruction" means,

in general, initiation of physical on-site

construction activities on an emissions

unit which are of a permanent nature.

Such activities include, but are not

limited to, installation of building

supports and foundations, laying

underground pipework and construction

of permanent storage structures. With

respect to a change in method of

operations, this term refers to those onsite activites other than preparatory

activities which mark the initiation of

the change.

(12) "Best available control

technology" means an emissions

limitation (including a ;isible emission'

standard) based on the maximum dogree

of reduction for each pollutant subject to

regulation under Act which would be

emitted from any proposed major

stationary source or major modification

which the Administrator, on a case-bycase basis, taking into account energy,

environmental, and economic impacts

and other costs, determines is

achievable for such source or

modification through application of

production processes or available

methods, systems, and techniques,

including fuel cleaning or treatment or

innovative fuel combustion techniques

for control of such pollutant. In no event

shall application of best available

control technology result in emissions of

any pollutant which would exceed the

emissions allowed by any applidablo

standard under 40 CFR Parts and 60 and

61. If the Administrator determines that

technological or economic limitations on

the application of measurement

methodology to a particular emissions

unit would make the impostion of an

emissions standard infeasible, a design,

equipment, work practice, operational

standard, or combination thereof, may

be prescribed instead to satisfy the

requirement for the application of best

available control technology. Such

standard shall, to the degree possible,

set forth the emissions reduction

achievable by implementation of such

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design, equipment, work practice or

operation, and shall provide for

compliance by means which achieve

equivalent results.

(13)(i) "Baseline concentration" means

that ambient concentration level which

exists in the baseline area at the time of

the applicable baseline date. A baseline

concentration is determined for eachpollutant for which a baseline date is

established and shall include:

(a) The actual emissions

representative of sources in existence on

the applicable baseline date, except as

provided in paragraph (b)(13](ii];

(b) The allowable emissions of major

stationary sources which commenced

construction before January 6,1975, but

were not in operation by the applicable

baseline date.

(ii) The following will not be included

in the baseline concentration and will

affect the applicable maximum

allowable increase(s):

(a) Actual emissions from any major

stationary source on which construction

commenced after January 6.1975; and

(b) Actual emissions increases and

decreases at any stationary source

occurring after the baseline date.

(14)(i) "Baseline date" means the

earliest date after August 7.1977, on

which the first complete application

under 40 CFR 52.21 is submitted by a

major stationary source or major

modification subject to the requirements

of 40 CFR 52.21.

(ii) The baseline date is established

for each pollutant for which increments

or other equivalent measures have been

established if:

(a) The area in which the proposed

source or modification would construct

is designated as attainment or

unclassifiable under section 107(d)(i) (D)

or (E) of the Act for the pollutant on the

date of its complete application under 40

CFR 52.21; and

(b) In the case of a major stationary

source, the pollutant would be emitted

in significant amounts, or. in the case of

a major modification, there would be a

significant net emissions increase of the

pollutant.

(15)(i) "Baseline area" means any

intrastate area (and every part.thereof)

designated as attainment or

unclassifiable under section 107(d)(1)

(D) or (E) of the Act in which the major

source or major modification

establishing the baseline date would

construct or would have an air quality

impact equal to or greater than 1 pg/m3

(annual average) of the pollutant for

which the baseline date is established.

(ii) Area redesignations under section

107(d)(1) (D) or (E) of the Act cannot

intersect or be smaller than the area of

impact of any mjaor stationary source or

major modification which:

(a) Establishes a baseline date; or

(b) Is subject to 40 CFR 52.21 and

would be constructed in the same state

as the state proposing the redesignation.

(16) "Allowable emissions" means the

emissions rate of a stationary source

calculated using the maximum rated

capacity of the source (unless the source

is subject to federally enforceable limits

which restrict the operating rate, or

hours of operation, or both) and the

most stringent of the following:

(i) The applicable standards as set

forth in 40 CFR Parts 60 and 61;

(ii) The applicable State

Implemenation Plan emissions

limitation, including those with a future

compliance date; or

(ii) The emissions rate specified as a

federally enforceable permit condition,

including those with a future compliance

date.

(17) "Federally enforceable" means all

limitations and conditions which are

enforceable by the Administrator.

including those requirements developed

pursuant to 40 CFR Parts 60 and 61,

requirements within any applicable

State Implementation Plan, and any

permit requirements established

pursuant to 40 CFR 52.21 or under

regulations approved pursuant to 40 CFR

51.18 and 40 CFR 51.24.

(18) "Secondary emissions" means

emissions which would occur as a result

of the construction or operation of a

major stationary source or major

modification, but do not come from the

major stationary source or major

modification itself. For the purpose of

this section, secondary emissions must

be specific, well defined, quantifiable,

and impact the same general area as the

stationary source or modification which

causes the secondary emissions.

Secondary emissions may include, but

are not limited to:

(i) Emissions from ships or trains

coming to or from the new or modified

stationary source; and

(ii) Emissions from any offsite support facility which would not otherwise be

constructed or increase its emissions as

a result of the construction or operation

of the major stationary source or major

modification.

(19) "Innovative control technology"

means any system of air pollution

control that has not been adequately

demonstrated in practice, but would

have a substantial likelihood of

achieving greater continuous emissions

reduction than any control system in

current practice or of achieving at least

comparable reductions at lower cost in

terms of energy, economics, or nonair

quality environmental impacts.

(20) 'Fugitive emissions" means those

emissions which could not reasonably

pass through a stack, chimney, vent. or

other functionally equivalent opening.

(21(i) "Actual emissions" means the

actual rate of emissions of a pollutant

from an emissions unit, as determined in

accordance with subparagraphs (ii}-(iv)

below.

(ii) In general, actual emissions as of a

particular date shall equal the average

rate, in tons per year, at which the unit

actually emitted the pollutant during a

two-year period which precedies the

particular date and which is

representative of normal source

operation. The Administrator shall

allow the use of a different time period

upon a determination that it is more

representative of normal source

operation. Actual emissions shall be

calculated using the unit's actual

operating hours, production rates, and

types of materials processed, stored, or

combusted during the selected time

period.

(ii) The Administrator may presume

that source-specific allowable emissions

for the unit are equivalent to the actual

emissions of the unit.

(iv) For any emissions unit which has

not begun normal operations on the

particular date, actual emissions shall

equal the potential to emit of the unit on

that date.

(22) "Complete" means, in reference

to an application for a permit, that the

application contains all of the

information necessary for processing the

application.

(23)(i) "Significant" means, in

reference to a net emissions increase or

the potential of a source to emit any of

the followingpollutants, a rate of

emissions that would equal or exceed $

any of the following rates:

Pollutant and EmIssions Rate

Carbon monoxide: 100 tons per year (tpy) Nitrogen oxides: 40 tpy

Sulfur dioxide. 40 tpy Particulate matter. 25 tpy

Ozone: 40 tpy ofvolatile organic compounds

Lead 0.5 tpy

Asbestos: 0.007 tpy Beryllium: 0.0004 tpy Mercury. 0.1 tpy

Vinyl chloride i tpy

Fluorides: 3 tpy Sulfuric acid mist: 7 tpy Hydrogen sulfide (H2S]: 10 tpy

Total reduced sulfur (including HzS]:1O tpy Reduced sulfr compounds (including HS):

1otpy

(ii) "Significant" means, in reference

to a net emissions increase or the

potential of a source to emit a pollutant

subject to regulation under the Act that

paragraph (b)(23)(i) does not list, any

emissions rate.

52737

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(iii) Notwithstanding paragraph

(b)(23](i), "significant" means any

emissions rate or any net emissions

increase associated with a major

stationary source or major modification,

which would construct within 10

kilometers of a Class I area, and have an

impact on such area equal to or greater

than 1 ILg/m s, (24-hour average).

(24) "Federal Land Manager" means,

with respect to any lands in the United

States, the Secretary of the department

with authority over such lands.

(25) "High terrain" means any area

having an elevation 900 feet or more

above the base of the stack of a source.

(26) "Low terrain" means any area

other than high terrain.

(27) "Indian Reservation" means any

federally recognized reservation

established by Treaty, Agreement,

Executive Order, or Act of Congress.

(28) "Indian Governing Body" means

the governing body of any tribe, band, or

group of Indians subject to the

jurisdiction of the United States and

recognized by the United States as

possessing power of selfgovernment. * * *r -* *

(0 Exclusions from increment

consumption. (1) Upon written request

of the governor, made after notice and

opportunity for at least one public

hearing to be held in accordance with

procedures established in 40 CFR 51.4,

the Administrator shall exclude the

following concentrations in determining

compliance with a maximum allowable

increase:

(i) Concentrations attributable to the

increase in emissions from stationary

sources which have converted from the

use of petroleum products, natural gas,

oP both by reasodt of an order in effect

under sections 2(a) and (b) of the Energy

Supply and Environmental Coordination

Act of 1974 (or any superseding

legislation) over the emissions from such

sources before the effective date of such

an order;

(ii) Concentrations attributable to the

increase in emissions from sources

which have converted from using

natural gas by reason of a natural gas

curtailment plan in effect pursuant to

the Federal Power Act over the

emissions from such sources before the

effective date of such plan;

(iii) Concentrations of particulate

matter attributable to the increase in

emissions from construction or other

temporary emission-related activities of

new or modified sources;

(iv) The increase in concentrations

attributable to new sources outside the

United States over the concentrations

attributable to existing sources which

are included in the baseline

concentration; and

(v) Concentrations attributable to the

temporary increase in emissions of

sulfur dioxide or particulate matter from

stationary sources which are affected by

plan revisions approved by the

Administrator as meeting the criteria

specified in paragraph (fl(4).

