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Citation: 45 Fed. Reg. 52676 1980

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-- The search text of this PDF is generated from uncorrected OCR text.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 ofAppeals for the D.C. Circuit inAlabamaPowerCompanyv. Costle,EPA is today amending its regulations for the prevention of significant deterioration ofair 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 ofAir Quality Planning and Standards, Research Triangle Park, N.C. 27711, 919/
541-5292.
SUPPLEMENTARY INFORMATION: The
contents of today's preamble arelisted in the following outline. A section entitled Summary ofPSD Programhas been added to provide a concise narrative overview of this program. Outline

I. Summary ofPSD Program

A. PSD Allows Industrial Growth Within

Specific Air Qualtiy goals B.Who is Subject to the PreventioA of

SignificantDeterioration 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. OffsetRuling D. Part 51Nonattainment Regulations E. Construction Moratorium F. Pending SIP Revisions G. Effective Date ofNonattainment

Provisions H.Miscellaneous V.Potential ToEmit

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. PollutantApplicability D. Netting ofActual 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 onConstruction J.Reconstruction K. Exclusions L.

Example offlow The Definitions Work XI. DeMinimisExemptions XII. Geographic and Pollutant Applicability

A. Background B. PSD Applicability C. Nonattainment Applicability D. Case Examples, E.Interstate Pollution F. Geographic Applicability forVOC

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 ofActual Emissions B. Exclusions fromIncrement Consumption C.Increment Expansion due to Emissions

Reductions D. Gulf Coast Problem E. Potential Increment Violations XV. Best Available ControlTechnology XVI. Ambient Monitoring XVII. Notification XVIII.PSD SIPRevisions

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 ofPSD Program

The purpose ofthis summary is to help those people who are unfamiliar with the PSD program gain an understanding ofit. 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 ofthe preamble and the regulations, the remaining preamble and the. regulations shall govern.
A. PSDAllowsIndustrialGrowth Within SpecificAirQualityGoals

The basic goals ofthe prevention of significant air quality deterioration (PSD) regulations are (1)to ensure that economic growth will occur in harmony with the preservation ofexisting clean air resources to prevent the development ofany 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 ofspecial natural recreational, scenic, orhistoric 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 forPreparation, Adoption and Submittal of Implementation Plans." IfEPA approves the proposed PSD plan, the state can then implement its own program, In the absence of an approved state PSD plan, another portion oftoday's regulations will govern PSD review. See 40 CFR 52.21, "Approval and Promulgation of Implementation Plans." EPA will implement this regulation Itself ifthe

state does not submit an approvable PSD program ofits own.

States can Identify in their SIPs the local land use goals for each clean area through a system ofarea classifications. A "clean" area is one whose air quality is better than thatrequired by the National Ambient Air Quality Standards. Each classification differs in the amount ofgrowth it will permit before significant air quality deterioration would be deemed to occur. Significant deterioration Is said to occur when the amount ofnew pollution would exceed the applicable maximum allowable increase ("increment"), the
amount ofwhich varies with the classification ofthe 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 ofthe firstPSD permit application submittal affecting that area. To date, only PSD increments for sulfur dioxide and particulate matter have been established. Increments or alternatives 52676

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### / Thursday, August 7, 1980 / Rules and Regulations

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 ofair 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 ofdevelopment. 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 ofthe country were initially designated

as Class II. Flexibility exists under the Act to adjust most ofthese designations, except for those mandated by Congress.

The principal mechanism within the SIP to implement the objectives ofthe 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 ifthe 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 ofthe applicable PSD increment. This corrective action may require additional controls on existing emissions sources which contribute to the problem.

B. Who is Subjectto thePreventionof Significant Deterioration Regulations?

The requirements oftoday's PSD regulations apply to major stationary

sources and major modifications which

meet certain criteria concerning the geographic location, type ofpollutants to be emitted, and timing ofproposed construction. No source ormodification 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 inresponse to AlabamaPower will apply.

The primary criterion in determining PSD applicability is whether the proposed project is sufficiently large (in
terms ofits 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 ofall required air pollution control equipment and after taking into account all federally enforceable requirements restricting the type or amount ofsource operation. A "major stationary source" is any source type belonging to a list of 28 source categories which emits orhas the potential to emit 100 tons peryear or

more ofanypollutant subject to regulation under the Act, or any other

source type which emits orhas the potential to emit such pollutants in
amounts equal to orgreater 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 ofManagement 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 ofoperatiod'of a major stationary source which would result in

a significant net emissions increase in the emissions ofany regulated pollutant. In determining if a proposed increase would cause a significant netincrease 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 ofthe new ormodified unit. Second, the owner must document and quantify all emissions increases and decreases that have occurred orwill

occur contemporaneously (generally within thepast five years) and have not been evaluated as part ofa PSD review. The value ofeach contemporaneous decrease and increase is generally determined by subtracting the old level ofactual emissions from the new or revised one. Third, the proposed emissions changes and the unreviewed contemporaneous changes must then be totalled. Finally,ifthere 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 ofmajor modification. These include: (1)routine maintenance, rEpair, and replacement; (2) use ofan alternative fuel orraw material by revision ofan order under sections (2)(a) and (b] ofthe Energy Supply and Environmental Coordination Act of 1974 (orany superseding legislation); (3) use of an alternative fuelby reason of an order or ruleunder section 125 ofthe Clean Air Act; (4) use ofan alternative fuel at a steam generating unit to the
extent it is generated from municipal solid waste; (5) use ofan alternative fuel which the source is capable of accommodating- and (6) an increase in the hours ofoperation, orthe production
rate. The last two exemptions can be used ony ifthe corresponding change is
not prohibited by certainpermit conditions established after January 6, 1975.

Ifasource ormodification thus qualifies as major,its prospective location or existing location must also qualify as aPSD area, in order forPSD review to apply. A PSD area is one formally designated by the state as "attainment" or "unclassifiable" forany pollutant forwhich a national ambient air quality standard exists. This geographic applicability test does not take Into account whatnew pollutant emissions caused the construction to be major.It looks simply at whether the

source Is major for anypollutant and will be located in a PSD area.

Once a source applicant has determined thatproposed construction falls under PSD based on the above size and location tests, itmust then assess whether the pollutants theproject would emitare orare subject to PSD. If a new major stationary source emits pollutants forwhich the area it locates in is designated nonattainment then the

source is exempt fromPSD review for those pollutants. These sources must. however,meet the applicable requirements ofNSR for each nonattainment pollutant. Similarly, if a major modification to be constructed in

aPSD area involves changes only for nonattainment pollutants then the

source is not subject to PSD. These modifications mustmeet the appropriate nonattainment NSR underthe SIPfor the pollutant. Once the question ofNSR jurisdiction is resolved,then the PSD review applies to all sigificant emissions increases ofregulated air pollutants. Specific numerical cutoffs which define whatemissions increases

are "significant" have been spelled out in the regulations. These pollutant52677

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specific cutoffs'can exempt i source from PSD review for a particular pollutant, except where the proposed construction would adversely impact a Class Iarea.-

Ifa proposed source ormodification 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 forPSD review would notneed a PSD permit under these regulations ifthe proposed construction: (1) was subject
to the old PSD rules,has submitted a complete application under these rules before today, and was 6ris subsequently approved to construct based on this application; or (2) was not subject to the oldPSD rules, has receivedall federal, state, and local air permits needed before todayand

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 oftoday's regulations do
not apply to any major stationary source

or major modification that is. (1) a nonprofit health or educational institution (only ifsuch exemption is requested by the governor]; or (21 a portable source which has already received a PSDpermit and proposes relocation.

C. WhatMust A Sourceor Modification Do To Obtain A PSDPermit?
1.Itmust 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 ofreduced emissions that the technology would bring. The reviewing authority will then specify an emissions limitation for the source that reflects the maximum degree ofreductioft achievable for eachpollutant regulated under the Act. Inno event can a: technology be recommended which would not meet any applicable standard ofperformance under 40 CFR Parts 60
and 61.

In addition, ifthe reviewing authority determines that there is no economically reasonable or technologically feasible
way to accurately measure the emissions, andhence toimpose an enforceable emissions standard, itmay require the source to use source design, alternative equipment, work practices or operational standards to reduce emissions ofthe pollutant to the maximum extent. For example, if an immense pile ofuncovered coal emits coal dustinto the atmosphere, it woud make little sense to impose an emission, standard, since measuring the amount of coal dust rising offthe pile is nearly, impossible. A much more direct approach to controlling emissions is, for example, requiring the owner to wet the coalpile' daily.This type of standard or practice willbe equivalent to an emissions limitation for purposes of the BACT requirement.

'2.Itmust conduct an ambient air quality analysis.

Each PSD source ormodification 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 thatreguired by national standards and that baseline air quality will not be degraded beyond the applicable PSD increment.

Each proposed major construction project suBject toPSD 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 qualityis poor or adverse impacts to

a Class Iarea arein 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 thebaseline 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 ambientanalysis requirement for sulfur dioxide orparticulate matter must also perform an analysis to compute how much ofthe PSD increment remains available to them. In general the amount ofincrement 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 inemissions, 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 ofhow much increment remains is resolved; then the applicant must demonstrate thathis proposed new emissions would not exceed the remaining PSD increment. Where a proposed project would cause

a new violation ofthe 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 orvegetation. Not only
must the applicant look at the direct effect ofsource 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 ofthis analysis
may be used to determine ifthe project would have an adverse impact on a Class I area.

4. It mustnot adversely impact a Class I area.

Ifthe 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 formanaging 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. Ifthe 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 ofthe allowable air quality increment, the Federal Land

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Manager mayrecommend that the reviewing authority deny the permit.

5. Its application mustundergo adequate publicparticipation.

The regulations solicit and encourage participationby the general public, industry, and other affected persons impacted by theproposed major source

ormajor modification. Specific public notice requirements and a public
comment period arerequired before the
PSDreview agency takes final action on

a PSD application. The public notice
must indicate whether the reviewing authority proposed permit approval, denial, orconditional approval ofa proposed major source ormajor modification. Consideration is given to all comments received provided they are relevant to the scope ofthe review. Where requested, or at its own discretion, the reviewing authority may conduct a publichearing tohelp clarify the issues and obtain additional information to assist inmaking a final permit decision.

6. Itmust start construction on time. The source owner, once receiving a PSD permit, must start construction within a reasonable period oftime (typically within 18 months ofapproval) 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 ActAmendments of 1977 (1977 Amendments) intolaw. Those amendments established, in the form ofPart C ofTitle I ofthe Clean Air Act (CAA], a set ofrequirements for the prevention ofsignificant deterioration (PSD) ofair quality in %lean air" areas. Sections 160-69,42 U.S.C. 7470-79. The requirements forpreconstruction review ofnew stationary sources and modifications in Part C followthe outline ofthe PSDregulations that EPA promulgated in 1974, but are more elaborate and inmany ways more stringent. Part C also requires that each
state implementation plan (SIP) contain the new PSDrequirements.

In response to Part C,EPA promulgated two sets ofPSD regulations

on June 19, 1978. One set specified the minimum requirements that a PSD SIP revision wouldhave to contain in order
to warrant EPA approval. See43 FR 26380 (codified at 40 CFR 51.24 (1979)) (hereinafter,the "1978Part 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 SIPrevision for a state,the permitting ofnew sources and modifications for PSD purposes would continue under the 1978 Part 52 regulations.

On June 18,1979, the United States Court ofAppeals for the District of Columbia Circuit issued a decision that upheld some ofthe substantive provisions ofboth the 1978 Part 51 and Part 52 regulations and overturned others.Alabama PowerCompanyv. Castle,13 ERC1225. In its opinion, the
court merely summarized itsholdings, but promised toissue supplemental opinions afterithad considered any petitions forreconsideration. In an order that accompanied the summary opinion. the court stayed the effect ofits decision until it hadissued the supplemental opinion. The purpose ofthat 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. at1227.

By a notice that appeared in the Federal Register forSeptember 5,1979. EPAbegan the process the court had in mind. 44 FR 51924. There EPAproposed 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 newprovisions to supplement the replacement provisions, for instance, the deminimisexemptions.

Prior to September, EPAhad 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 itsEmission Offset Interpretative Ruling ("Offset Ruling"), which now appears at 40 CFR Part 51,Appendix S [1979). Then, in April 1979, EPAissued a guideline entitled "General Preamble for Proposed Rulemaking onApproval ofPlan Revisions forNonattainmeut Areas." 44 FR20372.' Finally, in July1979, 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

IForsupplements to theGeneral Preamble.See44 FR3883 (July 2.1979): 44 FR 0371 (August 28. 1979); 44 FR519-4. 519Z-29 (September5,1 M5 44 FR53761 (September 17.199); and44FR Ml- (November 23,19n).

'For a fuller description of those norattainment regulations andgudelines. See 44 FR 51925 and45 FR31304-05. issues concerning new construction in such areas. 44FR38583.

Inthe September Federal Register notice, EPA also proposed various changes to those nonattainment regulations and guidelines. Thepurpose 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 holdpublic hearings on the September proposal on October15 and 16 in Washington, D.C., and on October 18 and 19 in San Francisco. See44 FR 54069. Atthe same time, the Agency set November 18 as the deadline for submitting information rebutting or supplementing any presentation at thehearings. Subsequently, EPAheld the public hearings as scheduled.

On October 4,1979, EPA announced various corrections to technical errors in the Septemberproposal. 44 FR 57107. At the same time, it extended theperiod for submitting written comments until November 5.1979. It added thatitwould hold therulemaking 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.

OnNovember 9,1979, EPA announced that ithadrecently released forpublic
comment a draft ofa revision ofthe AmbientMonitoringGuidenefor PrevenLtionof Significant Deteriorafion (PSD) (OAQPS 1.2-096), which the Agency had originallypublished inMay 1978.44 FR 65084. EPA also announced that itwould accept any written
comments on the draft untilDecember 10.1979.

On December 14,1979, the Court of Appeals handed down its final opinion inAlabamaPower. 13 ERC 1993. Subsequently, in orderto avoidthe uncertainty and confusion that would

occurin PSD permitting ffthefinal opinion came into effect before EPA completed the rulemaking, EPA and
many ofthe other parties to the litigation petitioned the court to keep the final opinion from coming into effect until June2,1980. On March 14,1980, the
court granted therequest.

OnMay 30,1980.EPA and other parties to the litigation againpetitioned the court, requesting a further extension of time until July 18, 1980. The court granted an extension, to July 28, onJune 23,1980.

On January 30,1980. EPAannounced that itwould reopen the rulemaking docketfor the receipt ofwritten 52679

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comments on various aspects ofthe rulemaking, including the final opinion ofthe court, certain issues that the Agency described in the notice, the redraft ofthe 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 FR7800. The stay was effective as of January 30, 1980. Its purpose was "to relieve from the permitting requirements ofthe 1978PSD regulations roughly those sources and modifications that would not be subject to the permitting requirements ofvalid replacement regulations that would comport with the AlabamaPoweropinion." Id. OnMay 13, 1980, EPA promulgated a stay ofthe 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 OffsetRuling, the regulations relating tonew source review at 40 CFR 51.18, and the construction moratorium. Those amendments established the geographic applicability ofthe various nonattainment requirements relating to the construction ofnew sources and modifications. 44 FR31307. Those amendments embody EPA's responses to many 6fthe 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 ofapplications forpermits under the new Part 52 PSD regulations.

During the course ofthe rulemaking that EPAbegan 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 certainprovisions 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 ofany 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 ofthe promulgation date. In addition, today's rules allow less than a full year ofmonitoring 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 ofpromulgation will be subject to the full new monitoring requirements.

B. PotentialToEmit:Potential to emit is the maximum design capacity ofthe

source, except as constrained by federally enforceable permit conditions. This would include permit conditions restricting hours or type ofsource operation.

C. 50-TonExemption:Today's regulations essentially delete the "50- Ton Exemption" for both nonattainment andPSD. The eligibility date for the section 165(b) exemption has been changed from August7,1977 to March 1, 1978.

D.FugitiveEmissions:For the purpose ofPSD and nonattainment, "fugitive emissions" nowmeans those emissions released directly into the atmosphere, which could notreasonably pass through a stack, chimney, vent orother 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 ofboth 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, aPSD

source is a grouping ofall pollutant emitting activities at one location "and owned or under the control ofthe same person or persons.This generally relates
to the common notion ofa plant. Smaller portions ofsuch a plant no longer will be examined for applicability purposes. For added clarification, pollutantemitting activities will now be considered part ofthe same "plant" if theybelong to the same "major group"

as described in the Standard Industrial Classification Manual. At thistime, however, the Agency has decided not to changeits previous approach to defining

source for nonattainment purposes. Therefore, today's rules continue to incorporate the "dual definition" concept ofsource which iequires consideration ofoverall 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 ofSIP approvability

or degree ofcompletion.

G. Modification: The definition and
treatment ofmodifications have been changed since the September 5, 1979 proposal. The concept ofaccumulating minor changes made at an existing minor source until the sumwas 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 itselfis greater than 100 or250
tons peryear. Contemporaneous changes now generally refer to emissions increases and decreases occurring within the same 5-year time period unless the state opts for a differenttime period in its Part D SIP or PSD program. Reductions, to be creditable, must be enforceable under the SIPbefore 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 buthas 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 minimisnumbers have been generated and can onlybe used to exempt PSD

sources from the ambient monitoring requirements; and (3) a ten kilometer proximity cutoffhas 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 occurin 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 ofwhat 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 formajor construction which emits only the pollutant for which the area oflocation is nonattainment.

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J.Pollutant Applicability: Any net significant emissions increase ofany pollutant subject to regulation under the Act (notjust 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 berequired for a given criteria pollutant, ifa source would

construct in an area designated nonattainment for thatpollutant

K Baseline Area/Date:Baseline area

now refers to all section 107 areas which

are designated attainment or unclassified forPM or SO, (as may be redesignated) in which the PSD source triggering the baseline date would locate

or wouldhave 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 ofa source with significant emissions ofthe applicable pollutant States will have the flexibility to redesignate clean orunclassified 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.BestAvailable ControlTechnology: Today's regulations reflect the proposal with one exception. Aprovision has been added that requires BACT for modifications only when both anet 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 forphasing in the additional monitoring requirements will provide relieffor sources covered under the existing regulations that are in the

process ofmonitoring and offer allowances for setup time ofmonitors 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 SIPRevisions: The requirements proposed on September 5 for governing the development ofPSD SIP submittals are essentially unchanged. These regulations allow limited flexibility in the development of different but equally effective state plans.

P.IncrementConsumption: A discussion has been included in the preamble to summarize the effects that theAlabama.Power decision has had on increment tracking. This section also discusses how certain SIP related issues

are tobe 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.PublicParticipation The requirements ofparagraph (r)of

### § 52.21 have been replaced with thepublic participation procedures associated with the consolidated permitregulations (40 CFR 1 ).

IV. Transition

This section focuses on those provisions ofthe final PSD and nonattainment regulations which govern the transition from thepreexisting requirements to the new ones. Itbegins with a discussion ofthe new transition provisions ofthe Part52 PSD regulations and then deals in turn with the transition provisions ofthe Part 51 PSD regulations, the Offset Ruling, the Part 51 nonattainment regulations, and finally the construction moratorium.

A. Part 52PSDRegulations

The new transition provisions ofthe Part 52 PSD regulations fall into three categories: those thatrelate to the new coverage ofthe regulations, those that relate to the new requirements forbest 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 1978Part 52 regulations applied to a certain class ofprojects that emitor would emit pollutants.The keystone of those regulations, section 52.21(i)(1), provided that "[n]o major stationary

source ofmajor modification shallbe 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." Thebalance ofsection 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 thatwas "major" and had no "grandfather"

status.

In September 1979, EPA proposed to establish new Part 52PSD regulations whose coverage would be substantially different from that ofthe 1978 regulations. First, it proposed to define "major stationary source" differently than it had defined that term in the 1978 regulations. Under the 1978regulations, whether a "source" was "major" depended upon whether its "potential to emit" any pollutant regulated under the Act would equal orexceed 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 EPAproposed in September, "potential to emit" would be the maximum rate at which a "source" would emit apollutant 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" thatwould increase the "potential to emit" ofthe "source" by 100 tons per year ofanypollutant regulated under the Act, or250 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" thatwould result in a signficantnet increase in the "potential to emit" ofthe "source." "Significant" is defined as emissions greater than certain de minimisvalues. 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 onthe basis ofitslocation. 3

Amendments ofthe sort thatEPA proposed in September would have left
manyprojects that previouslyfell or would have fallenwithin the coverage of the 1978 Part 52regulations outside the coverage ofthe resulting Part 52 regulation. For instance, many new "sources" thatwere 'major" under the 1978 regulations would nothave been "major" under the proposed amendments, because while their maximum uncontrolled emissions would exceed the applicable thresholds, their maximum controlled emissions would

not.

Ofthose projects that were orwould have been subject to the PSD permit requirements under the 1978 PSD regulations, but notunder the proposed

3Specifically EPA proposedthat thepermit requirementswould apply onlyto any "maior stationarysource" or"majocmodification" that would belocated in anareadesignatedunder section 107oftheAct as attainment or unclassifiable forapollutantfor which the"source"

or"modficatlon" would bemajororwould significantly impact anarea in anotherstatewhich Isdesignated asattainmentorunclassifiable forany such pollutant. 52681

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amendments, some have already received a PSD permit, while others have not. In September, EPAproposed
toput both sets ofprojects outside the reach ofthe 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. ButEPA also proposed that anypermit 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 hadexpired under an existing paragraph (s). See id.
at 51927, 51956. Under paragraph (w),a permittee would have been able to obtain rescission only ifthe 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 alsohave brought some projects that previously fell orwouldhave fallen outside the
coverage ofthe 1978 regulations inside the coverage of the Part t2 regulations. For instance, many changes at a "source" that would result in agross increase in "potentialto emit" well below 100 or250 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 ofthe PSD permit requirements under the 1978 regulations, but not under the proposed amendments. Inparticular,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 willhave "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 August7,1977, the date ofenactment ofthe 1977 Amendments. Seeid.at 51928 (first column), 51953 (proposed § 52.21(i)(3)). The purpose ofthe proposal was merely
to state inregulatory form what section 168(b) of the Act, 42 U.S.C. 7478(b), alreadyprovides. * b. Comments andfinal actionon the proposed transition provisionsrelating

tocoverage: 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 ofthe date thisnotice appears in the Federal Register. Some projects that were within the coverage ofthe 1978 Part 52 regulations, but have yet to receive a PSD permit, are nowoutside the coverage ofthe new Part52 regulations, since the prohibition on construction without apermit in § 52.21(i)(1)(i) no longer applies to them, As a result, construction on themmay begin immediately. 4 Because further delay is pointless, and mightbe harmful in some cases, EPA finds that ithas "good cause" to put the new applicability provisions into effect immediately upon promulgation, within the meaning ofsection4(d)(3) ofthe Aditfinistrative Procedure Act (APA), 5 U.S.C. 553(d)(3). See alsoAPA4(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 theproposal,
most did not. They objected primarily to
two aspects of theproposal: first, that it would place on the permittee the dual burden ofcoming forward with an application for rescission and of providing proofthat theproject in question does fall outside the coverage ofthe new Part 52regulations 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 ofthe new regulations and that it therefore has no authority now either to place the burden ofcoming forward and ofproofon 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

newprovision, §52.21(w), which does place theburden ofcoming forward and ofproofon the permittee, but imposes

no deadline for filing an application. Whether EPA hadauthority originally to require a permit for a project thatfalls outside the coverage ofthe new regulations is immaterial. EPA has authority under section 301(a)(1) ofthe Act, 42 U.S.C. 7601(a)(1), to fashion

4The partial stay ofthe 1978 regulations that EPA issuedin January 1980 has probably already relieved most ofthose projects from the permit requirements ofthose regulations. within reason the regulatory tools It needs to carry outits tasks. Here EPA has undertaken not only to release certain PSD permittees from the constraints oftheir PSD permits, but also to settle as finally, as publicly, and

as quickly as possible which oldpermits

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 theburdens of *coming forward and ofproof 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, theprovision promotes the soundness and therefore the finality of the rescission, since thereviewing authority willhave 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 ofeach permit will be In the public record.

Certain commenters suggested two alternatives to EPA'sproposed rescission provision. One alternative

was to declare upon promulgation that
anyPSD permit for a project that falls outside the coverage of the new regulations is null and void as ofthat 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 forrescission andto 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 thatbasis.

Certain commenters also objected to other aspects ofthe 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 ofa permit would in no way affect any other limitations on the project that may apply by virtue ofthe SIP or a state permit. It should also be noted that, ifa source or modification whose permit is rescinded were later found to be causing or contributing to an increment violation, additional controls -mightbe necessary. See 40 CFR 51.24 (a)(3)(1979).

EPA received many comments on its proposal to "grandfather" certain projects thatfall 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 thatin general a project would escape PSD review under the new Part 52 regulatioris only if certain permits were obtained forit by March 1,1978, and construction "commenced" on it by March 19,1979.

EPA disagrees that it should ormust adhere to the transitional rules in the 1978 regulations in deciding which ofthe projects in question here should have to get aPSD permit. Part C ofTitle I ofthe Act contains two provisions, sections 165(a) and168, which describe how the PSD permit requirements ofPart C are to be implemented. Those sections, however, contradict each other irreconcilably. See Citizens to Save Spencer Countyv. 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 Citizensto SaveSpencer Countyidentified those "considerations" as follows:

(1) enhanced protection ofthe environmental quality ofthe nation's air; (2) minimization ofeconomic dislocation and loss as aresult ofsuch enhanced protection- (3)a heightened enforcement role for states ** "; and (4) facilitation ofan 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 ofthe projects in question are modifications that would result in a significant net increase in the maximum controlled emissions ofthe "source," but
not in a gross increase in uncontrolled emissions equal to or above 100 or250
tons per year.This discrete group of small modifications, even in the aggregate, have a relativelyminor effect

on air quality. But,because they are numerous, delaying them byimposing

new PSD requirements could frustrate economic development. Theproposed provision would strike a roughbalance between the benefits and the cost of applying PSD to those projects by allowing any company thathas already obtained each ofthe 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 urgedEPA to promulgate a grandfather provision that would use the date ofcomplete application instead ofthe date ofpermit issuance. The commenter was concerned that the proposed provision would treat unfairly a company that obtained the last permit necessary under the SIPjust 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, inEPA's view, it would fail to give adequate expression to the interests behind section 165, especially the goal ofprotecting air quality.

$Even ifthe conflict between sections 165(a) and 168 had notconferred on EPA the discretion to exempt certain projects thatwould otherwise be subject to PSD review for the firsttime,EPA would have authorityundersection 301(a](1) toexempt those projects in orderto phasein new requirements on areasonable schedule. Certain commenters pointed out that a company mightbe unable to "commence construction" within theproposed 18- month period, because it might be unable toget sufficiently in advance any preconstruction permits that federal or state law outside the SIPmight require. Theyrecommended thatEPA set the deadline 18 months from issuance ofthe last necessary federal authorization. That recommendation parallels a proposal EPAmade in July1979 to amend the grandfatherprovisions ofthe 1978 regulations so as to extend the *"commence" construction deadlines in those provisions generally to a date nine months from the issuance ofthe last
necessary federal authorization. See 44 FR 42722. EPA has not yet completed that rulemaking. When it does, itwill decide whether to accept the recommendation ofthe 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 oroperator * * obtained all finalfederal, state and local preconstruction approvals orpermits necessary" underthe SIPby a certain date.EPA intends that clause torefer only to the date on which thereviewing authority issues the permit. For emissions increases as a result ofSIP relaxations, the appropriate date is the effective date offinal EPA approval. Because ofthe construction moratorium, 40 CFR 52.24,44 FR 38471, some SIP permits may be issuedbefore the time that the owner oroperator is allowed to begin construction. Nevertheless, in EPA's view, the owner or operator "obtains" thepermit when thereviewing authority issues it, even if permission to begin construction takes effect subsequently.

EPAreceived no comments on its proposal to put into regulatory language the provision in section 168(b) oftheAct 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 thatprovision basically as proposed. See section 52.21(i[4)(i].

2.SubstantiveProvisions Relatingto BACT.

a.Proposed transition provisions: In September,EPA proposed certain new substantive requirements. One ofthe

new requirements was that aproject apply BACT for each pollutantregulated under the Act that theproject would emit in a significant, but "minor"
amount. Under the 1978Part 52 regulations, a project has to apply BACT only foreach pollutant regulated under the Act that the project would emit in a 52683

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## 1 Rules and Regulations

"major" amount. EPA added that it intended to put the new BACT requirement into effect immediately
upon itspromulgation.

Inproposing 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 aPSD permit was complete before the requirement came into effect. See44 FR 51928, 51954 

### (proposed § 52.21j)(2)).

b. Commentsand finalactionon proposedtransition provisionsrelating

toBACTrequirements In general, those commenting on the proposal to

- grandfather any project whose application was complete before the date ofpublication ofthis notice from the new BACT requirement favored such an exemption forat 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 orwould fall within the
coverage ofthose regulations, even to those which have already received a PSD permit.

EPA disagrees that it should ormust adhere to the 1978 transitional rules in applying the new BACTrequirements. As discussed above, the courtin Citizens toSave SpencerCountyheld that EPA has a "responsibility to harmonize the statutoryprovisions [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 forpollutants to be emitted in "minor" amounts would hardly minimize economic dislocation, To the contrary, it would delay construction substantially in many

cases. The benefits ofthat 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 ora complete application would fail to give adequate expression
to the economic considerations behind section 168.

Another commenter argued that the proposal did notgo far enough, in--that it. would require companies which on the date ofpromulgation were just about to file a complete application to amend project designs andapplications. 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 ofthis 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 provisionreasonably 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); theprovision that sets forth the general BACT requirement. EPA has sought to gather each ofthe exemption provisions intoparagraph (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 ofthe 1978 regulations, if they would otherwise have applied. The
purpose ofthat structure is in part to

assure that BACTwould apply to a pollutantfor which the project would be "major" under the'1978 regulations, but "minor" underthe new Part 52 regulations due to the new concepts of "potential to emit" and "modification."

The final Part 52regulations contain a definition ofthe term "complete" in reference to an application, Under that definition an application becomes "complete" when it contains all ofthe information necessary for application processing.

It shouldbe noted, finally, that the date an application was complete will generally differ from the date onwhich the reviewing authority makes its completeness determination, since the filing of thelast necessary piece of information will typically occur before the determination is made. When EPA makes a completeness determination, it will specify the date as ofwhich the application was "complete." That date

6Even ifthe conflictbetween sections 165[a) and 168had not conferred onEPA the discretion to exemptprojects with a complete application. EPA wouldihave authorityundersection 301(a)(1) to. exempt them..since applying thenew BACT requirements tosuch projectswould beunfair. willbe the date on which the last
necessary piece ofinformation was received. One ofthe provisions ofthe Consolidated Permit Regulations, 40 CFR 124.3(0 (discussed below), refers to the "effective date" of an application. Generally, the "effective date" ofan application will follow the date it Is "complete."

