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OAR Box 1787 

Prepped by Ollie Stewart 

Document Number: 

31) ll-B-16 

Docket Number: 

A-90-37 

Printed 11/4/2008 10:22:19 AM Sheet 31 of 147 
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i: J \ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

^ffiZ J* WASHINGTON, O.C. 20460 

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JUL I 5 

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?r ORM 2 51' 

MEMORANDUM 

SUBJECT: Procedures for EPA to Address Deficient New 

Source Permits Under the Clean Air Act 

FROM: Michael S. Alushin JLYmviJ l^nLL^-fc'******* 

Associate Enforcement Counsel for Air 

Office of Enforcement and Compliance Monitoring 

John S. Seitz, Di recto ry^^-u//V/7(/lw/C 

Stationary Source Compliance Dvrision 

Office of Air Quality Planning and Standards 

TO: Addressees 

I. Introduction 

This guidance applies to permits issued for major new 

sources and major modifications under both the prevention of 

significant deterioration (PSD) program and the nonattainment 

new source review (NSR) program. It contains three sets of 

procedures — one for permits issued pursuant to EPA-approved 

state programs (NSR permits and PSD permits in more than half 

the states) one for permits issued by states pursuant to delegations of authority from EPA, and one for instances where EPA 

issues the permit directly. An appendix of model forms 

appears at the end. 

The need for this guidance has become increasingly evident 

in the last two years. Before then, EPA had attempted only once, 

in 1981, to enforce against sources constructing or operating 

with new source permits the Agency determined to be deficient. 

In 1986, BPA litigated Greater Detroit Recovery Facility v. 

Adamkus et al. No. 86-CU-72910-DT (October 21, 1986). In that 

case, EPA wanted to enforce against a major stationary source 

constructing with a PSD permit issued by Michigan under a delegation agreement with EPA. The Agency had first determined that 

the best available control technology (BACT) determination for 

SO2 in the permit was inadequate. Before EPA started formal 

enforcement action, the source filed suit against the Agency, 

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arguing that EPA had no authority to "second guess" the BACT 

determination and that, in any event, we should be equitably 

foreclosed froa challenging the permit because we had remained 

silent during the two years since we had failed to comment on the 

permit. The court agreed and granted the source's motion for 

summary judgment. 

The Detroit case was an example of the need for prompt and 

thorough EPA review of and written comments on new source permits. 

Our ability to influence the terms of a permit, both informally 

and through legal procedures, diminishes markedly the longer EPA 

waits after a permit is issued before objecting to a specific 

term. This is due both to legal constraints, that is, tight time 

limits for comments provided in the regulations, and to equitable 

considerations that make courts less likely to require new sources 

to accept more stringent permit conditions the farther planning 

and construction have progressed. Accordingly, as a prerequisite 

to successful enforcement action, it is imperative that EPA 

review all major source permit packages on a timely basis and 

provide detailed comments on deficiencies. If EPA does not 

obtain adequate consideration of those comments, it is also 

important for EPA to protect air quality by prompt and consistent 

enforcement action against sources whose permits are found lacking. 

Because PSD permits are issued on a case-by-case basis, 

taking into consideration individual source factors, permitting 

decisions involve the exercise of judgment. However, although 

not an exhaustive list, any one of the following factors will 

normally be sufficient for EPA to find a permit "deficient" 

and consider enforcement action: 

1. BACT determination not using the "top-down" approach. 

2. BACT determination not based on a reasoned analysis. 

3. No consideration of unregulated toxic pollutants in 

BACT determination. 

4. Public notice problems - no public notice & comment 

period or deficiencies in the public notice. 

5. inadequate air quality modeling demonstrations. 

6. Inadequate air quality analysis or impact analysis. 

7. unenforceable permit conditions. 

8. For sources that impact Class I areas, inadequate 

notification of Federal Land Manager or inadequate 

consideration of impacts on air quality related 

values of Class I areas. 
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In NSR permitting, each of the following factors, while not 

necessarily an exhaustive list, are grounds for a deficient 

permit: 

1. Incorrect LAER determination, i.e., failure to be at 

least as stringent as the most stringent level achieved 

in practice or required under any SIP or federally 

enforceable permit. 

2. No finding of state-wide compliance. 

3. No emissions offsets or incorrect offsets. 

4. Public notice problems - no public notice and comment 

or deficiencies in public notice. 

5. Unenforceable permit conditions. 

II. Timing of EPA Response 

A. Comment 

Although EPA should know about every permit, at least by the 

time it is published as a proposal, the Agency sometimes does not 

learn about a permit during its development prior to the time the 

final permit is issued. If we do become aware of the permit and 

have objections to any of its terms, we should comment during the 

developmental stage before the permit becomes final. 

