### UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

### REGION 8 999 18TH 

### STREET- SUITE 300

DENVER, CO 80202-2466 Phone 800-227-8917 http://www.epa.gov/region08

CONCURRENCE COPY
Ref: 8P-AR Margie Perkins, Director Air Pollution Control Division Department ofPublic Health and Environment 4300 Cherry CreekDrive South Denver, CO 80246-1530
Dear Margie:
As you know, on December 22, 2005 we received a petitionto issue a SIP call to require Colorado to revise aspects ofits Common Provisions regulation related to upset conditions. The petitioners are Rocky Mountain Clean AirAction, Centerfor Native Ecosystems, and Jeremy Nichols. The petition alleges that Colorado's exemption for excess emissions during upsets is inconsistent with the CleanAirAct.
We identified concerns with Colorado's upset rule in previous letters. Among other things, we said the following:
"Webelievethat the existing upset rule does not conformto the Clean Air Act requirements to protectNAAQS and PSD increments and should be revised. Specifically, the existing upset rule allows an exemption from enforcement ('shall not be deemed to be in violation') for excess emissions that occurduring certain defined 'upset conditions.' It

### is ourinterpretation that the Clean Air Act requires that all periods of excess emissions must be treated as violations and not exempted from enforcement."
Please refer to the attached June 13,2001 letter from Richard Long to Margie Perkins for more information.
We also worked extensively withyour staffto try to craft areasonable alternative to the existing upset rule. Ultimately, the Colorado Air Quality Control Commission (AQCC) did not change the rule.
The petition brings this issue before us once again. The purpose ofthis letter is to inform you that we agree withthe petitioners that Colorado's upset rule does not meet the requirements ofthe Clean Air Act and that changes to the rule are needed. We have consulted with members ofyour staff, and they have indicated a willingness to renew efforts to revise the upset provisions

### in the CommonProvisions regulation, andrelatedprovisions in otherregulations, and to do so on an expedited basis.
Petitioners have indicated that their desire is to have the State revise the upset rule as quickly as possible and would be willing to allow time for the State to take action, ifdone expeditiously, to preempt an EPA SIP call action. In consideration ofthis, members ofyour staff said they will pursue a change to the upset rule before the AQCC at their June 15, 2005 meeting. We do notintendto initiate SIP call rulemaking at this time. However, ifthe AQCC does not expeditiously adopt changes to the upset rule that are consistentwith the Clean Air Act, we intend to propose a SIP call using ournotice and commentrulemaking authority
In order to assist the State in its efforts, we have attached draft rule language that could form the basis for subsequentEPA approval as a SIP revision. This language is modeled after rule language for startup and shutdown emissions that currently exists inthe CommonProvisions regulation that we recently approved as a SIP revision. We have changed that rule language as needed to reflect factors that are specific to malfunctions, and as crafted, our draft language would be a separate section,justfor malfunctions. In addition, we have identified related provisions in other rules that the State should change at the same time as the Common Provisions regulation.
We appreciate the State's willingness to pursue this matter, and we hope that ourjoint efforts will achieve a solution that is satisfactory to the State, EPA, the petitioners, and other stakeholders. Ifyou have any questions regarding this matter, please contact me at (303) 312-6005 orMarkKomp at (303) 312-6022. Sincerely,

Richard R. Long. Director, Air and Radiation Program
Attachments

cc: Douglas Lempke, Colorado AQCC Kirsten King, Colorado APCD Melanie Loyzim, Colorado APCD

### Attachment Draft Rule Language Malfunction Conditions

EPA Region 8'sreview ofColorado's regulations has identified the following areas where the State addresses upset provisions. We generallyreferto upset conditions as malfunction conditions and use that conventionhere.
COMMON PROVISIONS REGULATION
1. 

