51418 Federal Register / Vol. 74, No. 192 / Tuesday, October 6, 2009 / Rules and Regulations 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Parts 70 and 71 

[EPA–HQ–OAR–2004–0087; FRL–8964–8] 

RIN 2060–AM45 

Operating Permit Programs; Flexible 

Air Permitting Rule 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Final rule. 

SUMMARY: We are revising the 

regulations governing State and Federal 

operating permit programs required by 

title V of the Clean Air Act (CAA or the 

Act) to promote flexible air permitting 

(FAP) approaches that provide greater 

operational flexibility and, at the same 

time, ensure environmental protection 

and compliance with applicable laws. 

The revisions to our title V 

regulations consist of adding definitions 

for alternative operating scenario (AOS) 

and approved replicable methodology 

(ARM) and codifying some clarifications 

to existing provisions. These revisions 

are intended to clarify and reaffirm 

opportunities for accessing operational 

flexibility under existing regulations. 

We are not finalizing any revisions to 

our existing minor or major New Source 

Review (NSR) regulations. In particular, 

we are withdrawing that portion of the 

proposal which relates to Green Groups 

and their potential inclusion in NSR 

programs required by parts C and D of 

title I of the Act. Instead, we are 

encouraging States and sources to 

investigate in more depth the 

flexibilities currently available under 

the major NSR regulations. 

DATES: This final rule is effective on 

November 5, 2009. 

ADDRESSES: The EPA established a 

docket for this action under Docket ID 

No. EPA–HQ–OAR–2004–0087. All 

documents in the docket are listed on 

the http://www.regulations.gov Web 

site. Although listed in the index, some 

information may not be publicly 

available, e.g., CBI or other information 

whose disclosure is restricted by statute. 

Certain other material, such as 

copyrighted material, is not placed on 

the Internet and will be publicly 

available only in hard copy form. 

Publicly available docket materials are 

available either electronically through 

http://www.regulations.gov or in hard 

copy at the Air and Radiation Docket, 

EPA/DC, EPA West, Room 3334, 1301 

Constitution Avenue, Northwest, 

Washington, DC. The Public Reading 

Room is open from 8:30 a.m. to 4:30 

p.m., Monday through Friday, excluding 

legal holidays. The telephone number 

for the Public Reading Room is (202) 

566–1744, and the telephone number for 

the Air and Radiation Docket is (202) 

566–1742. 

FOR FURTHER INFORMATION CONTACT: For 

general issues concerning this action, 

please contact Michael Trutna, Air 

Quality Policy Division (C504–01), U.S. 

Environmental Protection Agency, 

Research Triangle Park, NC 27711; 

telephone (919) 541–5345; fax number 

(919) 541–4028; or electronic mail at 

trutna.mike@epa.gov. 

For specific issues concerning the 

pilot permits used to support this 

rulemaking, contact David Beck, Office 

of Policy, Economics, and Innovation, 

Innovative Pilots Division (C304–05), 

U.S. Environmental Protection Agency, 

Research Triangle Park, NC 27711; 

telephone (919) 541–5421; fax number 

(919) 541–2664; or electronic mail at 

beck.david@epa.gov. 

For issues relating to monitoring, 

recordkeeping, and reporting for FAPs, 

contact Barrett Parker, Sector Policies 

and Programs Division, Measurement 

Policy Group (D243–03), U.S. 

Environmental Protection Agency, 

Research Triangle Park, NC 27711; 

telephone 919–541–5635; fax number 

(919) 541–1039; or electronic mail at 

parker.barrett@epa.gov. 

For other part 70 issues, contact Juan 

Santiago, Operating Permits Group, Air 

Quality Policy Division (C504–05), U.S. 

Environmental Protection Agency, 

Research Triangle Park, NC 27711; 

telephone (919) 541–1084; fax number 

(919) 541–5509; or electronic mail at 

santiago.juan@epa.gov. 

SUPPLEMENTARY INFORMATION: 

The information in this 

Supplementary Information section of 

this preamble is organized as follows: 

Table of Contents 

I. General Information 

A. Does This Action Apply to Me? 

B. Where Can I Get a Copy of This 

Document and Other Related 

Information? 

II. Purpose 

III. Background 

A. What Is a Flexible Air Permit? 

B. What Is the Title V Operating Permit 

Program? 

C. What Is the New Source Review (NSR) 

Program? 

1. Major NSR 

2. Minor NSR 

IV. Overview of This Final Action 

A. What Specific Changes to Parts 70 and 

71 Is EPA Finalizing? 

B. What Changes to Parts 51 and 52 Is EPA 

Finalizing? 

C. What Approach Is Being Used To 

Discuss the Final Actions? 

D. What Are EPA’s Recommendations for 

Public Participation in Flexible 

Permitting? 

E. What Types of Support Does EPA Intend 

To Offer? 

V. Advance Approval of Minor NSR 

A. Background 

B. Final Action 

VI. Alternative Operating Scenarios 

A. Background 

B. Final Action 

VII. Approved Replicable Methodologies 

A. Background 

B. Final Action 

VIII. Green Groups 

A. Background 

B. Final Action 

IX. Statutory and Executive Order Reviews 

A. Executive Order 12866—Regulatory 

Planning and Review 

B. Paperwork Reduction Act 

C. Regulatory Flexibility Act 

D. Unfunded Mandates Reform Act 

E. Executive Order 13132—Federalism 

F. Executive Order 13175—Consultation 

and Coordination With Indian Tribal 

Governments 

G. Executive Order 13045—Protection of 

Children From Environmental Health 

and Safety Risks 

H. Executive Order 13211—Actions That 

Significantly Affect Energy Supply, 

Distribution, or Use 

I. National Technology Transfer and 

Advancement Act 

J. Executive Order 12898—Federal Actions 

To Address Environmental Justice in 

Minority Populations and Low-Income 

Populations 

K. Congressional Review Act 

X. Judicial Review 

I. General Information 

A. Does This Action Apply to Me? 

Entities potentially affected by this 

final action are facilities currently 

required to obtain title V permits under 

State, local, Tribal, or Federal operating 

permits programs, and State, local, and 

Tribal governments that are authorized 

by EPA to issue such operating permits. 

Potentially affected sources are found in 

a wide variety of industry groups. In 

particular, we believe based on the 

collective experience in implementing 

the pilot permit activity that these 

groups will include, but are not limited 

to, the following: 


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Federal Register / Vol. 74, No. 192 / Tuesday, October 6, 2009 / Rules and Regulations 51419 

1 In addition to written comments submitted on 

the proposal, we have received input from 

stakeholders in outreach meetings held to discuss 

the proposal. These meetings, and the topics 

discussed, are documented in the docket for this 

rulemaking, Docket No. EPA–HQ–OAR–2004–0087. 

For purposes of this preamble, we refer to input 

from all these sources as ‘‘comments.’’ 2On January 13, 2009, then Administrator 

Stephen L. Johnson signed a final Flexible Air 

Permitting Rule and the signed rule was made 

publicly available on EPA’s Web site. The signed 

rule was submitted to the Office of Federal Register 

for publication. Rahm Emanuel, Assistant to the 

President and Chief of Staff, issues a memorandum 

on January 20, 2009, directing Agencies to 

withdraw from the Office of Federal Register ‘‘all 

proposed and final regulations that have not been 

published in the Federal Register so that they can 

be reviewed and approved by a department or 

agency head.’’ Administrator Lisa P. Jackson 

reviewed and approved the final Flexible 

Permitting Rule, and this rule as published is 

identical in substance to the rule previously signed 

January 13, 2009. 

3 ‘‘Applicable requirements’’ is a term that is used 

in title V. The EPA has defined the term to include, 

among other things, State implementation plan 

(SIP) rules, the terms and conditions of 

preconstruction permits issued under a SIPapproved NSR program, and requirements pursuant 

to the new source performance standards (NSPS), 

national emission standards for hazardous air 

pollutants (NESHAP), maximum achievable control 

technology (MACT), and Acid Rain Programs. See 

40 CFR 70.2. 

Industry group SIC a NAICSb

Aerospace Manufacturing .... 372 .................................................................................. 336411, 336412, 332912, 336411, 335413. 

Automobile Manufacturing ... 371 .................................................................................. 336111, 336112, 336712, 336211, 336992, 336322, 

336312, 33633, 33634, 33635, 336399, 336212, 

336213. 

Industrial Organic Chemicals 286 .................................................................................. 325191, 32511, 325132, 325192, 225188, 325193, 

32512, 325199. 

Chemical Processes ............ 281 .................................................................................. 325181, 325182, 325188, 32512, 325131, 325998, 

331311. 

Converted Paper and Paperboard Products.267 .................................................................................. 322221, 322222, 322223, 322224, 322226, 322231, 

326111, 326112, 322299, 322291, 322232, 322233, 

322211. 

Magnetic Tape Manufacturing.369 .................................................................................. 334613. 

Petroleum Refining .............. 291 .................................................................................. 32411. 

Other Coating Operations .... 226, 229, 251, 252, 253, 254, 267, 358, 363 ................. 313311, 313312, 314992, 33132, 337122, 337121, 

337124, 337215, 337129, 37125, 337211, 337214, 

337127, 322221, 322222, 322226, 335221, 335222, 

335224, 335228, 333312, 333415, 333319. 

Paper Mills ........................... 262 .................................................................................. 322121, 322122. 

Pharmaceutical Manufacturing.283 .................................................................................. 325411, 325412, 325413, 325414. 

Printing and Publishing ........ 275 .................................................................................. 323114, 323110, 323111, 323113, 323112, 323115, 

323119. 

Pulp and Paper Mills ............ 262 .................................................................................. 32211, 322121, 322122, 32213. 

Semiconductors ................... 367 .................................................................................. 334413. 

Specialty Batch Chemical 

Processes.

282, 283, 284, 285, 286, 287, 289, 386 ......................... 3251, 3252, 3253, 3254, 3255, 3256, 3259, except 

325131 and 325181. 

aStandard Industrial Classification. 

b North American Industry Classification System. 

This table is not intended to be 

exhaustive, but rather provides a guide 

for readers regarding entities likely to be 

affected by this action. If you have any 

questions regarding the applicability of 

this action to a particular entity, contact 

the person listed in the preceding FOR

FURTHER INFORMATION CONTACT section. 

B. Where Can I Get a Copy of This 

Document and Other Related 

Information? 

In addition to being available in the 

docket, an electronic copy of this final 

rule will also be available on the World 

Wide Web. Following signature by the 

EPA Administrator, a copy of this final 

rule will be posted in the regulations 

and standards section of our NSR home 

page located at http://www.epa.gov/nsr. 

II. Purpose 

The purpose of this rulemaking is to 

clarify and reaffirm opportunities 

within the existing regulatory 

framework to encourage the wider use 

of the FAP approaches. The Agency has 

learned a great deal over the past decade 

through the implementation and 

evaluation of pilot permits. In light of 

that experience and the comments we 

received on the proposed FAP 

rulemaking (72 FR 52206, September 12, 

2007),1 we are finalizing certain 

elements of that proposal.2

III. Background 

A. What Is a Flexible Air Permit? 

A FAP is a title V permit that by its 

design facilitates flexible operations at a 

source, allowing it to be marketresponsive while ensuring equal or 

greater environmental protection than 

that achieved by conventional permits. 

In particular, a FAP contains one or 

more approaches that allow the source, 

under protection of the permit shield, to 

make certain types or categories of 

physical and/or operational changes 

without further review or approval of 

the individual changes by the 

permitting authority as they 

subsequently occur. Flexible air permit 

approaches, as discussed in this notice, 

include advance approvals of minor 

NSR, AOSs, and ARMs. In pursuing a 

FAP, the source must propose one or 

more of these approaches to the 

permitting authority who then would 

accept those which are judged to be 

appropriate in a particular situation. In 

order to be effective, the combination of 

FAP approaches contained in the title V 

permit must address all applicable 

requirements and requirements of part 

70 relevant to the anticipated changes 

being authorized.3 Flexible air permits 

cannot circumvent, modify, or 

contravene any applicable requirement 

and, instead, by their design must 

assure compliance with each one as it 

would become applicable to any of the 

authorized changes. 

For more than a decade, we 

participated in a pilot permit activity 

with certain title V sources and 

permitting authorities through which 

were tested and evaluated various 


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51420 Federal Register / Vol. 74, No. 192 / Tuesday, October 6, 2009 / Rules and Regulations 

4The EPA may also issue a part 71 permit where 

a State permitting authority fails to respond to an 

objection by the Administrator to a part 70 permit. 

See CAA section 505(c), 40 CFR 71.4(e). 

5The Federal operating permit program at part 71 

addresses reasonably anticipated operating 

scenarios in the same fashion as part 70. See 40 CFR 

71.6(a)(9). This rulemaking affects both parts 70 and 

71, and the revisions to each part are virtually 

identical. For ease of reference, this preamble 

discussion refers to the part 70 provisions, but the 

discussion applies equally to the part 71 program 

revisions. Section numbers given for the part 70 

rules correspond directly to the analogous sections 

in part 71. The term ‘‘title V permit’’ refers to 

permits issued under either part 70 or part 71. 

6The EPA included other operational flexibility 

provisions in the final part 70 regulations, 

including 40 CFR 70.4(b)(12), (b)(14), and (b)(15), 

which implement section 502(b)(10) of the Act. 

This rule does not address those provisions. 

7 In the 1990’s, we proposed certain clarifications 

and modifications to the part 70 regulations. See 

generally 60 FR 45529 (August 31, 1995) and 59 FR 

44460 (August 29, 1994). In those proposals, among 

other things, we discussed the concept of ‘‘advance 

NSR’’ in relation to AOSs, and proposed a 

definition for ‘‘alternative operating scenarios.’’ In 

August 2000, based in large part on the experience 

gained through the pilot permit activity discussed 

below, we issued a draft guidance document called 

White Paper Number 3 (64 FR 49803, Aug. 15, 

2000), on which we solicited comment. That draft 

guidance addressed various flexible permitting 

approaches, including the use of the AOS 

provisions, Clean Buildings, and PALs. In 

fashioning the proposal on which this final rule is 

based, we considered a summary of those 

comments received on the prior proposals that 

addressed advance approval and AOSs (which is 

available in the docket) and the relevant individual 

comments received on the draft guidance (which 

are also in the docket). 

8Sources at the following locations participated 

in the pilot permit activity: (1) 3M (St. Paul, MN); 

(2) Intel (Aloha, OR); (3) Lasco Bathware (Yelm, 

WA); (4) Imation (Weatherford, OK); (5) Cytec 

(Connecticut); (6) DaimlerChrysler (Newark, DE); (7) 

Merck (Elkton, VA); (8) Merck (Barceloneta, PR); (9) 

Saturn (Spring Hill, TN); (10) BMW (Spartanburg, 

SC); (11) Eli Lilly (West Lafayette, IN); (12) 3M 

(Nevada, MO); and (13) Imation (Camarillo, CA). 

9The six permits that we analyzed were: (1) Intel 

(Aloha, OR); (2) 3M (St. Paul, MN); (3) Lasco 

Bathware (Yelm, WA); (4) DaimlerChrysler 

(Newark, DE); (5) Saturn (Spring Hill, TN); and (6) 

Imation (Weatherford, OK). 

permitting approaches that afford 

operational flexibility. The lessons 

learned through the pilot permit 

experience served, in part, as the basis 

for our adoption of the plantwide 

applicability limitation (PAL) 

provisions of the 2002 NSR 

Improvement rule. They also serve as a 

basis for this rulemaking, in which we 

clarify and reaffirm existing regulatory 

provisions that currently afford 

reasonable opportunities for operational 

flexibility, while ensuring the required 

levels of environmental protection. We 

intend that this rulemaking provide a 

more positive foundation upon which 

FAPs can be considered by sources and 

permitting authorities and, as 

appropriate, be designed and 

implemented. 

B. What Is the Title V Operating Permit 

Program? 

When Congress amended the Act in 

1990, it established an operating permit 

program in title V of the Act for major 

(and certain other) stationary sources of 

air pollution. Title V mandates that each 

State develop and implement an 

operating permit program, and requires 

EPA to establish minimum standards for 

these programs. The purpose of the 

program is to improve the 

enforceability, and thus the 

effectiveness, of the Act’s requirements 

by issuing to every covered source a 

permit that lists all the requirements 

applicable to the source under the Act 

and contains other terms as necessary to 

assure compliance with those 

requirements. States may delegate 

program responsibility to local agencies, 

and eligible Tribes may develop and 

implement a program at their option. In 

1992, EPA promulgated regulations 

setting forth minimum requirements for 

State, local, and Tribal operating permit 

programs in part 70 of title 40 of the 

Code of Federal Regulations (40 CFR 

part 70). Currently all States and many 

local agencies administer operating 

permit programs approved by EPA 

pursuant to the part 70 requirements. 

There are 112 such State, territorial, and 

local operating permit programs. These 

programs are typically referred to 

interchangeably as ‘‘title V programs’’ or 

‘‘part 70 programs.’’ 

In addition, title V requires EPA to 

implement an operating permit program 

in areas lacking an approved or 

adequately administered State, local, or 

Tribal program. Accordingly, in 1996 

EPA promulgated the Federal operating 

permit program at 40 CFR part 71. In 

1999, EPA amended part 71 specifically 

to address Indian country. Currently, 

EPA administers the part 71 program in 

Indian country, for sources located on 

the outer continental shelf, and for deep 

water ports.4 There are currently no 

Tribes with approved part 70 programs, 

although one Tribe has received 

delegation to administer the part 71 

Federal program. 

The concept of operational flexibility 

in title V permits is not a new one. Since 

they were initially promulgated in 1992, 

the part 70 State operating permit 

program regulations have included 

operational flexibility provisions. One 

of these is the AOS provision found at 

40 CFR 70.6(a)(9), which is one subject 

of this rulemaking.5, 6 Section 70.6(a)(9) 

generally provides that any permit 

issued under part 70 must include terms 

and conditions for reasonably 

anticipated operating scenarios 

identified in its application by the 

source and as approved by the 

permitting authority. Over the years, we 

have proposed rulemaking or guidance 

to address operational flexibility further, 

but none has been finalized.7

Shortly after we promulgated part 70, 

we initiated and/or supported pilot 

permit activities with interested States.8

Companies participating in this activity 

sought to reduce the cost, time, and 

delays associated with a permit revision 

for each operational change at a facility. 

