1 ENERGYAND ENVIRONMENT CABINET 2 Departmentfor Environmental Protection 3 Division forAirQuality 4 (Amendment) 

## JUN 142012**~l·~** REGULATIONS COMPILER

5 401 KAR 51:052. Review ofnewsources in or impacting upon nonattainmentareas. 6 RELATES TO: KRS 224.20-1-00[{51], 224.20-110, 224.20-120, 40 C.F.R. Part 51 7 AppendixS, Part51 Subpart I, 51.165, 51.166, 51.300, 51.307, 52.21, 60, 61, 70.6, Part 8 81 Subpart D, 81.318,42 U.S.C. 7401-7671q 9 STATUTORYAUTHORITY: KRS 224.10-100(5), 42 U.S.C. 7401-7671q 10 NECESSITY, FUNCTION, AND CONFORMITY: KRS 224.10-100(5) requires the 11 cabinet to promulgate administrative regulations for the prevention, abatement, and 12 control of air pollution. This administrative regulation establishes requirements for the 13 construction or modification of stationary sources within, or impacting upon, areas 14 where the national ambientairqualitystandards have not been attained. The provisions 15 ofthis administrative regulation are not more stringent than the corresponding federal 16 requirements [regulation, 40C.F.R. 51.165]. 17 Section 1. Applicability. This administrative regulation shall apply to the construction 18 of a new major stationary source or a projectthat is a major modification at an existing 19 majorstationary source, which commences construction after September22, 1982, and 20 locates in or impacts upon an area designated nonattainment under 42 U.S.C. 21 7407(d)(1)(A)(i). 11 (1) The provisions ofthis administrative regulation relating to visibility protection shall 2 also apply to major sources or major modifications in nonattainment areas that 3 potentially have an impact on visibility in a mandatory Class Ifederal area. 4 (2) Applicability tests for projects, Except as provided in subsection (3) of this 5 section, a project shall be a major modification for a regulated NSR pollutant only if the 6 project causes a significant emissions increase and a significant net emissions 7 increase, as provided in paragraphs (a) and (b) ofthis subsection. 8 (a) Priorto beginning actual construction, the owner oroperator shall first determine 9 if a significant emissions increase will occur for the applicable type of unit being 10 constructed or modified accordingto subparagraphs 1to 3ofthis paragraph. 11 1. Actual-to-projected actual applicability test for projects that only involve existing 12 emissions units. A significant emissions increase of a regulated NSR pollutant shall be 13 projected to occur ifthe sum ofthe difference between the projected actual emissions 14 and the baseline actual emissions for each existing emissions unit equals or exceeds 15 the significant amountforthat pollutant. 16 2. Actual-to-potential test for projects that involve only construction of new 17 emissions units. A significant emissions increase of a regulated NSR pollutant shall be 18 projected to occur if the sum of the potential to emit from each new emissions unit 19 following completion of the project equals or exceeds the significant amount for that 20 pollutant. 21 3. Hybrid testfor projectsthat involve multiple types ofemissions units. A significant 22 emissions increase ofa regulated NSR pollutant shall be projected to occur ifthe sum 23 of the emissions increases for each emissions unit, using the methods specified in



### 21 subparagraphs 1and 2 ofthis paragraph as applicable for each emissions unit, equals 2 orexceedsthe significantamountforthat pollutant. 3 (b) Priorto beginning actual construction and after completing the applicable test in 4 paragraph (a) of this subsection, the owner or operator shall determine for each 5 regulated NSR pollutant if a significant net emissions increase will occur pursuant to 6 401 KAR 51:001, Section 1(144) and (218). 7 (3) For a plant-wide applicability limit (PAL) for a regulated NSR pollutant at a major 8 stationary source, the owner or operator of the major stationary source shall comply 9 with the applicable requirements ofSection 11 ofthis administrative regulation. 10 Section 2. Initial Screening Analyses and Determination of Applicable 11 Requirements. (1) Reviewofall sourcesforemissions limitation compliance. 12 (a) The cabinet shall examine each proposed major new source and proposed 13 major modification to determine if the source or modification will meet all applicable 14 emissions requirements in the Kentucky State Implementation Plan (SIP) and 40 C.F.R. 15 Parts 60 and 61. 16 (b) Ifthe cabinet determines from the application and all other available information 17 that the proposed source or modification will not meet the applicable emissions 18 requirements, the permitto construct shall be denied. 19 (2) Review ofspecified sources ofairquality impact. 20 (a) The cabinet shall determine if a proposed major stationary source or major 21 modification will be constructed in an area designated as nonattainment pursuant to 42 22 U.S.C. 7407(d)(1)(A)(i) for a pollutant for which the stationary source or modification is 23 major.



### 31 (b) Ifadesignated nonattainment area is projected to be an attainment area as part 2 of an approved control strategy by the new source start-up date, offsets shall not be 3 required ifthe newsourcewill not cause a newviolation. 4 (3) Fugitive emissions sources. Sections 4 and 10 ofthis administrative regulation 5 shall not applyto asource or modification thatwill be a majorstationarysource or major 6 modification only if fugitive emissions, to the extent quantifiable, are considered in 7 calculating the potential to emit ofthe stationary source or modification and the source 8 does not belong to one (1) ofthefollowing categories: 9 (a) Coal cleaning plantswith thermal dryers; 10 (b) Kraft pulp mills; 11 (c) Portland cement plants; 12 (d) Primaryzinc smelters; 13 (e) Iron and steel mills; 14 (f) Primaryaluminum ore reduction plants; 15 (g) Primary coppersmelters; 16 (h) Municipal incinerators capable ofcharging morethan 250 tons ofrefuse perday; 17 (i) Hydrofluoric, sulfuric, or nitricacid plants; 18 U) Petroleum refineries; 19 (k) Lime plants; 20 (I) Phosphate rock processing plants; 21 (m) Coke oven batteries; 22 (n) Sulfur recovery plants; 23 (o) Carbon black plants, furnace process;



### 41 (p) Primary lead smelters; 2 (q) Fuel conversion plants; 3 (r) Sintering plants; 4 (s) Secondary metal production plants; 5 (t) Chemical process plants, except ethanol production facilities producing ethanol 6 by natural fermentation under the North American Industry Classification System 7 (NAICS) codes 325193 or312140; 8 (u) Fossil-fuel boilers, or combination of fossil-fuel boilers, totaling more than 250 9 million BTUs per hourheat input; 10 (v) Petroleum storage and transfer units with a total storage capacity exceeding 11 300,000 barrels; 12 (w) Taconite ore processing plants; 13 (x) Glassfiber processing plants; 14 (y) Charcoal production plants; 15 (z) Fossil fuel-fired steam electric plants of more than 250 million BTUs per hour 16 heat input; or 17 (aa) Another stationary source category that, as of August 7, 1980, is being 18 regulated under42 U.S.C. 7411 or7412. 19 Section 3. Sources Locating in Designated Attainment or UnclassifiableAreas that 20 Will Cause or Contribute to aViolation of a National Ambient Air Quality Standard. (1) 21 This section shall apply only to new major stationary sources or new major 22 modifications that will locate in designated attainment or unclassifiable areas, pursuant 23 to 42 U.S.C. 7407(d)(1)(A)(ii) or (iii), ifthe source or modification will cause impactsthat



### 51 exceed the significance levels, as listed in the table in this subsection, at a localitythat 

### 2 does notorwill not meetthe national ambientairqualitystandards. Pollutant Annual Averaging Time Average 24- 

### 8- 3- 1- Hour Hour Hour Hour Sulfur 1.0 5



## -- 25



## -- Dioxide !Jg/m3 !Jg/m3 j.Jg /m3

PM2.s 0.3 

## 12. -- 

## -- --

- - - b!g/m3 b!g/m3 PM10 1.0 5



## -- -- 

## -- !Jg/m3 !Jg/m3 Nitrogen 1.0 

### -- 

## -- -- -- Dioxide !Jg/m3 Carbon



## -- -- 0.5



## -- 2 Monoxide mg/m3 mg/m3 3 (2) Sources to which this section applies shall meet the requirements in Section 4 4(1), (2) and (4) ofthis administrative regulation and may be exemptfrom Section 4(3) 5 ofthis administrative regulation. 6 (3) For sources of sulfur dioxide (S02 ), particulate matter, and carbon monoxide 7 (CO), the determination that a new major source or major modification will cause or 8 contribute to a violation of a national ambient air quality standard shall be made on a 9 case-by-case basis using the source's allowable emissions in an approved atmospheric



