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Appendix D

Calcagni Memorandum

This appendix contains a reproduction of a Memorandum from John Calgagni entitled, "Limitations

of Potential to Emit with Respect to Title V Applicability Thresholds," dated September 18, 1992. 

"The text you are viewing is a computer-generated or retyped version of a paper photocopy of the

original. Although considerable effort has been expended to quality assure the conversion, it may

contain typographical errors. To obtain a legal copy of the original document, as it currently

exists, the reader should contact the office that originated the correspondence or provided the

response."
Appendix D

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United States Environmental Protection Agency

Office of Air Quality Planning and Standards

Research Triangle Park, North Carolina 27711

Sep 18 1992

MEMORANDUM

SUBJECT:

Limitation of Potential to Emit with Respect to Title V Applicability Thresholds

FROM:

John Calcagni, Director

Air Quality Management Division (MD-15)

TO:

William A. Spratlin, Director 

Air and Toxics Division, Region VII

This is to acknowledge receipt of your August 6,1992 memorandum to John Seitz requesting guidance

with respect to a State's ability to utilize a Title V permit, or other federally-enforceable means, to limit

the potential to emit for various purposes.

Before addressing your specific questions, some background review will be helpful. We recognize that

sources may wish to limit their potential to emit by accepting voluntary limits to avoid being subject to

more stringent requirements. The voluntary limit must be federally enforceable. This is indicated in the

definition of "potential to emit" contained in 40 CFR 70.2. There are several mechanisms that will allow

sources to adopt federally-enforceable restrictions on their potential to emit. The preamble discussion on

voluntary limits in the Part 70 rule for operating permits programs is a useful summary of these

approaches (see 57 FR 32250, 32279, July 21, 1992).

A source that emits criteria pollutants may be subject to a federally-enforceable restriction on its potential

to emit either under an existing State preconstruction review or a non-Title V State operating permits

program that has been approved into a State implementation plan (SIP). These options were discussed in

the preamble to the final rule: Requirements for the Preparation, Adoption, and Submittal of

Implementation Plans; Approval and Promulgation of Implementation Plans, 54 FR 27274, June 28,

1989.

Although we do not have extensive experience with implementing this rule, we believe the preamble and

rule adequately describe the process States and sources would use to limit potential to emit. A source

using this approach to take federally-enforceable conditions so as to not be "major" for Title V purposes

would not have to obtain a Title V permit (assuming, of course, that the State Title V program does not

otherwise apply to the source). It, therefore, would not have to meet Title V permit requirements. For

sources emitting hazardous air pollutants listed in section 112(b), the Agency is also considering allowing

States to use programs approved under section 112(1) as a means of developing federally-enforceable

limits on the potential to emit, if such an approach is legally permissible. Implementation of this concept

will require the resolution of many issues and will be addressed in forthcoming guidance issued pursuant

to section 112. It is also possible to limit a source's potential to emit through the Title V permitting

process. Indeed, Wayne Leidwanger and Josh Tapp of your staff indicated that Nebraska wishes to use

Title V permits to create various, federally-enforceable emissions limitations. This can be done in a

number of ways. 

Some sources may be issued a general permit under the Part 70 operating permits program for the purpose

of avoiding classification as a major source. If a source above a certain emissions level is subject to more
Calcagni Memorandum

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stringent requirements, in some situations a general permit may be developed to contain a principal

requirement that would limit a source's potential to emit to below that level of emissions (see 57 FR at

32278). This approach can be used for either criteria or hazardous air pollutants. The primary advantage

of a general permit is that it involves streamlined procedures for processing.

If a general permit is not used, a source could obtain the standard Title V permit. However, we believe

this approach would involve additional effort for the source and for the permitting authority. Because the

source would be subject to the full source-specified permit issuance process, it would be required to

individually develop the periodic monitoring, reporting, and compliance certification aspects required of

all Title V permitted sources. Although more burdensome for the source, the State may wish to take

advantage of these procedural requirements to assure that the federally-enforceable conditions are being

adhered to.

Because Title V permitting is likely to be more procedurally rigorous than the other approaches, Title V is

probably not the preferred option for the State to use. In other words, we believe it would be more

complicated for a State or source to use a Title V permit to avoid being considered a major source for

Title V purposes. We believe the other options mentioned above (e.g., construction permits or operating

permits programs that have been approved into a SIP) accomplish the goal in a more straightforward

manner. We are, however, continually investigating approaches to developing federally-enforceable limits

on potential to emit, and we will inform you of any additional options.

Concerning the permit fee issue you raised, it is important to realize that States have considerable

flexibility in determining which sources must pay permit fees as long as they maintain fee programs that

result in the collection, in the aggregate, of sufficient funds to pay for all permit program costs. It is not

necessary for all permitted sources to be charged a permit fee. Similarly, it is also not necessary for

States to charge a permit fee based on potential to emit, but they may.

If you have any further questions, please contact Gwen Holfield of my staff at (919) 541-2343.

cc:

J. Seitz

L. Wegman

B. Jordan

T. Williamson

M. Winer 

Division Director, Regions I-VI and VIII-X
Appendix D

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