We and the States sought to increase the 

sources’ operational flexibility, while 

assuring compliance with applicable 

requirements, ensuring environmental 

protection, and facilitating pollution 

prevention (P2). These pilots typically 

allowed for both changes to operations 

of existing emissions units and the 

addition of new emissions units, 

provided that the changes were 

sufficiently well described in the permit 

application so that the permitting 

authority could confirm that all 

applicable requirements were identified 

and that the permit contained terms and 

conditions assuring compliance with all 

applicable requirements. 

To evaluate the pilot permit activity, 

we conducted a thorough review of the 

six pilot permits for which at the time 

there was significant implementation 

experience.9 We reviewed on-site 

records to track utilization of the 

flexible permit provisions, assessed how 

well the permits worked, evaluated total 

emissions reductions achieved, and 

analyzed the economic benefits 

associated with the permits. Overall, we 

found that the flexibility approaches 

which States implemented under their 

current authorities had worked well for 

both the sources and the permitting 

authorities, with significant benefits 

accruing as follows: 

• Environmental—The sources 

generally achieved 30 to 80 percent 

reductions in actual plantwide 

emissions or emissions per unit of 

production. 

• Informational—Permitting 

authorities and the public received 

better information about the scope of 

planned changes at the sources and the 

maximum, cumulative environmental 

effects of those changes. 

• Economic—Increased permitting 

certainty and reduced transaction costs 

improved the participating companies’ 

ability to compete effectively in the 

market and enabled them to retain, and 

in some cases, create jobs. 

• Administrative—Even with the 

higher front-end design costs associated 

with the pilot permits, permitting 

authorities reported a net reduction in 

administrative costs over the life of the 


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10 ‘‘Evaluation of the Implementation Experience 

with Innovative Air Permits.’’ A copy of this report 

is located in the docket for this rulemaking, or can 

be accessed at http://www.epa.gov/ttn/oarpg/t5/ 

memoranda/iap_eier.pdf. 

11The Act uses the terms ‘‘major emitting 

facility’’ to refer to sources subject to the PSD 

program, and ‘‘major stationary source’’ to refer to 

sources subject to NA NSR. See CAA sections 165, 

169, 172(c)(5), and 302(j). For ease of reference, we 

use the term ‘‘major source’’ to refer to both terms. 

12The term ‘‘criteria pollutant’’ means a pollutant 

for which we have set a NAAQS. 

13 In addition, the PSD program applies to many 

noncriteria regulated pollutants. 

permits as a result of a reduction in 

subsequent permit revisions. 

For a more extensive discussion of the 

findings of the pilot permit evaluation, 

see the evaluation report.10

C. What Is the New Source Review 

(NSR) Program? 

The NSR program is a preconstruction 

permitting program that applies when a 

source is constructed or modified. The 

NSR program is composed of three 

different programs: 

• Prevention of Significant 

Deterioration (PSD); 

• Nonattainment major NSR (NA 

NSR); and 

• Minor NSR. 

1. Major NSR 

We often refer to the PSD and NA 

NSR programs together as the major 

NSR program because these programs 

regulate only major sources.11 These 

programs are mandated by parts C and 

D of title I of the Act. 

Part C contains the PSD provisions. 

The PSD program applies when a major 

source that is located in an area that is 

designated as attainment or 

unclassifiable for any criteria pollutant 

is constructed or undergoes a major 

modification.12 13 Part D prescribes the 

NA NSR program, which applies when 

a major source that is located in an area 

that is designated as nonattainment for 

one or more criteria pollutants is newly 

constructed or undergoes a major 

modification for any of those pollutants. 

The implementing regulations for the 

PSD program are found at 40 CFR 52.21, 

40 CFR 51.166, and 40 CFR 51.165(b). 

For NA NSR, the regulations are found 

at 40 CFR 52.24, 40 CFR 51.165, and 40 

CFR part 51, appendix S. 

As noted above, parts C and D set 

forth the statutory requirements for the 

PSD and NA NSR programs, and the 

implementing regulations include 

requirements for State major NSR 

programs. As a result, major NSR 

programs generally are similar across 

the States. 

The PSD requirements include but are 

not limited to: 

• Installation of Best Available 

Control Technology (BACT); 

• Air quality monitoring and 

modeling analyses to ensure that a 

project’s emissions will not cause or 

contribute to a violation of any national 

ambient air quality standards (NAAQS) 

or maximum allowable pollutant 

increase (PSD increment); 

• Notification of Federal Land 

Manager of nearby Class I areas; and 

• Thirty-day public comment period 

and opportunity for a public hearing on 

the permit. 

Nonattainment NSR requirements 

include but are not limited to: 

• Installation of Lowest Achievable 

Emission Rate (LAER) control 

technology; 

• Offsetting new emissions with 

creditable emissions reductions; 

• Certification that all major sources 

owned and operated in the State by the 

same owner are in compliance with all 

applicable requirements under the Act; 

• An alternative siting analysis 

demonstrating that the benefits of the 

proposed source significantly outweigh 

the environmental and social costs 

imposed as a result of its location, 

construction, or modification; and 

• Thirty-day public comment on the 

permit. 

Based on our pilot permit evaluation 

and our 1996 proposed modifications to 

the major NSR program, in December 

2002 we finalized the NSR Improvement 

rule. In that rule, we promulgated 

regulations for PALs in the PSD and NA 

NSR programs. As explained in the 

preamble to the December 2002 final 

rule, a PAL is an alternative approach 

for determining NSR applicability on a 

plantwide basis. See 67 FR 80206. 

Sources with PALs can make changes 

without triggering the major NSR 

preconstruction permitting 

requirements, provided such changes 

remain below the limit established in 

their PAL and do not otherwise violate 

the requirements of the PAL. A PAL is 

an important technique which is often 

used in tandem with other FAP 

approaches such as advance approvals 

for minor NSR. 

2. Minor NSR 

Under section 110(a)(2)(C) of the Act, 

States are required to have ‘‘minor’’ NSR 

programs, which apply to new and 

modified sources that do not meet the 

emissions thresholds for the NSR 

programs that apply to major sources, as 

well as permit programs to meet parts C 

and D of the Act. In addition, section 

110(j) requires all applicants for permits 

issued under title I of the Act to show 

that they will comply with standards of 

performance and all other requirements 

of the Act. The minor NSR program is 

part of each State’s ‘‘State 

implementation plan’’ (SIP) and is 

designed to ensure that the construction 

or modification of any stationary source 

does not interfere with the attainment of 

the NAAQS. Aside from this 

requirement, which is stated in broad 

terms, the Act includes no specifics 

regarding the structure or functioning of 

minor NSR programs. The 

implementing regulations, which are 

found at 40 CFR 51.160 through 51.164, 

also are stated in very general terms. As 

a result, SIP-approved minor NSR 

programs can vary quite widely from 

State to State. 

IV. Overview of This Final Action 

This final action is primarily a 

reaffirmation of currently available 

flexibility options and the process for 

accessing them. This action adds some 

new definitions and clarifications to 

existing parts 70 and 71 provisions in 

order to promote greater certainty and 

reasonable consideration of these 

options. This notice discusses each of 

the FAP approaches (e.g., advance 

approvals of minor NSR, AOSs, and 

ARMs) and the common process for 

their consideration. In this process, the 

source first proposes use of one or more 

of the FAP approaches to the permitting 

authority who then evaluates the 

proposal on a case-by-case basis. 

Commenters have generally found 

these options to be available to the 

extent needed and appropriate under 

existing authorities. Commenters have 

also found the common process to be 

sufficient and effective in the reasonable 

consideration of the particular options 

proposed for a FAP. These commenters 

have convinced the Agency that more 

prescriptive approaches proposed to 

assure greater consistency may well be 

counterproductive to our objective for 

greater consideration and appropriate 

use of FAP approaches. While deciding 

not to prescribe specific approaches to 

the design and implementation of FAPs, 

EPA does intend to monitor State 

activities in these areas, to evaluate the 

effectiveness of various FAP approaches 

periodically, and to assess, on the basis 

of new experiences and other 

information, whether any additional 

rulemaking would be appropriate in the 

future. 

A. What Specific Changes to Parts 70 

and 71 Is EPA Finalizing? 

We are finalizing a proposed revision 

to the title V permit application 

requirements at 40 CFR 70.5(c)(3)(iii) to 

facilitate the use of emissions caps, 

including those for advance approvals 

of minor NSR and for PALs, although 


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51422 Federal Register / Vol. 74, No. 192 / Tuesday, October 6, 2009 / Rules and Regulations 

the wording has been changed slightly 

in the final rule. The final revisions 

clarify that for emissions units subject to 

an annual emissions cap, the 

application may report the units’ 

emissions as part of the aggregate 

emissions associated with the cap, 

except where more specific information 

is needed, including where necessary to 

determine or assure compliance with an 

applicable requirement. 

With respect to AOSs, after 

considering the comments we received 

on the proposed rules, we are finalizing 

only those aspects of our proposal that 

would preserve the current levels of 

flexibility and add no new 

administrative burden. In particular, we 

are revising the rules to: 

• Add a definition of AOS, but 

eliminating the reference to ‘‘physical 

and operational changes’’ from the 

proposed definition. 

• Clarify that the permitting authority 

shall require the source to supplement 

its application with additional 

information when necessary to define 

permit terms and conditions to 

implement a proposed AOS as 

requested by the source. 

• Clarify that the compliance plan 

requirements for applications must 

address proposed AOSs when an 

application includes them. 

• Clarify that applications must 

contain documentation that the source 

has obtained all authorizations required 

under the applicable requirements 

relevant to a proposed AOS or a 

certification the source has submitted 

all relevant materials for obtaining such 

authorizations. 

• Clarify that permits must contain all 

authorizations as required under the 

applicable requirements relevant to an 

AOS. 

• Use consistent terminology 

wherever the rules refer to AOSs. 

We are not finalizing other proposed 

requirements relating to the specific 

content of AOSs in logs and permits and 

to the need to report AOS 

implementation every 6 months. We 

have been persuaded by the commenters 

on the proposal that these potential new 

requirements would not be necessary 

and may, in fact, be counterproductive. 

In the final rules with respect to 

ARMs, we are adding the proposed 

definition of ARM and supplementing it 

with two clarifications added in 40 CFR 

70.6(a)(1): (1) As is currently the case for 

AOSs, the source must identify in its 

application a potential ARM and the 

permitting authority must then choose 

to approve it before the ARM can be 

effective; and (2) an ARM cannot be 

used to circumvent any other applicable 

requirement. Although ARMs can 

reduce the number of potential permit 

revisions that a source must otherwise 

request, an ARM must be consistent 

with and implement an applicable 

requirement or requirement of part 70. 

We are not finalizing the proposed 

requirement for sources to identify in 

the 6-month monitoring report any 

ARMs implemented during the 

reporting period. Instead, we are 

clarifying that implementation records 

for all ARMs use must be kept on-site 

by the source. 

Because the final rules represent 

clarifications to the existing part 70 

regulations, we believe that many States 

will be able to implement the final rules 

without revising their regulations. This 

belief is further based on the pilot 

experience and on the comments 

received from States who affirmed that 

their current authority was sufficient to 

implement both AOSs and ARMs (i.e., 

no State rulemaking was thought to be 

needed to incorporate the new 

definitions and clarified requirements). 

However, since the AOS provisions 

are impacted by the rule and are one of 

the part 70 program minima, and State 

part 70 programs differ, some States 

may revise their current part 70 program 

to add sufficient authority to implement 

the final rule or opt to make current 

authority on flexible permits more 

explicit. 

With respect to AOSs, for those States 

that believe they lack authority under 

their current part 70 programs to 

implement the final rule, or that chose 

to make current authority more explicit, 

such States should submit proposed 

revisions to their title V operating 

permits program to their EPA Regional 

Offices pursuant to 40 CFR 70.4(i). For 

other States if, based on their 

subsequent efforts to implement the 

final rule, we determine in writing that 

a particular part 70 program does not 

provide sufficient authority to 

implement the final rule or is 

inconsistent with the final rule, then the 

relevant State must revise the program 

pursuant to 40 CFR 70.4(i). Accordingly, 

the State will have, from the date of our 

written determination, 180 days, or such 

other period as the Administrator may 

specify following notification by the 

Administrator, or within 2 years if the 

State demonstrates that additional legal 

authority is necessary to make the 

required program revisions, to submit a 

proposed operating permit program 

revision consistent with the final rule to 

us for review and approval. 

With respect to ARMs, States may 

choose to send us specific revisions to 

their current programs at any time. 

There is no mandate for part 70 

programs to contain provisions specific 

to ARMs. Thus, States are not obligated 

to revise their part 70 programs in this 

regard as a result of this final rule. 

However, optional rule changes may be 

useful to some States in implementing 

the final rule more effectively and to 

achieve the anticipated administrative 

benefits attributed to ARM 

implementation. 

Regardless of whether States revise 

their rules to incorporate the part 70 

rule changes that are being finalized in 

this action, the Agency wishes to 

reiterate that inclusion of AOSs or 

ARMs in a title V permit remains an 

essentially voluntary activity. A source 

owner in deciding whether to propose 

one must first determine that an AOS 

and/or ARM would be useful in 

increasing certainty and flexibility and 

then the permitting authority must 

determine whether or not to grant the 

source’s request for an AOS and/or 

ARM. The permitting authority, on a 

case-by-case basis, may reject source 

proposals as inadequate to assure 

compliance with the underlying 

applicable requirements or otherwise 

inappropriate, depending on the 

specific facts of the situation. 

B. What Changes to Parts 51 and 52 Is 

EPA Finalizing? 

We are not finalizing any changes to 

the NSR program in parts 51 and 52. We 

did not propose any changes to the 

regulations for minor NSR based on our 

experience with several pilot States. 

Comments received on the proposal 

affirmed that the relevant pilot 

experience was broadly applicable and 

that States, in general, have sufficient 

existing authority to advance approve 

minor NSR, where they determine it 

appropriate to do so, and to incorporate 

the permit terms accomplishing this 

approval into title V permits as 

applicable requirements. As a result, we 

continue to believe revisions to our part 

51 minor NSR regulations are not 

necessary. Where States are considering 

revisions to their current minor NSR 

programs to provide more explicit 

authority for authorizing advance 

approvals, EPA is willing to discuss 

possible revisions and to review any 

rule changes proposed by the State, 

consistent with 40 CFR 51.160 through 

51.164. 

We have also decided to terminate our 

rulemaking proposal for Green Groups. 

As discussed more fully later in this 

preamble, we instead intend to support 

States and sources who wish to explore 

the flexibilities available under the 

existing major NSR regulations. Upon 

request to do so, EPA is willing to assist 

States in an evaluation of their current 

SIPs and to discuss possible 


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14 ‘‘Advance approval’’ generally refers to an 

authorization to make certain categories or types of 

changes which is issued to a source by its 

permitting authority pursuant to a specific 

applicable requirement that requires approval prior 

to making subject changes (e.g., minor and major 

NSR, section 112(g), etc.). Changes within the types 

or categories of changes which are advance 

approved can subsequently be made over the 

duration of the permit without further review or 

approval by the permitting authority with respect 

to the particular applicable requirement for which 

the changes are advance approved. In order to 

explore use of a specific advance approval, a source 

would first propose its use which then could be 

accepted or rejected by the permitting authority, as 

appropriate. Advance approvals authorized under 

one particular applicable requirement (e.g., advance 

approvals under minor NSR) may also address 

additional requirements which may or may not 

themselves require prior approval before the 

specified changes can be made (e.g., MACT, NSPS, 

and State air toxics requirements). 

replacement provisions with them 

consistent with our 40 CFR 51.165 and 

51.166 regulations governing NA NSR 

and PSD SIPs. 

C. What Approach Is Being Used To 

Discuss the Final Actions? 

The final actions relative to parts 70 

and 71 and to parts 51 and 52 are 

subsequently discussed in four sections 

entitled: V. Advance Approval of Minor 

NSR; VI. Alternative Operating 

Scenarios (AOSs); VII. Approved 

Replicable Methodologies (ARMs); and 

VIII. Green Groups. Each of these 

sections first summarizes what we 

proposed and the significant reactions 

of commenters to our proposal, and then 

describes what EPA is finalizing as a 

result. A more comprehensive summary 

and analysis of the written comments 

received can be found in our Response 

to Comments document, which is 

available in the public docket for this 

rulemaking as described in the 

ADDRESSES section of this preamble. 

D. What Are EPA’s Recommendations 

for Public Participation in Flexible 

Permitting? 

Based on our experience with pilot 

permits, we believe that FAPs provide at 

least as much environmental protection 

as conventional permits and often 

promote superior environmental 

performance. Nevertheless, we also 

recognize that FAPs will contain 

features, such as AOSs, ARMs, or 

advance approval of minor NSR, that 

may not be familiar to the reviewing 

public at least until these approaches 

are more widely used. For this reason, 

we encourage permitting authorities to 

consider using their discretion to 

enhance the relevant public 

participation process (as currently 

required in both title V and NSR 

regulations), as appropriate, for a 

particular FAP. Some recommendations 

which we found to work well in the 

context of the pilot permits are 

described below. 

During the permitting process, 

permitting authorities could consider 

making the permit application available 

to the public soon after receipt. We 

found in pilot permits that early 

outreach to the community, rather than 

waiting until the draft permit was 

prepared, was an effective public 

participation strategy. Some permitting 

authorities have also found it useful to 

issue a local press release (in addition 

to a conventional notice in the 

newspaper) when a permit containing 

innovative approaches is released for 

comment. Press releases have potential 

to reach more people and raise local 

awareness of FAP approaches. 

The minimum public comment period 

required for a title V permit renewal or 

significant permit modification is 30 

days. Where a significant amount of a 

permit’s content consists of terms to 

incorporate operational flexibility, we 

suggest that permitting authorities 

consider expanding the comment period 

to 45 days or more. Note, however, that 

for some pilot permits, an up-front 

outreach to the public was sufficient to 

resolve community questions and 

comments early in the process, so that 

by the time of the public hearing and 

comment period no adverse comments 

were received. 

Finally, in order to ensure adequate 

technical support and accessibility for 

the public in their efforts to understand 

and comment upon FAPs, we suggest 

that permitting authorities provide a 

principal point of contact for 

responding to technical questions and 

ensure the availability of draft permits, 

applications, and technical support 

documents on an Internet Web site. We 

believe that any additional costs here 

will be offset by the subsequent 

administrative cost savings to the 

permitting authority resulting from the 

reduced need to process permit 

revisions for sources with FAPs. 

