Page 1 of 49

From: Lydia Wegman/RTP/USEPA/US To: nfrey@omb.eop.gov Cc: Anna Wood/RTP/USEPA/US@EPA, Rich Damberg/RTP/USEPA/US@EPA, Phil

Lorang/RTP/USEPA/US@EPA, Peter Keller/RTP/USEPA/US@EPA, Raj Rao/RTP/USEPA/US@EPA, Beth Hassett

- Sipple/RTP/USEPA/US@EPA, martin.karen@epa.gov, Joseph

- J Dougherty/DC/USEPA/US@EPA, hannon.john@ep a.gov, Sara Schneeberg/DC/USEPA/US@EPA Date: 06/12/2012 01:03 PM Subject: Redline of implementation section (section IX) in the PM NAAQS preamble
Nathan, Attached is the redline mark

- up of the implementation section (section IX) of the PM preamble. W e hope that it is fully responsive to the comments we received in writing last Wednesday and in discussions Friday and this morning. The revisions address the implications of the proposed monitoring regulation clarifications for nonattainment area impleme ntation (pp 13

- 14), permitting (pp 21

- 22) and transportation conformity (pp 41

- 42). Please let us know if you have any questions. LydiaPage 2 of 49

IX. Clean Air Act Implementation Requirements for the PM NAAQS The proposed revisions to the primary annual PM 2.5 NAAQS and the proposed new secondary
PM 2.5 visibility index NAAQS discussed in sections III.F and VI.F above , if finalized, would trigger a process under which states 1 will make recommendations to the Administrator regarding area designations , and the EPA will take final action on these designations

. States will also be required t o review, modify, and supplement their existing implemen tation plans. The se proposed PM NAAQS revisions would also affect the applicable air permitting requirements and the transportation conformity and general conformity processes . This section provides b ackground information for understanding the possible implications of the proposed NAAQS changes, and describes the EPA’s plans for providing states necessary guidance or rules in a timely manner to clarify how they are affected and to assist their implementation efforts . This section also describes existing EPA interpretations of CAA requirements and other EPA guidance relevant to implementation of new or revised NAAQS. Relevant CAA provisions that provide potential flexibility with regard to meetin g implemen tation timelines are also discussed. This section also contains a discussion of several requirements of the stationary source construction permit programs under the CAA that may be affected by the proposed revisions of the PM NAAQS. These are t he PSD and Nonattainment New Source Review (NNSR) programs. To facilitate implementation of the PSD requirements, which would be the first of the implementation requirements to become applicable upon the effective date of the final NAAQS rule, the EPA prop oses as part of this rulemaking to add a grandfathering provision to its regulations that would apply to certain PSD permit applications that are pending on the effective date of the revised PM NAAQS . If the proposed NAAQS revisions are finalized, this rul e could be finalized at the same time as the revised NAAQS. This section

1 This and all subsequent references to “state” are meant to include state, local and tribal agencies responsible for the implementation of a PM 2.5 control program.Page 3 of 49

also discusses other possible actions under consideration to facilitate implementation of the PSD and NNSR programs (see section IX.F). The EPA intend s to propose additional appropri ate regulations or issue guidance related to the implementation requirements for the revised PM NAAQS at a later date or dates. These may include additional revisions to both the PSD and NNSR regulations , as well as the promulgation of rules or development of guidance related to NAAQS implementation. These actions will be taken on a schedule that provides timely assistance to responsible states. Accordingly, in this section, the EPA solicits comment on several issues that the Agency anticipates will need to be addressed in future guidance or regulatory actions. Because these issues are not relevant to the establishment of the NAAQS, the EPA does not expect to respond, nor is the Agency required to respond, to these comments in the final action on this propos al, but the EPA expects these comments will be helpful as future guidance and regulations are developed.
A. Designation of Areas After the EPA establishes or revises a NAAQS, the CA A requires the EPA and the states to take steps to ensure that the new or revised NAAQS is met

. The first step, known as the initial area designations, involves identifying areas of the country that either meet or do not meet the new or revised NAAQS along with the nearb y areas contributing to violations. Section 107(d)(1) of the C AA states that, “By such date as the Administrator may reasonably require, but not later than 1 year after promulgation of a new or revised national ambient air quality standard for any polluta nt under section 109, the Governor of each state shall

... submit to the Administrator a list of all areas (or portions thereof) in the S tate” that designates those areas as nonattainment, attainment, or unclassifiable. 2 Section 107(d)(1)(B)(i) further provi des, “Upon promulgation or revision of a NAAQS, the Administrator shall promulgate the designations of all areas

2 While the CAA says “designating” with respect to the Governor’s letter, in the full context of the CAA section it is clear that the Governor actually makes a recommendation to which the EPA must respond via a specified process if the EPA does not accept it.Page 4 of 49

(or portions thereof)

... as expeditiously as practicable, but in no case later than 2 years from the date of promulgation

. Such period may be ex tended for up to one year in the event the Administrator has insufficient information to promulgate the designations .” The term “promulgation” has been interpreted by the courts with respect to the NAAQS to be signature and widespread dissemination of a ru le

. By no later than 120 days prior to promulgating designations, the EPA is required to notify states of any intended modifications to their boundaries as the EPA may deem necessary

. States then have an opportunity to comment on EPA's tentative decision

. Whether or not a state provides a recommendation, the EPA must timely promulgate the designation that it deems appropriate

. While section 107 of the
CAA specifically addresses states, the EPA intends to follow the same process for tribes to the extent
prac ticable, pursuant to section 301(d) of the CAA regarding tribal authority, and the Tribal Authority Rule (63 FR 7254; February 12, 1998)

. To provide clarity and consistency in doing so, the EPA recently issued a 2011 guidance memorandum to our Regional Off ices on working with tribes during the designations process (Page, 2011). Monitoring data are currently available from numerous existing aggregated PM 2.5 mass and
PM 2.5 speciation sites to determine compliance with the proposed revised primary annual PM 2.5 NAAQS and with for the proposed new PM 2.5 visibility index NAAQS. As discussed in sections III and VI above, the EPA is proposing to: (1) revise the form and level of the primary annual PM 2.5 standard , and retain the current primary 24

- hour PM 2.5 standard (section III.F); (2) retain the current secondary 24

- hour PM 2.5 standard , and revise the form and retain the level of the secondary annual PM 2.5 standard for

non - visibility

- related welfare protection (section VI.F); and (3) establish a new secondary PM 2.5 visibility index standard (section VI.F) . The EPA’s examination of air quality monitoring data current at the time of this proposal indicate s that , for the proposed levels for the revised primary annual PM 2.5 standard and the new secondary PM 2.5 visibility index standard , it is likely that the vast majority of monitors violating th e is secondary s tandard would overlap with monitors violating th e is primary standard. Since the same types of emissions sources contribute to concentrations affecting at tainmentPage 5 of 49

status for both the proposed primary and secondary NAAQS , the EPA expects that the nonattainment

area boundaries in locations with such overlap would be identical. The EPA will, consistent with previous area designations, use area

- specific factor analysis 3 to support area boundaries decisions for both the primary and secondary standards . The EPA intends to more fully address issues affecting area designations in the designations guidance that will be issued around the same time as any accompanying the revised PM 2.5 NAAQS are finalized

. The EPA solicits comment and technical information related to establishing nonattainment area boundaries for the proposed revised primary annual PM 2.5 NAAQS and the proposed new secondary PM 2.5 visibility index NAAQS , including any relevant technical information that should be considered by the EPA, and any input on the extent to which different considerations may be relevant to establishing boundaries for a secondary PM 2.5 NAAQS. For the reasons stated above, upon promulgation of the revised NAAQS, the EPA currently intends to move forward on the same schedule with the initial area designations for both the revised primary annual PM 2.5 standard and the new secondary PM 2.5 visibilit y index standard. The EPA notes that p romulgating initial area designations for the se standards on the same schedule will provide early regulatory certainty for states. The EPA intends to promulgate the Thus, assuming for illustrative purposes that the revised PM NAAQS in December 2012 are promulgated in June 2013 , the EPA and would complete initial designations for both the revised primary annual PM 2.5 NAAQS and the new secondary PM 2.5 visibility index NAAQS by December 2014 June 2015 using available ai r quality data from the current PM 2.5 and speciation monitoring networks

. These designations would follow the standard 2

- year process described previously and would be based on 3 consecutive years of certified air quality monitoring data from the years 20 1 1 0 to 20 1 3 2 , or 20 1 2 1 to 20 1 4 3 , if available

. (Note, as discussed in sections I V .F and V I .F above, the EPA is propos ing to retain the current primary 24

- hour

3 The EPA has used area

- specific factor analyses to support nonattainment area boundary recommendations and final boundary determinations by evaluating factors such as air quality data, emissions data, population density and degree of urbanization, traffic and commuting patterns, meteorology, and geography/topograp hy. Formatted: Not Superscript/ SubscriptPage 6 of 49

PM 10 standard and to revise the form of the secondary annual PM 2.5 standard to remove the option for spatial averaging and to retain all other elements of the current suite of secondary PM standards to address non

- visibility welfare effects . A new round of mandatory d esignations for these standards would occur only if th ese standards change

. 4 ) EPA requests comment on promulgating designations for both the revised primary and secondary PM 2.5 NAAQS at the same time. In today’s action, as discussed in section VII I .B.3.b.i above, the EPA is proposing to add requirements for establishing near

- road PM 2.5 monitors in certain cities

. If these requirements are finalized, the EPA anticipates that it will take up to 3 years to establish new monitoring sites for PM 2.5

mass , plus an additional 3 years of monitoring thereafter to dete rmine compliance with the mass - based primary and secondary PM 2.5 NAAQS based on these new monitors

. This means that a complete set of air quality data for use in designations from any near

- road monitoring sites would not be available until
201 9 8

. Also , as discussed in section VII I .B.3.d above, the EPA is proposing that each state with a CBSA over 1 million in population would need to have a CSN (or IMPROVE) monitoring site in at least one of its CBSAs to collect speciated PM 2.5 data to support implementatio n of the proposed new secondary standard to address visibility impairment

. This proposal may require the addition of new monitors, or the relocation of existing monitors, in some CBSAs

. The EPA is also proposing in today’s action to extend
the data certifi cation period for speciation measurements by 12 months

. Thus, even if EPA were to consider taking an additional year to complete the designations process (i.e., in December 2015 June 20 16 instead of in December 2014 June 20 15 in the illustrative example ), data from new PM 2.5 near - road monitoring sites would not be available prior to the extended C AA designation deadline; and data from certain CSN (or IMPROVE) monitors also may not be available prior to the extended C AA designation deadline

. For these reason s, the EPA does not currently intend to delay designations based on

4 As discussed in section in VII.A.2 above, t he EPA is proposing to remove the option for spatial averaging from the form of the secondary annual PM 2.5 NAAQS consistent with the proposed change in the form of the primary annual PM 2.5 standard

. The EPA does not consider this change to trigger a new round of non

- discretionary designations for this standard. Formatted: SubscriptPage 7 of 49

unavailability of data for either the revised primary or new secondary standards in order to be able to include data from these new monitors. Initial area designations would not take into account monitoring data from any newly established near

- road monitoring sites, nor from newly established speciation monitoring sites

. Should any of these newly established monitoring sites indicate a violation of the relevant standard after completion of the initial designations , the EPA would consider at that time whether to redesignate the area from attainment to nonattainment

. Such actions are discretionary under the CAA, and the EPA may use other means to assure attainment at any such monitors