3. SubstantiveProvisions Relatingto 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 theproject wyould affect for each pollutant regulated under the Act that the project would emit in "minor," but still significant, amounts. Under the 1978regulations, 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 ofthe 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 forwhich a NAAQS exists ("criteria pollutant")
must generally include monitoring data gathered over and relating to the year preceding the submission ofa complete application. In September, EPA proposed a reformulation ofthat requirement. That requirement, however, when coupled with the new requirement for an analysis for each critera pollutant emitted in "minor" amounts, could cause aprospective 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 ofpromulgation and the date the applicant would file an otherwise complete application. See id.at 51920, 51954 (proposed § 52.21(n)(1)(it)).

b. Commentsand finalactionon transition provisions relating-to air qualityanalysis requirements. Two

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commenters argued that EPA should adhere to the transitional rules ofthe 1978regulations 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 hadnot commenced by March 19, 1979. Certain other
commenters objected to any application ofthe new monitoring requirements to a company which, although it hadnot filed a complete application by the date ofpromulgation, 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" ofnewmonitoring equipment, together with the analysis of
any new data,would require at least several months. Many commenters did
note that the draft ofthe revision ofthe monitoring guideline would allow three months for those tasks, but asserted that

even three months would generally be insufficient. See U.S. EPA, (Draft) AmbientMonitoringGuidelines for Preventionof 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 ofcommenters observed that the proposedregulatory 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 ofpromulgation 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 ofpromulgation. Consequently, it specified no phase-in rules for projects whose applications were not complete by then, the very projects thatEPA 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 newregulations, but was not under the 1978regulations, to gather the full amount ofmonitoring data foreach ofits "major" pollutants, but none ofits "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 ofthe proposed provisions, but differ substantially in structure and articulation. One ofthe four final provisions, §52.21(i)(9), exempts certain

sources and modifications from the new requirements withrespect tomonitoring entirely. It provides that those requirements shall notapply to a source ofmodification that was subject to the 1978Part 52 regulations, ifits 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 ofthe three remaining provisions exempt certain other sources and modifications from the new monitoring requirements forcriteria and noncriteria pollutants. One ofthose 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, ifits application becomes complete with respect to the requirements ofthe new Part 52 regulations, other than the new monitoring requirements, on or before a date ten months from the date of promulgation. Theprovision adds the clarification that the monitoring requirements ofthe 1978 regulations apply instead to the source or modification. The other exemption provision, §52.21(i)(10(ii), Is similar.It exempts a source ormodification that would not have been subject to the 1978 Part 52 regulations, ifits application becomes complete withrespect to the requirements ofthe New Part 52 regulations, other than those for monitoring, on orbefore 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 ofnew § 52.21(m)(l)(iv) to the extent that they placemonitoring 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 mustinclude monitoring data gathered over a period ofat 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 ofpromulgation to the date the application becomes complete, except as to the monitoring requirements ofthe newPart 52 regulations. The applications towhich 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 generalrule. First, an applicant with

a project that would have been subject
to the 1978Part 52 regulations must provide at least whatevermonitoring data the 1978Part 52 regulations would have required the applicant to provide. Second, if theAdministrator determines that a complete and adequate analysis

canbe accomplished with monitoring data gathered over a shorter period (not
to be less than fourmonths), the required datamay be gathered over at least that shorter period.Finally, ifthe monitoring data wouldrelate exclusively to ozone and would not have been requiredunder the 1978 regulations, the Administrator may waive the otherwise applicable requirements ofthe phase-in provision
to the extent that the applicant shows that the monitoring data would be unrepresentative ofair quality overa full year.

The following example illustrates how theproposed phase-in provision works. A company proposes to construct a new plant thatwould emit sulfur dioxide and particulate matter.Under boththe new Part 52 regulations and the 1978 regulations, the plantwould be "major" for sulfur dioxide and "minor" for particulate matter. The emissions of particulate matter would notbe de minimis.But forthe phase-in provision, the new Part 52 regulations would require an application for apermit for theplant to contain a year's worth of monitoring data forboth sulfur dioxide andparticulate matter. (This assumes thatthe Administrator does not determine that a complete and adequate analysis could be accomplished with datagathered over a shorterperiod.) 52685

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The 1978 regulations would-have required the application to contain ayear's worth ofdata forjust sulfur dioxide. The company submits an,

- application which becomes complete, except with respect to monitoring, at the end ofthe fifteenth month after promulgation. Under the phase-in provision, the application must contain (1) a year's worth ofmonitoring data for sulfur dioxide'and (2) nine months' worth ofdata forparticulate matter.

The four final provisions embody EPA's resp'onse'to the comments on the proposalsFirst, EPA has-adopted the fundamental approach ofthe proposal, which was to apply the-new monitoring requirements prospectively only. EPA has concluded.thatthat approach reasonably accommodates the purposes and concerns ofsections 165(a) -and (el(2), on the one hand, and section168,

on the other. In brief, the approach institutes the new requirements promptly, but with minimum economic. dislocation. See Citizens. To Save SpencerCountyv.EPA, 600 F.2d at851. Full and.immediate application ofthe--

new monitoring requirements.would have caused substantial delays in.the submission ofcomplete applications and hence the issuance ofpermits, but provided little direct environmental benefit inreturn. As for applicants who undertook an approved program of monitoring before the date of thisnotice, thephase-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, EPAhas established a grace period of tenmonths in the final grandfatherprovisions. Ithas done so because itagrees with the
commenters who asserted that instituting a new monitoring program and analyzing the data it generates requires more than three months in
many, ifnot most, circumstances. EPA has selected a grace period often months with respect to monitoring for both criteria and non-criteria pollutants, first, because six months is an estimate

7Even iftheconflict between sections 165(a). 165(e)(2]. and 168 hadnot conferred onEPA the discretion toexempt certain proJects from the new air quality analysis requirements, EPA would have had authority under-section 301(a)[1) toexempt those projects, because application ofthose requirements would have been unfair.. of the amountoftime that would generally baneeded to complete those' tasks and.. second, because there is little usefulnessto less than fourmonths of data formost 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 noncriteriapollutant that it would emitin "major" amounts. In addition, thephasein 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 subjectto the 1978 regulations, but also projects that were

- not subject to them.

4.Comments on theeffective dateof thesubstantive provisions. ,In

proposing the new substantive

- provisions relating.to BACT and air. quality analyses the,Agency stated that itintended to put those-new provisions into-effect immediately upon their promulgation. One -commenter contended thatEPA should put the new provisions into effect 30 days after promulgation, rather than immediately

on the date ofpromulgation, 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 ofthe commenter.With respect to the newBACT provisions, .however; EPA disagrees. Prospective applicants have had ample warning of the newBACT provisions. The court in AlabamaPower held in June of1979 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), 5U.S.C. section 553(d)(2).

5.ffewProvisionsGoverning Procedure.

EPA recently promulgated regulations aimed atconsolidating and unifying various permitrequirements and procedures. See 45FR 33290 (May 19,1979) (the "Consolidated Permit Regulations"). Those newregulations contain provisions which will govern the processing ofapplications for permits under the Part 52PSD regulations. Those provisions appear as_40: CFR 124.1-" 124.21.and 124.41-124.42,45 FR 33485-93. Paragraph (r)ofthe 1978 Part 52 regulations has governed the processing ofPSD permit applications under those 1978 regulations.

The Consolidated Permit Regulations contain a provision, section 124.21, which describes the transition from the procedures ofparagraph (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 ofsections 124.9 and 124.18, which would require the preparation of a formal administrative record, shall apply only
to "PSDpermits for which draft permits [i.e., preliminary determinations] were prepared after the effective date ofthese regulations." Id.

Inpromulgating the new Part52 regulations, EPAhas adopted a new paragraph (q). It states that the new consolidated permit procedures govern the processing ofPSD permit

. applications to the extent that they apply. It adds that the procedures ofthe 1978 Part 52 regulations continue to apply to the extent that the new procedures have not yet displaced them. Intime, the new procedures will displace the old ones entirely.

B.Part 51PSD Regulations

In September, EPA didnot propose an amendments to the 1978Part 51 regulations that paralleled the proposed Part 52 transition provisions. The Part51 amendments that EPA didpropose paralleled only the-Part 52provisions 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 ofits 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 Part51 regulations. The

new section provides thatPSD SIP revision may operate prospectively,

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thereby establishing that a state may adopt grandfather provisions ofthat
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 Part51 regulations. Itprovides 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 thatthe 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 ofthe plan that go beyondthe requirements of the new Part 51regulations withinnine months after the date ofpromulgation of those new regulations, unless the state within thatperiod oftime submits "to EPA written acknowledgment thatit is
notrequired byfederal law to include such provisions in its state plan,but has nevertheless elected to do so under state law pursuant to section 116 ofthe Act," The commenter feared that absent such

a requirement,inertia and lack of

resources mightprevent 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 ofa state plan simplybecause 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) ofthe Clean AirAct Amendments of 1977 already states: anyPSD SIP revision required bythe new Part 51 regulations
mustbe adopted and submitted within nine months ofthe date thisnotice
appears in theFederal 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 ofthat requirement is merely to minimize confusion and uncertainty during the transition from
any oldto new PSD SIP requirements.

C. OffsetRuling

The amendments to the Offset Ruling which EPA is announcing in thisnotice expand its coverage,just as the amendments to the Part 52 PSD regulations expand its coverage. In EPA's view, the expansion ofthe
coverage ofthe Offset Ruling should operate prospectively only.Hence, it has inserted into the Ruling a grandfather provision that parallels therelevant PSD grandfather provision. Itprovides that the Ruling does not apply to any source

ormodification that was not subject to the version ofthe Ruling in effect prior
to the date this notice appears in the Federal Register, ifall necessary SIP permits were obtained for the source or modification by that date and if construction commences within 18 months ofthat date.

D. Part 51 Nonattainment Regulations

Pursuant to section 406(d)(2)(B) ofthe Clean Air Act Amendments of 1977,
states will have nine months after the date ofthis 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

oradopt have the effect ofbeing at least

as stringent as those set out in §51.180)(1). Ifa 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 orof revising them so as to conform toEPA's rules. Ifa state does not submit any necessary revisions to its plan within nine months after the date thisnotice
appears in theFederal 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 forPart D submittedunder section 110(a](2)W1) and 129(c) ofPub. L 95-95.

EPA received only one comment on transitional requirements for 

### §51.180). This commenter requested that EPA allow states whichhave already adopted NSR regulations pursuant to section 173 of the Actbe 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 isfree to adopt such aprovision, andEPA will approve it,provided that the state's NSR program meets the requirements ofsection 173 andthat permit rescission will not interfere with reasonable further
progress or attainment ofambient 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 therelevant PSD and OffsetRuling provisions. It appears as § 52.24(g).

F.PendingSIPRevisions

Bythe date this notice appears inthe Federal Register,EPA willnot have taken final actionon many PSI) and nonattainment SIP revisions that states have already submitted. EPA intends to review those pending revisions under the requirements that appliedto them before the date ofpromulgation. 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 andundue burden,particularly inthose cases where approval ofaPart
D plan is needed to lift the construction moratorium.

G.EffectiveDateof theNonattainment Provisions

EPAhas made all ofthenew nonattainment provisions announced here effective immediately upon their promulgation. EPA finds that ithas "good cause" within the meaning ofthe relevant provisions ofthe Administrative Procedure Actto do so. First, the new provisions in the main provide relieffrompre-existing regulatory burdens. Second, the decision in

AlabamaPowerand the September 1979 proposal provided ample warning of the new changes. Finally,itis important for planning and management byEPA, 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 ofPSD and nonattainment regulations uses the phrase "this section" at somepoints and phrases such as "40 CFR 52.21" at other points. EPA intends "this section," when used in a particular set ofregulations to refer only to theversion ofthe regulations which hasresulted 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 ofthe particular regulations whichhas appeared oris to appear at the particular location in the Code of Federal Regulations. For example, "40 CFR 52.21" refers to eachversion ofthe Part 52PSD regulations that has ever 52687

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existed, including the version that has resulted from the amendments announced here.

V. Potential to Emit

The preconstruction review requirements ofsection 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 orhas the "potential to emit" 100 tons per year or more ofany pollutant, for sources included in one of 28 specified source categories, or 250

tons per year ormore ofany pollutant for any other type ofsource. 42 

### U.S.C. 7479(1).

A. Control Equipment Obviously, many more sources would be affected ifthe term "potential to emit'! referred to the amount ofpollution that a source would emit without controls than ifit took the operation of control equipment into account. In the PSD regulations promulgated on June 19, 1978, EPA took the former approach and defined "potentialto emit" as "the capability at maximum capacity to emit

a pollutant in the absence ofair pollution control equipment." 40 CFR 51.24(b)(3), 52.21(b)(3) (1979). This approach was rejected by theAlabama Powerdecision 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 onlyincludes a: facility's maximum productive capacity (a criterion employed by EPA) but also takes into account the anticipated functioning ofthe 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 ofcontrol equipment would be taken into account in computing potential emissions. Thatapproach, 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 ofcontrol 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 resultingreduction in emissions is federally enforceable (see below). This provision is necessary, as a practical matter,to ensure that sources willperform the propef operation and maintenance forthe control equipment. Thus, a source installing control equipment that wouldreduce emissions

more than that required by generally applicable emissions limitations cannot receive creditfor the additional increment ofpollution reduction, unless it-is federally enforceable. The definition of "potential to emit" is being modified appropriately.

Under the definition being promulgated, thepotential to emit of existing sources with respect to the
treatment ofenforceable in-place control equipment shall be defined in the same fashion as discussed above for

new sources. This responds to
commenters who complained ofthis 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 inplacecontrol 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 ofa stationary source in toda's ruleis ofprimary importance in defining when a source would be major,it is not generally used in determining increment consumption or thebaseline for assessing emission increases and decreases at a source (seeModification).

B. ContinuousOperation

Under the existing definition of. "potential to emit," a source can avoid PSD review ifit binds itself, in a federally enforceable permit, to sufficiently limited hours ofoperation.
40 CFR 51.24(v)(5), 52.21(b)(5) (1979). In the September 5, 1979proposal, 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 alsoproposed to delete, from the same regulation, thewords "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 ofsources which

are physically incapable ofsuch operation.

Many commenters (169 of 173) have strongly criticized this proposal, the
mostfrequent response being that few sources operate constantly, and most
cannot do so. These commenters also advised the Agency ofcertain 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 away 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 ofemissions actually produced by the source.

There was some comment in support ofthe 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 itwould 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 inAlabamaPowerdid 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 ofa facility rarely contemplates uninterrupted operation 24 hours per day, 385 days per year.Projected downtime forrepairs and maintenance or otherfactorsmayreduce the hours of operation that are appropriately considered in the calculation ofa 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 ofthe above, the Agency believes It has discretion to adopt the most reasonable approach to thisIssue and has, therefore, reconsidered its proposal. Today's regulations recognize the ability ofallfederally enforceable limitations
to constrain thepotential to emit ofa stationary'source.

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The Administrator believes that the policy concerning "enforceable permit conditions" isresponsive tomost of the

concerns raised by commenters who

were critical ofEPA's proposal. New

sources are now allowed to avoid NSR forPSD and nonattainment areas by limiting their type or amount of operation. Moreover, potential to emit is

now defined in the same way fornew and existing stationary sources. The use ofcertain permit conditions also addresses the concerns raisedregarding 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 otherphysically limiting factors outside the design capacity of an emissions unitlegally enforceable and

can thereby limit the applicability of NSR.

The final policy concerning enforceable permit conditions has also taken in account the concerns ofthose favoring the proposal. One commenter noted that limited operation conditions would require greater enforcement attention. The Administrator agrees, but hebelieves 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 operationbut high short
term rates ofemission. 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 ofthe 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 oftoday's policy, a potential problem exists concerning the future relaxation ofa preconstruction permit that previously caused a proposed stationary source to enjoy minorrather than major status. For example, a source might evade NSR through agreement to unrealistically stringent operating limitations in its permit, and later obtain arelaxation of the condition. The Agency believes that the problem can be dealt with by40 CFR 52.21(r)(4), entitled "Source Obligation." That paragraph provides that any owner

oroperator ofa source, who would receive a relaxation of apermit condition that had enabled avoidance of NSR, would then become subject to review for all units subject to the original permit, as ifthey were new

sources. In other words, ifoperational limitations are to be considered as an aspect ofa source's design, it is reasonable that the permit accurately incorporate that design. Ifsuch operation is changed, the permit, and concomitant obligations, should be correspondingly changed.

C.AdditionalGuidance

Fugitive emissions under today's regulations are applicable in defining potential to emit. (SeeFugitive Emissions.) However, like theproposal, such emissions do not count in assessing permit applicability unless a specified type ofsource 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 toPSD 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. EPAis promulgating for each ofthose nonattainment programs the same definition of "potential to emit" that it is promulgating for the PSD program, as well as aprovision 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 ofNSR, between the direct emissions ofa source and its "secondary emissions." (SeeAdditional Issues.) Inrevising the Offset Ruling in January 1979 the Agency added a definition of "secondary emissions" and

a provision describing forwhat 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 ofthose sets of provisions "secondary emissions" are to be excluded in determining whether the regulations apply to a source (i.e., whether a source ormodification is "major"). Similarly, the control technology requirements ofBACT 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 1978PSD regulations, stationary sources ormodifications with allowable emissions ofless than 50 tons peryear, 1000 pounds per day,or 100 pounds perhour 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 preliminarypercuiam 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 bemajor if "potential to emit" referred to controlled emissions. 13 ERC at 1228-29. Nevertheless, itremanded the exemption to the Agency for reconsideration and notedthat the Agency had exceeded its authority in establishing the exemption. Inresponse, EPA proposed to delete the provisions which embodied the exemption, andto delete parallel provisions inthe Offset Ruling. EPA, however, proposed adding
to the PSD regulations a 50-ton exemption for certain modifications. The proposed exemption tracked section 165(b) ofthe Act closely, but not exactly.Essentially it provided that a

source qualifying forthe exemption would face a limited air quality review for S0 2 and PM.Use ofthe exemption would be restricted to modifications, at

a plant existing as ofAugust 7,1977, entailing emissions increases of 50 tons

or less of any pollutant after application ofBACT and which would impact no Class I area orinterfere with the attainment ofPM or S02 standards. All
net emission changes since August 7, 1977would 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, fourcommenters wanted

an additional 50-ton exemption after each full review. Five'commenters requested a special, more lenient, review forpollutants whose emissions
rates fall between 50 tons peryear and the demianislevel in those cases where the exemption would not apply. The Administrator finds no grounds for providing additional exemptions after each review. Similarly, thereis no justification orauthority under section 165(b) for a special limited reviewfor emissions increases falling between de minimisamounts and the 50-tonlevel. A few commenters suggested that other eligibility values than 50 tons be used. EPA responds that section 165 ofthe Act 52689

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mandates the 50-ton figure, but that much of these commenters' concerns are dealt with by the de minimisprovisions being promulgated today. Two other
commenters requested that the exemption begoverned by net emissions increases. Today's regulations provide thatreview 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 lintedin its application than the Clean AirAct language ofsection 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 ofthe 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 AlabamaPower final opinion suggested thatEPAhad authority to conform the eligibility date for the section 165(b) exemption to the "effective date" ofthe preconstruction permit requirements ofthe 1978 regulatiqns, i.e., March 1, 1978. In the January 30, 1980Federal 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 ofMarch 1 or 19, 1978. Fourwanted the date tobe that of the final promulgation ofthese regulations. One commenter disagreed with the date change because it considers the exemption itselfto 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 notregulated as ofMarch 1, 1978. Thisis apparently a reference to the fact that rulemaking relative to potential to emit (seePotential 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 toMarch Ireferred
to a statement inAlabamaPowerthat March 19,1978 is the "effective date" of the regulations. 13 ERC at 2006, n.79. The "effective date" ofthose regulations is, however, March 1, 1978.See Citizensto Preserve SpencerCountyv. EPA, 12 ERC 1961,1978; and Preamble to 1978 Regulations, 43 FR 26380,26390. Concerning the comments favoring the date ofthis promulgation as the eligibility date, the Administrator notes that section 165(b) ofthe Act limits eligibility for the 50-ton exemption to those sources in existence on the date of

enactment ofthe 1977Admendments to the Act. For the reasons noted in the AlabamaPower decision, EPA has authority to extend eligibility toMarch 1, 1978. However, the Agency cannot extend this deadline to today's promulgation. For these reasons March 1, 1978 isnow promulgated as the eligibility date for the 50-ton exemption.

VII. Fugitive Emissions

For PSD determinations prior to the AlabamaPowerdecision, EPA considered allreasonably 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 ofhow they emanate. This practice applied to calculations of a source's emissions and potential emissions ofa given pollutant both: (1) for the threshold determination under section 169[1) ofwhether the source was

a "major emitting facility" subject to section 165, and (2) for the permitting requirements ofsection 165 itself.

TheAlabamaPower court upheld EPA's practice for the latter purpose, and confirmed that

The terms ofsection 165,which detail the preconstruction review andpermit requirements for eachnew ormodified "major emittingfacility" 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 ofsection 165 for eachpollutant it emits irrespective ofthe

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 agiven 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 ofthe September 5, 1979rulemaking proposal, the Administrator identified 27 categories of stationary sources forwhich 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 ofeffective techniques for their control. EPA has considered these comments, but believes that Congress intended the rulemaking provision ofsection 302(j) to

serve a much simpler and ndrrowor
purpose.

Asthe court itselfnoted, "[t]he legislative history ofthis 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 toindicate the inclusion ofmajor

sources offugitive emissions (lastyear'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 forwhich 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 ofaffected categories ofsources 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 ofclaims that it would notbe appropriate to do

so. Although many such presentations will be technically oriented, EPA does
not agree that section 3020) requires the formal promulgation ofmeasurement, modeling or control techniques or guidelines, because the fundamental decision which the Administrator Is making under section 302(j) is whether fugitive emissions should beincluded In threshold calculations.

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EPAfinds support forthis interpretation ofsection 302(j) in the fact that section 165 does notcontain any rulemaking provision governing the substantiveregulation offugitive emissions. As explained earlier, the AlabamaPowercourt confirmed that

once a source is determined to be a major emitting facility under section 169(1), the substantive preconstruction review andpermitting requirements of section 165 "apply with equal force to fugitive emissions and emissions from industrial point sources." In other words, even iffugitive emissions remain excluded from threshold calculations, section 165 requires that fugitive emissions be taken into account in determinations ofwhether 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 priorpromulgation 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 offugitive emissions from allmajor emitting facilities is mandatory under section 165, EPA does not believe that the rulemaking provision ofsection 302(j)

was intended to require the promulgation ofsuch technical guidelines orregulations.

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 offugitive 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 ofsources identified in the proposal (assources 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 of100 tons per year (rather than 250 tons per year) for determinations of"major emitting facility" status.8The commenterb complained that by merely copying the 28 sources without any other supporting

gThe apparent discrepancy inthe numberof categories (i.e.. 26 versus 28] is explained by the fact that the September 5.1979 proposal listed hydrofluoric, sulfuric andnitric acid plants together in a single subheading. rationale, EPAfailed to conduct proper rulemaking.

Although it is true that the two lists

are virtually identical,it isnot 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 ofthe deleterious pollutants thatbefoul our nation's air." 13 ERC at 2003. In light of that intent, the Administrator Initially determined that as a matter ofpolicy, 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 Categoryand 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 millplants

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 ofAir 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 blackplants

(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 Fossilfuel-fired steam electric plants) Petroleum storage and transfer units

(AP-42) Fossil fuel-fired steam electricplants

'For example. EPAhas preiously published fugitive emissions data for many ofthe identified categories ofsources: (EPA-450/3-77--Om)

Several commenters pointed out, however, that the two listswere not identical insofar as certain restrictions

orlimitations for six categories of

sources in the section 169(1] listwere 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 thantwo-hundred-andfifty millionBritish thermalunits per hour heatinput;coal cleaning plants (thermal dryers);municipal incinerators capableof charging morethan twohundred-and-fiftytonsof refuse perday; carbon black plants (fumaceprocess]; fossil-fuel boilers of more than twohundred-and-fifty millionBritish thermalunits per hour heatinput;and petroleum storage and transfer facilities with acapacityexceedingthreehundred-thousand barrels. These discrepancies are the result ofan inadvertent administrative error, since EPAintended to identify in-the proposed section 302(j) list the same categories of

sources identified by Congress in the section 169(1) list. Accordingly, thefinal list promulgated todayreflects the qualifying descriptions specified above for the six categories ofsources. Several

commenters objected to the last category on thelist ofsources for which the Administrator proposed to include fugitive emissions in threshold calculations-namely, "any other stationary source category which, at the time ofthe applicability determination, is being regulated under section 11 or 112 ofthe Act." Section 111 concerns the establishment ofstandards of performance for new stationary sources (new source performance standards or NSPS) and section 112 concerns the establishment ofnational emissions standards forhazardous air pollutants (NESHAP). The commenters argued that the focus ofthese provisions is on emissions controls rather than on ambient air quality, and that there is therefore no logical linkto support the automatic inclusion offugitive emissions from a source forPSD threshold calculation purposes simplybecause the

source is being regulated under section 111 or section 112. EPA disagrees with

some ofthe commenters' assumptions and characterizations ofNSPS and NESHAP regulation, but concludes for other reasons that the last category should berevised to apply onlyto

sources which are being regulated under section II orsection 112as ofthe effective date ofthe 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 ofcontinuous emissions reduction which "the Admilstrator deterniines has been adequately demonstrated," the establishment ofan NSPS for a source is unrelated to the ambient air quality considerations which are at theheart ofPSD review. What the commenters overlook, however, is that under section 111(b)(1)(B), NSPS are only promulgated forcategories ofstationary sources whichhave been included in a listunder section 111(b)[1)(A); and section 111[b)(1)(A) directs the Admiiistrator-to "include a category ofsources in such list ifin hisjudgment 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 ofthe Administrator causes, or contributes to, air pollution which may reasonably be anticipated toresult in an increase in mortality or an increase in serious irreversible, or incapacitating reversible, illness."

In short, categories ofsources are regulated under section 111 or section 112 on the basis ofdeterminations by the Administrator that their emissions seriously and adversely impact ambient air quality, and the Administrator therefore determined that itwould be appropriate to include theirfugitive emissions intheir threshold calculations for purposes ofPSD andNSR review and regulation. That basic policy determination is beingfinalized today.

At the same time, however,EPA believes that the comments about' "automatic" inclusion ofcategories of

sources which are notnowregulated under section 111 or section 112, but which may beregulated thereunder at

some point in the future,raise valid

concerns. AlthoughEPA believes that the same basic policy considerations would support the inclusion offugitive emissions for such categories ofsources, EPA recognizes that unless a source had affirmative notice during this rulemaking that it willbe regulated in the future under section 111 or section 112, itwill
notreally have been afforded a meaningful opportunity to comment on, theproposed inclusion ofits fugitive emissions inits threshold calculations, Accordingly, EPA has determined to limitthe scope ofthelast category on theproposedlist to sources which are being regulated under section 111 or section 112 as ofthe effective date of

- these amended PSD and NSR regulations. Atthe time ofany future rulemaking under section 111 or section 112 proposing to regulate additional categories ofsources,EPA will conduct parallel section 302(j) rulemaking concerning the proposed inclusion of fugitive emissions inthreshold calculations. On the issue ofthe appropriateness ofincluding fugitive emissions inthreshold calculations for particular categories ofsources, the basic objection expressed bymost
commenters was thatfugitive emissions data were either unavailable or inadequate, and thatitwould therefore be inappropriate to include fugitive emissions in threshold calculations fora particular category.

Inresponse, EPA notes that such

concerns should and willbe addressed in the context ofparticular applicability -determinations,but that they have not changed the basic policy decision made bythe 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 ofa. proposed new source and the BACT requirements which will apply to-it,

even ifthere are no existing fugitive emissions data, orif the available data

are crude. Obviously, the nature and

extent ofthe available data and technologies areimportant factors in determining how fugitive emissions should be taken into account and how they should be regulated under the review and permitting process ofsection 165; but those factors will not avoid or eliminate the consideration offugitive emissions under that process. Similarly, although the issue of quantification may be relevantto particular applicability determinations, EPA does notbelieve 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 ofthe 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 ofa particulaf applicability determination, issues of quantification whichmight be peculiar to anindividual source. (Ofcourse, fugitive emissions willnot have to be quantified for threshold purposes Ifthe

source would qualify as a "major emitting facility" on the basis ofpoint emissions alone, a situation which EPA believes will occur more often than not.) As indicated above, EPA has in the past published data andother information relating to the quantification offugitive emissions forvarious categories of

sources and, as some commenters noted,. additional data and Information are currently under development, EPA considers these publications concerning quantification offugitive 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 orprecise methods

ormodels for quantification offugitive emissions, and will accept any estimate ofa source's fugitive emissions Ifthe

source can support the accuracy and reliability ofthe 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 oftechnology or based

on principles ofmaterial balance. Moreover, ifa source satisfactorily demonstrates that all such methodologies are inappropriate in Its circumstances and that there Is absolutely nobasis 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 ofboth 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 willbe 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 ofdefining fugitive emissions as "those emission which do


### notpass through a stack, chimney, vent,

or other functionally equivalent opening," EPA believes that the term should apply to "those emissions which couldnotreasonably passthrough a
. stack, chimney; vent orother,

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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 ofemissions. 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 ofEPA's action today deleting the fugitive dust exemption (seeFugitive Dust Exemption), EPAis finalizing the proposed deletion ofthe existing definition of "fugitive dust" at 40 CFR 51.24(b)(6) and 52.21(b](6) (1979).

VIII. Fugitive DustExemption

The 1978 PSD regulations provided that "fugitive dust" from amajor stationary source or major modification be excluded from air quality impact
assessment, 40 CFR 51.24(k)(5), 52.21(k)(5](1979). Because ofits decision regarding inclusion offugitive emissions in threshold chculations, and because it questioned EPA's authority to establish the exemption inthe manner in which it did, the court inAlabamaPower vacated EPA's generalized excemption for fugitive dust andremanded it to the Agency for further consideration. 13

ERC at 1231 and 13 ERC at 2017.

In response to the court's opinion, EPAproposed deletion of the fugitive dust exemption. It also proposed to delete a parallel provision in the Offset Ruling (44FR 3274). The majority ofthe 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, theAlabama Powercourt vacated EPA's partial exemption offugitive dust from the requirements of section 165 because the exemption was premised on the

erroneous assumption that "the statute ofits own momentum subjects major

sources offugitive emissions to PSD preconstruction review and permit requirements" 13 ERC at 2017. However, the court also expressed serious doubt thatEPA 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 ofemissions, 13 ERC at 2016, and (2) in the absence ofexplicit 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 ofpartially exempting fugitive dust emitted by major emitting facilities from the requirements ofsection 165. That approach would involve defining the pollutant "particulate matter" "to exclude particulates ofa 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 ofsection 307(d) will apply.

EPA today is adopting itsproposed deletion ofthe existing "fugitive dust exemption" and is deferring further action on any such "exemption" pending completion ofthe standard review

process.

IX. Source

A. Proposed Definitionsof "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 ormore contiguous or adjacent properties and which is owned or operated by the same person (orby

persons under common control)." The Offset Ruling contained the same definition of "source."

In its June 1979 opinion inAlabama Power, the Court ofAppeals rejected the definition of "source" in the PSD regulations. It concluded that Congress intended section 111(a)(3) ofthe Act to
govern the definition of "source" for PSD purposes. That section defines "source" as "any building, structure, facility, orinstallation which emits or may emit any airpollutant." 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, thecourt also focused on the clause "which is located

on one or more contiguous oradjacent properties and which is owned or operated by the same person (orpersons under common control)" The courtheld that the approach, which that clause embodied, ofgroupingpollutant-emitting activities solely on thebasis of proximity and control is generally acceptable, since the Agency had "evidenced an intention to refrain from unreasonable literal applications ofthe definition and instead to consider as a single source only common sense industrial groupings." 13 ERC at 1230.

In September 1979, EPAproposed to define "building, structure, facility and installation" for PSD purposes as "any grouping ofpollutant-emitting activities which are located on one ormore contiguous or adjacent properties and which are owned or operated by the

sameperson (orby persons under

common control)." As thepreamble to the September proposal explains in detail, EPAconcluded that the proposed definition would serve thepurposes of PSD adquately by requiring review of those majorprojects thatwould cause air quality deterioration. Atthe same time, the definition would operate to avoid review ofprojects 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 hadproposed to define them forPSD
purposes, and "installation" as "an identifiable piece ofprocess equipment." One effect ofthatproposal would be theapplication of nonattainment requirements to a new piece ofequipment thatwould emit significant amounts ofapollutant for which the areahad been designated nonattainment, regardless ofany accompanying emissions offsets at the plant.Thepreamble to theproposal explained: "Unlike thePSD 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 willbe subject to NSRt" 44 FR 51932.EPA proposed to apply this definition to "incomplete" SIPs,i.e., those which didnot demonstrate attainment based exclusively on currently approved requirements. Fully 52693

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## I Rules and Regulations

"complete" SIPs could,under EPA's proposal, use the PSD definition.

In December 1979, the courtissued its final opinion on the 1978PSD regulations, which opinion superseded the June 1979 opinion. In the December opinion, the courtreaffirmed its earlier -conclusions that EPAmust adhere to section 111(a)(3) in defining "source" for PSD purposes and thatEPAhas discretion to define the component terms "reasonably to carry out" the
purposes ofPSD. 13ERC at 2039. The
court added that "a plantis to be viewed as a source" and that the Agency "should" provide for the aggregation ofpolluting-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 ownedunits as a single source unless they fit within the fourpermissible 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 intoits constituent units, toinclude the unloading ofvessels atmarine terminals and 'long-line' operations such as pipelines, railroads, and transmission lines. We agreed with Industry Groups that EPAhas not yet given adequate notice as to whether it considers those industrial activities to be subject to PSD."Id.at2040.