E. What Types of Support Does EPA 

Intend To Offer? 

The Agency anticipates that the effort 

by States and sources to investigate 

FAPs will involve a potentially wide 

spectrum of sources (see section I.A). As 

a result, EPA intends to provide general 

support to States, sources, and the 

public on this and other FAP topics, 

potentially in the form of a Web site, 

workshops, and an EPA network of 

contacts. In addition, we will consider 

other types of support to individual 

States where requested to do so. 

V. Advance Approval of Minor NSR 

A. Background 

Pursuant to section 110(a)(2)(C) of the 

Act and its implementing part 51 

regulations (see 40 CFR 51.160 through 

51.164), States are required to adopt 

minor NSR programs that complement 

their major NSR programs required 

under parts C and D of title I the Act. 

Given the general nature of these 

requirements, the content of minor NSR 

programs varies widely among the 

States. Regardless of their specific 

provisions, through the pilot permit 

experience, we found that State minor 

NSR requirements, where applicable, 

are among the most important in 

designing a FAP for sources making 

frequent and/or rapid physical and 

operational changes. Absent an up-front 

authorization for these changes under 

minor NSR (usually categories or types 

of changes), an individual review by the 

permitting authority typically is 

required at the time each change would 

be approved. 

We refer to up-front, categorical 

authorizations as ‘‘advance approvals’’ 

under minor NSR.14

Upon examining the provisions of 

their minor NSR programs, most of the 

States in which pilot permits were 

conducted (‘‘pilot States’’) found that 

they could issue advance approvals 

under existing minor NSR authority for 

a wide spectrum of changes, provided 

that certain boundary conditions were 

established in the minor NSR permit. 

The conditions established in the minor 

NSR permit to accomplish such 

approvals varied depending upon the 

requirements of the different State 

minor NSR programs and the specific 

facts of the particular situation. 

The pilot permits employed several 

types of techniques to authorize, in a 

practicably enforceable manner, a 

category of changes under minor NSR. 

These techniques, while not necessarily 

transferable in all aspects to other 

permitting situations, do represent fieldtested reference points from which 

similar advance approval approaches 

can be considered by other permitting 

authorities. Ultimately, as with all FAP 

approaches, in order for a minor NSR 

project proposing use of an advance 

approval to be viable, the source must 

first propose it to the permitting 

authority, and the permitting authority 

must then agree to pursue it in the 

context of its own SIP-approved minor 

NSR rules and the case-specific facts. 

Permitting authorities in pilot States 

employed the following approaches and 

safeguards when authorizing the 

advance approval of minor NSR: 

• Scope of minor NSR project— 

Permitting authorities were able to rely 


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upon available flexibility to interpret 

the relevant SIP-approved definitions 

(e.g., emissions unit, facility, source) in 

order to fashion a reasonable scope and 

duration of the minor NSR pilot project 

(i.e., ones that provide appropriate 

operational flexibility for the particular 

situation while ensuring environmental 

protection). In general, these advance 

approvals (i.e., the minor NSR projects) 

consist of several categories of potential 

changes anticipated to occur over an 

appropriately defined period of time 

(e.g., a range of possible types of 

changes, such as ‘‘any of various 

physical changes to the rollers, drive 

mechanism, and other components of 

the coating section within a coating 

line’’). In their permit applications 

requesting advance approval of minor 

NSR, pilot sources described these 

changes in sufficient detail to allow the 

permitting authority to conduct the 

relevant ambient air impact and control 

technology reviews, to determine 

relevant applicable requirements, and to 

assess the compatibility of the changes 

with the approved emissions reduction 

and monitoring approaches. The SIPapproved requirements concerning the 

timeliness of the approved construction 

project vary among the pilots, 

depending upon the content of the 

approved SIP and the ability to 

characterize the project (as deemed 

appropriate by the permitting authority) 

as a series of related ongoing changes. 

• Non-applicability of major NSR—In 

order to assure the types of changes 

authorized under the advance approvals 

for minor NSR could subsequently 

occur without further review and 

approval by the permitting authority, 

the pilot permits contain terms to 

prevent major NSR from also applying 

to the same changes. These terms 

typically involve either a PAL based on 

actual emissions or a potential to emit 

(PTE) cap to prevent an existing source 

from becoming major, depending on 

whether the source is already major or 

not for the pollutant(s) involved in the 

advance approval of minor NSR. 

• Control technology requirements— 

Permitting authorities imposed terms in 

pilot permits as necessary to assure 

compliance with all applicable control 

requirements. In all pilot permits, these 

terms require compliance with Federal 

standards (e.g., MACT, NSPS, 

NESHAPs) that continue to apply 

regardless of the approach taken to 

advance approve minor NSR. In 

addition, the advance approved changes 

must meet any applicable SIP 

requirements, including those in some 

States to apply best available technology 

(BAT) to certain changes subject to their 

minor NSR programs. In those pilot 

permits subject to a State BAT 

requirement, permitting authorities also 

determined whether the advance 

approval allowed discrete changes with 

later construction times and whether 

any initial BAT determination for them 

would require re-evaluation. 

• Protection of ambient standards— 

Pilot permits contain terms judged 

appropriate by the permitting authority 

to assure that the minor NSR pilot 

project would not interfere with the 

attainment and maintenance of the 

NAAQS. Typically, since the advance 

approvals requested by the pilot sources 

involved VOC emissions, pilot projects 

primarily focused on protecting the 

ozone NAAQS. The plantwide VOC 

emissions caps used in the pilots were 

determined to be adequate for purposes 

of safeguarding the ozone NAAQS, but 

for other pollutants (e.g., air toxics) 

States sometimes required a replicable 

modeling procedure to screen the 

impacts of individual emissions 

increases relative to acceptable ambient 

levels. In the case of one pilot, an 

ambient dispersion model, complete 

with implementation assumptions, was 

included in the permit to evaluate any 

new air toxic pollutants of concern, or 

increases in existing toxic pollutants. 

Failure of a particular change to meet 

the screening levels triggered a case-bycase review of that change by the 

permitting authority. Additional 

safeguards were imposed to a varying 

extent, as applicable and as deemed 

appropriate, by the permitting authority 

to address averaging time concerns 

potentially applicable to NAAQSs other 

than ozone. 

• Public participation—Each pilot 

permit project was subjected to an 

opportunity for public comment. Often 

this process was enhanced to facilitate 

better understanding and support for the 

project. (See section IV.D.) 

To augment initial application 

information, pilot States, as part of 

authorizing advance approvals under 

their existing minor NSR programs, 

frequently decided to require sources to 

send a notice to the permitting authority 

contemporaneous with the operation of 

any entirely new emissions unit relying 

upon the advance approval. Pilot States 

were also able to add other permit 

terms, where necessary, to make 

enforceable any advance approvals of 

minor NSR that were authorized. 

Often the permitting authorities were 

able in pilot permits to streamline 

various permit terms so as to 

accomplish multiple objectives and to 

simplify the overall permit. For 

example, the pilot source frequently 

requested its permitting authority to 

establish in the minor NSR permit a 

plantwide VOC emissions cap at a 

particular level for two purposes. First, 

the level was requested to prevent the 

applicability of major NSR. In cases 

where the existing plantwide VOC 

emissions were below the major source 

threshold, the permitting authority 

approved an emissions cap to constrain 

the PTE of the source in a practicably 

enforceable fashion so that it would not 

be a major source of VOC emissions for 

purposes of PSD. In other cases, where 

the source was an existing major 

stationary source for its VOC emissions, 

the source requested a plantwide cap 

level to function as a PAL. In response, 

the permitting authority approved the 

requested PAL consistent with the PAL 

provisions of the major NSR regulations 

(see, e.g., 40 CFR 52.21(aa)). 

Accordingly, compliance with the PAL 

ensures that major NSR would not apply 

to any future changes made at the 

source during the time period over 

which the PAL was effective. Second, 

the VOC emissions level established in 

the PTE cap or in the PAL, as 

applicable, was interpreted by the 

permitting authority as a sufficient 

safeguard to prevent future changes 

approved under minor NSR, in 

combination with existing source 

emissions, from interfering with the 

ozone NAAQS. As such, the VOC 

emissions cap would both prevent major 

NSR from applying to changes at the 

source and ensure that the advance 

approval of changes under minor NSR 

does not jeopardize the NAAQS. Given 

the strategic importance of such caps, 

pilot sources typically maintained a 

significant margin of safety between 

their actual plantwide emissions and 

the level required by their emissions 

cap(s). 

Under the current part 70 regulations, 

any permit terms accomplishing an 

advance approval pursuant to a SIPapproved minor NSR program must be 

incorporated into the title V permit as 

applicable requirements, and combined 

with other permit terms established in 

the part 70 permit as necessary to assure 

compliance with all requirements that 

will apply when the approved changes 

are subsequently implemented. Thus, 

the part 70 permit would include the 

requirements directly addressed in the 

minor NSR permit, as well as other 

requirements that the minor NSR permit 

did not address, if any. Changes 

advance approved under minor NSR can 

then be implemented without any 

further review or approval by the 

permitting authority, provided that the 

terms of the authorizing minor NSR 

permit are effective upon its issuance 

and are incorporated into the title V 


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15See footnote 9 for information on where to 

obtain our report ‘‘Evaluation of the 

Implementation Experience with Innovative Air 

Permits.’’ 

16 In the proposal preamble, we discussed this 

proposed clarification as a revision for purposes of 

AOSs (72 FR 52219). We now believe that it is more 

appropriately portrayed as a revision in support of 

advance approvals under minor NSR. 

permit as applicable requirements 

consistent with 40 CFR 70.2. 

In our evaluation of pilot permits,15

we found that the use of advance 

approvals under minor NSR improved 

operational efficiency at the plants 

because companies knew in advance 

what changes were authorized, making 

resource allocation more efficient and 

accommodating the typically 

incremental, iterative nature of 

industrial process improvements. We 

also found that P2 projects approved in 

advance became more attractive to the 

companies because such projects could 

be undertaken without the delay and 

uncertainty of future case-by-case 

approvals. In addition, P2-related 

projects reduced emissions and enabled 

sources to comply more easily with 

emissions limits such as the plantwide 

emissions caps that were often features 

of the pilot permits. 

As mentioned above, pilot permit 

experience indicates that obtaining 

advance approval under minor NSR is 

often a critical element in the design of 

a FAP. This experience also suggests 

that many State minor NSR programs 

may already provide, in situations 

judged to be appropriate by the 

permitting authority, the legal authority 

necessary to issue minor NSR permits 

that accommodate various types of 

operational flexibility, which can be 

readily incorporated into title V permits. 

Although we did not propose any 

revisions to the minor NSR regulations 

at 40 CFR 51.160 through 51.164, we 

used the proposal preamble to 

encourage States to implement advance 

approvals in response to requests by 

sources under their existing minor NSR 

programs, as appropriate, and to seek 

additional authority to consider source 

proposals where they do not currently 

have such discretion. Based on pilot 

experience, we also expressed our belief 

that permitting authorities can often 

advance approve changes with respect 

to other applicable requirements that 

require a specific authorization without 

regulatory changes. See 72 FR 52215. 

We proposed one revision to part 70 

to facilitate the use of advance 

approvals under minor NSR, which, as 

mentioned, often rely upon one or more 

emissions caps to accomplish their 

authorizations.16 This revision to 40 

CFR 70.5(c)(3)(iii) would clarify that for 

emissions units subject to an annual 

emissions cap, the title V permit 

application may report the units’ 

emissions (in tons per year) as part of 

the aggregate emissions associated with 

the cap, except where more specific 

information is needed to determine and/ 

or assure compliance with an applicable 

requirement. 

As explained in the proposal 

preamble (72 FR 52219), the 

introductory text in 40 CFR 70.5(c) 

states generally that the application 

must include information for each 

emissions unit. Existing 40 CFR 

70.5(c)(3)(iii) further requires that the 

application provide the emissions rate 

in tons per year and in such terms as are 

necessary to establish compliance 

consistent with the applicable reference 

test method. We proposed to clarify this 

regulatory requirement as it applies to 

sources subject to title V permitting 

requirements that employ an annual 

emissions cap (e.g., caps which are 

PALs, limit PTE, and/or enable advance 

approval for minor NSR). In particular, 

we proposed that for the operation of 

any emissions unit authorized under an 

annual emissions cap, a source can meet 

40 CFR 70.5(c)(3)(iii) by reporting the 

aggregate emissions associated with the 

cap. 

We noted in the proposal preamble 

that under the proposed approach, an 

emissions cap could be thought of as a 

constraint on annual emissions from 

each emissions unit under the cap as 

well as on the aggregated emissions 

from the group of units. That is, in the 

extreme, a unit could emit up to the full 

amount of the cap if all other units 

under the cap had zero emissions. Thus, 

for a group of emissions units under an 

annual emissions cap, the 40 CFR 

70.5(c)(3)(iii) requirement for unit-byunit emissions figures could be met by 

reporting in the permit application that 

the emissions cap represents the upper 

limit on emissions both from each unit 

in the group and from the entire group. 

The proposed revision to 40 CFR 

70.5(c)(3)(iii) would simply clarify that 

in this particular situation, more 

specificity is not needed in the title V 

permit application (unless additional 

specificity is necessary to determine 

applicability or to assure compliance 

with one or more potentially applicable 

requirements). Reporting emissions data 

in this manner would be permissible 

except where the permitting authority 

determined that more specific emissions 

information was needed (e.g., where an 

applicable requirement for a specific 

emissions unit depends on the 

emissions type or level, or where annual 

emissions figures are needed to assess 

compliance for the unit). 

We did not propose any other 

revisions to part 70 related to advance 

approvals under minor NSR. Part 70 

already requires incorporation into a 

title V permit of the terms of any State 

minor NSR permit, including those 

issued to advance approved changes. 

These permit terms are themselves 

applicable requirements as defined in 

40 CFR 70.2. Sometimes, however, the 

permitting authority may need to 

include other terms in the title V permit, 

in addition to the terms of a minor NSR 

permit authorizing advance approved 

changes, so that the changes can be 

made without further review or 

approval. This would be the case if 

there were other applicable 

requirements also implicated by the 

advance approved changes that were not 

addressed in the minor NSR permit. In 

such cases, the part 70 permit must 

assure compliance with these applicable 

requirements as well. 

We pointed out in the proposal 

preamble that an advance approval that 

is incorporated into a part 70 permit 

remains subject to all the conditions of 

the underlying authorization. For 

example, if an underlying minor NSR 

permit is contingent upon the source 

commencing construction of the 

authorized change(s) within a certain 

period, the part 70 permit must contain 

terms to ensure that the part 70 permit 

does not authorize operation if the 

source fails to meet the required 

deadline. The source is responsible for 

obtaining any extensions or additional 

authorizations as necessary to keep the 

advance approval in the part 70 permit 

in effect. See 72 FR 52217, footnote 23. 

In the proposal preamble we also 

noted that an advance approval under 

minor NSR may be added to a title V 

permit through permit issuance or 

renewal or through the permit revision 

process. When an existing permit is to 

be revised to incorporate an advance 

approval of minor NSR, the appropriate 

revision track depends on the nature of 

the proposed advance approval and the 

process under which it was established 

(e.g., whether the authorizing NSR 

process also addressed title V 

requirements). See 40 CFR 70.7(d) & (e). 

Note also that the permit shield (where 

available and granted by the permitting 

authority) can be extended to advance 

approvals added through permit 

issuance or permit renewal or to those 

added during a significant permit 

modification, but not to those added 

through other permit revision 

procedures. 

Commenters generally agreed that no 

Federal rulemaking is needed on the 

advance approval of changes under 

minor NSR because States currently can, 


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17As noted previously, our proposed and final 

actions related to AOSs apply equally to part 70 and 

part 71. For simplicity, we refer only to part 70 in 

this preamble discussion. The provisions of part 71 

generally mirror those of part 70, so the part 71 

paragraphs that correspond to the cited paragraphs 

in part 70 differ only by designating part 71 instead 

of part 70 (unless otherwise noted). For example, 

the AOS provisions of part 71 are found at 40 CFR 

71.6(a)(9) rather than at 40 CFR 70.6(a)(9). 

at their discretion, employ a variety of 

advance approval techniques under 

their existing rules and authorities. 

Some commenters indicated that any 

new Federal rules might actually 

constrain innovation by the States in 

this area, rather than enable greater use 

of advance approvals. A commenter 

noted that some State minor NSR 

programs require contemporaneous 

minor source BACT determinations that 

are not consistent with the advance 

approval of a wide spectrum of changes, 

and some expressed concern about the 

burden and other costs that advance 

approval permits could impose upon 

State agencies for uncertain projects and 

uncertain environmental gain. 

Several industry commenters urged 

EPA to further encourage States to issue 

advance approvals under minor NSR. 

On the other hand, an association of 

State and local air agencies indicated 

that States do not need our 

encouragement to use their minor NSR 

programs for advance approvals as 

appropriate, and objected that the 

discussion in the proposal preamble 

could be misinterpreted as having 

regulatory force. This commenter 

believed that advance approvals cannot 

be issued under some minor NSR 

programs. 

We received few comments on our 

proposal to revise 40 CFR 70.5(c)(3)(iii). 

One State agency indicated that for a 

combined NSR/title V permit program 

unit-specific information is often 

needed for several purposes, including 

control technology assessment, 

modeling, compliance assessment, 

determining the appropriate level and 

frequency of monitoring, etc., even if the 

unit is covered by an emissions cap. 

This commenter wanted to retain the 

ability to require such information as 

needed. 

B. Final Action 

Consistent with our proposal, we are 

not revising any part 51 requirement in 

order to require or facilitate advance 

approvals under minor NSR (or under 

any other applicable requirement). We 

continue to believe that many States are 

able to advance approve changes under 

their existing minor NSR programs, to 

the extent that they believe it is 

appropriate to do so. As mentioned by 

a commenter, EPA recognizes, however, 

that certain minor NSR rules are not as 

amenable to advance approval as are 

others. In particular, advance approvals 

under State rules that require sources to 

employ best available technology 

(where such rules are judged to be open 

to advance approval by the permitting 

authority and appropriate for use in a 

particular case) may require additional 

permit terms as necessary to assure that 

best available technology will be used. 

