### 28646 Federal Register / Vol. 76, No. 96 / Wednesday, May 18, 2011 / Rules and Regulations

**FOR FURTHER INFORMATION CONTACT :**  If you have questions on this rule, call or e-mail Kay Wade, Bridge Administration Branch, Coast Guard; telephone 504–671–2128, e-mail Kay.B.Wade@uscg.mil. If you have questions on viewing the docket, call Renee V. Wright, Program Manager, Docket Operations, telephone 202–366–

9826.

**SUPPLEMENTARY INFORMATION :**  The Union Pacific Railroad has requested a temporary deviation from the operating schedule for the swing span bridge across the Calcasieu River, mile 36.4, at Westlake, Calcasieu Parish, Louisiana. The swing span bridge has a vertical clearance of 1.07 feet above mean high water, elevation 3.56 feet Mean Gulf Level in the closed-to-navigation position.

In accordance with 33 CFR 117.5, the bridge currently opens on signal for the passage of vessels. This deviation allows the swing span of the bridge to remain closed to navigation from 8 a.m. through 5 p.m. with an opening for the passage of vessels from 12 noon to 1 p.m. on the following Thursdays: June 2, 9, 16, 23, and 30, 2011.

The closures are necessary in order to remove and install the structural steel, new gear motors, and shafts at both ends of the bridge and the center pivot pier.
This maintenance is essential for the continued operation of the bridge. Notices will be published in the Eighth
Coast Guard District Local Notice to
Mariners and will be broadcast via the
Coast Guard Broadcast Notice to Mariners System.

Navigation on the waterway is minimal at the bridge site. The very limited commercial traffic at the bridge site consists of commercial tugs with tows. There are only two companies that transit above the bridge. The bridge will be able to open for emergencies if necessary. There are no alternate waterway routes available. Based on experience and coordination with waterway users, it has been determined
that these closures will not have a significant effect on vessels that use the waterway.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the designated time period. This deviation from the operating regulations
is authorized under 33 CFR 117.35.

Dated: May 9, 2011.

David M. Frank, Bridge Administrator.

[FR Doc. 2011–12246 Filed 5–17–11; 8:45 am]

**BILLING CODE 9110–04–P ENVIRONMENTAL PROTECTION** 
**AGENCY**

**40 CFR Part 52**

**[EPA–HQ–OAR–2003–0062: FRL–9306–9]**

**RIN 2060–AP75**

**Implementation of the New Source Review (NSR) Program for Particulate** 
**Matter Less Than 2.5 Micrometers (PM**  2.5 **); Final Rule To Repeal**
**Grandfather Provision**

**AGENCY :**  Environmental Protection Agency (EPA).

**ACTION :**  Final rule.

**SUMMARY :**  The EPA is issuing a final rule that repeals the ‘‘ grandfather ’’ provision for particulate matter less than 2.5 micrometers (PM 2.5 ) under the Federal Prevention of Significant Deterioration (PSD) permit program, which is administered by EPA in states that lack a PSD permit program in their approved state implementation plan (SIP). The grandfather provision allowed certain
facilities under certain circumstances to satisfy the PSD permit program requirements for PM 2.5 by meeting the requirements for controlling particulate matter less than 10 micrometers (PM 10 ) and analyzing impacts on PM 10 air quality as a surrogate approach based on an EPA policy known as the ‘‘ 1997 PM 10 Surrogate Policy. ’’ In its February 11, 2010, notice of proposed rulemaking, EPA also proposed to end early the 1997

PM 10 Surrogate Policy in EPA-approved state PSD programs during the remainder of the SIP development period, which ends on May 16, 2011. EPA is taking no final action on that aspect of the proposal.

**DATES :**  This final rule is effective on July

18, 2011.

**ADDRESSES :**  The EPA has established a
docket for this action under Docket ID No. EPA–HQ–OAR–2003–0062. 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., Confidential Business Information (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 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 Docket is (202) 566–1742.

**FOR FURTHER INFORMATION CONTACT :**  Mr. Dan deRoeck, Air Quality Policy Division, (C504–03), U.S. Environmental Protection Agency, Research Triangle Park, NC, 27711; telephone number (919) 541–5593; fax number (919) 541–5509; or e-mail
address: deroeck.dan@epa.gov.

**SUPPLEMENTARY INFORMATION :**  The information in this Supplementary Information section of this preamble is organized as follows:

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. Overview of This Final Rule III. Background

A. Prevention of Significant Deterioration

Program B. Fine PM and the NAAQS for PM 2.5 C. How is the PSD program for PM 2.5

implemented?

IV. Grandfather Provision for PM 2.5 in the Federal PSD Program A. What is the grandfather provision for

PM 2.5 ? B. Why did EPA propose to repeal the

grandfather provision for PM 2.5 ? C. Summary of Comments and Responses

on the Proposed Repeal of the

Grandfather Provision D. What final action is EPA taking on the

grandfather provision for PM 2.5 ? V. What action is EPA taking on the 1997

PM 10 Surrogate Policy for state PSD programs? VI. 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

L. Conclusion and Determination Under

Section 307(d) VII. Judicial Review VIII. Statutory Authority


### 28647 Federal Register / Vol. 76, No. 96 / Wednesday, May 18, 2011 / Rules and Regulations

1 In this preamble, the terms ‘‘ we, ’’ ‘‘ us, ’’ and ‘‘ our ’’
refer to the EPA. 2 Sources that applied for a PSD permit under the Federal PSD program on or after July 15, 2008, are already excluded from using the 1997 PM 10 Surrogate Policy as a means of satisfying the PSD requirements for PM 2.5

. See 73 FR 28321. I. General Information

A. Does this action apply to me?

Entities potentially affected by this action include those proposed new and modified major stationary sources subject to the Federal PSD program that submitted a complete application for a PSD permit before the July 15, 2008,
effective date of the final PM 2.5 New Source Review (NSR) Implementation Rule (73 FR 28321), but have not yet received a final and effective permit authorizing the source to commence

construction.

The EPA estimates that fewer than 30 proposed new major sources or modifications will be affected by the repeal of the grandfather provision in the Federal PSD program. At least two projects known to have been grandfathered received final permits to construct (that are effective) prior to EPA taking action to stay the provision in June 2009; EPA’s final action to repeal the grandfather provision does not apply retroactively to such permits.

The majority of sources potentially affected are expected to be in the following groups:

Industry group NAICS a

Electric services ........................................................................................ 221111, 221112, 221113, 221119, 221121, 221122. Petroleum refining .................................................................................... 32411. Industrial inorganic chemicals .................................................................. 325181, 32512, 325131, 325182, 211112, 325998, 331311, 325188. Industrial organic chemicals ..................................................................... 32511, 325132, 325192, 325188, 325193, 32512, 325199. Miscellaneous chemical products ............................................................. 32552, 32592, 32591, 325182, 32551. Natural gas liquids .................................................................................... 211112. Natural gas transport ................................................................................ 48621, 22121. Pulp and paper mills ................................................................................. 32211, 322121, 322122, 322 13. Paper mills ................................................................................................ 322121, 322122. Automobile manufacturing ........................................................................ 336111, 336112, 336712, 336211, 336992, 336322, 336312, 33633, 33634, 33635, 336399, 336212, 336213. Pharmaceuticals ....................................................................................... 325411, 325412, 325413, 3 25414.

a North American Industry Classification System.

Entities affected by this action also include state and local governmentsresponsible for implementing PSD preconstruction permit programs for new and modified major stationary sources under the Federal PSD permit program (40 CFR 52.21).

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. Overview of This Final Rule

In this final rule we 1 are taking final
action on one of the two actions that we proposed in a notice of proposed rulemaking on February 11, 2010, at 75 FR 6827. We are taking final action on the proposal to repeal the grandfather provision for PM 2.5 contained in the Federal PSD rules at 40 CFR 52.21(i)(1)(xi). The grandfather provision, applicable only to PSD source applications that were determined to be complete before July 15, 2008, enabled those applications to
continue to be reviewed for PM 10 ( i.e.,
the 1997 PM 10 Surrogate Policy) in lieu of the new requirements for PM 2.5 , which became effective on July 15,

2008.