InJanuary 1980, EPA solicited
comment on the Septemberproposals in light ofthe December opinion ofthe
court. 45 FR 6803. EPA specifically asked for comment on whether factors other than proximity and control, such

as the functional relationship ofone activity to another, shouldbe used. The Agency also asked for specific examples ofcases where aliteral application of the proposed definition would be unreasonable.

B.PSD: CommentsonProposal and Responses

Most commenters agreed that forPSD
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 ofthose terms to an individual activity. One commenter,however, argued that EPA should adopt for PSD
purposes the same definitions ofthose
terms that it hadproposed to adoptfor nonattainment purposes. The,
commenter asserted that the decision of the courtinASARCO v.EPA, 578 F.2d 319 (D.C. Cir. 1978), required the Agency
to impose BACTon a newunit at a plant, even ifthe unitwouldresultinno net increasein emissions. The ,commenter also asserted that.the Allencompassing definition * * * destroys the intent ofthe PSD program by letting opportunities forreducing increment consumption disappear before control technology standards (i.e., NSPS) can be in place." (Emphasis addedJ

EPA has decided to adopt forPSD
purposes the sort of "all-encompassing" definitions that the commenter opposed. First in itsDecember 1979 opinion in AlabamaPower,the court explicitly held thatASARCO "does notprevent' aggregation ofindividual units ofa plant Into a single source." laERG at 2040. Second, the dominant purpose ofPSD review isnot toreduce 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, sinceit would. allow only those changes at the "source" that would not significantly worsen-air quality to escape review.

Some ofthe commenters who agreed that each ofthe component terms of "source" should aggregate pollutantemitting activities also supported the

use ofproximity and control as the sole criteria for aggregating then. Most of those commenters, however, objected to the use ofproximity 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 wouldnot 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 ofthe examples they gave are the following activities at one site and under common control: (1) asurface coal mine and coalburning electrical generators that the mine supplies with coal; (2) arock
quarry and theportland cementplant that the quarry supplies withraw . material; (3) a primary aluminum ore reduction plant,an aluminum fabrication plant and an aluminum reclamation plant; (4) arefinery, a service station, aresearch laboratory, a fertilizerfactory, and a pesticide factory; and (5)a uranium mill and an oil field. Withthe language ofthe 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 digitsunder the Standard Industrial Classification Code of the U.S. Department ofCommerce, (2) they are dependent upon or affect the process of each other, (3) they use a common raw product orproduce a common product, and (4) the proponent of theproject 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 itsplace. Some ofthem described a plan by agroup 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 ofthe coal-burning plant. The commenters contended thatEPA 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 newplant would-not deteriorate air quality, since presumably the decrease in emissions from the shutdown of the oldplants 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.

Afterconsidering the comments of those who objected to the use of proximity and control only,EPA has decided to adopt forPSD 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 ofthe pollutant-emitting activities which belong to the same industrial grouping,

are located on one ormore contiguous

or adjacent properties, and are under the control ofthe same person (or
persons under common control). Pollutant-emitting activities shall be considered as part ofthe same industrial, grouping ifthey belong to the same 'Major Group' (i.e., which have the same two-digit code) as described In the .Standard IndustrialClassification 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 ofthe court inAlabamaPowersets the following boundaries on the definition for PSD purposes ofthe component
terms of"source": (1) it must carry out

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reasonably the purposes ofPSD; (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 withinthe 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 anew definition of "source," EPA accepted the suggestion ofone commenter that the Agency use a standard industrial classification code fordistinguishing between sets of activities on the basis oftheir functional interrelationships. While EPA sought to distinguish between activities on that basis, it also sought to maximize the predictability ofaggregating activities and to minimize the difficulty of administering the definition. To have merely added function tothe proposed definition as another abstract factor wouldhave reduced the predictability of aggregating activities under that definition dramatically, since any assessment offunctional interrelationships would be highly subjective. To have merely added function would also have made administration ofthe definition substantially more difficult, since any attempt to assess those interrelationships would have embroiled theAgency in numerous, fine-grained analyses. A classification code, by contrast, offers objectivity and relative simplicity.

EPAhas chosen the classification code in the StandardIndustrial Classification Manual,1972, as amended in1977 ("SIC'),because it is both widely-known andwidely-used. EPA has also chosen tousejust 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 ofactivities 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 arebroad enough to minimize the likelihood ofartificially dividing a set ofactivities that does constitute a "plant" intomore than one group and -thelikelihood ofdisputes over whether

a set ofactivities falls entirely into one category oranother.

Each source Is to be classified according to Its primary activity, which is determined by its principal product or group ofproductsproduced or distributed, or services rendered. Thus,

one source classification encompasses bothprimary 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 ofthe principal product. Where a single unit isused to support
two otherwise distinct sets ofictivities, the unit Isto be included within the

source which relies most heavily on its support. For example, a boiler mightbe used to generate process steam forboth

a commonly controlled and located kraft pulp mill and plywood manufacturing plant.Ifthe yearly boiler output isused primarily by the pulp mill, then the total emissions of the boiler shouldbe 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 notbe inclusive enough. As noted above, they urged that EPA formulate a definition thatlooked 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 ofeven the most elastic of the fourterms, "building." "structure," "facility," and "installation."

Many commenters urged EPA to clarify the extent to which the final definition ofthose terms encompasses the activities along a "long-line" operation, such as a pipeline or electrical power line. For example, some urgedEPA 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. EPAhas 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
nottreat all ofthe pumping stations along a multistate pipeline as one "source."

EPA is unable to say precisely atthis point howfar apart activities mustbe 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 by20 miles and

### linked bya railroad as one "souce," ifthe mine, the generator, and the railroad were all under commoncontrol. EPA confirms that itwould not.First, themine and the generator would be too far apart. Second. eachwould fallinto a different two-digit SIC category.

Three commenters focused on whether and towhat extent the emissions from each shipthatwould dock at a proposed marine terminal should be taken into accountin determining whether theterminal would be "major" for PSDpurposes. One
commenter argued in effect that the emhissions ofeach such ship that are quantifiable and occurwhile the ship is coming to, staying at orgoingfrom the terminal should be taken into account. In the view ofthat commenter, all of those activities would be "integral" to the operation of the terminaL Another
commenter asserted thatnone ofthe emissions ofany such ship should be taken Into account, because ships are mobile sources. Theremaining
commenter contendedthat only the emissions that- (1) come from a ship which is underthe proprietary control of the owner or operator ofthe terminal and(2) occur while the ship is atthe dock shouldbe included in an applicability determination. That

commenter viewed the ability ofthe terminal owner or operator to regulate thebehavior ofa ship as the critical consideration.

The permit requirements ofthefinal Part52 PSDregulations apply to a collection ofpollutant-emitting activities according to the 

### "potential to emit" of just those activities inthat collection which constitute a "stationary source." Whether andto what extent the emissions ofships that would dock at a terminal are to be takeninto account in determining PSD applicability depends, therefore, on whether andto what
extent the term "stationary source'" in the final regulations encompasses not only the activities of theterminal itself. but also the activities ofthe shipswhile they are coming to, staying at, or going from the terminal.

The final definition of"building. structure, facility,and installation" resolves that question. EPAintends 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 ofthe terminal directly and would be under the control ofits 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 ofactivities, it is limited to combinations that would be "stationary," that is, fixed to the particular site. The activities ofa 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, wouldbe stationary since they alone would be in

a sense fixed to the particular site. Hence, "stationary source"
encompasses the activities ofa 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 ofactivities that would-be "under the control" of one person or one group ofpersons 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 ofthe 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" (number44).

Whether a particular dockside activitiy would directly serve the
purposes ofa terminal and would be under the control ofits 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 ofits 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 orunloading. 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 allofthe activities ofa 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 groupjust 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 ifthe ships that engage in it have mobility. Ships, moreover, are not "mobile sources" within the meaning of section 110[a)(5) ofthe 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 oroperator has no control over behavior ofthe ship at the terminal.

In deference to the position taken in AlabamaPower, EPA has decided to treat the definition of "source" in the 1978PSD regulations asnot 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 subjectto review under the 1978PSD regulations. A terminal which would notbe subject
to review under the 1978 regulations if ship emissions are not included in the determination ofpotential 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 ofsuch a

source has obtained each ofthe 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 ofthe component terms of "stationary source" differs from the proposed definition in one significant respect. The proposed definition used the phrase "any grouping ofpollutant-emitting activities." The final definition uses the phrase "allof the pollutant-emitting activities." Taken literally, the proposed definition would haye referred not only to all ofthe activities at a plant, but also to any subgroup of those activities. EPA, however, intended it torefer only to all ofthe activities. The final definition merely makes that explicit.

C.Nonattainment:Commentson 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 ofthe
commenters further claimed that the "dual definition" (i.e., treating a source

as both a plant and an individual piece ofprocess equipment at the plant) both

was illegal under the statute and AlabamaPowerand was wrong as a matter ofpolicy.

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 ofsurces, which had been forbidden by both AlabamaPower andASARCO. EPA therefore could, In these commenters' view, define "source"

as either the entire plant or an individual piece ofprocess 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 ofthe 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 ofstrategies they

want to achieve reasonable further
progress. This suggested to the

commenters thatEPA had no authority
to ban a plant-wide definition for new

source review ifthe state could otherwise demonstrate reasonable furtherprogress.

Several commenters also pointed to a variety ofpolicy concerns which they felt militated against EPA'sproposed dual definition. First, they argued that the definition would discourage technological innovation that could actually reduce emissions, because

sources would be reluctant tomodernize 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 themwith 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 Rulingin January 1979,EPA adopted definitions of "source" and "modification" which hadthe effect ofrequiring any increase greater than 100 tons in the potential to emit ofaplant to undergo nonattainment new source review, even ifoffsetting reductions at the plantwere to accompany the change. The effect of theproposed definitions of "source" and "modification" which are being promulgated today would be basically the same as those in the Offset Ruling. Adoption ofthe proposed definitions would constitute, therefore, a continuation ofan established approach
to nonattainment new source review.

The comments on the dual definition have failed to persuade EPAthat it should abandon the established approach at this time. As a result, the
agency has decided to adopt the dual definition in each set ofnonattainment regulations. For the reasons given below, EPAdoes not agree thatthe dual definition is either illegal orunsound 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 fordefining "source" according to the complete orincomplete

status ofthe SIP,and that the proposed definition was complicated.

The dual definition, by defining individual units as a "source," will bring

more units in forreview in areas with unhealthy air and thereby result in reducing emissions from the status quo. The legislative history ofthe 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 controlfrom new

sources isnecessary in order topermit room for maximum potential economic growth. Thisisparticularly truein light ofthe requirement forreasonable further progress and theindications that emissions from many existing sources innonattainment areas will be increasing (dueto fuel switching,natural gas curtailments) or remaining static (dueto 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 dirtyair areas. Forall these
reasons, the committee adopted the requirementforproposed new ormodified major stationary sources in nonattainment

areas to meet thelowest achievable emission

rate requirement.
H. Rep. No. 95-294, 95th Congress, Ist Sess. 215 (1977). In addition, after hearing testimony that no steel sources ownedby five major steel companies

were in compliance, the House inserted into section 173 a requirement that the

owner ofa proposed source or modification demonstrate that all other

sources owned, operated, orcontrolled by him in the state are in compliance with the applicable SIP.Id.at 210-213. Inthis way, Congress meant to use new

source review as a means ofcleaning up existingsources as well

To realize this goal fully, Congress intended thatnew source reviewbe appliedto the greatest extent possible. For example, Senator Muskle, in presenting the Clean Air Act Amendments of1977 to the Senate, spoke ofreviewing "anyphysical change which increases [emissions] * * ," and he went on tonote:

Thus, [under the offsetruling andPartD NSR requirements] anew source Isstill subject to such requirements as "lowest achievable emission rate" even ifit is constructed as areplacement for an older facility resulting In a new reduction from previous emission levels. 123 Cong. Rec. at S 13702 (dailyedition,August 4,19M7).
Since the dual definition would bring in

more sources ormodifications for review than would the plant-wide definition usedfor PSD purposes (including many replacement facilities which would not be reviewed under a plant-wide definition), use ofthe dual definition clearly is more consistent with Congressional intent

The dual definition also is consistent withAlabamaPower and ASARCO. AlabamaPower 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 thereforebe used fordifferent sections ofthe statute.See 13ERG at 2039. As EPA discussed in detail in Its proposal, thepurpose 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 ofcost-effective opportunities to reduce emissions will in factbe used to avoid review. See 44 FR 51932.The dual definition therefore comports with the purposes ofPartD of the Act.

Moreover,AlabamaPowerand ASARCO takentogether suggest that there Is a distinction between Clean Air Actprograms designed toenhanceair quality and those designed onlyto maintainair quality.InASARCO, the Court ofAppeals for the District of Columbia Circuit struck downthe definition of "source" for new source performance standards (NSPS), which had employed a "bubble" concept. An important element in thecourt's decision

was its beliefthat the "bubble" by allowing sources to escape NSPS,was inconsistent with the purpose ofNSPS, which wasto improve air quality.See 578 F2d at 327-28. But inAlabama Power, the same courtheld thatforPSD
purposes, EPA mustuse 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 aplantwide definition to avoid new source review would appear to be inappropriate innonattainment areas, since the purpose ofnonattainment SIPs Is to improve existing air quality so as to attain the ambient air quality standafds. EPA therefore believes thatitwould be

more consistent with thepurposes ofthe Act not to permit states to choose a plant-wide definition ofsource.

Promulgation ofthe dual definition follows the mandate of AlabamaPower, which held that, while EPA could not define "sburce" as a combination of

sources, EPA hadbroad discretion to define "building," "structure," "facility," and "installation" so as to best accomplish thepurposes oftheAct. 13 ERC at2039. This holding contemplates that one term (such as "building") may be more inclusive than another term (such as "installation"), and so a "building" mayinclude many 'Installations." Inthis way, a "source"

can, underAlabamaPowe, be composed ofsmaller "sources," yetnot be a combination ofsources. The dual definition fits intoAlabamaPower, since under EPA's definitional scheme, a "source" is either an individual piece of
process equipment or the entire plant; it isnot a combination ofsources. Thatis, 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 ofequipment orat the plant as a whole.Wherever such an increase occurs is a "source." Thus the plant itselfis a source, not a combination ofsources, although itmay contain smaller sources.

EPA recognizes that use ofdifferent definitions for PSD and nonattainment

areas adds to the complexity ofthe permitting process.But this additional complexity Is outweighed by the need for amore inclusive definition ofsource in nonattainment areas in order to

assure attainment ofstandards. 52697

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Although it is claimed that some

sources may not be willing tomodernize theirfacilities due to the perceived added expense ofLAER and the needto demonstrate statewide compliance, EPA believes that its approach isjustified by the fact that the dual definition will bringin more sources and modifications for review and willrequire better pollution control technology in nonattaininent areas.10

EPA disagrees that iuse ofa 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 ofthe states, indicate thatLAER 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), formajor new sources in nonattainment areas (LAER), and whenever EPA has setnew source performance standards (NSPS). EPA therefore intends tointerpret 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 forPSD
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 oftheir major aspects, giving in

- particular the relevant proposal, the
comments on it and EPA's responses. An example ofhow the definitions work
appears at the end ofthe 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, andnot "any pollutant regulated under theAct." 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 hasbeen designated nonattainment andfor 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 "majormodification." That provision establishes that a physical change at a "minor" stationary

source which change by itselfwould constitute a "major stationary source" shall be treated as a "major stationary source."

A. .Final Definitionsof"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 inmethodof operation"tt a major stationary source which would result in a 'ignificant netemissions 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," theyprovide that those phrases do not encompass certain specific types ofevents. 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 (orany superseding legislation] ordde
to a natural gas curtailment plan under the Federal Power Act; (3) afuel switch due to an order orrule under section 125 ofthe 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 orraw material which (a) the source was capable ofaccommodating 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 'undera PSD permit; (6) any increase in the hours orrate of operation ofa 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 ofdeminimis thresholds for eachpollutant 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 DeMinimisExemptions. 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 thepositive sum of
any increase in "actual emissions" from

a particular physical oroperational 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." Ifit 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

ordecreases are contemporaneous with

a proposed change only if they occur between two dates: first,the date five
years before construction "commences"

on theproposed 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 areasonable shakedown period (notto 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 ofthe 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 ordecrease is creditable only ifthe relevant reviewing authority has not relied on it in issuing a PSD permit for the source,

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## / Rules and Regulations

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

ordecrease 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" ofsulfur dioxide

orparticulate matter that occurs before the applicable baseline date is creditable only if, in addition, itis required to be considered in calculating how much of aparticular 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," ifit 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 atwhich an emissions unit actually emits a particularpollutant. See §§ 51.24(b)(21) and 52.21(b)(21). In general, thatrate as ofa 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 ofnormal source operation. The reviewing authority may presume that any "source-specific allowable emissions" for the unit is equivalent to the actual emissions ofthe unit.For anyunit whichhas 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 ofthe 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 ofcertain legal constraints may emit a particular pollutant. The legal constraints are (1)
any applicable standards in40 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 issuedunder the SIP thatis 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"majormodification," "significant," "netemissions increase," "actual emissions," and "allowable emissions." In general those definitions follow the pattern ofthe 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 apreconstruction permit under the SIP.

B. NoNetIncrease

The Alabama Powerdecision rejected EPA's regulatory approach ofrequiring PSD review ofpotential emissions increases at existing stationary sources only when such increases would equal

or exceed the 100/250 ton threshold used in the review ofnew sources. It held instead that a change in a major stationary source is subject to review only ifit would result in any significant
net increase. Inresponse, EPA proposed

on September 5,1979, an approach that would subject to new source review (NSR) under the relevantPSD or nonattainment provisions only each significant net increase that would occur in the potential to emit ora 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 orgreater than a pollutant-specific emissions cutoff (see DeMinimisExemptions), taking into
account contemporaneous emissions increases and decreases at the same

source. An exception to this general rule ofnetting 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 ofthe Alabama Powerdecision. Sixty-two of sixty-three commenters endorsed the general netting approach to modification taken in theproposal, although several took Issue ith certain ofthe specific rules relating to the concept (see discussion below). Several commenters felt thatrequiring any significant net increase toundergo review wastoo strict on existing sources as compared with new sources, since new sources

can emit up to 100/250 tons peryear and still not be subject to review.The terms of the Actand the court decision preclude allowing such ageneral exemption for existing sources. Pursuant
toAlabamaPower, the Administrator is today promulgating the netting concept for determining thereview applicability ofchanges at existing major stationary

sources (consistent with eachprogram's definition ofsource). Thispromulgation affects regulations forPSD (40 CFR 52.21 and 40 CFR 51.24), nonattainment NSR (Emissions OffsetInterpretative Ruling and40 CFR 51.18(j), Review ofNew Stationary Sources and Modifications), and the construction restrictions under sections 110(a](2]W1] and 173(4), (40 CFR 52.24, Statutory Restriction onnew Stationary Sources). Allowance of netting for determining the applicability of40 CFR 52.24is a change from the proposal and is discussed below.

C.Pollutant Applicability

EPAproposed to require preconstruction review onlyif the increase inpotential to emitwould be for a pollutantwhich the source emits in major amounts. Once an increase in the majorpollutant triggered PSD review then review would be required forall regulated pullutants emitted ingreater than deminimisamounts as a result of the modification. Review would also be required if the emissions change itself

were equivalent to a majorstationary

source.

Onlylimited comment wasreceived

onEPA's proposal torequire review where major changes in emissions of minor pollutants orgreater than de minimischanges in emissions ofa major pollutant would occur.While a few
groups endorsed the September 5 proposal, one group argued that AlabamaPowerdid notrestrictPSD applicability tojust modifications involving thepollutant[s) which the

source emitsin major amounts. That
group pointed outthat section 111(a)(4) ofthe Act defines "modification!' as "any physical change in. or change in the method of operation of,a stationary 

### 52699

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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 previouslyemitted." (Emphasis added.)

.The Administrator agrees that requiring review for a net emissions increase in any pollutant subjectto regulation under the Actis consistent with theAlabamaPowerdecision. Consequently, EPA is promulgating a final rule thatrequires PSD preconstruction review for net emissions increases in greater than deminimis
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 5proposal with respect to pollutant applicability in nonattainment

areas. See Geographic and Pollutant Applicability.The source must be major for the nonattanent pollutant(s) and

mustmake a greater than deminuzmis emissions change in such a pollutant in order to trigger nonattainment review for thatpollutant(s). APSD review, however,would be triggered if agreater than deminimischange occurs at that major source for any regulated pollutant emitted by the source other than the nonattainment pollutant(s).

D.Nettingof ActualEmissions

EPA proposed on September 5that an activity be deemed amajor modification when the "potential to emit" ofthe 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 ofthe 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 maximumratedcapacity ofthe source and is represented by the most stringent than
any ofthe 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 SIPlimitation in the case ofdesignated nonattainment

areas included the emissions rate that

was assumed for the source in the attainment demonstration and in the schedule formaking reasonable further
progress.

Forty offorty-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" fromnew and existing sources. (Under the proposal, "allowable emissions" and physical incapability could have constrained the "potential to emit" ofexisting but not

new stationary sources.)

There are problems with using a baseline fornetting thatis based onthe 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 ifthe 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 theJune 1979 opinion inAlabama Power, the court held that the definition of"modification" in section 111(a)(4) governs the definition ofthat 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 theamountofany air pollutant emittedby such source or which results in the emissionsofany air pollutant not previously emitted." (Emphasis added.) Although the uiderl'ned wordsin the definition
appear torefer 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" ofa

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 ofterms to describe "modification." Instead ofusing "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 thisrule will occur when the increasesarede minimis,and, when the increasesare offsetby contemporaneous decreases of pollutants, as we discuss below * (Emphasis added.)

Following the lead ofthe court,EPA has also shifted the focus ofits regulatory definitions from "potential to emit" to "actual emissions." For both PSD and nonattainment purposes, a "majormodification" is now any significant "net emissions increase" at a major stationary source thatresults from certain changes. "Net emissions increase" is, in turn, roughly any net increase in "actual emissions." Not only

-arethose definitions consistent with the court's view ofsection 111(a)(4), but they also avoid the "paper offset" problem described above, thereby better serving PSD and nonattainment
purposes.
E.Contemporaneous Increasesand Decreases

UnderAlabamaPower,a modification is anynet increase in emissions that wouldresult form "contemporaneous" changes at a major stationary source, The court decision left to EPA the task of defining what changes should be considered "contemporaneous."

Anarrow interpretation ofthe 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 ofold

or obsolete equipment in order to preserve offset credit. Instead, EPA proposed a system that would grant credit for anypost-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 ofthe

- 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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### / Rules and Regulations

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 atmajor stationary sources. The majority of

commenters on the January 30Federal Register notice were from the industrial

sector and they urged EPAto 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 ofwhat is "contemporaneous," since a period ofcontemporaneity 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 setfive years, plus time for construction, as the period of contemporaneity for the purposes ofthe Part 52 PSD regulations, the Offset Ruling and the construction moratorium. Specifically, the definition of "net emissions increase" in each ofthose regulations provides that a decrease in "actual emissions" may be credited only ifit 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 ofthe Part 51 PSD and nonattainment regulations, EPA has established that each state may set the period ofcontemporaneity forits own NSR regulations. The state may not, however, set aperiod ofunreasonable

or undefined length.

F. Otherwise Creditable Increasesand 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 ofthe PSD and nonattainment definitions, a priorincrease or decrease is creditable only ifthe 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 ofan increment or ambient standard.The purpose ofthat rule is to "wipe the slate clean." Once the reviewing authority has evaluated a significant net increase inissuing 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 ofsulfur dioxide or particulate matter which

occurs before the baseline date is creditable only ifit would be considered in calculating how much ofan increment remains available. In formulating that definition, EPA sought to establish as close a correspondence as possible between what consumed increment and whatmust undergo NSR for PSD. Without that rule, some changes that wouldconsume increment could escape review because ofa 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 aprior increase that was also subsumed in the baseline concentration.

0. The Extentto WhichIncreasesand Decreasesare 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 ofthose definitions relating to increases are simple. An increase is creditable to the extent that the new level of "actual emissions" at the emissions unitin question exceeds the oldlevel. The oldlevel of"actual emissions" is thatwhich prevailedjust priorto the physical oroperational change which caused the increase. The

new level is that which prevailsjust after the change.

Therules relating to decreases that

are common to each ofthe definitions

aremore complex. First. a decrease is creditable only to the extent that "the oldlevel ofactual emissions or theold 

### levelof allowableemissions,whichever
is lower exceeds the new level ofactual emissions." (Emphasis added.) Since "allowable emissions" encompasses any federally enforceable requirement. including anywith a future compliance date, the underlined language prevents a company from taking credit for decreases that ithas had to make orwll have to make in the future. EPA concluded that to give credit fora decrease a company has hadto make in order to bring an emissions unitinto compliance wasunwise, since together with the five-year "contemporaneous" period it would create an incentive to stay out ofcompliance. Furthermore, it would be contrary to thepurposes ofthe Act and good sense toprovide whatis in essence a benefit forrecalcitrance. Similarly,EPA concluded that to give credit fora decrease a company will ultimately have tomake anyway in orderto 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 ofthe PSD andnonattainment
programs by interfering with efforts to preserve or achieve attainment.

Second, a decrease is creditable only
to the extent that itis "federally enforceable" from the momentthat actual construction begins on the physical or operational change which

causes the "actual emissions" increase in question. The purpose ofthat ruleis
to ensure that the decrease is real and that it remains in effect. The term "federally enforceable" is defined inthe regulations as any limitation or conditions which EPA can enforce, such

as any permit requirements established pursuantto 40 CFR52.21 orunder regulations approved under40 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 thisprovision, EPA seeks mainly to prevent an increase in emissions with considerable health and welfare significance from escaping review merely because ofa contemporaneous decrease in less harmful emissions. The basichealth and welfare protection purposes ofthe Act mandate thisprovision.

The definitions of'net emissions increase" in the nonattainment regulations contain a restriction on crediting decreases that thePSD regulations do not contain. Specifically, they provide that a permitting authority
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already accepted the decrease in satisfaction ofthe 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" ofdecreases in "actual emissions." Double crediting would allow air quality to deteriorate withoutpriorreview.

EPAis 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, EPAproposed
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 itselfwas minor as ofa certain date, are sufficient
to require the series ofchanges to be treated as a major stationary source. In addition, the Administratofrproposed to make the current policy consistent with theAlabamaPowerdecision 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). ForPSD review, the date from which emissions increases were to be aggregated was August7,1977, the date found in the 1978PSD regulations. The proposed December 21, 1976 date for each ofthe 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 ofindividually minor changes or one major change at a minor stationary sourcb had qualified forreview, 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 5that accumulation would also govern the review of individual de minimischanges at major stationary sources. Once a source had aggregated enough emissions to make it major, a subsequent emissions increase ofany 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 deminimisincrease.. ,Twenty ofthe twenty-three comments received did not favorretaining the accumulation concept, even with theaddition ofnetting. 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 ofanychangeand
not aseriesof changesat 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 oftrying to document and report de minimis emissions changes, were claimed tobe overwhelming, costly, and counterproductive.

Thdse concerns mighthave had merit ifthe proposed deminimis emission levels had notbeen raised in the final regulations and the accumulation ofde 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 deminimis orminor emissions changes, instead ofaccumulation. Commenters stressed that,in any event, accumulation ofdeminimis increases shouldrun 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 ifa 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 forproposing accumulation at minor sources was to prevent circumvention of the regulations bythe systematic construction ofcf.refully sized emissions units which only in the aggregate would triggerreview. 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 aPSD permitby constructing first one-halfofit 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 forthe construction ofnew 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 thatis 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 ofthe PSD and nonattainment regulations embodies that view.

Ingeneral, under the promulgation announced here a series ofminor changes at the same minor stationary

source will not be accumulated. On the otherhand, a series ofindividually do minimischanges at a major stationary

source would be accumulated within a contemporaneous time frame to see Ifa review would be required, This is reflected in the definitions of "net emissions increase" in the PSD and nonattainment regulations. Plainly, a series ofindividually deminimis increases in emissions in the aggregate deteriorate air quality significantly.

L Restrictionson Construction

EPA proposed that the netting of emissions changes would notbe 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 ofoffsets to

cease after June 30, 1979,in the absence of an approved Part Dplan, 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 AlabamaPower authorized only a netting approach, despite any programmatic sense that another

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approach might have. Several asserted that EPA's proposalwould discourage early cleanup and actually perpetuate the existing air quality problem.

The Administrator has reconsidered the interpretation that led to the proposal ofthe "increase only" approach for carrying out the growth restrictions and concluded that the AlabamaPowerdecision 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 (subjectto 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 ofthe capital cost forreplacing the source) was to be treated as ifit were a

new source for purposes ofNSR under both PSD and nonattainment rules. Under the proposal, a reconstructed major stationary source would be subject to review regardless ofany contemporaneous emissions reductions that would occur at the same source. TheAdministrator proposed this approach in accordance with Congressional intent to subjectnew construction in nonattainment areas to requirements such as meeting the lowest achievable emission rate (LAER). even though a replacement ofan older unit would result ina net reduction from previous emission levels (see123 CONG. REC. 13702, col.2 (daily ed. August 4,1977) (statement ofSenator Muskie)). Inthe agency's view nonattainment areas require very stringentNSR Procedures to overcome theinertia ofthe nonattainment problem. Having a reconstruction provision would promote maximum air quality improvements from an area's limited reduction capability byrequiring

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 forhaving reconstruction in nonattainment areas

was considerably stronger than that for
PSD inclusion, itwas believed that less confusion would resultwith a parallel application ofthe reconstruction rule.

All ten commenters on the reconstruction topic voiced general disapproval for the proposal. Eight of the tenfavored dropping the concept entirely from both sets ofregulations, with theremaining two requesting that its applicability be restricted. They advised that EPA should rely instead on the reconstruction provisions ofNSPS and NESHAP to ensure such construction would apply adequate control technology. Commenters complained thatreview criteria based solely on the replacement cost of equipment regardless ofair quality improvements make little sense for NSR rules charged with safeguarding air quality. Theyfurther argued that the added regulatory complexity inherent to the inclusion ofa reconstruction provision was not warranted and its addition to NSR would not be consistent with the "no net increase" exemption underAlabamaPower.

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 Istrue 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 onlylimited deterioration of existing air quality. On the other hand, the PSD objective ofmaximizing future use of the allowable increments through application ofbest available control technology (BACT) would not be strictly

met Nevertheless, the Administrator believes that the general PSD objective ofsafeguarding existing air quality from significant degradation will notbe undermined by deleting the requirement forreview ofreconstructions.

The proposal would have implemented reconstruction for PSD only on a plant wide basis. Thus, an entire plant would have to be reconstructed in orderfor itto be subjected to PSDreview as a reconstruction. Fewinstances of plantwide reconstruction are expected. The limited applicability underPSD 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 ofreconstruction from PSD would avoid some increment tracking problems; treatingreconstruction 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 qualitybenefits. As explained in the proposal. EPAbelieves that the reconstructionprovision within nonattainment NSRrules is consistent with stated Congressional intent and programmatic goals to getreasonable air quality improvements from each major construction activity.SinceAlabama Powerdid not strictly bind EPA in nonattainment concerns and sinc! the reconstruction concept was not expressly precluded, theAdministrator hasdetermined thatreconstruction is warranted innonattainment areas and is today promulgating this concept as proposed fornonattainment NSRrules.

Commenters also askedthat several exemptions be considered ifa reconstruction rule were promulgated. Among the exemptions suggested were: (1)currentNSPS exemptions for modifications, (2) Fuel-Use Act exemptions, (3) involuntary replacement ofdamaged equipment, and [4) voluntary fuel switches. The Administrator is notpromulgating any ofthese exemptions into the reconstruction provision. First,the
current NSPS exemptions and involuntary replacement ofdamaged equipment do not avoid applicability of NSPS under40 CFR 60.15 when a unit wouldhave been reconstructed. Therefore, itwould be inconsistent to establish such a concept under nonattainment NSR. In addition, 40CFR 60.15,which governs how the reconstruction rule will apply in the affected NSR programs (seee.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
appearwarranted at thistime.

K Exclusions

In September,EPA proposed to exclude "routinemaintenance, repair and replacement" from the category "physical change" which appeared in the proposed PSD andnonattainment definitions of "majormodification." At the same time EPAproposed to exclude the following events from the category "change in method ofoperation." unless previously limited by enforceable permit conditions: (1)a fuel switch due to an order under theEnergy Supply and Environmental Coordination Act of1974 ESECA) (orany superseding legislation)

or due to a natural gas curtailment plan under theFederal Power Act; (2] a voluntary switch to analternative fuel

or rawmaterial that the source prior to January 6,1975, was capable of accommodating; (3) a fuel switch due to

an order orrule under section 125 ofthe 

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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 ofa source.