We would also like to emphasize that 

permitting authorities, operating under 

their existing minor NSR regulations 

and authorities, must include terms as 

necessary to ensure the practical 

enforceability of advance approvals. For 

example, for purposes of tracking 

compliance with an emissions cap 

established in minor NSR, the minor 

NSR permit should contain sufficient 

terms that collectively act to monitor 

and quantify the relevant emissions at 

the site over the applicable time period. 

We are finalizing the proposed 

revision to the title V permit application 

requirements at 40 CFR 70.5(c)(3)(iii) 

with minor changes. As proposed, the 

final revisions clarify that for emissions 

units subject to an annual emissions 

cap, the application may report the 

units’ emissions as part of the aggregate 

emissions associated with the cap, 

except where the permitting authority 

determines that more specific 

information is needed. The EPA agrees 

with the commenter who wanted to 

assure that permitting authorities 

retained the ability to require more unitspecific information as needed to 

develop permit terms needed to 

determine or to assure compliance with 

all applicable requirements relevant to 

emissions units included under the 

emissions cap. As a result, the final rule 

language now indicates that unitspecific information must be provided 

whenever it is needed, including where 

necessary to determine or assure 

compliance with an applicable 

requirement. 

We believe that the revised 40 CFR 

70.5(c)(3)(iii) will facilitate the use of 

advance approvals under emissions 

caps. This combination of FAP tools 

was repeatedly validated in our 

evaluation of pilot permits. In addition, 

emissions caps were clearly shown to 

promote emissions reductions as 

sources sought to create ‘‘head room’’ 

under their caps to allow for additional 

growth. No other changes to part 70 are 

being made for the purposes of 

accomplishing advance approvals under 

minor NSR or incorporating them into 

part 70 permits. However, we again 

stress that an advance approval which is 

incorporated into a part 70 permit must 

include all the conditions of the 

underlying authorization. The source is 

responsible for obtaining any extensions 

or additional authorizations as 

necessary to keep the advance approval 

in the part 70 permit in effect. 

While we believe that appropriately 

crafted advance approvals of minor NSR 

can, in certain cases, facilitate 

operational flexibility while protecting 

the environment (at least as effectively 

as would the individual review of each 

change as it occurs), we do not intend 

to imply that States should issue such 

advance approvals in any cases that 

would be inconsistent with their 

existing rules or, in their judgment, 

would be inappropriate. As a general 

matter, the permitting authorities have 

authority to decide, on a case-by-case 

basis, the merits of granting an advance 

approval of minor NSR to a particular 

requesting source. Additionally we do 

not intend to imply that States must 

revise their current rules to facilitate 

advance approvals in the future. Rather, 

where existing rules may limit advance 

approval opportunities, EPA simply 

encourages States to consider the 

adoption of more flexible minor NSR 

rules under the broad governing 

regulations in 40 CFR 51.160–51.164. It 

is EPA’s policy to support State use of 

advance approvals under minor NSR, 

where they deem them appropriate, and 

particularly where States expect benefits 

similar to those found in our evaluation 

of pilot permits to occur. 

We also acknowledge that States, in 

order to respond to requests by sources 

for advance approval of minor NSR, 

may incur additional up-front 

development costs for which they may 

have to charge additional service fees. 

However, based on the pilot permit 

experience, annual administrative costs 

associated with FAPs should decline 

over time and, over the life of the 

permit, be less than those for 

conventional permits. 

VI. Alternative Operating Scenarios 

A. Background 

Since they were initially promulgated 

in 1992, the part 70 State operating 

permit program regulations have 

included the AOS provisions found at 

40 CFR 70.6(a)(9).17 These provisions 

were promulgated consistent with 

section 502(b)(6) of the Act, which 

requires permit programs to include 

provisions for adequate, streamlined 

and reasonable procedures for 

expeditious processing of the 

application and expeditious review of 

permit actions. Accordingly, 40 CFR 

70.6(a)(9) is a mandatory part 70 

program element, but its use is 

discretionary on the part of both sources 


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18Alternatively, if a title V permit is issued 

without an AOS, it must nonetheless, pursuant to 

40 CFR 70.6(a)(1), contain terms sufficient to assure 

compliance with all applicable requirements at the 

time of permit issuance. While permissible to do so, 

failure to address anticipated changes in an AOS 

which are not otherwise sufficiently addressed by 

the included applicable requirements may result in 

the need for a permit revision or, if available under 

the State’s part 70 program, an off-permit action 

which would require an advance notice and would 

not be eligible for the permit shield. On the other 

hand, if an AOS were authorized in a title V permit, 

then the source could subsequently implement it 

without further review or approval, provided that 

such implementation was contemporaneously 

recorded in an on-site log upon making the relevant 

change(s). 

19 ‘‘Applicable requirement’’ as defined in 40 CFR 

70.2 includes all the separate emissions reduction, 

monitoring, recordkeeping, and reporting 

requirements of a particular standard or SIP 

regulation and all the terms and conditions of 

preconstruction permits issued pursuant to 

regulations approved or promulgated through 

rulemaking under title I of the Act. 

20Failure to anticipate and include a particular 

change in a part 70 permit (including under an 

AOS) does not in and of itself bar the source from 

implementing the change, without a permit 

revision, if it can satisfy the requirements of the offpermit provisions in an approved part 70 permit 

program. Cf. 40 CFR 70.4(b)(12) and (b)(14). 

21 In the 1990s, we proposed certain clarifications 

and modifications to the part 70 regulations. See 

generally 60 FR 45529 (August 31, 1995) and 59 FR 

44460 (August 29, 1994). In those proposals, among 

other things, we discussed the concept of ‘‘advance 

NSR’’ in relation to AOSs, and proposed a 

definition for ‘‘alternative operating scenarios.’’ In 

August 2000, we issued a draft guidance document 

called White Paper Number 3 (64 FR 49803, Aug. 

15, 2000), on which we solicited comment. That 

draft guidance addressed various flexible permitting 

approaches, including the use of the AOS 

provisions. In fashioning the proposal on which 

this final rule is based, we considered a summary 

of the comments received on the prior proposals 

that addressed AOSs (which is available in the 

docket) and the relevant individual comments 

received on the draft guidance (which are also in 

the docket). 

and permitting authorities. In particular, 

40 CFR 70.6(a)(9) provides that any 

permit issued under part 70 must 

include terms and conditions for 

reasonably anticipated operating 

scenarios identified by the source in its 

application, as approved by the 

permitting authority.18

The Agency outlined broad policy on 

the design and implementation of AOSs 

in our final part 70 rule and then further 

explained our policy in the September 

12, 2007 proposal. In the final part 70 

rule, we emphasized the importance of 

40 CFR 70.6(a)(9), noting that a permit 

that contains approved AOSs ‘‘will be a 

more complete representation of the 

operation at the permitted facility.’’ See 

57 FR 32276. We also explained that 

once a permit with approved AOSs is 

issued, the need for additional permit 

modifications will be substantially 

reduced since the permit will already 

contain appropriate terms and 

conditions to accommodate the 

approved operating scenarios. In the 

final part 70 rule, we did not place any 

restrictions on the types of operations 

that could qualify as a reasonably 

anticipated operating scenario. Instead, 

the Agency deferred to the process 

under which a candidate AOS would be 

identified by the source and considered 

for approval by the permitting authority 

to establish those AOSs which would be 

appropriate for streamlining purposes. 

In the September 12, 2007 proposal, 

the Agency explained that, when 

deciding to approve an AOS, the 

permitting authority must ensure that 

the proposed operating scenarios are 

adequately described for each relevant 

emissions unit such that all applicable 

requirements 19 20 associated with each 

scenario are identified and appropriate 

terms and conditions to assure 

compliance with these requirements 

(when they become applicable) are 

included in the permit. We also noted 

that the source must obtain all specific 

authorizations which are required under 

any applicable requirements (e.g., those 

under minor NSR) in order to 

implement any AOS approved by the 

permitting authority without any further 

review or approval on their part. In 

addition, EPA affirmed that, while 

States must have sufficient authority in 

their part 70 programs to grant an AOS, 

if proposed by a source, permitting 

authorities retain the discretion as to the 

appropriateness of doing so on a caseby-case basis, depending on the specific 

facts of each situation. The Agency 

further conveyed that changing to an 

AOS can not be used to circumvent 

applicable requirements or to avoid an 

enforcement action. A switch to an AOS 

does not affect the compliance 

obligations applicable to a source under 

its previous operation. 

As with advance approvals, we noted 

in the proposal preamble that an AOS 

may be added to a title V permit through 

permit issuance or renewal or through 

the permit revision process. When an 

existing permit is to be modified, the 

appropriate modification track 

(significant or minor) depends on the 

nature of the proposed AOS (or the 

proposed revision to an AOS) and 

whether it would qualify for treatment 

as a minor permit modification under 

existing 40 CFR 70.7(e)(2)(i). We noted 

also that the permit shield (where 

available and granted by the permitting 

authority) can be extended to AOSs 

added during permit issuance or 

renewal or through a significant permit 

modification, but not to those added 

through minor permit modification 

procedures (per existing 40 CFR 

70.7(e)(2)(vi)). 

In addition, we pointed out in the 

proposal preamble that the contents of 

the AOS log, such as its description of 

requirements that apply to a particular 

AOS, are not permit provisions for 

purposes of the permit shield. Thus, a 

source would not be deemed to be in 

compliance with the applicable 

requirements of the Act simply because 

it was in compliance with the 

description of applicable requirements 

contained in the log, if that description 

were inaccurate. 

On a few occasions prior to our 

September 2007 proposal, we proposed 

rulemaking and guidance on AOSs. 

These proposals focused primarily on 

how AOSs might relate to advance 

approvals. We did not finalize our 

proposals.21

In the preamble to our September 

2007 proposed rulemaking we also 

proposed several specific revisions to 

the existing part 70 and part 71 

regulations as they apply to AOSs. The 

Agency stated that the primary purpose 

of these revisions to parts 70 and 71 is 

to build upon the existing regulatory 

framework and to ensure that the 

flexible permitting approaches with 

which we have experience are more 

readily and widely used. 

We specifically proposed to define the 

term ‘‘alternative operating scenario 

(AOS)’’ in 40 CFR 70.2 and to codify 

certain related requirements to promote 

consistency and a common 

understanding of AOSs. The proposed 

definition read as follows: 

Alternative operating scenario (AOS) 

means a scenario authorized in a part 70 

permit that involves a physical or operational 

change at the part 70 source for a particular 

emissions unit, and that subjects the unit to 

one or more applicable requirements that 

differ from those applicable to the emissions 

unit prior to implementation of the change or 

renders inapplicable one or more 

requirements previously applicable to the 

emissions unit prior to implementation of the 

change. 

The other proposed revisions 

included the following: 

• Revisions to 40 CFR 70.5(c)(7) to 

clarify that the permitting authority may 

require the source to include in its 

application additional information as 

necessary to define permit terms and 

conditions implementing any AOS; 

• Additional revisions to 40 CFR 

70.5(c)(7) to clarify that the application 

must include a demonstration that the 

source has obtained all authorizations 

required under the applicable 

requirements that apply to any AOS, or 

a certification that the source has 

submitted a complete application for 

such authorizations; 


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22 In streamlining, the compliance terms are based 

on the most stringent requirement applicable to the 

proposed changes and are effective upon permit 

issuance. In guidance generally referred to as 

‘‘White Paper Number 2,’’ we interpreted our part 

70 rules to allow sources to streamline multiple 

applicable requirements that apply to the same 

emissions unit(s) into a single set of requirements 

that assure compliance with all the subsumed 

applicable requirements. See ‘‘White Paper Number 

2 for Improved Implementation of the Part 70 

Operating Permits Program,’’ March 5, 1996, 

(http://www.epa.gov/ttn/oarpg/t5/memoranda/ 

wtppr-2.pdf). If all the applicable requirements that 

apply to a set of changes are streamlined in the 

permit and the permitting authority approves the 

proposed streamlining, the source need only 

comply with the streamlined requirement. This 

benefits all parties by simplifying and focusing the 

compliance requirements contained in the permit. 

As a result, a source relying upon emissions limit 

streamlining implicitly has chosen not to pursue 

the use of AOSs, since the source would always be 

required to meet the worst case scenario at all times 

regardless of which scenario was actually operated. 

As explained in White Paper Number 2, sources 

that seek to streamline applicable requirements 

should submit their request as part of their title V 

permit application, identifying the proposed 

streamlined requirements and providing a 

demonstration that the streamlined requirements 

assure compliance with all the underlying, 

subsumed applicable requirements. Upon approval 

of the streamlined requirements, the permitting 

authority would place the requirements in the title 

V permit (see White Paper Number 2 for the 

complete guidance on the streamlining of 

applicable requirements). A source can request in 

its title V permit application that the permitting 

authority streamline an advance approval already 

authorized under minor NSR with all other relevant 

applicable requirements. For the complete text of 

the elements that must be included in a title V 

application, see 40 CFR 70.5(c). 

• Revisions to the compliance plan 

requirements for applications under 40 

CFR 70.5(c)(8) to clarify that such plans 

must address AOSs when an application 

includes them; 

• Revisions to 40 CFR 

70.6(a)(3)(iii)(A) to require the source to 

identify in the 6-month monitoring 

report any AOSs implemented during 

the reporting period; 

• Revisions to 40 CFR 70.6(a)(9)(i) to 

clarify what specific information must 

be included in the AOS log (already 

required under the existing regulations) 

when an AOS is implemented; 

• Revisions to 40 CFR 70.6(a)(9)(iii) to 

clarify what constitutes an acceptable 

description in a title V permit for an 

AOS; 

• Additional revisions to 40 CFR 

70.6(a)(9)(iii) to make clear that the 

permitting authority cannot grant final 

approval of an AOS until the source has 

obtained all the authorizations required 

under the applicable requirements 

relevant to that AOS; and 

• Revisions to use consistent 

terminology wherever the rules refer to 

AOSs. 

The commenters on our proposal 

generally indicated an overall consensus 

that the proposed additional 

requirements for AOSs are not necessary 

or useful. They pointed out that AOSs 

are already provided for in part 70, and 

that permitting authorities have been 

implementing these provisions without 

difficulty for years. On the other hand, 

some commenters believe that use of 

AOS provisions, in their experience, has 

not been necessary in some States. In 

these States, commenters assert that 

permitting authorities have been able to 

address prospective operating scenarios 

identified by the source by simply 

including in the title V permit the 

applicable requirements and 

corresponding compliance assurance 

terms (i.e., monitoring, recordkeeping, 

and reporting requirements) related to 

these scenarios. Commenters further 

asserted that in many cases, such terms 

are adequate to assure compliances at 

all times without AOS-specific logs or 

reports. Therefore, they objected to the 

level of detail proposed for the content 

of AOS logs and permit terms, and to 

the requirement to document AOS 

implementation in the 6-month 

monitoring reports. These commenters 

also claim that the proposed 

requirements would be unnecessarily 

burdensome and would not improve 

compliance assurance. Moreover, some 

States indicated the rulemaking on 

AOSs, as proposed, might have the 

unintended consequence of stifling 

innovative approaches to operational 

flexibility by prescribing a rigid 

approach to AOSs. These commenters 

collectively seek to preserve the current 

levels of available flexibility and the 

avenues for accessing it. 

We also received a number of 

comments specific to our proposed 

definition of AOS. Most of these 

commenters objected to the inclusion of 

the phrase ‘‘physical or operational 

change’’ in the definition, believing that 

this will cause confusion with the 

similar phrase ‘‘physical change or 

change in the method of operation’’ 

used in the NSR program. 

B. Final Action 

Based on the comments received, the 

States’ current approach to 

implementing existing AOS rules 

(described above) has proven to be 

fundamentally sound and effective. We 

are persuaded that the proposed specific 

revisions which would be new 

requirements would not promote more 

widespread use of AOSs and other 

effective strategies than does the current 

process-based approach and that these 

revisions might instead be 

counterproductive. The Agency has 

therefore decided to not impose any 

additional requirements onto an already 

working approach. Rather, we intend to 

preserve the flexibility available under 

existing rules by codifying a definition 

of ‘‘AOS’’ (as modified in response to 

comments received) and promulgating a 

few minor clarifications to the existing 

rules intended to improve certainty. The 

Agency believes that these actions, in 

light of the comments received, are 

appropriate and consistent with the 

basic streamlining tenets of section 

502(b)(6) of the Act on which the 

provisions for AOSs are based. 

Commenters have convinced us that 

permitting authorities are currently able, 

in response to a request by a source for 

more operational flexibility, to develop 

title V permits which allow the source 

to shift among identified operating 

scenarios. Commenters correctly point 

out that, under the current rule, in lieu 

of using an AOS, this result might be 

achieved by relying on the authority and 

provisions contained in the applicable 

requirements implicated by the 

anticipated scenario. This would be true 

where the applicable monitoring and/or 

reporting requirements assure 

compliance (including requirements for 

records that effectively identify when 

the scenario operates) or where the 

source and permitting authority have 

opted to streamline the relevant 

applicable requirements consistent with 

White Paper Number 2.22 Conversely, 

AOSs would be useful where additional 

records are needed to document when a 

new scenario occurs. We are therefore 

agreeing with commenters that, for 

flexibility purposes, the current process 

is effective in developing: (1) 

Appropriate permit design options to 

access the inherent flexibility under 

relevant applicable requirements to 

provide for alternative modes of 

operation; and (2) AOSs which are 

determined to be adequate and 

otherwise appropriate by the permitting 

authority in reducing administrative 

costs while assuring compliance with 

all applicable requirements. 

In finalizing these limited revisions, 

the Agency wishes to make some 

additional observations relative to 

AOSs. First, as in the past, an AOS is 

essentially defined through the process 

used to establish it. This allows AOSs 

to encompass situations in which the 

relevant applicable requirements might 

be sufficient with respect to monitoring 

and/or recordkeeping to determine the 

compliance status of the unit at a given 

time but the source and permitting 

authority have nonetheless opted to use 

an AOS for greater certainty. We 

continue to believe that this result is 

acceptable if the source and permitting 

authority choose to pursue it. Although 

a log is required to record 


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23Alternative operating scenarios, in contrast to 

advance approvals of minor NSR, more often 

involve the reversible shifts in operation of existing 

emissions units which implicate different 

applicable requirements and require additional 

monitoring and/or recordkeeping to determine what 

requirements apply at a particular time. On the 

other hand, advance approvals of minor NSR 

generally involve either: (1) The implementation of 

a modification to any existing unit which 

irreversibly triggers new applicable requirements 

such that the emission unit cannot return to its 

preconstruction status in the future; or (2) the 

construction and operation of a new unit which 

represents the beginning of the initial or baseline 

operation of the unit. In some cases, however, one 

or more AOSs may be used to complement an 

advance approval. For example, a complementary 

AOS might be useful where the source anticipates 

varying operation of the future or changed existing 

emissions unit in a manner that would implicate a 

set of applicable requirements different from those 

of the minor NSR advance approval. 