### 61 simulation model listed in 40 C.F.R. Part 51, Appendix W, "Guideline on Air Quality 2 Models". 3 (4) For sources of NOx, the initial determination that a new major source or major 4 modification will cause or contribute to a violation of the national ambient air quality 5 standard for nitrogen dioxide (N02) shall be made using an approved atmospheric 6 simulation model assuming all the nitric oxide emitted is oxidized to N02 bythe time the 7 plume reaches ground level. The initial concentration estimates may be adjusted if 8 adequate data are availableto accountforthe expected oxidation rate. 9 (5) For ozone, sources of VOCs or NOx locating outside a designated ozone 10 nonattainment area shall be presumed to not have a significant impact on the 11 designated nonattainment area. If ambient monitoring indicates that the area of source 12 location is in fact nonattainment, the source shall be permitted pursuant to this 13 administrative regulation and 401 KAR 52:020 until the area is designated 14 nonattainment pursuantto 42 U.S.C. 7407(d)(1)(A)(i). 15 (6) The determination that a new major source or major modification will cause or 16 contribute to a violation of a national ambient air quality standard shall be made as of 17 the start-up date. 18 (7) Applications for major new sources and major modifications locating in 19 attainment or unclassifiable areas, the operation ofwhich will cause a newviolation ofa 20 national ambient air quality standard but will not contribute to an existing violation, may 21 be approved only ifthefollowing conditions are met: 22 (a) The newsource shall: 23 1. Meet an emissions limitation;



### 71 2. Meet adesign, operational, orequipmentstandard; or 2 3. Control existing sources so that the new source will not cause a violation of a 3 national ambientairqualitystandard. 4 (b) The newemissions limitationsforthe new and existing sources affected shall be 5 state and federally enforceable in accordance with Section 6 of this administrative 6 regulation. 7 Section 4. Sources Locating in a Designated Nonattainment Area. This section 8 shall apply to a new major stationary source or major modification that will be 9 constructed in an area designated as nonattainment pursuant to 42 U.S.C. 10 7407(d)(1)(A)(i) for a pollutant for which the stationary source or modification is major. 11 Approval to construct may be granted only ifthe conditions ofthis section are met. 12 (1) The new major source or major modification shall be required to meet an 13 emissions limitation that specifies the lowest achievable emissions rate (LAER) for the 14 source. 15 (2) The applicant shall demonstrate that all existing major sources owned or 16 operated by the applicant, or an entity controlling, controlled by, or under common 17 control with the applicant, in the Commonwealth of Kentucky are in compliance with all 18 applicable emissions limitations and standards specified in Title 401, Chapters 50 to 65, 19 and 40 C.F.R. Parts 60 and 61 and 42 U.S.C. 7401-7626, or are in compliance with an 20 expeditious state and federally enforceable compliance schedule or a court decree 21 establishing acompliance schedule. 22 (3)(a) Except for VOCs or NOx emissions, emissions from existing sources in the 23 affected area ofthe proposed new major source or modification, whether or not under



### 81 the same ownership, shall be reduced oroffsetat a ratio ofat least1:1, so thatthere will 2 be reasonable further progress toward attainment ofthe applicable national ambient air 3 quality standard (NAAQS). Only those transactions in which the emissions being offset 4 arefrom the same criteria pollutantcategory shall be accepted. 5 (b) The ratio of total emissions reductions of VOCs or NOx to total increased 6 emissions ofthe same air pollutant shall be at leastthe ratio indicated for the following 7 ozone nonattainmentarea classifications: 8 1. Formarginal nonattainmentareas, at least 1.1 to 1; 9 2. Formoderate nonattainmentareas, at least 1.15to 1; 10 3. Forserious nonattainmentareas, at least 1.2to 1; 11 4. Forsevere nonattainmentareas, at least 1.3to 1; and 12 5. Forextreme nonattainmentareas, at least 1.5to 1. 13 (4) The emissions reductions shall provide a positive net air quality benefit in the 14 affected area. 15 (a) Atmosphericsimulation modeling shall notbe required forVOCs and NOx. 16 (b) Except as provided in Section 3(5) ofthis administrative regulation, compliance 17 with subsection (3) ofthis section and Section 5(3)(e) ofthis administrative regulation 18 shall be adequateto meetthis condition. 19 (5) The proposed major stationary source or major modification shall include in the 20 application for a construction permit an analysis of the alternative sites, sizes, 21 production processes, and environmental control techniques for the proposed source, 22 which demonstrates that benefits of the proposed source significantly outweigh the 23 environmental and social costs imposed as a result of its location, construction, or



### 91 modification. 2 Section 5. Determining Credit for Emissions Offsets. (1) The baseline for 3 determining creditforemissions reductions oroffsets shall be, considering that baseline 4 actual emissions as defined in 401 KAR 51:001, Section 1(20), shall not be used for 5 determining the baselineforemissions offsets: 6 (a) The emissions limitations in effectwhen the application to construct or modify a 7 source isfiled; or 8 (b) The actual emissions ofthe sourcefrom which offset credit is attained if: 9 1. The demonstration of reasonable further progress and attainment of ambient air 10 qualitystandardsforthe SIPwas based on actual emissions; or 11 · 2. The SIP does not contain an emissions limitation for that source or source 12 category. 13 (2) Creditforemissions offsets. Creditforemissions offset purposes may be allowed 14 for existing control if the existing control goes beyond the control required under 401 15 KAR Chapters 50 to 65 and applicablefederal regulations. 16 (3) General provisionsforcalculating offsetvalues. 17 (a) Offset calculations shall be made on a pound-per-hour basis if all facilities 18 involved in the emissions offset calculations are operating at their maximum or allowed 19 production rate. 20 (b) Offsets may be calculated on a tons-per-year basis if baseline emissions for 21 existing sources providing the offsets are calculated using the actual annual operating 22 hoursforthe previoustwo (2) year period. 23 (c) If the cabinet requires certain hardware controls instead of an emissions

101 limitation, baseline allowable emissions shall be based on actual operating conditions 2 forthe previoustwo (2) year period in conjunction with the required hardware controls. 3 (d) Ifthe emissions limitations required by the cabinet allow greater emissions than 4 the uncontrolled emissions rate of the source, emissions offset credit shall be allowed 5 onlyforcontrol belowthe uncontrolled emissions rate. 6 (e) The owneroroperatorofanewor modified majorstationary source shall comply 7 with any offset requirement in effect under this administrative regulation to increase 8 emissions ofan air pollutant byobtaining emissions reductions ofthe airpollutantfrom: 9 1. The same source orothersources in the same nonattainmentarea; or 10 2. A Source in another nonattainmentarea if: 11 a. The other area has an equal or higher nonattainment classification than the area 12 in whichthesource is located; and 13 b. Emissionsfrom the other area contribute to aviolation ofthe national ambient air 14 qualitystandard in the nonattainmentarea in which the source is located. 15 (4) Calculating offsets if an applicable emissions limitation does not exist. If the 16 Kentucky SIP does not contain an emissions limitation for a source or source category, 17 the emissions offset baseline involving the source shall be actual emissions determined 18 underactual operating conditionsforthe previoustwo (2) year period. 19 (5) Calculating offsetsforexisting fuel combustion sources. 20 (a) The emissions for determining emissions offset credit involving an existing fuel 21 combustion source shall be the allowable emissions under the emissions limitation 22 requirements of the cabinet for the type of fuel being burned when the new major 23 source or major modification application isfiled.

111 (b) Ifthe existing source has switched to adifferenttype offuel at some earlierdate, 2 a resulting emissions reduction, either actual or allowable, shall not be used for 3 emissions offsetcredit. 4 (c) Ifthe existing source commits to switch to a cleaner fuel at some future date, 5 emissions offset credit based on the allowable emissionsforthe fuels involved shall not 6 be allowed unless the permit is conditioned to require the use ofa specified alternative 7 control measure thatwill achieve the same degree ofemissions reduction ifthe source 8 switches backto adirtierfuel at some laterdate. 9 (6) Calculating offsetsforoperating hours and source shutdowns. 10 (a) 

### Asource may be credited with emissions reductions achieved by shutting down 11 an existing source or permanently curtailing production or operating hours below 12 baseline levels if the work force to be affected has been notified in writing of the 13 proposed shutdown orcurtailment. 14 (b) Emissions reductions achieved by shutting down an existing emissions unit or 15 curtailing production oroperating hours: 16 1. May be generally credited for offsets pursuant to 40 C.F.R. 51.165(a)(3)(ii)(C)(1) 

### 17 if: 18 a. The reductions are surplus, permanent, quantifiable, and federally enforceable; 19 and 20 b. The shutdown or curtailment occurred after the last day ofthe base yearfor the 21 SIP planning process. 22 (i) The cabinet may consider a prior shutdown or curtailment to have occurred after 23 the last day ofthe base year ifthe projected emissions inventory used to develop an