. The EP A recognizes that the number of PM 2.5 speciation monitoring sites available to support the state Governors’ designation recommendations and EPA’s decisions for the proposed new secondary
PM 2.5 visibility index NAAQS will be much smaller than the number of PM 2.5 FRM/FEM/ARM sites available to support designation recommendations and decisions for the revised annual primary PM 2.5 NAAQS. Therefore, it may well be that more areas of the nation are designated unclassifiable (or unclassifiable/attainment) for the proposed new PM 2.5 visibility index NAAQS than for the proposed revised primary annual PM 2.5 NAAQS, if finalized. At this time the EPA does not believe that taking an additional year to complete designations for the new secondary PM 2.5 visibility index NAA QS would change this outlook. However, the EPA intends to remain flexible with regard to the designation schedule for the proposed new and revised PM 2.5 NAAQS and will reassess the potential need for an extended schedule upon issuance of the final NAAQS ru le and thereafter. In summary, the EPA intends to provide designation guidance to the states at the time of the promulgation of new or revised NAAQS or very shortly thereafter, to assist them in formulating these recommendations. i I n accordance with sectio n 107(d)(4) of the C AA , the EPA currently believes that
state Governors (and tribes, if they choose) should submit their initial designation recommendations for both the revised primary annual PM 2.5 NAAQS and the new secondary PM 2.5 visibility index NAAQS to the EPA no later than 1 year following promulgation of any new or revised NAAQS (e.g., by in December 201 3 assuming promulgation of the June 2014 if the revised PM NAAQS in DecemberPage 8 of 49

2012 are promulgated in June 2013 )

. The EPA intends to provide designation guidance to the states at the time of the promulgation of a new or revised NAAQS or very shortly thereafter, to assist them in formulating these recommendations. If the Administrator intends to modify any state area

r ecommendation, the EPA would notify the appropriate state Governor no later than 120 days prior to making final designations decisions . A s tate that believe s the Administrator’s modification is inappropriate would have an opportunity to demonstrate to EPA why it believe s its original recommendation (or a revised recommendation) is more appropriate before designations are promulgated

. The Administrator would take any additional input from the state into account in making final designation decisions

. As previ ously stated, the EPA plans to issue guidance regarding designations for the revised
PM 2.5 NAAQS at or very shortly after the time of their final promulgation. The EPA invites preliminary comment on all aspects of the designation process at this time, whic h the Agency will consider in developing that guidance.
B. Section 110(a)(2) Infrastructure SIP Requirements The C AA directs states to address basic SIP requirements to implement, maintain , and enforce the standards . States are to develop and maintain an air quality management infrastructure that includes enforceable emission limitations, a permitting program, an ambient monitoring program, an enforcement program, air quality modeling capabilities, and adequate personnel, resources, and legal authority

. Under
C AA sections 110(a)(1) and 110(a)(2), states are to submit these SIPs within 3 years after promulgation of a new or revised primary standard . While the CAA allows the EPA to set a shorter time for submission of these SIPs, the E PA does not currently intend to do so. Section 110(b) of the CAA provides that the EPA may extend the deadline for the “infrastructure” SIP submission for a new secondary standard by up to 18 mo nths beyond the initial 3 years. If both the annual PM 2.5 NAAQ S and the secondary PM 2.5 visibility index NAAQS are revised, t T he EPA currently believe s it would be more efficient for states and the EPA if each affected state submit s a single section 110 infrastructure SIP thatPage 9 of 49

addresses both standards the revised primary annual PM 2.5 NAAQS and the new secondary PM 2.5 visibility index NAAQS at the same time (i.e., within 3 years of promulgation of any revisions to the NAAQS for PM ) , because the EPA does not at present discern any need for there to be any substantive difference in the infrastructure SIPs for the two standards. However, the EPA also recognizes that states may prefer the flexibility to submit the secondary NAAQS infrastructure attainment SIP at a later date. The EPA solicits comment on th ese infrastruct ure SIP submittal is timing aspect. considerations

. The EPA intends to provide guidance regarding the required date(s) for submission of infrastructure SIPs at the same time as or very shortly after promulgation of the revised NAAQS. Section The CAA’s specific section 110(a)(2) of the CAA provisions include s the following paragraphs describing specific requirements specifying elements of infrastructure SIPs: (A) Emission limits and other control measures , (B) Ambient air quality monitoring/dat a system , (C) Programs for enforcement of control measures and for construction or modification of stationary sources , (D)(i) Interstate pollution transport; and (D)(ii) Interstate and international pollution abatement , (E) Adequate resources and authority , conflict of interest, and oversight of local governments and regional agencies , (F) Stationary source monitoring and reporting , (G) Emergency episodes , (H) SIP revisions , (I) Plan revisions for nonattainment areas , (J) Consultation with government offici als, public notification, PSD and visibility protection , (K) Air quality modeling and submission of modeling data , (L) Permitting fees , and (M) Consultation and participation by affected local entities

. The EPA interprets the CAA such that for t wo of the s ection 110(a)(2) elements , both of which pertain to nonattainment area requirements in part D, title I of the CAA, the required submittal date should not be identified in section 110(a)(2) are not governed by the 3

- year submission deadline of section 110(a )(1). The elements pertain to part D, in title I of the CAA, which addresses plan requirements for nonattainment areas

. Therefore, for the reasons explained below, the following section 110(a)(2) elements are considered by EPA to be outside the scope of infrastructure SIP actions: (1) section 110(a)(2)(C) to the extent it refers to permit programs (known as "nonattainment new sourcePage 10 of 49

review") under part D; and (2) section 110(a)(2)(I) (plan revisions for nonattainment areas) in its entirety . The EPA does n ot expect infrastructure SIP submittals to include regulations or emission limits developed specifically for attaining the relevant standard in areas designated nonattainment for the proposed new and revised PM 2.5 NAAQS

. Infrastructure SIPs for any final n ew and revised PM 2.5 NAAQS will be due before PM 2.5 SIPs are due to demonstrate attainment with the same NAAQS . ( New emissions limitations and other control measures to attain a new or revised PM 2.5 NAAQS will be due 3 years from the effective date of nona ttainment area designation as required under CAA section 172(c) and will be reviewed and acted upon through a separate process. ) For this reason, the EPA does not expect infrastructure SIP submissions to identify new nonattainment area emissions controls

. It is the responsibility of each state to review its air quality management program's infrastructure SIP provisions in light of each new or revised NAAQS

. Most states have revised and updated their infrastructure SIPs in recent years to address requiremen ts associated with revised NAAQS

. It may be the case that for a number of infrastructure elements, the state may believe it has adequate state regulations already adopted and approved into the SIP to address a particular requirement with respect to the revised PM NAAQS

. For such portions of the state ’ s infrastructure SIP submittal, the state may provide a “certification” specifying that certain existing provisions in the SIP are adequate

. Although the term "certification" does not appear in the CAA as a type of infrastructure SIP submittal, the EPA sometimes use s the term in the context of infrastructure SIPs, by policy and convention, to refer to a state's minimal SIP submittal (e.g., in the form of a letter to EPA from the state Governor or her/his desi gnee). If a state determines that its existing SIP

- approved provisions are adequate in light of the revised
PM NAAQS with respect to a given infrastructure SIP element (or sub

- element), then the state may make a "certification" that the existing SIP conta ins provisions that address those requirements of the specific section 110(a)(2) infrastructure elements. In the case of a certification, the submittal does not have to include a copy of the relevant provision (e.g., rule or statute) itself. Rather, the su bmittal mayPage 11 of 49

provide citations to the SIP

- approved state statutes, regulations, or non

- regul atory measures, as appropriate, which meet the relevant CAA requirement. Like any other SIP submittal, such certification can be made only after the state has provid ed reasonable notice and opportunity for public hearing. This "reasonable notice and opportunity for public hearing" requirement for infrastructure SIP submittals appears at section 110(a), and it comports with the more general SIP requirement at section 1 10(l) of the
CAA

. Under EPA's regulations at 40 CFR p art 51, if a public hearing is held, an infrastructure SIP submittal must include a certification by the state that the public hearing was held in accordance with EPA's procedural requirements for public hearings. See 40 CFR p art 51, a ppendix V, paragraph 2.1(g), and 40 CFR 51.102. In consultation with its EPA Regional Office, a state should follow applicable EPA regulations governing infrastructure SIP submittals in 40 CFR p art 51

- e.g., s ubpart I (Revi ew of New Sources and Modifications), s ubpart J (Ambient Air Quality Surveillance), s ubpart K (Source Surveillance), s ubpart L (Legal Authority), s ubpart M (Intergovernmental Consultation), s ubpart O (Miscellaneous Plan Content Requirements), s ubpart P (Pr otection of Visibility), and s ubpart Q (Reports)

. For the EPA's general criteria for infrastructure SIP submittals, refer to 40 CFR p art 51, Appendix V, Criteria for Determining the Completeness of Plan Submissions . A recent EPA guidance memorandum identif ies a number of alternatives that are available to states to reduce the administrative burden, cost, and time required to complete the CAA

- required steps that are part of submitting infrastructure and other SIP revisions to EPA (McCabe, 2011). The EPA also notes that many of the infrastructure SIP provisions are not NAAQS

- specific, and therefore are likely to have been approved as part of SIP actions associated with other recently promulgated NAAQS (e.g., 2006 PM 2.5 and 2008 lead NAAQS). The EPA intends to issue a separate guidance document on section 110 infrastructure SIP requirements for the any revised PM NAAQS. The target date for issuing such guidance would be no later than 1 year after the revised PM NAAQS are finalized (2 years before state submittals are due )

. The EPA invite s preliminary comment on all aspects of infrastructure SIPs at this time, which th ePage 12 of 49

Agency will consider in developing future guidance.
C. Implementing the Proposed Revised Primary Annual PM 2.5 NAAQS in Nonattainment Areas Part D of the C AA describes the various program requirements that apply to nonattainment areas for di fferent NAAQS

. Section 172 (found in subpart 1 of part D) includes the general SIP requirements that govern the PM 2.5 program . Under s ection 172, s tates are required to submit SIPs within 3 years of the effective date of area designations by EPA

. These pla ns need to show how the nonattainment area will attain the primary PM 2.5 standards “as expeditiously as practicable,” but presumptively no later than within 5 years from the effective date of designations

. However, in certain cases, the EPA can approve attainment dates up to 10 years from the effective date of designations , as appropriate, considering the severity of the air quality concentrations in the area, and the availability and feasibility of emission control measures per section 1 72(a)(2)(C)

. Section 172(a)(1) of the C AA authorizes the EPA to establish classification categories for areas designated nonattainment for the primary or secondary PM NAAQS, but does not require the EPA to do

so . The implementation program for the 1997 and 2006 primary and secondary PM 2.5 standards did not include a tiered classification system

. This provide d a relatively simple implementation structure and flexibility for states to implement control programs tailored to the specific nature of the problem a nd source mix in each area

. For this same reason, the EPA also does not intend to establish classifications for nonattainment areas for the proposed revised primary annual PM 2.5 standard (or for a revised primary
24

- hour standard if one is promulgated). Ho wever, the EPA solicits comment on whether a classification s system would be appropriate and how a such classification s system could be designed. In April 2007, the EPA issued a detailed PM 2.5 implementation rule (72 FR 20586; April 25, 2007) to provide guidance to s tates regarding development of SIPs to attain the 1997 PM 2.5 NAAQS

. Th e EPA believe s that the overall framework and policy approach of the implementation rule for the 1997 PM 2.5 NAA QS provides effective and appropriate guidance on the general approach for states to follow in planning for attainment of the revised primary annual PM 2.5 standard . The EPA intends toPage 13 of 49

develop and propose a revised implementation rule that will address any new implementation requirements as a result of the proposed revised primary annual PM 2.5 NAAQS and the proposed revised monitoring regulations

. The EPA intends to propose this implementation rule within 1 year after the revised PM NAAQS are promulgated, an d finalize the implementation rule by no later than the time the area designations process is finalized ( approximately 1 year later ). The EPA believes that for many issues, much of the regulatory text similar to that of the existing implementation rule for the 1997 PM 2.5 NAAQS can be included in this new implementation rule. In the implementation rule for the 1997 PM 2.5 NAAQS , there are a few specific references to the 1997 annual PM 2.5 NAAQS or associated implementation dates ; in a proposed implementation rule for any revised PM 2.5 NAAQS, such references that would be updated as appropriate to reflect the final rule for today’s proposal

. In addition, the EPA expects to consider options for potentially updating certain policies in the existing implementation rule based on new information or implementation experience ( e.g., attainment demonstration requirements)

. For completeness, T t he EPA solicits preliminary comment on the implementation issues that the Agency should consider for updating. Under the basic approach outlined in the implementation rule for the 1997 PM 2.5 NAAQS , the

s tate begins the development of an attainment demonstration with the evaluation of the air quality improvements the nonattainment area can expect in the future due to “on the books” existing federal, state, and local emission reduction measures