(2) No exclusion of such

concentrations shall apply more than

five years after the effective date of the

ordei to which paragraph (f)(1)(i) refers

or the plan to which paragraph (fl(1)(ii)

refers, whichever is applicable. If both

such order and plan are applicable, no

such exclusion shall apply more than

five years after the later of such

effective dates.

(3) No exclusion under paragraph (f)

of this section shall occur later than 9

months after August 7,1980, unless a

State Implementation Plan revision

meeting the requirements of 40 CFR

51.24 has been submitted to the

Administrator.

(4) For purposes of excluding

concentrations pursuant to paragraph

(f)(1)(v), the proposed plan revision

shall:

(i) Specify the time over which the

temporary emissions increase of sulfur

dioxide or particulate matter would

occur. Such time is not to exceed two

years in duration unless a longer time is

approved by the Administrator,

(ii) Specify that the time period for

excluding certain contributions in

accordance with paragraph (fJ(4)(i) is

not renewable;

(iii) Allow-no emissions increase from

a stationary source which would:

(a) Impact a Class I area or an area

where an applicable increment is known

to be violated; or

I (b) Cause or contribute to the

violation of a national ambient air

quality standard;

(iv] Require limitations to be in effect

at the end of the time period specified in

accordance with paragraph (fj(4](i)

which would ensure that the emissions

levels from stationary sources affected

by the plan revision would not exceed

those levels occurring from such sources

before the plan revision was approved.

(i) Review of Major Stationary

Sources and Major ModificationsSource Applicability and Exemptions.

(1) No stationary source or modification

to which the requirements of paragraphs

(j) through (r) of this section apply shall

begin actual construction without a

permit which states that the stationary

source or modification would meet those

requirements. The Administrator has

authority to issue any such permit._o

(2) The requirements of paragraphs (j)

through (r) of this sectibn shall apply to

any major stationary source and any

major modification with respect to each

pollutant subject to regulation under tho

Act that it would emit, except as this

section otherwise provides.

(3) The requirements of paragraphs (j)

through (r) of this section apply only to

any major stationary source or major

modification that would be constructed

in an area designated as attainment or

unclassifiable under section 107(d)(1]D)

or (E) of the Act.

(4) The requirements of paragraphs (j) through (r) of this section shall not apply

to a particular major stationary source

or major modification, if; (i) Construction commenced on the

source or modification before August 7,

1977. The regulations at 40 CFR 52.21 as

in effect before August 7, 1977, shall

govern the review and permitting of any

such source or modification; or

(ii) The source or modification was

subject to the review requirements of 40

CFR 52.21(d)(i) as in effect before March

1, 1978, and the owner or operator:

(a) Obtained under 40 CFR 52.21 a

final approval effective before March 1,

1978;

(b) Commenced construction before

March 19,1979; and

(c) Did not discontinue construction

for a period of 18 months or more and

completed construction within a

reasonable time; or

(iii) The source or modification was

subject to 40 CFR 52.21 as in effect

before March 1, 1978, and the review of

an application for approval for the

stationary source or modification under

40 CFR 52.21 would have been

completed by March 1, 1978, but for an

extension of the public comment period

pursuant to a request for such an

extension. In such a case, the

application shall continue to be

processed, and granted or denied, under

40 CFR 52.21 as in effect prior to March

1, 1978; or

(iv) The source or modification was

not subject to 40 CFR 52.21 as in effect

before March 1,1978, and the owner or

operator: (a) Obtained all final federal, state

and local preconstruction approvals or

permits necessary under the applicable

State Implementation Plan before March

1,1978;

(b) Commenced construction before

March 19, 1979; and

(c) Did not discontinue construction

for a period of 18 months or more and

completed construction within a

reasonable time or

(v] The source or modification was

not subject to 40 CFR 52.21 as In effect

on June 19, 1978 or under the partial stay

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of regulations published on February 5,

1980 (45 FR 7800), and the owner or

operator:

(a) Obtained all final federal, state

and local preconstruction approvals or

permits necessary under the applicable

State Implementation Plan before

August 7,1980;

(b) Commenced construction within 18

months from August 7,1980, or any

earlier time required under the

applicable State Implementation Plan;

and

(c) Did not discontinuue construction

for a period of 18 months or more and

completed construction within a

reasonable time; or

[vi) The source or modification would

be a nonprofit health or nonprofit

educational institution, or-a major

modification would occur at such an

institution, and the governor of the state

in which the source or modification

would be located requests that it be

exempt from those requirements; or

(vii) The source or modification would

be a major stationary source or major

modification only if fugitive emissions,

to the extent quantifiable, are

considered in calculating the potential to

emit of the stationary source or

modification and the source does not

belong to any of the following

categories:

(a) Coal cleaning plants (with thermal

dryers];

(b) Kraft pulp mills;

(a) Portland cement plants;

[d) Primary zinc smelters;

(e) Iron and steel mills;

[9 Primary aluminum ore reduction

plants;

(g) Primary copper smelters;

(h) Municipal incinerators capable of

charging more than 250 tons of refuse

per day;

(i) Hydrofluoric, sulfuric, or nitric acid

plants;

6 Petroleum refineries;

(k) Lime plants;

(1) Phosphate rock processing plants;

im) Coke oven batteries;

(n) Sulfur recovery plants;

[a) Carbon black plants (furnace

process);

[p) Primary lead smelters;

(q) Fuel conversion plants;

(r) Sintering plants;

(s) Secondary metal production

plants;

(t) Chemical process plants;

(u) Fossil-fuel boilers (or combination

thereof) totaling more than 250 million

British thermal units per hour heat input;

(v) Petroleum storage and transfer

units with a total storage capacity

exceeding 300,000 barrels;

(w) Taconite ore processing plants;

(x) Glass fiber processing plants;

(y) Charcoal production plants;

(z) Fossil fuel-fired steam electric

plants of more than 250 million British

thermal units per hour heat input;

(aa) Any other stationary source

category which, as of August 7,1980, is

being regulated under section 111 or 112

of the Act; or

(viii) The source is a portable

stationary source which has previously

received a permit under this section. and

(a) The owner or operator proposes to

relocate the source and emissions of the

source at the new location would be

temporary; and

(b) The emissions from the source

would not exceed its allowable

emissions; and

(c) The emissions from the source

would impact no Class I area and no

area where an applicable increment is

known to be violated; and

(d) Reasonable notice is given to the

Administrator prior to the relocation

identifying the proposed new location

and the probable duration of operation

at the new location. Such notice shall be

given to the Administrator not less than

10 days in advance of the proposed

relocation unless a different time

duration is previously approved by the

Administrator.

(5) The requirements of paragraphs (0)

through (r) of this rection shall not apply

to a major stationary source or major

modification with respect to a particular

pollutant if the owner or operator

demonstrates that, as to that pollutant,

the source or modification is located in

an area designated as nonattainment

under section 107 of the Act.

(6) The requirements of paragraphs

(k), (in) and (o) of this section shall not

apply to a major stationary source or

major modification with respect to a

particular pollutant, if the allowable

emissions of that pollutant from the

source, or the net emissions increase of

that pollutant from the modification:

(i) Would impact no Class I area and

no area where an applicable increment

is known to be violated, and

(ii) Would be temporary.

(7) The requirements of paragraphs

(k), (in) and (o) of this section as they

relate to any maximum allowable

increase for a Class I area shall not

apply to a major modification at a

stationary source that was in existence

on March 1, 1978, if the net increase in

allowable emissions of each pollutant

subject to regulation under the Act from

the modification after the application of

best available control technology would

be less than 50 tons per year.

(8) The Administrator may exempt a

stationary source or modification from

the requirements of paragraph (in) with

respect to monitoring for a particular

pollutant ifi

(i) The emissions increase of the

pollutant from the new source or the net

emissions increase of the pollutant from

the modification would cause, in any

area, air quality impacts less than the

following amounts:

Carbon monoxide-575 pg/m , 8-hour

average;

Nitrogen dioxide-14 yg/m'. annual

average;

Total suspended particulate-10 pg

M3, 24-hour average;

Sulfur dioxide-13 pg/m 3

, 24-hour

average;

Ozone; 2

Lead-0.1 pg/n, 24-hour average;

Mercury-025 pg 1 3, 24-hour

average;

Beryllium-0.0005 pg/m3, 24-hour

average;

Fluorides-0.25 g/m3, 24-hour

average;

Vinyl chloride-15 pg/m, 24-hour

average;

Total reduced sulfur-10 pg/ms, 1-

hour average;

Hydrogen sulfde-0-.04 pg/ni 3, 1-hour

average;

Reduced sulfur compounds-10 pg/

m3, 1-hour average; or

Cii) The concentrations of the pollutant

in the area that the source or

modification would affect are less than

the concentrations listed in paragraph

(i)(8)(i), or the pollutant is not listed in

paragraph (i)(8)[i).

(9) The requirements for best

available control technology in

paragraph (j) of this section and the

requirements for air quality analyses in

paragraph (m)(1) shall not apply to a

particular stationary source or

modification that was subject to 40 CFR

52.21 as in effect on June 19, 1978, if the

owner or operator of the source or

modification submitted an application

for a permit under those regulations

before August7, 1980, and the

Administrator subsequently determines

that the application as submitted before

that date was complete. Instead, the

requirements at 40 CFR 52.21" and (n)

as in effect on June 19,1978 apply to any

such source or modification.