While AOSs and advance approvals of minor 

NSR are typically used as separate FAP approaches, 

sources and permitting authorities are not 

precluded from relying upon AOS authority to 

establish an advance approval of minor NSR in a 

title V permit. For example, an AOS might be 

appropriate where a different control approach 

would not be effective until and unless a particular 

change were made to an existing emissions unit. 

implementation of an AOS, the primary 

objectives of section 502(b)(6) are still 

met, since the authorized changes can 

subsequently occur without further 

review or approval by the permitting 

authority. On the other hand, in the 

absence of an AOS, the title V permit 

authorizing multiple operating scenarios 

at a particular emissions unit which 

implicate different applicable 

requirements must require sufficient 

records to determine, at any point in 

time, which requirements apply to the 

unit and whether the unit is in 

compliance with each of them. If permit 

terms ensuring this result can be written 

by relying upon the authority contained 

in the relevant applicable requirements 

themselves and not that in 40 CFR 

70.6(a)(9), then there would be no need 

for the permitting authority to approve 

an AOS. Conversely, if the permitting 

authority would need the authority 

contained in 40 CFR 70.6(a)(9), for 

example, to require the operational and/ 

or material use records needed to 

determine which scenario is operating 

at any time, then the permitting 

authority, as appropriate, could either 

authorize these changes as AOSs (if first 

proposed by the source) or reject the 

operating scenario proposed without 

this recordkeeping and address future 

changes under the applicable off permit 

(as available from the permitting 

authority) or permit revision provisions. 

We have decided to finalize a 

definition for ‘‘alternative operating 

scenario (AOS)’’ and to revise the 

various references to AOSs to use 

consistent terminology. We believe that 

the term ‘‘AOS’’ should be defined and 

used consistently in the regulations. 

The final definition reads as follows: 

Alternative operating scenario (AOS) 

means a scenario authorized in a part 70 

permit that involves a change at the part 70 

source for a particular emissions unit, and 

that either results in the unit being subject to 

one or more applicable requirements which 

differ from those applicable to the emissions 

unit prior to implementation of the change or 

renders inapplicable one or more 

requirements previously applicable to the 

emissions unit prior to implementation of the 

change. 

The final definition is different from 

the proposed definition in that we no 

longer define an AOS as involving a 

‘‘physical or operational change.’’ We 

agree with the commenters that 

inclusion of the phrase ‘‘physical or 

operational change’’ invites confusion 

with the major NSR provisions. 

The deletion of this phrase also helps 

to clarify the interface between the 

concepts of advance approvals (e.g., 

advance approval of minor NSR) and 

AOSs. As mentioned in the previous 

section, we recognized, based on our 

evaluation of pilot permits, that 

potentially many States could currently 

advance approve minor NSR and then 

incorporate the terms of the authorizing 

minor NSR permit into the title V 

permit as applicable requirements. 

While not proposing to do so, the 

Agency nonetheless took comment on 

whether some aspects of such advance 

approvals might also involve AOSs. 

Commenters strongly affirmed the 

current abilities of States to authorize 

advance approvals of minor NSR and 

that these authorizations should be kept 

generally separate and distinct from 

AOSs. The EPA agrees with these 

commenters and finds that the deletion 

of the phrase is useful in maintaining 

this separation.23 Thus, in most cases, 

advance approval of minor NSR is 

simply another example of how the 

inherent flexibility in an applicable 

requirement can be accessed without 

the need for an AOS. 

The deletion of the phrase ‘‘physical 

or operational’’ is also consistent with 

our previously stated decision to 

preserve the scope and operation of the 

current rule regarding AOSs. That is, the 

Agency believes, in light of comments 

received, it is not necessary to constrain 

the scope of AOSs by limiting them to 

those triggered by a ‘‘physical or 

operational’’ change when the current 

approach only restricts the 

establishment of AOSs to those which 

both the source and permitting authority 

must agree are appropriate and are 

consistent with all underlying 

applicable requirements, including 

those involving NSR. The existing 

process to establish an AOS in a title V 

permit also addresses any potential 

concerns that too many AOSs might be 

proposed, including, for example, those 

involving a switch from one compliance 

option to another as provided for under 

a MACT (or other) standard. We do not 

believe that the population of AOSs 

actually approved will be impacted by 

the deletion. First, the deletion just 

preserves the status quo. Moreover, 

sources and permitting authorities are 

unlikely to establish alternative MACT 

compliance options as one or more 

AOSs, since the extensive monitoring 

and recordkeeping requirements 

typically found in MACT standards can 

themselves authorize shifts in 

compliance options after being 

incorporated into a title V permit. 

In addition to adding a revised 

definition of AOS and standardizing the 

part 70 references to AOSs to use 

consistent terminology, we have 

decided to finalize three other aspects of 

our proposed rules which we believe 

will also preserve the basic operation of 

the current rule while improving 

certainty. First, we are essentially 

finalizing the proposed revisions to 40 

CFR 70.5(c)(7) to clarify that the 

permitting authority shall require the 

source to include in its application 

additional information as necessary to 

define permit terms and conditions to 

implement any AOS. Note that the final 

version obligates the permitting 

authority to require, as contained in the 

proposal, additional information to 

develop and implement AOSs, but this 

requirement only extends to situations 

where the permitting authority believe 

such information is necessary. We 

believe that this obligation has always 

been implicit in the previously existing 

language of the section, but that an 

explicit clarification is appropriate. 

Second, we are finalizing our proposed 

revisions to the compliance plan 

requirements for applications under 40 

CFR 70.5(c)(8) to clarify that such plans 

must address proposed AOSs when an 

application includes them. We believe 

that this clarification also merely 

codifies existing policy and is 

appropriate to ensure that all applicants 

understand what is required for AOSs 

when a source chooses to request one. 

Finally, we are finalizing our 

proposed revisions to 40 CFR 70.5(c)(7) 

to specify that the application must 

include a demonstration that the source 

has obtained all authorizations required 

under the applicable requirements that 

apply to any AOS being requested for 

approval by the source, or a certification 

that the source has submitted a 

complete application for such 

authorizations, and additional revisions 


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24Under the authority of 40 CFR 70.6(a)(3), 

however, the permit can also contain additional 

streamlined monitoring or gap-filling periodic 

to 40 CFR 70.6(a)(9)(iii) to make clear 

that the permitting authority cannot 

grant final approval of an AOS until the 

source has obtained all the 

authorizations required under the 

applicable requirements relevant to that 

AOS. These actions again just codify 

existing policy and should be 

manageable given the relatively few 

AOSs that may also involve an advance 

approval (e.g., the preconstruction 

approval of a new unit requiring AOSs 

for its multiple future operating modes 

or for its involvement as a replacement 

component unit in an AOS for an 

existing emissions unit at the same 

source). This clarification will also help 

to ensure that any additional resources 

required for AOS development are 

focused on sources which are likely to 

use them and to eliminate any 

confusion over a provision approved 

without such authorizations. 

As noted above, we have been 

convinced by numerous commenters 

from both State and local permitting 

agencies and industry that the other 

more specific requirements proposed for 

AOSs are unnecessary and potentially 

could undermine the streamlining 

objectives of the AOS provisions. We 

have, therefore, elected to not finalize 

them. In particular, proposed revisions 

that we are not finalizing are the 

following: 

• Revisions to 40 CFR 

70.6(a)(3)(iii)(A) to require additionally 

that the source identify in the 6-month 

monitoring report any AOSs 

implemented during the reporting 

period; 

• Revisions to 40 CFR 70.6(a)(9)(i) to 

clarify the type of information that must 

be included in the AOS log when an 

AOS is implemented; and 

• Revisions to 40 CFR 70.6(a)(9)(iii) to 

clarify what constitutes an acceptable 

description in a title V permit for an 

AOS. 

Based on comments received, the 

Agency is persuaded that the new 

reporting requirements, as proposed for 

inclusion in the 6-month monitoring 

report, would not be necessary or 

useful. We generally believe that 

sufficient information about AOSs and 

their use already exists from the 

combination of the AOS provisions 

contained in the permit and the 

required reports concerning annual 

compliance certification and the prompt 

reporting of deviations from achieving 

compliance with the AOS terms of the 

permit. In addition, pursuant to 40 CFR 

70.6(a)(9)(i), permits must require the 

source to keep an on-site log that 

contemporaneously records the 

implementation of any AOS which 

occurred during the duration of the title 

V permit. Pursuant to 40 CFR 

70.6(a)(3)(ii)(B), the source owner must 

keep these records at their site for at 

least 5 years. Under 40 CFR 70.6(a)(6)(v) 

the source must submit to the 

permitting authority, upon their request, 

this and any other on-site information 

which is required to be kept by the 

permit or is needed by the permitting 

authority to determine compliance with 

the permit. 

The Agency also agrees with 

commenters that there is no need to 

standardize the content of AOS logs and 

permit provisions. While not finalizing 

any specific content or format 

requirements for permits or logs 

involving AOSs, the Agency notes that 

there remains an overall obligation that 

the information which is required by the 

permitting authority for AOSs must be 

adequate to assure compliance with all 

applicable requirements. Thus, the 

structure of the AOS implementation 

log required by the permitting authority 

is relatively flexible, provided that the 

required records are, in total, sufficient 

to verify the requirements applicable to 

a particular operating scenario and 

whether the source was in compliance 

with them. 

VII. Approved Replicable 

Methodologies 

A. Background 

Under the Act, title V permits are 

required to assure compliance with all 

applicable requirements. Sometimes, 

circumstances change for a source that 

bring about the need to recalculate or 

update a value used either in 

determining the compliance status of 

the source with an applicable 

requirement or in determining the 

applicability of a requirement. An 

advance approval under minor NSR or 

an AOS can incorporate flexibility into 

a permit, but the scope of changes that 

can be authorized in them can be 

severely limited with respect to a 

particular applicable requirement, if 

such recalculations or updates are 

involved and require case-by-case 

review/approval and a permit revision 

to ensure ongoing implementation. To 

facilitate such implementation, and to 

encourage additional permitting 

techniques that reduce the need for 

permit revisions (in a manner consistent 

with part 70), we proposed the use of 

ARMs. 

In our September 12, 2007 proposal 

on flexible air permitting, EPA included 

provisions dealing with ARMs. Therein 

we stated our belief that ARMs are 

available now as one type of permit 

term described in 40 CFR 70.6(a)(1) that 

can assure compliance with all 

applicable requirements at the time of 

permit issuance. In order to establish an 

ARM, a source would first propose one 

to the permitting authority who would 

then consider the appropriateness of 

authorizing it on a case-by-case basis, 

depending on the specific facts of the 

situation. In all cases, the 

implementation of the proposed ARM 

must be consistent with all underlying 

applicable requirements. 

While we believed that ARMs as 

proposed are generally available 

without any rulemaking (depending on 

the structure and content of individual 

part 70 programs, as approved for 

States), we proposed to codify certain 

additions to 40 CFR parts 70 and 71 in 

order to promote greater certainty and 

use of ARMs, where the permitting 

authority decides it is appropriate to do 

so. 

In particular, we proposed to define 

ARMs at 40 CFR 70.2 as part 70 permit 

terms that: (1) Specify a protocol which 

is consistent with and implements an 

applicable requirement or requirement 

of part 70, such that the protocol is 

based on sound scientific/mathematical 

principles and provides reproducible 

results using the same inputs; and (2) 

require the results of that protocol to be 

used for assuring compliance with such 

applicable requirement or requirement 

of part 70, including where an ARM is 

used for determining applicability of a 

specific requirement to a particular 

change. In the proposal preamble we 

also noted that within the scope of this 

definition, an ARM may be used to 

assure that a given requirement does not 

apply in a particular situation. 

As proposed, the terms of an ARM 

must specify when the ARM is to be 

used, the applicable methodology (e.g., 

equation or algorithm), and the purpose 

for which the output obtained upon the 

execution of the prescribed 

methodology will be used (e.g., to 

determine compliance with an 

applicable requirement or to modify the 

level of the parameters used to 

determine compliance in the future). All 

necessary terms and conditions must be 

included in the permit at the time the 

ARM is approved so that no permit 

revision will be required in the future to 

implement the ARM. 

We emphasized that an ARM, like any 

provision of a part 70 permit, cannot 

modify, supersede, or replace an 

applicable requirement, including, but 

not limited to, any monitoring, 

recordkeeping, or reporting required 

under applicable requirements.24


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monitoring as needed to assure compliance with 

applicable requirements. We pointed out that an 

ARM could operate on the information gathered 

under these obligations as well. 

25Although an ARM can reduce the number of 

permit revisions a source must make, it cannot 

modify an applicable requirement. For example, 

there are some instances where the applicable 

requirement requires a notice to the permitting 

authority, such as where the requirement calls for 

notice of a performance test or the submission of 

certain performance test results. An ARM can not 

abrogate these requirements. 

Instead, we proposed ARMs as a 

strategic approach for incorporating into 

a title V permit relevant applicable 

requirements and the requirements of 

part 70. The ARM provides a method for 

obtaining and updating information 

consistent with an underlying 

applicable requirement(s) or 

requirement(s) of part 70 in such a 

manner so as to avoid the need to 

reopen or revise the permit to 

incorporate the updated information. As 

such, an ARM must work within and be 

consistent with the applicable part 70 

rules that govern permit revisions. 

We further explained that the protocol 

to obtain information under an ARM 

must be objective and scientifically 

valid and reliable—such as an EPA test 

method or monitoring method (usually 

specified in the applicable requirement 

itself). We noted that an ARM also 

includes the instructions governing how 

the results of the protocol are to be used. 

For example, an ARM could specify that 

firebox temperature measurements 

taken during a performance test of a 

thermal oxidizer be used to: (1) Define 

a temperature level that assures 

compliance with a particular applicable 

requirement; and (2) revise and update 

the minimum firebox operating 

temperature of the oxidizer previously 

relied upon to assure compliance. 

We found permit terms containing 

ARMs to be useful in maintaining the 

effect of the advance approvals found in 

the pilot permits. Pervasively, all the 

pilot permits contained ARMs as the 

quantification methodology by which 

the source would sum VOC emissions 

from individual emissions units on an 

ongoing basis. These ARMs also 

included requirements governing when 

the aggregation procedures for 

determining total actual VOC emissions 

for the site would be compared to the 

relevant plantwide emissions cap(s) in 

order to assess source compliance. In 

some cases, the aggregation ARM relied 

on other ARMs to assure that certain 

input values were replicably 

determined. For example, two of the 

pilot permits contained replicable 

testing procedures. These procedures, 

once implemented, determined the 

control device operating parameter 

values that the source must monitor to 

demonstrate compliance with capture 

and destruction efficiency requirements 

(i.e., the applicable requirement). 

Without the replicable testing 

procedures in the permit, those values 

would have been included on the face 

of the permit, and the source would 

have had to seek a permit revision each 

time it repeated the testing procedures 

and the operating parameter values 

changed.25 Another pilot permit 

specified the process (i.e., compliance 

method) by which a source-specific 

emissions factor could be updated and 

used to determine whether emissions 

remained under the source’s PTE cap 

where both the emissions cap and the 

ARM were established in its minor NSR 

permit. By including these replicable 

processes (e.g., replicable testing and/or 

emissions factor updating procedures) 

in the permit instead of specific 

operating values and emissions factors, 

sources could update those values and 

indicate compliance based on the latest 

results consistent with the replicable 

testing procedures in the title V permit, 

and forego a permit revision each time 

the values are changed. 

In addition to proposing a definition 

of an ARM, we also proposed that the 

6-month monitoring reports (required 

under existing 40 CFR 70.6(a)(3)(iii)) 

must identify any ARMs implemented 

during the reporting period, and that for 

ARMs generating values related to 

parametric monitoring (e.g., an ARM 

used to determine the minimum 

operating temperature of a thermal 

oxidizer during a performance test), the 

source must also include the results of 

the ARM in the 6-month monitoring 

report. We also proposed to modify 40 

CFR 70.6(a)(1) to include a reference to 

ARMs, because ARMs are an example of 

permit terms that assure compliance 

with applicable requirements. Although 

we believe that the proposed regulatory 

change to 40 CFR 70.6(a)(1) is a 

relatively simple clarification, given that 

all permits must include terms that 

assure compliance with applicable 

requirements and the requirements of 

part 70, we proposed the change to 

promote increased consideration of 

ARMs, where appropriate. We 

recognized that we could have proposed 

to modify other provisions of part 70, 

such as 40 CFR 70.6(a)(9), to include a 

reference to ARMs, but given the 

structure and content of the existing 

regulations, we did not believe that such 

additional changes were needed. 

As with advance approvals and AOSs, 

we noted in the proposal preamble that 

an ARM may be added to a title V 

permit through permit issuance or 

renewal or through the permit revision 

process. When an existing permit is to 

be modified, the appropriate 

modification track (significant or minor) 

depends on the nature of the proposed 

ARM (or a proposed change to an ARM 

which requires a permit revision) and 

whether it would qualify for treatment 

as a minor permit modification under 

existing 40 CFR 70.7(e)(2)(i). We also 

noted that the permit shield (where 

available and granted by the permitting 

authority) can be extended to ARMs 

added through a significant permit 

modification, but not to those added 

through minor permit modification 

procedures (per existing 40 CFR 

70.7(e)(2)(vi)). In addition, we pointed 

out in the proposal preamble that a 

source that incorrectly applies the 

procedures and criteria for an ARM will 

be considered not to be in compliance 

with the terms of the permit (and 

therefore not in compliance with the 

Act). 

In proposing ARMs, we stated our 

belief that ARMs are authorized under 

title V of the Act and its implementing 

regulations. Section 502 sets forth the 

minimum elements for a State operating 

permit program. Among other things, 

section 502 provides that for a State 

operating permit program to be 

approved, the permitting authority must 

have adequate authority to ‘‘issue 

permits and assure compliance by all 

sources required to have a permit * * * 

with each applicable standard, 

regulation or requirement’’ under the 

Act. See CAA section 502(b)(5)(A). 

