### DATE: UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION III 1650 Arch Street Philadelphia, Pennsylvania 19103-2029



### 12/n/ll 

### SUBJECT: Approval and Promulgation ofAir Quality Implementation Plans; Pennsylvania; Nonattainment New Source Review Rules

- Technical Support Document

. 

### FROM: Gerallyn Duke

# j~~**\{)J~** Office ofPermits and AirToxics Review 

### TO: Kathleen Cox, Associate Director Office ofPermits and AirToxics Review



### I. BACKGROUND OnAugust 9, 2007, the Pennsylvania Department ofEnvironmental Protection (PADEP) submitted a State Implementation Plan (SIP) revision request, pertaining to Pennsylvania's nonattainmentNew Source Review (NSR) program. This SIP revision is intended to update the state's nonattainment NSRregulations to meet the 2002 NSR Reform measures, make clarifying changes to certain nonattainment NSR provisions and to satisfy the requirements ofarecent decision bythe United States Court ofAppeals for the District ofColumbia (D.C. Circuit Court) regarding antibacksliding (South CoastAir QualityManagementDistrict vEPA (South Coast)I. 2002 NSR Reform On December 31, 2002 (67 FR 80186), EPA published final rule changes to 40 Code ofFederal Regulations (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 offinal action on the reconsideration ofthe December 31, 2002, final rule changes. The December 31, 2002, and the November 7, 2003, final actions are collectivelyreferred to as the "2002 NSR Reform Rules." The 2002 NSR Reform Rules are part ofEPA's implementation ofparts C and D oftitle I ofthe CAA, 42 U.S.C. 7470-7515. Part C oftitle I ofthe 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 oftitle I ofthe

1 In 2006, the United States Court ofAppeals for the District ofColumbia Circuit found in et aI, 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 underthe CAA.CAA, 42 U.S.c. 7501-7515, is the nonattainmentNSRprogram, which applies in areas that are not in attainment oftheNAAQS-"nonattainment" areas. Collectively, the PSD and nonattainment NSRprograms are referred to as the "New Source Review" orNSRprograms. EPAregulations implementingthese programs are contained in 40 CFR 51.165,51.166,52.21,

··52.24, andpart.51, appendix S. The CAA's NSRprograms arepreconstruction review and permittingprograms applicable to new and modified stationary sources ofairpollutants regulated underthe CAA. TheNSRprogramsofthe CAA include a combination ofair quality planning and airpollution control technologyprogram requirements. Briefly, section 109 ofthe CAA, 42 U.S.C. 7409, requires EPA to promulgate primaryNAAQS to protectpublichealth 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**require~** to contain a preconstruction review program for the construction and modification ofany stationary source of airpollution to assure that the NAAQS are achieved and maintained; to protect areas ofclean air; to protect air qualityrelated 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 ofclean airresources; and to ensure that any decision to increase air pollution is made only after full public consideration ofthe consequences ofthe decision. The 2002 NSR Reform Rules made changes to five areas ofthe NSRprograms. In summary, the 2002 Rules: (l) Provide a new method ford,etermining baseline actual emissions;(2) adopt an actual-to-projected actual methodology for determining whether a majormodification has occurred; (3) allow major stationary**source~** to complywith PALs to avoid having a significant emissions increase that triggers the requirements ofthe majorNSRprogram; (4) provided a new applicabilityprovision 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 ofoperation." On November 7,2003 (68 FR 63021), EPA published a notice of final action on its reconsideration ofthe 2002 NSR Reform Rules, which added a definition for "replacementunit" 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 ofthe 2002 NSR Reform Rules, along withportions ofEPA's 1980NSR Rules (45 FR 52676, August 7, 1980). OnJune 24, 2005, the United States Court ofAppeals for the District ofColumbia (D.C. Circuit Court) issued a decision on the challenges to the 2002 NSR Reform Rules. New York v. UnitedStates, 413 F.3d 3 (D.C. Cir.2005) (also calledNew York 1). In summary, the D.C. Circuit Court vacated portions oftherules pertaining to clean unIts and PCPs, remanded a portion ofthe rules regarding recordkeeping and the term "reasonablepossibility" found in 40 CFR 52.21(r)(6) and 40 CFR 51.166(r)(6), and eitherupheld or did not comment onthe otherprovisions included as part ofthe 2002 NSRr 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 bythe D.C. Circuit Court. With regard to the remanded portions