. The s tate then must conduct s a further assessment of emission sources in the nonattainment area, and the additional reasonably available control measures (RACM) and reasonably available contr ol technology (RACT) that can be implemented by these sources, in determining how soon the area can attain the standard

. (Under the current implementation rule, the sources for consideration would be those emitting SO 2 , direct PM 2.5 , and presumptively NOx. Sources of the other PM 2.5 precursors, VOC and ammonia, presumptively do not need to be evaluated for control measures unless demonstrated by the s tate or EPA as significant contributors to PM 2.5 concentrations in the relevant nonattainment area.) Under section 172 of the C AA as interpreted by the Formatted: Subscript

Formatted: Subscript Formatted: Subscript Formatted: Subscript
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EPA, attainment demonstrations must include a RACM analysis showing that no additional reasonably available measures could be adopted and implemented such that the SIP could specify an advance the attainment dat e that is 1 by 1 year or more years earlier. The evaluation of these potential emission reductions and associated air quality improvement is commonly performed with sophisticated air quality modeling tools

. Given that fine particle concentrations are affec ted both by regionally

- transported pollutants (e.g., SO 2 and NO x emissions from power plants) and emissions of direct PM 2.5 from local sources in the nonattainment area (e.g., steel mills, rail yards, and highway mobile sources), the EPA plans to recommend s the use of regional grid

based models (such as CMAQ and CAMx) in combination with source

- oriented dispersion models (such as AERMOD) to develop PM 2.5 attainment strategies for the revised annual primary NAAQS. Although the EPA projects significant improv ements in PM 2.5 concentrations regionally from a number of recently promulgated rules such as the Cross State Air Pollution Rule (76 FR 48208, August 8, 2011) and the Mercury and Air Toxics Standards rule (77 FR 9304, February 16, 2012 ) that will re sult in SO 2 and NO x reductions from many geographically dispersed sources, local reductions of direct PM 2.5 emissions also result in important health benefits

. On a per ton basis, reductions of direct PM 2.5 are more effective in reducing PM 2.5 concentrations than reductions of precursor emissions

. The refore, reductions of direct
PM 2.5 emissions y should therefore play a key role in attainment planning as well. Each nonattainment area needs to ensure that it will make “reasonable further progress” (RFP) in accordance with section 172(c)(2) of the C AA from the time of SIP submittal to its attainment date

. Under the approach outlined in the implementation rule for the 1997 PM 2.5 NAAQ S, f or an area that can demonstrate it will attain the standard within the presumptive 5

- year period from designation, its attainment demonstration will be considered to meet the RFP requirement . The EPA believes it is appropriate to apply this same approa ch for the revised annual primary PM 2.5 standard. The EPA believes there should be no additional RFP requirements for such an area because the SIP and attainment demonstration would be due 3 years after designations and its attainment date will be only 2 y ears after Formatted: SubscriptPage 15 of 49

that date

. The EPA believes that two other provisions in the implementation rule for the 1997 PM 2.5 NAAQS are also appropriately extended to a revised primary annual PM 2.5 NAAQS: (1) a A n area that cannot demonstrate attainment within the presumptive 5 year period s w h ould be required to provide a separate RFP plan showing that the area will achieve emission reductions by certain interim milestone dates which provide for “generally linear” progress over the course of the implementation period . All
PM 2.5 attainment plans must also ; and (2) a PM 2.5 plan should be required to include contingency measures which would apply without significant delay in the event the area fails to attain by its attainment date

. The EPA expects that the same general approach for determining attainment of the 1997 PM 2.5 primary standard by the attainment deadline would be followed for determining attainment with any primary PM 2.5 standard. Attainment would be evaluated based on the 3 most recent years of certified, complete, and quality

- assured air quality data in the nonattainment area. The EPA also would expect to include similar flexibility provisions for an area to be able to obtain two 1

- year attainment date extensions under certain circumstances. In the 1997 PM 2.5 NAAQS implementation rule, an area whose design value based on the most recent 3 years of data exceeds the standard could receive a 1

- year attainment date extension if the air quality concentration for the third year alone does not exceed the level of the standard. Similarly, an area that has received a 1

- year extension could receive a second 1

- year extension if the average of the area’s air quality concentration in the “extension year” and the previous year does not exceed the level of the standard. The EPA notes that in other sections of today’s proposal, the EPA describes new requirements for deploying near

- road monitors and clarifies certain existing monitoring provisions. As discussed in the designations section, the EPA would not expect that data from any new near

- road PM 2.5 monitors would be available in time to consider during the initial area designations process, and therefore such monitoring data would not be the basis for designating a new nonattainment area at the time of initial designations

. The EPA plans to address any potential implications of the proposed monitoring changes Formatted: Subscript

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Formatted: Not HighlightPage 16 of 49

on attainment planning and development of attainment demonstrations by states in the future implementation rule. The EPA requests comment on any specific attainment plannin g considerations for future SIPs that may be associated with today’s proposed changes to monitoring provisions. With regard to implementation of the pre

- existing standards for PM 2.5 , As noted above , the EPA expects to consider options for potentially updating certain policies in the existing implementation rule. One issue the EPA has identified for updating, as discussed in section VII I .B.3.b.i above, relates to the use of data from newly

- deployed monitor s. The EPA is proposing to require that by January 1, 2015, states establish one near road PM 2.5 monitor in each CBSA with a population greater than 1 million, and that these monitors be collocated with NO 2 near road monitors in these CBSAs

. One implicatio n of these changes is that a nonattainment area might have additional monitoring sites that violate the mass

- based
PM 2.5 NAAQS

. As noted earlier, this change in monitoring network requirements, if finalized, would not affect the initial area designations p rocess for implementing the revised standards because of the timing of the deployment of new monitoring sites relative to the designations schedule. However, there are also implications for SIP development once the designations are made. There are similar SIP development implications arising from the EPA’s proposal to change , as discussed i n section VII I .B.2.b above, the current presumption that micro

- and middle

- scale monitoring sites are “unique” and are comparable only to the 24

- hour PM 2.5 standard s, unless the Regional Administrator determines that the micro

- or middle

- scale site is not unique and can be compared to the annual PM 2.5 standard s. Today’s proposal, if finalized, would reverse th is presumption, such that micro

and middle

- scale monitoring sites would not be considered to be “unique,” and therefore would be comparable to the annual PM 2.5 standard s , unless otherwise determined by the Regional Administrator

. This change conceivably could affect initial designations. In any case, h owever, thes e changes may necessitate changes in the requirements for air quality modeling analyses that are needed for PSD permitting, transportation conformity hotspot assessments, attainment demonstrations, and maintenance Formatted: SubscriptPage 17 of 49

plans to implement the existing and revise d PM 2.5 NAAQS. 5
Potential implications for and appropriate changes to attainment demonstration and maintenance plan SIP requirements will be more fully addressed in the implementation rule that we intend to finalize by the time that area designations would be finalized for the revised PM 2.5 NAAQS . The EPA invites preliminary comment at this time on this and other possible implications. T t he EPA ’s current opinion is
that the changes in the monitoring regulations , if finalized, sh ould not result in any new requirements with respect to attainment plans or maintenance plans for the 1997 or the 2006 PM 2.5 NAAQS during

some specified transition period

. 6 For example, if the proposed PM NAAQS revi sions and revised monitoring regulations are finalized in December 2012 June 20 13 , many states will have recently submitted , or will be close to submitting their implementation plans to attain the 2006 24

- hour PM 2.5 NAAQS (also due that are due in December 2012 )

. In addition, state and EPA actions are still under way with regard to adopting and approving certain attainment plans and maintenance plans for nonattainment areas under the 1997 PM 2.5 standards. These plans will still be under EPA review. If any states have experienced delays in completing their nonattainment SIPs for the 2006 NAAQS, they also should be close to such submittal. Also, some states may be developing or may have recently submitted maintenance plans for areas that have attained the 1997 or 2006 PM 2.5 NAAQS

. The EPA does not believe it would be reasonable for requirements applicable to such attainment implementation plans and maintenance plans to change beginning immediately upon any revision of the monitoring regulations

. , for ex ample to demonstrate attainment at any monitoring sites newly considered to be violating the NAAQS as a result of the monitoring regulation changes

. 7 It could be very burdensome on s tate air

5 See sections IX .F and IX .G below for additional discussion of the potential effect on the PSD and transportation conformity programs, respectively. 6 For example, it may be possible that a new near

- road monitoring site has collected 3 years of data and shown a violation before final EPA action has been taken on an attainment plan or maintenance plan for the 1997 or 2006 NAAQS

. 7 For example, it may be possible that a new near - road monitoring site An additional monitoring site violating the PM 2.5 NAAQS could be a new near road site, if the site has collected 3 years of data and shown a violation before final EPA action has been taken on an attainment plan to rmaintenance plan for Formatted: SubscriptPage 18 of 49

quality programs to revise SIPs that have already been submitted to EPA or that ha ve been under development for some time and are about to be submitted. The EPA believes that a more reasonable approach would be to provide for a transition period before the revised monitoring network and data comparability provisions would affect implementation plan and maintenance plan requirements . The EPA believes i t would be important for the transition period to provide enough time for the EPA to complete action on attainment and maintenance SIPs for the 1 997 or 2006 PM 2.5 NAAQS that were initiated and completed ( or that are close to nearly complet ed ion) by states before the finalization of the proposed changes in the monitoring regulations. The EPA believes that if a SIP for the 1997 or 2006
PM 2.5 NAAQS has been approved during the transition period, the state would not be under an obligation to revise it unless the EPA has made a SIP call. The EPA invites preliminary comment on th e is transition period concept , and on an appropriate date by which t he transition period should be concluded

. D. Implementing the Primary and Secondary PM 10 NAAQS As summarized in section s I V .F and VI.F above , the EPA is proposing to retain the current primary and secondary 24

- hour PM 10 standard s to protect against the health effects associated with short

- term exposures to thoracic coarse particles and against welfare effects. If this approach is finalized, the EPA would retain the existing implementation strategy for meeting the C AA requirements for PM 10 . States and emission sources would continue to follow the existing guidance and regulations for implementing the current standard s. E. Implementing the Proposed New Secondary PM 2.5 Visibility Index NAAQS in Nonattainment Areas by a date when the nonattainment or maintenance SIP for the 1997 or 2006 NAAQS

. is still under development or review by EPA

. It is also possible t hat after this PM NAAQS revision is finalized, a micro

- or middle

- scale site that previously was not comparable to the annual PM 2.5 NAAQS will become comparable to that NAAQS and indicate a violation that was not officially a violation at the time of the nonattainment designation and SIP development for the 1997 or 2006 NAAQS . Because there are no existing monitors that are now offici ally considered not “population oriented” the proposed revision to remove population orientation as a condition for data comparability to the NAAQS would not by itself result in any monitoring sites newly being considered to be violating. Formatted: SubscriptPage 19 of 49

In past actions, the EPA has set the secondary PM standard s identical to the primary PM standard s. In this action, as summarized in section V I .F above , the EPA is proposing a new distinct secondary PM 2.5 visibility index NAAQS. In addition, a s also summarized in section V I .F a bove , the EPA is proposing to retain the current annual and 24

- hour secondary PM 2.5 standards to provide protection against non

- visibility welfare effects

. Although the proposed new secondary PM 2.5 visibility index NAAQS would differ from the primary PM 2.5 NAAQS (and existing secondary PM 2.5 NAAQS) with respect to indicator/index, statistical form, and level, attainment of this standard would, like the aggregated PM 2.5 mass - based standards, depend on ambient measurements (i.e. , specifically speciated
PM 2.5 mass concentrations ) . The EPA expects that implementation of emission reduction measures that will help to achieve the mass - based 1997 and 2006 primary and secondary PM 2.5 standards and the proposed revised primary annual PM 2.5 standard will also provide i mportant improvements in visibility and substantial progress toward meeting the proposed new secondary PM 2.5 visibility index standard , where necessary, because these emission reduction measures will address the same sources and pollutants which also contribute to PM

- related visibility impairment . In fact, as discussed below in section IX.F.1, an analysis of the relationships between recent design values for the proposed primary ( annual and 24