(10)(i) The requirements for air quality

monitoring in paragraphs (m][1)(ii]-(iv)

of this section shall not apply to a

particular source or modification that

was subject to 40 CFR 52.21 as in effect

on June 19,1978, if the owner or operator

of the source or modification submits an

2No d. mLu?1 7s air qznity le.ve L .- pnAid for

oz,_e. However any net Increase ofi0o t ns per

year or more of vc!atile organic comptoads subject

to PSD would be required to perform an ambient

Impact anrly-ls Including the Sathe'ing ofambint

air quality data.

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application for a permit under this

section on or before June 8, 1981, and the

Administrator subsequently determines

that the application as submitted before

that date was complete with respect to

the requirements of this section other

than those in paragraphs (m)(1)[ii)-(iv]

and with respect to the requirements for

such analyses at 40 CFR 52.21(m)f2) as

in effect on June 19, 1978. Instead, the

latter requirements shall apply to any

such source or modification.

(ii) The requirements for air quality,

monitoring in paragraphs (m)[1)[ii)-iv)

of this section shall not apply to a

particular source or modification that

was not subject to 40 CFR 52.21 as in

effect on June 19, 1978, if the owner or

operator of the source or modification

submits an application for a permit

under this section on or before June 8,

1981, and the Administrator

subsequently determines that the

application as submitted before that

date was complete, except with respect

to the requirements in paragraphs (m[1](i}-iv}.

() Control Technology Review, (1)'A

major stationary source or major

modification shall meet each applicable

emissions limitation underthe State

Implementation Plan and each

applicable emissions standard and

standard of performance under 40 CFR

Parts 60 and 61.

(2) A new major stationary source

shall apply best available control

technology for each pollutant subject to

regulation under the Act that it would

have the potential to emit in significant

amounts.

(3) A major modification shall apply

best available control technology for

each pollutant subject to regulation

under the Act for which it would result

in a significant net emissions increase at

the source. This requirement applies to

each proposed emissions unit at which a

net emissions increase in the pollutant

would occur as a result of a physical

change or change in the method of

operation in the unit.

(4) For phased construction projects, the determination of best available

control technology shall be reviewed

and modified as appropriate at the latest

reasonable time which occurs no later

than 18 months prior to commencement

of construction of each independent

phase of the project. At such time, the

owner or operator of the applicable

stationarysource may be required to

demonstrate the adequacy ofany

previous detprmination of best available

control technology for the source. " (k) Source Impact Analysis. The

owner or operator of the proposed

source or modification shall

demonstrate that allowable emission

increases from the proposed source or

modification, in conjunction with all

other applicable emissions increases or

reductions (including secondary

emissions), would not cause or

contribute to air pollution in violation of:

(1) Any-national ambient air quality

standard in any air quality control

region; or

(2) Any applicable maximum

allowable increase over the baseline

concentration in any area.

(1) Air Quality Models.

(m) Air QualityAnalysis. (1)

Preapplication analysis.

(i) Any application for a permit under

this section shall contain an analysis of

ambient air quality in the area that the

major stationary source or major

modification would affect for each of the

following pollutants:

(a) For the source, each pollutant that

it would have the potential to omit in a

significant amount;

(b) For the modification, each

pollutant for which it would result in a

significant net emissions increase.

(ii) With respect to any such pollutant'

for which no National Ambient Air

Quality Standard exists, the analysis

shall contain such air quality monitoring

data as the Administrator determines is

necessary to assess ambient air quality

for that pollutant in any area that the

emissions of that pollutant would affect.

(iii) With respect to any such pollutant

(other than nonmethane hydrocarbons)

for which such a standard does exist,

the analysis shall contain continuous air

quality monitoring data gathered for

purposes of determining whether

emissions of that pollutant would cause

or contribute to a violation of the

standard or any maximum allowable

increase.

(iv) In general, the continuous air

quality monitoring dafa: that is required

shall have been gathered over a period

of at least one year and shall represent

at least the year preceding receipt of the

application, except that, if the

Administrator. determines that a

complete and adequate analysis can be

accomplished with monitoring data

gathered over a period shorter than one

year (but not to be less than four

months), the data that is required shall

have been gathered over at least that

shorter period.

(v) For any application which

becomes complete, except as to the

requirements of paragraph (m)(1) (iii)

and (iv), between June 8, 1981, and

February 9, 1982, the data that

paragraph (m)(1)(iii) requires shallhave

been gathered over at least the period

from February 9,1981, to the date the

application becomes otherwise

complete, except that:

(a) If the source or modification would

have been major for that pollutant under

40 CFR 52.21 as in effect on June 10,

1978, any monitoring data shall have

been gathered over at least the period

required by those regulations.

(b) If the Administrator determines

that a complete and adequate analysis

can be accomplished with monitoring

data over a shorter period (not to be less

than four months), the data that

paragraph (m)(1)(iii) requires shall have

beeri gathered over at least that shorter

period.

(c) If the monitoring data would relate

exclusively to ozone and would not

have been required under 40 CFR 52.21

as in effect on June 19, 1978, the

Administrator may waive the otherwise

applicable requirements of this * paragraph (v) to the extent that the

applicant shows that the monitoring

data would be unrepresentative of air

quality over a full year.

(vi) The owner or operator of a

proposed stationary source or

modification of violatile organic

compounds who satisfies all conditions

of 40 CFR Part 51 Appendix S, section IV

may provide post-approval monitoring

data for ozone in lieu of providing

preconstruction data as requried under

paragraph (m)(1).

(2) Post-construction monitoring. The

owner or operator of a major stationary

source or major modification shall, after

construction of the stationary source or

modification, conduct such ambient

monitoring as the Administrator

determines is necessary to dqtermine

the effect emissions from the stationary

source or modification may have, or are

having, on air quality in any area.

(3) Operations of monitoring stations.

The owner or operator of a major

stationary source or major modification

shall meet the requirements of Appendix

B to Part 58 of this chapter during the

operation of monitoring tations for

purposes of satisfying paragraph (m) of

this section.

(n) Source Information.

(o) A dditional Impact Analyses.

(p) Sources Impacting Federal Class I

Areas-Additional Requirements.

(q) Public Pdrticipation. The

Administrator shall follow the

applicable procedures of 40 CFR Part

124 in processing applications under this

section. The Administrator shall follow

the procedures at 40 CFR 52.21(r) as In

effect on June 19, 1979, to the extent that

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the procedures of 40 CFR Part 124 do not

apply.

(r) Source Obligation.

(4) At such time that a particular

source or modification becomes a major

stationary source or major modification

solely by virtue of a relaxation in any

enforceable limitation which was

established after August 7.1980, on the

capacity of the source or modification

otherwise to emit a pollutant, such as a

restriction on hours of operation, then

the requirements or paragraphs {j)

through (s) of this section shall apply to

the source or modification as though

construction had not yet commenced on

the source or modification.

" (s) Environmentalimpact Statements.

(t] Disputed Permits or

Redesignations.

(u) Delegation ofAuthority.

(v) Innovative Control Technology. (1)

An owner or operator of a proposed

major stationary source or major

modification may request the

Administrator in writing no later than

the close of the comment period under

40 CFR 124.10 to approve a system of

innovative control technology.

(2) The Administrator shall, with the

consent of the governor(s) of the

affected state(s), determine that the

source or modification may employ a

system of innovative control technology,

if:

(i) The proposed control system would

not cause or contribute to an

unreasonable risk to public health,

welfare, or safety in its operation or

function;

(ii) The owner or operator agrees to

achieve a level of continuous emissions

reduction equivalent to that which

would have been required under

paragraph 0)(2) by a date specified by

the Administrator. Such date shall not

be later than 4 years from the time of

startup or 7 years from permit issuance;

(ill) The source or modification would

meet the requirements of paragraphs (0)

and (k) based on the emissions rate that

the stationary source employing the

system of innovative control technology

would be required to meet on the date

specified by the Administrator,

(iv) The source or modification would

not before the date specified by the

Administrator.

(a) Cause or contribute to a violation

of an applicable national ambient air

quality standard; or

(b) Impact any Class I area; or

Cc) Impact any area where an

applicable increment is known to be

violated; and

(v) All other applicable requirements

including those for public participation

have been met.

(3) The Administrator shall withdraw

any approval to employ a system of

innovative control technology made

under this section, if:

(i) The proposed system fails by the

specified date to achieve the required

continuous emissions reduction rate; or

(ii) The proposed system fails before

the specified date so as to contribute to

an unreasonable risk to public health,

welfare, or safety; or

(iii) The Administrator decides at any

time that the proposed system is

unlikely to achieve the required level of

control or to protect the public health,

welfare, or safety.

(4) If a source or modification fails to

meet the required level of continuous

emission reduction within the specified

time period or the approval is

withdrawn in accordance with

paragraph (v)(3), the Administrator may

allow the source or modification up to

an additional 3 years to meet the

requirement for the application of best

available control technology through use

of a demonstrated system of control.

(w) Permit rescission. (1) Any permit

issued under this section or a prior

version of this section shall remain in

effect, unless and until it expires under

paragraph (s) of this section or is

rescinded.

(2) Any owner or operator of a

stationary source or modification who

holds a permit for the source or

modification which was issued under 40

CFR 52.21 as in effect on June 19,1978,

may request that the Administrator

rescind the permit or a particular portion

of the permit

(3) The Administrator shall grant an

application for rescission if the

application shows that this section

would not apply to the source or

modification.