2ofthe 2002 NSR Refonn Rules related to recordkeeping, on December 21, 2007, EPA took final action to establish that a "reasonablepossibility" applies where source emissions equal or exceed 50 percent ofthe CAA NSR significance levels for any pollutant (72 FR 72607). The "reasonablepossibility" provision identifies for sources and reviewing authorities the circumstances under which a major stationary source undergoing a modification that does not triggermajorNSRmust keep records. The 2002 NSR Reform Rules require that state agencies adopt and submit revisions to their SIP permittingprograms implementing the minimum program elements ofthe 2002 NSR Reform Rules no later than January 2,2006. (Consistent with changes to 40 CFR 51.166(a)(6)(i), state agencies are now required to adopt and submit SIP revisions within three years after new amendments are published in the Federal Register.) State agencies maymeetthe requirements of40 CFR part 51 and the 2002 NSR Refonn Rules with different but equivalent regulations. Antibacksliding On April 30,2004 EPA published the "Phase 1Rule To Implement the 8-Hour OzoneNational Ambient Air Quality Standard" (69 Fed. Reg. 23,951) which, among otherthings, allowed areas that had a highernonattainment classificationunder the one-hour ozone standard to impose the NSR requirements ofthe 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 ofpoints, including the NSRprovisions and the D.C. Circuit Court determined in 

### South Coast, that all one-hour ozoneNAAQS majorNSR requirements must remain inplace. 

### II. SUMMARY OFACTION On August 9,2007, PADEP submitted a SIP revision request to the EPA Region III. The August 9,2007 SIP revision request amends 25 Pa. Code Section 121.1 (relating to definitions) and 25 Pa. Code Chapter 127 (relating to construction, modification, reactivation and operation ofsources). Public hearings wereheld on June 6, June 13, and June 19,2006. Theserules were adopted bythe Pennsylvania Environmental Quality Board on February 20, 2007 and became effective May 19,2007. This approval action will revise the previously-approved version ofPennsylvania's nonattainment NSR rules as approved into the Pennsylvania SIP onDecember 9, 1997 (62 FR 64722). The state has adopted an automatic incorporationbyreference offederal PSD rules at §52.21, in its entirety, which was approved as part ofthe SIP on on June 18, 1983. This SIP revision takes no action on the state's PSD program. 

### III. EVALUATION EPA last took action onthe NSR provisions ofthe Pennsylvania SIP on December 9, 1997. At that time EPA approved a wholesalerevision ofthe state's pre-construction permitting program and included new and revised subchapters A, B, C and E. Pennsylvaniahad adopted the new rules in response to the 1990 Clean AirAct Amendments (CAAA) requirement to 3submit new NSR programs addressing §182. The only subchapter that was not revised was subchapterD - the state's PSD program. The approved 1997 SIP revision created a framework whereby all sources, except those specifically exempt, must comply with the general requirement to obtain a "plan approval" prior to construction as outlined in subchapters A and B. These subchapters are generally considered the state's minorNSRprogram covering minor sources as well as minor changes at major sources. Major sources are subject to the additional requirements ofsubchapters D (PSD)

.and E (nonattainment NSR). Subchapter E also includes additional provisions relating to minor changes at major sources for ozoneprecursors (NOx and VOCs). The latterrequires facilities to aggregate de minimis increases over a specified period oftime. Once the net emissions increase (creditable decreases can beused to net overthe period ofaggregation) equals orexceeds the significance threshold for the area, the facility is required to offset the increase at a ratio commensurate with the area's classification. De minimis changes are not subject to a technology requirement such as LAER orBACT. Finally, the 1997 SIP revision established the state's banking and trading emissions offset program. The 2007 SIP revision retains the currently approved framework for the state's minor and major