- ho ur ) PM 2. 5 standards and coincident design values for the proposed new PM 2.5 visibility index standard indicates that all or nearly all areas in attainment of the proposed primary PM 2.5 standards would also likely be in attainment of the proposed new second ary PM 2.5 visibility index standard ( Kelly, et al. Wayland, 2012)

. 8 Section 172(a)(1) of the C AA authorizes the EPA to establish classification categories for areas designated nonattainment for the primary or secondary PM NAAQS, but does not require the EPA to do

so . The implementation program for the 1997 and 2006 primary and secondary PM 2.5 standards did not

8 This analysis w as based on 2008 to 2010 air quality data using the proposed level of 12 μg/m 3 for the primary annual PM 2.5 standard and the existing 35 μg/m 3 level for the primary 24

- hour PM 2.5 standard and with the proposed level of either 30 or 28 dv in conjunction wit h a 24

- hour averaging time and a 90 th percentile form for the secondary PM 2.5 visibility index standard. The relationships between design values as characterized here are dependent upon the specific level and form of each of the standards

.Page 20 of 49

include a tiered classification system . This provide d a relatively simple implementation structure and flexibility for states to implement control programs tailored to the specific nature of the problem and source mix in each area

. For this same reason, the EPA also does not intend to establish classifications for nonattainment areas for the proposed new secondary PM 2.5 visibility index standard.
Se ction 172(a)(2) of the C AA provides the same statutory framework for implementing secondary standards in nonattainment areas as it does for primary standards, except that it provides different attainment date requirements for secondary standards . T he attai nment date for the proposed revised primary annual PM 2.5 standard is as expeditiously as practicable, but presumptively within 5 years of the date of designation, with the possibility of an attainment date of up to 10 years for certain areas with more seve re air quality problems . For secondary NAAQS, however, section 172(a)(2)(B) defines the attainment date for an area designated nonattainment as “the date by which attainment can be achieved as expeditiously as practicable ” but with no maximum limitation. T hus, it is possible for the EPA to approve a n impl ementation plan part D SIP that provides for attainment of the secondary standards by a date more than 10 years after the date of designation with an appropriate demonstration. As noted in the above section on implementing the primary PM 2.5 standard, the EPA expects that the same general approach for providing two possible 1

- year extensions to the attainment date would also apply to any revised secondary PM 2.5 standard. Attainment would be evaluated b ased on the 3 most recent years of certified, complete, and quality

- assured air quality data in the nonattainment area. The EPA also would expect to include similar flexibility provisions for an area to be able to obtain two 1

- year attainment date extensio ns under certain circumstances. A n area whose design value based on the
most recent 3 years of data exceeds the standard could receive a 1

- year attainment date extension if the deciview index for the third year alone does not exceed the level of the standa rd. Similarly, an area that has received a 1

- year extension could receive a second 1

- year extension if the average of the area’s deciview index in the “extension year” and the previous year does not exceed the level of the standard. As noted previously, th e EPA expects that implementation of control measures to achieve the Formatted: Subscript

Formatted: SubscriptPage 21 of 49

1997 and 2006 primary annual and 24

- hour PM 2.5 standards and the proposed revised primary annual
PM 2.5 standard will address the same sources and pollutants that contribute to PM

- related visibility impairment, and , thus , great progress can be achieved toward attaining the proposed new secondary
PM 2.5 visibility index standard as a result of clean air programs designed principally to improve public health by attaining the primary PM 2.5 stan dards

. However, because the proposed new secondary PM 2.5 standard is based on a visibility index rather than a mass concentration, i mplementation can be expected to present new challenges when developing part D SIPs. For example, while the proposed revisio n to the level and form of the primary annual PM 2.5 standard does not pose any new issues with respect to air quality modeling methods, the speciated nature of the index for the proposed new secondary PM 2.5 visibility index standard does pose new modeling issues. For this reason, the EPA invites commenters to present information concerning air quality modeling and other issues that are expected to be unique to implementing the proposed new secondary PM 2.5 visibility index standard in nonattainment areas and that should be considered by EPA in the development of the future implementation rule and related guidance . The EPA particularly seeks input on how implementation planning for the proposed new secondary PM 2.5 visibility index standard can be integrated as much as possible with implementation planning for the proposed revised primary annual PM 2.5 standard to increase the efficiency of the process and reduce administrative burden on state agencies and stakeholders. The EPA will c onsider these comments in developing a proposed implementation rule and related guidance for the new and revised standards.
F. Prevention of Significant Deterioration and Nonattainment New Source Review Programs for the Proposed Revised Primary Annual PM 2.5 NAAQS and the Proposed New Secondary PM 2.5 Visibility Index NAAQS T he C AA requires states to include SIP provisions that address the preconstruction review of new stationary sources and the modification of existing sources

. The preconstruction review of ea ch new and modified source generally applies on a pollutant

- specific basis and the requirements for each pollutant vary depending on whether the area is designated attainment or nonattainment for thatPage 22 of 49

pollutant. Parts C and D of title I of the C AA contain specific requirements for the preconstruction review and permitting of new major stationary sources and major modifications , referred to as the PSD program and the NNSR program, respectively. Collectively, those permit requirements are commonly referred to as the “major NSR program.” The proposed revised primary annual PM 2.5 NAAQS and proposed secondary PM 2.5 visibility index NAAQS , if finalized, w ould affect certain PSD permitting actions as of the effective date for those NAAQS and would affect certain NNSR permitting actions after area designations are effective . In order to minimize the potential for disruption to NSR permitting, the EPA is proposing, in sub section IX.F.1.a of this preamble 1(b) , a grandfathering provision for certain PSD permits that are already in process, and is also proposing, in sub section IX.F.1.c 1(c) , a surrogacy approach for implementing PSD permitting requirements for the proposed secondary PM 2.5 visibility index NAAQS . These provisions will assure that NSR permitting will be able to continue using the provisions and processes virtually identical to those already in place for the exis t ing PM 2.5 NAAQS, except that, in evaluating whether a source causes or contributes to a NAAQS violation, an applicant s would need to compare the source’s their impacts to a different level and form of the primary annual standard if finalized as proposed

. As discussed in more detail in the following sections, the EPA is not now proposing to change the PM 2.5 increment s , nor are we proposing to revise screening tools that are now used to implement PSD for PM 2.5 such as the significant emission rate , used as a threshold for determining whether a given project is subject to major NSR permitting r equirements under both PSD and NNSR , ; the significant impact levels , used to determine the scope of the required air quality analysis that must be carried out in order to demonstrate that the source’s emissions will not cause or contribute to a violation of any NAAQS or increment under the PSD program ; or the significant monitoring concentration SMC , a screening tool used to determine whether it may be appropriate to exempt a proposed source from the requirement to collect pre

construction ambient monitorin g data as part of the required air quality analysis

. 1. Prevention of Significant DeteriorationPage 23 of 49

The PSD requirements set forth under part C (sections 160 through 169) of the CAA apply to new major stationary sources and major modifications locating in a reas designated as “attainment” or “unclassifiable ” with respect to the NAAQS for a particular pollutant. The EPA regulat ions addressing the statutory requirements under part C for a PSD permit program can be found at 40 CFR 51.166 (containing the PSD requirements for an approved SIP) and 40 CFR 52.21 (the federal PSD permit program). For PSD, a “major stationary source” is one with the potential to emit 250 t ons per year (t py ) or more of any air pollutant, unless the source or modif ication is classified under a list of 28 source categories contained in the statutory definition of “major emitting facility” in section 169(1) of the C AA. For those 28 source categories, a “major stationary source” is one with the potential to emit 100 tp y or more of any air pollutant . A “major modification” is a physical change or a change in the method of operation of an existing major stationary source that results in a significant net emissions increase of a regulated NSR pollutant. Under PSD, new majo r source s and major modification s must apply best available control technology (BACT) for each applicable pollutant and conduct an air quality analysis to demonstrate that the proposed construction will not cause or contribute to a violation of any NAAQS o r PSD increments (see CAA section 165(a)(3); 40 CFR 51.166(k); 40 CFR 52.21(k)). PSD requirements also include in appropriate cases an analysis of potential adverse impacts on Class I areas (see sections 162 and 165 of the CAA). PSD permitting requirement s first became applicable to PM 2.5 in 1997 when EPA established a NAAQS for PM 2.5 (Seitz, 1997). The EPA’s regulations define the term “regulated NSR pollutant” to include “[a]ny pollutant for which a national ambient air quality standard has been promulga ted and any pollutant identified [in EPA regulations] as a constituent or precursor to such pollutant” (40 CFR 51.166(b)(49); 40 CFR 52.21(b)(50)). 9

. In addition, on May 16, 2008, the EPA amended its rules to

9 Under various provisions of the CAA, PSD requirements are applicable to each pollutant subject to regulation under the CAA, excluding hazardous air pollutants. The definition of “regulated NSR pollutant” also includes pollutants subject to any standard under section 111 of the CA A or any Class I or II substance subject to title VI of the CA A.Page 24 of 49

identify certain PM 2.5 precursors ( SO 2 and NO x ) as regulated NSR pollutant s and adopt other provisions, such as a significant emissions rate for PM 2.5 , to facilitate implementation of PSD and NNSR program requirements for PM 2.5 (73 FR 28321). States were required to revise their SIPs by May 16, 2011 t o incorporate the required elements of the 2008 final rule. On October 20, 2010, the EPA again amended the PSD rules at 40 CFR 51.166 and 52.21 to add PSD increments as well as two screening tools for PM 2.5 – significant impact levels (SILs) and a signific ant monitoring concentration (SMC) (75 FR 64864)

. The October 2010 final rule became effective on December 20, 2010

. The EPA indicated that the SILs and SMC for PM 2.5 , while useful tools, are not considered mandatory elements of an approvable SIP; thus, no schedule was imposed on states for addressing those screening tools in their PSD rules

. For the portions of the rule that addressed the PSD increments for PM 2.5 , states are required to submit the necessary SIP revisions (at least as stringent as the PSD r equirements at 40 CFR 51.166) to EPA for approval within 21 months from the date on which the EPA promulgated the new PM 2.5 increments

– by July 20, 2012

. This particular schedule is prescribed by the C AA specifically for the adoption of new PSD increments in state PSD
programs . Sources for which PSD permits are issued pursuant to the Federal PSD program at 40 CFR 52.21 after October 20, 2011, must determine their impact on the PM 2.5 increments. The PSD program currently regulates emissions of PM using several indicators of particles, including “particulate matter emissions” (as regulated under various new source performance standards under 40 CFR part 60), “PM 10 emissions,” and “PM 2.5 emissions .” The latter two emission indicators are designed to be con sistent with the ambient air indicators for PM that the EPA currently uses in the PM NAAQS . As already noted, t he PSD program also limits PM 2.5 concentrations by regulating emissions of
gaseous pollutants that result in the secondary formation of particula te matter

. Those pollutants, known
as PM 2.5 precursors, generally include SO 2 and NO x . In addition to the NAAQS revisions themselves, for which proposed and other possible implementation approaches actions are described further below, the EPA is proposing certain Formatted: Font: 12 pt

Formatted: Font: 12 ptPage 25 of 49

clarifications to the existing monitoring regulations codified at 40 CFR 58.30 (Special considerations for data comparisons to the NAAQS). These proposed clarifications are presented in detail in section VIII.B.2 of this preamble. The monitoring re gulations provide a basis for determining whether specific monitoring sites are comparable to specific NAAQS. By extension, the EPA has used the principles for making these determinations for monitoring sites to also guide permitting authorities in assessi ng the comparability of specific receptor locations involved in PSD air quality analyses. Receptors are used in PSD modeling analyses to predict potential air quality impacts in the vicinity of the proposed new or modified facility and in some cases also a t more distant Class I areas. The EPA will continue to use these principles in guiding PSD modeling analysis design. Accordingly, if the proposed PM NAAQS revisions and monitoring regulation clarifications described previously are finalized, the EPA will continue to advise permitting agencies to qualify or disqualify specific receptor locations used in PSD air quality analyses consistent with those provisions , and we will do so ourselves when we are the permitting authority

. the EPA is
propos ing revisions to existing implementing regulations that will affect implementation of not only a revised annual PM 2.5 NAAQS, but also the existing 24