(4) If the Administrator rescinds a

permit under this paragraph, the public

shall be given adequate notice of the

rescission. Publication of an

announcement of rescission in a

newspaper of general circulation in the

affected region within 60 days of the

rescission shall be considered adequate

notice.

2. (b) In § 52.60 (AL, § 52.96 (AK), § 52.144 (AZ), § 52.131 (AR), § 52.270

(CA), § 52.343 (CO), § 52.383 (CT),

§ 52.432 (DE), § 52.499 (DC), § 52.530

(FL), § 52.632 (HI), § 52.683 (I), § 62.738

(IL], § 52.793 (IN), § 52.833 (IA), § 52.884

(KS), § 52.931 (KY), § 52.986 (LA),

§ 52.1118 MD), § 52.1180 (MI, § 52.1234

MN), § 52.1280 (MS), § 52.1339 (MO),

1 52.1382 MT, § 52.1436 (NB), § 52.1485

NV, § 52.1529 NH, § 52.1603 NJ),

52.1634 (NM, § 52.1689 (NY), § 52.1778

(NC). § 52.1884 (OH), § 52.1929 (OK],

§ 52.1987 (OR), § 52.2058 (PA), § 52.08

(RI), § 52.2131 (SC), § 52.2178 (SD),

1 52.23O3 (TX), § 52.2346 (UT), § 52.2451

(VA), § 52.2497 [WA), § 52.2528 fWV),

§ 52.2581 (WI), § 52.2676 (GU), § 52.2729

(PR), § 52.2779 (VI), and § 52.2827

(AreS), paragraphs (a) and (b) are

revised to read as follows:

(a) The requirements of sections 160

through 165 of the Clean Air Act are not

met, since the plan does not include

approvable procedures for preventing

the significant deterioration of air

quality.

(b) Regulations for preventing

significant deterioration of air qualty

The provisions of 52.21(b) through (w)

are hereby incorporated and made a

part of the applicable state plan for the

State of

Emission Offset Interpretative Ruling

3. Sections , U. 11 and IV of the

Emission Offset Interpretative Ruling, 40

CFR Part 51 Appendix S, as revised 44

FR 3274 (January 16,1979] and 45 FR

31307 (May 13,1980), are amended as

follows:

A. By adding a new third paragraph to

Section L to read as follows:

L Introduction

The requirement of this Ruling shall not

apply to any major stationary source or major modification that was not subject to the

Ruling as in effect on January 16,1979, if the

owner or operator. A. Obtained all final federal. state, anl

local preconstruction approvals or permits

necessary under the applicable State

Implementation Plan before August 7,190;,

B. Commenced construction within 18

months from August 7,1980, or any earlier

time required under the applicable State

Implementation plan. and

C. Did not discontinue construction for a period of 18 months or more and completed construction within a reasonable time.

B. By revising Section IH, subsection A,

to read as follows:

IL Initial Screening Analyses and

Determination of Applicable Requirements.

A. Defzitons-For the purposes of this

Ruling: . "Stationary source" means any building,

structure, facility, or Installation whch emits

or may emit any air pollutant subject to

regulation under the Act.

2. "Building. structure, or facility- means

all of the pollutant-emitting activities which

belong to the same industrial grouping, are

located on one or more contiguous or

adjacent properties, and are under the control

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52742 Federal Register / Vol. 45, No. 154 / Thursday, August 7, 1980 1 Rules and Regulations

of the same person (or persons under common control). Pollutant-emitting activities

shall be considered as part of the same- industrial grouping if they belong to the same "Major Group" (i.e., which have the same two

digit code) as described in the Standard

Industrial Classification Manual, 1972, as amended by the 1977 Supplement (U.S.

Government Printing Office stocknmbers

4101-0066 and 003-005-00176-0, xespectively).

3. "Installation" means an identifiable

piece of process equipment.

4. "Potential to emit" means the maximum

capacity of a stationary source to emit a pollutant -under its physical and operational

design. Any physical or operational limitation on the capacity of the source to emit a

pollutant, including air pollution control

equipment and restrictions on hours Df

operation or on the type or amount of

material combusted, stored, or processej,

shall be treated as part of its design only if

the limitation or the effect it would have on- emissions is federally enforceable. Secondary

emissions do not count in determining the

potential to emit of a stationary source. 5.[i) "Major stationary source" means: (a) Any stationary source of air pollutants

which emits, or has the potential to emit, 100

tons per year or more of any pollutant subject

to regulation under the Act; or (b) Any physical change thafwould occur at a stationary source not qualifying under

paragraph 5.[i}[a) as a major stationary

source, if the change would constitute -a major stationary source by itself.

(ii) A major stationary source that is major

for volatile organic compounds shall be

considered major for ozone. 6.(i) "Major modification" means any

physical change in or change in the method of

operation of a major stationary source that

would result in a significant net emissions

increase of any pollutant subject to regulation

under the Act.

(ii) Any net emissions increase that is

considered significant for volatile organic

compounds shall be considered significant for ozone. (iii) A physical change or change in the

method of operation shall not include:

(a) Routine maintenance, repair, and

replacement;

(b) Use of an alternative fuel or raw material by reason of an order under sections

2 (a) and (b] of the Energy Supply and

Environmental Coordination Act of 1974 (or

any superseding legislation) or by reason of a natural gas curtailment plan pursuant to the

Federal Power Act;

(c) Use of an alternative fuel by reasoiiof an order or rule under section 125 of the Act;

(d) Use of an alternative fuel at a steam

generating unit to the extent that the fuel is

generated from municipal solid waste;

(e) Use of an alternative fuel or raw material by a stationary source which.

(1) The source was capable of

accommodating before December21, 1976,

unless such change would be prohibited

under any federally enforceable permit

condition which was established after -

December 21, 1976, purusant to40 CFR 52.21 or under regulations approved pursuant to 40

CFR 51.18 or 40 CFR 51.24; or (2) The source is approved to use under

anypermit issued under this xuling;

M) An increase in the hours of operation or in the production rate, unless such change is

prohibited underany federally enforceable

permit condition which was established after

December 21,1976 pursuant to 40 CFR 52.21

or under regulations approved pursuant to 40

CFR 51.18 or 40 CFR 51.24;

(g) Any change in ownership at a stationary source. 7.(i) "Net emissions increase" means the

amount by which the sum of the following

exceeds zero: (a) Any increase in actual emissions from a

particular physical change or change in the

method of operation at a stationary source;

and

(b) Any other increases and decreases in

actual emissions at the source that are contemporaneous with the particular change

and are otherwise creditable.

(ii) An increase or decrease in actual

emissions is contemporaneous with the

increase from the particular change only if it occurs between:

(a) The date five years before construction on the particular change commences and

(b] The date that the increase from the

particular change occurs. (iI) An increase or decrease in actual

emissions is creditable only if the

Administrator has not xelied on it in'issuing a

permit for the source under this Ruling which

permit is in effect when the increase in actual

emissions from the particular change occurs. (iv) An increase in actual emissions is

creditable only to the extent that the new level of actual emissions exceeds the old

level.

(v) A decrease in actual emissions is

creditable only to the extent that:

(a) The old level of actual emissions or the

old level of allowable emissions, whichever

is lower, exceeds the new level of actual

emissions;

(b) It is federally enforceable at and after

the time that actual construction on the

particular change begins;

(c) The reviewing authority has not relied

on it in issuing any permit under regulations

approved pursuant to 40 CFR 51.18; and

(c It has approximately the same qualitative7 significance for public health and

welfare as that attributed to the increase

from the particular change.

(vi) An increase that results from a

physical change at a source occurs -when the

emissions unit on which construction

occurred becomes operational and begins to

emit a particular pollutant. Any replacement

unit that requires shakedown becomes

operational only after a reasonable

shakedown period, not to exceed 180 days.

8. "Emissions unit" means anypart of a stationary source which emits or would have

the potential to emit any pollutant subject to

regulationunder the Act.

9. "Reconstruction" will be presumed to

have taken place where the fixed capital cost

of the new components exceeds 50 per cent

of the fixed capital cost of a comparable

entirely new stationary source. Any final

' decision as to whether reconstruction has

occurred shalllbe made in accordance with

the provisions of 40 CFR 60.15(f) (1)-(3). A

reconstructed stationary source will be

treated as:anew stationary source for

purposes of this Ruling. in determining lowest

achievable emission rate for a reconstructed

stationary source, the provisions of 40 CFR

60.15(f)(4) shall be taken Into account in

assessing whether a new source performance

standard Is applicable to such stationary source.

10. "Fixed capital cost" means the capital

needed to provide all the depreciable

components.

11. "Secondary emissions" means emissions which would occur as a result of

the construction or operation of a major

stationary source or major modification, but

do not come from the major stationary source or major modification itself. For the purpose

of this Ruling, secondary emissions must be

specific, well defined, quantifiable, and

impact the same general area as the

stationary source or modification which causes the secondary emissions. Secondary

emissions may include, but are not limited to:

(i) Emissions from ships or trains cominlg to or from the new or modified stationary source and

(ii) Emissions from any offsite support

facility which would not otherwise be

constructed or increase Its emissions as a result of the construction or operation of the

major stationary source or major

modification.

12. "Fugitive emissions" means those

emissions which could not reasonably pass

through a stack, chimney, vent, or other

functionally equivalent opening.

