```

[Federal Register Volume 77, Number 13 (Friday, January 20, 2012)]
[Proposed Rules]
[Pages 2937-2941]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-1116]

=======================================================================
-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R03-OAR-2011-0925; FRL- 9619-6]

Approval and Promulgation of Air Quality Implementation Plans; 
Pennsylvania; Nonattainment New Source Review Rules

AGENCY: Environmental Protection Agency (EPA).

[[Page 2938]]

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: EPA is proposing to approve a State Implementation Plan (SIP) 
revision submitted by the Commonwealth of Pennsylvania on August 9, 
2007. This revision pertains to the preconstruction permitting 
requirements of Pennsylvania's nonattainment New Source Review (NSR) 
program. The revision is intended to update Pennsylvania's 
nonattainment NSR regulations to meet EPA's 2002 NSR Reform regulations 
(NSR Reform), and to satisfy the requirements related to 
antibacksliding. Additionally, the proposed revision makes clarifying 
changes to regulations that are not related to NSR Reform. This action 
is being taken under the Clean Air Act (CAA).

DATES: Written comments must be received on or before February 21, 
2012.

ADDRESSES: Submit your comments, identified by Docket ID Number EPA-
R03-OAR-2011-0925 by one of the following methods
    A. www.regulations.gov. Follow the on-line instructions for 
submitting comments.
    B. Email: cox.kathleen@epa.gov.
    C. Mail: EPA-R03-OAR-2011-0925, Kathleen Cox, Associate Director, 
Office of Permits and Air Toxics], Mailcode 3AP10, U.S. Environmental 
Protection Agency, Region III, 1650 Arch Street Philadelphia, 
Pennsylvania 19103.
    D. Hand Delivery: At the previously-listed EPA Region III address. 
Such deliveries are only accepted during normal hours of operation, and 
special arrangements should be made for deliveries of boxed 
information.
    Instructions: Direct your comments to Docket ID No. EPA-R03-OAR-
2011-0925. EPA's policy is that all comments received will be included 
in the public docket without change, and may be made available online 
at www.regulations.gov, including any personal information provided, 
unless the comment includes information claimed to be Confidential 
Business Information (CBI) or other information whose disclosure is 
restricted by statute. Do not submit information that you consider to 
be CBI or otherwise protected through www.regulations.gov or email. The 
www.regulations.gov Web site is an ``anonymous access'' system, which 
means EPA will not know your identity or contact information unless you 
provide it in the body of your comment. If you send an email comment 
directly to EPA without going through www.regulations.gov, your email 
address will be automatically captured and included as part of the 
comment that is placed in the public docket and made available on the 
Internet. If you submit an electronic comment, EPA recommends that you 
include your name and other contact information in the body of your 
comment and with any disk or CD-ROM you submit. If EPA cannot read your 
comment due to technical difficulties and cannot contact you for 
clarification, EPA may not be able to consider your comment. Electronic 
files should avoid the use of special characters, any form of 
encryption, and be free of any defects or viruses.
    Docket: All documents in the electronic docket are listed in the 
www.regulations.gov index. Although listed in the index, some 
information is not publicly available, i.e., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, is not placed on the Internet and will be 
publicly available only in hard copy form. Publicly available docket 
materials are available either electronically in www.regulations.gov or 
in hard copy during normal business hours at the Air Protection 
Division, U.S. Environmental Protection Agency, Region III, 1650 Arch 
Street, Philadelphia, Pennsylvania 19103. Copies of the State submittal 
are available at the Pennsylvania Department of Environmental 
Protection, Bureau of Air Quality Control, P.O. Box 8468, 400 Market 
Street, Harrisburg, Pennsylvania 17105.

FOR FURTHER INFORMATION CONTACT: Gerallyn Duke, (215) 814-2084, or by 
email at Duke.Gerallyn@epa.gov.