- hour PM 2.5 NAAQS that the EPA is not proposing to change. Specifically, the EPA proposes to remove certain restrictions on the comparison of monitoring data to the PM 2.5 NAAQS, currently codified at 40 CFR 58.30 (Special considerations for data comparisons to the NAAQS). These proposed changes include revok ing the restriction that only “population

- oriented” mo nitoring sites are comparable to the annual and 24

- hour PM 2.5 standards , and reversing the current presumption that micro

- and middle

- scale monitoring sites are “unique” and are comparable only to the 24

- hour standard unless the Regional Administrator dete rmines that a particular micro

- or middle

- scale site is not unique and can be compared to the annual standard. The latter proposed change would mean that micro

- or middle

- scale monitoring sites would be compared to the annual PM 2.5 NAAQS unless the Regional Administrator determines that a particular micro

- or middle

scale site is unique and cannot be compared to these standards. See section VIII.B.2 of this preamble forPage 26 of 49

a more detailed discussion of the proposed changes regarding PM 2.5 monitoring data

. Under PSD, modeling analyses are used to predict potential air quality impacts on “receptors” in the vicinity of the proposed new or modified facility, and in some cases also at more distant Class I areas where the emissions increase f rom the proposed source or modification could adversely affect applicable air quality related values, as defined for such areas. In the preamble to the 2008 final rule for PM 2.5 NSR Implementation, the EPA stated that the PSD source impact analysis “must consider how a source, in combination with other sources in the area, will impact air quality at existing PM 2.5 monitoring locations, as well as at locations that are appropriate for comparing predicted PM 2.5 concentrations to the
PM 2.5 NAAQS based on PM 2.5 monitor siting requirements and recommendations” (73 FR 28336, May 16, 2008). This statement was intended to acknowledge the current provisions of 40 CFR 58.30 and to communica te that EPA did not expect PSD modeling for PM 2.5 to include receptors representing sites that would not be eligible to be monitor locations (sites that are not population

- oriented). The EPA has also interpreted 40 CFR 58.30 to mean that PSD modeling is no t required to consider the effect of a new or modified facility on the annual standard at receptors that are micro

- and middle

- scale sites unless a monitor at the site of those receptors would be considered comparable to the annual standard. The proposed c hanges would eliminate restrictions in 40 CFR 58.30 and by extension mean that compliance with all the PM 2.5 NAAQS should be considered at all ambient air receptors in a PSD modeling analysis unless the Regional Administrator determines that one or more mi cro - or middle

- scale sites is unique and cannot be compared to the annual standard. While on first impression it might appear that these changes could make it more difficult for a source to show that it does not cause or contribute to a NAAQS violation, th e EPA believes that few if any air quality analyses for PSD permits have relied upon the current EPA interpretation that allows the exclusion of some receptors in ambient air. With regard to the specific revisions being proposed to the PM NAAQS , today’s a ction, if finalized as proposed, would affect sources applying for PSD permits in several ways . We first discuss the implications for PSD with respect to the proposed revised primary annual PM 2.5 standard (some ofPage 27 of 49

which also apply to the proposed new secon dary PM 2.5 visibility index standard), and then the unique implications for PSD with respect to the proposed new secondary PM 2.5 visibility index standard.

a. Grandfathering Provision
A s discussed previously in this preamble, the EPA is proposing to revise the level of the primary annual PM 2.5 NAAQS and establish a new secondary PM 2.5 visibility index NAAQS. 10 L ongstanding EPA policy interprets the CAA and EPA regulations at 40 CFR 52.21(k)(1) and 51.166(k)(1) to generally require that PSD perm it appli cations must include a demonstration that new sources and modifications will not cause or contribute to a violation of any NAAQS that is in effect as of the date the PSD permit is issued (Page, 2010a; Seitz, 1997) . Thus, if the proposed revision to the pri mary annual
PM 2.5 NAAQS and the proposed new secondary PM 2.5 visibility index NAAQS are promulgated, any proposed new and modified sources with permits pending at the time th ose PM 2.5 NAAQS changes take effect would be expected to demonstrate compliance wi th them, absent some type of transition provision exempting such applications from the new requirements.
In order to provide for a reasonable transition into the new PSD permitting requirements that will result from the proposed revision of the primary an nual NAAQS, the proposed addition of a secondary NAAQS for visibility protection , and the changes to the monitoring requirements discussed earlier, the EPA proposes to add a grandfathering provision to the federal PSD program codified at 40 CFR 52.21 that would apply to certain PSD permit applications that are pending on the effective date of the revised
PM NAAQS . The EPA proposes that the grandfathering provision would apply specifically to pending PSD permit applications for which the proposed permit (draft permit or preliminary determination) has been noticed for public comment before the effective date of the revised N AAQS

. The proposed grandfathering provision would not be the first such grandfathering provision adopted by EPA. The Agency previously recognized that the CAA provides discretion for the EPA to

10 The E PA is also proposing to revise the form of the annual primary standard by removing the option for spatial averaging. However, this provision has played no role in PSD so its removal has no implications for PSD.Page 28 of 49

grandfather PSD permit applications from requirements that be come applicable while the application is pending ( 45 FR 526 83 , Aug. 7, 1980; 52 FR 24672, July 1, 1987; US EPA, 2011c, pp. 54 to 61 ). As discussed in more detail in the se referenced actions, section 165(a)(3) of the C AA requires that a permit applicant dem onstrate that its proposed project will not cause or contribute to a violation of any NAAQS

. At the same time, section 165(c) of the CA A requires that a PSD permit be granted or denied within 1 year after the permitting authority determines the application for such permit to be complete

. In addition, section 301 of the CAA authorizes the Administrator “to prescribe such regulations as are necessary to carry out his functions under this chapter .” When read in combination, these three provisions of the CAA pr ovide the EPA with the discretion to promulgate regulations to grandfather pending permit applications from having to address a revised NAAQS where necessary to achieve a balance between the C AA objectives to protect the NAAQS on the one hand, and to avoid delays in processing PSD permit applications on the other . The EPA has also construe d s ection 160(3) of the CAA, which states that a purpose of the PSD program is to “insure that economic growth will occur in a manner consistent with the preservation of e xisting clean air resources” to call for a balancing of economic growth and protection of air quality ( 70 FR 59587 to 59588, Oct. 12, 2005 ). The reasoning of those prior EPA actions is also applicable to the promulgation of revised PM NAAQS. 11
The C AA pr ov ides the EPA with discretion to establish the appropriate milestone within the permitting process for determining that a permit application is eligible for grandfathering (US EPA, 2011c, p. 81 ). For example, i n 1987, the EPA used the date of submittal of a complete permit application as the milestone upon which to base the grandfathering of a source from new permitting requirements

11 In one extraordinary case where the EPA had not previously adopted a grandfathering provision in regulations and had significantly exceeded the deadline in section 165(c) of the CAA , the EPA h as taken the position tha t it may grandfather through adjudication respecting a specific source , thus interpreting its regulations, as well as other authorities, to allow grandfathering in that extraordinary circumstance (US EPA, 2011c, pp. 67 to 71 ). Although grandfathering witho ut a specific exemption in regulations was justified based on the particular facts in that specific instance, the EPA generally believes the preferred approach is to enable grandfathering through express regulatory exemptions of the type proposed in this a ction (US EPA, 2011c, p. 68 )

.Page 29 of 49

associated with the revisions made to the PM NAAQS at that time (52 FR 24672, July 1, 1987 at 24703). In the context of the im plementation of the revisions to the PM NAAQS that are being proposed today , the EPA is proposing to use a different milestone to establish the date before which permits may be grandfathered. Accordingly, t o avoid unreasonable delays in permit processing a nd issuance , and based on basic principles of fairness and equity, we believe that it is appropriate to allow pending permit applications that have reached the notice and comment period on a proposed permit (that is, a notice has been issued for public com ment on the proposed permit action) by the effective date of the revised PM NAAQS to continue being processed in accordance with the PM NAAQS requirements in place as the time of the public notice on the proposed permit. 12
Before a proposed permit is issue d for public comment , the applicant still has a reasonable opportunity to amend its permit application to address new or revised NAAQS that become effective while the reviewing authority’s preliminary consideration of the application is underway. Furthermo re, the reviewing authority has the opportunity to review additional material and revise its fact sheet or statement of basis before beginning the public comment period on such a permit

. However, if the EPA and other reviewing authorities were to apply new permitting requirements based on the revised PM NAAQS after the public comment period has begun, this would unduly delay the process ing of the permit application by potentially requiring an additional public comment period and additional work by the revie wing authority at a time when it should be focused on considering public comments and preparing a final permit decision in order to conclude its review of a permit application in a timely

manner . Through this proposal, the EPA is providing notice to curren t and future permit applicants that they may have to provide an analysis showing that their facility will not cause or contribute to a

12 There may be proposed permits for which a public notice was issued prior to October 20, 2011 , which is the date that PM 2.5 increments became applicable requirements for any newly issued federal PSD permits under 40 CFR 52.21

. It is not the EPA’s intention that the grandfathering provision proposed today should relieve such a permit from the requirement to demonstrate compliance with th o se new PM 2.5 increments , for which the EPA did not adopt any grandfathering provisions but deferred implementation in accordance with the requirements of the CAA

.Page 30 of 49

violation of the revised NAAQS for PM if a proposed permit is not issued for public comment before such NAAQS become effe ctive

. Accordingly, the EPA proposes to amend the federal PSD regulations at 40 CFR 52.21 to provide a grandfathering provision to allow for the continued review of permits proposed before a revision to the 2006 PM NAAQS under the PM NAAQS that applied at the time of the public notice on the proposed permit . These requirements include not only the NAAQS as of that date, but also the modeling receptor restrictions based on the special considerations for comparability of PM 2.5 ambient air monitoring data to the NAAQS, as discussed in section V I II.B.2 above

. The EPA also proposes that s tates that issue PSD permits under a SIP

- approved PSD permit program should have the discretion to “grandfather” proposed PSD permits in the sam e manner under th e se same circumstances

. Thus, the EPA also proposes to revise section 40 CFR 51.166 to provide a comparable exemption applicable to SIP

- approved PSD programs. In developing the proposed grandfathering provision, the EPA considered whether such a provision should include a sunset clause. A sunset clause would add a time limit beyond which an otherwise eligible permit action would no longer be grandfathered from PSD permitting requirements associated with a revised PM NAAQS

. Consistent with p ast grandfathering actions described above, the
EPA is not proposing to include a sunset clause for the proposed grandfathering provision . Permit applicants and reviewing authorities already have strong incentives to process applications and issue draft pe rmits in a timely manner , and the EPA does not believe that the addition of a sunset clause to the proposed grandfathering provision w ould add meaningful additional incentive for sources or permitting authorities to expedite permitting processes . Furthermo re, the EPA believes that a sunset clause could in fact result in further delays for permit actions that qualify for the proposed grandfathering provision in circumstances where unrelated and not reasonably avoidable factors cause draft permit issuance and public notice to lapse beyond the sunset date. In such cases, the already delayed permit action would be further delayed to address PSD permitting requirements associated with the revised PM NAAQS,Page 31 of 49

potentially triggering a domino effect of newly applicabl e requirements. As such, the EPA believe s a sunset clause would diminish the value of the grandfathering provision and likely introduce additional complexities in relation to specific permit actions. However, the EPA solicits comment on whether a
sunset cl ause would be appropriate under certain circumstances, and if so, what time limits would be placed on the grandfathering period associated with the revised PM NAAQS. b. Recent Guidance Applicable to the P roposed R evised P rimary Annual PM 2.5 NAAQS Today’s proposal to revise the level of the primary annual PM 2.5 NAAQS from 15.0 μg/m 3 to a level in the range between 12.0 and 13 μg/m 3 and to establish a new secondary PM 2.5 visibility index NAAQS generally will require proposed new major stationary s ources and modifications to take these changes into account as part of the required air quality analysis to demonstrate that the proposed emissions increase will not cause or contribute to a violation of the PM NAAQS

. If the PM NAAQS are revised as propose d, and when effective, proposed sources that are not grandfathered from the new requirements (as described in section IX.F.1.a ) would be required to demonstrate compliance with the suite of PM NAAQS, including the revised primary annual PM 2.5 NAAQS and the proposed new secondary PM 2.5 visibility index NAAQS upon their effective date. PSD applicants are currently required to demonstrate compliance with the existing primary annual and 24