When EPA issued the PM 10 Surrogate Policy in 1997, the policy enabled sources, EPA, and state and local permitting authorities to address the PSD requirements for PM 2.5 simply by satisfying the requirements for PM 10—a regulated form of particulate matter (PM) that includes PM 2.5 as well as larger particles. As explained in the

1997 PM 10 Surrogate Policy, some alternative to directly addressing PM 2.5 was necessary at that time because of various technical problems that made it
infeasible to estimate PM 2.5 and conduct the analyses necessary to demonstrate compliance with the applicable PM 2.5 requirements under the PSD program as required by section 165 of the Clean Air Act (CAA or Act).

More recently, EPA has made important progress in addressing the technical issues that impeded a PM 2.5 analysis. With the deployment and operation of the monitoring network for

PM 2.5 beginning in 1999, ambient air quality monitoring data has become more abundantly available. Also, EPA has promulgated screening tools, including a significant emissions rate (SER), significant impact levels (SILs), and a significant monitoring concentration (SMC) to streamline the implementation of the PSD program for

PM 2.5 . Finally, EPA has issued revised test methods for sampling emissions of

PM 2.5 and its condensable fraction, and issued interim modeling guidance for modeling PM 2.5 emissions to complete a cumulative air quality analysis for

PM 2.5

. Accordingly, in this final action, EPA
will end the use of the 1997 PM 10 Surrogate Policy for PSD permits under the Federal PSD program (40 CFR 52.21) for sources that have been covered by the grandfather provision (that is, those sources for which a complete permit application was submitted before July

15, 2008 2 ) and that have not yet been issued a permit by the effective date of
this final rule. After this final rule becomes effective, in order for those permits to be issued, such applications will have to be reviewed directly against
the PM 2.5 requirements or, alternatively, use a surrogate approach for PM 2.5 (other than the 1997 PM 10 Surrogate Policy) that is consistent with the applicable case law. Thus, those affected PSD permit applications must be amended to include further analyses to demonstrate compliance with the PSD requirements for PM 2.5

. Alternatively, those affected PSD permit applications must show that PM 10 is an adequate surrogate for PM 2.5 for that specific project. The demonstration must show, at a minimum, that the
source’s emissions are controlled to a
level that satisfies Best Available Control Technology (BACT) requirements for PM 2.5 and that the
emissions will not cause or contribute to a violation of any National Ambient Air Quality Standard (NAAQS or standard)
for PM 2.5

.


### 28648 Federal Register / Vol. 76, No. 96 / Wednesday, May 18, 2011 / Rules and Regulations

3 We have delegated our authority to some states that lack an approved PSD program in their SIPs and have requested the authority to implement the Federal PSD program. The EPA remains the reviewing authority in non-delegated states lacking SIP-approved programs. The current status of individual state PSD programs can be found at EPA’s Web site at http://www.epa.gov/nsr/
where.html. We believe that it is appropriate to
terminate the use of the 1997 PM 10 Surrogate Policy at this time for those PSD applications grandfathered under the Federal PSD program because the necessary technical tools to conduct

PM 2.5 analyses for PSD sources are now
available. The 1997 PM 10 Surrogate Policy was always intended as an
interim measure that was to remain in effect only as long as needed. Over the past 13 years, EPA believes that the necessary technical tools and test methods required to show compliance
with PM 2.5 have been developed and, hence, we believe that the need for this interim approach no longer exists.

We do not believe that the use of the

1997 PM 10 Surrogate Policy affords the same degree of protection of the PM 2.5 NAAQS from major new and modified stationary sources as does the direct analysis of PM 2.5 emissions. In addition to the fact that the original PM 2.5 NAAQS promulgated in 1997 were generally more stringent than the corresponding PM 10 NAAQS, the strengthening of the 24-hour primary

PM 2.5 NAAQS in 2005 created a greater disparity between the relative stringency of the PM 2.5 and PM 10 standards. Thus, now that the necessary technical tools are available, we believe that it is important to move as quickly as possible to implement fully the PSD program for PM 2.5

.

We recognize that this action will in some cases increase the PSD permit review timeframe (although not unexpectedly) for the affected grandfathered sources, but we believe
that the use of the 1997 PM 10 Surrogate Policy should be permanently
discontinued under the Federal PSD program. Those grandfathered sources with pending permits have been on notice since June 1, 2009, (the date of

our Federal Register notice announcing that we had agreed to reconsider the grandfather provision and to administratively stay the provision so that we could propose repealing it) that EPA was considering ending the grandfather provision for PM 2.5 and, as noted above, now have additional technical tools to complete the permitting process for PM 2.5

.

In our February 2010 proposed rule, we also proposed to end the use of the

1997 PM 10 Surrogate Policy for permits issued under PSD programs implemented by states as part of their approved SIP. We received and have reviewed some comments that support an early end to the policy and some comments that oppose ending the policy earlier than the original May 16, 2011, sunset date. Some of the opposing
comments also asked EPA to extend the time that the policy could be used beyond the original sunset date. At this time, however, we are taking no action on our proposal to end the use of the

1997 PM 10 Surrogate Policy or to otherwise change the time period during which the policy could continue to be
used.

Thus, as announced in the May 2008 rulemaking, the 1997 PM 10 Surrogate Policy may not be used for any state PSD permits after the 3 years allowed for SIP development (ending May 16, 2011). With the end of the 1997 PM 10 Surrogate Policy in SIP-approved states on May 16, 2011, and the repeal of the grandfather provision in this final action, the 1997 PM 10 Surrogate Policy may not be relied on for any pending or future applications.

III. Background

A. Prevention of Significant Deterioration Program

The NSR provisions of the Act are a combination of air quality planning and air pollution control technology program requirements for new and modified major stationary sources of air pollution. Section 109 of the Act requires EPA to promulgate primary NAAQS to protect public health and secondary NAAQS to protect public
welfare. Once we have set these standards, states must develop, adopt, and submit to us for approval SIPs that
contain emission limitations and other
control measures to attain and maintain the NAAQS and to meet the other requirements of section 110(a) of the

Act.

Part C of title I of the Act contains the requirements for a component of the major NSR program known as the PSD (short for ‘‘ Prevention of Significant

Deterioration ’’ ) program. The PSD program sets forth procedures for the preconstruction review and permitting of new and modified major stationary sources of air pollution locating in areas meeting the NAAQS ( ‘‘ attainment’’ areas) and areas for which there is insufficient information to classify an
area as either attainment or nonattainment ( ‘‘ unclassifiable ’’ areas). In most states, EPA has approved a PSD permit program that is part of the applicable SIP. The Federal PSD program at 40 CFR 52.21 applies in states that lack a SIP-approved PSD permit program, and in Indian country. 3 The applicability of the PSD program to a new major stationary source or major
modification must be determined in
advance of construction and is a pollutant-specific determination. Once a major new source or major modification is determined to be subject to the PSD program ( i.e., to be a ‘‘ PSD source ’’ ), among other requirements, it must undertake a series of analyses for each regulated NSR pollutant subject to
review to demonstrate that it will use
the BACT and will not cause or contribute to a violation of any NAAQS
or increment. In cases where the source’s emissions of any NSR regulated pollutant may adversely affect an area specially classified as ‘‘ Class I, ’’ such as national parks and wilderness areas,
additional review must be conducted to protect the Class I area’s increments and special attributes referred to as ‘‘ air quality related values. ’’

When the reviewing authority reaches a preliminary decision to authorize construction of a proposed major new source or major modification, the authority must provide notice of the preliminary decision and an opportunity for comment by the general public, industry, and other persons that may be affected by the emissions of the proposed major source or major modification. After considering these comments, the reviewing authority
issues a final determination on the construction permit in accordance with the PSD regulations. However, under EPA regulations at 40 CFR part 124 and similar state regulations, an administrative appeal of a permitting determination may prevent the permit from becoming final and effective until the appeal is resolved.