### DELETE THE DEFINITION OF "UPSET CONDITIONS." ADD THE FOLLOWING DEFINITION OF "MALFUNCTION":
Malfunction means a sudden and unavoidable breakdown ofprocess or control equipment. or Re-adopt the definition of"malfunction"that is currentlyin the EPA-approved SIP.
2. REPLACE EXISTING SECTION H.E WITH THE FOLLOWING:
II.E. AffirmativeDefense Provision for Excess Emissions During Malfunctions
II.E.I. An affirmative defense is provided to owners and operators for civil penalty actions for excess emissions during periods ofmalfunction. To establish the affirmative defense and to be relieved ofa civil penaltyin any action to enforce an applicable requirement, the owneror operatorofthe facility must meet the notification requirements ofparagraph 2 in a timelymanner and proveby a preponderance ofthe evidence that:
II.E.l.a. The excess emissions were causedbya sudden, unavoidable breakdown oftechnology, beyond the control ofthe owner oroperator;
II.E.I.b. The excess emissions (a) did not stem from any activityor event that could havebeen foreseen and avoided, or planned for, and (b) could not have been avoided bybetteroperation andmaintenance practices;
II.E.I.c. Repairs weremadein an expeditious fashion when the operatorknew or shouldhave known that applicable emission limitations werebeing exceeded. Off-shift labor and overtime labormust havebeenutilized, to the extent practicable, to ensure that such repairs were made as expeditiously as practicable.
II.E.l.d. The amount and duration ofthe excess emissions (including anybypass) were minimizedto themaximum extent practicable during periods ofsuch emissions;
H.E.I.e. All possible steps were taken to minimize the impact ofthe excess emissions on ambient airquality;

### II.E.I.f. All emissions monitoring systems were kept in operation (ifat all possible); II.E.I.g. The owner oroperator's actions during the period ofexcess emissions were documented byproperly signed, contemporaneous operating logs orotherrelevant evidence;
II.E.I.h. The excess emissions were not partofarecurringpattern indicative ofinadequate design, operation, ormaintenance; and
II.E.l.i. At all times, the facility was operated in a manner consistent with good practices for minimizingemissions. This subparagraph i. is intended solelyto be a factor in determining whether an affirmative defense is available to an owner oroperator, and shall not constitute an additional applicable requirert:lent.
II.E.2. Notification: The owner oroperatorofthe facility experiencing excess emissions during a malfunction shall notifythe division verballyas soon as possible, butno laterthantwo (2) hours after the start ofthe nextworking day, and shall submit written quarterly notification following the initial occurrence ofthe excess emissions. The notification shall address the criteria set forth in paragraph 1 above.
II.E.3. The Affirmative Defense Provision contained in this section shall notbe availableto claims for injunctive relief.
II.E.4. TheAffirmative Defense Provision does not applyto State Implementation Plan provisions orotherrequirements that derive from new sourceperformance standards ornational emissions standards for hazardous airpollutants or any otherfederally enforceableperformance standard oremission limit with an averaging time greater than twenty-four hours. In addition, an affirmative defense cannotbeused bya single source or small group ofsources where the excess emissions havethepotential to cause an exceedance ofthe ambient air quality standards or Prevention ofSignificantDeterioration (PSD) increments.


### REGULATION NO.1


### 1. REVISE REGULATION NO.1, SECTIONIV.G.S, AS FOLLOWS: "Compliance with thereporting requirements ofthis Section IV.G. shall not relieve the owner or operator ofthe reportingrequirements ofSections n.E and 

### J ofthe Common Provisions Regulation concerning malfunctions and startups and shutdowns."


### REGULATION NO.3
1. 

### Revise Regulation No.3, section i.b.65., to eliminate the definition of"upset conditions" and substitute the definition of"malfunction." Change any use ofthe term "upset conditions" within Regulation No.3 to instead use the term "malfunction."UNITED STATES ENVIRONMENTAL PROTECTION AGENCY**~,..},;"~.** REGION 8 999 18TH STREET· SUITE 300