- hour PM 2.5 NAAQS and will need to consider their impact o n the revised primary annual
PM 2.5 NAAQS, if finalized. To assist sources and permitting authorities in carrying out the required air quality analysis for PM 2.5 under the existing standards, the EPA issued, on March 23, 2010, a guidance memorandum that rec ommends certain interim procedures to address the fact that compliance with the
24

- hour PM 2.5 NAAQS is based on a particular statistical form, and that there are technical complications associated with the ability of existing models to estimate the impacts of secondarily formed PM 2.5 resulting from emissions of PM 2.5 precursors (Page, 2010b). For the latter issue, the EPA recommended that special attention be given to the evaluation of monitored background air quality data, since such data readily account f or the contribution of both primary and secondarily formed PM 2.5 . To Comment [PAK1]: HEID check this language.Page 32 of 49

provide more detail and to address potential issues associated with the modeling of direct and precursor emissions of PM 2.5 , the EPA is now developing additional permit modeling guidance that will recommend appropriate technical approaches for conducting a PM 2.5 NAAQS compliance demonstration for the existing primary PM 2.5 NAAQS, which includes more adequate accounting for contributions from secondary formation of ambient PM 2.5 resulting from a proposed new or modified source’s precursor emissions. (As discussed in the next section, these recommended approaches may be extended to the proposed secondary NAAQS as well under a surrogacy approach). To this end, the EPA discussed thi s draft guidance in March 2012 at the EPA’s 10 th Modeling Conference

. 13 Based on its review of public comments received and further technical analyses, the EPA intends to issue final guidance by the end of calendar year 2012.

c. Surrogacy Approach for the P roposed N ew S econdary PM 2.5 Visibility Index NAAQS
As summarized in section VI.F of this preamble, the EPA is proposing a distinct secondary NAAQS for PM 2.5 that will provide protection against visibility impairment, measured in terms of a visibility index using a calculated PM 2.5 light extinction indicator (see section VI.D.1 above) . The PM 2.5 visibility index values are determined using a six

- step procedure involving 24

- hour speciated PM 2.5 concentration data together with climatological relative humidity factors. The EPA plans to calculate design values for the proposed new secondary PM 2.5 visibility index NAAQS using the procedures described in section VII .A.5 above, relying upon ambient PM 2.5 speciation measurement data available through the CSN or IMPROVE methods and spatial interpolation of historical relative humidity data. As explained above, t he PSD program requires individual new or modified station ary sources to carry out an air quality analysis to demonstrate that their proposed emissions increases will not cause or contribute to a violation of any NAAQS. Such a demonstration for the proposed new secondary PM 2.5 visibility index NAAQS c ould require each PSD applicant to predict, via air quality modeling, the

13 Th e presentation on this draft guidance was posted on the EPA website at: http://www.epa.gov/ttn/scram/10thmodconf.htm

.Page 33 of 49

visibility impairment that will result from its proposed emissions in conjunction with an assessment of existing air quality (visibility impairment) conditions

. Under 40 CFR 51.166(l)(1) and 40 CFR 52.21(l)(1), all applications of air quality model ing for purposes of determining compliance with

a whether a new or modified source causes or contributes to a NAAQS violation , including a violation of the proposed secondary NAAQS for PM 2.5 , must be based upon air quality models specified in a ppendix
W to 40 CFR part 51. Currently there are no air quality models identified in A ppendix W that are recommended for regulatory applications ( A ppendix W to 40 CFR part 51, Section 3.1.1(b)) for add ressing the atmospheric chemistry associated with secondary formation of PM 2.5 . Thus, I i f this demonstration were to be attempted using the six

- step procedure that the EPA is proposing to use f o r calculat ing PM 2.5 visibility index design values , significant technical issues with the modeling procedures c ould arise

. Those technical difficulties include the current limitations on speciated source

specific emissions data for model input ; the lack of an EPA

- approved air quality model with the capabi lity to address the atmospheric chemistry associated with secondary formation of PM 2.5 ; and the lack of PSD screening tools for streamlining the air quality analysis process. In addition, due to the limited monitoring network for speciated PM 2.5 , some sour ces may not be able to rely on existing speciated monitoring data to adequately represent the background air quality and thereby satisfy preconstruction monitoring requirement s. Consequently , those prospective PSD sources could be required to collect new d ata in order to determine the representative background concentration s of PM 2.5 species (i.e., those required for calculatin g the PM 2.5 visibility i ndex values as described in section VII.A.5 above ). Recognizing these difficult technical issues, the EPA believes that there is an essential need to provide alternative approaches to enable prospective PSD sources to demonstrate that they will not cause or contribute to a violation of the secondary PM 2.5 visibility index NAAQS , if finalized as proposed . To me et this need, the EPA believes that it is reasonable to allow the use of a surrogacy approach , as discussed below, for at least the interim period while technical issues are being resolved,Page 34 of 49

but which could potentially be continued beyond such time if shown to be appropriate. The EPA is providing notice of its intent to follow such an approach and is asking for comments on the approach as discussed in the remainder of this section. The Agency believes that following this approach will facilitate the transiti on to a workable PSD permitting approach under the proposed new secondary PM 2.5 visibility index NAAQS

. To support consideration of alternative approaches that could be used by prospective PSD

sources , the EPA conducted a two

- pronged technical analysis of the relationships between the proposed

new PM 2.5 visibility index standard and the proposed primary annual and 24

- hour PM 2.5 standards ( Kelly , et al. , Wayland, 2012). The first prong of the analysis addresse d aspects of a PSD significant impact analysis by evaluating whether an individual source’s impact resulting in a small increase in
PM 2.5 concentration would produce a comparably small increase in visib ility impairment . This analysis included estimate s of P M 2.5 speciation profiles based on direct PM 2.5 emission profiles for a b road range of source categories and for t heoretical upper and lower b ound scenarios

. The analysis indicate d that small increases in PM 2.5 concentrations caused by individual source s produce similarly small changes in visibility impairment for ambient conditions near the proposed standard level of either 30 dv or 28 dv

. The second prong of the analysis addresse d aspects of a PSD cumulative impact analysis by exploring the relationship between the 3

- year design values for the proposed primary and secondary annual and
24

- hour PM 2.5 standards and coincident design values for the proposed new PM 2.5 visibility index standard based on recent air quality data. This analysis showed that visibility generally decreases when daily PM 2.5 concentrations increase, and vice versa. T his analysis further explored the appropriateness of using a demonstration of attainment with the primary 24

- hour PM 2.5 standard s as a surro gate for a demonstration of attainment with the proposed new secondary PM 2.5 visibility index standard. The Kelly, et al. Wayland (2012) analysis was based on 2008 to 2010 air quality data and on the proposed retention of the primary 24

- hour PM 2.5 standard s with a level of 35 μg/m 3 in conjunction with a 98 th percentile form (section s III.F and IV.F ) and the proposed new secondary PM 2.5 visibility index standardPage 35 of 49

with a level of either 30 dv or 28 dv in conjunction with 24

- hour averaging time and a 90 th percentile form ( see section VI.F). 14 This analysis indicate d that all or nearly all areas in attainment of the primary
24

- hour PM 2.5 standard would also likely be in attainment of the proposed new secondary PM 2.5 visibility index standard

. The EPA believ e s that th is technical analys i s is robust and will have broad national application

. ; thus, sources may choose to rely on the surrogacy demonstration even after resolution of the issues and limitations described previously, consistent with the case law on the use of surrogates. Based on this technical analysis, the EPA currently believe s that there is sufficient evidence that , for the purposes of making a demonstration under the PSD program that a new or modified source will not cause or contribute to a vio lation of the proposed secondary 24

- hour PM 2.5 visibility index NAAQS, a demonstration that the source does not cause or contribute to a violation of compliance with the mass based primary 24

- hour PM 2.5 NAAQS serves as a suitable surrogate

. for demonstrating compliance with the proposed secondary 24

- hour PM 2.5 visibility index NAAQS under the PSD program. As such, many or all sources undergoing PSD review for PM 2.5 would be able to rely upon their analysis demonstrating that they do not cau se or contribute to a violation of compliance with the mass

- based 24

- hour primary
PM 2.5 NAAQS to also demonstrate that they do not cause or contribute to a violation of show compliance with the proposed secondary PM 2.5 visibility index NAAQ S , if finalized. The described surrogate approach would thus serve to overcome the technical challenges discussed above and minimize otherwise burdensome and costly air quality analyses associated with individual sources being required to perform separate a nd distinct analyses with regard to the proposed new secondary PM 2.5 visibility index standard

. The EPA believes this surrogacy approach is appropriate to fulfill PSD requirements for individual sources in PSD areas, which , by definition, will not have been designated as nonattainment for the PM 2.5 visibility index NAAQS. However, our proposed surrogacy approach for

14 As identified in section IX.E above, the relationships between design values characterized in the Wayland Kelly , et al. (2012) analysis and summarized here are dependent upon the specific level and form of each of these standards.Page 36 of 49

PSD should not be construed as a proposal to use a surrogacy approach for designating nonattainment

areas or f or implementing programs to attain the visibility index NAAQS in those areas. The surroga cy te approach is not intended to replace or otherwise undermine the validity of the analytical techniques employed for air quality related value (AQRV) assessments, i ncluding visibility, required under 40 CFR 51.166(p) and 40 CFR 52.21(p). The f ederal l and m anagers (FLM)

– th e f ederal official s with direct responsibility for management of Federal Class I parks and wilderness areas

– have an affirmative responsibility to protect the AQRVs of such lands, and to provide the appropriate procedures and analysis techniques for assessing AQRVs (Appendix W to 40 CFR part 51, Sections 6.1 (b) and 6.2.3(a)). The FLMs have developed specific mod eling approaches for AQRV assessments that are not specifically governed under the requirements set forth in 40 CFR 51.166(l)(1) and 40 CFR 52.21(l)(1), thus the surroga cy te approach is not applicable to the AQRV assessments under the PSD
program. The surr ogate approach could be incorporated into the PSD program in any of three alternative ways. First, the decision as to whether the surrogate approach is adequate could be handled on a case

by

- case basis in consultation with the permitting authority , similar to the existing consultation process under the EPA’s Guideline on Air Quality Models for ozone and secondary PM 2.5 impacts ( 40 CFR part 51, appendix W, section 5.2.1.c ), with no presumption regarding its adequacy. Second, the EPA could establish a rebutta

ble presumption that the surrogate approach is applicable for all permits through either guidance or a notice

- and

- comment rulemaking. In either the first or second alternative, there would be a possibility that reliance on a surrogate

- based demonstration c ould be subjected to challenge for any particular permit analysis. Third, the EPA could establish that the surrogate approach is applicable for all permits, also through a notice

- and

- comment rulemaking. The EPA seeks comment on all of the identified issues and proposed alternative implementation mechanisms associated with the proposed surrogate approach. It is the Agency’s intention to issue either guidance or new regulatory provisions as just described for a surrogacy approach by the time any final revisio ns to the PM NAAQS becomePage 37 of 49

effective, so that sources seeking permits will not be unnecessarily delayed. While noting the importance of the surrogacy approach as an essential initial strategy due to limitations on data and analytical tools, the EPA also notes that when a technically robust surrogate relationship exists there may not be a need to apply an end date for the use of a surrogacy approach. Without an end date, PSD applicants would always have the option of relying upon such a demonstration if th ey would so choose. This would offer long