B. Fine PM and the NAAQS for PM 2.5 Fine particles in the atmosphere are made up of a complex mixture of components. Common constituents include sulfates; nitrates; ammonium; elemental carbon; a great variety of organic compounds; and inorganic material (including metals, dust, sea salt, and other trace elements) generally
referred to as ‘‘ crustal ’’ material, although it may contain material from
other sources. Airborne PM with a nominal aerodynamic diameter of 2.5 micrometers or less (a micrometer is one-millionth of a meter, and 2.5
micrometers is less than one-seventh the average width of a human hair) is
considered to be ‘‘ fine particles, ’’ and is
also known as PM 2.5

. ‘‘ Primary ’’ particles are emitted directly into the air as solid or liquid particles ( e.g., elemental


### 28649 Federal Register / Vol. 76, No. 96 / Wednesday, May 18, 2011 / Rules and Regulations

4 Available in the docket for this rulemaking, ID No. EPA–HQ–OAR–2003–0062, and at http:// www.epa.gov/region07/programs/artd/air/nsr/ nsrmemos/pm25.pdf. 5 We identified various technical difficulties, including the lack of necessary tools to calculate the
emissions of PM 2.5 and related precursors, the lack of adequate modeling techniques to project ambient impacts, the lack of PM 2.5 monitoring sites, and the lack of adequate approved test methods. carbon from diesel engines or fire activities, or condensable organic particles from gasoline engines).

‘‘ Secondary ’’ particles ( e.g., sulfates and nitrates) form in the atmosphere as a
result of various chemical reactions.

The health effects associated with exposure to PM 2.5 are significant and well studied. Epidemiological studies have shown a significant correlation
between elevated PM 2.5 levels and premature mortality. Other important
effects associated with PM 2.5 exposure include aggravation of respiratory and cardiovascular disease (as indicated by increased hospital admissions, emergency room visits, absences from school or work, and restricted activity days), lung disease, decreased lung function, asthma attacks, and certain cardiovascular problems. Individuals particularly sensitive to PM 2.5 exposure include older adults, people with heart and lung disease, and children.

The EPA has established primary health-based long-term and short-term NAAQS for PM 2.5 . The long-term annual average standard is 15 micrograms per cubic meter ( μg/m 3 ), established in

1997. See 62 FR 38652. The short-term
24-hour standard is 35 μg/m 3

, established in 2006. See 71 FR 61286. At the time we established the primary standards in 1997, we also established welfare-based (secondary) standards identical to the primary standards. The secondary standards are designed to protect against major environmental
effects of PM 2.5 such as visibility impairment, soiling, and materials damage.

In addition, EPA has established a short-term primary and secondary NAAQS for PM 10 as an indicator for
coarse PM. The short-term standard for

PM 10 is 150 μg/m 3

. See 71 FR 61236.

C. How is the PSD program for PM 2.5 implemented?

After we promulgated the NAAQS for

PM 2.5 in 1997, we issued a guidance document titled, ‘‘ Interim Implementation for the New Source Review Requirements for PM 2.5 ’’ (John S. Seitz, EPA, October 23, 1997). 4 That guidance document, referred to throughout this preamble as the ‘‘ 1997
PM 10 Surrogate Policy, ’’ allows proposed major sources and major modifications to satisfy the PSD requirements for

PM 2.5 by meeting the requirements for controlling PM 10 and for analyzing impacts on PM 10 air quality as a surrogate approach. The 1997 PM 10 Surrogate Policy was designed to temporarily help states implement the CAA requirements for PSD pertaining to
the new PM 2.5 NAAQS and PM 2.5 as a regulated pollutant. We intended to make the policy available until we
resolved the known technical difficulties associated with addressing

PM 2.5

. 5

We believed the 1997 PM 10 Surrogate Policy was necessary because section 165(a)(1) of the Act provides that no new or modified major source may be constructed without a PSD permit that meets all of the section 165(a) requirements with respect to the regulated pollutant. Moreover, section 165(a)(3) provides that the emissions from any such source may not cause or
contribute to a violation of ‘‘ any NAAQS. ’’ The EPA policy for implementing the Federal PSD program provides that the term ‘‘ any NAAQS ’’ applies to any existing NAAQS, including new or revised NAAQS upon their effective date. Also, section 165(a)(4) requires BACT for each pollutant subject to PSD regulation.

PM 2.5 became a regulated pollutant when EPA promulgated the NAAQS for

PM 2.5 in 1997.

On November 1, 2005, we proposed
the Clean Air Fine Particle Implementation Rule (PM 2.5 Implementation Rule) to implement the

1997 PM 2.5 NAAQS. See 70 FR 65984. The PM 2.5 Implementation Rule proposal described the requirements
that states and tribes must meet in their implementation plans for attainment of
the PM 2.5 NAAQS. Among other things, that rule proposal sought comments on revisions to the NSR program in attainment and unclassifiable areas (the PSD program), and in nonattainment areas (the nonattainment NSR program).

For PSD, EPA proposed to revise the existing PSD rules in several ways: by proposing a PSD major source threshold
and SER for PM 2.5 ; proposing to define applicable precursors to regulate under PSD and SERs for those precursors; proposing to clarify that condensable

PM 2.5 must be included in determining major source status; proposing options for implementing the preconstruction monitoring requirements for PM 2.5 ; and proposing transition provisions for implementing the new PSD requirements for PM 2.5

.

On September 21, 2007, EPA proposed additional program elements for the PSD program for PM 2.5 that were not included in the 2005 PM 2.5 Implementation Rule proposal. The 2007 PSD proposal included several options for defining the PM 2.5 increments, SILs, and an SMC for PM 2.5

. Increments define maximum allowable increases in pollutant concentrations
above a baseline concentration for a particular area. The SILs and SMC are useful screening tools for effectively implementing the air quality impact requirements under PSD. See 72 FR

54112.

On May 16, 2008, EPA published a
final PM 2.5 NSR Implementation Rule to complete the rulemaking for NSR based
on the 2005 PM 2.5 Implementation Rule proposal. The 2008 PM 2.5 NSR Implementation Rule contains requirements for state and tribal plans to implement the Act’s preconstruction review provisions for the PM 2.5 NAAQS
in both attainment and nonattainment

areas. See 73 FR 28321. The 2008 PM 2.5 NSR Implementation Rule generally requires that, as of the effective date of the new rule (July 15, 2008), major stationary sources seeking permits must begin directly satisfying the PM 2.5 requirements, rather than relying on the

1997 PM 10 Surrogate Policy. In PM 2.5 attainment (or unclassifiable) areas, the new PSD requirements under 40 CFR
51.166 set forth the PM 2.5 requirements for states with SIP-approved programs to include in their state PSD programs; similar requirements were added to 40 CFR 52.21—the Federal PSD program— for EPA (or, where applicable, delegated state agencies) to use for implementing
the new PM 2.5 requirements in states lacking approved PSD programs in their

SIPs.

Although the 2008 PM 2.5 NSR Implementation Rule generally requires states to begin implementing the new

PM 2.5 requirements upon the July 15, 2008, effective date of the rule, EPA provided two transition provisions within the PSD program under specific
conditions. The first of these transition provisions, a grandfather provision, applied specifically to certain sources that had applied for PSD permits pursuant to the Federal PSD program
under 40 CFR 52.21. The second transition provision allowed states to continue using the 1997 PM 10 Surrogate Policy on an interim basis to implement
the PM 2.5 requirements in any state PSD program that is part of an approved SIP. This latter exception was to apply to permit reviews under state PSD programs until the end of the 3-year SIP development period (which ends in May 2011) or until EPA approves the revised state program, whichever comes
first.


### 28650 Federal Register / Vol. 76, No. 96 / Wednesday, May 18, 2011 / Rules and Regulations

6 At the time the grandfather provision for PM 2.5 was put into effect, we estimate that fewer than thirty proposed new or modified major stationary sources were covered. Of these, at least two projects subsequently received final and effective PSD permits after the July 15, 2008, effective date of the final rule and before the June 1, 2009, administrative stay took effect.

7 Available in the docket for this rulemaking at http://www.regulations.gov, document number EPA–HQ–OAR–2003–0062–0279.1. 8 Available in the docket for this rulemaking at http://www.regulations.gov, document number EPA–HQ–OAR–2003–0062–0281. IV. Grandfather Provision for PM 2.5 in the Federal PSD Program

A. What is the grandfather provision for

PM 2.5 ?