121 ·attainmentdemonstrationexplicitly includesthe emissionsfrom the previouslyshutdown 2 orcurtailed emission unit, pursuantto 40 C.F.R. 51.165(a)(3)(ii)(C)(1)(ii). 3 (ii) Creditshall not be given forashutdownthatoccurred beforeAugust 7, 1977; 4 2. Thatdo not meetthe requirements ofsubparagraph 1.b. ofthis paragraph may be 5 generallycredited pursuantto 40 C.F.R. 51.165(a)(3)(ii)(C)(2) if: 6 a. The shutdown or curtailment occurred on or afterthe datethe construction permit 7 application isfiled; or 8 b. The applicant establishes thatthe proposed new emissions unit is a replacement 9 forthe shutdown or curtailed emissions unit, and the emissions reductions achieved by 10 the shutdown or curtailment meet the requirements of subparagraph 1.a. of this 11 paragraph. 12 (7) Calculating offsets for hydrocarbon substitution. An emissions offset credit shall 13 not be allowed for replacing one volatile organic compound with another of lesser 14 photochemical reactivity, unless the replacement compound is methane, ethane, 1,1,1- 15 trichloroethane, ortrichlorofluoroethane. 16 (8) Banking ofemissions offsetcredit. 17 (a) New sources obtaining permits by applying offsets afterthe effective date ofthis 18 administrative regulation may bank offsetsthat exceed the requirements ofSection 5(3) 19 ofthis administrative regulation. 20 (b) An owner or operator of an existing source that reduces its own emissions may 21 bank a resulting reduction beyond those required by regulation for use under this 22 administrative regulation, even if the offsets are applied immediately to a new source 23 permit.

131 (c) Banked emissions offsets may be used under the preconstruction review 2 program required in 42 U.S.C. 7401 to 7626, as long as these banked emissions are 3 identified and accounted for in Kentucky's control strategy. 4 (9) Offsetcreditfor meeting NSPS or NESHAPS. 

### 5 (a) If a source is subject to an emissions limitation established in a New Source 

### 6 Performance Standard (NSPS) or a National Emissions Standard for Hazardous Air 7 Pollutants (NESHAPS) and a different emissions limitation is required by the cabinet, 

### 8 the more stringent limitation shall be used as the baseline for determining credit for 

### 9 emissions offsets. 10 (b) The difference in emissions between NSPS or NESHAPS and other emissions 11 limitationsshall notbe used as offsetcredit. 12 Section 6. Administrative Procedures for Emissions Offsets. (1) Emission 13 reductions shall be enforceable by the cabinet and the U.S.· EPA, and shall be 14 accomplished bythe start-up date ofthe newsource. 15 (a) If emissions reductions are to be obtained in a state that neighbors the 16 Commonwealth for a new source to be located in the Commonwealth, the emissions 17 reductions shall be enforceable by the neighboring state or local agencies and the U.S. 18 EPA. 19 (b) The necessaryemissions offsets may be proposed bythe ownerofthe proposed 20 source orbythe cabinet. 21 (2) Source initiated emissions offsets. 22 (a) The owneroroperatorofasource may propose: 23 1. Internal emissions offsets, which involve reductions from sources controlled by

141 the owner; or 2 2. External emissions offsets, which involve reductions from other sources, if the 3 emissions offsets meet the requirements of this section and Section 4(3) of this 4 administrative regulation. 5 (b) An internal emissions offset shall be included and made enforceable as a 6 condition ofthe source's permit. 7 (c) An external emissions offset shall only be accepted ifthe cabinet requires the 8 affected source to comply with a new emissions limitation to ensure that its emissions 9 shall be reduced by a specified amount in a specified time; and the new emissions 10 limitation shall be enforceable bythe cabinet and the U.S. EPA. 11 (3) Cabinet initiated emissions offsets. 12 (a) The cabinet may commit to reducing emissions from mobile sources and other 13 existing sourcesto provide a net airquality benefit in the impactarea ofaproposed new 14 sourceto accommodatethe proposed newsource. 15 (b) This emissions reduction commitment shall be reflected in the emissions 16 limitation requirementsforthe newand existing sources as required bythis section. 17 Section 7. Source Obligation. (1) An owner or operator of a source or modification 18 subject to this administrative regulation shall construct and operate the source or 19 modification in accordance with the application submitted to the cabinet under this 20 administrative regulation and 401 KAR 52:020 or under the terms of an approval to 21 construct. 22 (2)(a) Approval to constructshall become invalid ifconstruction: 23 1. Is not commenced within eighteen (18) months after receipt ofthe approval;

151 2. Is discontinued foraperiod ofeighteen (18) months or more; or 2 3. Is notcompleted within a reasonabletime. 3 (b) The cabinet may extend the eighteen (18) month period upon a satisfactory 4 demonstrationthat an extension isjustified. 5 1. An extension shall not apply to the time period between construction of the 6 approved phases ofaphased construction project; and 7 2. Each phase shall commence construction within eighteen (18) months of the 8 projected and approved commencementdate. 9 (3) Approval to construct shall not relieve an owner or operator ofthe responsibility 10 to comply fully with applicable provisions of 401 KAR Chapters 50 to 65 and other 11 applicable requirements under local, state, orfederal law. 12 (4) Ifa particularsource or modification becomes a majorstationary source or major 13 modification solely by virtue of a relaxation in an enforceable limitation which was 14 established after August 7, 1980, on the capacity of the source or modification 15 otherwise to emit a pollutant, the requirements of this administrative regulation shall 16 apply to the source or modification as though construction had not yet commenced on 17 the source or modification. 18 (5)(a) The provisions ofthis subsection shall applyto projects at existing emissions 19 units at amajorstationarysource otherthan projects at asourcewith a PAL, if: 20 1. There is a reasonable possibility that a project that is not part of a major 21 modification may result in asignificantemissions increase; and 22 2. The owner or operator uses the method specified in 401 KAR 51:001, Section 23 1(199)(b)to calculate projected actual emissions.

161 (b) Before beginning actual construction of a project specified in paragraph (a) of 2 this subsection, the owner or operator shall document and maintain a record of the 3 following information: 4 1. Adescription ofthe project; 5 2. Identification of the emissions units for which emissions of a regulated NSR 6 pollutant may be affected bythe project; and 7 3. A description ofthe applicability test used to determine that the project is not a 8 majormodification for any regulated NSRpollutant, including: 9 a. Baseline actual emissions; 10 b. Projected actual emissions; 11 c. Amount of emissions excluded in calculating projected actual emissions and an 12 explanationforwhythat amountwas excluded; and 13 d. Anyapplicable netting calculations. 14 (c) Fora project specified in paragraph (a) ofthis subsection, the owner oroperator 15 shall: 16 1. Monitor the emissions of any regulated NSR pollutant that could increase as a 17 result of the project and that are emitted by an emissions unit identified in paragraph 18 (a)2 ofthis subsection; and 19 2. Calculate and maintain a record ofthe annual emissions, in tons per year on a 20 calendaryear basis, for: 21 a. Five (5) yearsfollowing resumption ofregularoperations afterthe change; or 22 b. Ten (10) years ifthe project increases the design capacity ofor potential to emit 23 forthat regulated NSR pollutantatthe emissions unit.

171 (d) Ifthe unit is an existing EUSGU, before beginning actual construction, the owner 2 oroperator: 3 1. Shall provide a copy ofthe information in paragraph (b) ofthis subsection to the 4 cabinet; and 5 2. Shall not be required to obtain a determination from the cabinet before beginning 6 actual construction; and 7 3. Shall submit a report to the cabinet within sixty (60) days after the end ofeach 8 year during which records are required to be generated under paragraph (b) of this 9 subsection that contains the unit's annual emissions during the calendaryear preceding 10 report submittal. 11 (e)1. Foran existing unit otherthan an EUSGU, the owneroroperatorshall submita 12 reportto the cabinet if: 13 a. The annual emissions, in tons peryear, from a project identified in paragraph (a) 14 of this subsection exceed the baseline actual emissions, as documented and 15 maintained pursuant to paragraph (b)3 of this subsection, by a significant amount for 16 that regulated NSR pollutant; and 17 b. The emissions· differ from the preconstruction projection as documented and 18 · maintained pursuantto paragraph (b)3 ofthis subsection. 19 2. The report shall be submitted to the cabinetwithin sixty (60) days afterthe end of 20 the year during which records are required to be generated under paragraph (b) ofthis 21 subsection and shall contain the following: 22 a. The name, address, and telephone numberofthe majorstationarysource; 23 b. The annual emissions as calculated pursuantto paragraph (c) ofthis subsection;