. NSR program but updates the program to incorporateNSR Reform elements in the nonattainment NSRprovisions, includes antibacksliding measures, and makes other clarifying rule changes. NSR Reform Elements Priorto NSR Reform, emission increases associated with a physical change orchange in the method ofoperation at an existing major source were calculated by comparingpast actual emissions with the facility's potential to emit after the change, commonlyreferred to as the actual-to-potential test2• In general, NSR Reform allows facilities to choosebetween the traditional test and a new test that would compare past actual emissions to a projection offuture actual emissions, so long as the facility makes those projections based on realistic and reliable information. In addition, the facility would not berequired to establish the projected emissions as an enforceable emissions limit. The latter is commonlyreferred to as an actual-to-actual test. As noted above, NSR Reform was challenged on all fi;"onts, including the applicability provisions related to the actual-to-actual test and, ofimportance to the Pennsylvania SIP, the Clean Unit test. The Clean Unit test would have allowed facilities that had installed state ofthe 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 ofactual emissions." In its concluding paragraph on the matter, the Court opined that:

2 In 1992, EPA promulgated regulations that created special rules for physical and operational changes at electric generating units (EGUs). (57 FR 32314). These rules are commonly called the WEPCO rule because they were prompted bylitigation involving the Wisconsin Electric Power Company (WEPCO). In those regulations, EPA adopted an actua1-to-future-actua1 methodology for all changes at EGUs except for construction ofnew units or the replacement ofexisting units. 4Therefore, because theplain language of the CAA indicates that Congress intended to applyNSR to changes that increase actual emission instead of potential orallowable emissions, we holdthatEPA lacks the authority topromulgate the Clean Unitprovision, andwe vacate thatportion of the 2002 rule, 67Fed. Reg. at 80,279-83 (codifiedat40 C.F.R. § 

### 52.21(x)) as contrary to the statute under Chevron Step 1. Pennsylvania's approved 1997 SIP rules allow sources to detennine nonattainment NSR applicability based on a comparison ofpast "maximum allowable emissions" emissions to future "maximum allowable emissions". Inother words, it allows facilities to use a potential-topotential test to detennineNSR applicability. This methodology applies to both the applicability test for majorNSR as well as in calculating de minimis increases under theirminorNSR provisions for ozoneprecursors. By any measure, these rules did not confonn to the pre-Refonn actual-to-potential test orto the present, clear mandate ofthe D.C. Circuit Court inNYI that applicabilitybebased onincreases in actual emissions. The 1997 SIP could allow facilities to make substantial increases in actual emissions without undergoing review and without applying offsets orinstalling LAER, particularlyin nonattainment areas that already have poor air quality. Byincorporating NSR Refonn elements, adoption oftheproposed 2007 SIP revision is a significant strengthening ofthe SIP and will finally bring Pennsylvania'S program in line with the requirements ofthe CAA. Pennsylvaniahas adopted all ofthe NSR Refonn measures with some modifications. Areas in which Pennsylvania'S regulations differ from their federal counterparts include: Baseline actual emissions (BAE):
The look-back period for detennining BAE is five years for all facilities, but non-EGUs mayrequest up to ten years upon a demonstration that a different period is more representative ofnonnal source operation. BAE do not include emissions associated with malfunctions. Additionally, the same 24-month period is to beused for all pollutants when multiple units are affected by a project unless a facility can demonstrate that another 24- monthperiod would bemorerepresentative. Projected actual emissions (PAE): Projected actual emissions mustbe incorporated into the required plan approval as an emissions limit.
Reasonable Possibility: The "reasonablepossibility" provision identifies for sources and reviewing authorities the circumstances under which a major stationary sourceundergoing a modification that does not trigger majorNSR must keep records. The 2002 NSR Refonn Rules requirethat state agencies adopt and submit revisions to their SIP pennitting programs implementing the minimum program elements ofthe 2002 NSR Refonn Rules. In the case ofthe 2007 SIP revision, it wasn't necessary for Pennsylvania to make any changes based on the reasonable possibilityprovisions 5because facilities that use projected actual emissions with the result that majorNSR is not triggered, are still required to obtain a permit. Thesepermits require all facilities to maintain and report theirpost-change emissions. AntiBacksliding: On April 30, 2004, EPA designated Bucks, Chester, Delaware, Montgomery and Philadelphia Counties in Pennsylvania as moderate nonattainment under the eight-hour ozoneNAAQS 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 ofSouth Coast, all**one~hour** ozoneNAAQS majorNSR requirements in Pennsylvania and in the five-county Philadelphia areamust remain inplace. No other areas on Pennsylvania were affected bythese antibacksliding provisions. Summary ofRule Changes: Many ofthe definitions in the approved 1997 SIP have been revised and manyterms have been added to accommodate theNSR Reform regulations. In addition, Pennsylvania has updated the text ofsome definitions and added definitions that have existed in the federal program for some years prior to NSRreform. The following table summarizes the changes to the definitions in Section 121.1. Unless otherwise noted in the discussion below, all other modifications to definitions are grammatical or citation corrections or otherwiseminor changes: 2S PA Code Chapter 121.1 Definitions:

Modified definitions "BACT

-- best available control technology," "creation," "deminimus emission increase," "generation," "major facility," "majormodification," "majorNOx emitting facility," "major VOC emitting facility," and "secondary emissions" New definitions "Actual emissions," "Actual PAL for a major facility," "aircontamination source," "allowabJe emissions," "baseline actual emissions," "begin actual construction," "commence," "CEMS

- continuous emissions monitoring system," "CERMS

- continuous emissions rate monitoring system," "CPMS

- continuous parametermonitoring system," "creditable emissions decrease," "deactivation," "electric steam generatingunit," "emissions unit," "fugitive emissions," "federally enforceable," "major emissions unit," "necessarypreconstruction approvals or permits," "net emissions increase," "PAL

- plantwide applicability limit," "PAL effective date," "PAL effective period," "PALmajor modification," "PALpermit," "PAL pollutant," " PEMS

- predictive emissions monitoring 6system;" "project," "projected actual emissions," "regulated NSRpollutant," "replacement unit," "repowering," "significant," "significant emissions increase," "significant emissions unit," "significant net emissions increase," and "small emissions unit". Deleted Definitions "Extreme ozone nonattainment area," "marginal ozone nonattainment area," "moderate ozone nonattainment area," "serious ozone nonattainment area," and "severe ozone nonattainment area." Except for the revisions made to implement NSR Reform and one-hour ozone anti-backsliding provisions, these definition changes reflect minor word changes (e.g., changing "which" to "that"). Pennsylvaniahas also added terms that are intended to help implement their state permit programs in general. As stated above, State agencies maymeet the requirements of40 CFR part 51 and the 2002 NSR Reform Rules with different butequivalent regulations

. EPA is proposirig approval ofthe following revisions and additions, including definitions for terms that differ from the federal rules. Departures from the 2002 federal rules and EPA's approval ofthese deviations are indicated below.

Section Status Description NSR Reform? 121.1 Modified Added definition of"actual emissions

." Varies from no

-text federal definition in two ways: (1) requires written determination when owner or operatorjustifies use ofa consecutive 24-month period different than the 24- month**p~riod** immediatelypreceding normal (2) does not presume that source-specific allowable emissions for

.. the unit are equivalent to the actual emissions ofthe unit 121.1 Modified Added definition of"actual PAL for a major facility" yes

.text which conforms with the federal definition of"actuals PAL" 121.1 Modified

. Added definition of"air contarpination source." This no text term is·included in Section 3 ofPennsylvania's Air Pollution Control Act (APCA)(35 P.S. §4003) 121.1 Modified Added definition of"allowable emissions." Conforms no text with federal definition and also adds a fourth requirement that conforms with 40 CFR 51. 165(f)(4)(A) to assure that PAL limits are enforceable as a practical matter