EPA received few comments on the proposed exclusions. Certain

commenters expressed reservations about the legal and policy basis ofthe
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 ifthe source could accommodate the fuel ormaterial 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 ofthis, 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 of1974, 42 U.S.C. 3251 etseq., firmly supports the exclusion. In that statute, Congress expressed a strong interest in the development and use ofRDF. In addition, the exclusion has a sound policy basis, in view ofthe importance ofreducing 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 ofPSD and nonattainment NSR as it does for the purposes ofthe

new NSPS for certain electric utility "steam generating units." For the NSPS
definition ofthat 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 ofaccommodating the fuel ormaterial before January 6, 1975 (or December 21, 1976, for the Offset Ruling and 40 CFR 5118; orJuly 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 cutoffdate 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 sourcetype. Second, EPA disagrees that the counterpart governs whether the NSR exclusions mustignore permit conditions. The NSPS program does not involve assessments ofthe impact ofa source on air quality. In EPA's view, any switch to another fuel

orraw material that would distort a prior assessment ofa 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" forNSR purposes. Obviously, a second evaluation of the air quality impact ofthe switch would be unnecessary..

The comment relating to voluntary switches has prompted EPA to add one

more exclusion. Itwould exclude any increase in hours orrate of operation, as longas 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 EPAhas 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 tohave to get a NSR permit before it could lawfully change hours orrate of operation. Plainly, such a requirement would severely and unduly hamper the ability ofany company to take advantage offavorable market conditions. The emphasis ofthe 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 ofoperation that would disturb a prior assessment ofa source's environmental impact should have to undergo scrutiny.

Because ofthe absence ofany significant comments on the other four exclusions, EPA has promulgated them

as proposed.

L. Example of How theDefinitions 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, anew 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 ofbest available control technology, and assuming yearround continuous operation, the source

can emit 700 tons ofSO 2 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 ofPM 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 ofreview, modeling reveals the SO 2 increment will be violated in the source's area ofimpact 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 SO 2 per year.This reduction proves sufficient to eliminate thepredicted violation. The source Is issued aPSD permit that sets an SO2 emissions limitation of600 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 forthe 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 duringthe next two years.

In April 1985, another new source of SO2 (Source B)proposes to locate in the

area ofimpact ofSource 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 (seeIncrement Consumption), Source

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A's actual emissions should be modeled. Because Source Ahas 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 ofSource A, allowable emissions, in fact, differ from actual emissions. Assuming that thereviewing authority is aware of this difference as a result ofitsperiodic assessment or because Source B has presented this information in its application, Source A is modeled at its actual emissions rate representative ofnormal source operation during a two-year period preceding the date ofconcern. Inthis

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 oftime was atypical ofnormal source operation. For Source A, the two-year periodpreceding Source B's application can be considered representative ofnormal source operation. Source A's actual emissions during that period, on an average annual basis, are approximately 300 tpy. The modeling ofincrement consumption for Source B should assume that emissions
rate for Source A.

Unless SourceA's permit is revised at thispoint to reflect its actual emissions
rate of300 tpy, Source A could attempt to use the decrease in its actual emissions in the future to offset a future emissions increase ofits own. This would result in a large net increase in actual emissions for the area which couldviolate the applicable PSD increment. The potential problem of double counting ofemissions decreases is discussed in more detail in Increment Consumption.

Assume that in June 1987, Source A decides to modify its facility. Demand for its producthas increased and Source Awants to add a new emissions unit that will emit 60 tpySO2. In addition, Source A plans to increase the hours of operation at the units whichbegan production in March 1982, to result in an actual emissions increase of75 tpy at those units. Ifno 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 unitis a physical change. The increase in hours of operation is a change in themethod ofoperation, assuming that the reviewing authority revised Source A'spermit to reflectits actual emissions of300 tpy at the time Source A's actual emissions were used by Source B in modeling increment consumption.

IfSource 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 orboth modifications. Assume, for example, thatin April 1988, Source A applied additional control equipment and decreased actual SO emissions across the facility by 100 tpy. InJune 1987 Source A can use those decreases to offset itsproposed 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 useIts 100 tpy decrease to avoid PSD review forboth changes. Seventy-five tons ofthe decrease can be used to offset the increase inhours of operation and 25
tons ofthe decrease can offset 25 tons of the increase due to the new unit. Since the net emissions increase of35 tons is
not significant, it would notbe amajor 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 inFebruary 1989. The increases and decreases since April 1986 are all contemporaneous because they occurred within the same five-year period. Now,assume Source Arevises its permit to reflect only 50 tons ofthe 80-ton decrease inFebruary 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 ofthe 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 tpyin June 1987 and 150 tpy in November 1990, for a total increase of 285 tpy.The net emissions increase is 135 tpy, whichis significant for SO,. Source A mustget aPSD permit for the change leading to the 150 tpy increase in November 1990. However, ItIs not

"Under theprovisions of40 CFRPazt51 Appendix S,40 CFR51.18(J), and40 CRUX5.,4 tke emissions bceases atSource Awould probably be subjectto reviewas modlcatloas notwithtanding the contemporanmou decreae at thesourc. required to get aPSD permit forthe 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 itsApril 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 thenbe creditable. Theamount ofSource A's creditable decrease could also be reduced ifthe designation ofthe area where Source A is located were changed from attainment to nonattainment in March 195 and Source Abecame subject to a new, more stringent SIP requirement inMarch1988. If.for example, theSIP required Source Ato reduce emissions from 700 to 600 tpy by December 198, none ofthe 100 tpy decrease in April 1986would again be creditable.

X. Da Minixnis Exemptions

IntheAlabamaPowerdecision, the
court indicated that emissions from certain small modifications, and emissions ofcertain pollutants at new sources, could be exempted from some

or all PSD review requirements on the grounds that suchemissions would be demhzlims In other words, the Administratormay determine levels below which there is no practical value in conducting an extensive PSD review. The court also indicated that theAgency could establish exemptions based on administrative necessity (e.g., the inability ofreviewing authorities to provide the necessarywork 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 notedthat because ofthe
urgency associated with theproposal. the deminimisnumbers published were not supportedby extensive analysis, and that a more thorough analysis would be undertaken priorto promulgation.

Theproposal included two tables, one for defining significant emissions changes (intonsper year) and one for defining significant air quality changes (in micrograms percubic meter]. Values lower than thosein the proposed tables

were recommended asbeing deminmns. These tables, withrespect to criteria pollutants, were generally based on the "significance" levelspublished inthe preamble to the June 19,1978 PSD regulations (43FR 25398) and in the Offset Ruling (44 FR3283]. These significance levels in turnwere derived from theClass Iincrement values listed 52705

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in Part C ofTitle I ofthe Clean Air Act. For noncriteria pollutants, a similar approach was taken: the Agency extrapolated emissions rates from documented air qualityguideline 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 forthe applicatioh ofBACT for each pollutant whose emissions would exceed the value inTable 1. In addition, an air quality analysis to determine the impact ofthese pollutants

was required. Formodifications, any pollutant for which the source was major and forwhich there was a contemporaneous net increase equal to

or greater than the applicable value(s) in Table 1 would trigger PSD review ofthe modification; as in the case ofnew sources, BACT and air quality impact analyses were required for each pollutant whose net emissions increased by greater than a de minimisamount. Table 2 was proposed to provide an exemption from air quality impact analysis (includingmonitoring) forthose

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 fromreviews on the basis ofde minimis emissions would be required to

so notify the Administrator.The de minimisrequirements 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 thisissue. 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 ofair quality concentrations; others claimed that the low de minimislevels made the applicability ofthe review process inequitable for modifications i comparison to new sources. A consistent theme was that the proposed values would necessitate unproductive review in terms ofenvironmental 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), little 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 orthe amount of existing emissions. One commenter did suggest the use ofan equation that accounted for variability in stack height.

Only one commenter criticized the de minimislevels for being too high. This
commenter also believed that exemptions from review because of emissions less than the deminimisrate should notbe automatic, but should be allowed only after a case-by-case review ofsource impact. In addition, the
commenter stated that in areas where the increment is almost entirely consumed, sources shouldbe subject to PSD review for any increase in emissions.

A frequently addressed aspect was the perceived need to incorporate any deminimis values in the regulations, as opposed to leaving them as guidelines in thd preamble. Forty-eight offifty-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 minimisvalues.

There were several other meaningful
comments. Sixteen commenters recommended that deminimis coverage be limited to criteria pollutants. Eighteen
commenters contended that the needto accumulate de minimischanges was burdensome, environmentally
unnecessary, and should be dropped;

some questioned the legislative basis for this requirement.Several commenters cited the difficulty, if not impossibility, ofmonitoring for all regulated pollutants.These commenters were especially concerned regarding monitoring fornoncriteria 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 deminimis values.

-

Mindful ofthe comments received, the Administrator has undertaken a reassessment ofthe de minimisissue. This reassessment is decribed in two 'documents. One is areport entitled "Impact ofProposed and Alternative De MinimisLevels for Criteria Pollutants," EPA-450/2-80-072, and the otheris a staffpaper entitled "Approach to Developing DeMinimisValues 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 ofthe
reassessment involved the use of reasonable judgment. The task requires consideration ofan area in which not only is data limited, but criteria for decision making is almost non-existent, The first task ofthe reevaluation was to identify the basic objectives to be met in selecting de minimisvalues. 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 ofobtaining useful air quality information or obtaining greater emission reductions as

a result ofBACT analysis than would be expected from normal state permit or NSPS/NESHAP processing.

The proposed de minimisair quality values, which stemmed from the legislated Class Iincrements, caused

concern for two reasons, First, Ifa modification occurs near enough to a Class I area, almost any deminimis 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 ofClass I criteria on the eview process for Class IIand IMI

areas may be overly stringent. These

concerns were examined as part ofthe deminimisreassessment.

As a result of this examination, the Administrator has decided that higher deminimis 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 ormodification that would
construct close to a Class Iarea must be prepared to demonstrate for each regulated pollutant that it would emit that it would nothave a significant impact on such area (defined as one microgram per cubic meter ([tg/m3)or more, 24-hour average), even Ifthe proposed emissions increases are below the applicable deminimis threshold, The effect ofthis change is to require less review formany sources through higher de minimisvalues (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 ofprotecting Class I

HeinOnline -- 45 Fed. Reg. 52706 1980Federal Register / Vol. 45, No. 154 / Thursday, August 7, 1980 / Rules and Regulations

areas while limiting PSD review to projects with significant impact.

There were three basic alternatives available for specifying de minimis cutoffs-one based solelyon 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 deminimiscutoffs in
terms ofemissions rate for applicability, BACT and air quality analysis purposes, with no provisions for case-by-case demonstration ofa 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 wouldproduce a maximum impact less than the air quality concentrations listed forthat pollutant. An air quality concentration deminimislevel for eachpollutant for which measurement methods are available is included in the regulations only for the purpose ofproviding a possible exemption from monitoring requirements.

This approach has been adopted for several reasons. First, the Congress specified emissions rates, notprojected air qualityimpacts, in the Clean AirAct

as the criteria for determining which

sources aremajor and therefore subject
to PSD review.Moreover, the court, in .the AlabamaPowerdecision, continually refers to emissions rate rather than air quality concentration in its discussion ofthe de minimisissue. Therefore, it wouldbe 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 qualitylevel, it is the Administrator's opinion that thereview process would become excessively complex and greatly increase theresources 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 apermit or not and could lead to uneven application ofthe regulations from state to state. Third.the task ofestablishing deminimisair quality levels for noncriteria pollutants,with proper consideration ofthreshold levels and factors ofsafety (ifany), is very complex and could notbe done in the time available.

Finally, given the inclusion ofa de minimisexclusion 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 forpotential 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 itselfbe an air quality impact analysis.

In analyzing the basis for deminimis emissions rates, it was apparent that
two distinct classes ofpollutants were involved. The first consists ofthe 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 AirPollutants (NESHAP), both ofwhich arebased on a national emissions standard, rather than an air quality management approach. That Is, theregulations developed pursuant to both these legislative requirements generally specify emissions limitations and/or equipment performance standards as opposed to threshold air qualitylevels that must be achieved as for the criteria pollutants. Thus, it appeared reasonable to develop de minimiscutoffs from separate perspectives-to base criteria pollutant de minimisemissions cutoffs on air quality "design values" and tobase the noncriteria pollutant deminimisvalues

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 ofair quality "design values." Such designvalues were then converted to emission rates in accordance with EPA modeling procedures, 13using data on sources permitted under the PSD program. The latterprovided modeling parameters associated with sources of the type expected to be most affected by the de minimisrequirements. Ambient concentations representing percentages ofthe 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 forAir Quality Maintenance Planning andAnalysis. Volume 10 fRevised]: Procedures for Evaluating Air QualityImpact of New StationarySources. OAQPS No. 1.2-O=R. October L977. percentages ofthe primary standard for the other criteria pollutants were examined.

The primary standard was chosen as the basis for designvalues because, except forPM and SO, none ofthe criteria pollutants have a secondary standard that is different than the primary standard.The 24-hour standard instead ofthe annual standard wasused forPM and SOz since shortterm rather than the long term impact tends to be the controllingfactor in determining whether air quality increments are exceeded. Inaddition, levels higher than five percent ofthe primary standard

were not seriously considered because thatpercentage equates to approximately 35 percent oftheTSP Class I increment. TheAdministrator does notbelieve that a source which, due to its ownemissions, could potentially consume more than that
amount ofincrement shouldbe exempt from review.

Two factors had an important influence on the choice ofdembiis emissions levels within theresulting
range ofannual emissions rates.The primary one was the cumulative effect

on increment consumption ofmultiple

sources in an area eachmaking the maximum de

### miznims emissions increase (thereby goingunreviewed underPSD at the time ofthe change]. The other, and secondary one, was the projected consequence ofa given de minimislevel on administrative burden. To determine the cumulative effect on increment consumption expected from several sources, all making maximumde minimisincreases (a ratherunlikely event) in the same area, actual source distributions in the Dayton, Ohio, area

were used. Dayton was chosen because it is afairly representative industrialized community, and source data suitable for modeling was readily available. To check the impact ofthe variousde mirdmislevels on administrative burden, data frompast permitting experience were again used, inthis case to prepare curves showing thenumber ofsources expected to require review at various demigjnisemissions levels.A description ofthese analyses is found in the deminimisreport on criteria pollutants cited earlier.

As a result ofthereevaluation, the Administrator has decided to use four percent ofthe 24-hour primary standard

as a design value for both PM and SO2. These ambient levels correspond to emissions rates of25 tonsper year for PM and 40 tonsper year for SO 2 (except forlead, all emissions ratespredicted from the modeling for criteriapollutants

were rounded to the nearest five tons). 

### 52707

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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 AirAct to define major formany source categories. Therefore,

as proposed, the deminasemissions
rate for CO is established at100 tons per year.

Because the nitrogen dioxide standard is expressed only as an annual average,

a factor of twopercent was used to determine the designvalue. There were tworeasons for this decision. First, for a given level ofemissions, a predicted aniual concentration will be smaller than a short-termvalue. Conversely, therefore, alower percentage for the annual standard than fora shorterterm standard isindicated ifone is to maintain areasonably consistent rationale for emissions rates. Second, the emissions rate corresponding totwo percent of the standard is 40 tons per year, which is comparable to the rate established for SO. Both these pollutants are frequently emittedfrom the same source,in roughly equivalent amounts; for exampple, a typical power plant meeting the NSPS with low sulfur coal would emit about 1300tonsper year ofnitrogen oxides andabout 1500
tons per year of SO2.

Finally,models foruse in establishing

a relationship betweenindividualsource hydrocarbon [VOC) emissions and

ozone concentrations arenot-presently available. Thus, it was notpossible to model an emissions rate from an air quality designvalue. However, in view ofthe link between VOC andNO. emissions in the formation of ozone, the emissions rate for VOCwas also set at 40 tons per year.

It should be recognized that several

sources ormodifications can be allowed in the same area even though each might

consume up tofourpercent of the standard (about 16 percent ofthe Class II increment for S02 and about 28 percent forPM). Thisis because the

source specific concentration occurs in only a limited area (often one point) and the temporal and spatial conditions which lead tomaximum consumption by

one source are seldom the same for other sources thatmay be making similar deminimis changes. To reinforce this understanding, a-modeling analysis of37 sources in the Dayton area was conducted. Themaximum aggregate increment consumption projected to

occur as a result ofall majorsources each making a deminimds emissions ificrease equal to 40 tons per year (e.g., that for SO 2)wasless 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 theregulations. Although such sources would not get PSD permits, they do not go unreviewed. Most, ifnot all, willbe permitted under ongoing state NSR
programs pursuant to 40 CFR 51.18. Moreover, theircontribution to increment consumption willbe evaluated either by the next major

sourceundergoing PSD review, or during the periodic assessment ofsource growth. Nevertheless, in atypical situations there might still be concern with the deminimislevels causing accelerated increment consumption. This can be controlled by a state, upon taking theprogram, through the establishment of smallerde minimis levels.

To determine a proximity cutoffthat gives assurance ofprotection ofClass I

areas, amodeling analysis was performed toidentify the effect ofthe de minimis emissions levels on such areas using Volume 10 screening procedures. For the purpose ofthis analysis, the effect ofvarying stack height and meteorology, as well as the influence of terrain features, was considered. Significant impact was taken tobe one ig/m 3

, 24-hour average. The results indicate that sources locating more than 10kilometers from a Class I area would
not have such an impact as aresult of making demLimis changes. Therefore, theregulations promulgatedhhere require that anynew ormodified 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. Itmust be pointed outthat while the preceding responds to those commenters concerned about how tojudge whether a

source has "no impact" on a Class I
area, the analysis ofimpact on such an

area frommajor sources subject to PSD review must be done on a case-by-case basis. Further, such sources may be subject to an evaluation bythe appropriateFederal Land M~fanager as described in theregulations.

Noncriteria pollutant emissionsrates

were developed from the existing emission standards (NSPS and NESHAP). In general, afraction ofthe 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 amplemargin of safety to prevent unreasonable risk to the public health from hazardous pollutants, a small percentage ofthese standards would, for PSD purposes, prevent a significant change from escapingreview.

Levels generally representing 20 percent of a NSPS emissions standard and, because oftheir greater impact on health, tenpercent ofa NESHAP emissions standard, were evaluated. The air quality impacts ofthe resulting NSPS emissions rates were then calculated in amanner 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 offluorides, this check resulted in a reduction of the emissions rate originally indicated, No adjustment based on resultant effect

was made forthe 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, tenpercent ofsuch

a value is in the Administrator's judgment sufficiently stringent for use as

a deminimislevel.

A brief discussion ofthe rationale for eachnoncriteria pollutant emissions
rate isgiven below. For more information, see the staffpaper cited earlier.

Hazardous Pollutants (NESHAP: Asbestos-Reevaluation ofexisting data indicates that trying to establish a quantitative link between emissions and potential effects is notpossible. No level of exposure can be presumed de minimis.Therefore, a theoretical do minimis emissions rate ofzero was considered. Such a value is not practical, however, since changes ofany kind at sources using materials contaiing even traces ofasbestos could trigger review regardless ofthe amount of asbestos emitted. Therefore, an estimate-was made ofthe 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 theNESHAP,

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 thede minimis emissions
rate has been taken. The deminimis levelis based on a source category

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which has relatively small asbestos emissions, and which includes the majority ofasbestos emitting sourcesmanufacturing operations using asbestos. Therefore, the promulgated asbestos de minisrate is 0.007 TPY, based on tenpercent ofthe emissions estimated from asbestos manufacturing

sources.

Beryllium-The NESHAP emissions
rate is ten grams per day or 0.004 tons per year.Tenpercent ofthis yields a de minhisemission rate of0.0004 tonsper year.

Mercury-The NESHAP emissions
rate is 2300grams per day which equates to approximately one tonper year.Atten percent the promulgated de mkinidsemissions rate is 0.1 tonsper year.

Vinyl chloride-The NESHAP standard is expressed in parts per million ofthe effluent stream. Itwas 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 ofthis pollutant. Such plants, well controlled, emit about 10
tons per year.Based on this value, the promulgated demzinimis emissions rate is one tonper year.

NSPSPoHutants: FluPrides-The proposed de minimis emissions rate for fluorideswas extremely conservative, and was strongly criticized as being too low by several commenters. Upon reevaluation, the Administrator agrees with the
comments. A dem~inmis emissions rate based on the NSPS for aluminumplants is 30 tons per year-a well controlled, moderate sized, plant emits about 150
tons peryear offluorides. At a rate of30
tons per year, the predicted maximum 24-hour ambient concentration is approximately tenmicrograms per cubic
meter. That concentration is about ten timesthe levelthat has been observed

toproduce effects onvegetation (about

one microgram]. In order to limit the potential for such damage, a deminimis emissions rate ofthree tons per year, corresponding to a one microgram impact ispromulgated.

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 minkisvalue would thenbe 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 of0.5 tons per year would probably getreviewed under state new

source review and/orNSPS requirements.

Sulfuric Acid-A modelplant of130C
tons per day ofproduction was used. TheNSPS-emissions limit is 0.15 pound ofsulfuric acid perton ofproduct processed.Thus, the modelplant woulc emitabout 35 tons per year.This yielde

a deminimis emissions rate ofseven tons peryear using the 20percent 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 arebased on a representativ kraft pulp mill (900 tons ofpulp perday which at 20 percent yields a denzmniu emissions rate of10 tons per year. Similarly, using a model refinery of about 100long 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 forTRS and 9.4 tons per year for RS. Both values were rounded to 10 ton per year foradministrative purposes.)

Hydrogen Sulfide-Regulated under therefinery NSPS only. Specified as on thirtieth ofreduced 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 (nuisancerather thanhealth impact) the de minimisemissions rate for 

### 1-hS alone is set at ten tons peryear

Methyl Mercaptan, Dimethyl Sulfide, Dimethyl Disulfide, Carbon Disulfide, Carbonyl Sulflde-De minimis emissions rates were proposed for thesi compounds. However, none ofthem arc individually regulated under the Act. Rather, they are described as constituents ofeither TRS or RS. Therefore, since deminimisemissions
rates are promulgated for TRS andRS, individual deminimisfor the five compounds have been dropped.

The complete list of the emissions levels promulgated today, and where applicable, the deminimisair quality design values from which they are derived, is givenbelow 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 

### - TableA.-De Uknis Values-Coninued

Do WIiis; Design ai quaity

erasons rale Vafti W_

Lead 0.6 0.06 (3mront). Asbestos 0.007 Bayjkx, 0.0004 SUercY 0.1 V' -ode 1.0

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 designvalues are not included in theregulations. Demirdms

e emissions levels are included foruse in defining the term "significant." As inthe proposal, these values determine the need to reviewmodifications and determine which pollutants require
d BACT and air quality impact analyses for anynew source or modification requiring review. ie The Administrator doesnotbelieve that the promugated de mulmi slevels willproduce an extraordinary

s administrative burden onreviewing authorities. Based on thedata available, it is estimated that approximately 700

e more sources will be subject to PSD review annually, all for small modifications notheretofore reviewed.

The regulations also include alist of is air quality concentrations for each pollutant as criteria for exempting

sources from the monitoring requirements at the discretion ofthe reviewing authority. Table B summarizes the applicable air quality values by pollutant type.

e Table B.-MondodngExemption

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(VOCam ss lew 100 lons

tio satetaclory rnouloftg tdriquewraiable atWs MtneL

2 

### ~Several Table B values are somewhat

14.6 (244w different from the design air quality 1L4 (2"4vw. numbers shown in TableA. This is because the Table Bvalues are based on the current capability to provide a

### 52709

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### 1 Thursday, August 7, 1980 / Rules and Regulations

meaningful measurement ofthe pollutants. The values promulgated represent five times the lowest detectable concentration in ambient air that can be measured by the instruments available formonitoring each pollutant. The factor offive was chosen after reviewing test data for the various methods considered reasonably available. The decision was based in part on considerations ofinstrument 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 ofthis determination, see the memorandum from K.Rehme toW. Peters datedMay 20, 1980, whichis available in the rulemaking docket and from the address given forthe other reports:

There also are several changes in the

use ofTable B from the Table 2 proposed on September 5.First, a source deemed subject to review may claim the de minimisair 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 deminimisto 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 thesource impact area or its projected-impact in the affected area is de minimis.Inmost 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 ifmodeling predicts de minimisconditions, the exemption is not automatic butrather must be with the approval of the reviewing authority. For example, Table B values should notbe 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 ofadverse impact on a Class I area.'Questions of adverse impact on a Class Iarea are to be decided on a case-by-case basis with the objectives ofthe affecied Federal Land Manager in mind.

Some ofthe suggestions made in the
comments have not been adopted.For the reasons stated earlier, many ofthe de minimisvalueshave been increased. The automatic exemption on the basis of emiisions rate is retained, although the exemption from monitoringhas been made discretionary. The Administrator believes that a clearindication of applicability is necessary. Itis not reasonable to expect a potential applicant to have continuous knowledge ofthestatus ofincrement consumption and thus know when an application is required and when it.is not.Nor have the de minimisvalues been promulgated

as a guide only, with a screening review ofall 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 ofde minimisvalues. has notbeen dropped, because formost pollutants thepromulgated deminimis emissions levels are nowsubstantially higher than those proposed. The suggestion to allow sources with greater than deminimisemissions-to make a showing that their air quality impact

was deminimis 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 stacksmight avoid review andthe BACT requirement. Variations in actual impact because ofstack height can be afactor in the BACT review. Similarly, an equation considering stack height to determine the deminimis emissions rate cutoffhas notbeen promulgated. It is questionable whether such an equation could be developed for application nationwide that would be anyless judgmental thanthe fixed deminimis 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 tonsper year for the criteria pollutants, and to limit the demiinu's concept to only the criteria pollutants. In developing an approach to defining de " minimisforPSD purposes and consequently calculating the specific de minimisvalues under the guidance given within the Act andAlabama Power, emissions levels as high as 100
tons per year couldnot bejustified for
most criteria pollutants. Use ofthe de minimis concept with respect to only the criteria pollutants suggests that any increase (i.e., a zero deminimisvalue) would be significant fornoncriteria pollutants and must be reviewed. As mentioned earlier, a zero deminimisis
not practical-for this program. XII. Geographic and Pollutant Applicability

A. Background

AlabamaPower held that in determining the applicability ofPSD review,EPA must look to whether a

source locates in an area to which Part C ofthe 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 ifthe source locates in an area designated attainment or unclassifiable for apollutant 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 ifit would result in a significant net increase in the emissions ofany 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 ormodification that would significantly affect an area in another state designated as attainment

or unclassifiable for apollutant for which the source or modification would be major. See44 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 ofthe Actin AlabamaPower suggested that PSD review was not appropriate In such circumstances. EPA also noted that under its September 5proposal, a source

or modification would be exempt from PSD review ifit 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 PSDApplicability

After further evaluation ofits proposed approach, and consideration of the comments submitted In response to the September 5,1979, and January 30, 1980, notices (see discussion below), EPAhas decided tomodify the September 5proposal somewhat. Under today's action, except with respect to nonattainment pollutants, PSD review will apply to any source that emits any pollutant inmajor amounts, ifthe source would locate in an area designated

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attainment orunclassifiable for any criteria pollutant. If the source is subject
toPSD review,then PSD review willbe applied to eachpollutant the source emits in greater thandeminimis amounts, unless the area is designated

as nonattainment under section-107(d)(1) forthe particular pollutant. It shouldbe noted that in order for PSD review to apply to a source, the source need not bemajor fora pollutant for which an

area is designated attainment or unclassifiable; the sourceneed only emit
anypollutant inmajor amounts (i.e., the
amounts specified in section 169(1) of the Act) andbe located in an area designated attainment orunclassifiable for that or any otherpollutant. Therefore, sources that are major only for pollutantsfor which an area is designated nonattainment will notbe 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 mnimisamounts are nonattainment pollutants.

The applicability ofthe PSD regulations to modifications mirrors that fornew sources (seeModification). PSD review will apply to any modification to

a source which emits any pollutant subject toregulation under the Act in major amounts, ifthe modification would resultin a significantnet increase in the emissions ofanypollutant, and if the source islocated in an area designated attainment orunclassifiable for any criteria pollutant. PSD review would riot apply to any nonattainment pollutant. Unlike the approach proposed

on September 5. in order forPSDreview

to apply, the modification need not increase emissions of apollutant for which the source ismajor, norneed the

source bemajor for apollutant for which the area is designated attainment

orunclassifiable.

EPAbelieves that this approach is required byAlabama Powerand sections 165(a) and 169(1) ofthe 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 ofthe Act], may be constructed in any area to which this part applies unless" the conditions set
out insection 165(a) are met.Alabama Powerheld thatthis provision mustbe interpreted literally and that, in particular, EPA should focus on the locationofthe source, notits 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 inAlabamaPower 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. Seealsosections 161,162, and 167 ofthe Clean Air Act. But neither section 165

nor section 169(1) links the pollutant for which the source is major and the pollutant forwhich an area is designated attainment orunclassifiable. Read literally, section 165(a) applies PSD preconstruction review to all

sources that are major forany pollutant subject to regulation under the Act and locate in an area designated attainment

orunclassified for any pollutant.

Section 165(a) also does not link review ofa particular pollutant to the attainment status for thatpollutant or limit review topollutants 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 thatthe source is majorforsome pollutant and is located in a clean air

area for somepollutant. However, implicit inAlabamaPowerand the
structure ofthe Act is arecognition that where nonattainment pollutants are emitted inmajor amounts (i.e., where a

source emits in major amounts a pollutant for which the area in which the

source wouldlocate is designated nonattainment), Part D NSR rather than Part C PSD review should apply to these pollutants (seebelow). 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 afinal rule setting out the applicability ofnonattainment review of

new andmodified 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 bythe proposed major source ormajor modification. States still arerequired under section 10(a)(2)(D) toreview new

or modified sources locating outside of nonattainment areas, butcausing or contributing to a violation ofan ambient air quality standard; however,review need notmeet all ofthe nonattainment requirements under section 173 andthe offset policy.

The current regulations concerning pollutant applicabilityJn nonattainment

areas have notbeen changed. These rules are different from the PSD pollutant applicability rules. Major

sources are subject to review underthe Offset Ruling. section 173, and the construction moratorium onlyifthey emitin major amounts the pollutant(s) forwhich the area is designated nonattainment. In addition, onlythose nonattainment pollutants which the

source emits in major amounts are subject to review orthe construction moratorium. Similarly,only ifa modification increases emissions ofa pollutant forwhich the source is major and forwhich the area is designated nonattainment do nonattainment requirements apply. Thebasic rationale for theserestrictions is that section 110(a](2), which contains the construction moratorium, restricts the construction moratorium to pollutants for which the source is major andfor 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 toreview 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 ofa new plant with potential emissions of500 tpy PM and 50 tpy SO2 in an area designated nonattainment forboth PMand SO 2 would be subject to nonattainment requirements forP1 only, since the
sottrce is minorfor SO2. Similarly, modification ofthis plantresulting in a net increase in emissions of50 tpyin SO. would not be subject to nonattainment requirements. See also examples (3), (4), and (7).

D. CaseEvamples

Thefollowing additional examples illustrate how applicability ofPSD requirements will work undertoday's final regulations:

(1)Construction ofa new plant with potential emissions of500 tpy PMN and 50 tpy SO in an area designated attainment forboth PM and SO2 would be subject to PSD review forboth PM and SO.

(2) Construction ofthe same plant as in example (1), but in an area designated attainment forSO and nonattainment for PM.would be subject toPSD review 52M1

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for SO and nonattainment requirements forPM.

(3)Construction ofthe same plant as in example (1), but in an area designated attainment forPM and nonaltainment for 

### S02, would be subject toPSD review forPM only. PSD ieview wouldnot apply for SO2, since S02 is a nonattainment pollutant. 

### (4) Construction ofthe 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 forPM. This would be the case even ifthe S0 2 emissions would have an impact on a nearby Class Iarea for SO 2 or on an

area located in another state which is designated attainment orunclassifiable for PM.

(5)Modification to the plant in example (1), where the plant is located in an area designated attainment for both PM and SO 2 resulting in a 30 tpy
net increase in PM emissions, would be subject to PSD review forPM.