State agencies should send copies of all draft permit public 

notice packages and all final permits to EPA immediately upon 

issuance. (The requirements for contents of public notice packages 

are set forth at 40 C.F.R. S51.166(q)(2)(iii).) The Regional Office 

should review all draft permit public notice packages and final 

permits during the 30 day comment periods provided for in the 

federal regulations. It should write detailed comments whenever 

Agency staff does not agree with the terms of a draft or final 

permit. To make sure they get permits in time for review, Regional 

Offices should consider requiring states with approved new source 

programs, through Section 105 Grant Conditions, to notify them of 

the receipt of all major new source permit applications. They 

should also require states to send them copies of their draft 

permits at tbe beginning of the public comment period. 

Final permits should be required to be sent to EPA immediately 

upon issuance. (Note that the requirement for Regions to review 

draft and final permits is contained in guidance issued by Craig 

Potter on December 1, 1987.) Regions should carefully check 

their agreements with delegated states. These agreements require 
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states to send draft permits to EPA during the comment period. 

In addition, 40 C.F.R. S52.21(u)(2)(ii) requires delegated agencies 

to send a copy of any public comment notice to the appropriate 

regional office. Pursuant to 40 C.F.R. S124.15, a final, permit 

does not become effective until 30 days after issuance, unless 

there are no comments received during the comment period, in 

which case it becomes effective immediately. Regions should make 

sure that delegated states know about permit appeal procedures at 

40 C.F.R. S124 and, if necessary, issue advisory memoranda 

notifying them that EPA will use these procedures if the Agency 

determines a permit is deficient. 

B. Formal Enforcement Action 

If the permit was issued under a delegated program, it is 

important to initiate formal review or appeal within 30 days after 

the final permit is issued. (This response is set forth in 

Section IV below. The 30 day period is required by the regulations at 40 C.F.R. $124.19). When enforcing against permits 

issued under state programs, the same legal requirement to initiate 

enforcement within 30 days does not exist, but it is still 

extremely important to act expeditiously. 

III. Enforcement Against the Source v. Enforcement Against 

the State 

If a state has demonstrated a pattern of repeatedly issuing 

deficient permits, EPA may consider revoking the delegation for a 

delegated state or acting under Section 113(a)(2) of the Act to 

assume federal enforcement for an approved state. It is not 

appropriate to issue a $167 order to a state. Revocations of 

delegated authority as to individual permits and revocations of 

actual permits are theoretically possible, but they are unnecessary where EPA can act under Part 124 (i.e. within 30 days of 

issuance). Revocation may be appropriate where Part 124 appeals 

are unavailable, but likely will be subject to legal challenge. 

IV. Procedures to Follow When Enforcing Against 

Deficient Permits in Delegated Programs 

A. If possible, the following actions before construction 

commences: 

1. Take action under 40 C.F.R. $124.19(a) or (b) within 

30 days of the date the final permit was issued to 

review deficient provisions of the permit. 

a. $124.19(a) is an appeal, which may be taken by 

any person who commented during the public comment 

period. 
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b. S124.19(b) is a review of the terms of the permit 

by the Administrator under his own initiative. 

Regional Offices informally request the Administrator to take this action. They need not have 

commented during the public comment period. The 

Administrator has demonstrated a preference for 

using $124.19(b) over $124.19(a). In the four 

instances thus far when he was given the choice 

of acting under (a) or (b), he chose (b). However, 

the Administrator may not have sufficient time to 

act within 30 days in every situation in the 

future. 

2. In the majority of situations, it is more appropriate 

for the Agency to act as one body to initiate review 

under S124.19(b). In some instances, however, the 

third party role for a Regional Office, through 40 

C.F.R. $124.19(a) may be preferable. Regions should 

pick (a) or (b). However, if both provisions are 

legally available, they should request, in the 

alternative, that the Administrator act under the 

provision other than the one chosen by the Region 

should he deem it more appropriate. In particular, 

if a Region requests the Administrator to act under 

$124.19(b), it should ask that its memorandum be 

considered as a petition for review under $124.19(a) 

should review under $124.19(b) not be granted within 

30 days. This is to protect the Regions' right to 

appeal a permit if the Administrator does not have 

sufficient time to act. Therefore, all memoranda 

requesting review should be written to withstand 

public scrutiny if considered as petitions under 

$124.19(a). 

3. If the 30 day period for appeal has run and strong 

equities in favor of enforcement exist, issue a $167 

order and be prepared to file a civil action to 

prohibit commencement of construction until the 

source secures a valid permit. (See Section IV B(2)) 

below. 

B. For sources where construction has already commenced: 

1. If the permit was issued less than 30 days previously 

take action under 40 CFR $124.19. 