Section 504(a) of the Act also requires 

that each title V permit contain 

‘‘enforceable limitations and standards 

* * * and such other conditions as are 

necessary to assure compliance with 

applicable requirements of this Act, 

including the requirements of the 

applicable implementation plan.’’ The 

Act further provides that any State 

operating permit program must include 

‘‘adequate, streamlined, and reasonable 

procedures * * * for expeditious 

review of permit actions.’’ See CAA 

section 502(b)(6). 

Several State commenters indicated 

that the rulemaking on ARMs is 

unnecessary because States already 

issue permits with these sorts of terms 

under existing authority, as evidenced 

by EPA’s discussion of ARM-like permit 

terms in some of the pilot permits. 

These commenters also expressed 

concern that this Federal rulemaking on 

ARMs might have the unintended 

consequence of stifling innovative 

approaches to operational flexibility by 

prescribing a rigid approach to ARMs. 

Some commenters expressed concern 


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that an ARM could be used to avoid the 

applicability of major NSR, which might 

otherwise apply when the operating 

conditions of a control device are 

altered and actual emissions are 

anticipated to increase as a result. 

Several industry commenters 

indicated that the rulemaking and EPA’s 

expression of support for ARMs would 

help to clarify for States that ARMs are 

supported by the Act and viewed 

favorably by EPA. However, none of 

these commenters expressed support for 

the proposed 6-month reporting 

requirements for ARMs, and one 

industry commenter objected to the 

proposed 6-month reporting 

requirement for ARMs on the basis that 

no additional reporting is warranted for 

what is simply a method for showing 

compliance. 

B. Final Action 

In response to these commenters, EPA 

has decided to finalize the proposed 

definition with minor changes and to 

add certain additional clarifications to 

§ 70.6(a)(1). In doing so, we reaffirm the 

proposal as summarized in the 

preceding section, except as described 

below in this section. As previously 

mentioned, these final rules with 

respect to ARMs do not affect any 

specific minima for part 70 programs, 

and, due to their clarifying nature, we 

do not expect many States to opt to 

revise their operating permit programs 

(see footnote 13). 

While we agree that States currently 

have authority to issue ARMs in title V 

permits, we do not agree that placing a 

definition for ARM in our part 70 rules 

will stifle innovation by the States. On 

the contrary, we believe that finalizing 

the ARM definition will clarify the 

availability of this aid to flexible 

permitting to those States and sources 

that are not aware of it or have had prior 

issues concerning its use. 

The final definition is nearly identical 

to the one proposed (i.e. we added a 

minor clarification that the results of the 

ARM be recorded as well as used for 

assuring compliance with any 

applicable requirement or requirement 

of part 70). The final definition reads as 

follows: 

Approved replicable methodology (ARM) 

means part 70 permit terms that: 

(1) Specify a protocol which is consistent 

with and implements an applicable 

requirement, or requirement of this part, such 

that the protocol is based on sound scientific 

and/or mathematical principles and provides 

reproducible results using the same inputs; 

and 

(2) Require the results of that protocol to 

be recorded and used for assuring 

compliance with such applicable 

requirement, any other applicable 

requirement implicated by implementation of 

the ARM, or requirement of this part, 

including where an ARM is used for 

determining applicability of a specific 

requirement to a particular change. 

We wish to emphasize that, under the 

final definition, an ARM may be used as 

a means to determine the applicability 

of a requirement, not just as an aid for 

assuring compliance. The EPA has 

included other ARM-like mechanisms 

in several of our national standards for 

MACT and NSPS. If a source proposes 

an ARM to delineate which changes are 

subject to one requirement instead of 

another, examples should be provided 

to the permitting authority and to the 

record supporting proposed approval of 

the ARM illustrating the prospective use 

of the ARM (if approved). We believe 

that the permitting process is the best 

forum for clarifying how a proposed 

ARM would work in the relevant 

situations reasonably expected to occur 

over the duration of the permit. 

However, in the case where the 

permitting authority has significant 

concerns over how an applicability 

ARM would operate in certain 

situations, the permitting authority 

should not authorize the ARM for those 

situations. 

We are also revising 40 CFR 70.6(a)(1) 

to acknowledge that ARMs may be 

considered as one type of part 70 permit 

term that assures compliance with 

applicable requirements. We are also 

adding two clarifications that 

appropriately focus ARM 

implementation. The Agency believes 

that these clarifications in combination 

with the mentioned final definition will 

promote increased consideration of 

ARMs, where appropriate. 

This final version of 40 CFR 70.6(a)(1) 

incorporates existing policy that a 

source must first request an ARM in its 

part 70 permit application before it can 

be considered by the permitting 

authority. Note that this request could 

appear as part of the originally 

submitted application or in the later 

submittal of supplemental application 

material (e.g., a letter requesting 

consideration of a replicable protocol as 

an ARM). As is the case for AOSs, the 

permitting authority must then decide 

whether to accept the proposed ARM 

and may reject it or modify it for several 

appropriate reasons, including concerns 

over its replicability and/or value in 

lowering administrative costs. This 

addition is consistent with the basic 

process required for the establishment 

of AOSs which, based on comments 

received, is effective in ensuring that 

FAP approaches are appropriately 

considered. 

Relevant to the first element of the 

final ‘‘ARM’’ definition, sources will 

identify candidate protocols that if 

judged to be replicable could be 

considered further as a potential ARM 

by the permitting authority. Candidates 

for such protocols would frequently 

arise from already established 

applicable requirements, such as MACT 

standards, NSPS, or preconstruction 

permits (e.g., minor or major NSR). If 

accepted by the permitting authority as 

an ARM, pursuant to the second 

element of the final definition, the part 

70 permit would contain the ARM (i.e., 

the combination of the replicable 

protocol and the instructions for its use, 

including the type of data to be 

inputted). 

The second clarification to 40 CFR 

70.6(a)(1) was added in response to 

those commenters who were concerned 

that ARM implementation of one 

applicable requirement might 

circumvent the applicability of another 

applicable requirement. We believe that 

this final clarification adequately 

conveys appropriately that an ARM 

created under part 70 to streamline the 

implementation of one applicable 

requirement cannot be used to 

contravene compliance with another 

requirement under the Act or to 

circumvent its applicability as a result 

of implementing an ARM. Accordingly, 

the terms of an NSR permit, which are 

applicable requirements that must be 

incorporated into a title V permit, 

cannot subsequently be changed using 

an ARM created under different 

authority. Approved replicable 

methodologies can be used to update 

values only when the applicable 

requirement allows for this to occur. For 

example, if an existing NSR permit 

includes specific parametric monitoring 

levels as compliance indicators, to 

automate the updating of such levels the 

NSR permit would need to be revised to 

establish an ARM. The title V process 

could not create an ARM to revise the 

NSR conditions directly. Similarly, the 

potential applicability of other 

requirements implicated by the 

implementation of an ARM (e.g., NSR) 

must be independently evaluated and 

determined. 

As noted above, no commenters 

specifically supported our proposed 

reporting requirements for ARMs, and 

one commenter specifically opposed the 

reporting requirement. In addition, 

numerous States opposed the ARM 

proposal in general as being 

unnecessary and likely to reduce, rather 

than expand, the flexibility available 

under the existing rules. Although these 

commenters did not specifically refer to 

the reporting portion of the ARM 


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26The authority to impose this requirement 

typically arises from the ARMs themselves being 

applicable requirements (e.g., provisions within 

NSPS or MACT standards or terms of 

preconstruction permits) but also can occur under 

other authorities such as 40 CFR 70.6(a)(9) authority 

where the ARM would be part of an AOS. 

27The major NSR rules refer to the ‘‘reviewing 

authority,’’ while part 70 refers to the ‘‘permitting 

authority.’’ For purposes of consistency with the 

other sections of this preamble, we use the term 

‘‘permitting authority’’ in this section. In these 

discussions, this term is intended to have the same 

meaning as ‘‘reviewing authority.’’ 

proposal (or most other specifics of the 

proposal), we believe that this is one 

aspect of the proposal that was targeted 

as unnecessary and potentially 

restrictive. Finally, several commenters 

raised concerns regarding our similar 

proposal to require reporting the 

implementation of AOSs in the 6-month 

monitoring report which we believe are 

also appropriate to consider in deciding 

whether to require the 6-month 

reporting of ARMs. As a result, we have 

concluded that the information 

contained in the permit about the nature 

of any approved ARM and the 

instructions for its use along with the 

required reports concerning annual 

compliance certification and the prompt 

reporting of deviations from achieving 

compliance with the ARM should 

generally be sufficient. In addition, 

sources must keep on-site records of 

ARM implementation.26 Moreover, any 

required on-site records must be 

submitted to the permitting authority 

upon their request pursuant to 40 CFR 

70.6(a)(6)(v). Therefore, we have 

decided to drop the proposed 

requirement for the 6-month monitoring 

report to identify any ARMs 

implemented during the reporting 

period. 

VIII. Green Groups 

A. Background 

We proposed to modify the major 

NSR regulations in order to create an 

alternative means to comply with major 

NSR. Specifically, we proposed to allow 

a new pathway that would treat a 

number of emissions activities as a 

single emissions unit (which we termed, 

a ‘‘Green Group’’) where the emissions 

from each of these activities would be 

routed to a common emissions control 

device meeting BACT/LAER, and future 

emissions increases and other changes 

within the Green Group would be 

approved for a 10-year period in a major 

NSR permit. The proposed approach 

was described as an extension of our 

December 2002 NSR reform regulations 

(67 FR 80186, December 31, 2002). In 

particular, Green Groups would 

complement the use of plantwide 

emissions caps (termed, plantwide 

applicability limitations, or PALs) by 

providing a flexible permitting option 

for a section of a plant. Like PALs, we 

proposed that Green Groups would be a 

mandatory minimum element of a State 

NSR program, but the permitting 

authorities would retain discretion as to 

when to approve individual Green 

Groups requested by sources.27

However, we also solicited comment on 

whether Green Groups should be a 

voluntary, rather than mandatory, 

program element for States. 

The Green Group provisions were 

proposed to encourage a wide spectrum 

of sources to construct specified types of 

changes for a 10-year period with 

greater certainty and flexibility in 

exchange for implementing BACT/ 

LAER, regardless of whether or to what 

extent the source may have been subject 

to the current major NSR regulations. 

That is, the Green Group provisions, as 

an alternative means to comply with 

major NSR, did not require an 

evaluation of whether conventional 

major NSR would otherwise apply. 

In its permit application, the source 

would be required to describe the new 

and existing emissions activities to be 

included in a Green Group in sufficient 

detail to allow the permitting authority 

to determine BACT or LAER (as 

applicable) for the Green Group taken as 

a whole and to conduct an ambient air 

impact analysis to safeguard relevant 

ambient increments and standards 

(including the determination of any 

offsets necessary in nonattainment 

areas) or to safeguard air quality values 

in any relevant Class I areas. We further 

proposed that the type of detail required 

in a permit to describe the authorized 

changes in the Green Group must be 

sufficient to allow the permitting 

authority to determine, when a change 

subsequently was implemented, 

whether the permitting authority 

contemplated that change in the scope 

of the advance approval contained in 

the major NSR permit. 

We proposed that, in general, two 

types of emissions limits must be set in 

the major NSR permit for Green Groups: 

(1) An emissions limit to constrain the 

overall emissions of the Green Group; 

and (2) a limit to ensure that BACT/ 

LAER technology is being employed and 

is effective across the Green Group (e.g., 

lbs/gal, percent reduction). These two 

limits would complement each other 

and collectively implement the core 

requirements for the Green Group. The 

amount of any actual emissions increase 

from authorized changes above previous 

actual emissions would be limited by 

the annual emissions cap and by the 

BACT/LAER emissions limitation, both 

of which would apply to the applicable 

emissions unit, in this case designated 

as the Green Group, and would be 

placed in the major NSR permit. 

The major NSR review process must 

determine the level of monitoring, 

recordkeeping, reporting, and testing 

(MRRT) to assure compliance with the 

control technology requirement and any 

other emissions limit(s) imposed by the 

permitting authority on emissions 

unit(s) as necessary to meet major NSR. 

We proposed specifically for Green 

Groups that a source would be required 

to monitor all emissions activities that 

comprise the Green Group to ensure 

compliance with the Green Group limit 

using essentially the same approaches 

that would meet our requirements for 

tracking emissions associated with a 

PAL. These monitoring, recordkeeping, 

and reporting requirements would be 

incorporated into the NSR permit that 

established the Green Group. 

We proposed that all NSR projects 

using a Green Group be of a 10-year 

duration, for two reasons. First, we 

stated that this time frame represents a 

balance between the useful life of the 

emissions control system and the time 

frame in which additional major NSR 

review is likely to result in little, if any, 

added environmental benefit. Second, 

we stated that a 10-year duration for a 

Green Group is supported by the same 

rationale we used in choosing a 10-year 

period for the duration of PALs. For 

PALs we concluded that a 10-year 

period was necessary to ensure that the 

normal business cycle would be 

captured generally for any industry; to 

balance the need for regulatory certainty 

with the administrative burden; and to 

align the PAL renewal with the title V 

permit renewal. See 67 FR 80216, 

80219. In proposing a 10 year duration 

for the Green Group, the Agency also 

solicited comment on the 

appropriateness of a 15-year period. 

The Agency further proposed to 

exclude from application to a Green 

Group the existing PSD part 52 

requirements in 40 CFR 52.21(r)(2) for 

timely construction and in paragraph 

(j)(4) of both parts 51 and 52 PSD 

requirements for the BACT reevaluation 

of later independent phases of phased 

construction projects. We also clarified, 

albeit without proposing specific rule 

language, that the provisions of 40 CFR 

52.21(r)(4), 51.166(r)(2), and 

51.165(a)(5)(ii), which subject a source 

to major NSR upon the relaxation of 

certain permit terms that had previously 

allowed the source to avoid major NSR, 

are met during any major NSR process 

like one that would establish a Green 

Group. Finally, we noted that, under the 


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28Sections 51.165(a)(5)(ii), 51.166(r)(2), and 

52.21(r)(4) provide that when a source or 

modification that took an emissions limit to avoid 

major NSR review wishes to relax that limitation, 

it must undergo major NSR as if construction had 

not yet commenced. 

current NSR regulations, an emissions 

change is only creditable for netting 

purposes to the extent that the 

permitting authority has not previously 

relied on it in issuing a major NSR 

permit. See 40 CFR 52.21(b)(3)(iii). 

Accordingly, emissions increases and 

decreases that occur at the emission 

activities of a source subject to a current 

major NSR permit, like those in a Green 

Group during its effective period, are 

not to be included in future netting 

calculations at the same source. 

In our proposal, we based the legal 

rationale for Green Groups on the 

premise that the changes and emissions 

activities within a Green Group are 

specifically authorized to occur as a 

result of undergoing, not avoiding, 

major NSR. Conversely, other changes 

that a source seeks to implement, but 

that are not authorized in the Green 

Group, cannot occur without first 

obtaining all necessary preconstruction 

approvals that would apply to such 

changes. The determination of whether 

the newly proposed, but unauthorized 

changes trigger NSR would be made 

using the ‘‘actual-to-projected-actual 

test’’ under, for example, 40 CFR 

52.21(a)(2)(iv). The Agency noted that 

this legal rationale for Green Groups 

differs from the legal rationale for Clean 

Units, a provision in the 2002 NSR 

reform rules that employed an allowable 

emissions test for netting purposes 

which the U.S. Court of Appeals for the 

DC Circuit vacated. New York v. EPA, 

413 F.3d at 40 (DC Cir. 2005). 

Finally, as discussed in the proposal 

preamble, we believe that the 

environment and the public would 

potentially benefit from Green Groups 

for several reasons. First, we believe that 

substantial environmental benefits 

could occur because a Green Group 

would require all included emissions 

activities to be controlled to the level of 

BACT or LAER. The BACT or LAER 

limits would apply to existing emissions 

activities (which otherwise would 

remain uncontrolled or be subject to less 

stringent control requirements), as well 

as to emissions activities that are 

modified or added pursuant to the 

Green Group authorization. In addition, 

absent a Green Group, some 

modifications and new emissions 

activities might not be subject to major 

NSR because their emissions would be 

below applicability thresholds or 

because they would ‘‘net out’’ of review. 

Even when individual changes would 

prove to be subject to major NSR, the 

resulting BACT might in some cases be 

less stringent than that required for a 

Green Group, given the economies of 

scale in evaluating BACT at the same 

time for all the activities and authorized 

changes making up a Green Group. 

Moreover, we expect that environmental 

benefits would accrue from the better 

and more frequent type and amount of 

monitoring proposed to be required for 

Green Groups. Finally, we believe that 

Green Groups would also promote 

greater administrative efficiency for 

permitting authorities and sources, 

because a Green Group would eliminate 

iterations of permitting processes that 

produce little or no environmental 

benefit. 

The commenters, while mixed in their 

overall reaction to the Green Group 

concept, generally did not support the 

specifics of the Green Group proposal. 

State commenters indicated that the 

proposed 10-to-15-year term of the 

Green Group is inappropriate because 

the Act and good environmental 

stewardship require BACT/LAER 

reviews and air quality analyses to be 

conducted contemporaneously with the 

time of each change at a facility. These 

commenters disagreed with our 

assertion that BACT and LAER typically 

do not advance significantly over the 

proposed 10- or 15-year period. They 

added that such permits would unfairly 

reserve PSD increments for projects that 

might never be built and that the air 

quality status in the area of a Green 

Group could also change due to, for 

example, transported pollution, 

revisions to the NAAQS, and natural 

events. State commenters also 

questioned the environmental benefits 

of Green Groups and did not believe 

that the pilot permits contained in the 

docket supported the Green Group 

approach. They also asserted that Green 

Groups share the legal flaws of Clean 

Units. State commenters further 

conveyed that many permitting 

authorities already offer considerable 

flexibility and that it is the permitting 

authorities who can best decide the 

structure of their own programs in this 

regard. The State commenters generally 

believe that the Green Group proposal 

should be abandoned, but if it is 

finalized it should be a voluntary 

element of the major NSR program, 

rather than mandatory as proposed. 