(6) Modification to the plantin example (1), where the plant is located in an area designated attainment for S02 and nonattainment forPM, resulting in increased emissions of50 tpy in SO2, would be subject to PSD review for SO2. (Itis a significant increase at a major

source located in an attainment area.) But ifthe modification only were to increase the emissions ofPM by 30 tpy, only nonattainment requirements would apply, since this is a modification ofa 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 of50 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 thatpollutant. PSD does not apply since the only change is
to a nonattainment pollutant. Instead, the general NSR under the SIPwould typically apply to thispollutant, and the

new emissions of SQ2 would be accommodated in the SIP's allowance for area and minor source growth.

(8) Construction ofa new plant with potential emissions of500 tpyhydrogen sulfide (H 2 S) in an area designated attainment forPM would be subject to PSD review forH 2S. If, in addition, the plant had potential emissions of50 tpy PM, PSD review would be applied to both H1S and PM.

(9) Construction of a new plant with potential emissions of500 tpy CO and 50 tpy H 2 S in an area designated nonattainment for CO and attainment for SO2 would be subject to PSD review for 142S and tononattainment requirements for CO.Ifthis plantwere latermodified, resulting in anet increase in emissions of30 tpy in H 2 S, PSD review would apply for H 2 S. (10) Construction ofanew plant with potential emissions of500 tpy H2S in an
area designated nonattainment for all criteria pollutants would notbe 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 orunclassifiable for any criteria pollutant.

E.Interstate Pollution

The September 5proposal, in
response to thepercuriam Alabama Powerdecision issued onJune 18, 1979, would have required PSD review for a major source locating ormodifying in a designated nonattainment area only if such construction would substantially impact a clean air area in another state. Inits final opinion issued on December 14,1979, the court reversed its earlier positionregarding the need for a PSD review ofall 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 inAlabama 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 ofthe nineteen comments received byEPA supported this decision. Three
commenters requested EPA to propose regulations to control interstate pollution pursuant to sections 110(a)(2)(E) and 161. EPAis 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, EPAproposed to delete the "36hour rule," which subjected a source ofvolatile organic compounds (VOC) to review, ifthe

source proposed construction within 36 hours pollutant travertime 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 (44FR 51940), EPA has decided to delete the 38 hourrule. The commenters' concerns are taken care of by the rules on geographic applicability fornonattainment areas, as set out at 45 FR 31307 (May13, 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 ofthe Offset Ruling or State plans adopted pursuant to section 110(a)(2)(D) ofthe Act shall apply until the area is redesiginated as nonattainment and a SIP revision has been approved. Ofcourse, 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 ofnonattainment requirements can be found at 45 FR 31307. Comments concerning interstate pollution and the geographic applicability ofVOC sources, are responded to above.

With regard toPSD 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 ofPSD 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 ofan 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 thelack ofNAAQS 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 correctlynoted, 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 thisAct" emitted by a source. Neither of these provisions is limited to criteria pollutants. See alsoAlabamaPower, 13 ERC at2045.

Two commenters urged that ifEPA decides.to regulate sources with minor but significant emissions ofcriteria pollutants and sources ofnoncriteria pollutants, it should do so only ifthere already exists a SIP emission limit for the "minor" pollutants oronly ifsection 111 or 112 CNSPS and NESHAP, respectively) has been made applicable after appropriate rulemaking to such

sources ofnoncriteria 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 nothave an applicable SIP emissions limit orNSPS orNESHAP" 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 thatAlabamaPower did notrestrict PSD applicability to modifications involving the pollutant(s) which the source emits in major
amounts. This commenter claimed that section 111(a) (4)ofthe Act defines "modfication" as "any physical change in, orchange in the method ofoperation ofa stationary source which increases the amount ofanyair pollutant emitted by such source or which results in the emission ofany airpollutant 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 forgreater than deminimisnet increases in the potential to emit ofa 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 innonattainment

areas should be as broad as thatin 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 ofsources emitting nonattainment pollutant(s) inmajor
amounts. In addition, sources emitting the nonattainment pollutants inminor
amounts are subject to the generalNSR contained in SIPs, and the impacts of such sources are accounted for in demonstrations ofreasonable further
progress and within the growth allowance provisions ofthe SIP. Thus, there isno need to apply PSD review to either type ofnonattainment 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 AlabamaPowerfor support.Neither AlabamaPowernor the Act support such an exemption.AlabamaPower heldthat, 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 andthe pollutant for which an area is designated attainment

or unclassifiable, EPA interprets section 165(a) as requiring PSD review for each

source that ismajor for some pollutant and locates in an area designated attainment orunclassifiable for that or any other pollutant and that this review
encompasses PSD pollutants whether or not emitted inmajor amounts.

Finally, some commenters perceived

an inconsistency inrequiring broader pollutant applicability forPSD review than fornonattainment review,yet using

a broader definition of"source" for nonattainment areas thanfor PSD areas. However, EPA's actions are consistent with the Act The scope ofPSD review applicability and the nonattainment definition ofsource are separate issues and there is no basis forrequiring that they be resolved in such a way as to in

somemanner equalize their effects.

XII. Baseline Concentration, Baseline Area, andBaseline Date

EPA's'June 1978PSD regulations generally define baseline concentration

as the ambient concentration level reflecting actual air qualitk as ofAugust 7,1977, including projected emissions of major sources commencing construction

ormodification before January 6,1975, but not in operation byAugust 7,1977, and excluding emissions from major

sources commencing construction (includingmodification) after January 6, 1975. (40CFR 51.24(b](11). 52.21(b(11) (1979).) Emissions from major source construction commencing afterJanuary 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 oftherelationship between baseline concentration and increment consumption is provided inIncrement Consumption.) Actual air quality includes emissions increases after the baseline date at existing sources whose emissions are counted inthe baseline concentration, ifthe increases are due to increased hours ofoperation or capacity utilization authorized underthe SIP and reasonably anticipated to occur on the baseline date. Thebaseline concentration also includes emissions increases allowed under a SIP relaxation pending final EPA approval

on the baseline date, ifthe allowable emissions under the revision were higher than the source's actual emissions on the baseline date.The June 1978 regulations established auniform baseline date ofAugust 7.1977 for all clean air areas. A definition ofbaseline

area was unnecessary since all PSD

areas were covered by the August7, 1977 baseline date.

TheAlabamaPower decision held that auniform baseline date wasnot authorized by section 169(4). Itrequired the baseline date tobe established at the time ofthe first application for a permit in an area subject toPSD requirements. EPA's regulations were consequently remanded for change.

TheAlabamaPowerdecision, 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 52713

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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 ofa 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).

Inits 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 ofthe firstcomplete application, after August 7, 1977, fora PSD permit to construct ormodify 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 anAir Quality Control Region (AQCR) designated as attainment or unclassifiable under section 107(d) of the Act.Under that definition, an application ofa major stationary source to construct in any part ofan AQCR designated as attainment or unclassifiable would triggerthe baseline date forboth SO and PM in all portions ofthe AQCR.

EPA's proposed definition ofbaseline

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 mightrdsult 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 ofbaseline concentration but asked for comment on

a particular problem specific to the Gulf Coast areas (see44 FR 57107, October 4, 1979 and discussion in Increment, Consumption). EPA's September 5 proposal specifically asked for comment

on two aspects ofitsproposal: (1) whether baseline area should be defined

as clean portions ofthe 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 ofthe AQCR in which the

source would locate or also in clean

areas ofany 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 (45FR 6802, January 30,1980). First,EPA statedit

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 orimpact, rather than all clean portions ofan AQCRin which a source would locate

orimpact. 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 ofimpact. Third,EPA indicatedit 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,ifthe 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 SO 2 and minor forPM would trigger a baseline date only for S02 or forboth 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 ofbaseline 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 ofbaseline concentration as the ambient concentration levels at the time ofthe firstpermit 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 frommajor 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 ofoperation or capacity utilization. Existing policy permitted this grandfathering, provided such Increases

were allowed under the SIPand reasonably anticipated to occur as ofthe baseline date.Today's policywhich 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. Ifa source

can demonstrate thatits operation after thebaseline date is more representative ofnormal source.operation thanIts operation preceding thebaseline date, the definition ofactual emissions allows thereviewing authority to use the more representative period to calculate the source's actual emissions contribution to thebaseline concentration. EPA thus believes that sufficient flexibility exists within the definition ofactual 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 SIPrelaxations, Under that policy, emissions allowed under SIP relaxations pending on August 7, 1977 are included In the baseline concentration ifthe 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 onAugust 7,1977 had allowed sources to increase emissions prior to final EPA approval ofthe 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, ifthe 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 thatEPA would establish

a uniform baseline date ofAugust 7. 1977, and those emissions increases after that date would consume increment.

EPA believes this exemption from increment consumption analyses is no longernecessary. States and sources have been on notice since June 1978 that emissions increases at existing sources due to SIPrelaxations must be evaluated forpossible increment consumption. No state or source has been uncertain as to the applicable baseline date, orbeen placed in an inequitable position as to other states or

sources.Therefore, today's regulations donot 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 planrelaxations received after the August 7, 1977 baseline date butbefore the June 19, 1978promulgation would consume the applicable increment but couldbe reviewed as part of the periodic
assessment rather than assessed individually forincrement consumption prior to plan approval.

EPA does not believe that a similar exception isrequired under today's regulations. EPA considered the exception necessary in June 1978 due to uncertainty as tohow 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 mustbe individually reviewed for increment consumption. Therefore, emissions increases due to plan relaxations received afterJune 19, 1978 must be individually evaluated forincrement consumption prior to EPA approval.

EPA is concerned, however, that the

new definition ofbaseline 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 ofsources, located in

an area where the baseline date has not been set, and would not be required to provide an increment consumption analysis. Ifprior 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
towithdraw the revision until it has conducted the necessary increment analysis. To prevent such burdensome delays, EPAis 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 mustbe evaluated as part ofa state's periodic
assessment Exemptions from individual analyses is analogous to the previous reliefprovided for sources subject to SIP relaxations submitted afterAugust 7, 1977,but before EPA's June 1978 promulgation.The exemption is therefore consistent with prior EPA policy.

B.BaselineArea.

In response to the September 5, 1979 proposal, fifty-three commenters felt that an AQCR definition ofbaseline

area wouldnot 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
toprovide just as much administrative relief,more growth options, and elimination ofthe problem ofa 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 ofsixteen commenters favored a source impact area definition ofbaseline area. One of the remaining
two commenters favored retention ofthe 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 oftwenty-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 thatbaseline

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

orgreater than 1 j.g/m3 on an annual basis. EPA has concluded that "an area subject to thispart." 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 AlabamaPower ruling. Referring to Congress' intent touse actual air quality data to establishbaseline concentrations, Judge Robinson states that "the task ofmonitoring existing ambientpollution levels in attainment

areas is assigned to the firstpermit applicant, who willprovide the information essential to calculation of thebaseline." (Emphasis added) 13 ERC 1993. 2022.The footnote which follows that sentence discussesa state's obligation under section 107(d](1) to submit area designations to EPA and the fact that section 107lists submitted to date bythe 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. Themajority ofcomments-also opposed defining baseline area asAQCR. Opposition was based on the view thatit 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 itlbcates in. One objective ofPSD is to track air quality changes in clean air areas. Ifamajor

source significantly affects any clean air

area in the same state the purposes of PSD will be served ifair quality deterioration from minor/area source growth and actual changes in baseline

source emissions are tracked from the time significant SO2 orPM emissions from a new ormodified major source impact a clean area. Such a policyis also consistent with the language of section 165(e)(1) ofthe Actwhich 52715

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## / Thursday, August 7, 1980 / Rules and Regulations

requires an air quality analysis ofthe 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 otherhand, establishment ofbaseline dates does not affect increment consumption across state borders by major source construction commencing afterJanuary 6, 1975.

EPAhas concluded thatbaseline

areas may be redefined by the states through arearedesignations. Section 107(d) specifically authorizes states to submit redesignations to the Administrator. Consequently, states may submit redefinitions ofthe boundaries ofattainment or unclassifiable areas at any time. IfEPA
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.canbe redesignated as a new attainment or unclassifiable area, even ifthe area

were previously part ofa 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 ofimpact ofany major. stationary source ormajormodification that established or would have established a baseline date forthe area proposed forredesignation orthat is otherwise requiredto obtain a PSD permit.In addition, area redbsignations

can be no smaller than the area of impact ofsuch 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 wilfbe assessed for its air quality effects from that date forward. Moreover, ifstates 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 orincrements could be violated in anearby area impacted by the source, but neither the state nor EPA would review the air quality impact.The

source could therefore affect airquality but thereviewing authority wouldbe

unaware ofthe deterioration. In addition

tojeopardizing air quality, "postage stamp" baseline areas would be difficult

to administer.

A source will be considered to impact

an area ifit has an impact of I g/m 3 or

more ofS02 orPM on an annual basis. This figure has been selected because it corresponds to levels ofsignificance used in previous Agency determinations for SO2 and PM. The annual average

was selected over the short term value due to its ease ofimplementation. That is, the shape of source impact areas is less complex and the 1 1g/m annual
average provides ample area coverage ofthe soutceimpact area.

The Administrator believes that defining baseline area as section 107

areas and allowing state redesignation will satisfymost of the commenters who objected to the proposed AQCR definition andfavored stateflexibility 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 thatis large relative to the impact area ofthe triggering source, the
state has the option ofredefining the

area to reflectmore accurately the area affected by the source.
C.BaselineDate

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 bythe court's interpretation of section 169(4], which requires a. , baseline concentration to be set on the date, after August 7,1977, "ofthe first application for a permit in an area subject to this part." See44 FR51941 col. 3. Consequently, the first complete PSD permit application by a major source to
construct in a baseline area, as thatterm is defined in §51.24(b)[15) and 52.21(b)(15), and explained above, will trigger abaseline date.

As discussed below, under PollutantSpecificBaseline,the regulation further requires that a baseline date be set for each pollutant emitted by the applicant

sourcein greater than deminimis amounts, ifincrements oir other equivalent measures under section 166 have been established for thepollutant. At present'increments are established. only for SO 2 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 othercriteria 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 ofthe first complete application In an area as the baseline date, eight commenters suggested that'the date be set at the time ofthe 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 oneyear after the effective date ofthe 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 ofmonitoring data,

as evidenced by the fact that the monitoringrequirement 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. Theneed to accept less data is reflected in the provision ofsection 169(4) that baseline concentrations be based on available, air quality data and on such monitoring data as the applicant Is required to submit. Theprovision suggests that calculationb ofbaseline and increment use may have to be made with limited data, ifavailable data, such

as that from the state agencies, Isnot appropriate. EPA interprets the requirements for monitoring data after August 7,1978, and not August 7, 1977,

as intended toprovide agrace period for

sources, rather than evidencing Intent to

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## / Rules and Regulations

postpone the establishment ofbaseline 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 aPSD 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 penalizingpermit applicants if a

source thatis 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 aPSD 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 ofapermit. This policy is consistent with the establishment ofa baseline concentration which is based

on the available monitoring data, typically thatgathered by the source applicant. The data to establish the baseline concentration would be available regardless ofthe eventual permit status ofthe baseline triggering application. Using source application also stabilizes the NSR permitting
process. Later applicants can determine whether a baseline date has been setin

an area by looking to whether a previous application has been filed, rather thanneeding to determine ifthe permit has been or will be issued.

Finally, the Administrator wishes to point out that itis the firstPSD application submitted under either40 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 maywell have been triggered. However, as mentioned above, states can minimize the impact of early baseline dates by redesignating the size ofthe baseline area which is affected by a previously established baseline date.

D. Pollutant-Specific Baseline

The Agency has concluded that a pollutant-specific baseline isconsistent with section 169(4) and the statutory
structure. Section 169(4) requires that a baseline concentration be established "with respect to apollutant * * in an

area subject to (Part C)." Therefore, by the terms ofthe statute, abaseline concentration is established for individual pollutants. Moreover, such concentrations are established for areas subject toPSD. Section 107(d), which provides that areas designated attainment orunclassifiable 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 arepollutant-specific, baseline concentrations mustbe 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 ofpollutant-specific baseline dates. Ifa major source ofNO. that would also emit SO, in significant

amounts and PM inless than significant

amounts submits a complete application fora 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 forSO but

notPM. If a later modification to the

source results in a significant net increase inPM 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 ofincrement consumption: (1) which

source emissions consume increment and (2) how to calculate the amount of increment consumed by those emissions. TheAlabamaPowerdecision addressed neither question. EPA, therefore, proposed in September to continue its

current approach. Under the approach, fourcategories ofsource emissions affect increment: (1) as provided by section 169(4), emissions from major

source construction (including modification) commencing afterJanuary 6,1975. This group includes emissions from sources issuedPSD 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 thebaseline date: and (41 minorand area source growth occurring after the baseline date. EPA's current regulations provide that the first and third category ofsources affect increment on thebasis ofemissions allowed underthe permit and emissions allowed under the SIP as revised, respectively. The second and fourth categories affectincrement on thebasis ofactual 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 GulfCoast problem (discussed below). EPA has concluded that increment consumption and expansion shouldbe 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 formajor source construction not subjectto sourcespecific permits orSIP requirements and forsources 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 willbe reviewed for increment consumption on thebasis ofthe revised policy.

A. Useof ActualFmissions

1. Rationale forUse ofActual Emissions. 52717

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- As discussed in theBaseline Concentration section, theAlabama Powerdecision supported EPA's requirements that baseline concentrations reflect actual air quality in an area. Increment consumption or expansion is directly related to baseline concentration. Anyemissions 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 AlabamaPowerdecision 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 GulfCoast 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 SIPrevision process.However, if increment calculations were based on allowable emissions, EPA believes increment violations wouldbe inappropriately predicted and proposed

source construction would be delayed or halted. In practice, EPA expects that few, ifany, sources will increasetheir emissions to allowable levels.

EPA believes itis unwise to restrict

source growth based only on emissions

a source is permitted to emitbut which, in many instances, have notbeen and

are not likely to ever be emitted. Increment calculations based on the best prediction ofactual emissions links PSD permitting more closely to actual air quality deterioration than calculations based on allowable "paper" emissions. In addition, use ofactual emissions for increment consumption is consistent with using an actual emissions baseline for defining a major modification and forcalculating emissions offset baselines.

2. Calculation ofIncrement Consumption Using Actual Emissions.

To determine howmuch increment remains available to apl'oposed major

source or modification, the source owner

or operator must analyze several types ofemissions changes as ofits 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 orwill

occur at sources which have submitted complete PSD applications as ofthirty days prior to the date that theproposed

source files its application; and (3) emissions changes reflected in SIP relaxations submitted after August 7, 1977, and pending as ofthirty days prior
to the date the source files its application, or emissions changes reflected in SIP relaxations whichhave 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 reviewprocess 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 itsrecent

- experience in reviewing state-NSR
programs fornonattainment areas. The
state submittals use periods ofbetween

one and three years to evaluate source emissions. InEPA'sjudgment, two years represents a reasonable period for assessing actual source operation, Since the framework fornonattainment 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 usedto calculate the emissions offset baseline for modifications in nonattainment areas.

The two-year period ofconcern shouldgenerally be the two years preceding the date as ofwhich increment consumption is being calculated, provided that the two-year period is representative ofnormal

source operation. The reviewing authorityhas discretion to use another two-year period, ifthe authority determines that some otherperiod of time ismore typical ofnormal 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 orother 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 underfederally 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 issuedin accordance with § 51,18(J) and other § 51.1aprograms, 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 ora state,ifreliable evidence is available which shows that actual emissions differ from the level established in the SIP orthe permit.

EPAbelievf.two factors support the presumption that source-specific requirements represent actual source emissions.First, since therequirements

are tailored to the design and operation ofthe 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 theresources 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 ormodfied units, since these units

are not yet operational at a normal level ofoperation. EPA, a state, or source remains free to rebut the presumptibn by demonstrating that the source-specific requirement is not representative of actual emissions.Ifthis occurs, however, EPAwould encourage states to revise the permits orthe 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 thanthe source emissions contributing to thebaseline concentration). Calculations will generally be made on the difference between the source emissions Included in the baseline concentration and the

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

emissions allowed under the revised SIP. Initialuse ofallowable 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 SIPrevisions

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, ifit is found that the

source has not increased its emissions
tolevels allowed in the SIP, estimates of increment usage should be revised to reflect actual source emissions. Ifthis

occurs, EPA would also encourage states to revise the emissions levels allowedin the SIP to represent the source's actual emissions.

Finally, therequired increment consumption analysis can be amended by the applicant afterthe PSD review
process has begun. For example, an applicant would normally revise its analysis to reflect increment made available by the withdrawal ofPSD applications previously considered in the applicant's calculation ofincrement consumption. In no event, however, will the source be required to take account ofemissions changes or changes due to pending PSD applications or SIP relaxations that could increase the
amount ofincrement consumed by other

sources.
B. ExclusionsFromIncrement Consumption

1. ExclusionsRequestedby Governors.

Section 163(c) authorizes four exclusions fromincrement consumption upon the request ofa governor. Exemptions are available forfederallyordered 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 ofthe federally-ordered switches and natural gas curtailment plans, the exclusion is limited to a maximum offive years after the effective date ofthe 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 itsJune 1978 regulations, however, EPA permitted governors to

use the exclusions during the ninemonthperiod between promulgation of the regulations and the date plan revisions wererequired to be submitted. See 

### §52.21(fl(3) (1979). As discussed in the preamble to the June 1978 regulations, EPA concluded that prohibiting use ofthe exclusions after the nine-month period would be an adequate incentive to states to submit PSD plans. See 43FR 28402 (Col. 1).

EPAhas decided to extend this policy
to today's regulations. Inview ofthe
many changes in the regulations resulting from the court's decision,
states whichhave 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 fromtoday 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'spromulgation, even ifno PSD plan has been submitted to or approved byEPA. Thereafter, the exclusions willbe unavailable unless the state has submitted an approvable PSD plan to EPA.

2. Temporary Emissions

EPA's June 1978regulations 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, EPAproposed to exempt from increment analyses the impacts on the PSD increments from the temporary emissions associated with the development ofan approved innovative

- control technology system, provided the

applicable ambient standards were not jeopardized. The regulations, however, did notprovide a comparable exemption for temporary emissions resulting from short-term SIPrelaxations.

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 Iareas or areas with known increment violations would be impacted.

Temporary SIPrelaxations are comparable to temporary emissions from new and modifiedmajor stationary

sources since both affect air quality for

a limitedperiod oftime.Therefore, the Administrator has decided that the existing policy ofexempting temporary emissions shouldbe extended to those associated with certain SIPrelaxations. A SIPrelaxation willbe eligible forsuch reliefifit meets the following five conditions. These conditions are intended to ensure that the emissions increase associated with the SIP relaxation willbe limitedin duration and thatno residual harm will occur to the environment as a result ofthe relaxation. (1) The SIPrevision allows

an emissions increase for a temporary period only.As stated in thepreamble
to the June 1978regulations, temporary emissions generally wouldlast no more than two years at one location, although emissions for alonger period oftime
maybe considered temporary ifan appropriate demonstration is made. See 43 FR 26394 col 2. (2) Therevision is nonrenewable. This conitionfis intended to prevent sources from indefinitely postponing compliance with emissions limitations necessary to preventPSD incrementviolations. (3) The temporary emissions willnot cause

or contribute to the violation ofany applicable NAAQS. (4) At the expiration ofthe temporary SIPrelaxation, the

source must be required to comply with

an emissions limitation that ensures the post-exemption emissions willbe equal
to orless than the emissions existing before the exemption was granted. (5) The temporary emissions from the revision do not impact any Class Iarea and any area where an increment is known to be violated. Restricting the exemption to sources impacting ClassH

orM areas conforms to Congress' intent
to provide maximum protection ofair qualityvalues in Class Iareas and
meets the commenter's concerns.

In addition to SIP relaxations for individual sources, the exemption will be available fortemporary emissions due to SIPrelaxations that apply to several sources, ifthe state provides adequate assurances thatno standards will beviolated.

C.IncrementEpansion Dueto Emissions Reductions Prior to the BaselineDate

EPA's policyunder theJune 1978 regulations is unclear as to whether emissions reductions prior to the 52719

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baseline date increase the amount of available incredients. Thepolicy 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 ofthe 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 ofold 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. Inview 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 ifthe 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 ofoperation ofa stationary

source resulting in a change in the actual emissions ofthe 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 ifit 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 infugitive emissions levels (to the extent quantifiable) at major stationary sources, resulting from. construction commenced since January 6,1975, will consume orexpand the available increment. This is true even if such changes o-ccurred prior to the baseline date.

D. Gulf CoastProblem.

In the September 5proposal, 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 ofa 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 earliestpossible baseline date. Assuming the baseline date is set in the area where these

sources are located, which EPAbelieves is.the case for most ofthe 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 ofthe violations until another source applied for a PSD permit or until a periodic assessment

was made..Ifpctual Increment violations

were discovered during the PSD review
process for the proposed source, the

source would not be permitted tobuild

ormodify until the violations were corrected. If violations were found during aperiodic 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 toprevent increment violations couldresult In increment violations which would delay, and possiblyprevent, 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'sJune 1978 policy required increment calculations to be based on emissions allowed under a permit or SIP and not

on actual source emissions. Ifa PSD

source applied to locate In an area and these GulfCoast 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 toreceiving construction approval. Future growth in the area could, therefore, be delayed or prevented. The problem posed by the second
group ofsources is reduced to some extentby 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 gasIs expected toremain less expensive and more available than oil, EPA believes few, ifany, 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 orNSR permits arenot predicted to

cause increment violations.

Ifan actual increment violation has occurred, EPA's June 1978 policy imposes aPSD permit moratorium until

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the violation is corrected. 43 FR 26401 (col.1), June 19, 1978. Thispolicy is continued in today's regulations. Therefore, if an increment violation is predicted to occurwithin the significant impact area ofa proposed source (1 1Lg/m3 on an annual average), aPSD permit cannotbe issued to the source, unless the state or source obtains sufficient emissions reductions to restore the increment. The issue ofhow
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 itsrevised policy ofusing 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 ormay include in the baseline concentration emissions increases due to fuel switches. Twelve ofthirteen 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 priorto the baseline date butnot occurring bythat 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 ofsome commenters that EPA consider increment consumption to

occur onlywhen actual emissions increase and not when the permit or SIP allowing the increase is approved. As a result ofEPA'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

orreceived 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 bepenalized ifthe utilities were unable to make the allowedincrease bythe 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'sJune 1978 policy ofincluding in the baseline concentration emissions allowed under SIP relaxations pending before EPA on the baseline date.

While appreciating the commenter's

concerns, EPAhas concluded thatno exemption fromincrement consumption analyses is appropriate in these cases. First, as discussed inBaseline 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 citedby 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 byphysical 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 amodification and would be subject to PSD review, including increment consumption analysis, in any

case.

Other commenters suggested that prospective application ofthe definitions ofmajor emitting facility and modification promulgated today would resolve the GulfCoast 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 notbe evaluated under the new definitions. These commenters argued that the Gulf Coast problem is due toincrement 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 ofthe definitions.

EPAbelieves 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 wouldhave consumed increment to the extent the fuel switches occurred. (See39 FR42510).

E.PotentLal Increment Violaflons

1.Inadequate SIP and Permit Provisions. While the use ofactual emissions to calculate increment consumption partially resolves theGulf 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 GulfCoast area, and in other states as well, have permits

or SIPrequirements that allow actual emissions increases ,.ithout subjecting the source to PSD review orthe SIP revision process. For example, sources may be allowed to burn fuels with higher sulfur contents, as in theGulf Coast area, or may have high allowable limits that would permit sources to relax existing pollution controls. Ifall sources in an area increased actual emissions to levels allowed under the SIP orpermits, EPA believes increment violations would occur. Because no PSD review or SIPrevision would be required,neither the statenor EPAwould know ofthe " violations until a PSD application was filed ora periodic assessment occurred. Growth would be halteduntil the violation was corrected.

Atpresent, increment violations due
to allowed but unreviewed emissions increases, and consequent construction delays, are only potentialproblems. EPA has therefore concluded that itis premature to promulgate remedial regulations toprevent such theoretical violations. EPA, however, encourages states tobe alert to emissions increases that affect the increment. EPA urges states to closelymonitor emissions increases from baseline sources and from new ormodified sources not subject toPSD review which affect the available increment. States should consider requiring sources toreport any emissions increases after thebaseline date, including increases reflecting changed operating conditions that will continue for an extended period oftime, perhaps sixmonths. States wouldthen learn ofincreases that consume increments and could take those increases into account inPSD 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 52721

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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 ifit finds that unreviewed emissions increases are causing or contributing to increment violations.

2. Double Counting ofEmissions Decreases.

EPA is concerned about another potential problem: double counting of emissions decreases. Theproblem could arise ifan 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 byincluding the emissions decrease inits modeling of actual emissions from Source A.Ifthe 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 ofthe 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 PSDreview for the increase. The use ofone emissions decrease to offset two emissions increases could lead to air quality deterioration, and possible increment violations thatwould require correction before more PSD permits could be issued.

While EPA believes double counting ofdecreases should not be permitted, it is not promulgating regulations today to address the problem. EPA is Uncertain how often, ifever, the problem will arise. Certainly it willbe 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 ofdecreases should not occur, It is uncertain what solution is equitable for affected

sources. In the absence of aformal' increment banking system, or other • provisions regulating increment allocation, the reviewing authority would have no basis for denying Source B use ofany available increment. This could result in hardship to Source A ifit deprives Source A ofuse ofits decrease

as an offset forfuture increases.

The issue ofdouble counting is part of the broader question ofincrement 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 ofemissions decreases. To this end, EPA solicits suggestions on how to prevent double counting ofdecreases and on methods ofincrement allocation and management.

XV. Best Available Control Technology

Section 165 ofthe Actprovides in part that any "major emitting facility" constructed in a PSD area must apply best available control technology (BACT) "for each pollutant subjectto regulation under thisAct emitted frpm,

or which results from, such facility." Section 169(3) ofthe Act defines BACT and specifically requires that it notbe 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 ofthe 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).

TheAlabamaPower decision held that the Actrequires thatBACT be applied to all pollutantsi subject to regulation under the Act, not only those forwhich the source is major, and that EPA iswithout authority to circumscribe the requirement in this manner. 13 ERC 1993,2046. The court did conclude, however, that EPAhas authority to set deminimisthresholds for BACT applicability, in order to alleviate economic and administrative burdens. Id.

Inresponse 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 deminimis amounts. Application ofBACT is also required, in ,thecase ofmajormodifications, for each regulated pollutant emitted forwhich there is a significant net emission increase (greater than de minimis amounts) at the source. TheBACT requirement applies to onlythe modified units and added units at the source whose construction results in a sourcewide significant net increasb in the emissions ofthe regulated pollutant. The

new BACT requirements apply only to the owner or operator ofa PSD source

ormodification whose application for a PSD permit was not complete before today's promulgation. (SeeTransition).

The deminimis emissions rates promulgated bj, the Administrator (see DeMinimisExemption) will apply to both BACT and LAER requirements. The Agency specifically solicited comments

on the need to specify de minimislevels for BACT, since the case-by-case BACT determinations would presumably take deminimislevels and such related issues as cost into account. Twenty-si

commenters addressed this Issue. Seventeen agreed in principle but generally considered theproposed levels toolow and requested special consideration forpollutants emitted In less than majoramounts. Eight ofnine dissenters preferred case-by-case BACT determinations, with no de minimis values.

The Administrator is implementing the proposed deminimis approach for determining BACT applicability, although several values have been increased. (SeeDeMinimis Exemptions.) This action should alleviate the concerns ofthose commenting about the need for BACT review ofthose pollutants emitted in small amounts. The Agency also solicited comments on the potential problem ofa source obtaining lenient BACT'determinations and later applying better controls to offset additional expansion plans. Twelve ofthirteen
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 ofincrement. The Administrator agrees that there
appears to be adequate protection against loose BACT determinations.

Each ofthe three comments that addressed a need tophase in the BACT requirement favored a sixmonth to one year grace period because ofthe complexity ofthe program. However, the Administrator believes that the caseby-case flexibility ofBACT determinations is sufficient to phase In these regulations. Moreover, sources have effectively had a one year notice, in that the originalAlabamaPower decision, published June 18, 1979, informed them ofthe new BACT requirements. (See Transition,)

An additional issue, regarding the pollutant applicability ofthe 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, ifan 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 BACTreview for anypollutant emitted from a source that was modified, regardless of whether the emissions ofthe pollutant increased. However, that was not the Agency's intent.