7Section Status Description NSR Reform? 121.1 Modified Added definition of"Baseline actual emissions" (BAE). yes text Languagein definition mirrors that in the federal definition 121.1 Modified Added definition of"Begin actual construction" which no text conforms with federal definition 121.1 Modified Added definition of"Continuous emissions monitoring yes text system (CEMS)" which mirrors the federal definition 121.1 Modified Added definition of"Continuous emissions rate yes text monitoring system" (CERMS) which mirrors the federal definition 121.1 Modified Added definition of"Continuous parametermonitoring yes text system" (CPMS) which mirrors the federal definition 121.1 Modified Added definition of"Commence"which pertains to no text extensions under §127.13 and conforms to federal definition 121.1 Modified Modified definition of"Creation"pertainingto emission no text reduction credits (ERCs) for emission offset purposes 121.1 Modified Added definition of"creditable emissions decrease" in no text §121.1 121.1 Modified Added definition of"deactivation." This term is no 127.215 text included to clarifyreactivation requirements under §127.11a and 127.215 as well as ERC application procedures under §127.207(2)(i) 121.1 Modified Modified definition of"deminimis emissions increase" no text to clarifythat a change byitselfthat is less than significant would be a de minimis emissions increase 121.1 Modified Added definition of"Electricutility steam generating no text unit" which mirrors the federal definition 121.1 Modified Added definition of"Emissions unit" which conforms yes text with the federal definition. As part ofdefinition of "emissions unit," added definition of"new emissions unit" and "existing emissions unit"both which conform to federal definition 121.1 Modified Added definition of"Federally enforceable" which no text mirrors the federal definition 8Section Status Description NSR Reform? 121.1 Modified Added definition of"fugitive emissions" which mirrors no text the federal definition 121.1 Modified Modified definition of"generation" to specify that the no text term pertains to an owner or operator ofan air contamination source, emissions unit or facility with respect to emission reduction credits (ERCs). 121.1 Modified Added definition of"majoremissions unit" which is yes text used in §127.18(k)(5)(1) for calculating a PAL and conforms to federal term. 121.1 Modified Added definition of"majorfacility" which is used in no text lieu ofand consistent with the federal definition of "major stationary source" in most respects. Two differences make PA's definition more inclusive: (1) As an anti-backsliding measure, P A includes fugitive emissions when determining the status ofa facility rather than considering fugitive emissions forjust the 28 source categories listed inthe Federal definition (2) PA's lower emissions threshold for CO in nonattainment areas does not include the federal caveat, "where stationary sources contribute significantlyto CO levels in the area (as determined inrules issued bythe Administrator)". 121.1 Modified Added definition of"majormodification." Note the yes text following differences: (1) Definition includes in Subpart (ii) a deminimis increase that would result in exceedence ofthe significance threshold (2) Temporary clean coal technology demonstration projects are not exempted from the definition. Definition does not include anyincreases in VOC emissions in extreme ozone nonattainment areas as set forth in 40 CFR 51.165(a)(v)(F), but no extreme ozone nonattainment areas are designated in PA. 121.1 Modified Modified definition of"MajorNOx emitting facility" to no text ensure that reasonably available control technology (RACT) remains applicable to major stationary sources ofNOx and VOCs in Bucks, Chester, Delaware, Montgomery orPhiladelphia counties. Facilities in these counties which emit orhave the potential to emit at least 25 tons per year (tpy) ofNOx will be considered major facilities and be subject to the requirements applicable to major facilities located in a "severe" 9

.Section Status Description NSR Reform? nonattainment area ofozone. This provisionprevents backslidingrelated to revocation ofthe fonner one-hour ozone standard. Retained fonner emissions thresholds for facilities located in extreme and serious, nonattainment areas as well as in ozone transport regions. 121.1 Modified Modified definition of"MajorVOC emitting facility" to no text ensure that RACT remains applicable to major stationary sources located in Bucks, Chester,**Delaware~** Montgomery orPhiladelphia counties. These facilities that emit orhave the potential to emit at least 25 TPY of VOCs will be considered major facilities and be subject