181 and 2 c. Anyother informationthatthe owneroroperatorwishesto include in the report. 3 (f) The owner or operator ofthe source shall make the information required to be 4 documented and maintained underthis subsection availablefor review upon requestfor 5 inspection bythe cabinetorthe general public pursuantto 401 KAR 52:100. 6 Section 8. Permit Condition Rescission. (1) An owner or operator holding a permit 7 for a stationary source or modification that was issued pursuant to 401 KAR 51:050 or 8 51:051Emay requestthatthe cabinet rescind the applicable conditions. 9 (2) The cabinet shall rescind apermitcondition ifthe owneroroperator: 10 (a) Requests and demonstrates to the satisfaction of the cabinet that this 11 administrative regulation does not apply to the source or modification or to a portion of 12 the source or modification if construction will have commenced after September 22, 13 1982; and 14 (b) Demonstrates that the rescission will not violate the requirements of Sections 15 4(3) and 7ofthis administrative regulation. 16 Section 9. Class I Areas. (1) The following areas, which were in existence on 17 August7, 1977, shall be Class Iareas and shall notbe redesignated: 18 (a) International parks; 19 (b) National wilderness areas and national memorial parks which exceed 5,000 20 acres in size; and 21 (c) National parksthatexceed 6,000 acres in size. 22 (2) Any other area, unless otherwise specified in the legislation creating the area, is 23 designated Class II but may be redesignated as provided in 40 C.F.R. 51.166(g).

191 (3) The visibility protection requirements ofthis administrative regulation shall apply 2 onlyto sourcesthat may impactamandatory Class Ifederal area. 3 (4) Thefollowing areasmaybe redesignated onlyas Class 

### Ior 

### II: 4 (a) An area which as ofAugust 7, 1977, exceeded 10,000 acres in size and was a 5 national monument, a national primitive area, a national preserve, a national 6 recreational area, a national wild and scenic river, a national wildlife refuge, a national 7 lakeshoreorseashore; and 8 (b) A national park or national wilderness area established after August 7, 1977, 9 which exceeds 10,000acres in size. 10 Section 10. Protection of Visibility. (1) New source review; applicability and 11 exemptions. 12 (a) A stationary source or modification to which this section applies shall not begin 13 actual construction without a permit that states the stationary source or modification 14 shall meetthe requirements ofthis section. 15 (b) This section shall applyto construction ofa new majorstationary source or major 16 modification that will be constructed in an area designated as nonattainment under 42 17 U.S.C. 7407(d)(1)(A)(i) and potentially have an impacton visibility in aClass Iarea. 18 (c) This section shall apply to a majo.r stationary source or major modification for 19 each pollutant subject to regulation under 42 U.S.C. 7401 to 7626 that it will emit, 20 exceptas provided in paragraphs (d) and (e) ofthis subsection. 21 (d) This section shall not apply to a particular major stationary source or major 22 modification if: 23 1. The source or modification is a nonprofit health or nonprofit educational institution

201 or a major modification will occur at the institution, and the Governor of the 2 Commonwealth requeststhat it be exemptfrom the requirements ofthis section; and 3 2. The source is a portable stationary source that has previously received a permit 4 underthis section and will be temporarily relocated; and 5 (a) The emissionsfrom the sourcewill notexceed the allowable emissions; 6 b. The emissionsfrom the sourcewill not impactaClass Iarea or an area where an 7 applicable increment is known to be violated; and 8 c. Reasonable notice is given to the cabinet prior to the relocation, identifying the 9 proposed new location and the probable duration ofoperation at the new location. The 10 notice shall be given to the cabinet not less than ten (10) days in advance of the 11 proposed relocation unless a different time duration is previously approved by the 12 cabinet pursuantto this section. 13 (e) This section shall not apply to a major stationary source or major modification 14 with respectto a particular pollutant, ifthe allowable emissions ofthat pollutantfrom the 15 source, orthe netemissions increase ofthat pollutantfrom the modification: 16 1. Will not impact aClass Iarea; 17 2. Will not impact an area where an applicable increment is known to be violated; 18 and 19 3. Will be temporary. 20 (2) Visibility impact analyses. The owner or operator of a source shall provide an 21 analysis ofthe impairment to visibility that will occur in a Class Iarea as a result ofthe 22 source or modification and general commercial, residential, industrial, and other growth 23 associated with the source ormodification.

211 (3) Federal land manager notification. 2 (a) The federal land manager and the federal official charged with direct 3 responsibilityfor managementofClass Iareas shall have an affirmative responsibilityto 4 protect the visibility and other air quality related values of the Class I lands and to 5 consider, in consultation with the cabinet, ifa proposed source or modification will have 6 an adverse impacton thesevalues. 7 (b) The cabinet shall provide written notification to all affected federal land 8 managers and to the federal official charged with direct responsibility for management 9 oflandswithin the Class Iarea ofapermit application oran advanced notice ofapermit 10 application for a proposed new major stationary source or major modification that may 11 affectvisibility in aClass Iarea. The notification shall: 12 1. Include acopy ofall information relevantto the permitapplication; 13 2. Be submitted pursuant to this paragraph within thirty (30) days of receipt ofthe 14 permit application or advanced notice of permit application and at least sixty (60) days 15 priorto a public hearing on the applicationfora permitto construct; and 16 3. Include an analysis ofthe proposed source 1S anticipated impacts on visibility in a 17 Class Iarea. 18 (c)1. The cabinet shall consider an analysis by the federal land manager, provided 19 within thirty (30) days ofthe notification and analysis required by paragraph (b) ofthis 20 subsection, that the proposed new major stationary source or major modification may 21 have an adverse impact on visibility in aClass Iarea. 22 2. Ifthe cabinet finds that the analysis does not demonstrate, to the satisfaction of 23 the cabinet, thatan adverse impacton visibilitywill result in the Class Iarea, the cabinet

221 shall, in the public hearing notice required in 401 KAR 52:100, either explain that 2 decision orgive notice asto where the explanation may be obtained. 3 (d) Adverse impact on visibility as it applies to paragraph (c) ofthis subsection shall 4 be determined on a case-by-case basis, taking into account the geographic extent, 5 intensity, duration, frequency, and time ofvisibility impairments, and how these factors 6 correlate with the times ofvisitor use ofthe Class Iarea, and the frequency and time of 7 natural conditions that reducevisibility. 8 (4) Public participation. The cabinet shall follow the applicable procedures of401 9 KAR 52:100 in processing applications under this section and shall follow the 10 procedures at 40 C.F.R. 52.21(r), effective July 1, 2009, to the extent that the 11 procedures of401 KAR 52:100 do notapply. 12 (5) National visibility goal. 13 (a) The cabinet shall only issue permitsto those sources forwhich emissionswill be 14 consistent with making reasonable progress toward the national goal of preventing 15 future, and remedying existing, impairmentofvisibility.in Class Iareaswhich impairment 16 resultsfrom manmade airpollution. 17 (b) In making the decisionto issue a permit, the cabinetshall consider: 18 1. The costs ofcompliance; 19 2. Thetime necessaryforcompliance; 20 3. The energy and non-airquality environmental impacts ofcompliance; and 21 4. The useful life ofthe source. 22 (6) Monitoring. 23 (a) The cabinet may require monitoring of visibility in a Class I an;:Ja near the

231 proposed new stationary source or major modification using human observations, 2 teleradiometers, photographic cameras, nephelometers, fine particulate monitors, or 3 otherappropriate methods as specified bythe U.S. EPA. 4 (b) The monitoring method selected shall be determined on a case-by-case basis by 5 the cabinet. 6 (c) The cabinet shall not undertake visibility monitoring in a Class Iarea withoutthe 7 approval ofthefederal land manager. 8 (d) Data obtained from visibility monitoring shall be made available to the cabinet, 9 thefe.deralland manager, and the U.S. EPA, upon request. 10 Section 11. Plant-wide Applicability Limit Provisions. The cabinet may approve the 11 use of an actuals PAL (PAL) for an existing major stationary source if the PAL meets 12 the requirements ofthis section. 13 (1) General provisions. 14 (a) An owner or operator may execute a projectwithouttriggering major NSR, ifthe 15 source maintains its total source-wide emissions below the PAL level, meets the 16 requirements in this section, and complies with the PAL permit. Ifthese conditions are 17 met, a project: 18 1. Shall not be considered a majormodificationforthe PAL pollutant; 19 2. Shall not haveto be approved through Kentucky's major NSR program; and 20 3. Shall not be subject to the provisions of Section 7(4) of this administrative 21 regulation concerning restrictions on relaxing enforceable emissions limitations that the 22 majorstationarysource used to avoid applicabilityofthe major NSR program. 23 (b) Except as provided under subparagraph (1)(a)3 of this section, the major