- term benefits in terms of simplification and resource savings for applicants and reviewing authorities. Accordingly, based on the technical analysis for the standards analyzed ( Kelly , et al Wayland , 2012) which supp orts the surrogacy approach for demonstrating compliance with the proposed secondary PM 2.5 visibility index NAAQS, the EPA may determine that it is not necessary to announce an end date for using it. The EPA invites comment on this aspect of the proposal a s well. For context, the EPA note s that with regard to sources being required to demonstrate compliance with the 1997 PM 2.5 NAAQS, the EPA has previously issued an interim policy for permit applicants that were required to demonstrate compliance with the P M 2.5 NAAQS ( Seitz, 1997 ). Under the 1997 policy, which is no longer in effect, 15 the EPA stated that demonstrating compliance with the NSR requirements for controlling PM 10 emissions and for analyzing impacts on PM 10 air quality could be used to demonstrat e compliance with the PM 2.5 NSR requirements . This approach was designed to control PM 2.5 emissions and protect PM 2.5 air quality until certain technical difficulties concerning PM 2.5 were resolved. At that time, however, we did not support the policy with any technical analysis to show how a demonstration of compliance with the PM 10 NAAQS would satisfy the PM 2.5 requirements and support the issuance of a PSD permit. Consequently, the EPA later concluded that, in keeping with numerous court opinions regarding the use of surrogates, PSD applicants and reviewing authorities seeking to rely specifically on the 1997 PM 10 Surrogate Policy should consider certain overarching legal principles, including that a surrogate may be used only after it has been shown to be reasonable (such as where the

15 The 1997 PM 10 Surrogate Policy formally ended on May 16, 2011. See 76 FR 28646 (May 18, 2011).Page 38 of 49

surrogate is a reasonable proxy for the pollutant or has a predictable correlation to the pollutant) and that the relationship between the regulated po llutant and the surrogate pollutant can be shown to apply in the specific instance where an applicant or reviewing authority seeks to rely upon it. In keeping with these principles, the Agency believes that the surrogate approach now being proposed for use in demonstrating compliance with the new proposed secondary PM 2.5 visibility index NAAQS is supported by a robust technical analysis . The EPA invites comment on this analysis, which is provided in the docket for this action. The EPA notes that t

he analysis supporting the surroga cy approach for the PSD program is distinct from and serves a different purpose than the analyses conducted to inform the Administrator ’s proposed conclusion on the appropriate indicator for a standard intended to protect aga inst PM

- related visibility impairment. As discussed in section VI.A above, the EPA has long recognized that the determination of a single, appropriate national level for a secondary standard to address PM

- related visibility impairment is complicated by reg ional differences in several factors that influence visibility , such as background and current PM 2.5 concentrations, PM 2.5 composition, and average relative humidity. Variations in these factors across regions could thus result in situations where attaining an appropriately protective concentration of fine particles in one region might or might not provide the appropriate deg ree of protection in a different r egion. Although the analysis upon which the surrogacy approach is based ( Kelly, et al., Wayland, 2012) generally shows that daily PM 2.5 visibility index values decrease when daily PM 2.5 m ass concentrations decrease, and vic e versa , there is nonetheless considerable variability in that relationship across the range of ambient fine particle concentrations. As a result, a s discussed in section VI.D.1.d above, the Administrator provisionally concludes that a calculated PM 2.5 lig ht ext inction indicator is an appropriate indicator to repl a ce the current PM 2.5 mass indicator and that such an indicator would afford a relatively high degree of uniformity of visual air quality protection in areas across the country by virtue of directly incorporating the effects of differences in PM 2.5 composition and relati ve humidity across the country.Page 39 of 49

d. PSD Screening Provisions: Significant Emissions Rates, Significant Impact Levels, and Significant Modeling Concentration. The EPA has histo rically allowed the use of screening tools to help facilitate the implementation of the NSR program by reducing the permit applicant’s burden and streamlining the permitting process
for circumstances where emissions or concentrations could be considered de minimis . These screening tools, which all provide de minimis thresholds of some kind, include a significant emissions rate (SER), significant impact levels (SILs), and a significant monitoring concentration (SMC). The EPA promulgated a SER for PM 2.5 in th e 2008 final rule on NSR implementation as part of the first phase of NSR amendments to address PM 2.5 (74 FR 28333, May 16, 2008). The PM 2.5 SER , defined as 10 tpy of direct PM 2.5 emissions (including condensable PM) 16
, is used to determine whether any prop osed new major stationary source or major modification will emit sufficient amounts of PM 2.5 to require review under the PSD program. 17 Under the terms of the existing EPA regulations, the applicable SER for PM 2.5 is 10 tpy of direct PM 2.5 emissions (including condensable PM) and, for precursors, 40 tpy of sulfur dioxide and 40 tpy of nitrogen dioxide emissions. 40 CFR 51.166(b)(23); 40 CFR 52.21(b)(23). This SER applies to permitting requirements based on both the annual and 24

- hour PM 2.5 NAAQS. The SERs are pollutant

- specific but not specific to the averaging time of any NAAQS for a particular pollutant. At this time, the EPA is not proposing any change to the existing PM 2.5 SER as a result of the proposed revisions to the primary annual PM 2.5 NAAQS and the proposed new secondary PM 2.5 visibility index NAAQS. However, the EPA intends to consider this issue in a subsequent rulemaking that will specifically address various PSD implementation issues that are being described herein. The EPA will solicit c omment on any proposed changes to the SER s for PM 2.5 and its precursors at that time, but also

16 The SER for PM 2.5 also includes de minimis thresholds for PM 2.5 precursors of 40 tpy of SO 2 and 40 tpy o f NO x emissions . The PM 2.5 precursors emitted in significant amounts are also required to undergo preconstruction review for PM 2.5 . Any decision to propose changing the existing SER for PM 2.5 will include consideration of the PM 2.5 precursor SER values as well. 17 The PSD rules prov ide that a source that would emit major amounts of any regulated NSR pollutant must undergo review for that pollutant as well as any other regulated NSR pollutant that the source would emit in significant amounts.Page 40 of 49

invites preliminary suggestions at this time that we may consider in developing that proposed rulemaking. Until any rulemaking to amend existing regulations is completed, permitting decision s should continue to be based on the SER s for PM 2.5 and its precursors in existing regulations

. Once it is determined that the proposed new source or modification is significant for PM 2.5 , the permit applicant must complete an air quality analysis. The SIL helps to determine the scope of the required air quality analysis that must be carried out in order to demonstrate that the source’s emissions will not cause or contribute to a violation of any NAAQS or increment. The EPA pro mulgated SILs for
PM 2.5 in 2010 under a final rule that established increments, SILs, and SMC for PM 2.5 (75 FR 64890 to 64894, October 20, 2010). A separate PM 2.5 SIL is defined for each averaging period for which PM 2.5 NAAQS and increments currently exist , as well as for each of the three area classifications, i.e., Class I, II and III, that Congress established in the CAA for PSD purposes. Historically, sources have been allowed to model their proposed emissions increase to predict ambient impacts associ ated with that emissions increase, and to compare this predicted ambient concentration of PM 2.5 to the applicable SIL, which is also expressed as an ambient PM 2.5 concentration over a prescribed averaging time consistent with the NAAQS and increments. At t his time, the EPA is not proposing to revise the annual SIL for PM 2.5 as a result of the proposed revision to the primary annual PM 2.5 NAAQS. However, the EPA intends to review this issue and will consider any potential need to revise the existing SIL in a separate rulemaking addressing PSD implementation issues. The EPA welcomes preliminary comments concerning this issue, but will also provide an additional opportunity for comments at a later date in the event that a subsequent proposal is made to revise t he annual PM 2.5 SIL. While the proposed new secondary PM 2.5 visibility index NAAQS is a 24

- hour standard for which no PM 2.5 SIL is currently defined, there is a question as to whether the existing 24

- hour PM 2.5 SIL, expressed on a PM 2.5 mass basis (μg/m 3 ), would be appropriate for this proposed new secondary NAAQS, expressed in terms of a PM 2.5 visibility index. As discussed in section IX.F.1.c above, t he EPAPage 41 of 49

conducted an analysis to evaluate whether an individual source’s impact resulting in a small incr ease in
PM 2.5 concentration would produce a comparably small increase in visibility impairment ( Wayland Kelly et al. , 2012). The analysis indicates that small increases in PM 2.5 concentrations caused by individual

source s produce similarly small changes in visibility impairment for ambient conditions near the proposed standard level of either 30 dv or 28 dv. The EPA is not proposing any possible alternatives to the existing 24

- hour PM 2

. 5 SIL in this proposed rule, but instead intends to issue a separate rulemaking to assess this and other related PSD implementation issues. The EPA also wishes to note that the current PM 2.5 SILs are the subject of a petition that challenges the EPA’s legal authority under the CAA to develop and implement those SILs, and also alleges that the existing PM 2.5 SILs have not been adequately demonstrated to represent de minimis values. Sierra Club v. EPA, No. 10

- 1413 (D.C. Circuit filed December 17, 2010)

. In the course of th is litigation, the EPA has recognized the need to correct the text of two PM 2.5 SILs provisions in the regulations, and the EPA has asked the court to vacate those provision s so that the EPA may correct them. However, EPA does not believe this corrective action would preclude use of the PM 2.5 SILs in the interim, and EPA intends to provide guidance on continued use of the PM 2.5 SILs (in a manner consistent with principles articulated by the EPA in the rulemakin g and litigation) pending this correction of the regulatory text. The proposed revised primary annual PM 2.5 NAAQS and the proposed secondary PM 2.5 visibility index NAAQS do not affect the continue d used of the PM 2.5 SILs in accordance with the forthcoming guidance described above

. It is unclear at this time what implications this lawsuit will have on the continued use of the PM 2.5 SILs. As a separate matter, the EPA intends to proceed with the process of evaluating consider the need for a new SIL specifically for implementing any

new secondary PM 2.5 visibility index NAAQS under the PSD program. In the event that we do proceed, the EPA now welcomes preliminary comments as to how such a SIL could be developed. The EPA will als o provide an additional opportunity for comments at a later date in the event that a subsequent proposal is made to establish a separate unique SIL for the secondary PM 2.5 visibility index NAAQS, ifPage 42 of 49

such a secondary NA AQS is finalized Finally, the SMC, al so measured as an ambient pollutant concentration (μg/m 3 ) , is a screening tool used to determine whether it may be appropriate to exempt a proposed source from the requirement to collect pre

- construction ambient monitoring data as part of the required air quality analysis for a particular pollutant. The EPA promulgated the existing SMC for PM 2.5 in 2010 on the basis of the defined minimum detection limit for PM 2.5 and the current information at that time concerning the physical capabilities of the PM 2.5 FRM samplers. In that rulemaking, the EPA addressed uncertainties introduced into the measurement of PM 2.5 due to variability in the mechanical performance of the PM 2.5 samplers and micro

- gravimetric analytical balances that weigh filter samples. In a future NSR implementation rulemaking that will follow this rulemaking, the EPA intends to evaluate the types of additional ambient data, if any, that may need to be collected by a proposed source concerning the proposed new secondary PM 2.5 visibility index NAAQS, and the feasibility of individual sources being required to gather such additional information. The EPA welcomes preliminary comments concerning this issue, but will provide additional opportunity for comment when a subsequent NSR implementation rulemakin g is proposed concerning the proposed revisions to the PM NAAQS.

e. PSD Increments Section 166(a) of the CAA requires the EPA to promulgate “regulations to prevent the significant deterioration of air quality” for pollutants covered by the NAAQS “for which national ambient air quality standards

. are promulgated after August 7, 1977.” Among other things, the EPA has implemented this requirement through promulgation of PSD increments. The EPA promulgated PM 2.5 increments in 2010 to prevent significant air quality deterioration with regard to the primary and secondary annual and 24

- hour PM 2.5 NAAQS 18 ( 75 FR 64864 , October 20, 2010). The proposed revision to the primary annual PM 2.5 NAAQS could raise s the question of whether the EPA should consider

18 The primary and secondary NAAQS for PM 2. 5 have been the same up until this time where EPA is proposing a new secondary NAAQS for PM

- related visibility impairment.Page 43 of 49

revis e ing the annual PM 2.5 increment s . Similarly, t T he EPA’s proposed action to establish a new secondary PM 2.5 visibility index NAAQS could raise s the question of whether revision s to the EPA should promulgate a new increment or revise the existing PM 2.5 increment s are appropriate to to specifically address public welfare considerations protected by the th is proposed new secondary standard

. In this proposal, the EPA is not proposing to revise the neither to revise the existing PM 2.5 increment s . nor to establish a new increment for the visibility index. The EPA will consider whether it is appropriate to take such an either of these action s in the future, and if so, would undertake rulemaking

. I ssues concerning the interpretation of section 166(a) of the CAA and EPA’s obligation to promulgate new or revised increments pursuant to that statutory provision have been raised in recent legal chal lenges. WildEarth Guardians v. Jackson , No. 3:11