Under certain circumstances, EPA has allowed proposed new major sources and major modifications that have submitted a complete PSD permit application before the effective date of an amendment to the PSD regulations, but have not yet received a final and effective PSD permit, to continue relying on information already in the application rather than immediately having to amend applications to demonstrate compliance with the new PSD requirements. In such a way, these proposed sources and modifications

were ‘‘ grandfathered ’’ or exempted from the new PSD requirements that would otherwise have applied to them. For example, the Federal PSD regulations at 40 CFR 52.21(i)(1)(x) provide that the owners or operators of proposed sources
or modifications that submitted a complete permit application before July 31, 1987, ( i.e., the effective date of the revisions to the Federal PSD regulations to implement the PM 10 NAAQS) are not required to meet the requirements for

PM 10 , but may instead satisfy the requirements for total suspended particulate matter (TSP) that were previously in effect.

In addition, EPA has allowed some grandfathering for permit applications
submitted before the effective date of an amendment to the PSD regulations establishing new maximum allowable increases in pollutant concentrations (also known as PSD increments). The Federal PSD regulations at 40 CFR 52.21(i)(10) provide that proposed
sources or modifications that submitted a complete permit application before the
effective date of the increments for PM 10 in the applicable implementation plan are not required to meet the increment requirements for PM 10 , but may instead satisfy the increment requirements for TSP that were previously in effect. Also, 40 CFR 52.21(b)(i)(9) provides that new sources or sources making modifications that submitted complete permit applications before the provisions embodying the maximum allowable increase for nitrogen oxides (the nitrogen dioxide increments) took effect are not required to demonstrate compliance with the new increment requirements to be eligible to receive the permit.

Similarly, the 2008 PM 2.5 NSR Implementation Rule added a grandfather provision allowing permit applicants that had submitted a complete application under the Federal PSD program at 40 CFR 52.21 prior to the July 15, 2008, effective date, but had not yet received their PSD permit by that date, to continue being reviewed using the 1997 PM 10 Surrogate Policy. The grandfather provision for PM 2.5 , added as new paragraph (xi) to 40 CFR 52.21(i)(1), was not proposed for notice
and comment in the 2005 PM 2.5 Implementation Rule proposal. Instead,
the 2005 PM 2.5 Implementation Rule proposal had provided that when we issued the final rule, the new PM 2.5 requirements would take effect immediately in PSD permits issued in states where the Federal PSD program applies. See 70 FR 65986 at 66043.

As described more in the discussion
that follows in section IV.B of this preamble, EPA has twice stayed the grandfather provision for PM 2.5 , with the first of the two stays beginning on June 1, 2009. Consequently, permits covered by the grandfather provision that had not already been issued by the effective date of the first stay could not be issued relying upon the 1997 PM 10 Surrogate Policy as the basis for approval during the time periods that the stays remained
in effect. 6 Prior to the stays, the grandfather provisions remained in effect from July 15, 2008, until June 1, 2009, during which time PSD permit applications relying on the 1997 PM 10 Surrogate Policy to satisfy the PSD requirements for PM 2.5 continued to be acceptable for purposes of approving and issuing the PSD permits.

B. Why did EPA propose to repeal the grandfather provision for PM 2.5 ?
On July 15, 2008, Earthjustice, acting
on behalf of the Natural Resources Defense Council and the Sierra Club, submitted a petition to the Administrator seeking reconsideration of four provisions of the 2008 PM 2.5 NSR Implementation Rule. 7 One of the four challenged provisions was the grandfather provision for PM 2.5 under the Federal PSD program. In the petition, the petitioners argued that

‘‘EPA unlawfully failed to present this grandfather provision and accompanying rationale to the public for

comment. ’’ See July 15 Petition at 6. Thus, petitioners argued, EPA had not given interested parties any notice of and the opportunity to comment on the grandfather provision that EPA adopted in 40 CFR 52.21(i)(1)(xi) in the final rule. Moreover, with regard to the grandfather provision itself, the petitioners questioned EPA’s authority to waive statutory requirements by establishing such a provision, and argued that Congress specifically addressed the issue of grandfathering in section 168(b), where it allowed for the grandfathering of only those sources on
which construction had commenced
before enactment of the 1977 Clean Air
Act Amendments. See July 15 Petition

at 7.

Finally, petitioners argued that the
technical difficulties associated with ambient monitoring, estimating emissions, and air quality modeling that led to the adoption of the 1997 PM 10 Surrogate Policy no longer existed. Hence, the petitioners argued that all sources must conduct the required analyses for PM 2.5 directly without relying on the 1997 PM 10 Surrogate Policy, and, therefore, there was no justification for continuing to allow any sources to rely on the grandfather provision. See July 15 Petition at 8. In sum, petitioners asserted that the grandfather provision in 40 CFR 52.21(i)(1)(xi) was illegal and arbitrary, and requested that EPA stay the provision.

On January 14, 2009, EPA responded in a letter to the petitioners that the Agency was denying all aspects of the petition for reconsideration. However, on February 10, 2009, the same petitioners submitted a second petition
similar to thefirst to EPA. 8

The second petition made the same arguments that were presented in the July 15, 2008, petition seeking
reconsideration and an administrative stay and sought reconsideration of both
the 2008 PM 2.5 NSR Implementation Rule and the January 2009 denial of petitioners’ first petition for reconsideration. In response to the second petition, the Administrator reversed the Agency’s earlier decision and agreed to reconsider each of the four challenged provisions.

In a letter dated April 24, 2009, the Administrator indicated that the Agency would reconsider the grandfather provision and propose to repeal the grandfather provision ‘‘ on the grounds that it was adopted without prior public notice and is no longer substantially justified in light of the resolution of the technical issues with respect to PM 2.5 monitoring, emissions estimation, and air quality modeling that led to the PM 10 Surrogate Policy in 1997. ’’ Finally, the


### 28651 Federal Register / Vol. 76, No. 96 / Wednesday, May 18, 2011 / Rules and Regulations

Administrator’s letter announced an administrative stay of the grandfather provision for 3 months under the authority of section 307(d)(7)(B) of the

Act.

The 3-month administrative stay became effective on June 1, 2009—the date the notice announcing the stay was published in the Federal Register—and ended on September 1, 2009. See 74 FR 26098. In order to allow additional time necessary to finalize this rulemaking, EPA proposed and promulgated a second stay that stayed the grandfather provision until June 22, 2010. See 74 FR 48153, September 22, 2009. During the second stay, on February 11, 2010, EPA issued a notice of proposed rulemaking that proposed repealing the grandfather provision. See 75 FR 6827. The same notice also proposed to end early the
use of the 1997 PM 10 Surrogate Policy in PSD programs implemented by states under an approved SIP. EPA is taking no final action on the latter proposed action, as described further in section V of this preamble.

C. Summary of Comments and Responses on the Proposed Repeal of the Grandfather Provision

A total of 38 commenters, including 7 commenters speaking at the public hearing held on February 26, 2010, responded to the 2010 notice of proposed rulemaking. Most of these commenters specifically addressed the proposed repeal of the grandfather provision for PM 2.5 in the Federal PSD rule at 40 CFR 52.21(i)(1)(xi).

Seven commenters support the proposal to repeal the grandfather provision, while 20 expressly opposed it. The commenters provided various reasons for their positions. The following discussion summarizes the significant comments and our responses categorized by specific topics. A more detailed summary of the comments and our responses is contained in the Response to Comment document in the docket for this rulemaking.

1. Comments on Legal Concerns

Comments on Legality of the Grandfather Provision:

Some environmental group commenters support EPA’s proposed repeal, in part, because of their interpretation that the grandfather provision is illegal. The commenters
claim that EPA has no discretion to waive or grandfather any permits under the Federal PSD program. On the other hand, 12 commenters disagree that there is anything unlawful about the grandfather provision for PM 2.5 . Those commenters claim that EPA clearly has the authority to establish a grandfather provision as part of a transition procedure for implementing new requirements. Some of these commenters point out that EPA
indicated in the 2008 PM 2.5 NSR Implementation Rule that the grandfather provision was consistent with existing grandfather provisions contained in 40 CFR 52.21(i)(1)(x).