SUPPLEMENTARY INFORMATION: Throughout this document, whenever ``we,'' 
``us,'' or ``our'' is used, we mean EPA. On August 9, 2007, the 
Pennsylvania Department of Environmental Protection (PA DEP) submitted 
a proposed SIP revision pertaining to preconstruction permitting 
requirements under Pennsylvania's nonattainment NSR program.

Table of Contents

I. Background
II. Summary of SIP Revision
III. Proposed Action
IV. Statutory and Executive Order Reviews

I. Background

    EPA last took action on the nonattainment NSR provisions of the 
Pennsylvania SIP on December 9, 1997. At that time EPA approved a 
wholesale revision of Pennsylvania's preconstruction permitting program 
for minor and major sources and included new and revised subchapters A, 
B, C, and E under 25 Pa. Code Chapter 127. Pennsylvania had adopted the 
new rules in response to the 1990 Clean Air Act Amendments (CAAA) 
requirement to submit new NSR programs addressing Sec.  182 of the CAA. 
The only subchapter that was not revised was subchapter D--the state's 
Prevention of Significant Deterioration (PSD) program. Pennsylvania 
adopted an automatic incorporation by reference (IBR) of the federal 
PSD regulations of 40 CFR 52.21. This automatic IBR was approved into 
Pennsylvania's SIP on June 18, 1983 (49 FR 33127). The currently 
proposed revision has no impact on Pennsylvania's PSD program.
    On December 31, 2002 (67 FR 80186), EPA published final rule 
changes to 40 CFR parts 51 and 52, regarding the CAA's PSD and 
nonattainment NSR programs. On November 7, 2003 (68 FR 63021), EPA 
published a notice of final action on the reconsideration of the 
December 31, 2002, final rule changes. The December 31, 2002, and the 
November 7, 2003, final actions are collectively referred to as ``NSR 
Reform.'' The purpose of this SIP revision is to incorporate changes to 
Pennsylvania's nonattainment NSR rules made as a result of EPA's 2002 
NSR Reform, and to address the antibacksliding provisions of the United 
States Court of Appeals for the District of Columbia (D.C. Circuit 
Court) decision in South Coast Air Quality Management District v. EPA 
\1\ (South Coast).
---------------------------------------------------------------------------

    \1\ In 2006, the United States Court of Appeals for the District 
of Columbia Circuit found in et al., 472 F.3d 882 (D.C. Cir 2006) 
that NSR is a control measure and to weaken its requirements under 
the SIP would constitute impermissible backsliding under the CAA.
---------------------------------------------------------------------------

    The 2002 NSR Reform Rules are part of EPA's implementation of parts 
C and D of title I of the CAA, 42 U.S.C. 7470-7515. Part C of title I 
of the CAA, 42 U.S.C. 7470-7492, is the PSD program, which applies in 
areas that meet the National Ambient Air Quality Standards (NAAQS) 
(``attainment'' areas), as well as in areas for which there is 
insufficient information to determine whether the area meets the NAAQS 
(``unclassifiable'' areas). Part D of title I of the CAA, 42 U.S.C. 
7501-7515, is the nonattainment NSR program, which applies in areas 
that are not in attainment of the NAAQS (``nonattainment'' areas). 
Collectively, the PSD and nonattainment NSR programs are referred to as 
the ``New Source Review'' or NSR programs. EPA regulations implementing 
these programs are contained in 40 CFR 51.165, 51.166, 52.21, 52.24, 
and part 51, appendix S.

[[Page 2939]]

    The CAA's NSR programs are preconstruction review and permitting 
programs applicable to new and modified stationary sources of air 
pollutants regulated under the CAA. The NSR programs of the CAA include 
a combination of air quality planning and air pollution control 
technology program requirements. Briefly, section 109 of the CAA, 42 
U.S.C. 7409, requires EPA to promulgate primary NAAQS to protect public 
health and secondary NAAQS to protect public welfare. Once EPA sets 
those standards, states must develop, adopt, and submit to EPA for 
approval a SIP that contains emissions limitations and other control 
measures to attain and maintain the NAAQS. Each SIP is required to 
contain a preconstruction review program for the construction and 
modification of any stationary source of air pollution to assure that 
the NAAQS are achieved and maintained; to protect areas of clean air; 
to protect air quality related values (such as visibility) in national 
parks and other areas; to assure that appropriate emissions controls 
are applied; to maximize opportunities for economic development 
consistent with the preservation of clean air resources; and to ensure 
that any decision to increase air pollution is made only after full 
public consideration of the consequences of the decision.