If a new unitwere added orifa modification were made to a unit at a
source, but there are contemporaneous decreases in emissions elsewhere at the

source, BACT is required only forthe pollutants for which there is a net significant plant-wide increase. For example, consider the addition ofa boiler whose emissions ofPM, SO,, and NO. each exceed deminimis levels. If,
at the same time, an emission unit of
S02 elsewhere atthe source were shut down, such that plant-wide emissions of S02 either do not increase orincrease by less than a de minimisamount. BACT is required for the new boiler only for PM and NO,. Ofcourse, BACT will
not be required ifthere is no significant plant-wide increase in emissions ofany pollutant. Similarly, if an existing emissions unit of a source were modified such that there is an emissions increase for one ormore pollutants, but
not all, BACT is required only for the pollutants forwhich there is both a net increase at the unit and a net significant plant-wide increase.

The above final policy governing the applicability ofBACTto 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 ofany pollutant towhich a standard applies shall be considered a modification within the meaning ofsection 111 ofthe Act.Upon modification, an existing facility shall become an affected facility foreach pollutantto which astandard appliesand forwhich thereis an increasein theemissionsrateto 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 forwhich 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 existingplant changed its operations in
ways thatproduced 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' ofa

source that do not produce a net increase in any pollutant." 13 ERC at 2043.

Second, BACT is required for net significant'increases ofanypollutant regulated under the Act.regardless of the category of source involved or the emissions standards generally applicable toit. Section 165(a)(4) ofthe Actrequires application ofBACT "for each pollutant subject toregulation 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

orNESHAP. 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

InAlabamaPower, the court held that section 165(e)(1) ofthe Actrequires 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, 1979percuriamopinion byproposing 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 orwould have to gather and analyze representative air monitoring dataresulting from ongoing monitoring activities.

As proposed, preconstruction monitoring data was required as part of the air quality analysis when: (1) the estimated ambient impact ofany new pollutant emissions from the stationary

source ormodification would be larger than the pollutant specific deminimis air quality concentration (TableB); or (2) the new emissions ornet emissions increases forthe pollutant would be major (100/250 tons per year). In addition to this rule, EPAproposed that

a case-by-case analysis of the proposed stationary source or modification which would impact on a Class Iarea be conducted even though the anticipated impact would fall below the deminimis level. Later, in October 1979, EPA provided further guidance for applying these requirements in the draft revision of theAmbientMonitoringGuidelines forPreventionof Significant Deterioration (PSD), OAQPS 1.2-096, U.S. EPA, Office ofAir Quality Planning and Standards and Office ofResearch 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 wouldbecome available, the Agency proposed to use mathematical modeling to estimate the air quality resulting from the emissions ofthese pollutants. Considering these limitations and the general lack ofexperience 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 ofthe 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 beresponsive to theAlabama Powerdecision which required EPA to

use monitors tohelp 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 toresult in air qualitylevels approaching an allowable increment or

a NAAQS could also be required to submit post-construction monitoring data. The rulepromulgated today is consistent with the proposal.

The Administrator believed that the required monitoring data wouldbe most productive in checking the accuracy of models and, in some cases, could be used to calculate increment consumption. If an applicant or other partybelieves that a modelrequired by EPAhad 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 ofmore sophisticated monitoring 52723

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techniques maypermit increased use of monitoring data to track'increment consumption and establish ambient baselines, as well as improve the level ofconfidence in modeling.

Lastly, EPA considered the approach needed to smoothly usher in the new • monitoring requirements. The September 5Federal Register indicated that EPA intended to require any additional monitoring requirements, as now necessary underAlabamaPower, 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 forprocuring and setting up the necessary monitoring equipment. (SeeTransition).

There was a large response toEPA's proposal and draft monitoring guidelines-nearly 100 public comments and over 800 requests for the guidance documentwere received. The comments indicated general agreement with EPA's interpretation ofthe court's preliminary opinion. But some concern was expressed over certain specific portions. of the proposal: (1) the limited *technology available tomonitor 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 ofthe 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 ananalysisbe 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 ofanalysis to be employed in the fulfillment ofits requirements." 13 ERC 1993,2019. This ruling gave EPA

more flexibility in defining'the minimum requirements for a proper analysib ofthe noncritera pollutants. "EPAmight * * * choose eithermonitoring ormodeling 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 maybe certain circumstances where monitoring
may bethe 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 ofconcern exist). In that case, EPA will require ambient monitoring for the noncriteria pollutants ifthere is an, acceptable method for the monitoring of thatpollutant. Presently, the Administrator has acceptable methods formeasuring ambient concentrations of: (1) all the criteria pollutants; (2)
mercury; (3)beryllium; (4)vinyl chloride; (5) fluorides; and (6) hydrogen sulfide. A list ofacceptable 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 formeasuring ambient levels ofasbestos and sulfuric acid mist.

AsEPA ghins more experience from the PSD program withrespect to noncriteria pollutant analysis and as the technology develops, theAdministrator will consider anincreased rolefor ambient monitoring within the required air quality analysis.

In addition to the exemptions givenin the deminimis section ofthis Federal Register publication,EPA may not always require a source owner to establish a monitoring network when the data would not validate orimprove the estimates made by the mathematical models. When the existing air pollution levels are conservatively estimated to be quite small and amonitoring network could notreliably measure the predicted background concentrations, EPA will

- generally notrequire thke source owner to generate preconstruction monitoring data. Also, ifthe source owner has submitted preconstruction data for the source-site, and the post-construction monitoring network couldnot measure a predicted degradation in the air quality, then EPA will generally notrequire the

source owner to collect further monitoring data. More guidance for meeting all the monitoring requirements is given in theAmbientMonitoring Guidelines for Pre vention of Significant Deterioration (PSD), EPA-450/4--80-012, July 1980, available from theMonitoring and Data Analysis Division, OAQPS, RMD-14), U.S. EPA, Research Triangle Park,N.C. 27711.

In the September 5,1979proposed regulations and the October 1979 draft of

AmbientMonitoringGuidelines for Preventionof SignificantDeterioration (PSD), EPA solicited comments on the

use ofrepresentative air quality data to satisfy PSD monitoring requirements. Thirty-nine comments were received on the various aspects ofthe use of representative air quality data. The major responses were as follows:' twenty-four commenters supported the

use ofexisting representative air quality data, especially for remote areas, Five
commenters wantedEPA to allow the

use ofbubbler data in lieu ofcontinuous 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 ofexisting representative air quality datawill be permitted In lieu ofmonitoring, provided that the data
meet the criteria in the above referenco guideline. (2) No bubbler data will be permitted because the data should be ofthe same quality as that obtained if the applicant monitored according to therequirements 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 ofthe minimum qluality assurance program needed for collecting air quality data are contained in thereferenced guideline.

Finally, the court held thatEPA had failed to provide concrete guidance to the states for designating when less than

one year ofmonitoring 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 ofthe 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 CFR51.180j) and 52.24, and Appendix S ofPart 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 (seeModification), or (2) the application ofairpollution controls not generally required by the applicable SIP

or 40 CFR 60 or 61, would lower the "potential to emit"ofthe source below the applicable threshold for permitting. The proposal wouldhave required the submittal ofcomprehensive data for bothnew and existing emissions units at the stationary source and all other information needed by the reviewing authority to determine ifthe 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 ofthe 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 ofoffsetting 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 ofthe Act or to determine if a

source owner is in violation ofa SIP requirement.

Fifty-nine comments were received on the notification requirements. Only two
comments completely supported the Agency proposal. Thirty-eight ofthe

commenters felt that the requirements

were unnecessary and not authorized by the Clean AirAct. 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 ofpost-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 riskpervasive construction delays ofproperly exempted sources. Many commenters felt that the administrative burden to both the reviewing agency and the

source outweighed itsbenefits. Seventeen commenters specifically stated that the extra cost to source

owners would remove the real incentives for early cleanup and would
act toperpetuate the operation ofolder 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 ofexisting state programs to accomplish this function, have caused EPA toreconsider theneed at this time for a preconstruction notification requirement. State comments and meetings with several state representatives in Atlanta 

### (seeDocket
account of 11I-D-4) indicate that all
states currently learn of allproposed 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 ofproposed emission increases through notification letters filed by the source pursuant to a formal applicability determination.

Many states do notroutinely require

sources to record emission decreases, especially when such would occur well in advance ofrelated emission increases. While apreconstruction notice would be desirable to document these decreases, the requirements for contemporaneous emission reduction credit (seeModification) are sufficient
tofulfill this need.That is, emission reductions, in order to be creditable in offsetting any contemporaneous increase at the same stationary source, mustbe enforceable before the associated unit(s)with the emissions increase(s) commence construction. Such reductions, to be enforceable, must generally be made partof an enforceable operating orconstruction permit orbe 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 fora "wait-and-see" approach in order to alleviate the concerns ofthe majority of the commenters who feltthe 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 intotheir existing permitprograms. The notification requirements in each state willbe different, depending upon whether the state has an emission banking system and howitoperates, the type ofemission 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 herebyput on notice for the following: (1)Sufficient records regarding the details ofcontemporaneous emission increases and decreases or applicable sourcb determinations of"potentialto emit" should be maintained so as to verify thatnopermit was required should the Administrator so require under section 114; (2) Ifexperience in implementing the "nonet increase" provisions ofPSD applicability indicates that a more comprehensive notification system is required, theAdministrator will promulgate an amendment to PSD and nonattainment regulations similar to the deleted provisions ofthe September 5proposal: and (3)Any source which improperly avoids review and

commences construction willbe considered in violation ofthe applicable SIP and will be retroactivelyreviewed under the applicable NSRregulation.

XVII. PSD SIP Revisions

Comments have been solicited on three aspects ofthe development of acceptable PSD plansby states. The issues are: (1) the authority ofstates to submit different but equally effective PSD programs, (2) state flexibility in defining baseline areas, and (3) state flexibility in allowing monitoring exemptions. 52725

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A. EquivalentStatePrograms. 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 ofPSD programs, it does notprohibit
states from using, in other areas, approaches equivalent to those ofthe federal regulations in order tomeet the statutory objectives. Accordingly, the Administrator proposed on September 5, 1979 that states be given some flexibility in preparingPSD plans. The Administrator requested comment on such an approach and suggested portions ofthe 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 "systemto capture as many emissions as would the 40 CFR 51.24 regulations.

All forty-nine comments on this topic strongly endorsed the general approach ofgiving 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 ofminormodifications andexempted sources. Another
commenter asserted thatEPA could hold the states responsible only for plans that addressed minimalrequirements, such

as maximum increment consumption.

After consideration of the comments. the Administrator has decided to treat PSD SIPrevisions generally in the

manner proposed. This means that
states willbe permitted to meet the following requirements of40 CFR 51.24 with different but equivalent regulations, or implement the federal regulations with considerable discretion:

a. Baseline area. b. Type and amount of dataneeded formonitoringpurposes.

c. Temporary exclusions from increment consumption.

d. Defining "contemporaneous" as a reasonable period that may be greater

or shorter than 5 years.

e.Banking ofemissions reductions for future offsets.

£ Source information and analysis required ofthe applicant.

g. Public participation after providing the opportunityfor public hearing.

h. Alternatives tofirst-come-firstserved permit processing. State PSD programs mustfollow the federal regulations in other matters. This includes, but is notlimited to the following:

a.Maximum allowable increments. b. Modeling techniques.

c. Class I area protection. d.Notice to the Administrator orthe applicable Federal Land Manager for prospective permit actions.

e.New (grass roots)major stationary

source applicability.

f. NSPS,NESHAP minimum -requirementsfor BACT determinations.

g. Definitions generally as contained in 40 CFR 51.24(b). (State definitions need notbe verbatim translations, but
must have the same effect).

The Agency isnot 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 isnot feasible at thistime for reasons detailed elsewhere (seeFugitive 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 ofstate flexibility in exempting additional types ofnew andmodified sources, EPA believes that adequate exemptions have been provided in today's regulations and no further ones are authorized under the Act. TheAdministrator 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 ofmajor modification and thereby affects the number ofPSD 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, itshould be considered by states in developing PSD SIPs in conjunction with their deliberations on alternatives to firstcome-first-served permitting and emission offsetbanking. The Administrator believes these issues are related t5 the state's inherent flexibility underthe Act to manage increment consumption. B. Baseline Area
This aspect ofthe 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 ofallowing states to define "area" as anyportionof 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 ofallowing states to have flexibility in defining baseline

area were in favor ofthat approach. Many were more specific, suggesting that 107 designated areas or source impact areas be used.

TheAdministrator has decided to allow flexibility to states, not by accepting alternative definitions In SIPs, butby defining baseline area in such

manner as to allow flexibility. This' change in definition arises from a revised legal interpretation ofwhat meaning "area" may be given under the Act. (seeBaseline Concentration). Basaline area isnow defined as all

areas (and every parttherein)within the
state that are designated attainment or unclassified under section 107(d)(1) (D)

or (E) ofthe Actin which the source establishing the baseline date would locate or would have an air quality impact equal to or greater than 1ug/ms (annual average) for thepollutant (SO 2 and/or TSP) forwhich the baseline date is established. Flexibility is inherent in
state authority to redesignate areas under section 107.Thus, large tracts of landbelonging to one clean or unclassified PSD area can laterbe divided into several smaller PSD baseline areas with potentially different baseline dates. Other than the limitations associated with processing 107 area redesignations as SIPrevisions,. EPA requires that area redesignations under section 107 cannot intersect orbe smaller than the area ofimpact ofany mdjor stationary source ormajor modification which establishes a baseline date oris subject to PSD and would be constructed inthe 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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## 1 Rules and Regulations

This approach allows the flexibility requested by the commenters, but precludes "postage-stamp" designations designed to trigger baseline only in the immediate vicinity ofthe 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 anyinclination to postpone baseline dates through area redesignations against increased difficulties associated with tracking increment consumption. %

C.StateMonitoring Exemption AlabamaPowerremanded to EPA that portion ofthe 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 notprovided adequate guidance to the states formaking this determination. 13 ERC 1993, 2020.

The proposal contained concrete guidance foruse by states in determining ifless than one year of monitoring data is sufficient. That guidance provided that as little as four months ofmonitoring data forthe criteria pollutants was acceptable ifthe applicant demonstrated thatthe maximum pollutant concentrations would occur withinthat time.

Fourteen comments were received on various aspects ofthisproposal. Thirteen commenters supported the flexibility ofrequiring less than one year ofmonitoring data under specified circumstances. Two commenters addressed ozone monitoring requirements where there were more thanfour months with average daily maximum temperatures greater than 20°*C P°F).

TheAdministrator has decided to promulgate the proposed regulations except for the following-

(1) Less than one year ofmonitoring data will be permitted for all regulated pollutants, rather than forjust the criteria pollutants. However, it must be demonstrated through historical data or dispersion models that the data for such shorter periods oftime, butnot less than fourmonths, willbe obtained during a time period when maximum air quality levels can be expected.

, (2) Guidance for monitoring ozone during the warmest fourmonths ofthe
year has been deleted. Monitoring for

ozone, aswell 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 fourmonths ofthe 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 ofthe 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 forreviewing sources that wish to utilize innovative control technologies. The new paragraph sets
out criteria tobe used by the Administrator in determining whether a proposed control technology is innovative, in addition to establishing specific provisions forimplementing the BACT and modeling requirements.

All ofthe 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 ofthe added flexibility in specifying BACT for innovative technologiesrit was concerned that Class I areas mightbe compromised ifincrement violations

were allowed to occur during the period oftesting. We share this concern ofthe environmental group and are today promulgating aregulation which ensures fullprotection ofClass I areas.

Today's amendments provide that for

a source whose technology has been designated as "innovative" bythe Administrator, the BACT requirement should insure the installation of the innovative system and the adoption ofa compliance schedule formeeting a final emission limitation. This final emission limitation must at leastrepresent the BACT level that would have been initially defined under § 52.210], assuming the use ofproven state-of-theart technology. The compliance schedule
may extend no more than7 years after permit issuance or4 years after startup ofthe source. The regulations also provide that the Administrator may withdraw his approval ifa 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 thenbe given a period ofno more than 3 years to come into compliance with the BACT level determined with theuse ofthe demonstrated system ofcontrol

The September 5Federal Register proposed that with the consent of the
governor an "innovative technology" source could conductthe increment impact analysis using the final emission limitation specified in thepermit, provided thatno interference with applicable NAAQS would result during the interimperiod. EPA reasoned that
any increased level ofemissions which might occur during the interimperiod would be temporary and would not significantly impact the increments. However, oneofthe commenters pointed out that Class I areas require protection evenfrom temporary violations. We agree with the concerns ofthis 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 ifthere is

no impact on any Class I area orany

area with a known increment violation. As in the proposal, thefinal rules requiring modeling for thepurpose of evaluating the impact onNAAQS must take into account interim emission projections. Under no condition may a

source be approved ifit would cause a violation ofthe NAAQS, even a temporary violation.

B.AMod1fiedPermits

In the September 5,1979 Federal Register, EPA proposed to add a new paragraph (t) entitled "Modified Permits." Thenew paragraph provided a simplified approval procedure for

sources thatmake minor changes in design capacity orin the nature of
process equipment between the time they obtain a PSD permit andthe time they complete construction. Italso required prior approval,through permit modifications, ofincreases inhours of operation.

The comments on this section were mixed. Some commenters felt that the

new paragraph wasredundant and superfluous, while others generally approved ofitbut askedfor clarification. Upon further consideration, theAgency believes that there is a need to distinguish between situations in which permits would be changed forprimarily administrative

reasons, such as a change to reflect a revised construction schedule, and situations in which thepermit change involves a significant increase in emissions. Inthe latter case a new permit must be issued: in the former, however, an abbreviated procedure

- involving modification ofthepermit might bepreferable. There arenumerous issues to be considered inimplementing 

## 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 forthat

reason the Agency has decided thatit 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. NonprofitInstitutions

EPAproposed on September 5 to exempt modifications ofnonprofit institutions from PSD review requirements as is already done for new construction ofthis type. This would

mean that, upon written request by the governor.ofthe state, a PSD permit would notbe required of amajor 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 ormodified 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 forpreviously 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 ifit wouldhave temporary location and temporary emissions. Existing EPA policy defines temporary emissions as emissions from a stationary source that wouldbe 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 ofsecondary emissions found in the offset ruling (44 FR 3274) to the PSD regulations. See 43 FR 26403. Secondary emissions would mean emissions fromnew or existings sources which occur as a result of the construction and/or operation ofa major source or major modification, but do not necessarily come from the source. itself.Secondary emissions would include:

(a] emissions from ships ortrains 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, 1979proposal and the finalAlabama Poweropinion regarding EPA's
treatment ofsecondary emissions was small. Generally the commenters favored the exclusion ofsecondary 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 ofredundant reviews was highlighted by several commenters. The Administrator, in weighing these comments, has decided to promulgate theregulations 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 AirAct clearly calls for a detailed and extensive air quality impact assessment. For instance, each permit application mustinclude impacts from the growth projectdd in the area that would occuras a result ofthe proposed source's construction. See section 165(a)(6). Also, once thebaseline -date is set,'such emissions would

consume the maximum allowable increments, so eachpermit decision
must give consideration to all the possible ramifications ofallowing a

source ormodification to construct. See section 165(a](3) ("cause orcontribute'. 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. See40 CFR Part 51, Appendix S, Sections IV.C. and D. To aid the states in developing their NSR regulations fornonattainment areas, or in revising those regulations, EPA has decided to promulgate those rules and "guidance in §51.180)(3). 14The 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) ofthe 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 SIPrevisions 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 40n January 16, 1979, EPA solicited comments on' certain aspects ofthe Offset Ruling, none of which directly concerned the matters published today, EPAwill respond to those comments after today's promulgation.

1 5For example, suppose a source's allowable emissions are 1,000 tpy,and Its actual emissions are 500 tpy.Now suppose Itwants to add a new emissions unit, thereby adding100 tpy, and the SIP requires a 100tpy reduction for RFP. The source might achieve both objectives by decreasing Its total allowable emissions to000 tpy.iLe., it adds the 100 tpy for the new facility, butmakes other reductions inallowable emissions of200 tpy,This Is adequate Ifthe RFP demonstration relies upon allowable emissions, since the source started at 1,000 typ andnow is at 900 tpy.But ifRFP Is based

on actual emissions, then there is a lossof 100 tpy, because RFP assumed 500 ipy and now the source emits 600 tpy.

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## 1 Rules and Regulations

allowable emissions ofthe source. where the SIPrelies 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.EconomicImpact Assessment

In the September 5proposal, it was stated that the Agency would prepare

an economic impact assessment ofthe proposed changes after the final court opinion was issued, which took place on December 14,1979. The Agency further indicated that itwould make thereport available forpublic comment prior to promulgation, and that anyresulting

comments would be taken into account in the promulgated regulations.

Although the results ofthe impact
assessment released todayhave been considered in developing the regulations, primarily for understanding de mihimiseffects, it has notbeen possible to complete the assessment in time to get comments prior to promulgation. In fact, because ofthe inherent complexity oftheprogram, 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 documentmade available today presents as assessment ofthe overall impact ofthe proposed regulations with respect to several ofthe majorissues or changes in-the proposed regulations. The assessment does not attempt to quantify the impact ofevery issue nor does it attempt to assess the overall impact associated with the implementation ofthe PSD regulations in general. Itis designed toprovide a relative assessment ofthe impact of the September 5proposal versus the June 1978 regulations in terms ofthe: sources to be affected, their associated emissions, major requirements which
must be met (orwhich are no longer required to be met), and estimated cost savings for sources no longer subject to PSD review as a result ofthe proposed regulations. In short, the analysis provides an estimate ofdifferential 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 deminimis values. Since thesevalues have a major impact on expected cost, a projection of the impact ofthe finalregulations was also made.

It is estimated that there willbe a savings as a result ofthe promulgation for sources which would have been subjectto the old regulations butwhich would notbe 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 ofthose which will receive permits in the future.

Although there is an overall savings for sources which would notlonger 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 peryear but which have controlled emissions greater than deminimis. Since these sources are not now subject to PSD review, they would be required toprepare a PSD permit, conduct the necessary air quality impact assessments, incur some delays in construction as a result ofundergoing PSD review in addition to state NSR review, and install BACTInstead ofjust meeting the emissions limits required by the State Implementation Plan orNew Source Performance Standards as applicable. As a result ofthe additional

cost incurred because ofmore extensive review and by the sources not currently subject to PSD, the overall effect ofthe promulgated regulations (including the savings described above) is an increase ofapproximately $12.4 to 24.5 million
per year.

The complete analysis is contained in the document entitled Regulatory ImpactAssessment fortheSeptember5, 1979Proposed Prevention of

Significant Deterioration Regulations,EPA-450/2- 80-073. This document is available for inspection in therulemaking docket. Copies may be obtained bywriting 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, EPArecently promulgated regulations, known as the Consolidated Permit Regulations, which

now generally govern the processing of applications forpermits under Part 52 PSD regulations. Among the regulatory amendments announced here are three minorchanges to the Consolidated Permit Regulation. First,EPAhas deleted the substantive language of40 CFR 124.3(b) and put "Reserved" inits place. Section 124.3(b) related primarily
to the 50-ton exemptions ofthe 1978 Part 52 regulations. With the deletion of those exemptions, § 124.3(b) would have become superfluous. Second. EPA has conformed 40CFR 124.5(g)(2) to the numbering inthe new Part 52 regulations. Finally, the agency has corrected 40 CFR 124.42(b) by substituting "submitted" for "requested."

FinalAction

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) ofthe Act, judicial review may be sought only in the United States Court ofAppeals for the District ofColumbia CircuiL Petitions forjudicial review mustbe filed on orbefore October 6,1980. (Sections 1010b[11. 110,160-169,171-178, and 301(a) ofthe CleanAir Act as amended (42
U.S.C. 7401*b](1). 7410.7470-7479.7501-7508, and781(a)); Section 129(a) ofthe CleanAir Act Amendments of1977 (Pub.L No.9-9- 91 

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

Dated.July 31.i9g. Douglas K. Coatle, Administrator.

State Plans ForNew Source Review For PSD Purposes

1. Section 51.24 ofTitle 40 ofthe Code ofFederal Regulations is amended by deleting paragraph [k)and redesignating paragraphs (1) through(s) as (k)through (r)andthen byrevising paragraphs (a](2), [b). (If,(i}-{k. (im) and (r)and adding new paragraphs (a)(6) and (s) to readas follows:

151.24 Prevention of significant deterioration of 

### air quality.

(a)(1)PlanRequirements

(2)PlanRevisions.Ifa State Implementation Plan revision would result in increased air quality deterioration over anybaseline concentration, theplan revision shall include a demonstration thatitwillnot

cause or contribute to a violationofthe applicable increment(s). Ifa plan revision proposing less restrictive requirements was submitted after August 7. 1977 butonor before any applicable baseline date andwas pending actionby 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 planrevision. Instead,the
assessment described in paragraph 52729

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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 ofan 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 ofsignificant 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 ofits approval and may operate prospectively.

(b)Definitions. All state plans shall

use the following definitions for the
purposes ofthis section. Deviations from the following wording will be approved only if the state specifically demonstrates that the submitted definition ismore stringent, or at least

as stringent, in all respects as the corresponding definitions below:

(1)(i) "Major stationary source"

means:

(a)Any ofthe following stationary

sources of air pollutants which emits, or has the potential to'emit, 100 tons per year ormore ofany pollutant subjectto regulation under the Act: Fossil fuelfired steam electric plants ofmore 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 steelmill plants, primary aluminum ore reduction plants, primary copper smelters, municipal incinerators capable ofcharging more than 250 tons ofrefuseper 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), primarylead 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) ofthis section, any stationary

source which emits, orhas the potential
to emit, 250 tons per year or more ofany 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 ifthe change would constitute a major stationary source by itself.

(ii) A major source that is majorfor volatile organic compounds shallbe considered majorfor ozone.

(2)(i) "Major modification" means any physical change in or change in the method ofoperation ofa major stationary source that would result in a significant net emissions increase ofany 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 ofoperation shall not include: (a)Routine maintenance, repair, and replacement; (b)Use ofan alternative fuel or raw material byreason ofany order under sections 2 (a) and (b) ofthe Energy Supply and Environmental Coordination Act of 1974 (or any superseding legislation) or by reason ofa natural gas curtailment plan pursuant to the Federal Power Act; (c) Use ofan alternative fuel by

reason ofan order orrule under section '125ofthe Act;

(d) Use ofan alternative fuel at a

. steam generating unit to the extent that the fuel is generated frommunicipal solid waste;

(e)Use ofan alternative fuel orraw 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 to40 CFR 52.21

orunder regulations approved pursuant to 40 CFR 51.18 or40 CFR 51.24; or

(2)The source is approved touse under any permit issued under 40 CFR 52.21 orunder 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 or40 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 ofoperation 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 increaseor decrease In actual emissions is contemporaneous with the increase from the particular change only ifit 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 ifthe reviewing authority has notrelied on It in issuing apermit 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 ofsulfur dioxide or particulate matter which occurs before the applicable baseline date is creditable only if itis 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 ofactual emissions exceeds the old level.

(vi)A decrease in actual emissions Is creditable only to the extent that:

(a)The old level ofactual emissions

or the old level of allowable emissions, whichever is lower, exceeds the new level ofactual emissions;

(b)It is federally enforceable at and after the time that actual construction

on the particular change begins; and

(clIt 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 ofthe source to emit a pollutant, including air pollution control equipment and restrictions on hours of

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## / Thursday, August 7, 1980 / Rules and Regulations

operation or on the type or amount of material combusted, stored, or processed, shall be treated as part ofits design ifthe limitation orthe effect it would have on emissions is federally enforceable. Secondary emissions do
not count in determining the potential to emit ofa stationary source.

(5) "Stationary source" means any building, structure, facility, or installation which emits ormay 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 ifthey 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 anypart of

a stationary source which emits or would have the potential to emit any pollutant subject to regulation under the Act

(8)"Construction" means anyphysical change or change in the method of operation (including fabrication, erection, installation, demolition, or modification ofan emissions unit] which would result in a change in actual emissions.

(9) "Commence" as applied to construction ofa major stationary

source ormajor modification means that the owner or operator has all necessary preconstruction approvals or permits and eitherhas:

(i)Begun, or caused tobegin, a continuous program ofactual on-site construction ofthe source, tobe completed within a reasonable time; or

(ii)Entered into binding agreements or contractual obligations, which cannot be cancelled ormodified without substantial loss to the owner or operator, to undertake a program of actual construction ofthe 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, ingeneral, initiation ofphysical on-site construction activities on an emissions unitwhich are ofa permanent nature. Such activities include, but are not limited to,installation ofbuilding supports and foundations, laying of underground pipework, and construction ofpermanent 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) basedon the maximum degree ofreduction foreach pollutant subject to regulation under the Actwhich would be emitted from any proposed major stationary source ormajor 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 ofsuch pollutant. In no event shall application of best available control technology result in emissions of
any pollutant which would exceed the emissions allowedby any applicable standard under40 CFR Parts 60 and 61. Ifthe reviewing authority determines that technological or economic limitations on the application of
measurement methodology to a particular emissions unitwould make the imposition ofan emissions standard infeasible, a design, equipment, work practice, operational standard or combination thereof,may be prescribed instead to satisfy the requirement for the application ofbest available control technology. Such standard shall, to the degree possible, setforth the emissions reduction achievable byimplementation ofsuch design, cquipment, workpractice

oroperation, 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 forwhich a baseline date is established and shall include:

(a) The actual emissions representative ofsources in existence on the applicable baseline date,except as provided in paragraph (b)(13)(ii); (b) The allowable emissions ofmajor stationary sources which commenced construction before January 6,1975, but

were not in operation by the applicable baseline date.

(ii) The following will notbe included in the baseline concentration and will affect the applicable maximum allowable increase(s):

(a)Actual emission from any major stationary source onwhich construction commenced afterJanuary 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 afterAugust 7,1977, that:

(a)A major stationary source ormajor modification subject to 40 CFR 52.21 submits a complete application under that section; or

(b)A major stationary source ormajor 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 forwhich increments

orother equivalent measures have been established iff

(a)The area in which theproposed

source or modification would construct is designated as attainment or unclassifiable under section 107(d](i (D)

or(E) ofthe Act for thepollutant on the date ofits complete application under 40 CFR 52.21 or underregulations approved pursuant to 40 CFR 51.24; and

(b)In the case ofa major stationary

source, the pollutantwouldbe emitted in

significant amounts, or,in the case of

a majormodification, there would be a significant net emissions increase ofthe pollutant.

(15)(i) "Baseline area" means any intrastate area (andevery part thereof) designated as attainment or unclassifiable under section 107(d](1) (D)or [E)ofthe Actin which the major

source ormajormodification establishing the baseline date would
construct or wouldhave an air quality impact equal to orgreater than 1 ug/m 3 (annual average) ofthe pollutant for which the baseline date is established.

(1i) Area redesignations under section 107(d)(1) (D)or (E) ofthe Act cannot intersect orbe smaller than the area of impact ofany major stationary source or major modification which. (a)Establishes a baseline date; or (b)Is subject to 40 CFR 52.21 orunder 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 ofa stationary source calculated using the maximumrated capacity ofthe source (unless the source is subject to federally enforceable limits 52731

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which restrict the operating rate, or hours ofoperation, or both) and the

most stringent ofthe 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, including those requirements developed pursuant to40 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 ofthe

- construction or operation of a major stationary source ormajormodification, but donot come from the major stationary source ormajormodification itself.For the purposes ofthis 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 ormodified 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 ofthe major stationary source or major modification.

(19) "Innovative,control technology"

means any system ofair pollution control that has notbeen adequately demonstrated in practice, butwould have a substantial likelihood of achieving greater continuous emissions reduction than any control system in
current practice or ofachieving at least comparable reductions at lower cost in
terms of energy, economics, or nonair quality environmental impacts.

(20) "Fugitive emissions" means those emissions which couldnot reasonably
pass through a stack, chimney, vent, or other functionally equivalent opening.

(21)(i) "Actual emissions" means the' actual rate ofemissions ofa 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 tonsperyear, at which the unit actually emitted the pollutant during a two-year period whichprecedes the particular date and which is representative ofnormal source operation. The reviewing authority may allow theuse ofa different time period
upon a determination that itis more representative ofnormal source operation. Actual emissions shallbe calculated using the unit's actual operating hours, production rates, and types ofmaterials 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 ofthe unit.