The environmental group that 

commented on the proposal asserted 

that the proposed 10-to-15-year term of 

the Green Group is inconsistent with the 

Act’s requirements for contemporaneous 

BACT/LAER and air quality reviews. 

The environmental group also indicated 

that Green Groups suffer from the same 

legal flaws as Clean Units. Like most 

State commenters, the environmental 

group believes that the Green Group 

proposal should be abandoned, but if it 

is finalized it should be voluntary for 

the States. 

Industry commenters, on the other 

hand, typically favored some aspects of 

the proposal and believe the Green 

Group to be a real incentive for sources 

to control beyond their legal 

requirements in exchange for greater 

regulatory certainty and operational 

flexibility. These commenters often 

argued that a term of 10 to 15 years 

would be necessary to justify the 

expenditure for state-of-the-art controls 

for a Green Group. They agreed with the 

proposal that Green Groups should be a 

mandatory element of the major NSR 

program and attributed real benefits 

such as those associated with lower 

administrative costs. They believe that 

Green Groups are legally defensible and 

clearly different from Clean Units. 

However, industry commenters asserted 

that the proposal did not reflect how 

manufacturing facilities are constructed 

and operated. In particular, they stated 

Green Groups should not be limited to 

a single control device and that 

pollution prevention should be allowed 

as the primary Green Group control 

approach. In addition, they indicated 

that the proposed monitoring, 

recordkeeping, and reporting 

requirements are unnecessarily detailed 

and prescriptive. 

B. Final Action 

Primarily for certain policy reasons 

raised by commenters and on our belief 

that the current major NSR regulations 

already provide considerable flexibility 

to States, EPA has decided to withdraw 

our proposal on Green Groups. As 

described below, the Agency will 

consider initiating another rulemaking 

related to flexibility under the major 

NSR regulations if new data becomes 

available after additional field 

experience that supports such an 

approach. Any such rulemaking would 

be an entirely new rulemaking separate 

and distinct from the Green Group 

proposal being withdrawn in this 

action. 

Notwithstanding our withdrawal of 

the Green Group proposal, we wish to 

note that certain statements we made in 

support of the proposal are not affected 

by the Green Group withdrawal. First, 

the requirements of 40 CFR 

51.165(a)(5)(ii), 51.166(r)(2), and 

52.21(r)(4) are met when an emissions 

unit with emissions limits previously 

taken to avoid major NSR subsequently 

undergoes major NSR review.28 Next, 

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29 ‘‘Project’’ is defined in the major NSR 

regulations as ‘‘a physical change in, or change in 

the method of operation of, an existing major 

stationary source.’’ See, for example, 40 CFR 

52.21(b)(52). 

30 ‘‘Emissions unit’’ is defined in the major NSR 

regulations as ‘‘any part of a stationary source that 

emits or would have the potential to emit any 

regulated NSR pollutant. * * *’’ See, for example, 

40 CFR 52.21(b)(7). 

31The part 51 PSD requirement related to the 

permitting of subject projects only mandates that 

States in their SIPs require reevaluations of certain 

BACT determinations for the later independent 

phases of an approved phased construction project 

at the latest reasonable time prior to their 

commencement of construction (see 40 CFR 

51.166(j)(4)). This longstanding safeguard was 

established in order to prevent inappropriate 

reserving of the available PSD increment by an 

individual source (see 43 FR 26396). 

32See footnote 30. 

33Section 52.21(n)(1) requires more specific 

detailed information about construction schedules 

and plans to be submitted by sources than do the 

analogous requirements of part 51 (see 40 CFR 

51.166(n)(1)). Section 52.21(r)(2), which has no 

counterpart in 40 CFR 51.166, ensures the timely 

construction of non-phased projects and provides, 

without specification, the opportunity for the 

permitting authority to extend these deadlines. 

term major NSR project is clearly 

different from a Clean Unit and may be 

defended on that basis. Construction of 

the later portions of an approved major 

NSR project is simply ‘‘building out’’ 

the permit as authorized and does not 

rely on an allowables emissions test. 

Finally, pursuant to 40 CFR 

52.21(b)(3)(iii), and to analogous 

provisions in 40 CFR 51.166(b)(3)(iii) 

and 51.165(a)(1)(vi)(C)(2), emissions 

increases and decreases that occur as 

authorized in a major NSR permit 

qualify as having been ‘‘relied upon by 

the permitting authority’’ in issuing a 

major NSR permit. As such, these 

emissions changes are not to be 

included in the future netting 

calculations at the same source during 

the time that the NSR permit would be 

effective. 

Our decision to withdraw the Green 

Group proposal is in large part based on 

the significant new information and 

policy perspectives conveyed in certain 

comments received on this proposal. 

Based on the varying types of concerns 

raised by commenters, EPA no longer 

believes that promulgation of the Green 

Group approach—which was EPA’s 

effort to develop a single, nationally 

uniform approach for Green Groups to 

achieving advance approval under 

major NSR—is appropriate. While an 

approach like that proposed for Green 

Groups might be effective in certain 

situations, several commenters pointed 

out serious reservations about initial air 

quality and technology reviews 

becoming stale over the 10-year life of 

a Green Group. Others were concerned 

that the proposed Green Group 

approach was not flexible enough to 

encompass already tested approaches 

involving emissions units serviced by 

multiple control approaches. These 

commenters also persuaded the Agency 

that a mandatory, one-size-fits-all 

approach under the major NSR rules 

could be counterproductive as well as 

too inflexible. Many of the same 

commenters believed that national rules 

requiring a specific template for Green 

Groups across all States could instead 

stifle future innovation and flexibility 

while adding complexity and 

unnecessary administrative burden. 

The Agency is also not finalizing our 

proposal on Green Groups because we 

believe that the current major NSR 

regulations already provide States 

considerable ability to design and 

implement their SIPs in ways that 

provide operational flexibility while 

addressing the types of concerns raised 

by commenters. The major NSR 

regulations, in general, are quite 

detailed and prescriptive as to what 

changes are subject to review, but afford 

considerable flexibility to determine 

specifically how subject NSR projects 

must be permitted. The inherent 

flexibility for States to design and 

implement their SIP provisions with 

respect to NSR projects arises from the 

structure and content of the part 51 PSD 

and the nonattainment (‘‘NA’’) NSR 

regulations. 

First, the definition of ‘‘project’’ can 

accommodate a wide spectrum of 

physical and operational changes, 

provided such changes are authorized 

by the permitting authority.29 Similarly, 

the definition of ‘‘emissions unit’’ is 

elastic in its ability to include several 

types of situations, ranging from a 

simple piece of equipment to a 

collection of them at the same site.30 A 

‘‘project’’ involves changes to or 

addition of one or more emissions units. 

Thus, the permitting authority may 

define these terms in its SIP broadly or 

narrowly, for a particular case, provided 

that the physical and operational 

changes included in the project are 

covered by the major NSR requirements, 

as appropriate. 

Moreover, the other provisions of the 

part 51 PSD and NA NSR regulations do 

not impose limitations on the scope or 

implementation of NSR projects once 

they are defined by the permitting 

authority. The NA NSR regulations do 

not contain any specific provisions that 

restrict how the permitting authority 

might define the scope, duration, and 

timeliness of an NSR project. The part 

51 PSD regulations only indirectly affect 

the acceptable scope of an NSR project 

in their requirements and the BACT 

reevaluations of certain phases of 

phased construction projects.31

As a result, under the current major 

NSR regulations, with the exception of 

the relatively narrow class of 

construction projects with independent 

phases for PSD purposes,32 States are 

free to design and implement their 

major NSR SIPs to address 

contemporaneity of construction, 

project scope and duration, number and 

types of emissions units comprising the 

project which are subject to emissions 

tracking, timely construction of 

authorized changes, and reevaluation of 

initial control technology and/or air 

quality impact reviews as they judge to 

be reasonable. For example, a SIP may 

be structured to allow the permitting 

authority to determine these aspects of 

a major NSR permit on a case-by-case 

basis after balancing appropriately the 

benefits of operational flexibility with 

the types of concerns raised by 

commenters on the Green Group 

proposal. 

The same part 51 flexibility has 

allowed states to adopt voluntarily some 

additional PSD regulatory constraints 

into their SIPs similar to those 

contained in paragraphs (r)(2) and (n)(1) 

of the 40 CFR part 52 regulations, which 

regulate the timeliness of construction 

and the required level of information for 

reviewing proposed NSR projects.33 The 

part 52 regulations, which apply to 

interim EPA implementation of the PSD 

program in the absence of an approved 

SIP, contain these additional 

requirements in paragraphs (r)(2) and 

(n)(1) to help preserve the available PSD 

air quality increments until the State 

can assume full responsibility for the 

program under an approved SIP. 

The EPA believes that States which 

have opted to include these additional 

regulatory constraints in their SIPs 

retain considerable discretion to 

interpret and implement them within 

the meaning of their SIP approved 

language. Affected States may choose to 

implement their programs consistent 

with policies that EPA has developed in 

our implementation of these provisions 

or to explore the adoption of different 

policies through their own 

administrative procedures. In addition, 

in accordance with their plans for 

preserving PSD increments and for 

protecting the NAAQS, States may 

maintain their current SIPs or opt to 

revise them as appropriate consistent 

with the applicable part 51 and/or part 

D requirements in order to allow greater 

flexibility to the permitting authority in 

reasonably determining how NSR 

projects can be approved on a case-bycase basis. The Agency is willing to 

work with States to evaluate their 


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current SIPs and to assist them in 

discussing possible revisions where 

requested to do so. 

The EPA is interested in learning 

more as to whether the flexibility under 

existing major NSR regulations to 

sources and permitting authorities is 

sufficient and appropriate. In order to 

gain additional perspectives about the 

currently available level of flexibility— 

including the need for it; the benefits, 

costs, and/or impediments associated 

with its use; and any lack of safeguards 

to assure its effectiveness—the Agency 

is encouraging States and sources to 

explore how projects subject to major 

NSR might be more flexibly permitted 

and administratively managed. Where a 

State would agree to investigate such 

possibilities with a requesting source, 

we ask that the State give us an advance 

notice of the project before any permit 

is released for comment. In addition, 

EPA requests that the State make 

available relevant information about 

both the development of the permit and 

its subsequent implementation so as to 

facilitate any future analysis on our part. 

We also intend to collect other 

information that would be useful to 

informing us as to whether a new 

rulemaking should be initiated in the 

future. 

In summary, the concerns of 

commenters on the potential 

inflexibility of the proposed Green 

Group affirms the need, at least for now, 

to maintain the relative openness of the 

current major NSR rules. These rules 

essentially defer to the States as to 

whether to adopt more specific 

requirements or to resolve flexibility 

needs on a case-by-case basis. This 

outcome is entirely consistent with the 

stated preference contained in State 

comments received on the proposal that 

States be allowed to structure their own 

SIP programs with respect to NSR 

flexibility. 

IX. Statutory and Executive Order 

Reviews 

A. Executive Order 12866—Regulatory 

Planning and Review 

This action is not a ‘‘significant 

regulatory action’’ under the terms of 

Executive Order (EO) 12866 (58 FR 

51735, October 4, 1993) and is therefore 

not subject to review under the EO. 

B. Paperwork Reduction Act 

The information collection 

requirements in this rule have been 

submitted for approval to the Office of 

Management and Budget (OMB) under 

the Paperwork Reduction Act, 44 U.S.C. 

3501 et seq. The information collection 

requirements are not enforceable until 

OMB approves them. 

The information collection 

requirements resulting from this final 

rule are associated with obtaining FAPs 

under minor or major NSR (pursuant to 

the requirements of title I of the Act and 

the implementing regulations at 40 CFR 

51.160 through 51.166, appendix S to 40 

CFR part 51, and 40 CFR 52.21) and/or 

under the title V operating permit 

program (pursuant to the requirements 

of title V of the Act and the 

implementing regulations at 40 CFR 

parts 70 and 71). The NSR and title V 

programs are established programs with 

approved information collection 

requests (ICRs). This final rule will 

encourage permitting authorities and 

sources to work together to create FAPs, 

which will eliminate the need for some 

subsequent permits and permit 

revisions and thereby reduce the burden 

on both the permitting authorities and 

sources. 

The NSR program requires a permit to 

be obtained by the owner or operator 

prior to constructing a new stationary 

source of air pollutants or modifying an 

existing source in such a way that air 

pollution emissions increase or a new 

air pollutant is emitted. The minor NSR 

program applies to minor sources and 

minor modifications, while the major 

NSR program applies to major sources 

and major modifications. The 

information collection for sources under 

NSR results from the requirement for 

owners or operators to submit 

applications for NSR permits. In some 

cases, sources must conduct 

preconstruction monitoring to 

determine the existing ambient air 

quality. For permitting authorities, the 

information collection results from the 

requirement to process permit 

applications and issue permits, and to 

transmit associated information to EPA. 

The EPA oversees the NSR program, and 

the information collected by sources 

and permitting authorities is used to 

ensure that the program is properly 

implemented. 

The title V program requires major 

sources and certain other sources of air 

pollutants to obtain an operating permit 

that contains all the requirements that 

apply to the source under the Act. The 

information collection for sources under 

the title V program results from the 

requirement for owners or operators to 

submit applications for title V permits 

and to submit deviation reports, semiannual monitoring reports, and annual 

compliance certifications. For 

permitting authorities, the information 

collection results from the requirement 

to process permit applications and issue 

permits, to review the reports submitted 

by sources, and to transmit associated 

information to EPA. The EPA oversees 

the title V program, and the information 

collected by sources and permitting 

authorities is used to ensure that the 

program is properly implemented. 

Flexible air permits are innovative 

permits that authorize sources to make 

certain anticipated changes to their 

operations without being required to 

obtain new or revised permits at the 

times these changes are implemented, 

while assuring that all applicable 

requirements of the Act are met and that 

the environment is protected at least as 

well as it would have been under 

conventional permitting procedures. 

The initial burden to apply for and issue 

a FAP is greater than for a conventional 

permit, but this increase in burden is 

more than compensated for by the 

subsequent burden reduction for 

foregone new permits and permit 

revisions. Thus, the net effect of this 

final FAP rule is a reduction in the 

burden the approved ICRs for the NSR 

and title V programs. 

As a result of this final rule, we 

estimate that 845 sources will obtain 

FAPs each year over the 3-year period 

of this ICR, with a total annual burden 

reduction averaging approximately 

251,000 hours, or almost 300 hours per 

source. We do not expect a burden 

increase or reduction in capital costs, 

operation and maintenance costs, or 

purchase-of-services costs. For the 112 

permitting authorities over the 3-year 

period of this ICR, we estimate a total 

annual burden reduction averaging 

about 197,000 hours, or nearly 1,800 

hours per permitting authority and 234 

hours per permit. Burden is defined at 

5 CFR 1320.3(b). 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to a collection of information 

unless it displays a currently valid OMB 

control number. The OMB control 

numbers for EPA’s regulations in 40 

CFR are listed in 40 CFR part 9. When 

this ICR is approved by OMB, the 

Agency will publish a technical 

amendment to 40 CFR part 9 in the 

Federal Register to display the OMB 

control number for the approved 

information collection requirements 

contained in this final rule. 

C. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

generally requires an agency to prepare 

a regulatory flexibility analysis of any 

rule subject to notice and comment 

rulemaking requirements under the 

Administrative Procedure Act or any 

other statute unless the Agency certifies 

that the rule will not have a significant 

economic impact on a substantial 


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number of small entities. Small entities 

include small businesses, small 

organizations, and small governmental 

jurisdictions. 

For purposes of assessing the impacts 

of this rule on small entities, ‘‘small 

entity’’ is defined as: (1) A small 

business as defined by the Small 

Business Administration’s regulations at 

13 CFR 121.201; (2) a small 

governmental jurisdiction that is a 

government of a city, county, town, 

school district or special district with a 

population of less than 50,000; and (3) 

a small organization that is any not-forprofit enterprise which is independently 

owned and operated and is not 

dominant in its field. 

After considering the economic 

impacts of this final rule on small 

entities, I certify that this action will not 

have a significant economic impact on 

a substantial number of small entities. 

In determining whether a rule has a 

significant economic impact on a 

substantial number of small entities, the 

impact of concern is any significant 

adverse economic impact on small 

entities, since the primary purpose of 

the regulatory flexibility analyses is to 

identify and address regulatory 

alternatives ‘‘which minimize any 

significant economic impact of the rule 

on small entities.’’ 5 U.S.C. 603 and 604. 

Thus, an agency may certify that a rule 

will not have a significant economic 

impact on a substantial number of small 

entities if the rule relieves regulatory 

burden, or otherwise has a positive 

economic effect on all of the small 

entities subject to the rule. 

This final rule merely clarifies 

existing requirements and allows 

regulated entities to seek additional 

flexibility for their Clean Air Act 

permits. It does not create a new burden 

for regulated entities. Because FAPs are 

voluntary on the part of all permittees, 

including any small entities that are 

subject to permitting requirements, only 

those permittees who expect to reduce 

their permitting burden will seek FAPs. 

We have determined there will be cost 

savings for small entities associated 

with this final rule. We have therefore 

concluded that this final rule will 

relieve regulatory burden for all affected 

small entities. 

D. Unfunded Mandates Reform Act 

This action contains no Federal 

mandate under the provisions of Title II 

of the Unfunded Mandates Reform Act 

of 1995 (UMRA), 2 U.S.C., 1531–1538 

State, local, and Tribal governments, in 

the aggregate, or the private sector. This 

action imposes no enforceable duty on 

any State, local or Tribal governments or 

the private sector. As discussed 

previously, we estimate that this rule 

will save State, local, and Tribal 

permitting authorities an average of 

$11.5 million per year over the first 3 

years of implementation and result in an 

administrative burden reduction 

averaging 197,000 hours per year over 

that period. Similarly, we estimate that 

this rule will save permittees an average 

of $20.6 million per year and reduce 

their administrative burden by an 

average of 251,000 hours per year over 

the first 3 years. Therefore, this action 

is not subject to the requirements of 

sections 202 or 205 of UMRA. 

This rule is also not subject to the 

requirements of section 203 of UMRA 

because it contains no regulatory 

requirements that might significantly or 

uniquely affect small governments. As 

discussed earlier, this rule is expected 

to result in cost savings and an 

administrative burden reduction for all 

permitting authorities and permittees, 

including small governments to the 

extent that they fall in either category. 