    The 2002 NSR Reform Rules made changes to five areas of the NSR 
programs. In summary, the 2002 Rules: (1) Provide a new method for 
determining baseline actual emissions; (2) adopt an actual-to-projected 
actual methodology for determining whether a major modification has 
occurred; (3) allow major stationary sources to comply with Plantwide 
applicability limits (PALs) to avoid having a significant emissions 
increase that triggers the requirements of the major NSR program; (4) 
provided a new applicability provision for emissions units that are 
designated clean units (Clean Unit test); and (5) excluded pollution 
control projects (PCPs) from the definition of ``physical change or 
change in the method of operation.'' On November 7, 2003 (68 FR 63021), 
EPA published a notice of final action on its reconsideration of the 
2002 NSR Reform Rules, which added a definition for ``replacement 
unit'' and clarified an issue regarding PALs.
    After the 2002 NSR Reform Rules were finalized and effective (March 
3, 2003), industry, state, and environmental petitioners challenged 
numerous aspects of the 2002 NSR Reform Rules, along with portions of 
EPA's 1980 NSR Rules (45 FR 52676, August 7, 1980). On June 24, 2005, 
the D.C. Circuit Court issued a decision on the challenges to the 2002 
NSR Reform Rules. New York v. United States, 413 F.3d 3 (D.C. Cir. 
2005) (New York I). In summary, the D.C. Circuit Court vacated portions 
of the rules pertaining to clean units and PCPs, remanded a portion of 
the rules regarding recordkeeping and the term ``reasonable 
possibility'' found in 40 CFR 52.21(r)(6) and 40 CFR 51.166(r)(6), and 
either upheld or did not comment on the other provisions included as 
part of the 2002 NSR reform Rules. On June 13, 2007 (72 FR 32526), EPA 
took final action to revise the 2002 NSR Reform Rules to remove from 
federal law all provisions pertaining to clean units and the PCP 
exemption that were vacated by the D.C. Circuit Court.
    With regard to the remanded portions of the 2002 NSR Reform Rules 
related to recordkeeping, on December 21, 2007, EPA took final action 
to establish the ``reasonable possibility'' provision which identifies 
the circumstances under which a major stationary source undergoing a 
modification that does not trigger major NSR must keep records (72 FR 
72607). The 2002 NSR Reform Rules require that state agencies adopt and 
submit revisions to their SIP permitting programs implementing the 
minimum program elements of the 2002 NSR Reform Rules no later than 
January 2, 2006. State agencies may meet the requirements of the 2002 
NSR Reform Rules with different but equivalent regulations.
    On April 30, 2004 EPA published the Phase 1 Rule to Implement the 
Eight-Hour Ozone National Ambient Air Quality Standard, (69 FR 23951) 
which, among other things, allowed areas that had a higher 
nonattainment classification under the one-hour ozone standard to 
impose the NSR requirements of the new, less stringent eight-hour 
classification. In Pennsylvania, for instance, the classification for 
the Philadelphia ozone nonattainment area changed from serious under 
the one-hour standard to moderate under the eight-hour standard. The 
Phase I rule was subsequently challenged on a number of points, 
including the NSR provisions; the D.C. Circuit Court determined, in 
South Coast, that all one-hour ozone NAAQS major NSR requirements must 
remain in place.