241 stationary source shall continue to comply with all applicable federal or state 2 requirements, emissions limitations, and work practice requirements that were 3 established priorto the effective date ofthe PAL. 4 (c) The cabinet shall not allow a PAL for VOC or NOx for any major stationary 5 source located in an extreme ozone nonattainmentarea. 6 (2) Permit application requirements. The owner or operator of a major stationary 7 source shall submit the following information to the cabinet for approval as part of an 8 application fora permitorpermit revision requesting a PAL: 9 (a) A list of all emissions units at the source designated as small, significant or 10 major, based on their potentialto emit; 11 (b) Identification of the federal and state applicable requirements, emissions 12 limitations, and work practice requirementsthat applyto each emissions unit; 13 (c) Calculations of the baseline actual emissions for the emissions units with 14 supporting documentation; and 15 (d) The calculation proceduresthe owneror operator proposesto use to convertthe 16 monitoring system data to monthly emissions and annual emissions based on atwelve 17 (12) month rolling totalforeach month as required bysubsection (12)(a) ofthis section. 18 (3) Establishing a PAL. The cabinet shall establish a PAL at a major stationary 19 source in afederallyenforceable permit pursuantto the requirements ofthis section. 20 (a) The PAL shall impose an annual emissions limitation in tons per year that is 21 enforceable as apractical matterforthe entire majorstationarysource, in which: 22 1. For each month during the PAL effective period afterthe first twelve (12) months 23 of establishing a PAL, the owner or operator shall demonstrate that the sum of the

251 monthly emissions from each emissions unit underthe PAL forthe previous twelve (12) 2 consecutive months is less than the PAL as a twelve (12) month average, rolled 3 monthly; and 4 2. For each month during the first eleven (11) months from the PAL effective date, 5 the owner or operator shall demonstrate that the sum of the preceding monthly 6 emissions from the PAL effective date for each emissions unit under the PAL is less 7 than the PAL; 8 (b) The PAL shall be established in a PAL permitthat: 9 1. Meetsthe public participation requirements in subsection (4) ofthis section; and 10 2. Contains all the requirements ofsubsection (6) ofthis section; 11 (c) A PAL shall include fugitive emissions, to the extent quantifiable, from all 12 emissions units that emit or have the potential to emit the PAL pollutant at the major 13 stationarysource; 14 (d) Each PAL shall regulate emissions ofonlyone (1) pollutant; 15 (e) Each PAL shall have a PAL effective period often (10) years; 16 

### (f) The owner or operator ofa majorstationary source with a PAL shall comply with 17 the monitoring, recordkeeping, and reporting requirements ofsubsections (11) to (13) of 18 this section foreach emissions unit underthe PALthrough the PAL effective period; and 19 (g) Emissions reductions of a PAL pollutant that occur during the PAL effective 20 period shall not be creditable as decreases for offsets under40 C.F.R. 51.165(a)(3)(ii), 21 unless: 22 1. The level ofthe PAL is reduced bythe amountofthe emissions reductions; and 23 2. The reductionswould be creditable in the absence ofthe PAL.

261 (4) Public participation requirements. PALs for existing major stationary sources 2 shall be established, renewed, or increased pursuant to this subsection and the 3 applicable procedures of401 KAR 52:100 for issuing permits or permit revisions. The 4 cabinet shall: 5 (a) Provide the public with notice ofthe proposed approval ofa PAL permit with at 6 least athirty (30) day period forsubmittal ofpublic comment; and 7 (b) Address all material comments before taking final action on a PAL permit or 8 permit revision. 9 (5) Setting the ten (10) year PAL level. 10 (a) The PAL level for a major stationary source shall be the sum of the baseline 11 actual emissions ofthe PAL pollutant for each emissions unit at the source during the 12 chosen twenty-four (24) month period plus the applicable significant level for the PAL 13 pollutant underthe definition for "significant" in 401 KAR 51:001, Section 1or under42 14 U.S.C. 7401-7671q, whichever is lower. 15 (b) In establishing a PAL level for a PAL pollutant, only one (1) consecutive twenty16 four (24) month period shall be used to determine the baseline actual emissions for all 17 existing emissions units. 18 (c) A different consecutive twenty-four (24) month period may be used for each 19 different PAL pollutant. 20 (d) Emissions associated with units that were permanently shut down after the 21 chosen twenty-four (24) month period shall be subtractedfrom the PAL level. 22 (e) Emissions from units for which actual construction began after the twenty-four 23 (24) month period shall be added tothe PAL level in an amount equal to the potential to

271 emitofthe units. 2 (f) The cabinet shall specify a reduced PAL level in the PAL permit to become 3 effective on the future compliance date of any applicable federal or state regulatory 4 requirementthatthe cabinet is aware ofpriorto issuance ofthe PAL permit. 5 (6) Contents of the PAL permit. The PAL permit shall contain the following 6 information: 7 (a) The PAL pollutant and the applicable source-wide emissions limitation in tons 8 peryear; 9 (b) The PAL permit effective date and the expiration date of the PAL or PAL 10 effective period; 11 (c) Specification in the PAL permit that if a major stationary source owner or 12 operator applies to renew a PAL under subsection (9) ofthis section before the end of 13 the PAL effective period, the PAL shall remain in effect until a revised PAL permit is 14 issued bythe cabinet; 15 (d) 

### A requirement that emissions calculations for compliance purposes include 16 emissionsfrom startups, shutdowns, and malfunctions; 17 (e) A requirement that, once the PAL expires, the major stationary source shall be 18 subjectto the requirements ofsubsection (8) ofthis section; 19 (f) The calculation procedures that the major stationary source owner or operator 20 shall use to convert the monitoring system data to monthly emissions and annual 21 emissions based on a twelve (12) month rolling total for each month as required by 22 subsection (12)(a) ofthis section; 23 (g) 

### A requirement that the major stationary source owner or operator shall monitor

281 all emissions units in accordancewith the provisions in subsection (12) ofthis section; 2 (h) A requirement thatthe owner or operator shall retain the records required under 3 subsection (12) ofthis section on site. Records may be retained in an electronicformat; 4 (i) A requirement forthe owner or operatorto submit, by the reports required under 5 subsection (13) ofthis section bythe required deadlines; and 6 U) Any requirements necessaryto implementand enforcethe PAL. 7 (7) PAL effective period and reopening ofa PAL permit. 8 (a) A PAL effective period shall be ten (10) years. 9 (b) The cabinetshall reopen a PAL permitto: 10 1. Correcttypographical orcalculation errors made in setting the PAL; 11 2. Reflectamore accuratedetermination ofemissions used to establish the PAL; 12 3. Reduce the PAL ifthe owner or operator ofthe major stationary source creates 13 creditable emissions reductionsfor use as offsets under40 C.F.R. 51.165(a)(3)(ii); or 14 4. Revise the PAL to reflect an increase in the PAL according to subsection (10) of 15 this section. 16 (c) The cabinet may reopen the PAL permit, during the PAL effective period, to: 17 1. Reduce the PAL to reflect newly applicablefederal requirements with compliance 18 dates afterthe PAL effective date; 19 2. Reducethe PAL consistentwith anyother requirement: 20 a. That is enforceable as apractical matter; and 21 b. That may be imposed on the majorstationarysource underthe SIP; and 22 3. Reduce the PAL ifthe cabinet determines that a reduction is necessaryto avoid 23 causing orcontributing to:

291 a. A NationalAmbientAir Quality Standard (NAAQS) or PSD incrementviolation; or 2 b. An adverse impact on visibility or another air quality related value that has been 3 identified for afederal Class Iarea by afederal land manager and forwhich information 4 is availableto the general public. 5 (d) All permit reopenings shall be carried out under the public participation 6 requirements of subsection (4) of this section except for permit reopenings to correct 7 typographical orcalculation oferrorsthatd.o not increasethe PAL level. 8 (8) Expiration ofa PAL. A PALthat is not renewed shall expire atthe end ofthe PAL 9 effective period and the requirements ofthis subsection shall then apply. 10 (a) Each emissions unit, or each group of emissions units, that existed under the 11 PAL shall comply with an allowable emissions limitation under a revised permit 12 established as follows: 13 1. An owner or operator of a major stationary source using a PAL shall submit a 14 proposed allowable emissions limitation for each emissions unit, or each group of 15 emissions units, by distributing the PAL allowable emissions for the major stationary 16 source among each ofthe emissions unitsthatexisted underthe PAL 17 a. This proposal shall be submitted to the cabinet at least six (6) months before the 18 expiration of the PAL permit but not sooner than eighteen (18) months before permit 19 expiration. 20 b. Ifthe PAL has not yet been adjusted for an applicable requirement that became 21 effective during the PAL effective period, as required under subsection (9)(e) of this 22 section, distribution of allowable emissions shall be made as if the PAL has been 23 adjusted.

