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Introduction UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION 10

December 19, 2014 1200 Sixth Avenue, Suite 900 Seattle, WA 98101-3140

Alaska's Part D MajorNew Source Review Rules David C. Bray, Senior Air

### Advisor**~fl** Office ofAir, Waste and Toxics 

### [/V.-...:J
Docket EPA-RIO-OAR-2014-0753 OFFICE OF AIR, WASTE , AND TOXICS

OnNovember 4, 2014, EPA Region 8 proposed to disapprove the Wyoming Part D nonattainment area new source review (NNSR) rules based on a determination that the Wyoming rules, which incorporate byreference 40 CFR 51

.165 (EPA's regulations for State Implementation Plan (SIP) NNSRrules), did not comply with several Clean Air Act requirements, including sections 110(a)(2)(C), 110(a)(2)(A) and 172(c)(5). 79 FR 65362. On that same day, EPA Region 10 proposed to approve the Alaska Part D NNSRrules based on a finding that the Alaska NNSR rules in 18 AAC 50, Article 3, Section 311 ''Nonattainment area major stationary source permits" and 18 AAC 50.040(i) (incorporating byreference text from 40 CFR 51.165) met the requirements ofthe Clean Air Act and EPA's regulations for SIP NNSR rules

. 79 FR 65366. EPA Region 10 noted that 18 AAC 50.311 had previouslybeen approved into the Alaska SIP on August 14, 2007 (72 FR45378) and had notbeenrevised since that time. EPA further explained that the primary changes proposed for approval in the SIP revision were updating the effective dates ofthe Federal regulations previously adopted byreference in the Alaska SIP for purposes ofAiaska's Part D NNSRprogram. Background EPA's requirements for SIP permit-to-construct programs, including the Part D NNSRprogram, are contained in 40 CFR part 51, subpart I, and specifically, in 40 CFR 51.160 through 51.166. The requirements for nonattainment areapermitting are found in 51.165(a), but this section does not stand alone and is part ofa series ofsections that together, comprise the requirements for approvable SIP permit-to-constructprograms (e.g., 51.161 spells out the requirements for public notice and comment; 51.164 the requirements for stack heights and dispersion techniques)

.Importantly, the provisions ofsubpart I are not written inthe form ofan implementable permitting rule which applies to the owner or operator ofsources who wish to construct or modify, butrather they are requirements that a State must meet in order to get its permittingrules approved as part ofthe SIP. In contrast to the requirements for NNSR, there are both SIP PSD requirements in 40 CFR 51

.166 and federal PSD regulations in 40 CFR 52.21, the latter being an implementable permittingrule that applies in States that do not have an approved SIP PSD rule

. For a variety ofreasons, many States incorporate 40 CFR 52.21 into State rules as the State PSD program. However, EPA does not have a similar implementable NNSRpermitting rule that can be directlyincorporated byreference into State rules. As a result, some States have incorporated byreference all or parts of40 CFR 51.165 into State rules for purposes ofNNSR. Analysis Unlike the Wyoming rule, which simply incorporates byreference the planningrequirements of 40 CFR 51.165 and does not link the federal permitting requirements directly to Wyoming's existing state permitting rules, Alaska has adopted a complete State permittingrule that includes provisions that are specifically applicable to sources locating innonattainment areas, including State provisions specifying the permissible location ofoffsets (see 18 AAC 50.311). This provision makes clear that no source may commence construction ofa major stationary source, a major modification, or a "PAL" major modification ofa nonattainment pollutant in a nonattainrnent area without obtaining a construction permit from the Alaska Department of Environmental Conservation (ADEC). 18 AAC 50.311 also specifies what mustbe included in an application for a Part D NNSRpermit, such as a demonstration that emissions ofthe nonattainrnent pollutant will be controlled to a rate that represents the Lowest Achievable Emission Rate, and documentation that proposed emission offsets will be sufficient, enforceable, and occurby the time the new or modified source begins operation. Finally, that provision also specifies that ADEC will provide notice and a 30-daypublic comment period on the proposed permit or permit denial and that the permit can onlybeissued ifthe applicant demonstrates to ADEC that the permittingrequirements of 40 CFR 51.165 that have been incorporated by reference in Alaska's rules will be met. Importantly, the Alaska incorporation byreference provision at 18 AAC 50.040(i) explicitly states thatit is adopting the text ofthe identified provisions of40 CFR 51.165 "setting out provisions that a state implementationplan shall or may contain." This makes clear that the incorporated provisions of40 CFR 51.165, including those specifying that a "stateplan may contain

...", are requirements ofAlaska's Part D NNSR permittingprogram. Because Alaska's reliance on 40 CFR 51.165 as part ofits Part D NNSR program is part ofan overall construction permitting program that imposes additional requirements on new and modified major sources located in nonattainment areas, and because Alaska's incorporation by reference oftext from 40 CFR 51.165 is clear with respect to the intent ofthe State to adopt the permittingrequirements as State law applicable to sources locating in nonattainment areas, the concerns raised inthe proposed action on Wyoming's incorporationbyreference of40 CFR 51.165 are not present in Alaska's rules.