E. Executive Order 13132—Federalism 

Executive Order 13132, entitled 

‘‘Federalism’’ (64 FR 43255, August 10, 

1999), requires EPA to develop an 

accountable process to ensure 

‘‘meaningful and timely input by State 

and local officials in the development of 

regulatory policies that have federalism 

implications.’’ ‘‘Policies that have 

federalism implications’’ is defined in 

the Executive Order to include 

regulations that have ‘‘substantial direct 

effects on the States, on the relationship 

between the national government and 

the States, or on the distribution of 

power and responsibilities among the 

various levels of government.’’ 

This final rule does not have 

federalism implications. It will not have 

substantial direct effects on the States, 

on the relationship between the national 

government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government, as specified in 

Executive Order 13132. This rule is 

projected to result in cost savings and 

administrative burden reductions for 

States and will not alter the overall 

relationship or distribution of powers 

between governments for the part 70 

and part 71 operating permits programs 

or for the part 51 and part 52 NSR 

programs. Thus, Executive Order 13132 

does not apply to this rule. 

In spirit of Executive Order 13132 and 

consistent with EPA policy to promote 

communications between EPA and State 

and local governments, EPA solicited 

comment on the proposed rule from 

State and local officials. We believe that 

this final rule is generally responsive to 

the comments received from these and 

other groups. 

F. Executive Order 13175—Consultation 

and Coordination With Indian Tribal 

Governments 

This action does not have Tribal 

implications, as specified in Executive 

Order 13175 (65 FR 67249, November 9, 

2000). This action merely clarifies 

existing requirements and allows 

regulated entities to seek additional 

flexibility for their CAA permits. Thus, 

Executive Order 13175 does not apply 

to this action. 

G. Executive Order 13045—Protection of 

Children From Environmental Health 

and Safety Risks 

The EPA interprets EO 13045 (62 FR 

19885, April 23, 1997) as applying only 

to those regulatory actions that concern 

health or safety risks, such that the 

analysis required under section 5–501 of 

the Executive Order has the potential to 

influence the regulation. This action is 

not subject to Executive Order 13045 

because it does not establish an 

environmental standard intended to 

mitigate health or safety risks. 

H. Executive Order 13211—Actions 

That Significantly Affect Energy Supply, 

Distribution, or Use 

This action is not a ‘‘significant 

energy action’’ as defined in Executive 

Order 13211 ‘‘Actions Concerning 

Regulations That Significantly Affect 

Energy Supply, Distribution, or Use’’ (66 

FR 28355, May 22, 2001) because it is 

not likely to have a significant adverse 

effect on the supply, distribution, or use 

of energy. This action merely clarifies 

existing requirements and allows 

regulated entities to seek additional 

flexibility for their CAA permits. 

I. National Technology Transfer and 

Advancement Act 

Section 12(d) of the National 

Technology Transfer and Advancement 

Act of 1995 (‘‘NTTAA’’), Public Law 

104–113, 12(d) (15 U.S.C. 272 note) 

directs EPA to use voluntary consensus 

standards in its regulatory activities 

unless to do so would be inconsistent 

with applicable law or otherwise 

impractical. Voluntary consensus 

standards are technical standards (e.g., 

materials specifications, test methods, 

sampling procedures, and business 

practices) that are developed or adopted 

by voluntary consensus standards 

bodies. The NTTAA directs EPA to 

provide Congress, through OMB, 

explanations when the Agency decides 

not to use available and applicable 

voluntary consensus standards. 


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This action does not involve technical 

standards. Therefore, EPA did not 

consider the use of any voluntary 

consensus standards. 

J. Executive Order 12898—Federal 

Actions To Address Environmental 

Justice in Minority Populations and 

Low-Income Populations 

Executive Order (EO) 12898 (59 FR 

7629 (Feb. 16, 1994)) establishes Federal 

executive policy on environmental 

justice. Its main provision directs 

Federal agencies, to the greatest extent 

practicable and permitted by law, to 

make environmental justice part of their 

mission by identifying and addressing, 

as appropriate, disproportionately high 

and adverse human health or 

environmental effects of their programs, 

policies, and activities on minority 

populations and low-income 

populations in the United States. 

The EPA has determined that this 

final rule will not have 

disproportionately high and adverse 

human health or environmental effects 

on minority or low-income populations 

because it does not affect the level of 

protection provided to human health or 

the environment. This final rule merely 

clarifies existing requirements and 

allows regulated entities to seek 

additional flexibility for their CAA 

permits. Such FAPs achieve equal or 

better environmental protection than 

that achieved using more conventional 

permits. 

K. Congressional Review Act 

The Congressional Review Act, 5 

U.S.C. 801 et seq., as added by the Small 

Business Regulatory Enforcement 

Fairness Act of 1996, generally provides 

that before a rule may take effect, the 

agency promulgating the rule must 

submit a rule report, which includes a 

copy of the rule, to each House of the 

Congress and to the Comptroller General 

of the United States. The EPA will 

submit a report containing this rule and 

other required information to the U.S. 

Senate, the U.S. House of 

Representatives, and the Comptroller 

General of the United States prior to 

publication of the rule in the Federal 

Register. A major rule cannot take effect 

until 60 days after it is published in the 

Federal Register. This action is not a 

‘‘major rule’’ as defined by 5 U.S.C. 

804(2). This rule will be effective 

November 5, 2009. 

X. Judicial Review 

Under section 307(b)(1) of the Act, 

petitions for judicial review of this 

action must be filed in the United States 

Court of Appeals for the District of 

Columbia Circuit by December 7, 2009. 

Any such judicial review is limited to 

only those objections that are raised 

with reasonable specificity in timely 

comments. Filing a petition for 

reconsideration by the Administrator of 

this final rule does not affect the finality 

of this rule for the purposes of judicial 

review nor does it extend the time 

within which a petition for judicial 

review may be filed, and shall not 

postpone the effectiveness of such rule 

or action. Under section 307(b)(2) of the 

Act, the requirements of this final action 

may not be challenged later in civil or 

criminal proceedings brought by us to 

enforce these requirements. 

Pursuant to section 307(d)(1)(V) of the 

Act, the Administrator determines that 

this action is subject to the provisions 

of section 307(d). Section 307(d)(1)(V) 

provides that the provisions of section 

307(d) apply to ‘‘such other actions as 

the Administrator may determine.’’ This 

action finalizes some, but not all, 

elements of a previous proposed 

action—the Flexible Air Permitting Rule 

proposed on September 12, 2007 (72 FR 

52206). That action included proposed 

revisions to the PSD regulations under 

part C of title I of the Act and was, 

therefore, subject to section 307(d) 

pursuant to section 307(d)(J). 

Consequently, although the proposed 

PSD revisions are not being finalized in 

this action, the procedural requirements 

of section 307(d) have been complied 

with for purposes of this action. 

List of Subjects 

40 CFR Part 70 

Environmental protection, 

Administrative practice and procedures, 

Air pollution control, Intergovernmental 

relations, Reporting and recordkeeping 

requirements. 

40 CFR Part 71 

Environmental protection, 

Administrative practice and procedures, 

Air pollution control, Intergovernmental 

relations, Reporting and recordkeeping 

requirements. 

Dated: September 25, 2009. 

Lisa P. Jackson, 

Administrator. 

■ For the reasons set out in the 

preamble, title 40, chapter I of the Code 

of Federal Regulations is amended as set 

forth below. 

PART 70—[AMENDED] 

■ 1. The authority citation for part 70 

continues to read as follows: 

Authority: 42 U.S.C. 7401, et seq. 

■ 2. Section 70.2 is amended by adding 

definitions of ‘‘Alternative operating 

scenario (AOS)’’ and ‘‘Approved 

replicable methodology (ARM)’’ in 

alphabetical order, to read as follows: 

§ 70.2 Definitions. 

* * * * * 

Alternative operating scenario (AOS) 

means a scenario authorized in a part 70 

permit that involves a change at the part 

70 source for a particular emissions 

unit, and that either results in the unit 

being subject to one or more applicable 

requirements which differ from those 

applicable to the emissions unit prior to 

implementation of the change or renders 

inapplicable one or more requirements 

previously applicable to the emissions 

unit prior to implementation of the 

change. 

* * * * * 

Approved replicable methodology 

(ARM) means part 70 permit terms that: 

(1) Specify a protocol which is 

consistent with and implements an 

applicable requirement, or requirement 

of this part, such that the protocol is 

based on sound scientific and/or 

mathematical principles and provides 

reproducible results using the same 

inputs; and 

(2) Require the results of that protocol 

to be recorded and used for assuring 

compliance with such applicable 

requirement, any other applicable 

requirement implicated by 

implementation of the ARM, or 

requirement of this part, including 

where an ARM is used for determining 

applicability of a specific requirement to 

a particular change. 

* * * * * 

■ 3. Section 70.4 is amended by revising 

paragraph (d)(3)(xi) to read as follows: 

§ 70.4 State program submittals and 

transition. 

* * * * * 

(d) * * * 

(3) * * * 

(xi) Approval of AOSs. The program 

submittal must include provisions to 

insure that AOSs requested by the 

source as approved by the permitting 

authority are included in the part 70 

permit pursuant to § 70.6(a)(9). 

* * * * * 

■ 4. Section 70.5 is amended as follows: 

■ a. By revising paragraph (c)(2); 

■ b. By revising paragraph (c)(3)(iii); 

■ c. By revising paragraph (c)(7); 

■ d. By adding paragraph (c)(8)(ii)(D); 

and 

■ e. By adding paragraph (c)(8)(iii)(D). 

The additions and revisions read as 

follows: 

§ 70.5 Permit applications. 

* * * * * 


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Federal Register / Vol. 74, No. 192 / Tuesday, October 6, 2009 / Rules and Regulations 51439 

(c) * * * 

(2) A description of the source’s 

processes and products (by Standard 

Industrial Classification (SIC) Code) 

including those associated with any 

proposed AOS identified by the source. 

(3) * * * 

(iii) Emissions rate in tpy and in such 

terms as are necessary to establish 

compliance consistent with the 

applicable standard reference test 

method. For emissions units subject to 

an annual emissions cap, tpy can be 

reported as part of the aggregate 

emissions associated with the cap, 

except where more specific information 

is needed, including where necessary to 

determine and/or assure compliance 

with an applicable requirement. 

* * * * * 

(7) Additional information as 

determined to be necessary by the 

permitting authority to define proposed 

AOSs identified by the source pursuant 

to § 70.6(a)(9) of this part or to define 

permit terms and conditions 

implementing any AOS under 

§ 70.6(a)(9) or implementing 

§ 70.4(b)(12) or § 70.6(a)(10) of this part. 

The permit application shall include 

documentation demonstrating that the 

source has obtained all authorization(s) 

required under the applicable 

requirements relevant to any proposed 

AOSs, or a certification that the source 

has submitted all relevant materials to 

the appropriate permitting authority for 

obtaining such authorization(s). 

(8) * * * 

(ii) * * * 

(D) For applicable requirements 

associated with a proposed AOS, a 

statement that the source will meet such 

requirements upon implementation of 

the AOS. If a proposed AOS would 

implicate an applicable requirement 

that will become effective during the 

permit term, a statement that the source 

will meet such requirements on a timely 

basis. 

(iii) * * * 

(D) For applicable requirements 

associated with a proposed AOS, a 

statement that the source will meet such 

requirements upon implementation of 

the AOS. If a proposed AOS would 

implicate an applicable requirement 

that will become effective during the 

permit term, a statement that the source 

will meet such requirements on a timely 

basis. A statement that the source will 

meet in a timely manner applicable 

requirements that become effective 

during the permit term will satisfy this 

provision, unless a more detailed 

schedule is expressly required by the 

applicable requirement. 

* * * * * 

■ 5. Section 70.6 is amended by revising 

paragraphs (a)(1) introductory text and 

(a)(9) to read as follows: 

§ 70.6 Permit content. 

(a) * * * 

(1) Emissions limitations and 

standards, including those operational 

requirements and limitations that assure 

compliance with all applicable 

requirements at the time of permit 

issuance. Such requirements and 

limitations may include ARMs 

identified by the source in its part 70 

permit application as approved by the 

permitting authority, provided that no 

ARM shall contravene any terms needed 

to comply with any otherwise 

applicable requirement or requirement 

of this part or circumvent any 

applicable requirement that would 

apply as a result of implementing the 

ARM. 

* * * * * 

(9) Terms and conditions for 

reasonably anticipated AOSs identified 

by the source in its application as 

approved by the permitting authority. 

Such terms and conditions: 

(i) Shall require the source, 

contemporaneously with making a 

change from one operating scenario to 

another, to record in a log at the 

permitted facility a record of the AOS 

under which it is operating; 

(ii) May extend the permit shield 

described in paragraph (f) of this section 

to all terms and conditions under each 

such AOS; and 

(iii) Must ensure that the terms and 

conditions of each AOS meet all 

applicable requirements and the 

requirements of this part. The 

permitting authority shall not approve a 

proposed AOS into the part 70 permit 

until the source has obtained all 

authorizations required under any 

applicable requirement relevant to that 

AOS. 

* * * * * 

PART 71—[AMENDED] 

■ 6. The authority citation for part 71 

continues to read as follows: 

Authority: 42 U.S.C. 7401, et seq. 

■ 7. Section 71.2 is amended by adding 

definitions of ‘‘Alternative operating 

scenario (AOS)’’ and ‘‘Approved 

replicable methodology (ARM)’’ in 

alphabetical order, to read as follows: 

§ 71.2 Definitions. 

* * * * * 

Alternative operating scenario (AOS) 

means a scenario authorized in a part 71 

permit that involves a change at the part 

71 source for a particular emissions 

unit, and that either results in the unit 

being subject to one or more applicable 

requirements which differ from those 

applicable to the emissions unit prior to 

implementation of the change or renders 

inapplicable one or more requirements 

previously applicable to the emissions 

unit prior to implementation of the 

change. 

* * * * * 

Approved replicable methodology 

(ARM) means part 71 permit terms that: 

(1) Specify a protocol which is 

consistent with and implements an 

applicable requirement, or requirement 

of this part, such that the protocol is 

based on sound scientific and/or 

mathematical principles and provides 

reproducible results using the same 

inputs; and 

(2) Require the results of that protocol 

to be recorded and used for assuring 

compliance with such applicable 

requirement, any other applicable 

requirement implicated by 

implementation of the ARM, or 

requirement of this part, including 

where an ARM is used for determining 

applicability of a specific requirement to 

a particular change. 

* * * * * 

■ 8. Section 71.5 is amended as follows: 

■ a. By revising paragraph (c)(2); 

■ b. By revising paragraph (c)(3)(iii); 

■ c. By revising paragraph (c)(7); 

■ d. By adding paragraph (c)(8)(ii)(D); 

and 

■ e. By adding paragraph (c)(8)(iii)(D). 

The additions and revisions read as 

follows: 

§ 71.5 Permit applications. 

* * * * * 

(c) * * * 

(2) A description of the source’s 

processes and products (by SIC Code) 

including those associated with any 

proposed AOS identified by the source. 

(3) * * * 

(iii) Emissions rates in tpy and in 

such terms as are necessary to establish 

compliance consistent with the 

applicable standard reference test 

method. For emissions units subject to 

an annual emissions cap, tpy can be 

reported as part of the aggregate 

emissions associated with the cap, 

except where more specific information 

is needed, including where necessary to 

determine and/or assure compliance 

with an applicable requirement. 

* * * * * 

(7) Additional information as 

determined to be necessary by the 

permitting authority to define proposed 

AOSs identified by the source pursuant 

to § 71.6(a)(9) or to define permit terms 

and conditions implementing any AOS 


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51440 Federal Register / Vol. 74, No. 192 / Tuesday, October 6, 2009 / Rules and Regulations 

under § 71.6(a)(9) or implementing 

§ 71.6(a)(10) or § 71.6(a)(13). The permit 

application shall include 

documentation demonstrating that the 

source has obtained all authorization(s) 

required under the applicable 

requirements relevant to any proposed 

AOSs, or a certification that the source 

has submitted all relevant materials to 

the appropriate permitting authority for 

obtaining such authorization(s). 

(8) * * * 

(ii) * * * 

(D) For applicable requirements 

associated with a proposed AOS, a 

statement that the source will meet such 

requirements upon implementation of 

the AOS. If a proposed AOS would 

implicate an applicable requirement 

that will become effective during the 

permit term, a statement that the source 

will meet such requirements on a timely 

basis. 

(iii) * * * 

(D) For applicable requirements 

associated with a proposed AOS, a 

statement that the source will meet such 

requirements upon implementation of 

the AOS. If a proposed AOS would 

implicate an applicable requirement 

that will become effective during the 

permit term, a statement that the source 

will meet such requirements on a timely 

basis. A statement that the source will 

meet in a timely manner applicable 

requirements that become effective 

during the permit term will satisfy this 

provision, unless a more detailed 

schedule is expressly required by the 

applicable requirement. 

* * * * * 

■ 9. Section 71.6 is amended by revising 

paragraphs (a)(1) introductory text and 

(a)(9) to read as follows: 

§ 71.6 Permit content. 

(a) * * * 

(1) Emissions limitations and 

standards, including those operational 

requirements and limitations that assure 

compliance with all applicable 

requirements at the time of permit 

issuance. Such requirements and 

limitations may include ARMs 

identified by the source in its part 71 

permit application as approved by the 

permitting authority, provided that no 

ARM shall contravene any terms needed 

to comply with any otherwise 

applicable requirement or requirement 

of this part or circumvent any 

applicable requirement that would 

apply as a result of implementing the 

ARM. 

* * * * * 

(9) Terms and conditions for 

reasonably anticipated AOSs identified 

by the source in its application as 

approved by the permitting authority. 

Such terms and conditions: 

(i) Shall require the source, 

contemporaneously with making a 

change from one operating scenario to 

another, to record in a log at the 

permitted facility a record of the AOS 

under which it is operating; 

(ii) May extend the permit shield 

described in paragraph (f) of this section 

to all terms and conditions under each 

such AOS; and 

(iii) Must ensure that the terms and 

conditions of each AOS meet all 

applicable requirements and the 

requirements of this part. The 

permitting authority shall not approve a 

proposed AOS into the part 71 permit 

until the source has obtained all 

authorizations required under any 

applicable requirement relevant to that 

AOS. 

* * * * * 

[FR Doc. E9–23794 Filed 10–5–09; 8:45 am] 

BILLING CODE 6560–50–P 


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