Response: We disagree with the comments stating that EPA may not establish grandfather provisions in appropriate circumstances. Our decision to repeal the grandfather provision here does not reflect any conclusion by EPA that the grandfather provision for PM 2.5 , or grandfather provisions in general, are unlawful. See also our response to the following comments on statutory authority.

Comments on Statutory Authority: Several commenters argue against the petitioners’ claim in the 2009 petition for reconsideration that section 168(b) of the Act restricts EPA’s ability to grandfather sources by allowing for the grandfathering of only those sources on
which ‘‘ construction was commenced * * * after June 1, 1975, and prior to
the enactment of the Clean Air Act
Amendments of 1977 * * *. ’’ These commenters argue that Congress’ inclusion of a one-time grandfather provision upon enactment of the PSD program is clearly different from grandfathering when a new pollutant is identified for regulation by a NAAQS,
which the Act does not address. These commenters urge EPA to confirm that the grandfather provision in section 168 (intended to ease transition upon enactment of the PSD statute) does not constrain the Agency with respect to offering reasonable transition provisions when pollutants become newly subject to a NAAQS. The commenters argue
instead that the existence of the grandfather provision in section 168 generally indicates that Congress
intended for smooth transitions to new programs under the Act.

One of these commenters argues that in the PSD program, EPA has included grandfather provisions when it adopted a number of new permitting requirements, and that the Act gives
EPA substantial discretion to decide on the specifics of PSD applicability. (Citing Envt’l Defense v. Duke Energy Corp., 127 S. Ct. 1423, 1433–34 (2007).)
Another of the commenters claims that a repeal of the grandfather provision would be unfair and contrary to the Act.

Finally, some commenters expressly call upon EPA to clarify that it retains the authority to issue transition policies, such as the grandfather provision, when new NAAQS are issued. Response: We do not agree with the petitioners’ original claim that EPA lacks authority to adopt and implement the grandfather provision for PM 2.5 . Thus, we agree with the commenters who also question the petitioners’ claim. In particular, we do not agree that the existence of certain grandfathering in section 168(b) of the Act is properly read to prohibit grandfathering in all other circumstances. As discussed previously in section IV.A of this preamble, and as pointed out in some of the comments, we have relied on the use of grandfather provisions in past NSR regulations
where we believed that it was appropriate as part of the transition process for implementing new requirements. In the preamble to the

2008 PM 2.5 NSR Implementation Rule, we stated our position that the PM 2.5 grandfather provision is consistent with the existing provision under 40 CFR 52.21(i)(1)(x) whereby EPA grandfathered new and modified major stationary sources with permit applications based on PM (measured as TSP) from the then-new PM 10 requirements established in 1987. However, while we continue to believe
that we have the discretion to use grandfather provisions in the PSD program where appropriate, we have decided to repeal the grandfather provision for PM 2.5 at 40 CFR 52.21(i)(1)(xi) on policy grounds, as discussed later in this preamble.

Comments on the Section 165(c) Requirement To Issue a PSD Permit
within 1 Year:

One commenter points to section 165(c) of the Act as creating a 1-year deadline for issuing a PSD permit after a complete application has been submitted, and argues that since most, if not all, of the permit applications that would be affected by the repeal of the grandfather provision were likely submitted more than 1 year before the initial (administrative) stay of the grandfather provision took effect, those applications are entitled to final action consistent with the grandfather provision and the use of PM 10 as a surrogate for PM 2.5 . The commenter further argues that, in addition to allowing EPA or states with delegated PSD authority to continue ongoing violations of the section 165(c) deadline, repealing the grandfather provision for

PM 2.5 would deepen and perpetuate the

‘‘ unlawful ’’ effects of the stay.

Response: We do not dispute that some of the permit applications relying on the grandfather provision were not granted or denied within the 1-year period provided in section 165(c) of the Act,


### 28652 Federal Register / Vol. 76, No. 96 / Wednesday, May 18, 2011 / Rules and Regulations

9 In support of this position, the commenter cites Appalachian Power v. EPA, 208 F.3d 1015, 1028 (D.C. Cir. 2001); Alaska Professional Hunters

Association v. FAA, 177 F.3d 1030, 1033–34 (D.C. Cir. 1999); and Paralyzed Veterans of America v. D.C. Arena L.P., 117 F.3d 579, 586 (D.C. Cir. 1997). but disagree that this is a valid justification for allowing the use of the grandfather provision, for all of the reasons discussed in this preamble. In making this comment, the commenter
has not shown that the failure to act on those applications within 1 year can be attributed to the stays of the grandfather provision (which, as the commenter recognizes, came into effect almost 1 year after the grandfather provision for

PM 2.5 was promulgated). Indeed, the fact that a permit was not issued within a year during the time that the grandfather provision was in effect suggests that there were other factors that prevented the source from receiving a permit within the 1-year period provided by CAA section 165(c). Moreover, even if the grandfather provision had not been stayed with respect to those pending applications (or if the 1997 PM 10 Surrogate Policy were to become available to the applicant through some other mechanism in the future), it is not clear that the applications provided the information or analyses necessary under
the case law to demonstrate that PM 10 is a reasonable surrogate such that the

1997 PM 10 Surrogate Policy could be
used. See, e.g., discussion of case law in 75 FR 6827, 6831–32 (February 11, 2010). Finally, if the applicant believes that it can demonstrate that surrogacy is consistent with the case law, then it may do so under the case law even in
the absence of EPA’s 1997 PM 10 Surrogate Policy.

Comments on the Legality of Repealing the Grandfather Provision for

PM 2.5 : Some commenters opposing the proposed repeal of the grandfather provision for PM 2.5 argue that the repeal, in addition to the second petition for reconsideration, is illegal. With regard to the repeal action, some commenters question EPA’s alleged position that it must repeal the grandfather provision because there was not adequate notice to the public of EPA’s intent to continue
the use of the 1997 PM 10 Surrogate Policy. The commenters disagree with this position, claiming that a failure to provide for notice and comment on a provision of a rule cannot be a reason to repeal that provision.

One commenter disputes that there was inadequate notice because technical difficulties of measuring, modeling, and monitoring PM 2.5 have been well known since 1997 and were fully documented during the rulemaking. Thus, the
commenter asserts that EPA lacked the technical basis to require sources that had complete applications pending at that time of the promulgation of the

2008 PM 2.5 NSR Implementation Rule to measure or predict PM 2.5 concentration. In addition, this commenter asserts that
EPA failed to meet the administrative requirements for terminating the 1997

PM 10 Surrogate Policy. Specifically, the
commenter states that EPA would have had to provide notice of the withdrawal
of the 1997 PM 10 Surrogate Policy to reverse its use by sources grandfathered by the final 2008 PM 2.5 NSR Implementation Rule. 9 Based on these assertions, the commenter contends that EPA may not repeal the grandfather provision retroactively.

Two commenters believe that the grandfather provision, while not explicitly proposed, was a logical outgrowth of the proposal. One of the commenters expresses the belief that EPA raised for comment, in the 2005

PM 2.5 Implementation Rule proposal, issues concerning appropriate means for and timing of the transition to implementation of PM 2.5 requirements in the PSD program. The other commenter alleges that the 2005 PM 2.5 Implementation Rule proposal expressly
announced continued use of the 1997

PM 10 Surrogate Policy as Option 1 at 70
FR 66044 and solicited comment on this approach.

The latter commenter also argues that the 2010 proposal to repeal the grandfather provision for PM 2.5 represents a dangerous procedural precedent. While acknowledging that some actions adopted in a final rule could clearly be outside the scope of the proposed rule, the commenter asserts that as an overarching rule, the determination of whether regulatory actions adopted by a previous
Administration’s final rule were a logical outgrowth of the proposed rule
should be left for the courts to decide. The commenter believes that leaving
such decisions to the courts will ensure objective and consistent determinations of administrative law, rather than politically-influenced determinations that likely will shift from
Administration to Administration. The
commenter contends that the grandfather provision is not an instance that warrants EPA’s departure from that principle.