.. t9 the requirements applicable to major facilities 109ated in a "severe" nonattainment area ofozone. This provisionprevents backslidingrelated to revocation of

. the fonner I-hourozone standard. Retained fonner emissions thresholds for facilities located in extreme and serious nonattainment areas as well as in ozone transport regions. 121.1 Modified Added definition of"Necessarypreconstruction no text approvals" which confonns with federal definition under 40 CFR 51.165(a)((1)((xvii). 121.1 Modified Added definition of"net emissions increase" which yes text refers to 127.203a(a)(4) and generally conforms with the federal definition at 40 CFR 51.165(a)(I)((vi). The difference in lookback period (see Baseline Actual Emissions Lookback, above) is noted. 121.1 Modified Added definition of"plantwide applicability'limitation" yes text (PAL) 121.1 Modified Added definition of "PAL effective date" yes text 121.1 Modified Added definition of"PAL effectiveperiod" yes, text 121.1 Modified Added definition of "PALmajor modification" yes text 121.1 Modified Added definition of"PALpennit" yes text 121.1 Modified Added definition of"PALpollutant" yes 10Section Status Description NSR Reform? text 121.1 Modified Added definition of"Predictive emissions monitoring yes text system (PEMS)" which conforms with the federal definition. 121.1 Modified Added definition of"project" which is similar to the yes text federal definition at §510165(a)(I)(xxxix) but is more inclusive as it applies to'a facility and thereby**include~** minor as well as major sources. "Project" applies to majorNSR and 

### PA'sDeMinimis Program, which is alreadypart ofthe P A SIP. 121.1 & Modified Added definition of"projected actual emissions" which yes 127.203 text is at least as stringent as federal requirements a(a)(5) 121.1 Modified Added definition of"regulated NSRpollutant" which no text conforms with the federal definition. 121.1 Modified Added definition of"replacementunit" which includes yes text

.' all 4 criteria that are included in the federal definition 121.1 Modified Modified definition of"secondary emissions" which no text mirrors federal definition 121.1 Modified Added definition of"significant" with values for no text significant emissions rates for CO, NOx, SOx, Ozone, Lead and PM-l0 that mirrorthe significant emissions rates set forth in the federal regulations. 121.1 Modified Added definition of"significant emissions increase" that no text conforms with the federal definition. 121.1 Modified Added definition of"significant emissionsunit" that yes text conforms with the federal definition in §51.165(f)(2)(xi) for the purpose ofusing PALs. 121.1 Modified Added definition of"significant net emissions increase." no text No definition of"significant net emissions increase" is set forth in the federal regulations. Nonetheless, PA's definition comports with the meaning ofthe term which is used in the federal rules. 121.1 Modified Added definition of "small emissions unit" that yes text conforms with the federal definition in §51.165(f)(2)(iii)
11Section Status Description NSR Reform? where PALs are used.

25 PA Code Chapter 127. Construction, Modification, Reactivation and Operation of Sources Subchapter B Plan Approval Reauirements' 2 

# . . " *NOTE: Sections 127.201 (d) through (f) are new. See Descriptions below. Section Status Description NSR Reform? 127.201 Modified Corrected language regarding application ofNSR no (c) to include attainment areas for ozone and within an ozone transport region that emits orhas PTE at least,50 tpy ofVOC of'l00 tpy ofNOx. Added language to include a facility within a basic nonattainment area and located within an ozone transport region as also to be considered a major facility and subject to requirements applicable to a major facility located in a moderate nonattainment area. Deleted term "stationary" related to major facility as §127.14 specifically exempts mobile , sources from plan approval requirements. 127.201 Added Language on general applicability ofprovisions of some (d) Subchapter E parts
127.201 Added More stringentrule applies in event of no (e) inconsistencybetween rules. 127.201 Added Facilities located in Bucks, Chester, Delaware, Montgomery orPhiladelphia Counties that emit or no (f) have potential to emit at least 25 tpy VOC orNOx are subject to requirements applicable to a major facility located in a severe nonattainment area for ozone.