II. Summary of SIP Revision

    The SIP submittal consists of changes to 25 Pa. Code Chapter 121, 
General Provisions, and 25 Pa. Code Chapter 127, Construction, 
Modification, Reactivation, and Operation of Sources. This action, when 
approved, will update Pennsylvania's nonattainment NSR regulations as 
previously approved on December 9, 1997 (62 FR 64722). It will 
incorporate for the first time the 2002 ``NSR Reform'' provisions into 
Pennsylvania's nonattainment NSR program, and will satisfy the 
requirements of the D.C. Circuit Court decision in South Coast 
regarding antibacksliding. The proposed regulations were adopted by 
Pennsylvania and became effective on May 19, 2007. A detailed analysis 
of the regulations as well as EPA's rationale for approving them can be 
found in the technical support document (TSD) in the docket for this 
proposed action.

A. NSR Reform Elements

    Prior to NSR Reform, emission increases associated with a physical 
change or change in the method of operation at an existing major source 
were calculated by comparing past actual emissions with the facility's 
potential to emit after the change, commonly referred to as the actual-
to-potential test. In general, NSR Reform allows owners and operators 
of all major sources to choose between the traditional test and a new 
test that would compare past actual emissions to a projection of future 
actual emissions, so long as those projections are based on realistic 
and reliable information. The latter is commonly referred to as an 
actual-to-actual test. In addition, the facility would not be required 
to establish the projected emissions as an enforceable emissions limit.
    As noted above, NSR Reform was challenged on all fronts, including 
the applicability provisions related to the actual-to-actual test and, 
of particular importance to the Pennsylvania SIP, the Clean Unit test. 
The Clean Unit test would have allowed facilities that had installed 
state of the art pollution controls within the past 10 years to avoid 
triggering NSR even when it would be clear that actual emissions would 
increase. The D.C. Circuit rejected the Clean Unit test on the grounds 
that ``the CAA unambiguously defines `increases' in terms of actual 
emissions.'' In its concluding paragraph on the matter, the Court 
opined that ``because the plain language of the CAA indicates that 
Congress intended to apply NSR to changes that increase actual emission 
instead of potential or allowable emissions, we hold that EPA lacks the 
authority to promulgate the Clean Unit provision, and we vacate that 
portion of the 2002 rule, 67 FR 80279-83 (codified at 40 CFR Sec.  
52.21(x)) as contrary to the statute under Chevron Step 1.''
    Pennsylvania's current SIP rules, approved on December 9, 1997, 
allow

[[Page 2940]]

sources to determine nonattainment NSR applicability based on a 
comparison of past ``maximum allowable emissions'' to future ``maximum 
allowable emissions,'' i.e., a potential-to-potential test to determine 
NSR applicability. By any measure, these rules did not conform to the 
pre-Reform actual-to-potential test or to the mandate of the D.C. 
Circuit Court in New York I that applicability must be based on 
increases in actual emissions. The 1997 SIP could allow facilities to 
make substantial increases in actual emissions without undergoing 
review and without applying offsets or complying with Lowest Achievable 
Emission Rate (LAER) requirements, particularly in nonattainment areas 
that already have poor air quality. By incorporating NSR Reform 
elements, adoption of the proposed 2007 SIP revision is a significant 
strengthening of the SIP and will bring Pennsylvania's program in line 
with the requirements of the CAA.
    Pennsylvania has adopted all of the NSR Reform measures with some 
modifications: The look-back period for determining baseline actual 
emissions (BAE) is five years for all facilities. However, facilities 
that are not Electric Generating Units (EGUs) may request up to ten 
years upon a demonstration that a different period is more 
representative of normal source operation. Also, BAE do not include 
emissions associated with malfunctions. Finally, the same 24-month 
period is to be used for all pollutants when multiple units are 
affected by a project unless a facility can demonstrate that another 
24-month period would be more representative. Another difference is 
that Pennsylvania rules require projected actual emissions to be 
incorporated into the required plan approval as an emissions limit. 
Finally, differences in establishing BAE related to the look-back 
period and inclusion of emissions from malfunctions, noted above, also 
apply to PALs in Pennsylvania.