One commenter claims that the issue of the lawfulness of the grandfather provision was previously addressed and decided by EPA in the January 14, 2009, denial of the first petition for
reconsideration of the final 2008 PM 2.5 NSR Implementation Rule. The
commenter contends that EPA’s reliance on the second petition for reconsideration, filed on February 10, 2009, is contrary to section 307(d)(7)(B) of the Act because the second petition did not contain any new information that would justify reconsideration and, thus, the second petition was untimely
and unfounded.

Response: We do not agree with the commenters’ claim that we are repealing the grandfather provision because of the lack of adequate notice to the public. The lack of prior public notice was a basis only for granting reconsideration and going through a subsequent rulemaking. EPA’s decision to repeal the grandfather provision is not based on the fact that the provision was not explicitly proposed in the 2005 PM 2.5 Implementation Rule proposal. EPA in this rule is not taking any position on whether a lack of public notice could be a basis for repealing a rule, or on the
other issues that these comments raise concerning the adequacy of public notice, logical outgrowth, the timeliness of the second petition for reconsideration, and other procedural

matters.

We believe that the Act provides EPA with sufficient authority to issue transition policy, including grandfather provisions, as needed to provide for the reasonable implementation of new NSR requirements. This is evidenced by the
fact that we have established grandfather provisions in the past, as
described in section IV.A of this preamble. However, it should not be
taken to mean that we have or intend to automatically use grandfathering as a transition mechanism for all changes in NSR requirements. In this case, we
continue to believe that the technical tools needed to carry out a PM 2.5 analysis are currently available to the degree necessary to justify requiring sources to comply with the PM 2.5 requirements via PM 2.5 analyses for BACT and air quality impacts. Indeed,
this is what all other sources that are not subject to the grandfather provision but are located in areas subject to the Federal PSD program are required to do. Alternatively, sources may use an appropriate surrogacy demonstration in accordance with past court decisions.
For this reason and the other
substantive reasons discussed in this preamble, we have decided to repeal the grandfather provision for PM 2.5

.

Finally, we wish to clarify a point made by the commenter who alleged
that the 2005 PM 2.5 Implementation Rule proposal expressly announced and sought comment on the continued use
of the 1997 PM 10 Surrogate Policy as Option 1. That proposal actually


### 28653 Federal Register / Vol. 76, No. 96 / Wednesday, May 18, 2011 / Rules and Regulations

proposed to allow the continued use of
the 1997 PM 10 Surrogate Policy only for states that have SIP-approved PSD programs and need additional time to
revise their rules to address the PM 2.5 requirements. For all other circumstances involving the NSR rules, we clearly stated that PSD applicants would be subject to the PM 2.5 requirements as of the effective date of
the final rule. See 70 FR 66043–44.

2. Comments on the Burden on Sources Resulting From Repeal of the
Grandfather Provision

In the 2010 proposal to repeal the grandfather provisions for PM 2.5 , EPA
solicited comments on the burdens that may be incurred by sources affected by a repeal of the grandfather provision.

See 75 FR 6833. Several commenters express concern that repeal of the grandfather provision would unfairly penalize permit applicants who were in the process of obtaining construction permits.

Comment: One commenter states that repeal would effectively impose retroactive requirements on sources that relied on past EPA statements of the law and the effect of the Agency’s regulations, which goes against the concepts of fundamental fairness and equity.

Response: We disagree with the premise of this comment: that the repeal of the grandfather provision imposes new requirements. The 1997 PM 10 Surrogate Policy did not eliminate any PSD requirements; it simply provided an alternative means of demonstrating compliance with the applicable requirements that were already in the PSD regulations at 40 CFR 52.21 when
the PM 2.5 NAAQS became effective in 1997. Thus, the repeal of the grandfather provision does not impose new requirements on any source. The
commenter’s concern about the fairness
of our decision is addressed in the next

response.

Comment: Some commenters indicate that repeal
would result in ‘‘ permit gridlock. ’’ These commenters state that each regulatory change adds another year onto the permitting process, during which more regulations could change and add further delay. The commenters contend that because of the length of the process, the major applicable rules need to stay constant (in all but extraordinary circumstances) in order for the process to proceed in a logical and orderly
fashion.

Another commenter claims that repeal of the grandfather provision would arbitrarily and unreasonably penalize applicants for the delay of the reviewing authority in discharging its permitting responsibilities. The commenter provides an example where two applicants (Applicants A and B) submit complete applications on the same date more than a year before the effective date of the stay of the grandfather provision, but Applicant A’s permit is approved and issued before the effective date of the stay and Applicant B’s permit is not yet ready to be issued on the effective date of the stay. The commenter concludes that, through no fault of Applicant B, EPA’s violation of its nondiscretionary statutory duty to act within 1 year would impose on the applicant the significant costs and delay involved in undertaking a new analysis of PM and, potentially, revising the permit application.

One commenter opines that an important principle underlies all grandfather provisions, including this

PM 2.5 grandfather provision. This principle is that a source that relies in good faith on EPA’s existing standards and procedures to design a construction project and prepare a PSD permit application based upon that design should have the right to rely upon those existing standards and procedures and should not later be penalized retroactively when the standards and/or procedures change and, more importantly, go into effect after the application was submitted.

The same commenter goes on to point out that the issuance of a PSD permit under the grandfather provision would not establish any future waiver of compliance or long-term exemption under law or in practice because the Act requires all sources, including those that have undergone PSD review, to comply
with limitations the state determines in its SIP are necessary to meet NAAQS (including any future revised NAAQS) as well as to comply with any New
Source Performance Standards. According to the commenter, this ensures that, regardless of whether a
source avoided direct evaluation of its

PM 2.5 emissions during NSR because of the grandfather provision, its PM 2.5 emissions will still be evaluated for compliance with the PM 2.5 NAAQS.

Response: In projecting the burdens of extended permitting time and effort, the
commenters assume that if we did not repeal the grandfather provision, sources could rely on the 1997 PM 10 Surrogate Policy without further analysis. However, as discussed in the 2010 proposal preamble ( see 75 FR 6831–32) and later in section V.C.1.b of this preamble, at present sources are only able to use the policy after completing a surrogacy demonstration consistent with the case law ( i.e. , PM 10 must be shown to be a reasonable surrogate for PM 2.5 under the circumstances of the specific permit) and within the limits of the policy itself ( i.e. , there must be continuing technical reasons why a PM 2.5 analysis is not technically feasible). These key prerequisites cannot be assumed to be met automatically, and the commenters have not shown these prerequisites to be met with respect to any of the applications that would be covered by the grandfather provision. Thus, even if the grandfather provision were to remain in force, additional analysis would be required of sources seeking to continue using the 1997 PM 10 Surrogate Policy under that provision.

The EPA has considered the comments concerning how a repeal of the grandfather provision might impact the permitting process and allegedly create unfairness and inequity in some of the hypothetical circumstances
described in the comments. We recognize that the commenters’ concerns pertain to the fairness of our proposal to change the procedures for demonstrating compliance with the

PM 2.5 requirements in mid-permit process for individual permits. However, we believe that we have an obligation to weigh those concerns and associated burdens against our interpretation of the Act, which requires
that PSD sources must demonstrate that
their emissions will not cause or
contribute to a violation of the PM 2.5 NAAQS, and such demonstration should provide adequate assurance that such compliance will occur. We believe
that the 1997 PM 10 Surrogate Policy,
which has been in effect for about 13 years, no longer provides an acceptable means of making the required demonstration in light of the availability
of the technical tools needed to complete a PM 2.5 analysis. Thus, as part of our obligation to evaluate the need for transition policy both initially and on an ongoing basis, we have concluded
that such burdens are neither unfair nor inequitable in comparison to the benefits associated with having a better understanding of the impacts the
source’s emissions will have on the

PM 2.5 NAAQS. This conclusion is based on our belief that the approach set forth in the 1997 EPA policy memo, while necessary in the absence of the technical tools needed to implement the PSD program for PM 2.5 directly, is sufficiently deficient in its ability to satisfy the PM 2.5 requirements (in that it lacks a surrogacy demonstration), particularly with regard to possible


### 28654 Federal Register / Vol. 76, No. 96 / Wednesday, May 18, 2011 / Rules and Regulations

10 A state agency commenter claims that EPA’s repeal of the grandfather provision for PM 2.5 could affect up to 16 of the agency’s pending PSD projects. However, this agency’s PSD program is part of an EPA-approved SIP and, as such, does not appear to be affected by the grandfather provision. Instead, we believe that the affected PSD projects would be affected by the ending of the 1997 PM 10 Surrogate Policy. Thus, we address this comment in the section V, where our final action on ending the

1997 PM 10 Surrogate Policy in SIP-approved PSD programs is addressed. 11 This guidance memorandum for PM 2.5 modeling can be found on EPA’s Web site at http://www.epa.gov/ttn/scram. adverse impacts on the PM 2.5 NAAQS, that it should no longer be available as a means of meeting those requirements now that the necessary technical tools
for a PM 2.5 analysis are available. Case law allows the use of surrogates when properly applied. Hence, we point out that the use of a valid surrogate approach in general is not prohibited by
our action in this final rule.