(iv)Forany emissions unit which has
notbegun 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 ofa source to emit any of the following pollutants, a rate of emissions that would equal or exceed
any ofthe following rates:
Pollutant andEmissions Rate Carbon monoxide: 100 tonsperyear (tpy) Nitrogen oxides: 40 tpy Sulfur dioxide: 40 tpy Particulate matter. 25 tpy Ozone:40 tpyofvolatile organic compounds Lead: 0.6 tpy Asbestos: 0.007 tpy Beryllium: 0.0004 tpy Mercury: 0.1 tpy Vinyl chloride: Itpy Fluorides: 3 ty Sulfuric acid mist: 7tpy Hydrogen sulfide (HSJ:10 tpy Total reduced sulfur (includingH2S): 10 tpy Reduced sulfur compounds 

### (including HI-SJ:

10 tpy (ii) "Significant' means, in reference
to a net emissions increase or the potential ofa 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 ormajor modification, which would construct within 10 kilometers ofa 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, withrespect to any lands in the United States, the Secretary ofthe department with authority over such lands.

(25) "High terrain" means any area having an elevation 900 feet ormore above the base ofthe stack ofa 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, orAct ofCongress.

(28) "Indian Governing Body" means the governing body of any tribe, band, or group ofIndians subject to the jurisdiction of the United States and recognized by the United States as possessing power ofself-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 ofpetroleum products, natural gas,

orboth byreason ofan order in effect under sections 2 (a) and (b) ofthe Energy Supply and Environmental Coordination Act of1974 (or any superseding legislation) over the emissions from such sources before the effective date ofsuch an order;

(ii) Concentrations attributable to the increase in emissions from sources whichhave converted from using natural gas by reason ofnatural gas curtailment plan in effect pursuant to the Federal Power Act over the emissions from such sources before the effective date ofsuch plan;

(iII) Concentrations ofparticulate
matter attributable to the increase in emissions from construction or other temporary emission-related activitid's of

new ormodified 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) Ifthe plan provides that the concentrations to which paragraph (f)(1) (i]or (ii)refers shall be excluded, it shall also provide thatno exclusion ofsuch concentrations shall apply more than five years after the effective date of the

HeinOnline -- 45 Fed. Reg. 52732 1980Federal Register / Vol. 45, No. 154 / Thursday, August 7, 1980 / Rules and Regulations

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

or the plan to which paragraph (f)(1)(ii) refers, whichever is applicable. Ifboth such order and plan are applicable, no such exclusion shall apply more than five years after the later ofsuch effective dates.

(3) No exclusion under paragraph (f) ofthis section shall occurlater than 9 months afterAugust 7,1980, unless a State Implementation Plan revision meeting the requirements of40 CFR 51.24 has been submitted to the Administrator.

(4)For purposes ofexcluding concentrations pursuant to paragraph [f)(1)(v), the Administrator may approve

aplan revision that-

(i) Specifies the time overwhich the temporary emissions increase ofsulfur dioxide or particulate matter would

occur. Such time isnot 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 anational ambient air quality standard;

(iv)Requires limitations tobe in effect the end ofthe 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 planrevision was approved.

(i)Review of Major Stationary Sourcesand MajorModificationsSourceApplicability and Exemptions. (1) The plan shall provide that no major stationary source ormajor 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 anymajor stationary source or major modification that wouldbe 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 ormodificatiofi would be a major stationary source or major modification only iffugitive emissions,
to the extent quantifiable, are considered in calculating thepotential 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; 

### (nPrimary aluminum orereduction plants;



### (q) Primary copper smelters; (h)Municipal incinerators capable of charging more than 250 tons ofrefuse
perday;

(z)Hydrofluoric, sulfuric, ornitric 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 than250 million British thermal units per hour heatinput;

(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 ofmore than 250 uiaillion British thermal units per hour heat input;

(aa) Any other stationary source category which, as ofAugust 7.1980, is being regulated under section 111 or 112 ofthe Act or

(iii) The source ormodification is a portable stationary source which has previously received a permit under requirements equivalent to those contained in paragraphs (Uthrough (r] of this section, if-

(a)The source proposes to relocate and emissions ofthe 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 Iarea 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 theprobable duration of operation at the new location. Such notice shall be given to thereviewing authority not less than 10-days in advance ofthe proposed relocation unless a different time duration is previously approved by the reviewing authority.

(5) Theplan may provide that requirements equivalent to those contained in paragraphs 01 through (r)of this section do not apply to a major stationary source ormajor 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 ofthe Act.

(6) The plan mayprovide that requirements equivalent to those contained in paragraphs 

### (k), (m), and 

### (o) ofthis section do not apply to a proposed major stationary source or majormodification with respect to a particular pollutant, ifthe allowable emissions ofthat pollutant from a new source, or the net emissions increase of thatpollutant 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) ofthis section as theyrelate 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 onMarch 1,1978, ifthe net increase in allowable emissions ofeach pollutant subjectto regulation underthe Act from the modification after the application ofbest 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 ofparagraph (m)with 52733

HeinOnline -- 45 Fed. Reg. 52733 198052734 Federal Register / Vol. 45, No. 154 / Thursday, August 7, 1980 / Rules and Regulations

respect to monitoring for a particular pollutant, if:

(I)The emissions increase ofthe pollutant from a new stationary source

or the net emissions increase ofthe 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 ofthe 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) IfEPA approves a plan revision under 40 CFR 51.24 as in effect before August 7,1980, any subsequent revision which meets the requirements ofthis section may contain transition' provisions which parallel the transition provisions of40 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 ofthe revision would operate any less stringently than would its counterpart in 40 CFR 52.21.

{j) ControlTechnologyReview. 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 ofperformance under 40 CFR Parts 60 and 61.

'No deminimis air quality level is provided for

ozone. However, any net increase of 100 tonsper year or more ofvolatile 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 underthe Act that it would have the potential to emit in significant
amounts.

(3) A majormodification shall applybest available control technology for each pollutant subject toregulation under the Act forwhich it would be a significant net emissions increase at the

source. This requirement applies to each proposed emissions unit at which a net emissions -increasein the pollutant would occur as a result ofaphysical change or change in the method of operation in the unit..

(4)Forphased construction projects, the determination ofbest 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 eachindependent phase ofthe project. At such time, the

owner or operator ofthe applicable stationary source may be required to demonstrate the adequacy of any previous determination ofbest available control technology for the source.

[k) SourceImpact Analysis.The plan shall provide that the owner or operator ofthe proposed source ormodification shall demonstrate that allowable emission increases from the proposed

source ormodification, in conjunction with all other applicable emissions increases orreduction (including secondary emissions) would not cause

or contribute to air pollution in violation of:

(1) Anynational 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)AirQualityModels.

* *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 qualityin the area that the major stationarysource or major modification would affect for each ofthe followingpollutants:

(a)For the source, eachpollutant 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 thatpollutant in any area that the emissions ofthat pollutant would affect.

(iii)The plan shall provide that with ' respect to any such pollutant (other than nonmethane hydrocarbons) forwhich such a standard does exist, the analysis shall contain continuous air quality monitoring data gathered forpurposes of determining whether emissions ofthat pollutant would cause or contribute to a violation ofthe standard or any niaxiumum allowable increase. (iv) Theplan shall provide that, in general, the continuous air monitoring data that is required shallhave been gathered over a period of one year and shall represent the year preceding receipt ofthe application, except that, if thereviewing 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 thanfour months), the data that is required shall have been gathered over atleast that shorter period.

{v) The plan may provide that the

owner or operator of a proposed major stationary source ormajor modification ofvolatile organic compounds who satisfies all conditions of40 CFR Part 51 Appendix S, section IV may provide postapproval monitoring data for ozone in lieu ofproviding preconstruction data

as required under paragraph (m)(1).

(2) Post-construction monitoring. The plan shall provide that the owner or operator ofa major stationary source or majormodification shall, after construction ofthe 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 ofmonitoring stations. The plan shall provide that the owner or operator of amajor stationary source or major modification shall meet the requirements ofAppendix Dto Part S8 of this chapter during the operition of monitoring stations for purposes of satisfying paragraph tnf)ofthis section,

(n)SourceInformation.

* * * * *#

(o)Additional Impact Analyses.

(p)SourcesImpacting Federal ClassI Areas-AdditionalRequirements.



### (q) PublicParticipation.

S * *# * •

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(r) SourceObligation.(1)The plan shall include enforceable procedures to provide that approval to construct shall

notrelieve any owner or operator ofthe responsibility to comply fully with applicable provisions ofthe 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 ormajormodification solely by virtue ofa relaxation in any enforceable limitation which was established afterAugust 7,1980, on the capacity ofthe source ormodification otherwise to emit a pollutant, such as a restriction on hours of operation, then the requirements ofparagraphs (j) through (s)ofthis section shall apply to the source ormodification as though construction hadnot yet commenced on the source ormodification.

(s)Innovative ControlTechnology.(1) The plan may provide that an owner or operator ofa proposed major stationary

source or major modification may request the reviewing authority to
approve-asystem ofinnovative control

- technology. (2) The planmay provide that the reviewing authority may. with the
consent ofthe governor(s) ofother affected state(s), aetermine that the

source or modification may employ a system ofinnovative control technology, if-.

(i)The proposed control system would

not cause or contribute to an unreasonable risk to public health, welfare, orsafety in its operation or function;

(ii) The owner or operator agrees to achieve a level ofcontinuous emissions reduction equivalent to'that which would have been required under

- paragraph {)(2) by a date specified by the reviewing authority. Such date shall
notbe later than 4years fromthe time ofstartup or7 years frompermit issuance;

(iiI) The source ormodification would
meet therequirements equivalent to those in-paragraphs (j) and (k] based on the emissions rate thatthe 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 ormodification would
notbefore the date specifiedby the reviewing authority:

(a)Cause or contribute to any violation ofan 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 forpublicparticipation 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 bythe 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 publichealth, welfare, or safety, or

(iii) Thereviewing authority decides
at any time that the proposed system is unlikely to achieve therequired level of control or toprotect the public health. welfare, or safety.

(4) The plan mayproilde that ifa

source ormodification fails to meet the required level ofcontinuous emissions reduction within the specified time period, or ifthe approval Is withdrawn in accordance with paragraph (s)(3), the reviewing authority may allow the

source ormodification up to an additional 3 years to meet the requirement for the application ofbest available control technology through use of a demonstrated system ofcontrol.

New Source Review For PSD Purposes

2. (a) Section 52.21 ofTitle40 ofthe Code ofFederal Regulations is amended by deleting paragraph (k) and redesignating paragraphs 0) through (v)

as (k) through (u) and then byrevising paragraphs (b), (), (i), (j). (k) and (g)and adding new paragraphs (r)(4), (v)and (w) as follows:
§52.21. Prevention ofsignificant deteroratUon ofair quality.

(b)Definitions.For the purposes of this section:

(1)(i) "Major stationary source"

means: (a)Any of the following stationary

sources of airpollutants which emits, or has the potential to emit, 100 tons per year ormore ofany pollutant subject to regulation under the Act: Fossilfuelfired steam electric plants ofmore 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 millplants, primary aluminum ore reductionplants, primary copper smelters, municipal incinerators capable ofcharging more than 250 tons ofrefuse perday, hydrofluoric, sulfuric, and nitric acid plants, petroleum refineries, lime plants, phosphate rockprocessing plants, coke

oven batteries, sulfurrecovery 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 millionBritish thermal units per hourheat 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 inparagraph (b)(1)(i) ofthis section, any stationary

source which emits, orhas the potential
to emit.250 tons peryear ormore ofany airpollutant subjectto regulation under the Act; or

(c) Any physical change that would

occur at a stationary source not otherwise qualifying underparagraph (b)(1) as amajor stationary source, ifthe changes would constitute amajor stationary source by itself.

(Ii)A major stationary source thatis major forvolatile organic compounds shall be considered majorfor ozone.

(2)(i) "Major modification" means any physical change in orchange in the method ofoperation of amajor stationary-source that would.result in a significant net emissions increase ofany pollutant subject toregulation under the Act.

(ii) Any net emissions increase that is significant forvolatile organic compounds shall be considered significant for ozone.

(iii)A physical change or change in the method ofoperation shall not include:

(a)Routine maintenance, repair and replacement:

(b) Use ofan alternative fuel orraw material by reason ofan order under sections 2 (a)and (b) oftheEnergy Supply andEnvironmental Coordination Act of 1974 (orany superseding legislation) orbyreason ofa natural gas curtailment plantpursuant to the Federal Power Act;

(c)Use ofan alternative fuelby

reason ofan order or ruleunder section 125 ofthe Act;

(d)Use ofan alternative fuel at a steam generating unit to the extent that the fuel is generated from municipal solid waste;

(e)Use ofan alternative fuel orraw 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 52735

HeinOnline -- 45 Fed. Reg. 52735 198052736 Federal Register / Vol. 45, No. 154 / Thutsday, August 7, 1980 / Rules and Regulations

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 40 CFR 52.21 or under regulatiqns approved pursuant to40 CFR 51.24;



### (f) An increase in the hours of operation orin 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

orunder regulations approved pursuant to 40 CFR 51.18 or40 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 ofoperation 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 ifit 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 ifthe Administrator has notrelied on it in issuing apermit forthe 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 ofsulfur dioxide or particulate matter which occurs before the applicable baseline date is creditable only if itis required tobe 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 ofactual 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 ofallowable emissions,' whichever is lower, exceeds the new level ofactual emissions;

• (b) Itis federally enforceable at and after the time that actual construction

on the particular change begins; and

(c) Ithas approximately the same qualitative significance forpublic 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) "Potentialto emit" means the maximum capacity ofa stationary

source to emit a pollutant under its physical and operational design. Any physical oroperational limitation on the capacity ofthe 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 ofits design ifthe limitation orthe effect it would have on emissions is federally enforceable. Secondary emissions do
not count in determining the potential to emit ofa 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 ofthe pollutantemitting activities which belong to the

same industrial grouping, are located on

one or more contiguous or adjacent properties, and are underthe control of the same person (orpersons under

common control). Pollutant-emitting activities shall be considered as part of the same industrial grouping ifthey 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 anyphysical change or change in the method of operation (including fabrication, erection, installation, demolition, or modification ofan emissions unit) which would result in a change in actual
" emissions. (9) "Commence" as applied to construction ofa major stationary

source ormajor 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 ofactual 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 ormodified without substantial loss to the owner or operator, to undertake a program of actual construction ofthe source tobe completed within a reasonable time.

(10)"Necessary preconstruction approvals orpermits" 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 ofphysical on-site construction activities on an emissions unit which are ofa permanent nature. Such activities include, but are not limited to, installation ofbuilding supports and foundations, laying underground pipework and construction ofpermanent 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 ofreduction for each pollutant subject to regulation under Actwhich would be emitted from any proposed major stationary source ormajor 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 ortreatment or innovative fuel combustion techniques for control ofsuch pollutant. In no event shall application ofbest 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. Ifthe Administrator determines that technological or economic limitations on the application ofmeasurement methodology to a particular emissions unit would make the impostion ofan emissions standard infeasible, a design, equipment, work practice, operational standard, or combination thereof, may be prescribed instead to satisfy the requirement for the application ofbest available control technology. Such standard shall, to the degree possible,
set forth the emissions reduction achievable by implementation ofsuch

HeinOnline -- 45 Fed. Reg. 52736 1980Federal Register / Vol. 45, No. 154 / Thursday, August 7, 1980 / Rules and Regulations

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 foreachpollutant forwhich abaseline date is established and shall include: (a) The actual emissions representative ofsources in existence on the applicable baseline date, except as provided in paragraph (b)(13](ii]; (b) The allowable emissions ofmajor stationary sources which commenced construction before January 6,1975, but

were not in operation bythe 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 onwhich construction commenced afterJanuary 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 of40 CFR 52.21.

(ii)The baseline date is established for each pollutant forwhich increments

or other equivalent measures have been established if:

(a) The area in which theproposed

source ormodification would construct is designated as attainment or unclassifiable under section 107(d)(i) (D)

or (E) ofthe Act forthe pollutant on the date ofits complete application under 40
CFR 52.21; and

(b)In the case of amajor stationary

source, the pollutant would be emitted in significant amounts, or.in the case of

amajor modification, there would be a significant net emissions increase ofthe 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) ofthe Actin which the major

source ormajor modification establishing the baseline date would
construct orwould have an air quality impact equal to orgreater than 1 pg/m3 (annual average) ofthe pollutant for which the baseline date is established.

(ii) Area redesignations under section 107(d)(1) (D) or (E)oftheAct cannot intersect orbe smaller than the area of impact ofany mjaor stationary source or major modification which:

(a)Establishes a baseline date; or (b)Is subject to40 CFR52.21 and would be constructed in the same state

as the state proposing the redesignation.

(16) "Allowable emissions" means the emissions rate ofa stationary source calculated using the maximum rated capacity ofthe source (unless the source is subjectto federally enforceable limits whichrestrict the operating rate, or hours ofoperation, orboth) and the
most stringent ofthe following:

(i) The applicable standards as set forth in40 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 orunder regulations approved pursuant to40 CFR 51.18 and 40 CFR 51.24.

(18) "Secondary emissions" means emissions which would occur as a result ofthe construction or operation of a major stationary source ormajor 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 ormodification which

causes the secondary emissions. Secondary emissions may include, but

are not limited to:

(i) Emissions from ships ortrains coming to or from the new ormodified stationary source; and

(ii) Emissions from any offsite support facility which would not otherwise be constructed orincrease its emissions as

a result ofthe construction oroperation of the major stationary source ormajor modification.

(19) "Innovative control technology"

means any system ofair pollution control thathas notbeen adequately demonstrated in practice, but would have a substantial likelihood of achieving greater continuous emissions reduction than any control system in
current practice or ofachieving at least comparable reductions at lower cost in
terms ofenergy, economics, or nonair quality environmental impacts. (20) 'Fugitive emissions" means those emissions which could notreasonably
pass through a stack,chimney, vent.or otherfunctionally equivalent opening.

(21(i) "Actual emissions" means the actual rate of emissions ofa pollutant from an emissions unit, as determined in accordance with subparagraphs (ii}-(iv) below.

(ii) Ingeneral, actualemissions as ofa particular date shall equal the average rate,in tons peryear,at which theunit actually emitted thepollutant during a two-year period whichprecedies the particular date and which is representative ofnormal source operation. TheAdministrator shall allow theuse ofa different timeperiod
upon a determination that it is more representative ofnormal source operation. Actual emissions shallbe calculated using theunit's actual operating hours, production rates, and types ofmaterials processed, stored, or combusted duringthe selected time period.

(ii) TheAdministrator may presume that source-specific allowable emissions for theunit are equivalent to the actual emissions ofthe unit.

(iv) For any emissions unit whichhas
notbegun normal operations on the particular date, actual emissions shall equal the potential to emit oftheunit on that date.

(22) "Complete" means, inreference
to an application for a permit,that the application contains all ofthe information necessary forprocessing the application.

(23)(i) "Significant" means, in reference to a net emissions increase or thepotential ofa source to emitany of the followingpollutants, arate of emissions thatwould equal or exceed $ any ofthefollowingrates:
Pollutant and EmIssionsRate

Carbon monoxide: 100 tons peryear (tpy) Nitrogen oxides: 40tpy Sulfur dioxide. 40 tpy Particulate matter.25 tpy Ozone: 40tpy ofvolatile organic compounds Lead 0.5 tpy Asbestos: 0.007 tpy Beryllium: 0.0004 tpy Mercury. 0.1 tpy Vinyl chloride i tpy Fluorides: 3tpy Sulfuric acid mist:7tpy Hydrogen sulfide (H 2S]: 10tpy Total reduced sulfur (includingHzS]:1O tpy Reduced sulfr compounds (includingHS):

1otpy (ii) "Significant" means, inreference

to a net emissions increase orthe potential ofa source to emit apollutant subject to regulation under theAct that paragraph (b)(23)(i) doesnot list, any emissions rate. 52737

HeinOnline -- 45 Fed. Reg. 52737 198052738 Federal Register / Vol. 45, No. 154 / Thursday, August 7, 1980 / Rules and Regulations

(iii) Notwithstanding paragraph (b)(23](i), "significant" means any emissions rate or any net emissions increase associated with a major stationary source ormajor modification, which would construct within 10 kilometers ofa 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 toany 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 ofa 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, orAct ofCongress.

(28) "Indian Governing Body" means the governing body of any tribe, band, or group ofIndians 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) Uponwritten request ofthe 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 ofpetroleum products, natural gas, oPboth by reasodt ofan order in effect under sections 2(a) and (b) ofthe 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 ofparticulate
matter attributable to the increase in emissions from construction or other temporary emission-related activities of

new ormodified 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 orparticulate matter from stationary sources which are affected by plan revisions approvedby the Administrator as meeting the criteria specified in paragraph (fl(4).

(2) No exclusion ofsuch concentrations shall apply more than five years after the effective date ofthe ordei to whichparagraph (f)(1)(i) refers

or the plan to which paragraph (fl(1)(ii) refers, whichever is applicable. Ifboth such order and plan are applicable, no such exclusion shall apply more than five years after the later ofsuch effective dates.

(3) No exclusion under paragraph (f) ofthis section shall occur later than 9 months after August 7,1980, unless a State Implementation Plan revision meeting the requirements of40 CFR 51.24has been submitted to the Administrator. (4) Forpurposes ofexcluding concentrations pursuant to paragraph (f)(1)(v), the proposed plan revision shall:

(i)Specify the time over which the temporary emissions increase ofsulfur dioxide orparticulate 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] Requirelimitations to be in effect
at the end ofthe 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 Sourcesand MajorModificationsSourceApplicabilityand Exemptions. (1)No stationary source ormodification

to which the requirements ofparagraphs (j)through (r)ofthis section apply shall begin actual construction without a permit which states that the stationary

source ormodification would meet those requirements. The Administrator has authority toissue any such permit._o (2)The requirements ofparagraphs (j) through (r)ofthis 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 ofparagraphs (j) through (r)ofthis section apply only to any major stationary source ormajor modification that would be constructed in an area designated as attainment or unclassifiable under section 107(d)(1]D)

or (E) ofthe Act.

(4) The requirements ofparagraphs 

## (j) through (r)ofthis section shall not apply
to a particular major stationary source

or majormodification, if;

(i) Construction commenced on the

source ormodification before August 7, 1977. The regulations at40 CFR 52.21 as in effect before August 7, 1977, shall
govern the review and permitting of any such source ormodification; or

(ii) The source ormodification was subject to the review requirements of40 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 CFR52.21 as in effect before March 1,1978, and the review of

an application for approval for the stationary source ormodification under 40 CFR 52.21 would have been completed by March 1,1978, but for an extension of thepublic 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 ormodification 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)Didnot discontinue construction for a period of 18 months ormore and completed construction within a reasonable time or

(v] The source ormodification was not subject to 40 CFR 52.21 as In effect

on June 19, 1978 orunder the partial stay

HeinOnline -- 45 Fed. Reg. 52738 1980Federal Register / Vol. 45, No. 154 / Thursday, August 7, 1980 / Rules and Regulations

ofregulations published on February 5,
1980 (45FR 7800), and the owner or operator:

(a) Obtained all final federal, state and local preconstruction approvals or permits necessary under the applicable State Implementation Planbefore 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) Didnot 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 ornonprofit educational institution, or-a major modification would occur at such an institution, and the governor ofthe state in which the source ormodification would be located requests that itbe exempt from those requirements; or

(vii)The source ormodification would be a major stationary source ormajor modification only iffugitive emissions,
to the extent quantifiable, are considered in calculating the potential to emit ofthe stationary source or modification and the source does not belong to any ofthe 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; 

### [9Primary aluminum orereduction plants;

(g)Primary copper smelters; (h)Municipal incinerators capable of charging more than 250 tons ofrefuse
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 (orcombination 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 fiberprocessing plants; (y)Charcoal production plants; (z) Fossil fuel-fired steam electric plants ofmore than250 million British thermal units per hourheat input;

(aa) Any other stationary source category which, as ofAugust 7,1980, is being regulated under section 111 or 112 of the Act; or

(viii)The source is a portable stationary source whichhas previously received a permit under this section. and

(a)The owner or operatorproposes to relocate the source and emissions ofthe

source at the new location wouldbe 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 ofthe proposed relocation unless a different time duration is previously approved by the Administrator.

(5) The requirements ofparagraphs 

### (0) through (r)of this rection shall not apply
to a major stationary source ormajor modification with respect to a particular pollutant ifthe owner or operator demonstrates that, as to that pollutant, the source or modification is located in

an area designated as nonattainment under section 107of the Act.

(6) The requirements ofparagraphs (k), (in) and (o)of this section shall not apply to a major stationary source or majormodification with respect to a particular pollutant, if the allowable emissions ofthatpollutant from the

source, orthe 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 ofparagraphs (k), (in) and (o) ofthis section as they relate to anymaximum 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, ifthe net increase in allowable emissions ofeach pollutant subject to regulation under the Actfrom 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 ormodification from therequirements ofparagraph (in) with respect to monitoring for aparticular pollutant ifi

(i)The emissions increase ofthe pollutant from the new source or thenet emissions increase ofthe pollutant from the modification would cause,in any area, air qualityimpacts less than the following amounts:

Carbon monoxide-575 pg/m , 8-hour
average;

Nitrogen dioxide-14 yg/m'.annual
average;

Total suspended particulate-10pg
M

3

, 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 ofthe pollutant in the area that the source or modification would affect are lessthan 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)ofthis section andthe requirements forair quality analyses in paragraph (m)(1) shall not applyto a particular stationary source or modification that was subject to 40 CFR 52.21 as in effect on June 19, 1978, ifthe

owner oroperator of the source or modification submitted an application for apermit underthose regulations before August7, 1980, and the Administrator subsequently determines that the application as submitted before that date was complete. Instead, the requirements at40 CFR 52.21" and (n)

as in effect on June 19,1978 apply to any such source ormodification.

(10)(i) Therequirements for air quality monitoring in paragraphs (m][1)(ii]-(iv) of this section shall not apply to a particular source or modification that

was subjectto 40 CFR 52.21 as in effect

on June 19,1978, ifthe owner or operator of the source ormodification submits an

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

oz,_e. However any net Increase ofi0o t ns per
yearor more of vc!atile organic comptoads subject

to PSD would be required toperform an ambient Impact anrly-ls Including the Sathe'ing ofambint airquality data. 52739

HeinOnline -- 45 Fed. Reg. 52739 198052740 Federal Register / Vol. 45, No. 154 / Thursday, August 7, 1980-/ Rules and Regulations

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 ofthis 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 ormodification that

was not subject to 40 CFR 52.21 as in effect on June 19, 1978,if the owner or operator of the source ormodification submits an application for a permit under this section on orbefore June 8, 1981, and the Administrator subsequently determines that the application as submitted before that date was complete, except withrespect
to the requirements in paragraphs (m[1](i}-iv}.

() ControlTechnologyReview,(1)'A major stationary source ormajor modification shall meet each applicable emissions limitationunderthe State Implementation Plan and each applicable emissions standard and standard ofperformance under40 CFR Parts 60 and 61.

(2) Anew major stationary source shall apply bestavailable control technology for each pollutant subject to regulation underthe Act that itwould have the potential to emit in significant
amounts.

(3) A major modification shall apply best available control technology for eachpollutant subject to regulation under the Act for which it would result in a significant net emissionsincrease at the source. Thisrequirement applies to eachproposed emissions unit atwhich a net emissions increase in thepollutant would occur as a result ofa physical change or changein the method of operation in the unit.

(4) Forphased construction projects, the determination ofbest available control technology shall be reviewed and modified as appropriate at the latest reasonable time which occurs nolater than 18 monthsprior to commencement ofconstruction ofeach independent phase of the project.At such time, the

owner or operator ofthe applicable stationarysource may be required to demonstrate the adequacy ofany previous detprmination ofbest available control technology for the source. "

(k)SourceImpact Analysis. The

owner or operator ofthe proposed

source ormodification 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)AirQuality Models.

(m)AirQualityAnalysis.(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 ormajor modification would affect for each ofthe following pollutants:

(a) For the source, eachpollutant that it would have thepotential to omit in a significant amount;

(b) For the modification, each pollutant for whichit would result in a significant net emissions increase.

(ii) With respect to any such pollutant' forwhich no National Ambient Air Quality Standard exists, the analysis shall contain such air qualitymonitoring data as the Administrator determines is
necessary to assess ambient airquality forthat pollutant in any area that the emissions of thatpollutant would affect.

(iii)With respect to any such pollutant (other thannonmethane hydrocarbons) forwhich such a standard does exist, the analysis shall contain continuous air quality monitoring data gathered for
purposes ofdetermining whether emissions ofthatpollutant would cause

or contribute to a violation ofthe standard or any maximum allowable increase.

(iv)In general, the continuous air quality monitoring dafa: thatisrequired shall have been gathered over aperiod ofat least one year and shall represent
at least the year preceding receipt ofthe application, except that, ifthe Administrator.determines that a complete and adequate analysis can be accomplished with monitoring data gathered over aperiod shorter than one year (butnotto be less thanfour months), the data that is required shall have been gathered over atleast that shorter period.

(v)For any application which becomes complete, except as to the requirements ofparagraph (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 atleast the period fromFebruary 9,1981, to the date the application becomes otherwise complete, except that:

(a)Ifthe source ormodification would have been major for thatpollutant 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) Ifthe Administrator determines that a complete and adequate analysis

can be accomplished with monitoring data over a shorter period (notto be less than fourmonths), the data that paragraph (m)(1)(iii) requires shall have beeri gathered overat least that shorter period. (c)Ifthe 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 maywaive the otherwise applicable requirements ofthis * paragraph (v)to the extent thatthe applicant shows that the monitoring data would be unrepresentative ofair quality over a full year.

(vi)The owner oroperator of a proposed stationary source or modification ofviolatile organic compounds who satisfies all conditions of40 CFR Part 51 Appendix S, section IV
may provide post-approval monitoring data for ozone in lieu ofproviding preconstruction data as requried under paragraph (m)(1).

(2) Post-construction monitoring. The

owner or operator of amajor stationary

source or major modification shall, after construction ofthe stationary source or modification, conduct such ambient monitoring as the Administrator determines is necessary to dqtermine the effect emissions from the stationary

source ormodification may have, or are having, on air qualityin any area. (3) Operations ofmonitoring stations. The owner or operator ofa major stationary source ormajor modification shall meet the requirements ofAppendix B to Part 58 of this chapter during the operation ofmonitoring tations for
purposes ofsatisfying paragraph (m) of this section.

(n) SourceInformation.

(o) Additional Impact Analyses.

(p) SourcesImpacting FederalClassI Areas-Additional Requirements.

(q) Public Pdrticipation. The Administrator shall follow the applicable procedures of40 CFRPart 124 in processing applications under this section. The Administrator shall follow the procedures at 40 CFR52.21(r) asIn effect on June 19, 1979, to the extent that

HeinOnline -- 45 Fed. Reg. 52740 1980Federal Register / Vol. 45, No. 154 / Thursday, August 7, 1980 / Rules and Regulations

the procedures of40 CFR Part 124 donot apply.

(r) Source Obligation.

(4)At such time that aparticular

source ormodification becomes a major stationary source ormajor modification solelyby virtue ofa relaxation in any enforceable limitation which was established afterAugust 7.1980, on the capacity ofthe source ormodification otherwise to emit a pollutant, such as a restriction on hours of operation, then therequirements orparagraphs {j) through (s)ofthis section shall apply to the source ormodification as though construction had not yet commenced on the source ormodification.

" (s)Environmentalimpact Statements.

(t] Disputed Permitsor Redesignations.

(u) DelegationofAuthority.

(v)Innovative ControlTechnology.(1) An owner or operator of aproposed major stationary source ormajor modification may request the Administrator in writing no later than the close ofthe comment periodunder 40CFR 124.10 to approve a system of innovative control technology.

(2) TheAdministrator shall, with the
consent ofthe governor(s) of the affected state(s), determine that the

source ormodification may employ a system ofinnovative control technology, if:(i)The proposed control system would
notcause or contribute to an unreasonable risk to publichealth, welfare, or safety in its operation or function;

(ii)The owner or operator agrees to achieve a level ofcontinuous emissions reduction equivalent to thatwhich wouldhave been required under paragraph 0)(2) by a date specified by theAdministrator. Such date shall not be later than 4 years from the time of startup or7 years from permit issuance;

(ill) The source ormodification would
meet the requirements ofparagraphs 

### (0) and (k)based on the emissions rate that the stationary source employing the system ofinnovative control technology would be required to meet on the date specified by the Administrator,

(iv)The source ormodification would
notbefore 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 Iarea; or Cc) Impact any area where an applicable increment is known to be violated; and

(v)All other applicable requirements including those forpublic participation have been met.