- CV

- 05651

- YGR (N.D. Cal. filed Nov. 22, 2011); Midwest Environmental Defense Center et al. v. Jackson , No. 3:11

- CV

- 05694

- YGR (N.D. Cal. filed Nov. 28, 2011). The decision to use section 166(a) to promulgate n ew increments for PM 2.5 , in light of the fact that the existing increments for PM measured air quality changes in terms of PM 10 , was based on EPA’s determination that “for purposes of section 166(a), the promulgation of a NAAQS for
PM 2.5 established a NAAQS for an additional pollutant after 1977” 19 (75 FR 64871 to 64872, October 20, 2010). While the determination of compliance with the proposed new secondary NAAQS would be based on a PM 2.5 visibility index , it could be argued that such an indicator is actually based on a subset of the existing PM 2.5 indicator and should not be considered a new pollutant for PSD purposes . Thus, there is a valid question as to whether the EPA should promulgate a new increment specifically designed to prevent significant deterioration with regard to PM

- related visibility impairment, or revise the existing
24

- hour PM 2.5 increment for that purpose

. The EPA anticipates that its decision concerning the need for

19 The EPA added new PM 2.5 increments while retaining the existing PM 10 increments, recognizing that two different indicators of PM were being used for the NAAQS.Page 44 of 49

new or revised increment s addressing a revised annual standard , and those addressing a PM

- related visibility impairment will be made at a later date. The EPA invites preliminary comments at this time on such a need , and on issues we should consider if we undertake a rule to revis e the PM 2.5 increments

. We would undertake any such action but also intends to address th e issue s associated with any new increments or equivalent measures in the separate NSR rulemaking discussed earlier in this section , consistent with the timeframe provided by the CAA. In the meantime, the current PM 2.5 increments remain in effect, and PSD permitting should continue pursuant to the current increments, with a minimum of disruption to the permitting process when the revised new NAAQS takes effect.
2. Nonattainment New Source Review The requirements under part D of the CAA pertain to the preconstruction review and permitting requirements for new major stationary sources and major modifications locating in areas designated “nonattainment” for a particul ar pollutant. Those requirements are commonly referred to as the N NSR
program . The EPA regulations for the N NSR program are contained at 40 CFR 51.165, 52.24 and part 51, appendix S.
For N NSR, “major stationary source” is generally defined as a source wit h the potential to emit at least 100 tpy or more of a pollutant for which an area has been designated “nonattainment .” Thus, the
N NSR program applies to pollutants for which the EPA has promulgated NAAQS

. Because the EPA has defined the PM NAAQS, and has e stablishe d area designations for PM, in terms of two separate indicators

– PM 10 and PM 2.5 – each indicator is regulated separately for purposes of N NSR applicability

. That is, for PM 10 , a “major stationary source” for N NSR applicability generally is a sour ce that is located in a PM 10 nonattainment area and has the potential to emit at least 100 tpy of PM 10 emissions. 20
For PM 2.5 , a “major stationary source” for N NSR applicability is a source that is located in a PM 2.5

20 I n some cases, however, the CAA and the EPA’s regulations define “major stationary source” for nonattainment area NSR in terms of a lower emissions rate dependent on the pollutant

. For PM 10 , for example, a source having the potential to emit at least 70 tpy of PM 10 is considered “major” if the source is located in a nonattainment area classified as a “Serious Area.”Page 45 of 49

nonattainment area and has the potential to emit at least 100 tpy of direct PM 2.5 (“PM 2.5 emissions”) or a precursor of PM 2.5 . For a major modification, the NNSR rules rely upon SERs described previously in the PSD discussion in section IX.F.1. For NNSR, a major modification is a physical change or a change in the method of operation of an existing stationary source that is major for the nonattainment pollutant and that results in a significant net emissions increase of that nonattainment pollutant. As des cribed earlier, the EPA will be evaluating the existing SERs for PM 2.5 and PM 2.5 precursors, and will determine whether there is any basis for proposing changes to the existing values. Any decision to propose changing the existing SERs in a future rulemaki ng would also apply to their use in the NNSR program requirements. The EPA has designated nonattainment areas for the existing primary annual and 24

- hour PM 2.5 NAAQS independently, and the EPA also approves redesignations to attainment separately for the t wo averaging periods. Thus, an area may be nonattainment for the annual standard and unclassifiable/attainment or attainment for the 24

- hour standard. While no formal policy has yet been developed to address this situation, the EPA presently believes that it is reasonable to require that only
N NSR (and not PSD) applies for PM 2.5 in any area that is nonattainment for either averaging period. 21 Looking forward, the EPA proposes that areas would be designated for a proposed new secondary PM 2.5 visibility index NAAQS independently of designations for the mass

- based annual and 24

- hour PM 2.5 NAAQS . Accordingly, the EPA intends to address this issue in a future NSR rulemaking, but invites comments now on whether it is appropriate to apply the NNSR program requiremen ts for any pollutant that is designated nonattainment for at least one averaging period or at least one primary or secondary NAAQS for a particular pollutant.
N ew major stationary sources or major modifi cations based on PM 2.5 emissions ( or emissions of

21 However, transportation conformity requirements discussed in section IX.G below are dependent upon the averaging period(s) for which an area is designated nonattainment.Page 46 of 49

a PM 2.5 precursor ) in a PM 2.5 nonattainment area, must install technology that meets the lowest achievable emission rate (LAER) ; secure appropriate emissions reductions to offset the proposed emissions increases ; and perform other analyses as required under section 173 of the CAA. Following the promulgation of any new or revised NAAQS for PM 2.5 , some new nonattainment areas for PM 2.5 may result. Where a state does not have any NNSR program or the current NNSR program does not apply to PM 2.5 , that state will b e required to submit the necessary SIP revisions to ensure that new major stationary sources and major modifications for PM 2.5 undergo preconstruction review pursuant to the NNSR program. Under section 172(b) of the CAA , the Administrator may provide state s up to 3 years from the effective date of nonattainment area designations to submit the necessary SIP revisions meeting the applicable NNSR requirements . Nevertheless, permits issued to sources in nonattainment areas must satisfy the applicable N NSR requi rements as of the effective date of the nonattainment designation; therefore states lacking the appropriate N NSR program requirements at that time will be allowed to issue such permits during the SIP revision period in accordance with the applicable nonatt ainment permitting requirements contained in the Emissions Offset Interpretative Ruling at 40 CFR part 51, appendix S, which would apply to the revised PM NAAQS upon their effective date. The EPA is not proposing any type of PM 2.5 grandfathering provision at this time for purposes of N NSR . The timetable for adopting new provisions under the State N NSR program will not apply with regard to the new or revised NAAQS for PM 2.5 until such time that an area is designated nonattainment for a particular standard. F urther consideration of the need for a grandfathering provision for purposes of N NSR for the new or revised NAAQS for PM 2.5 will be made and addressed in the future, as appropriate.
G. Transportation Conformity Program Transportation conformity is required under CAA section 176(c) to ensure that transportation plans, transportation improvement programs (TIPs) and federally supported highway and transit projects will not cause new air quality violations, worsen existing v iolations, or delay timely attainment of the relevant NAAQS or interim reductions and milestones

. Transportation conformity applies to areas thatPage 47 of 49

are designated nonattainment and maintenance for transportation

- related criteria pollutants: carbon monoxide, ozone, NO 2 , and PM 2.5 , and PM 10 . Transportation conformity for any new or revised NAAQS for PM 2.5 does not apply until 1 year after the effective date of the nonattainment designation for that NAAQS (See CAA section 176(c)(6) and 40 CFR 93.102(d))

. The EPA ’s Transportation Conformity Rule (40 CFR part 51, subpart T, and 40 CFR part 93, subpart A) establishes the criteria and procedures for determining whether transportation activities conform to the SIP

. The EPA is not proposing changes to the transportatio n conformity rule in this proposed rulemaking

. The EPA notes that the transportation conformity rule already addresses the PM 2.5 and PM 10 NAAQS

. However, in the future, the EPA will review the need to issue or revise guidance describing how the current con formity rule applies in nonattainment and maintenance areas for any new or revised primary or secondary PM NAAQS, as needed

. As discussed in section VIII above, the EPA is proposing cert ain clarifying changes to PM 2.5 air quality monitoring regulations , one of which will be of interest to those who are involved in implementing transportation conformity requirements. The EPA is proposing to change the current presumption that micro

- and middle

- scale monitoring sites are unique and are comparable only to th e 24

- hour PM 2.5 standards unless the Regional Administrator determines that the micro

- or middle

- scale site is not unique and can be compared to the annual standard. Today’s proposal, if finalized, would reverse this presumption (section VIII.B.2.b). This would mean that micro

- and middle

- scale sites would be compared to the annual PM 2.5 standards unless the Regional Administrator decides that the site is unique. The EPA is also proposing to remove population orientation as a condition for the NAAQS

compara bility of data from a monitoring site (section VIII.B.2.a). These pro posed changes are designed to align different elements of the monitoring regulations for consistency , which will changes will help facilitate the interpretation of modeling results from quantitative PM 2.5 conformity hot

- spot analyses for the annual standards by clarifying as they will help to determine more objectively which receptors are comparable to the NAAQS. Formatted: Not Highlight

Formatted: Not HighlightPage 48 of 49

If the EPA finalizes these changes to the monitoring regulations, the EPA w ill update its guidance on quantitative PM 2.5 hot

- spot analyses as appropriate to make it consistent with the revised monitoring requirements (US EPA, 2010j). If the proposed revisions to the monitoring requirements are finalized, the EPA intends that the current quantitative PM 2.5 hot spot guidance would continue to apply to any quantitative PM 2.5 hot

- spot analysis that was begun before the effective date of these proposed revisions to the monitoring regulations. Revised guidance on receptors to be compare d to the annual
PM 2.5 standards for quantitative PM 2.5 hot

- spot analyses would apply to any quantitative PM 2.5 hot

- spot analysis begun after the effective date of the revised monitoring regulations. Nonattainment and maintenance areas are encouraged to use their interagency consultation processes to determine whether an analysis for a given project was started before the effective date of changes to the monitoring requirements. Applying the current guidance regarding whether or not a receptor can be compare d to the annual PM 2.5 NAAQS to analyses that had begun before the effective date of changes to the monitoring regulations is consistent with how the conformity rule and guidance address the transitional period for new emissions factor models or local plann ing assumptions (40 CFR 93.110(a) and 93.111(b) and (c)). In both of those cases, analyses begun before the new model or data became available can be completed using the data and/or model that were available when the analyses began. The EPA allows this in order to conserve state resources by not making transportation planning agencies redo analyses simply because a model has been revised, new data have become available, or in this case, the EPA has revised its regulations for PM 2.5 monitoring.
H. General Conf

ormity Program General c onformity is required by CAA s ection 176(c)

. This section requires that Federal agencies do not adopt, accept, approve , or fund activities that are not consistent with s tate air quality goals

. General conformity applies to any Federal action (e.g., funding, licensing, permitting , or approving) , other than projects that are Federal Highway Administration (FHWA)/Federal Transit Administration (FTA) projects as defined in 40 CFR 93.101 (which are covered under transportationPage 49 of 49

confo rmity described above), if the action take s place in a nonattainment or maintenance areas for

ozone, PM, NO 2 , carbon monoxide, lead, or SO 2 . General conformity also applies to a Federal highway and transit project if it does not involve either Title 23 or 49 funding , but does involve FHWA or FTA approval such as is required for a connection to an Interstate highway or for a deviation from applicable design standards per 40 CFR 93.101 . (The FHWA and FTA actions described here as not subject to general confor mity are subject to transportation conformity.) General conformity for any revised PM NAAQS does not apply until 1 year after the effective date of a nonattainment designation for that NAAQS

. The EPA’s General Conformity Rule (40 CFR 93.150 to 93.165) esta blishes the criteria and procedures for determining if a Federal action conforms to the SIP

. The EPA is not proposing changes to the general conformity rule in this proposed rulemaking

. The general conformity rule already addresse s the PM 2.5 and PM 10 NAAQS

. The EPA will review the need to issue guidance describing how the current conformity rule applies in nonattainment and maintenance areas for the final revised primary and secondary PM NAAQS

.