301 2. The cabinet shall provide the date and procedure the owner or operatorshall use 2 to distributethe PAL allowable emissions. 3 3. The cabinet shall issue a revised permit incorporating allowable limits for each 4 emissions unit, or each group of emissions units, as the cabinet determines is 5 appropriate. 6 (b) Each emissions unit shall comply with the allowable emissions limitation on a 7 twelve (12) month rolling basis. The cabinet mayapprovethe use of monitoring systems 8 other than CEMS, CERMS, PEMS, or CPMS if the alternate monitoring system 9 demonstrates compliancewith the allowable emissions limitation. 10 (c) The source shall continue to comply with asource-wide, multiunit emissions cap 11 equivalent to the level of the PAL emissions limitation until the cabinet issues the 12 revised permit incorporating allowable limits for each emissions unit or each group of 13 emissions units. 14 (d) A major modification at the major stationary source shall be subject to major 15 NSR requirements. 16 (e) The majorstationary source owner or operator shall continue to complywith any 17 state or federal applicable requirements eliminated by the PAL that applied during or 18 before the PAL effective period, except for those emissions limitations established 19 pursuantto Section 7(4) ofthis administrative regulation. 20 (9) Renewal ofa PAL. 21 (a) Public participation requirements. 22 1. The cabinet shall follow the public participation procedures specified

.in 23 subsection (4) of this section in approving a request to renew a PAL for a major

311 stationarysource. 2 2. The cabinet shall provide awritten rationale forthe proposed PAL level for public 3 review and comment. 4 3. Any person may propose a PAL level for the source for consideration by the 5 cabinetduringthe public review period. 6 (b) Application deadline. 7 1. A major stationary source owner or operator shall submit an application for 8 renewal of a PAL at least six (6) months before the date of permit expiration but not 9 earlierthan eighteen (18) months before permitexpiration. 10 2. The deadlinefor application submittal shall ensurethatthe permit shall not expire 11 beforethe permit is renewed. 12 3. Ifacomplete application for renewal is submitted within thetimeframe specified in 13 subparagraph 1 of this paragraph, the PAL shall continue to be effective until the 14 revised permitwiththe renewed PAL is issued. 15 (c) Application requirements. The application to renew a PAL permitshall contain: 16 1. The information required in subsection (2) ofthis section; 17 2. A proposed PAL level; 18 3. The sum of the potential to emit of all emissions units under the PAL with 19 supporting documentation; and 20 4. Any other information the owner or operator wishes the cabinet to consider in 21 determiningthe appropriate levelto renewthe PAL. 22 (d) PAL adjustment. 23 1. A PAL shall notexceed the source's potential to emit. The cabinet shall adjustthe

321 PAL downward to a level not greaterthan the potential to emit ifasource's potential to 2 emit has declined belowthe PAL level. 3 2. The cabinet may renew the PAL at the same level as the current PAL without 4 considering thefactors specified in subparagraph 3ofthis section, ifthe emissions level 5 calculated according to subsection (5) ofthis section is equal to or greaterthan eighty 6 (80) percent ofthe PAL level; or 7 3. The cabinet maysetthe PAL at alevel that is determined to be: 8 a. More representative ofthe source's baseline actual emissions; or 9 b. Appropriate considering thefollowing factors: 10 (i) Airquality needs; 11 (ii) Advances in control technology; 12 (iii)Anticipated economic growth in the area ofthe source; 13 (iv) The cabinet's goal ofpromoting voluntaryemissions reductions; or 14 (v) Other factors as specifically identified by the cabinet in its written rationale for 15 setting the PAL level. 16 4. The cabinet shall not approve a renewed PAL level higherthan the current PAL, 17 unless the major stationary source has complied with the provisions of subsection (10) 18 ofthis section. 19 ·(e) The PAL shall be adjusted in conjunction with the PAL permit renewal orTitle V 20 permit renewal, whichevercomesfirst, if: 21 1. The compliance date for a state orfederal applicable requirement that applies to 22 the PAL source occurs duringthe PAL effective period; and 23 2. The cabinet has notalready adjusted forthe requirement.

331 (10) Increasing a PAL during the PAL effective period. The cabinet may increase a 2 PAL emissions limitation during the PAL effective period ifthe major stationary source 3 complieswith the provisions ofthis subsection. 4 (a) Application procedures. To request an increase in the PAL limitfor a PAL major 5 modification, the owner or operator of the major stationary source shall submit a 6 complete application, which shall include: 7 1. Identification ofthe emissions units contributing to the increase in emissions for 8 the PAL major modification; 9 2. Demonstration that increased PAL, as calculated in paragraph (c) of this 10 subsection exceedsthe PAL, and: 11 a. The level ofcontrol that results from BACTequivalent controls on each significant 12 or major emissions unit shall be determined by conducting a new BACT analysis when 13 the application is submitted, unless the emissions unit is currently required to comply 14 with a BACT or LAER requirement that was established within the preceding ten (10) 15 years. 16 b. Ifan emissions unit currently complies with BACT or LAER, the assumed control 17 level forthat emissions unit shall be equal to the current level ofBACT or LAERforthat 18 emissions unit; and 19 3. A statement that the increased PAL level shall be effective on the day any 20 emissions unit that is part of the PAL major modification becomes operational and 21 beginsto emitthe PAL pollutant. 22 (b) NSR permit and compliance requirement. The owner or operator shall obtain a 23 major NSR permitforall emissions units contributing tothe increase in emissionsforthe



### 341 PAL majormodification. 2 1. A significant level shall not apply in deciding for which emissions units a major 3 NSR permitshall be obtained; and 4 2. Emissions units that obtain a major NSR permit shall comply with any emissions 5 requirements resulting from the major NSR process, even though the units shall also 6 become subjectto the PALorshall continueto be subjectto the PAL. 7 (c) Calculation of increased PAL. The cabinet shall calculate the new PAL as the 8 sum ofthe allowable emissions for each modified or new emissions unit, plus the sum 9 ofthe baseline actual emissions ofthe significant and major emissions units assuming 10 application of BACT equivalent controls, plus the sum ofthe baseline actual emissions 11 ofthe small emissions units. 12 (d) Public notice requirement. The public notice requirements of subsection (4) of 13 this section shall befollowed during PAL permit revision foran increased PAL level. 14 (11) Monitoring requirementsfor PALs. 15 (a) General requirements. 16 1. Each PAL permit shall contain enforceable requirements for the chosen 17 monitoring system that accurately determines plant-wide emissions ofthe PAL pollutant 18 in terms ofmass perunitoftime; 19 2. A monitoring system authorizedfor use in the PAL permitshall be: 20 a. Approved bythe cabinet pursuantto this subsection; and 21 b. Based on sound science and meet generally-acceptable scientific procedures for 22 dataqualityand manipulation; 23 3. The data generated by a monitoring system shall meet minimum legal



### 351 requirementsfor admissibility in ajudicial proceeding to enforcethe PAL permit; 2 4. The PAL monitoring system shall employ one (1) or more ofthe four (4) general 3 monitoring approaches meeting the minimum requirements setforth in paragraph (b) of 4 this subsection; 5 5. The cabinet may approve an alternative monitoring approach that meets the 6 requirements ofsubparagraphs 1to 3ofthis paragraph; and 7 6. Failure to use a monitoring system that meets the requirements ofthis section 8 shall renderthe PAL invalid. 9 (b) Minimum performance requirements for approved monitoring approaches. If 10 conducted in accordance with the minimum requirements in paragraphs (c) to (i) ofthis 11 subsection, thefollowing shall be acceptable monitoring approaches: 12 1. Mass balance calculationsforactivities using coatings orsolvents; 13 2. GEMS; 14 3. CPMS or PEMS; and 15 4. Emissionsfactors. 16 (c) Mass balance calculations. An owner or operator using mass balance 17 calculations to monitor PAL pollutant emissions from activities using coatings or 18 solvents shall: 19 1. Provide a demonstrated**mean~** of validating the published content of the PAL 20 pollutant contained in orcreated byall materials used in oratthe emissions unit; 21 2. If it cannot be accounted for in the process, assumethatthe emissions unit emits 22 all ofthe PAL pollutant contained in or created by any raw material orfuel used in or at 23 the emissions unit; and