# .<~,~:' '-**,_~.** c'I;.' ", ., ,..,r. DENVER, CO 80202-2466 Phone 800·227·8917 http://www

.epa. gOYlregion08

Ref: 8P-/\f{ 

## m:'G 

## 'I 2 2006 Robt:rt Rrady, Chair Colorado Air Quality Control Commission Coloradv**D~pl.** Public Health

and Environment 4300 Cherry Creek Drive South Denver, CO 80246-1530
Dear COlllmissioner Brady:
Iam writing to urge the Colorado Air Quality Control Commission to adopt the rule language EPA helS suggested (Option I)as a replacement for Colorado's existing upset provisions. 111 our April 14, 2006 letter, EPA indicated that the existing rule j::; not adequilte and that the State would need to make changes to the existing regulation. Adoption ofour suggested language will bring closure to this matter. Maintaining the status quo or adopting Ci\C)'s proposal (Option 2) will not. Ifyou do not change the existing rule, EPA will have to take additional administrative actions· respond to the citizens' petition before LIS and in all likelihood issue a SIP call

- which will merely prolong this matter. The same is true ifyou adopt the C;\C1 proposal because that proposal does not meet requirements ofthe Cle.an Air Act and could not be approYcdby EPA.
We empha:;izc that our suggested language is reasonable. It is nearly identical to the startup/shutdown language that sources in Colorado are already meeting and that industry supported hd<')rc this Commission. It provides sources with a reasonable path to relieffrom civil penalties, but <it the same time sets clear, specific, work practice standards to quallt'y for reliet'. These standards have been part ofEPA's vie\vs regarding excess emissions at least since 1977. I This cbrity. specificity, and consistency ofexpression will help sources meet the standards and hdp illlerestt:d parties avoid future arguments. Colorado's existing upset rule is very general and provides an outright exemption Ii-orn emission limits.? The rule does not protect the right to seek injunctive relief, docs not clearly

I For cxarnpk. S\:I.: EPA '$ rulcmaking on excess emissions for the Bmker Hill Smelter, 42 FR 58l7), Novembc:r 8, 1977. We provided a (;Opy ofthis and-other relevant EPA documents to Mr. Lempke on December I, 1ill6. For your convcnielll.:C, we are artaching a copy to this lener.
! 111 [,:PA 's vie>y, any rule that provides an outright exemption from emission limits relied on l(J show utlainment Qr illllll)knnnce or l1ll:ct other Clean Air Act requirements is inconsistent withthe Clean Air Act. See EPA's September 20. 1999 Iln:rnoranduJ1) entitled. "State Implementation Plans: Policy Regarding Excess Emissions [Juring M'llfunctions, St3rlUP, and Shutdown" We provided a copy ofthis and other relevant EPA uucumcnb to Mr Lempke on D-:cember I, 2006. 1\/,0, see Michigan Department ofEnvironmental Quality v,**I3rown<:~** :DO f:3d 181 

### \

### 2 establish [he burden

## orproof. and does not specifically define elements sources must IT1Cl:l [0 UC!l10!1Slrate an UpSI:! has occurred. Ci\t'!'s proposal only protects the right to seek injunctive relief"under Colorado law" weakens ur omits several necessary elements ofan affirmative defense. and through the use of excessive \erbiage and unfamiliar terms, renders the meaning ofvarious elements ambiguous or din1culi lu understand. Instead ofengaging with 

### EPA on language we suggested in April 

### 2006. CACl largely ig.norcd our**conc~rns** and developed completely**differ~nt** rule language. During the course ofnumerous stakeholder meetings between May and Septcmber 2006, we explained our views. listened, and sought f1cxibility within EPA to address industry's most important concerns. Because our interpretations regarding upset provisions come from EPA guidance. we must consult wirh and gain concurrence 

### from other 

### EPA regions and Headquarters before we can agree to 

### SIP language that differs from that endorsed 

### by the guidance. :\ncr considerable effort within 

### EPA, in August 

### 2006 we offered significant compromises to our April 2006 rule language. In response to concerns expressed by CACI representative T\·1r. Sanderson and others, we agreed to the following changesJ: . 1. EI iIllination 