13.(l) "Significant" means, in reference to a net emissions increase or the potential of a source to emit any of the following pollutants, a rate of emissions that would equal or exceed any of the following rates:

Pollutant and Emissions Rate

Carbon monoxide: 100 tons per year (tpy]

Nitrogen oxides: 40 tpy

Sulfur dioxide: 40 tpy

Particulate matter. 25 tpy

Ozone: 40 tpy of volatile organic compounds

Lead: 0.6 tpy

14. "Allowable emissions" means the

emissions rate calculated using the maximum

rated capacity of the source (unless the

source is subject to federally enforceable

limits which restrict the operating rate, or hours of operation, or both) and the most

stringent of the following:

(I) Applicable standards as set forth in 40

CFR Parts 60 and 61;

(ii) Any applicable State Implementatlon

Plan emissions limitation, including those

with a future compliance date; or (iII) The emissions rate specified as a federally enforceable permit condition,

including those with a future compliance

date.

15. "Federally enforceable" means all

limitations and conditions which are enforceable by the Administrator, Including

those requirements developed pursuant to 40

CFR Parts 60 and 61, requirements within any

applicable State Implementation Plan, and

any permit requirements established

pursuant to this Ruling, 40 CFR 52.21, or under regulations approved pursuant to 40

CFR 51.18 or 51.24.

16.(ii "Actual emissions" means the actual

rate of emissions of a pollutant from an

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emissions unit as determined in accordance

with subparagraphs (ii)-{iv) below.

(ii) In general, actual emissions as of a particular date shall equal the average rate,

in tons per year, at which the unit actually emitted the pollutant during a two-year

period which precedes theparticular date

and which is representative of normal source operation. The reviewing authority shall

allow the use of a different time period upon a determination that it is more representative of normal source operation. Actual emissions

shall be calculated using the unit's actual

operating hours, production rates, and types

of materials processed, stored or combusted

during the selected time period.

(il) The reviewing authority may presume

that source-specific allowable emissions for

the unit are equivalent to the actual

emissions of the unit.

(iv) For any emissions unit which has not

begun normal operations on the particular

date, actual emissions shall equal the

potential to emit of the unit on that date.

17. "Construction" means any physical

change or change in the method of operation

(including fabrication, erection installation,

demolition, or modification of an emissions

unit) which would result in a change in actual

emissions.

18. "Commence" as applied to construction

of a major'stationary source or major

modification means that the owner or operator has all necessary preconstruction

approvals or permits and either has:

(i) Begun, or caused to begin, a continuous

program of actual on-site construction of the

source, to be completed within a reasonable

time; or (ii) Entered into binding agreements or contractual obligations, which cannot be

cancelled or modified without substantial

loss to the owner or operator, to undertake a program of actual construction of the source to be completed within a reasonable time.

19. "Necessary preconstruction, approvals or permits" means those permits or approvals

required under federal air quality control

laws and regulations and those air quality

control laws and regulations which are part

of the applicable State Implementation Plan.

20. "'Begin actual construction" means, in

general, initiation ofphysical aon-site

construction activities on an emissions unit

which are of a permanent nature, Such

activities include, but are not limited to.

installation of building supports and

foundations, laying of underground pipework,

and construction of permanent storage

structures. With respect to a change in

method of operating this term refers to those

on-site activities other than preparatory

activities which mark the initiation of the

change.

21. "Lowest achievable emission rate"

means, for any source, the more stringent rate

of emissions based on the following:

(i) The most stringent emissions limitation

which is contained in the implementation

plan of any state for such class or category of

stationary source, unless the owner or operator of the proposed stationary source demonstrates that such limitations are not

achievable; or (ii)The most stringent emissions limitation

which is achieved in practice by such class or

category of stationary source. This limitation.

when applied to a modification, means the

lowest achievable emissions rate for the new or modified emissions units within the

stationary source. Inno event shall the

application of this term permit a proposed new or modified stationary source to emit

any pollutant in excess of the amount

allowable under applicable new source standards of performance.

22. "Resource recovery facility" means any

facility at which solid waste Is processed for

the purpose of extracting, converting to

energy, or otherwise separating and

preparing solid waste for reuse. Energy

conversion facilities must utilize solid waste

to provide more than 50 percent of the beat

input to be considered a resource recovery

facility under this Ruling.

C. By amending Section II, subsection

C by deleting footnote 2 and the second

paragraph. The first paragraph is revised

to read as follows:

C. Re&-iew of specfied sources for air

quality impact.

In addition, the reviewing authority must

determine whether the major stationary source or major modification would be

constructed in an area designated in 40 CFR

81.300 etseq. as nonattainment fors

pollutant for which the stationary source or modification is major.

D. By revising Section II, subsection F

to read as follows:

F. Fugitive emissions sources. Section IV.

A. of this Ruling shall not apply to a source or modification that would be a major

stationary source or major modification only

if fugitive emissions, to the extent

quantifiable, are considered in calculating the

potential to emit of the stationary source or

modification and the source does not belong

to any of the following categorles:

(1) Coal cleaning plants (with thermal

dryers);

(2) Kraft pulp mills;

(3) Portland cement plants; (4) Primary zinc smelters:

(5) Iron and steel mills;

(0) Primary aluminum ore reduction plants-

(7) Primary copper smelters-

(8) Municipal incinerators capable of

charging more than 250 Ions of refuse per

day,

(9) Hydrofluoric, sulfuric, or nitric acid

plants;

(10) Petroleum refineries;

(11] Lime plants;

(12) Phosphate rock processing plants; (13) Coke oven batteries;

(14) Sulfur recovery plants;

(15) Carbon black plants (furnace process);

(16) Primary lead smelters;

(17) Fuel conversionplantr,

(18) Sintering plants;

(19) Secondary metal production plants.

(20) Chemical process plants;

(21) Fossil-fuel boilers (or combination

thereof) totaling more than 250 million British

thermal units perhour heat input:

(22) Petroleum storage and transfer units

with a totalstorage capacity exceeding

300,000 barrels;

(23) Taconite ore processing plants;

(24) Glass fiber processing plants;

(25] Charcoal production plants;

(26) Fossil fuel-fired steam electric plants

of more than 250 million British thermal units

per hour heat input;

(27) Any other stationary source category

which, as of August 7,1980, is being regulated

under sectop 111 or112 of the Act.

E. By deleting Footnote 3 of

subsection C of Section III and revising

the third paragraph as follows:

C. Review of s;ecif7led s2=-ces of air

quality iapact.

For ozone, sources of volatile organic

compounds, locating outside a designated ozone nonattainment area, will be presumed

to have no significant impact on the

designated nonattainment area. If ambient

monitoring indicates that the area of source location Is in fact nonattainment. then the source may be permitted under the provisions

of any state plan adopted pursuant to section

110(a](2)(D) of the Act until the area is

designated nonattainment and a State

Implementation Plan revision is approved. If no state plan pursuant to section 110(a]2 (D)

has been adopted and approved, then this

Ruling shall apply.

F. By adding a new subsection F. to

IV., to read as follows:

IV. Sources ThatWould Locate in a Designated Nonattainment Area

F. Source ObLigation.

At such time that a particular source or modification becomes a majorstationary source or major modification solely by vrtue

of a relaxation in any enforceable limitation

which was established after August 7,1980, on the capacity of the source or modification

otherwise to emit a pollutant, such as a restriction on hours of operation. then the

requirements of this Ruling shall apply to the source or modification as though construction

had not yet commenced on the source or modification.

State Plans For New Source Revriew For

Nonattainment Purposes.

4. Section 40 CFR 51.18(] is amended

to read as follows

§51.18 Review of new stationary sources modifications.

(j) State Implementation Plan

provisions satisfying sections 172(b)(6)

and 173 of the Act shall meet the

following conditions:

(1) All such plans shall use the

specific d nitions Deviations from the

following wording will be approved only

if the state specifically demonstrates

that the submitted definition is more

stringent, orat least asstringent, in all

respects as the corresponding definition

below:

(i) "Stationary source" means any

building, structure, facility, or

installation which emits or may emit

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any air pollutant subject to regulation

under the Act.

(ii) "Building, structure, or facility"

means all of the pollutant-emitting

activities which belong to the same

industrial grouping, are located on one

or more contiguous or adjacent

properties, and are under the control of

the same person (or persons under

common control). Pollutant-emitting

activities *shall be considered as part of

the same industrial grouping if they

belong to the same "Major Group" (i.e.,

which have the same two-digit code) as

described-m the Standard Industrial

Classification Manual, 1972, as amended by the 1977 Supplement (U.S.

Government Printing Office stock . numbers 4101-0066 and 003-005-00176-

0, respectively).

(iii) "Installation" means an

identifiable piece of process equipment.

(iv) "Potential to emit" means the

maximum capacity of a stationary

source to emit a pollutant under its

physical and operational design. Any

physical or operational limitation on the

capacity of the source to emit a

pollutant, including air pollution control

equipment and restrictions on hours of

operation or on the type or amount of

material combusted, stored, or

processed, shall be treated as part of its

design only if the limitation or the effect

it would have on emissions is federally

enforceable. Secondary emissions do

not count in determining the potential to

emit of a stationary source.

(v)(a) "Major stationary source"

means:

(1) Any stationary source of air

pollutants which emits, or has the'

potential to emit, 100 tons per year or

more of any pollutant subject to

regulation under the Act; or

(2) Any physical change that would

occur at a stationary source not

qualifying under paragraph (v)(a](1) as a

major stationary source, if the change

would constitute a major stationary

source by itself.

(b) A major stationary source that is

major for volatile organic compounds

shall be considered major for ozone.

(vi)(a) "Major modification" means

any physical change in or change in the

method of operation of a major

stationary,source that would result in a

significant net emissions increase of any

pollutant subject to regulation under the

Act.