2. If the permit was issued more than 30 days previously, 

issue a $167 order requiring immediate cessation of 

construction until a valid permit is obtained. This 
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step should only be taken if extremely strong equities 

in favor of enforcement exist. Regions should be 

keeping state and source informed of all informal 

efforts to change permit terms before the $167 order 

is issued. $167 orders may be used both for sources 

- which have and have not commenced construction. 

However, because the $124.19 administrative appeal 

and review process is available in delegated programs, 

it is greatly preferred for challenging deficient 

permits in states where it can be used. 

3. If EPA determines that penalties are appropriate, 

issue a NOV under Section 113(a)(1) of the Act for 

commencement of construction of a major source or 

major modification without a valid permit. This i3 

necessary because $167 contains no penalty authority. 

Note that strong equities for enforcement must exist 

before taking this step. EPA can issue both a $167 

order requiring immediate injunctive relief and a 

NOV if we decide that both are appropriate. 

4. Follow up with judicial action under $167 and $113(b)(2) 

if construction continues without a new permit. 

C. Note that the appeal provisions of 40 C.F.R. $124.19 

apply to all delegated PSD programs even if $124.19 

is not specifically referenced in the delegation. 

V. Procedures to Follow When Enforcing Against Permits in 

EPA-Approved State Programs (All NSR and More Than 

Half of the PSD Programs) 

A. issue S113(a)(5) order (for NSR) or 167 order (for 

PSD) as expeditiously as possible, preferably within 

30 days after the permit is issued, requiring the 

source not to commence construction, or if already 

started, to cease construction (on the basis that it 

would be constructing with an invalid permit), and to 

apply for a new permit. Note that EPA should issue 

a S167 order if it has determined that there is a 

reasonable chance the source will comply. Otherwise, 

the Region should move directly to section V.D below. 

B. From the outset of EPA's involvement, keep the 

source informed of all EPA's attempts to convince 

the permitting agency to change the permit. 

C. Issue an NOV (113(a)) as soon as construction commences 

if EPA determines penalties are appropriate. 
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D. If source does not comply with order, follow up with 

judicial action under S167, S113(b)(5), or, if NOV 

issued, 5113(b)(2). If penalties are appropriate, 

issue NOV and later amend complaint to add a $113 

count when 30 day statutory waiting period has run 

- after initial action is filed under $167. 

VI. For EPA-issued Permits (Non-delegated) 

A. If source submitted inadequate information 

(e.g., misleading, not identifying all options) 

and EPA recently found out about it, 

1. If within 30 days of permit issuance, request 

review by the Administrator under 40 C.F.R. 

$124.19(b). 

2. If permit has been issued for more than 30 days, 

issue $167 or S113(a)(5) order preventing startup or, if appropriate, immediate cessation of 

construction. 

3. Issue NOV if construction has commenced and EPA 

determines penalties to be appropriate. 

4. If necessary, request additional information from 

source; if source cooperates, issue new permit. 

5. Consider taking judicial action if appropriate. 

EPA recognizes the distinction between permits based on 

faulty and correct information only for EPA directly-issued 

permits. This distinction is necessary for EPA permits due 

to equitable considerations. 

B. If source submitted adequate information and EPA 

issued faulty permit, we should attempt to get source 

to agree to necessary changes and accept modification 

of its permit. However, if source will not agree, 

only available options are revoking the permit and 

enforcing, consolidated permit regulations are 

unclear about EPA's authority to revoke PSD permits. 

Because of this and the equitable problems associated 

with enforcing against our own permits, unless new 

information about health effects or other significant 

findings is available, we may choose to accept the 

permit. If faulty permit produces unacceptable 

environmental risk, act under 40 C.F.R. $124.19, if 

possible. If action under 40 C.F.R. $124.19 not 

possible, first revoke permit and then act as set 

forth in Section IV. 
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Addressees: 

Regional Counsels 

Regions I-X 

Regional Counsel Air Contacts 

Regions I-X 

Air and Waste Management Division Director 

Region II 

Air Management Division Directors 

Regions I, III, and IX 

Air and Radiation Division Director 

Region V 

Air, Pesticides, and Toxics Management Division Directors 

Regions IV and VI 

Air and Toxics Division Directors 

Regions VII, VIII, and X 

PSD Contacts 

Regions I-X 

Alan Eckert 

Associate General Counsel 

Greg Foote, OGC 

Gary McCutchen 

NPPB, AQMD (MD-15) 

Ron McCallum 

Chief Judicial Officer 

Bob Van Heuvelen 

Environmental Enforcement Section 

Department of Justice 

David Buente, Chief 

Envlronaental Enforcement Section 

Department of Justice 
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Appendix 

1. Request for Review under 40 C.F.R.$124.19 

2. $167 Order 

3

' NoL^fo^vfoUMon^

 Vi0lati0 n an d ac ^Panyin g S113(a)(l)