### 361 3. Ifthe vendorofthe material orfuel from which the pollutantoriginates publishes a 2 range, use the highestvalue ofthe published range ofpollutant contentto calculatethe 3 PAL pollutant emissions, unless the cabinet determines there is site-specific data or a 4 site-specific monitoring program to support anotherpollutant contentwithin the range. 5 (d) GEMS. An owner or operator using GEMS to monitor PAL pollutant emissions 6 shall meetthefollowing requirements: 7 1. GEMS shall comply with applicable Performance Specifications found in 40 8 G.F.R. Part60, AppendixA; and 9 2. GEMS shall sample, analyze, and record data at least every fifteen (15) minutes 10 whilethe emissions unit is operating. 11 (e) GPMS or PEMS. An owner or operator using GPMS or PEMS to monitor PAL 12 pollutantemissions shall meetthefollowing requirements: 13 1. The GPMS or the PEMS shall be based on current site-specific data 14 demonstrating a correlation between the monitored parameter and the PAL pollutant 15 emissions acrossthe range ofoperation ofthe emissions unit; and 16 2. While the unit is operating, each GPMS or PEMS shall sample, analyze, and 17 record data at least every fifteen (15) minutes, or at another less frequent interval 18 approved bythe cabinet. 19 (f) Emissions·factors. An owner or operator using emissions factors to monitor PAL 20 pollutantemissions shall meetthefollowing requirements: 21 1. All emissionsfactors shall be adjusted, ifappropriate, to accountforthe degree of 22 uncertaintyor limitations in the factors' development; 23 2. The emissions unit shall operate within the designated range of use for the



### 371 emissionsfactor, ifapplicable; and 2 3. The owner or operator ofa significant emissions unit that relies on an emissions 3 factor to calculate PAL pollutant emissions shall conductvalidation testing to determine 4 a site-specific emissions factor within six (6) months of PAL permit issuance if the 5 cabinetdeterminesthatthetesting is required and technically practicable. 6 (g) A source owneroroperatorshall record and report maximum potential emissions 7 without considering enforceable emissions limitations or operational restrictions for an 8 emissions unit during any period of time there is no monitoring data, unless another 9 method for determining emissions during the periods is specified in the PAL permit. 10 (h) If an owner or operator of an emissions unit cannot demonstrate a correlation 11 between the monitored parameters and the PAL pollutantemissions rate at all operating 12 points ofthe emissions unit, as an alternative to the requirements in paragraphs (c) to 13 (g) ofthis subsection, in conjunction with permit issuancethe cabinetshall: 14 1. Establish default values for determining compliance with the PAL based on the 15 highest potential emissions reasonably estimated at operating points if a correlation 16 cannot be demonstrated; or 17 2. Ifthere is not a correlation between monitored parameters and the PAL pollutant 18 emissions, determine that operation ofthe emissions unit during operating conditions is 19 aviolation ofthe PAL. 20 (i) Revalidation. All data used to establish the PAL pollutant shall be revalidated 21 through performance testing or other scientificallyvalid means approved bythe cabinet. 22 Validation testing shall occur at least once every five (5) years after issuance of the 23 PAL.



### 381 (12) Recordkeeping requirements. 2 (a) The PAL permit shall require an owneroroperatorto retain acopy ofall records 3 necessaryto determine compliance with any requirement ofthis section and ofthe PAL, 4 including a determination of each emissions unit's twelve (12) month rolling total 5 emissionsforfive (5) yearsfrom the date ofthe determination. 6 (b) The PAL permit shall require an owner or operator to retain a copy of the 7 following records forthe duration ofthe PAL effective period plusfive (5) years: 8 1. A copy of the PAL permit application and any applications for revisions to the 9 PAL; and 10 2. Each annual certification of compliance pursuant to Title 

### Vand the data used to 11 certifythe compliance. 12 (13) Reporting and notification requirements. The owner or operator shall submit 13 semi-annual monitoring reports and prompt deviation reports to the cabinet in 14 accordancewith 401 KAR Chapter52 that meetthe following requirements: 15 (a) Semiannual report. The semiannual report shall be submitted to the cabinet 16 within thirty (30) days ofthe end ofeach reporting period and shall contain: 17 1. The identification ofownerand operatorand the permit number; 18 2. Total annual emissions, in tpy, based on atwelve (12) month rolling total foreach 19 month in the reporting period recorded pursuantto subsection (12)(a) ofthis section; 20 3. All data used in calculating the monthly and annual PAL pollutant emissions, 21 including anyqualityassurance orqualitycontrol data; 22 4. A list of any emissions units modified or added to the major stationary source 23 during the preceding six (6) month period;

391 5. The number, duration, and cause of any deviations or monitoring malfunctions, 2 other than the time associated with zero and span calibration checks, and any 3 corrective actionfollowing adeviation; 4 6. A notification of permanent or temporary shutdown of any monitoring system 5 including: 6 a. The reason forthe shutdown; 7 b. The anticipated datethatthe monitoring system shall be fully operational orshall 8 be replaced with another monitoring system; 9 c. If applicable, a statement that the emissions unit monitored by the monitoring 10 system continued to operatewithoutthe monitoring system·; and 11 d. The calculation of the emissions of the pollutant or the number determined 12 accordingto subsection (11)(g) ofthis section that is included in the permit; and 13 7. A signed statement by the responsible official, as defined by 401 KAR 51:001, 14 Section 1(210), certifying the truth, accuracy, and completeness of the information 15 provided in the semiannua·l report. 16 (b) Deviation report. The major stationary source owner or operator shall submit 17 reports of any deviation or exceedance of the PAL requirements, including periods 18 monitoring is unavailable. 19 1. 

### A report submitted pursuant to 40 

### C.F.R. 70.6(a)(3)(iii)(B) shall satisfy this 20 deviation reporting requirement; 21 2. The deviation report shall be submitted within the time limits prescribed· by the 22 applicable program implementing 40 

### C.F.R. 70.6(a)(3)(iii)(B); 23 3. The deviation report shall contain thefollowing information:

401 a. The identification ofthe owner, the operator, and the permit number; 2 b. The PAL requirementthatexperienced the deviation orthatwas exceeded; 3 c. Emissions resulting from the deviation orthe exceedance; and 4 d. A signed statement by the responsible official, as defined by 401 KAR 51:001, 5 Section 1(210), certifying the truth, accuracy, and completeness of the information 6 provided in the report. 7 (c) Revalidation results. The owner or operator shall submit to the cabinet the 8 results ofany revalidation test or method within three (3) months aftercompletion ofthe 9 test or method. 10 (14) Transition requirements. 11 (a) Afterthe U.S. EPA approves the Kentucky SIP revisions forthe PAL provisions 12 published at 67 Fed. Reg. 80186, December 31, 2002, the cabinet shall only issue a 13 PALthat complieswith the requirements ofthis section. 14 (b) The cabinet may supersede a PALthatwas established beforeAugust 10, 2006, 15 with a PALthatcomplieswith the requirements ofthis administrative regulation.

41

### Da~ 

### J Leo ard K. Peters, Secretary Energyand EnvironmentCabinet



### 42PUBLIC HEARING AND PUBLIC COMMENT PERIOD: A public hearing on this administrative regulation shall be held on July 24, 2012, at 10:00 a.m. (local time) in Conference Room 201 Bonthe firstfloor ofthe Division forAir Quality at200 FairOaks Lane, Frankfort, Kentucky. Individuals interested in being heard at this hearing shall notify this agency five (5) workdays prior to the hearing of their intent to attend. If no notification of intent to attend the hearing is received by that date, the hearing may be canceled. This hearing is open to the public. Any person whowishesto be heard shall be given an opportunityto comment on the proposed administrative regulation. Ifyou do notwish to be heard at the public hearing, you may submit written comments on the proposed administrative regulation. Written comments shall be accepted until close ofbusiness on July 31, 2012. Send written notification of intent to be heard at the public hearing or written comments on the proposed administrative regulation to the contact personlisted below. The hearing facility is accessible to persons with disabilities. Requests for reasonable accommodations, including auxiliary aids and services necessary to participate in the hearing, may be made to the contact person at least five (5) workdays prior to the hearing. CONTACT PERSON: Laura Lund, Environmental Technologist Ill, Division for Air Quality, 151 Floor, 200 FairOaks Lane, Frankfort, Kentucky40601, telephone (502) 564- 3999, ext. 4428, fax (502) 564-4666, and electronic mail Laura.Lund@ky.gov.