25 PA Code Chapter 127. Construction2 Modification2 Reactivation and Operation of

' j Sources2 SubchapterE. New Source Review: *NOTE: Sections 127.201a, 127.203a and 127

.218 are new. See Descri Section Status Description Reform? 12Section Status Description NSR Reform? 127.201a Added Measurements, abbreviations and acronyms some

- , parts 127.202 Modified Changed effective date and clarified that special no permit requirements apply to facility owner or operator 127.203(a) Modified Replaced §127.203(a) (relating to facilities**subje~t** to No. Ozone special permit requirements) with an amended antiproposal which applies to the construction ofa new backsliding major facility or modification at an existing facility located in a nonattainment area orlocated in attainment orunclassified area, which impacts a nonattainment area in excess ofcertain significance levels. Lower threshold for applicability to include facilities with emissions below 100 tpy where these facilities are major. 127.203(b) Modified Replaced §127.203(b) (also relating to facilities No. Ozone subject to special permit requirements) with an antiamended proposal which includes provisions that backsliding would apply to an owner oroperator ofa facility in Bucks, Chester, Delaware, Montgomery or Philadelphia Counties or an area classified as a . serious or severe ozone nonattainment area. 127.203(c) Modified Replaced §127.203(b) (also relating to facilities No. Ozone through (f) subject to special permitrequirements) with an antiamended proposal which identified when the NSR backsliding requirements apply and do not apply to owners and operators offacilities. Cites applicabilityprocedures under §203a and offset requirements under §205(3) 127.203a Added Applicability determination. Includes provisions to No. Ozone determine net emission increases, baseline actual antiemissions, and projected actual emissions. backsliding 127.204 Modified Clarification some parts 127.205 Modified Special permit requirements. Adds provisions as to yes when LAER applies to a proposed modification within the contemporaneous period ofa proposed emissions increase and when emission offsets are required for the entire net emission increase that occurred over the contemporaneous period. 127.206 Modified Clarification no. 127.207 Modified Creditable emissions decrease orERC generation no. and creation. Amended to prohibit emission reductions necessaryto meet state-onlyminorNSR 13Section Status Description NSR Reform? and allowance-based programs required bythe CAA orAPCA to beused to generate emission reduction credits. 127.208 Modified ERC use and transfer requirements. Minor no clarifications. Provides that an owner or operator of a facility that is subject to allowance-based programs may generate, create, transfer and use ERCs'in accordance with Chapters 127 and 145 (relating to interstate pollution transport reduction). Provides limited allowance for obtaining ERCs from another nonattainment area, consistent with federal requirements for offsetting emissions at 40 CFR 51. 165(a)(3)(iii)(F)

. 127.209 Modified ERC registry system. Clarification. ' no 127

.210 Modified Offset ratios. Clarification. no 127.211 Modified Deleted and remaining applicable provisions were no moved to new §203a. 127.212 Modified Portable facilities. References to PM-l0 precursors no were delete4. 127.213 Modified Construction and demolition. Clarification. no 127.214 Rescinded Rescinded former Exemption section. no 127.215 Modified Reactivation. Clarification. Also provides that a no facility which is deactivated in accordance with subsection(a) may create ERCs only ifan ERC**r~gistry** application is filed within two years of deactivation. 127.218 Added New PALs provisions**~es**



### IV. CONCLUSION**Pennsylvania~s** August 9, '2007 proposed SIP revision amending fennsylvania's NSR construction, modification, reactivation and operationpermit 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 NSR set forth at 40 CFR 51.165.



### V. RECOMMENDED AGENCY ACTION

14I recommend approval ofthe 2007 SIP revision amending the state'srules at 25 Pa. Code, Part I, Subpart C, Article III, "Air'Resources," Chapter 121, "General Provisions," Sections 121.1 "Definitions" and 127 "Construction, Modification, Reactivation and Operation ofSources".

15