### oflanguage that Mr. Sanderson and others felt would precllIdc use ofthe ul1irmativt' defense by many major sources. This language indicated the defense would not be available where a single source or small 

### groups ofsources have the potential to cause an i.:xceedancl: 01' the NAAQS or increments. We replaced this with the follo\ving requirement: the :source !TIu:;t show that at the time ofthe violation there wasn't an exceedance ofthe NAAQS that could be attributed to the source. This language is consistent with language EPA has approved in other stutes.
:2. Elimination 

### oflanguage that would have restricted the affirmative defense to exccedanccs of'emissions limits with averaging times greater than 24 hours. Mr. Sanderson said that many new emission limits with 30-day averaging periods are extremely stringent. We substituted language that clarities that the affirmative defense does not apply to federal standards like the NSrS and NESHAPS (these either provide an exemption for upsets4 or are not intendcd to be subject to '-In t.:xemptlon) or to 

### SIP or permit limits that were set with an expectation that the: limits \.vould be met even during upsets. For examplc, certain emission limits at Craig Station must be met even during upsets, and EPA has said that PSD .Best Available Control Technology limits apply at all times.

(6'" Cil 2000), whieh upheld EPA's interpretation ofthe Clean Air At:l
JOur agrccl11clll**i~** prelill1inary because EPA must conduct notice and comment rulemaking bdore apprcwing SIP rev Isinn.'>. • The NSI'S unci NESHAI'S are technology-hased limits and are not set [0 comply with specific health aud**~1l\irOIlITlCrllai-ba** . .,ed**~tandard~** like the NAAQS and PSO Increments. for this reason, EPA has promulg.ated exemption, li'orll some NSPS and NESHAPS limits. By contrast, EPA has said it is inappropriate to provide ounghl exemptioll' frolll SIP limits because the purpose ofsuch limits is to protect the NAAQS and increments. For exampk. SCc' lllll' 1999 excessemissions policyciled in fOotnole 2 above,

# ·'

3
3. Relax;\tion ofthe showings required by II.E. ] .A, 13, and Eby adding a reasonableness

.standard, For example. now the owner/operator must show that all reasonably possible steps were taken to minimize the impact ofthc emissions, rather than all possible steps.
4. 1:1imination 

### ofthe requirement that the owner/operator show that it used olT-shinand overtime labor to repair malfunctioning equipment. Elimination orthe requirement that t;1C llWn<.:r!opcrator make expeditious repairs when it "should have known" that the emission limits were being exceeded
We note thm many ofthese provisions to which Mr. Sanderson and others objected were identical to provisions in Colorado'5 startup/shutdown rule. We 

### also nott that other 

### areas have adopted excess emissions rules that are consistent with our 1999 excess emissions policy**~tatcment** und with the language we are suggesting. For example, we have attached a copy of Maril.:opa CountY's Rule 140, which EPA approved on August 27,2002 (67 FR 54957.)
We fl.:el that our suggested changes are reasonable and would not significantly affect sources thm already employ good design, operation, and maintenance practices. For sources that Jon'l rollo\\' such practices, we're hopeful tbat this rule change would provide them greater incel1livcs 10 reduce their upsets and excess emissions. It is likely to spur creative solurions for prcvl.?nting**up~ets** We do not think this change would open a flood ofnew citizens' suits, as some allege. 11 certainly has not done sofaI' Colorado's startup and shutdown regulations in Colorado's Common I)royisions since they 

### were revised several years 

### ago. All enforcing entities, including citizens**grollp~,** have limited resources; we are confident all will focus their energies on the worst offenders, nOl sources that experience occasional upsets oflimited duration.
Oncc again, I urge you to adopt EPA's suggested language in order to bring closure to This matter. If you have any questions contact me at (303)312-6005 or iv1ark Komp ofmy staffat (303)3] 2-6022, Thank you 

### for your consideration.

### ~JY'r

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## fZ. Long,jDlrec.t<lr i Air and**~#n Pro~ram/'**  ,-,/
cc: Margie I)erkins [)oug.las Lempke


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