43REGULATORY IMPACTANALYSIS AND TIERING STATEMENT Administrative Regulation#: 401 KAR 51:052 Contactperson: Laura Lund, Environmental Technologist Ill (1) Provide a briefsummaryof: (a) Whatthis administrative regulation does: This administrative regulation establishes air quality permitting requirements for the construction or modification ofmajorstationary sources located within, or impacting upon, areas where the national ambient air quality standards have not been demonstratedto be attained. (b) The necessity of this administrative regulation: This administrative regulation is necessary to ensure that the addition of stationary source emissions will not contribute significantly to Kentucky's achievement of reasonable further progress of a national ambient air quality standard for an area currently not attaining that standard. This administrative regulation provides for economic growth in a nonattainment area without impeding Kentucky's progress towards cleaner air and attainment ofthe applicable national ambientairqualitystandards (NAAQS). (c) How this administrative regulation conforms to the content of the authorizing statutes: KRS 224.10-100(5) requires the Cabinetto provide forthe prevention, abatement, and control ofair pollution. 42 U.S.C 7503 requires air quality permits issued to sources located or impacting a nonattainmentarea to include provisions forthe attainment ofthe national primary ambient air quality standards and reasonable further progress of the air quality, which are contained in this administrative regulation. This regulation conforms to the statutes because it is no more stringent than thefederal mandate. (d) How this administrative regulation currently assists or will assist in the effective administration of the statutes: This administrative regulation provides the requirements for issuing permits to stationary sources in areaswhere the NAAQS have not been attained. (2) Ifthis is an amendment to an existing administrative regulation, provide a briefsummary of: (a) How the amendment will change this existing administrative regulation: This amendment incorporates significant impact levels (SILs) for PM2.s· (b) The necessityofthe amendmentto this administrative regulation: The PM2.5 SILs included in this amendment are necessary to ensure consistency between state and federal New Source Review (NSR) permitting programs. (c) How the amendment conforms to the content of the authorizing statutes: KRS 224.10-100(5) requires the Cabinet to provide for the prevention, abatement, and control of air pollution. 42 U.S.C 7503 requires that permits issued in a nonattainmentarea contain provisionsfor

44the attainment of the national primary ambient air quality standards and reasonable further progress ofthe air quality, which are contained in this administrative regulation. (d) How the amendment will assist in the effective administration of statutes: This amendment incorporates SILs for PM2.5, as required by40 C.F.R. 51.165. (3) Listthe type and numberofindividuals, businesses, organizations, orstate and local governments affected by this administrative regulation. Any new majorstationary source or any project at an existing major stationary sourcethat commences construction after September 22, 1982, and locates in an area designated nonattainment is affected by this administrative regulation. This regulation does not affect sources in Jefferson County, which are regulated under the Louisville Metro Air Pollution Control District. There are currently 

### 6 counties in Kentucky (not including Jefferson County) classified as nonattainment for the 1997 annual particulate matter NAAQS (Boone, Boyd, Bullitt, Campbell, Kenton, and a portion of Lawrence). This amendment affects new major stationary sources or new major modifications locating in areas that have attained the NAAQS, but cause impacts that will exceed the amounts of PM2.6 listed in an area thatdoes notorwill notattain the NAAQS. (4) Provide an assessment ofhowthe entities identified in question (3) will be impacted by either the implementation ofthis administrative regulation, if new, or by the change if it is an amendment: Changes to the current regulation will include the permitting of PM2.6 and require affected facilities to provide data on their PM2

.5 emissions. In the past, DAQ has used PM10 as a surrogate for PM2.5 due to inadequate test methods and the lack of implementation elements. However, the U.S. EPA has determined that the appropriate data and technology are now available and the use of the PM10 surrogacy policy is no longerallowed. (a) List the actions that each of the regulated entities identified in question (3) will have to take to comply with this administrative regulation or amendment: Affected facilities' permit applications will be required to provide emissions data for PM2

.5 and demonstrate that the project's emissions do not cause or contribute to a violation ofthe PM2.6 NAAQS. (b) In complying with this administrative regulation or amendment, how much will it cost each of the entities identified in question (3): Affected facilities will incur the cost necessary to obtain a permit that includesan evaluation ofPM2.6 emissions. (c) As a result of compliance, what benefits will accrue to the entities identified in question (3): When operating in compliance, the affected facilities will not be subject to enforcement actions and penalties. Furthermore, compliance with the Clean Air Act requirements preserves and improves airqualitythroughoutthe Commonwealth.·

45(5) Provide an estimate of how much it will cost the administrative body to implementthisadministrative regulation: (a) Initially: The Cabinet will not incur any additional costs for the implementation ofthis administrative regulation. (b) On a continuing basis: There will not be any additional continuing costs forthe implementation ofthis administrative regulation. (6) What is the source ofthe funding to be used for the implementation and enforcement of this administrative regulation: The Cabinet's current operating budget will be used for the implementation and enforcement of this administrative regulation. (7) Provide an assessment ofwhether an increase in fees or funding will be necessary to implement this administrative reguJation, if new, or by the change if it is an amendment. No increase in fees orfunding is necessary to implementthis administrative regulation amendment. (8) Statewhether or notthis administrative regulation established any fees or directly or indirectly increased any fees. This administrative regulation does notestablish, nordirectlyor indirectly increase, anyfees. (9) TIERING: Is tiering applied? Yes. This administrative regulation only applies to new major stationary sources, or an existing major stationary source with a project, that commences construction after September 22, 1982, and is located or impacting upon an area designated nonattainment.



### 46FEDERAL MANDATEANALYSIS COMPARISON 1. Federal statute or regulation constituting the federal mandate. As a SIPapproved state for the NSR program under 40 CFR 51.165, recent changes in the federal NSR program make it necessaryto revise this regulation to maintain federal approvability. 42 U.S.C. 7410(a)(1) requires Kentucky to adopt and submit a plan providingforthe implementation, maintenance, and enforcementofastandard. 2. State compliance standards. The state compliance standards are found in KRS 224.10-100(5). 3. Minimum or uniform standards contained in the federal mandate. The federal mandate governing nonattainment NSR requires sourcessubjectto this regulation to demonstrate that any construction or modification of a major stationary source will not cause a net increase in air pollution, thatemissions resulting from the projectwill not create a delay in attainment ofthe NAAQS, and that the source will install and use control technology that achieves the lowest achievable emissions rate (LAER). The Clean AirAct is the federal mandate that requires states to have a plan forthe attainment of the national primary ambient air quality standards and reasonable further progress ofthe air quality. 40 C.F.R. 51.165 is the federal rule that provides authorityforthe Cabinetto establish a plan and promulgate administrative regulation requirementsto ensure compliance. 4. Will this administrative regulation impose stricter requirements, or additional ordifferentresponsibilities or requirements, than those required by the federal mandate? No. This regulation is no more stringentthan the federal rule, codified in 40 C.F.R. 51.165, and no more stringentthan the federal mandate established by42 U.S.C. 7401-7626. 5. Justification for the imposition of the stricter standard, or additional or different responsibilities or requirements. Stricter standards and requirements are not imposed.

47FISCAL NOTE ON STATE OR LOCALGOVERNMENT Administrative Regulation#:401 KAR 51:052 Contactperson: Laura Lund, EnvironmentalTechnologist Ill 1. Does this administrative regulation relate to any program, service, or requirements ofastate or local government(including cities, counties, fire departments, orschooldistricts)? Yes. 2. Whatunits, parts ordivisionsofstate orlocal government(including cities, counties, fire departments, or school districts) will be impacted by this administrative regulation? The Division for Air Quality will continue to implement and enforcethe New Source Review (NSR) program. Also, state and local governments.constructing or modifying a major stationary source in, ·or impacting upon, an area where the national ambient air quality standards have not been attained will be impacted bythis administrative regulation. 3. Identify each state orfederal statute or federal regulation that requires or authorizes the action taken by the administrative regulation. KRS 224.10- 100(5), 40 C.F.R. 51.165, and 42 U.S.C. 7401-7671q. 4. Estimate the effect of this administrative regulation on the expenditures and revenues of a state or local government agency (including cities, counties, fire departments, or school districts) for the first full year the administrative regulation isto be in effect. (a) Howmuch revenue willthisadministrative regulation generateforthestate or local government(including cities, counties, fire departments, orschool districts) for the first year? This administrative regulation generates no revenue. (b) Howmuch revenue willthisadministrative regulation generateforthestate or local government(including cities, counties, fire departments, orschool districts) for subsequentyears? This administrative regulation generates no revenue. (c) How much will it cost to administer this program for the first year? The Cabinet's existing operating budget continues as the source of funding for the implementation ofthis program. (d) How much will it cost to. administer this program for subsequent years? There will be no additional costs for administering the program in subsequent years. Note: Ifspecific dollarestimates cannot be determined, provide a briefnarrative toexplainthefiscal impactsoftheadministrative regulation. Revenues (+/-): There is no known effecton current revenues. Expenditures (+/-): There is no known effecton current expenditures. OtherExplanation: There is nofurtherexplanation.



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