(b) Any net emissions increase that is

considered significant for volatile

organic compounds shall be considered

significant for ozone.

(c) A physiral change or change in the

method of operation shall not include:

(1) Routine maintenance, repair and

replacement;

(2) Use of an alternative fuel or raw

material byreason of an order under

sections 2(a) and (b) of the Energy

Supply and Environmental Coordination

Act of 1974 (or any superseding

legislation) or by reason of a natural gas

curtailment plan pursuant to the Federal

Power Act;

(3)-Use of an alternative fuel by

- reason of an order or rule under section

125 of the Act;

(4) Use of an alternative fuel at a

steam generating unit to the extent that

the fuel is generated from municipal

solid waste;

(5) Use of an alternative fuel or raw

material by a stationary source which:

(i) The source was capable of

accommodating before December 21,

1976, unless such change would be

prohibited under any fedeially

enforceable permit condition which was

established after December 21, 1976

pursuant to 40 CFR 52.21 or under

regulations approved pursuant to 40 CFR

51.18 or 40 CFR 51.24; or

(ii) The source is approved to use

under any permit issued under

regulations approved pursuant to this

section;

(6) An increase in the hours of

operation or in the production rate,

unless such change is prohibited under

any federally enforceable permit

condition which was established after

December 21,1976 pursuant to 40 CFR

52.21 or regulations approved pursuant

to 40 CFR 51.18 or 40 CFR 51.24.

(7) Any change in ownership at a

stationary source.

(vii)(a) "Net emissions increase"

means the amount by which the sum of

the following exceeds zero:

(1] Any increase in actual emissions

from a particular physical change or

change in the method of operation at a

stationary source; and

(2) Any other increases and decreases

in actual emissions at the source that

are contemporaneous with the particular

change and are otherwise creditable.

b) An increase or decrease in actual

emissions is contemporaneous with the

increase from the particular change only

if it occurs before the date that the

increase from the particular change

occurs.

(c) An increase or decrease in actual

emissions is creditable only if:

(1) It occurs within a reasonable

period to be 4pecified by the reviewing

authority; and

(2) The-reviewing authority has not

relied on it in issuing a permit for the

source under regulations approved

pursuant to this section which permit is

in effect when the increase in actual

emissions from the particular change

occurs.

(d) An increase In actual emissions Is

creditable only to the extent that the

new level of actual emissions exceeds

the old level.

(e) A decrease in actual emissions Is

creditable only to the extent that:

(1) The old level of actual emissions

or the old level of allowable emissions,

whichever, is lower, exceeds the new

level of actual emissions;

(2) It is federally enforceable at and

after the time that actual construction

on the particular change begins; and

(3) The reviewing authority has not

relied on it in issuing any permit under

regulations approved pursuant to 40 CFR

51.18 or the state has not relied on It In

demonstrating attainment or reasonable

further progress.

(4) It has approximately the same

qualitative significance for public health

and welfare as that attributed to the

increase from the particular change.

Wf) An increase that results from a

physical change at a source occurs when

the emissions unit on which

construction occurred becomes

operational and begins to emit a

particular pollutant, Any replacement

unit that requires shakedown becomes

operational only after a reasonable

shakedown pefiod, not to exceed 180

days.

(viii) "Emissions unit" means any part

of a stationary source which emits or

would have the potential to emit any

pollutant subject to regulation under the

Act.

(ix) "Reconstruction" will be

presumed to have taken place where the

fixed capital cost of the new

components exceeds 50 percent of the

fixed capital cost of a comparable

entirely new stationary source. Any

final decision as to whether

reconstruction has occurred shall be

made in accordance with the provisions

of 40 CFR 60.15(fo (1)-(3). A

reconstructed stationary source will be

treated as a new stationary source for

purposes of this subsection. In

determining lowest achievable emission

rate for a reconstructed stationary

source, the provisions of 40 CFR

60.15(f0(4) shall be taken into account in

assessing whether a new source

performance standard is applicable to

such stationary source.

(x) "Fixed capital cost" means the

capital needed to provide all the

depreciable components.

(xi) "Secondary emissions" means

emissions which would occur as a result

of the construction or operation of a

major stationary source or major

modification, but do not come from the

major stationary source or major

modification itself. For the purpose of

this section, secondary emissions must

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be specific, well defined, quantifiable,

and impact the same general area as the

stationary source or modification which

causes the secondary emissions.

Secondary emissions may include, but

are not limitedto:

(a) Emissions fromships or trains

coming to-or from the new or modified

stationary source; and

(b] Emissions from any offsite support

facility which would not otherwise be

constructed or increase its emissions as

a result of the construction or operation

of the major stationary source or major

modification.

(xii) "Fugitive emissions" means those

emissions which could not reasonably

pass through a stack, chimney, vent, or

other functionally equivalent opening.

(xiii) "Significant" means, in reference

to a net emissions increase or the

potential of a source to emit any of the

followingpollutants, a rate of emissions

that would equal or exceed any of the

following rates:

Pollutant andEnzissions Rate

Carbon monoxide: 100 tons peryear (tpy)

Nitrogen oxides. 40 tpy Sulfur dioxide: 40 tpy Particulate matter: 25 tpy Ozone 40 tpy of volatile organic compounds Lead. 0.6 tpy

(xiv) "Allowable emissions' means

the emissions rate of a stationary source

calculated using the maximum rated

capacity Df the source [unless the source

is subject to federally enforceable limits

which restrict the operating rate, or

hours of operation, or bn1k) and the

most stringent of the following: (a) The applicable standards set forth

in 40 CFR Parts 60 or 61;

(b) Any applicable State

Implementation Plan emissions

limitation including those with a future

compliance date; or

(c) The emissions rate specified as a

federally enforceable permit condition,

including those with a future compliance

date.

(xv)(a) "Actual emissions" means the

actual rate of emissions of a pollutant

from an emissions anit as determined in

accordance with subparagraphs (b)-(d)

below.

(b) In general, actual emissions as of a

particular date shaft equal the average

rate, in tons per year, at which the unit

actually emitted the pollutant during a

two-year period which precedes the

particular date and which is

representative of normal source

operation. The reviewing authority shall

allow the use of a different time period

upon a determination that it is more

representative of normal source

operation. Actual emissions shall be

calculated using the unit's actual

operating hours, -production rates, and

types of materials processed, stored, or

combusted during the selectedlime

period.

(c) The reviewing authority may

presume that the source-specific

allowable emissions for the unit are

equivalent to the actual emissions-of the

unit.

(d) For any emissions unit which has

not begun normal operations on the

particular date, actual emissions shall

equal the potential to emit of the unit on

that date.

(xvi) "Lowest achievable emission

rate" means, for any source. the more

stringent rate of emissions based on the

following:

(a) The most stringent emissions'

limitation which is contained in the

implementation plan of any state for

such class or category of stationary

source, unless the owner oroperator of

the proposed stationary source

demonstrates that such limitations are

not achievable; or

(b) The most stringent emissions

limitation which is achieved in practice

by such class or categoryof stationary

source. This limitation, when applied to

a modification, means the lowest

achievable emissions rate for the new or

modified emissions units within the

stationary source. In no event shall the

application of this term permit a

proposed new or modified stationary

source to emit any pollutant in excess of

the amount allowable under an

applicable new source standard of

performance.

(xvii) "Federally enforceable" means

all limitations and conditions which are

enforceable by the Administrator,

including those requirements developed

pursuant to 40 CFR Parts 60 and 81,

requirements within any applicable

State Implementation Plan, and any

permit requirements established

pursuant to 40 CFR 52.1 or under

regulations approved pursuant to tiis

section, 40 CFR 51.11, or 51.24.

(xviii) 'Begi actual -construction"

means in general, initiation of physical

on-site onstruction activities on an

emissions unit which are of a permanent

nature. Such activities include, but are

not limited to,-installation of building

supports and foundations, laying of

underground pipework, and construction

of permanent storage structures. With

respect to a change in method of

operating this term refers to those onsite activities other than preparatory

activities which mark the initiation of

the change.

(xix) "Commence" as applied to

construction of a major stationary

source or major modification means that

the owner or operator has all necessary

preconstruction approvals or permits

and either has:

(a) Begun, or caused to begin, a

continuous program of actual on-site

construction of the source, to be

completed within a reasonable time; or

(b) Entered into binding agreements or

contractual obligations, which cannot be

cancelled or modified without

substantialloss to the owner or

operator, to undertake a program of

actual construction of the source to be

completed within a reasonable time.

(xx) "Necessry preconstruction

approvals or permits" means those

permits or approvals required under

federal air quality control laws and

regulations and those air quality control

laws and regulations which are part of

the applicable State Implementation

Plan.

(xxi) "Construction" means any

physical change or change in the method

of operation (including fabrication,

erection, installation, demolition, or

modification of an emissions unit) which

would result ina change in actual

emissions.

(2) Each plan shall adopt a

preconstruction review program to

satisfy therequirements of sections

172(b)(6) and 173 of the Act for any area

designated nonattainment for any

national ambient air quality standard

under 40 CFR 61.300 et seq. Such a

program shall apply to any new major

stationary source -or major modification

that is major for the pollutant for which

the area is designated nonattainment, if

the stationary source or modification

would locate anywhere in the

designated nonattainment area.