    It wasn't necessary for Pennsylvania to make any changes related to 
the remanded portions of the 2002 NSR Reform Rules related to 
clarification of the term ``reasonable possibility'' (72 FR 72607). 
This is because Pennsylvania facilities that use projected actual 
emissions with the result that major NSR is not triggered must still 
obtain a permit. These permits require all facilities to maintain and 
report their post-change emissions.

B. Antibacksliding

    On April 30, 2004, EPA designated Bucks, Chester, Delaware, 
Montgomery and Philadelphia Counties in Pennsylvania as moderate 
nonattainment under the eight-hour ozone NAAQS and revoked the one-hour 
ozone NAAQS. Under the one-hour ozone standard, Bucks, Chester, 
Delaware, Montgomery and Philadelphia Counties had been designated as 
severe nonattainment. As a result of South Coast, all one-hour ozone 
NAAQS major NSR requirements in Pennsylvania and in the five-county 
Philadelphia area must remain in place. Under this SIP revision, 
facilities in these counties which emit or have the potential to emit 
at least 25 tons per year (tpy) of NOX or VOCs will be 
considered major facilities and be subject to the requirements 
applicable to major facilities located in a severe nonattainment area 
of ozone.

C. Miscellaneous Changes

    In addition to the changes outlined above, the proposed revisions 
include miscellaneous changes that were intended to provide additional 
clarity in Pennsylvania's regulations. These changes include the 
addition of definitions (unrelated to NSR reform) to conform to the 
federal nonattainment regulations in 40 CFR 51.165, clarification of 
provisions related to emission reduction credits, the re-codification 
of certain sections, and some additional clarifying rule changes. The 
TSD contains more detail on all of the proposed changes, and can be 
found in the docket for this action.

III. Proposed Action

    EPA's review of this material indicates that the 2007 SIP revision, 
amending Pennsylvania's NSR construction, modification, reactivation 
and operation permit programs at 25 Pa. Code Section 121.1 and 25 Pa. 
Code Chapter 127, significantly strengthens the existing SIP and is 
consistent with the federal program requirements for nonattainment NSR 
set forth at 40 CFR 51.165. EPA is proposing to approve the August 9, 
2007 Pennsylvania SIP revision. EPA is soliciting public comments on 
the issues discussed in this document. These comments will be 
considered before taking final action.

IV. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP 
submission that complies with the provisions of the CAA and applicable 
Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in 
reviewing SIP submissions, EPA's role is to approve state choices, 
provided that they meet the criteria of the CAA. Accordingly, this 
action merely proposes to approve state law as meeting Federal 
requirements and does not impose additional requirements beyond those 
imposed by state law. For that reason, this proposed action:
     Is not a ``significant regulatory action'' subject to 
review by the Office of Management and Budget under Executive Order 
12866 (58 FR 51735, October 4, 1993);
     Does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
     Is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the CAA; and
     Does not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human health or environmental 
effects, using practicable and legally permissible methods, under 
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, this proposed rule pertaining to Pennsylvania' 
nonattainment NSR program does not have tribal implications as 
specified by Executive Order 13175 (65 FR 67249, November 9, 2000), 
because the SIP is not approved to apply in Indian country located in 
the state, and EPA notes that it will not impose substantial direct 
costs on tribal governments or preempt tribal law.

List of Subjects in 40 CFR Part 52

    Administrative practice and procedure, Air pollution control, 
Carbon monoxide, Intergovernmental relations, Lead, Nitrogen dioxide, 
Ozone, Particulate matter, Reporting and recordkeeping requirements, 
Sulfur oxides, Volatile organic compounds.

    Authority:  42 U.S.C. 7401 et seq.

[[Page 2941]]

    Dated: January 3, 2012.
W.C. Early,
Acting Regional Administrator, Region III.
[FR Doc. 2012-1116 Filed 1-19-12; 8:45 am]
BILLING CODE 6560-50-P
```