Finally, we note that we did not stay the grandfather provision until almost 1 year following its effective date. Some permits were issued during the time that the grandfather provision was in effect.
Grandfathered sources for which a PSD permit was not issued during that period likely had problems related to
factors other than the PM 2.5 analyses that prevented the source from receiving a permit.

3. Comments on the Number of Sources Affected by Repeal

Comment: We did not receive any comments that either validate or dispute the number of
sources that we estimated would be affected by the stay of the grandfather provision for PM 2.5

. 10 One commenter observes that EPA has recognized that continued use of the grandfather provision would affect very few, if any, still-pending permits, and finds it hard to understand why EPA feels it necessary not only to discontinue the grandfather provision altogether, but also to do so immediately by issuing the administrative stay. This commenter believes that the facts presented by EPA undercut the petitioners’ claim that grandfathering certain permit applications presents an irreparable
harm.

Response: In the 2010 proposal to repeal the grandfather provision, we reported that
we were aware of 27 sources that had submitted PSD permit applications under the Federal PSD program prior to July 15, 2008— the effective date of the

2008 PM 2.5 NSR Implementation Rule— but did not receive their permits by that date. Thus, these applications fell within the scope of the grandfather provision at the time it was promulgated. For at least six of these applications, the permit was either issued or denied, or the project was cancelled, prior to June 1, 2009, when the administrative stay became effective. For most of the remaining 21 applications, it is our understanding that the sources have already directly addressed, or are planning to directly address, the applicable PM 2.5 requirements in order to obtain a permit. At least two of the sources are reportedly planning to take enforceable
emissions limitations on their PM 2.5 emissions in order to avoid the PSD requirements for PM 2.5 altogether.

Although only a few remaining grandfathered sources would be affected by a repeal of the grandfather provision, we believe that any air quality assessment contained in a PSD permit should reflect as accurately as possible the actual impacts that could be experienced in the area of concern. We do not believe that an analysis of PM 10 emissions impacts on the PM 10 NAAQS sufficiently represents the potential impacts that a source may have on the

PM 2.5 NAAQS. We did not base our decision to repeal the grandfather provision on the number of sources that could ultimately have to submit revised analyses to satisfy the PSD requirements
for PM 2.5

.
4. Comments on Retroactive Implementation

Comment: Several commenters who oppose the proposed repeal of the grandfather provision support a position, based on a statement by EPA in the 2010 proposal, that a repeal of the grandfather provision would not impact any PSD permits that relied on the 1997 PM 10 Surrogate Policy that became final and effective before the stay of the provision.

See 75 FR 6833. However, one commenter who supports repealing the grandfather provision takes exception to those opposing commenters’ position and requests a clarification as follows:

To the extent EPA is saying simply that the repeal does not change the defensibility of a source’s reliance on the illegal policy, we agree. But EPA should clarify that it is not claiming that its action somehow protects past illegal permitting decisions. The Surrogate Policy is and always has been illegal. Reliance on this illegal policy is subject to challenge and cannot be protected by EPA preamble statements that lack any authority or force of law.

Response: Neither EPA’s repeal of the grandfather provision nor its ending of
the 1997 PM 10 Surrogate Policy in SIPapproved states changes the defensibility of a source’s previous
reliance on the 1997 PM 10 Surrogate Policy. Put another way, repeal of the grandfather provision and the ending of
the 1997 PM 10 Surrogate Policy does not create a new basis for arguing that the permit was not properly issued. However, a challenge to a permit that is not based on the repeal itself (such as a challenge claiming that the 1997 PM 10 Surrogate Policy did not provide a valid means of meeting the CAA requirements or that the policy was not applied properly to the permit being challenged) is not impacted by repealing the grandfather provision for PM 2.5

. 5. Comments on the Technical Tools
Needed for a PM 2.5 Analysis

Some of the commenters responding to the 2010 proposal to repeal the grandfather provision for PM 2.5 agree with EPA’s conclusion that the
technical issues associated with the implementation of a PSD program for

PM 2.5 have been largely resolved. However, most of the commenters believe that the necessary technical
tools for PM 2.5 , i.e. , ambient monitoring data, emissions data (including emissions inventories, emissions factors, and stack testing methods), and air quality modeling techniques, are not yet sufficiently available to carry out an adequate analysis for PM 2.5 . One
commenter claims that technical problems continue to exist and points out that even EPA has acknowledged
that some technical issues remain to be
addressed. The commenter states that
this shows EPA has not satisfied its
burden to establish that the PM 2.5 program can be implemented by states.

Response: We do not agree with the commenter’s
claim that because some technical issues remain to be addressed, we should not require applicants to begin carrying out a PM 2.5 analysis to satisfy the PSD requirements. We believe that
there is a sufficient technical basis to allow sources to begin focusing on PM 2.5 emissions and direct demonstrations of compliance with the PM 2.5 standards without the use of surrogates. In the March 23, 2010, EPA modeling guidance memorandum titled,

‘‘ Modeling Procedures for Demonstrating Compliance with the

PM 2.5 NAAQS, ’’ we provide procedures that help an applicant complete both a preliminary significant impact analysis and a cumulative impact analysis to determine the impact of a PSD source or
modification on the PM 2.5 NAAQS. 11

In addition, we have recently addressed some of the important components of the PSD program for


### 28655 Federal Register / Vol. 76, No. 96 / Wednesday, May 18, 2011 / Rules and Regulations

12 http://www.epa.gov/ttn/scram

. PM 2.5 that were described by various commenters. We published a final rule
to revise the PM test methods to
measure in-stack concentrations of

PM 2.5 emissions and condensables on December 21, 2010, at 75 FR 80118. As
discussed further in section IV.C.6 of this preamble, we issued the final rule containing the PM 2.5 increments, SILs, and SMC on October 20, 2010, at 75 FR 64864. All of these documents, along with the availability of ambient monitoring data and the other necessary tools that we describe in our responses to comments that follow, provide a
sound and sufficient technical basis for completing necessary analyses of impacts of proposed sources on PM 2.5 ambient levels.

a. Comments on Ambient Monitoring

Data

Comment: One state agency commenter states that ambient air monitoring data may not represent ‘‘ true ’’ PM 2.5 concentrations because the Federal Reference Monitors include particle
sizes above PM 2.5 in the PM 2.5 particle
count. The commenter believes that it is
difficult to evaluate PSD and minor NSR permits without representative ambient monitoring data to verify the accuracy or appropriateness of emissions factors and dispersion modeling predictions.

Response: As part of its periodic review of the NAAQS, EPA recently evaluated the
latest available science for PM in its

‘‘ Integrated Science Assessment (ISA)
for Particulate Matter ’’ (EPA, 2009). This
document included a discussion of Federal Reference Methods (FRMs) and other PM test methods. Also, FRMs and Federal Equivalent Methods for PM
were discussed in detail in the 2004 PM Air Quality Criteria Document (EPA, 2004). These discussions document the
fact that the size-selective nature of the
FRM for PM 2.5 was developed based on epidemiological studies which used ambient fine particle sampler measurements as indicators of exposure. The position and shape of the PM 2.5 FRM’s fractionation curve was specified as a means of separating particles contained in the fine-thoracic regime of ambient aerosols ( e.g., those generated by combustion, coagulation, condensation) from those particles produced by other mechanisms ( e.g., mechanically generated). The PM 2.5 FRM was not designed nor intended to collect all particles less than 2.5 micrometers ( μm) aerodynamic diameter while excluding all particles greater
than 2.5 μm aerodynamic diameter. Even so, the slope of the PM 2.5 FRM’s fractionation is quite sharp and only a small fraction of particles greater than

2.5 μm are included in the PM 2.5 mass concentration measurement. As an example, less than 2 percent of 3.2 μm particles in the ambient air are included in the mass concentration measurement, and virtually all particles larger than this size are totally excluded from the

PM 2.5 mass concentration measurement. Therefore, concerns regarding potential

PM 2.5 mass measurement bias associated with large ambient particles are unfounded. As a result, the PM 2.5 FRM provides accurate PM 2.5 mass concentration measurements for purposes of determining compliance
with the PM 2.5 NAAQS, and for evaluating the effectiveness of PM 2.5 control initiatives.