(3) TheAdministrator shall withdraw
any approval to employ a system of innovative control technology made under this section, if:

(i) Theproposed 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 orto protect the public health, welfare, or safety.

(4) If a source ormodification 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 ormodification up to

an additional 3years to meet the requirement for the application ofbest available control technology through use ofa demonstrated system of control.

(w)Permitrescission. (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) ofthis section oris rescinded.

(2) Any owner or operator ofa stationary source ormodification who holds a permit forthe source or modification which was issuedunder 40 CFR 52.21 as in effect on June 19,1978,
may request that the Administrator rescind the permit or aparticular portion of the permit

(3) TheAdministrator shall grant an application for rescission ifthe application shows that this section would not apply to the source or modification.

(4) Ifthe Administrator rescinds a permit under thisparagraph, the public shall be given adequate notice ofthe rescission. Publication ofan announcement ofrescission in a newspaper ofgeneral circulation in the affected region within 60 days ofthe 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),

5 2.1634 (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 arenot met, since theplan does notinclude approvable procedures forpreventing the significant deterioration ofair quality.



### (b)Regulations for preventing significantdeterioration of

air qualty Theprovisions of52.21(b) through (w)

are hereby incorporated and made a part ofthe applicable state plan forthe State of

Emission OffsetInterpretative Ruling

3. Sections ,U.11 and IV ofthe Emission Offset Interpretative Ruling, 40 CFR Part 51 Appendix S, asrevised 44 FR 3274 (January 16,1979] and 45 FR 31307 (May 13,1980), are amended as follows:

A. By adding anew third paragraph to Section L toread as follows:
LIntroduction

The requirement ofthis Ruling shallnot apply to any major stationarysource ormajor modification that was not subject to the Ruling as in effecton January 16,1979,ifthe

owner or operator.

A. Obtained all final federal. state, anl local preconstruction approvals or permits
necessary under the applicable State Implementation Plan beforeAugust 7,190;,

B. Commenced construction within 18 months fromAugust 7,1980, oranyearlier timerequired underthe applicable State Implementation plan. and

C.Did not discontinue construction for a period of18months ormore and completed construction within areasonable time.

B. By revising SectionIH, subsection A,
to read as follows:
ILInitial ScreeningAnalyses and Determination ofApplicable Requirements.

A. Defzitons-For the purposes ofthis Ruling:

. "Stationary source" means anybuilding, structure, facility, orInstallation whch emits

ormay emit anyairpollutant subject to regulation under theAct.

2. "Building. structure, orfacility- means all of thepollutant-emitting activities which belong to the same industrialgrouping, are located on one ormore contiguous or adjacent properties, and areunder the control 

### 52741

HeinOnline -- 45 Fed. Reg. 52741 198052742 Federal Register / Vol. 45, No. 154 / Thursday, August 7, 1980 

### 1 Rules and Regulations

ofthe same person (orpersonsunder

common control). Pollutant-emitting activities shall be considered as part ofthe same- industrial grouping iftheybelong to the same "Major Group" (i.e., whichhave the same two digit code) as described in theStandard IndustrialClassification 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 anidentifiable piece ofprocess equipment.

4. "Potential to emit" means the maximum capacity ofa stationary source to emit a pollutant-under itsphysical and operational design.Any physical or operationallimitation

on the capacity ofthe source to emit a pollutant,including air pollution control equipment and restrictions onhoursDf operation or onthe type or amount of material combusted, stored, or processej, shall be treated as part ofits design only if the limitation or the effect it would have on- emissions isfederally enforceable. Secondary emissions do not count in determining the potential to emit ofa stationary source.

5.[i) "Major stationary source" means: (a) Any stationary source ofairpollutants which emits, or hasthepotential to emit, 100
tons peryear ormore ofany pollutant subject
toregulation 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, ifthe 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 changein or change in the method of operation ofa majorstationary source that would result in a significant netemissions increase ofanypollutant subject to regulation under the Act.

(ii)Any net emissions increase thatis considered significant forvolatile organic compounds shall be considered significant for

ozone.

(iii) A physical change or change in the method ofoperation shall not include:

(a)Routine maintenance, repair, and replacement;

(b)Use ofan alternative fuel orraw material by reason ofan order under sections 2 (a) and (b] ofthe Energy Supply and Environmental Coordination Act of1974 (or
any superseding legislation) orby reason ofa natural gas curtailment plan pursuant to the Federal Power Act;

(c)Use of an alternative fuel by reasoiiof

an order orrule under section 125 ofthe Act;

(d) Use ofan alternative fuel at a steam generating unit to the extent that the fuelis generated from municipal solid waste;

(e)Use ofan 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

orunder regulations approvedpursuant to40 CFR 51.18 or40 CFR 51.24; or

(2)The source is approved to use under anypermitissued under thisxuling; M) An increase inthe hours of operation or in the production rate, unless such change is prohibitedunderany federally enforceable permit condition which was established after December 21,1976 pursuant to 40 CFR 52.21

orunder regulations approved pursuant to 40 CFR 51.18 or40 CFR 51.24;

(g)Anychange in ownership at a stationary source.

7.(i) "Net emissions increase" means the
amount bywhich the sum ofthe following exceeds zero:

(a) Any increase in actual emissions from a particular physical change or change in the method of operation ata 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 ifit

occurs between:

(a) The date fiveyears 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 hasnotxelied onitin'issuing a permit for the source under this Ruling which permit is in effect when the increase in actual emissionsfrom the particular change occurs.

(iv) An increase in actual emissions is creditable onlyto the extent that the new level ofactual emissions exceeds the old level.

(v)A decrease in actual emissions is creditable only tothe extent that:

(a)The old level ofactual emissions orthe old level ofallowable emissions,whichever is lower, exceeds the newlevel ofactual emissions;

(b)It is federally enforceable at and after the time that actual construction on the particular change begins;

(c)

The reviewing authority has notrelied

on itinissuing anypermit underregulations approved pursuant to 40 CFR 51.18; and

(c Ithas approximately the same qualitative7 significance for public health and welfare as that attributed to theincrease from the particular change.

(vi)An increase thatresults from a physical change at a source occurs -whenthe emissions unit onwhich construction occurred becomes operational andbegins to emit aparticular 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 orwould have thepotential to emit anypollutant subject to regulationunder the Act.

9. "Reconstruction" willbepresumed to have takenplace where the fixed capital cost ofthe new components exceeds 50 per cent ofthe fixed capitalcost ofa comparable entirely new stationary source. Any final 'decision as to whether reconstruction has occurred shalllbe made in accordance with the provisions of40 CFR 60.15(f) (1)-(3). A reconstructed stationary source will be treated as:anew stationary source for purposes of thisRuling. in determining lowest achievable emission rate for a reconstructed stationary source, the provisions of40 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 ormajor modification, but do not come from the major stationary source

or majormodification itself.For the purpose ofthis Ruling, secondary emissionsmust be specific, well defined, quantifiable, and impact the same general area as the stationary source ormodification which

causes the secondary emissions. Secondary emissions may include, but are not limited to:

(i)

Emissionsfrom ships or trains cominlg to

or from the new ormodified stationary

source and

(ii) Emissions from any offsite support facility which would not otherwise be constructed orincrease Its emissions as a result ofthe construction or operation ofthe major stationary source ormajor 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 orthe potential ofa

source to emit any ofthe following pollutants,

a rate ofemissions that would equal or exceed any ofthe following rates:

Pollutant and Emissions Rate
Carbon monoxide: 100 tons peryear (tpy] Nitrogen oxides: 40 tpy Sulfur dioxide: 40 tpy Particulate matter.25 tpy Ozone: 40 tpy ofvolatile organic compounds Lead: 0.6 tpy

14. "Allowable emissions" means the emissionsrate calculated using themaximum rated capacity ofthe source (unless the

source is subject to federally enforceable limits which restrict the operating rate, or hours ofoperation, orboth) and themost stringent ofthe following:

(I)

Applicable standards as set forth in 40 CFRParts 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 thosewith afuture compliance date.

15. "Federally enforceable" means all limitations and conditions which are enforceable by theAdministrator, 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 thisRuling, 40 CFR 52.21, or underregulations approved pursuant to 40

CFR 51.18 or 51.24.

16.(ii "Actual emissions" means the actual
rate ofemissions of apollutant from an

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### / Rules and Regulations

emissions unit as determined inaccordance with subparagraphs (ii)-{iv)below.

(ii)In general, actual emissions as ofa particular date shall equal the average rate, in tonsper year, atwhich the unit actually emitted the pollutant during a two-year period which precedes theparticular date and which isrepresentative ofnormal source operation. The reviewing authority shall allowthe use ofa different time period upon

a determination that it is more representative ofnormal source operation. Actual emissions shallbe calculated using the unit's actual operating hours, production rates, and types ofmaterials processed, stored or combusted duringthe selected timeperiod.

(il) The reviewing authority may presume that source-specific allowable emissions for the unit are equivalent tothe actual emissions oftheunit.

(iv) For any emissions unit which has not begun normal operations on the particular date, actual emissions shall equal the potential toemit ofthe unit on that date.

17."Construction" means any physical change or change in the method ofoperation (including fabrication, erection installation, demolition, or modification ofan emissions unit)which wouldresult in a change in actual emissions.

18. "Commence" as applied to construction ofa major'stationary source ormajor modification means that the owner or operator has all necessary preconstruction approvals orpermits and either has:

(i)Begun, or caused tobegin, a continuous
program ofactual on-site construction ofthe
source, tobe completed within areasonable time; or

(ii)Entered intobinding agreements or contractual obligations, which cannotbe cancelled or modified without substantial loss to the owner oroperator, toundertake a program ofactual construction ofthe source to be completed within areasonable time.

19. "Necessary preconstruction,approvals

orpermits" means those permits or approvals required under federal air quality control laws and regulations and those air quality control laws andregulations which arepart ofthe applicable State Implementation Plan.

20."'Begin actual construction" means, in general, initiation ofphysical aon-site construction activities on an emissions unit which are ofapermanent nature, Such activities include,but arenot limited to. installation ofbuilding supports and foundations, laying ofunderground pipework, and construction ofpermanent storage structures. With respect to a change in method ofoperating this term refers tothose on-site activities otherthan preparatory activities which mark theinitiation ofthe change.

21. "Lowest achievable emissionrate"

means, for any source, the more stringent rate ofemissions based on thefollowing:

(i)The moststringent emissions limitation which is contained in the implementation plan of anystate for such class or category of stationary source, unless the owner or operator oftheproposed stationary source demonstrates that such limitations are not achievable; or

(ii)The moststringent emissions limitation which is achieved in practice by such class or category ofstationary 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 ofthis term permit aproposed

new ormodified stationary source to emit
any pollutant in excess of the amount allowable under applicable new source standards ofperformance.

22. "Resource recovery facility" means any facility at which solid waste Is processed for the purpose ofextracting, converting to energy, or otherwise separating and preparing solid waste forreuse. Energy conversion facilities must utilize solid waste toprovide more than50 percent ofthebeat 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 specfiedsources for air qualityimpact.

In addition, the reviewing authority must determine whether the majorstationary

source or majormodification would be constructed in an area designated in 40 CFR 81.300 etseq.as nonattainment fors pollutant for which the stationary source or modification ismajor.

D. By revising Section II, subsection F

to read as follows:

F.Fugitiveemissions sources.Section IV. A. ofthis Ruling shall not apply to a source or modification thatwould be a major stationary source ormajor modification only iffugitive emissions, to theextent quantifiable, are considered in calculating the potential to emit ofthe stationarysource or modification and the source does notbelong
to any of thefollowing categorles:

(1)Coal cleaning plants (with thermal dryers);

(2) Kraft pulpmills; (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 ofrefuse per day,

(9)Hydrofluoric, sulfuric, ornitric acid plants;

(10) Petroleum refineries; (11] Lime plants; (12) Phosphate rockprocessing plants; (13) Coke oven batteries; (14) Sulfur recovery plants; (15) Carbon black plants (furnace process); (16) Primarylead smelters; (17) Fuel conversionplantr, (18) Sintering plants; (19) Secondary metal production plants. (20) Chemical process plants; (21) Fossil-fuel boilers (orcombination thereof) totalingmore than 250million British thermal units perhour heatinput:

(22) Petroleum storage and transfer units with a totalstorage capacity exceeding 300,000 barrels;

(23) Taconite ore processing plants; (24) Glass fiberprocessing plants; (25] Charcoal production plants; (26) Fossil fuel-fired steam electric plants of more than 250million British thermal units
perhour heat input;

(27) Any other stationary source category which, as ofAugust 7,1980, is beingregulated under sectop111 or112 oftheAct.

E. By deleting Footnote 3 of subsection C of Section III and revising the third paragraph as follows:

C.Reviewofs;ecif7led s2=-cesof air qualityiapact.

For ozone, sources ofvolatile organic compounds, locating outside a designated

ozonenonattainment area, willbe presumed
to have no significant impact on the designated nonattainment area. Ifambient monitoring indicates that the area ofsource location Is in factnonattainment. then the

source may be permitted underthe provisions ofany state plan adopted pursuant to section 110(a](2)(D) ofthe Actuntil the area is designated nonattainment and a State Implementation Planrevision is approved.If

no state planpursuant to section110(a]2 (D) has been adopted andapproved, then this Ruling shall apply.

F.By adding a new subsection F.to IV., toread as follows: IV.Sources ThatWould Locate in a Designated Nonattainment Area

F.

Source ObLigation. At such time that aparticular source or modification becomes a majorstationary

source ormajormodification solely byvrtue ofa relaxation inany enforceable limitation which was established afterAugust 7,1980,

onthe capacity ofthe source ormodification otherwise to emit apollutant, suchas a restriction onhours ofoperation. then the requirements ofthisRuling shall apply to the

source ormodification asthough construction had notyet commenced on the source or modification.

State Plans ForNew Source Revriew For Nonattainment Purposes.

4. Section 40 CFR 51.18(] is amended

to read as follows

§51.18 Review of new stationarysources modifications.

(j)State Implementation Plan provisions satisfying sections 172(b)(6) and 173 ofthe Act shall meet the 

### following conditions:

(1) All such plans shall usethe specific d nitions Deviations from the following wording will be approved only ifthe state specifically demonstrates that the submitted definitionis 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 ormay emit 

### 52743

HeinOnline -- 45 Fed. Reg. 52743 198052744 Federal Register / Vol. 45, No. 154 / Thursday, August 7, 1980 / Rules and Regulations

any air pollutant subject to regulation under the Act.

(ii) "Building, structure, orfacility"

means all ofthe pollutant-emitting activities which belong to the same industrial grouping, are located on one

ormore 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 ifthey 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 ofprocess equipment.

(iv) "Potential to emit" means the maximum capacity ofa 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 ofits design only ifthe limitation or the effect it would have on emissions is federally enforceable. Secondary emissions do
not count in determining the potential to emitof a stationary source.

(v)(a) "Major stationary source"

means:

(1)Any stationary source ofair pollutants which emits, or has the' potential to emit, 100 tons per year or

more ofany 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, ifthe change would constitute a major stationary

source by itself.

(b) A major stationary source that is major forvolatile organic compounds shall be considered major for ozone.

(vi)(a) "Major modification" means any physical change in or change in the method of operation ofa major stationary,source thatwould result in a significant net emissions increase ofany pollutant subject to regulation under the Act.

(b)Any net emissions increase that is considered significant forvolatile organic compounds shall be considered significant for ozone.

(c)A physiral change or change in the method ofoperation shall not include:

(1)Routine maintenance, repair and replacement; (2)Use of an alternative fuel or raw material byreason ofan order under sections 2(a) and (b) ofthe Energy Supply and Environmental Coordination Act of 1974 (or any superseding legislation) orby reason ofa natural gas curtailment plan pursuant to the Federal Power Act;

(3)-Use ofan alternative fuel by

- reason ofan order or rule under section

125 of the Act;

(4)Use ofan alternative fuel at a steam generating unit to the extent that the fuel is generated frommunicipal solid waste;

(5) Use ofan 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 anyfedeially enforceable permit condition which was established after December 21, 1976 pursuant to 40 CFR 52.21 orunder regulations approved pursuant to 40 CFR 51.18 or40 CFR 51.24; or

(ii)The source is approved to use under anypermit 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 ifit 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 ofactual emissions

or the old level ofallowable emissions, whichever, islower, exceeds the new level ofactual 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 ItIn demonstrating attainment orreasonable further progress.

(4)It has approximately the same qualitative significance forpublic health and welfare as that attributed to the increase from theparticular 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 ofa 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 ofthe new components exceeds 50percent ofthe fixed capital cost ofa comparable entirely new stationary source. Any final decision as to whether reconstruction has occurred shall be made in accordance with the provisions of40 CFR 60.15(fo (1)-(3). A reconstructed stationary source will be treated as a new stationary source for
purposes ofthis subsection. In determining lowest achievable emission
rate for a reconstructed stationary

source, the provisions of40 CFR 60.15(f0(4) shall be taken into account in assessing whether anew 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 ofthe construction or operation ofa 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

HeinOnline -- 45 Fed. Reg. 52744 1980Federal Register / Vol. 45, No. 154 / Thursday. August 7, 1980 / Rules and Regulations

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 ormodified stationary source; and

(b] Emissions from any offsite support facility which would not otherwise be constructed or increase its emissions as

a result ofthe construction or operation ofthe major stationarysource ormajor modification.

(xii) "Fugitive emissions" means those emissions which could notreasonably pass through a stack, chimney, vent, or other functionally equivalent opening.

(xiii) "Significant" means, in reference
to a net emissions increase or the potential ofa source to emit any ofthe followingpollutants, a rate ofemissions that would equal or exceed any ofthe following rates:
Pollutant andEnzissions Rate

Carbon monoxide: 100tonsperyear (tpy) Nitrogen oxides.40 tpy Sulfur dioxide:40 tpy Particulate matter: 25 tpy Ozone 40 tpyofvolatile organic compounds Lead. 0.6 tpy

(xiv) "Allowable emissions' means the emissions rate ofa stationary source calculated using the maximum rated capacity Dfthe source [unless the source is subject tofederally enforceable limits which restrictthe operating rate, or hours ofoperation, orbn1k) and the

most stringent ofthe following:

(a) The applicable standards set forth in40 CFR Parts 60or 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 apollutant from an emissions anit as determined in accordance with subparagraphs (b)-(d) below.

(b)In general, actual emissions as ofa particular date shaft equal the average rate, in tons peryear, at which the unit actually emitted the pollutant during a two-year period which precedes the particular date and which is representative ofnormal source operation. Thereviewing authority shall allow the use of a different time period
upon a determination that it is more representative ofnormal source operation. Actual emissions shall be calculated using the unit's actual operating hours,-productionrates, and types ofmaterials processed, stored, or combusted during the selectedlime period. (c) The reviewing authoritymay presume that the source-specific allowable emissions for the unit are equivalent to theactual emissions-of the unit.

(d)For any emissions unit which has
notbegun 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 ofemissions based on the following:

(a)The most stringent emissions' limitation which is contained in the implementation plan ofany state for such class orcategory ofstationary

source, unless the owneroroperator of the proposed stationary source demonstrates that suchlimitations are not achievable; or

(b)The most stringent emissions limitation which is achieved inpractice by such class orcategoryof 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 ofthis term permit a proposed new ormodified 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 theAdministrator, including those requirements developed pursuant to40 CFR Parts 60 and 81, requirements within any applicable State Implementation Plan, and any permit requirements established pursuant to40 CFR 52.1 or under regulations approved pursuant totiis section, 40 CFR51.11, or 51.24.

(xviii) 'Begi actual-construction"

means in general, initiation ofphysical on-site onstruction activities on an emissions unit which are ofa permanent nature. Such activities include, but are not limited to,-installation ofbuilding supports and foundations, laying of underground pipework, and construction ofpermanent storage structures.With respect to a change in method of operating this term refers to those onsite activities otherthan preparatory activities which mark the initiation of the change.

(xix) "Commence" as applied to construction of a major stationary

source ormajor modification means that the owner oroperator has all necessary preconstruction approvals orpermits and either has:

(a)Begun, or caused to begin, a continuous program ofactual on-site construction ofthe source, to be completed withina reasonable time; or

(b) Entered into bindingagreements or contractual obligations, which cannot be cancelled ormodified without substantialloss to the owner or operator, to undertake a program of actual construction ofthe source to be completed within a reasonable time.

(xx) "Necessry preconstruction approvals orpermits" means those permits or approvals required under federal air quality controllaws 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 themethod ofoperation (includingfabrication, erection, installation, demolition, or modification of an emissions unit) which would resultina change in actual emissions.

(2) Each plan shalladopt a preconstruction review program to satisfy therequirements ofsections 172(b)(6) and 173 of theAct forany area designated nonattainment for any national ambient air quality standard under 40 CFR 61.300 etseq. Such a program shall apply to anynew major stationary source -or major modification that is major for thepollutant for which the area is designated nonattainment, if the stationary source ormodification would locate anywhere in the designated nonattainment area.

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

sources and modifications subject to anypreconstruction review program adoptedpursuant to this subsection the baseline for determining =edit for emissions reductions is the emissions limit underthe applicable State Implementation Plan ineffect at the time the application to construct isfiled. except that the offset baseline shall be the actual emissions-ofthesource from which offset credit is obtainedwhere: (a)The demonstration ofreasonable further progress and attainment of ambient air quality standards is based
upon the actual emissions ofsources 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 limitunder the applicable State Implementation 52745

HeinOnline -- 45 Fed. Reg. 52745 198052746 Federal Register / Vol. 45, No. 154 / Thursday, August 7, 1980 / Rules and Regulations

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 (oractual] emissions for the fuels involved is not acceptable, unless the permit is conditioned to require the

use ofa specified alternative control

measure which would achieve the same degree ofemissions reduction should the

source switch back to a dirtier fuel at

some later date.The reviewing authority should ensure that adequate long-term supplies ofthe 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 belowbaseline 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 yearprior to the date ofpermit 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 oflesser reactivity, except for those compounds listed in Table I ofEPA's "Recommended Policy on Control of Volatile Organic Compounds." (42FR 35314, July 8, 1977);

(e)All emission reductions claimed as offset credit shall be federally enforceable;

W Procedures relating to the permissible location ofoffsetting 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 notrelied on it in issuing any permit under regulations approved pursuaxit to 40 CFR 51.18 or the state has notrelied on it in demonstrating attainment orreasonable further progress. (4) Each plan mayprovide that the provisions ofthis subsection do not apply to a source ormodification that would be a major stationary source or major modification onlyiffugitive emissions, to the.extent quantifiable, are considered in calculating the potential to emit ofthe stationary source or modification and the source does not belong to any ofthe following categories:

(a)Coal cleaning plants (with thermal dryers];

(b)Kraft pulp mills; (c] Portland cement plants; (d)Primary zinc smelters; (e)Iron and steelmills; (f)

Primary aluminum ore reduction plants; (g)Primary copper smelters; (h)Municipal incinerators capable of charging more than 250 tons ofrefuse
per day,

(i)Hydrofluoric, sulfuric, ornitric acid plants;

U] Petroleum refineries; (k] Lime plants; (1) Phosphate rock processingplants; (m)Coke oven batteries; (n)Sulfur recovery plants; (a) Carbon blackplants (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 ofmore than 250 million British thermal units per hourheat input;.

(aa)Any other stationary source category which, as ofAugust 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 ofthe responsibility to complyfully with applicable provision ofthe plan and any other requirements under local, state or federal law.

(ii) At such time that a particular

source ormodification becomes a major stationary source ormajor modification solely by virtue ofa relaxation in any enforcement limitationwhich was -established after August 7, 1980, on the capacity ofthe source or modification otherwise to emit a pollutant, such as a restriction on hours ofoperation, then the requirments ofregulations approved pursuant to this section shall apply to the source ormodification as though construction hadnot yet commenced on the source ormodification.

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 ormay emit
any airpollutant subject to regulation under the Act.

(2) "Building, structure, or fability"

means all ofthe pollutant-emitting activities which belong to the same industrial grouping, are located on one

ormore 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" (ie,, whichhave the same two-digit code) as described in the following document, Standard IndustrialClassification 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 ofprocess equipment.

(4) "Potential to emit" means the maximum capacity ofa stationary

source to emit a pollutant under its physical and operational design. Any physical or operational limitation on the capacity ofthe source to emit a pollutant, including air pollution control equipment and restrictions on hours of operation oron amount ofmaterial combusted, stored, orprocessed, shall be treated as part ofIts design only If the limitation or the effect it would have

on emissions is federally enforceable. Secondary emissions do not count in determining thepotential to emit ofa stationary source.

(5)(i) "Major stationary source"

means:

(a)Any stationary source ofair pollutants which emits, orhas the potential to emit, 100 tons per year or
more ofany pollutant subject to regulation under the Act; or

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'(b) Any physical change that would

occur at a stationary source not qualifying under paragraph (5)(i](a) as a major stationary source, ifthe change would constitute a Major stationary

source by itself.

(i) A major stationary source that is major forvolatile for organic compounds shall be considered major forozone.

(6)(i) "Major modification" means any physical change in or change in the method ofoperation ofa major stationary source that would result in a significant net emissions increase ofany 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 ofoperation shall not include:

(a] Routine maintenance, repair, and replacement;

(b)Use ofan alternative fuel orraw material by reason ofan order under sections 2 (a) and (b) ofthe Energy Supply andEnvironmental Coordination Act of 1974 (or any superseding legislation] or by reason ofa natural gas curtailment plan pursuant to the Federal Power Act;

(c) Use ofan alternative fuel by

reason ofan order orrule 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 ofan 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 permitissued 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
anyfederally enforceable permit ,condition which was established after July 1,1979 pursuant to 40 CFR 52.21 or underregulations approved pursuant to 40 CFR 51.18 or40 CFR 51.24. (g] Any change in ownership at a stationary source.

(7](i] "Net emissions increase" means the amount by which the sum ofthe following exceeds zero:

(a)Any increase in actual emissions from aparticular physical change or change in the method ofoperation 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 ifit occurs between:

(a)The date five years before construction on theparticular change

commences and

(b] The date that the increase from the particular change occurs. (iII) An increase ordecrease in actual emissions is creditable only if the Administrator has notrelied on it in issuing a permit for the source under regulations approved pursuant to40 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 oldlevel.

(v)A decrease in actual emissions is creditable only to the extent that*

(a) The old level ofactual emissions

orthe old level ofallowable emissions, whichever is lower, exceeds the new level ofactual emissions (b)It is federally enforceable at and after the time that construction on the particular change begins; and (c)The Administrator orreviewing authority has not relied on It in issuing
anypermit under regulations approved pursuant to40 CFR 51.18 or the State has not relied on it in demonstrating attainment orreasonable further
progress.

(d)Ithas approximately the same qualitative significance forpublic 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 thatrequires 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 emitany pollutant subject toregulation underthe Act (9) "Reconstruction" will be presumed

to have taken place where the fixed capital cost ofthe new components exceeds 50 percent of the fixed capital
cost ofa comparable entirely new stationary source. Any final decision as to whether reconstruction has occurred shall be made in accordance with the provisions of40 CFR 60.15(f (1)-(3]. A reconstructed stationary source willbe 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 ofthe construction or operation ofa major stationary source ormajor modification, but do not come from the major stationary source ormajor modification itself.For the purpose of this section, secondary emissions must be specific, well defined, quantifiable, and impact the samegeneral area as the stationary source or modification which

causes the secondary emissions. Secondary emissions mayinclude, but

are notlimited to:

(i) Emissions from ships or trains coming to orfrom the new ormodified stationary source and

(ii) Emissions from any offsite support facility which would not otherwise be constructed orincrease its emissions as

a result ofthe construction oroperation ofthe major stationary source ormajor modification.

(12) "Fugitive emissions" means those emissions which could notreasonably
pass through a stack, chimney, vent, or other functionally equivalent opening.

(13) "Significant" means, in reference
to a net emissions increase orthe potential ofa source to emitany ofthe following pollutants, a rateofemissions that would eijual or exceed any ofthe following rates:
Pollutant and Fssions Rate Carbon monoxide: 100 tons peryear (tpy) Nitrogen oxides: 40 tpy Sulfurdioxide: 40 tpy Particulate matter.25 tpy Ozone: 40tpyofvolatile organic compounds Lead. 0.6 tpy (14) "Allowable emissions" means the emissions rate of a stationary source calculated usingthe maximum rated capacity ofthe source (unlessthe source is subject to federally enforceable limits which restrict the operating rate, or hours ofoperation, orboth] and the
most stringent ofthe following:. (i)The applicable standards setforth in 40 CFR Parts 60 and 61;

(ii) Any applicable State Implementation Plan emissions limitation, including those with afuture 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 

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## I Vol. 45, No. 154 

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enforceable bythe Administrator, , including 'those '-reqfurementsdeveloped pursuant 'to40fCFRParts;60and-61, requirements within anyapplicable State Implementation Plan; and any permit requiremenlts established pursuant to40 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) Ingeneral, actual emissions asoof:a particular date shall equalthe average rate, In tonsper year, at -whichtheunit -actuallyemittedthe pollutant during a two-year period which"precedes the particular-date and'whichis representative of-normal source operation. The Administrator shall allow the-useofad:ifferent time period
upon adetermination thatitismore representative ofnormal'source .operation.Actual emissions shalbe calculated usingthezunit's actual operating-hours, production rates,mand types ofimdterialsprocessed, 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 anyemissionsmanit 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 changein the method ofoperation (includingfabrication, erection, installation, demolition, or modification) ofan emissions'uiit which would result in a change in -actual emissions.

(18) "Commence" as applied to construction ofa major stationary

source or major-modification meansthat theDowner or operatorhas all necessary preconstruction approvals orpermits and eitherhas:

(i)Begun, or causedlo begin, a continuous program-ofactualon.site constructionof the source, tobe completed within a-reasonablelime; 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 ofthe source tobe -completed-within a-reasonable time. (-19) "Necessary preconstruction ,approvals orpermits" 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'ofphysical on-sgile -constructionactivities onan 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 pipework, andconstruction ofpermanentstqrage slructures. ith respect to a change inmethod-of operations, thislerm rnfers tothose onsite activities otherthan preparatory activities which mark theinitiation 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 Planbefore August 7,1980;

,(2) Commehced construction-within 18 monthsfrom August -, 1980, or any earlier time required under the applicable StateImplementation lan; and

(3)Did not discontinue construction foraperiod of18 months or more and completea sonstruction withina reasonable.time.

(h This section shall not 'applyto a

-source ormodification Thatwouid be a majorsltationary source orimajor modifica'ion.only iffugtive emissions,

to the extent quanifiable, are consideredincalculating the potential to emit ofthe stationary source or modification and the source does not belongto 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 than250tons-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 metalproduction 'plants; (20) :Chenicalprocess plants; (21) Fossil-fuel boilers ,(orcombination thereof) totaling more than 250 million British thermal units perhourheatinput: (22)Petroleum storage and transfer units with a total storage capacity exceeding 300,000 barrels;

'(23Taconlte oreprocessing plants; (24) Glass 'fiberprocessing plants; (25) Charcoal production plants; (26)Fossil fuel-fired steam electric plants ofmore than 250 million British thermal units perhour heat input;

,(27) Any other stationary source category which, as ofAugust 7,1980, is being regulated under section 111 or 112 ofthe Act.

fi)At such time thata particular

source or-modification becomes a major stationary source or majormodification solelyby-virtue of arelaxation in any enforceable limitation which was established after August 7, 1980, on the capacity ofthe source ormodification otherwise to emit a pollutant, such as a restriction onihours'of operation, then:

(1) Ifthe constructionmoratorium umposed pursuant to this section is still ineffect for the nonattainment area in whichthe source ormodification is located, then thepermit maynot be so revised; or

(2) Ifthe constructionmoratorium is no-longer-ineffect in that area, then tho requirements of40 CFR 51.180) shall apply to the source ormodification as though-construction had not yet commenced-on -thesource or modification.

Consolidated Permit Regulations

6.40 CFR Part 124is amended as follows:

a.40 CFR 124.3(b) Is deleted and reserved asfollows:

§ 124.3 Application for apernilt.

(b) [Reserved]

§ 124.5 [Amended]

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

[2)PSDpermits maybe terminated only'byxescission under §52.21[w) or by automatic expiration under § 52.21(r). Applications forrescission shallbe processed under § 52.21(w) and are not subject ,to this Part.

§ 124.42 [Amended]

,c.2Thefirst sentence of40 CER 124.42(b) is amended by substituting "submitted" for "requested."

[FRDoc 80-23780 Filed 94-M. M5 aml BILLING CODE 6560-01-M

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