(3)(i) Each plan shall provide-that for

sources and modifications subject to

any preconstruction review program

adopted pursuant to this subsection the

baseline for determining =edit for

emissions reductions is the emissions

limit under the applicable State

Implementation Plan in effect at the time

the application to construct is filed.

except that the offset baseline shall be

the actual emissions-of thesource from

which offset credit is obtained where:

(a) The demonstration ofreasonable

further progress and attainment of

ambient air quality standards is based

upon the actual emissions of sources

located within a designated

nonattainment area -for which the

preconstruction review program was

adopted; or

(b) The applicable State

Implementation Plan does not contain

an emissions limitation for that source

or source category.

(ii) The plan shall further provide that-

(a) WThere the emissions limit under

the applicable State Implementation

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Plan allows greater emissions than the

potential to emit of the source,

emissions offset credit will be allowed

only for control below this potential; (b) For an existing fuel combustion

source, credit shall be based on theallowable emissions under the

applicable State Implementation Plan

for the type of fuel being burned at the

time the application to construct is filed.

If the existing source commits to switch

to a cleaner fuel at some future date,

emissions offset credit based on the

allowable (or actual] emissions for the

fuels involved is not acceptable, unless

the permit is conditioned to require the

use of a specified alternative control

measure which would achieve the same

degree of emissions reduction should the

source switch back to a dirtier fuel at

some later date. The reviewing authority

should ensure that adequate long-term supplies of the new fuel are available

before grariting emissions offset credit

for fuel switches;

(c) Emissions reductions achieved by shutting down an existing source or

permanently curtailing production or

operating hours below baseline levels

may be credited, provided that the work

force to be affected has been notified of

the proposed shutdown or curtailment.

Source shutdowns and curtailments in

production or operating hours occurring prior to the date the new source

application is filed generally may not be

used for emissions offset credit.

However, where an applicant can

establish that it shut down or curtailed

production after August 7, 1977, or less

than one year prior to the date of permit

application, whichever is earlier, and'

the proposed new source is a

replacement for the shutdown or

curtailment credit for such shutdown or

curtailment may be applied to offset

emissions from the. new source;

(d) No emissions credit may be

allowed for replacing one hydrocarbon

compound with another of lesser

reactivity, except for those compounds

listed in Table I of EPA's

"Recommended Policy on Control of

Volatile Organic Compounds." (42 FR

35314, July 8, 1977);

(e) All emission reductions claimed as

offset credit shall be federally

enforceable;

W Procedures relating to the

permissible location of offsetting emissions- shall be followed which are at

least as stringent as those set out in 40

CFR Part 51 Appendix S; section IV.D.

(g) Credit for an emissions reduction

can be claimed to the extent that the

reviewing authority has not relied on it

in issuing any permit under regulations

approved pursuaxit to 40 CFR 51.18 or

the state has not relied on it in

demonstrating attainment or reasonable

further progress.

(4) Each plan may provide that the

provisions of this subsection do not

apply to a source or modification that

would be a major stationary source or

major modification only if fugitive

emissions, to the.extent quantifiable, are

considered in calculating the potential to

emit of the stationary source or

modification and the source does not

belong to any of the following

categories:

(a) Coal cleaning plants (with thermal

dryers]; (b) Kraft pulp mills;

(c] Portland cement plants;

(d) Primary zinc smelters;

(e) Iron and steel mills;

(f) Primary aluminum ore reduction

plants;

(g) Primary copper smelters;

(h) Municipal incinerators capable of

charging more than 250 tons of refuse

per day,

(i) Hydrofluoric, sulfuric, or nitric acid

plants;

U] Petroleum refineries;

(k] Lime plants; (1) Phosphate rock processing plants;

(m) Coke oven batteries;

(n) Sulfur recovery plants;

(a) Carbon black plants (furnace

process);

(p) Primary lead smelters;

(q) Fuel conversion plants;

(r) Sintering plants;

(s) Secondary metal production

plants;

(t) Chemical piocess plants;

(u) Fossil-fuel boilers (or combination

thereof) totaling more than 250 million

British thermal units per hour heat input;

(v) Petroleum storage and transfer

units with a total storage capacity

exceeding 300,000 barrels;

(w) Taconite ore processing plants; (x) Glass fiber processing plants; (y) Charcoal production plants; (z) Fossil fuel-fired steam electric

plants of more than 250 million British

thermal units per hour heat input;. (aa) Any other stationary source

category which, as of August 7,1980, is

being regulated under section 111 or 112,

of the Act.

(5) Each plan shall include

enforceable procedures to provide that.

(i) Approval to construct shall not

relieve any owner or operator of the

responsibility to comply fully with

applicable provision of the plan and any

other requirements under local, state or

federal law.

(ii) At such time that a particular

source or modification becomes a major stationary source or major modification

solely by virtue of a relaxation in any

enforcement limitation which was

-established after August 7, 1980, on the

capacity of the source or modification

otherwise to emit a pollutant, such as a

restriction on hours of operation, then

the requirments of regulations approved

pursuant to this section shall apply to

the source or modification as though

construction had not yet commenced on

the source or modification.

Restrictions on Construction For

Nonattainment Areas

5. 40 CFR 52.24 is amended by adding

new paragraphs (f), (g), (hi) and (i) to

read as follows:

§52.24 Statutory restriction on new

stationary sources. *t i * * *

(f) The following definitions shall

apply under this section.

(1) "Stationary source" means any

building, structure, facility, or

installation which emits or may emit

any air pollutant subject to regulation

under the Act.

(2) "Building, structure, or fability"

means all of the pollutant-emitting

activities which belong to the same

industrial grouping, are located on one

or more contiguous or adjacent

properties, and are under the control of

the same person (or persons under

common control). Pollutant-emitting

activities shall be considered as part of

the same industrial grouping if they

belong to the same "Major Group" (ie,,

which have the same two-digit code) as

described in the following document,

Standard Industrial Classification

Manual, 1972, as amended by the 1977

Supplement (U.S. Government Printing

Office stock numbers 4101-0006 and

003-005-o0176-0, respectively). (3) "Installation" means an

identifiable piece of process equipment.

(4) "Potential to emit" means the

maximum capacity of a stationary

source to emit a pollutant under its

physical and operational design. Any

physical or operational limitation on the

capacity of the source to emit a

pollutant, including air pollution control

equipment and restrictions on hours of

operation or on amount of material

combusted, stored, or processed, shall

be treated as part of Its design only If

the limitation or the effect it would have

on emissions is federally enforceable.

Secondary emissions do not count in

determining the potential to emit of a

stationary source.

(5)(i) "Major stationary source"

means:

(a) Any stationary source of air

pollutants which emits, or has the

potential to emit, 100 tons per year or

more of any pollutant subject to

regulation under the Act; or

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Federal Register / Vol. 45, No. 154 / Thursday, August 7, 1980 / Rules and Regulations

'(b) Any physical change that would

occur at a stationary source not

qualifying under paragraph (5)(i](a) as a

major stationary source, if the change

would constitute a Major stationary

source by itself.

(i) A major stationary source that is

major for volatile for organic compounds

shall be considered major for ozone.

(6)(i) "Major modification" means any

physical change in or change in the

method of operation of a major

stationary source that would result in a

significant net emissions increase of any

pollutant subject to regulation under the

Act.

(ii] Any net emissions increase that is

considered significant for volatile

organic compounds shall be considered

significant for ozone.

(ii) A physical change or change in

the method of operation shall not

include:

(a] Routine maintenance, repair, and

replacement; (b) Use of an alternative fuel or raw

material by reason of an order under

sections 2 (a) and (b) of the Energy

Supply and Environmental Coordination

Act of 1974 (or any superseding

legislation] or by reason of a natural gas

curtailment plan pursuant to the Federal

Power Act;

(c) Use of an alternative fuel by

reason of an order or rule under section

125 of the Act;

(d) Use of an alternative fuel at a

steam generating unit to the extent that

the fuel is generated from municipal

solid waste; I (e] Use of an alternative fuel or raw

material by a stationary source which:

(1) The source was capable of

accommodating before July 1,1979,

unless such change would be prohibited

under any federally enforceable permit

condition which was established after

July, 1,1979 pursuant to 40 CFR 52.21 or

under regulations approved pursuant to

40 CFR 51.18 or 40 CFR 51.24; or

(2] The source is approved to use

under any permit issued under

regulations approved pursuant to 40 CFR

51.18;

() An increase in the hours of

operation or in the production rate,

unless such change is prohibited under

any federally enforceable permit

,condition which was established after

July 1,1979 pursuant to 40 CFR 52.21 or

under regulations approved pursuant to

40 CFR 51.18 or 40 CFR 51.24.

(g] Any change in ownership at a

stationary source.

(7](i] "Net emissions increase" means

the amount by which the sum of the

following exceeds zero:

(a) Any increase in actual emissions

from a particular physical change or

change in the method of operation at a

stationary source; and

(b) Any other increases and decreases

in actual emissions at the source that

are contemporaneous with the particular

change and are otherwise creditable.

(ii) An increase or decrease in actual

emissions is contemporaneous with the

increase from the particular change only

if it occurs between:

(a) The date five years before

construction on the particular change

commences and

(b] The date that the increase from the

particular change occurs.

(iII) An increase or decrease in actual

emissions is creditable only if the

Administrator has not relied on it in

issuing a permit for the source under

regulations approved pursuant to 40 CFR

51.18 which permit is in effect when the

increase in actual emissions from the

particular change occurs.

(iv) An increase in actual emissions is

creditable only to the extent that the

new level of actual emissions exceeds

the old level.

(v) A decrease in actual emissions is

creditable only to the extent that*

(a) The old level of actual emissions

or the old level of allowable emissions,

whichever is lower, exceeds the new

level of actual emissions

(b) It is federally enforceable at and

after the time that construction on the

particular change begins; and

(c) The Administrator or reviewing

authority has not relied on It in issuing

any permit under regulations approved

pursuant to 40 CFR 51.18 or the State

has not relied on it in demonstrating

attainment or reasonable further

progress. (d) It has approximately the same

qualitative significance for public health

and welfare as that attributed to the

increase from the particular change.

(vi) An increase that results from a

physical change at a source occurs when

the emissions unit on which

construction occurred becomes

operational and begins to emit a

particular pollutant Any replacement

unit that requires shakedown becomes

operational only after a reasonable

shakedown period, not to exceed 180

days. (8) "Emissions unit" means any part of

a stationary source which emits or

would have the potential to emit any

pollutant subject to regulation under the

Act

(9) "Reconstruction" will be presumed

to have taken place where the fixed

capital cost of the new components

exceeds 50 percent of the fixed capital

cost of a comparable entirely new

stationary source. Any final decision as

to whether reconstruction has occurred

shall be made in accordance with the

provisions of 40 CFR 60.15(f (1)-(3]. A

reconstructed stationary source will be

treated as a new stationary source for

purposes of this subsection.

(10) "Fixed capital cost" means the

capital needed to provide all the

depreciable components.

(11) "Secondary emissions" means

emissions which would occur as a result

of the construction or operation of a

major stationary source or major

modification, but do not come from the

major stationary source or major

modification itself. For the purpose of

this section, secondary emissions must

be specific, well defined, quantifiable,

and impact the same general area as the

stationary source or modification which

causes the secondary emissions.

Secondary emissions may include, but

are not limited to:

(i) Emissions from ships or trains

coming to or from the new or modified

stationary source and

(ii) Emissions from any offsite support

facility which would not otherwise be

constructed or increase its emissions as

a result of the construction or operation

of the major stationary source or major

modification.

(12) "Fugitive emissions" means those

emissions which could not reasonably

pass through a stack, chimney, vent, or

other functionally equivalent opening.

(13) "Significant" means, in reference

to a net emissions increase or the

potential of a source to emit any of the

following pollutants, a rate of emissions

that would eijual or exceed any of the

following rates:

Pollutant and Fssions Rate

Carbon monoxide: 100 tons per year (tpy)

Nitrogen oxides: 40 tpy Sulfur dioxide: 40 tpy Particulate matter. 25 tpy Ozone: 40 tpy of volatile organic compounds Lead. 0.6 tpy

(14) "Allowable emissions" means the

emissions rate of a stationary source

calculated using the maximum rated

capacity of the source (unless the source

is subject to federally enforceable limits

which restrict the operating rate, or

hours of operation, or both] and the

most stringent of the following:. (i) The applicable standards set forth

in 40 CFR Parts 60 and 61;

(ii) Any applicable State

Implementation Plan emissions

limitation, including those with a future

compliance date; or

(iiI) The emissions rate specified as a

federally enforceable permit condition,

including those with a future compliance

date.

(15] 'Tederally enforceable" means all

limitations and conditions which are

52747

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52748 Federal Register I Vol. 45, No. 154 / Thursday, August 7., 1980 / Rules and Regulations

enforceable by the Administrator, , including 'those '-reqfurements developed

pursuant 'to 40fCFRParts;60and-61,

requirements within any applicable

State Implementation Plan; and any

permit requiremenlts established

pursuant to 40 CFR 52.21 or-under

regulations approved-pursuant to,40 CFR

51.18 and 51.24.

(16)[i) "'Actual emissions" means 'the

actual rate of erissions of-a pollutant

from an emissions unit, as determined in

accordance with subparagraphs-[ii)-(iv)

below.

fii) In general, actual emissions asoof:a

particular date shall equalthe average

rate, In tons per year, at -which the unit

-actually emitted the pollutant during a

two-year period which"precedes the

particular-date and'which is

representative of-normal source

operation. The Administrator shall

allow the -use of a d:ifferent time period

upon adetermination thatitismore

representative of normal'source

.operation. Actual emissions shalbe

calculated using the zunit's actual

operating-hours, production rates, mand

types ofimdterials processed, stored,-or

combusted during-theelected time

period.

(iii) The Administratornay presume

that source-specific allowable emissions

for themnitre'equivalent tothe actual

emissions df:themnit.

,(iv) For any emissionsmanit which has

not begun normal-operations on the

particular date, :actual emissions shall

equal the potential to emitofthe unit on

that date.

(17) "Construction" means any

physical change or change in the method

of operation (including fabrication,

erection, installation, demolition, or

modification) of an emissions'uiit which

would result in a change in -actual

emissions.

(18) "Commence" as applied to

construction of a major stationary

source or major-modification means that

the Downer or operator has all necessary

preconstruction approvals orpermits

and eitherhas:

(i) Begun, or causedlo begin, a

continuous program-of actual on.site

constructionof the source, to be

completed within a -reasonable lime; or

'(ii) Entered into binding agreements or

contractual obligations, which-cannot be

cancelled or modified without

substantialloss to the owner-or

operator,'to undertake a program-of

actual construction of the source to be

-completed-within a-reasonable time.

(-19) "Necessary preconstruction

,approvals or permits" means those

permits or approvals required under

Tederal air-quality control laws and

regulations and those air-qualitycontrol

laws and regulations which are part of

the applicable State Implementation

Plan.

.120) "Begin actual-construction"

means, in general, initiation'of physical

on-sgile -construction activities on an

emissions unit which are of a-permanent

nature. Such activities nclude, but -are

not limited :to, installa'ion ofbuilding - supporls-and foundations, laying of

underground pip ework, andconstruction

of permanentstqrage slructures. ith

respect to a change in method-of

operations, thislerm rnfers to those onsite activities other than preparatory

activities which mark the initiation of

'the change..

(g) This section shall not applyto a

major stationary source ortnajor

modificationif 1he source or

modification was not subject to 40 CFR

Partl3 AppendixS. asin effect on

January 16,1979, and Ihe owner or

operator. (1) 'Obtaimed all final federal, state,

and local preconstruction approvals or

permits necessary under the applicable

State'Implementalion Plan before

August 7,1980;

,(2) Commehced construction-within 18

monthsfrom August -, 1980, or any

earlier time required under the

applicable State Implementation lan;

and

(3) Did not discontinue construction

for aperiod of 18 months or more and

completea sonstruction withina

reasonable.time.

(h This section shall not 'applyto a -source ormodification That wouid be a

majorsltationary source orimajor

modifica'ion.only iffugtive emissions,

to the extent quanifiable, are

consideredincalculating the potential to

emit of the stationary source or

modification and the source does not

belong to anyof the following

categories: (1) Coal-cleanig plants [with thermal

dryers);

42) IYraft pulp mills;

13) Porfland cement plants; (4) Primary zincomelters;

(5) Iron and steelmills;

(6) Primary aluminum ore reduction

plants;

'(7) Primary copper-smelters; (8) Municipal incinerators -capable of

charging'more than 250 tons -of refuse

per day;

(9) Hydrofluoric,-sufuic, ornitric acid

plants;

[10) Petroleum refineries;

(11) lUme plants;

(12) Phosphate rock processing plants;

-113) Coke oven batteries;

(14) Sulfur recovery-plants;

(15) Carbon black-plantsi(furnace

process);

(16) -Primary leadsmelters;

(17) Fuel conversion-plants;"

'(18) Sintering plants; .

(19) Secondary metal production 'plants;

(20) :Chenical process plants;

(21) Fossil-fuel boilers ,(or combination

thereof) totaling more than 250 million

British thermal units perhourheat input:

(22) Petroleum storage and transfer

units with a total storage capacity

exceeding 300,000 barrels;

'(23Taconlte ore processing plants;

(24) Glass 'fiber processing plants;

(25) Charcoal production plants;

(26) Fossil fuel-fired steam electric

plants of more than 250 million British

thermal units per hour heat input;

,(27) Any other stationary source

category which, as of August 7,1980, is

being regulated under section 111 or 112

of the Act.

fi) At such time that a particular

source or-modification becomes a major

stationary source or majormodification

solely by-virtue of a relaxation in any

enforceable limitation which was

established after August 7, 1980, on the

capacity of the source or modification

otherwise to emit a pollutant, such as a

restriction onihours'of operation, then:

(1) If the constructionmoratorium

umposed pursuant to this section is still

in effect for the nonattainment area in

whichthe source or modification is

located, then the permit may not be so

revised; or

(2) If the construction moratorium is

no-longer-ineffect in that area, then tho

requirements of 40 CFR 51.180) shall

apply to the source or modification as

though-construction had not yet

commenced-on -the source or

modification.

Consolidated Permit Regulations

6.40 CFR Part 124 is amended as

follows:

a. 40 CFR 124.3(b) Is deleted and

reserved as follows:

§ 124.3 Application for apernilt.

(b) [Reserved]

§ 124.5 [Amended]

b. 40 CFR 124.5(g)(2) is Tevisedus

follows:

[2) PSDpermits may be terminated

only'byxescission under § 52.21[w) or

by automatic expiration under § 52.21(r).

Applications for rescission shall be

processed under § 52.21(w) and are not

subject ,to this Part.

§ 124.42 [Amended]

,c.2The first sentence of 40 CER

124.42(b) is amended by substituting

"submitted" for "requested."

[FR Doc 80-23780 Filed 94-M. M5 aml

BILLING CODE 6560-01-M

HeinOnline -- 45 Fed. Reg. 52748 1980