Comment: Some commenters believe that some states may not have adequate ambient monitoring data to determine ambient background levels. A commenter claims that many states do not yet understand
or have sufficient PM 2.5 ambient data to support the regional modeling initiatives, which would make assessing and enforcing the PM 2.5 NAAQS difficult and problematic for both the regulators and the regulated community.

Response: States have been operating a large and
robust network of PM 2.5 samplers since 1999. As part of each state’s required monitoring network, each stack is required to have a least one PM 2.5 site to monitor for regional background and
at least one PM 2.5 site to monitor for regional transport. See section 4.7.3, Appendix D to 40 CFR part 58. While there is flexibility in the location and methods used for these sites, given the spatial uniformity of PM 2.5 compared to

PM 10 and the large number of PM 2.5 samplers operating, EPA believes there
are sufficient PM 2.5 data to support data needs such as modeling.

Comment: Another commenter claims that there is no guidance available on how to determine representative (and reasonable) PM 2.5 background concentrations for air quality modeling analyses. The commenter contends that applying the current EPA-approved methodologies for determining background concentrations to PM 2.5 would result in background
concentrations of PM 2.5 in excess of 80 percent (and many cases in excess of 95 percent) of the NAAQS for PM 2.5 for vast areas of the United States, which would
leave a PM 2.5 emission source only an allowable air quality impact (as determined from modeling) of 1–4 μg/

m 3 . According to the commenter, even a small (less than 25 MMBtu/hr) natural gas-fired boiler or a baghouse with an allowable emission limit of as little 0.2 lb/hr will typically have an impact greater than 1–4 μg/m 3 . The commenter
believes that without additional guidance, neither of these types of small sources could be permitted.

Response : Generally, the ambient monitoring data used as part of the cumulative analysis should represent
concentrations from emissions from existing sources that are not also being modeled. However, based on recent guidance contained in the March 23, 2010, EPA modeling guidance memorandum titled, ‘‘ Modeling Procedures for Demonstrating Compliance with the PM 2.5 NAAQS, ’’ 12 we recommend a different approach for

PM 2.5 , which reflects the fact that secondary (precursor) impacts on
ambient PM 2.5 concentrations from
individual source emissions cannotadequately be estimated by currentlyaccepted modeling techniques. That is, we recommend that the monitoring data
for PM 2.5 account for the contribution of secondary PM 2.5 formation representative of the area being modeled for the proposed PSD source. See March 23, 2010, Guidance, at pages 7–8. To the extent that accounting for precursor impacts involves sources from which

PM 2.5 emissions are also being modeled, the March 23, 2010, guidance states (at page 7) that the double-counting problem generally will be of less importance for PM 2.5 than the representativeness of the monitor for secondary contributions. We also intend to address separately more detailed guidance on the determination of representative background data for

PM 2.5.

b. Comments on Emissions Factors and

Emissions Inventories

Comment: Several state agency and industry commenters cite continued problems with inadequate emissions factors and emissions inventories for estimating the
amount of PM 2.5 being emitted from a new project or from existing sources
that must be modeled to demonstrate compliance with the PM 2.5 NAAQS. For example, one commenter states that there is extremely limited information concerning emissions factors for PM 2.5 from industrial sources, without which it is not possible to accurately model the impacts of PM 2.5 . Another commenter states that emissions inventory data for

PM 2.5 are in development and grossly incomplete. Another commenter disputes EPA’s claim that emissions factors and emissions inventory data are


### 28656 Federal Register / Vol. 76, No. 96 / Wednesday, May 18, 2011 / Rules and Regulations

13 These OTM methods represent improved methods for measuring PM 2.5 emissions, including
condensable PM 2.5 . These and other OTM methods have not yet been subject to the Federal rulemaking process, but have been reviewed by EPA’s Emissions Measurement Center staff and placed on
the EPA Web site at http://www.epa.gov/ttn/emc/ prelim.html

. readily available, stating that such information is not yet readily availablein a quality-assured format on a sourceby-source and point-by-point basis as needed for regulatory permitting analyses. Another commenter adds that while progress has occurred since 2008, the inventories are far from complete and EPA has yet to finalize a PM 2.5 test method.

A state agency commenter claims that representative emission factors are not available for the majority of industries. The commenter adds that EPA clearly stated in the preamble to the final 2007

PM 2.5 Implementation Rule (citing 72 FR 20654–55, April 25, 2007) that the quality of available direct filterable and
condensable PM 2.5 national industry average emissions factors, such as those
found in EPA’s ‘‘ Compilation of Air
Pollutant Emission Factors ’’ (AP–42), is
often insufficient to establish effective source-specific emissions limits, and expected states to rely on directly
measured emissions data.

The same commenter recognizes the caveats related to using the factors in AP–42, but states that often these factors
are the ‘‘best or only method available for estimating emissions, in spite of
their limitations ’’ (quoting from AP–42, Volume I, Fifth Edition, January 1995, Introduction to AP–42). The commenter
concludes that while EPA advised
stakeholders of its concern related to

PM 2.5 implementation in 1997, EPA has not updated many of the emissions factors. In addition, the commenter
believes that factors for condensable emissions are suspect due to the use of a test method EPA is currently seeking to revise, and directly measured data to develop realistic emissions factors are not available for many industries at this

time.

Response: We believe that progress has been made in the development of emissions
factors for PM 2.5 since the time the
comments were submitted. When EPA established a transition period for NSR purposes in 2008 waiving the requirement that states address condensable PM in establishing
enforceable emissions limits for either

PM 10 or PM 2.5 in NSR permits, it was to provide time for sources and state/local reviewing authorities to improve the
emissions factors for the filterable and condensable PM that they need for the development of emissions inventories, source-specific emissions, and control
levels achievable with emissions
controls. See 73 FR 28334–35 (providing a waiver until January 1, 2011, unless the SIP or applicable permit condition otherwise required their inclusion). The Agency knows of several states and other organizations that have improved their ability to accurately
characterize these emissions. For example, the Mid-Atlantic Regional Air Management Association (MARAMA) conducted a study to identify emissions tests that employed EPA’s recommended procedures under Test Method 202, promulgated in 1990. The emissions factors developed by MARAMA are expected to be superior to the latest published AP–42 emissions factors even though both efforts attempted to eliminate tests that did not use the recommended options to minimize artifact formation. Also, the State of Pennsylvania and the San Joaquin Valley United Air Pollution
Control District in California have performed or required the performance of tests using Other Test Method (OTM)
27 and/or OTM 28 to better characterize
the emissions of PM 2.5 from sources and source categories from which they believed improved emissions
information was needed. 13

Although the final revised test
methods for PM 2.5 were only recently promulgated, on December 21, 2010, EPA has had a long history of supporting the use of improved procedures to perform particle sizing at 2.5 micrometers using modifications of Method 201A, to employ procedures
included in the 1990 version of Method 202 for condensable PM, and to employ the additional changes included in OTM 28 for condensable PM (to minimize artifact formation).

As part of the Information Collection Requests that EPA has issued to sources in support of the development of standards for select source categories, we have required testing using OTM 27 (for PM 2.5 only) and OTM 28. These emissions data are being used by EPA in the rule development process. These
data are also now available for sources and states to use in the development of improved emissions factors, emissions inventories, source emissions estimates, control measures evaluations, and development of applicable requirements.

With regard to comments regarding the adequacy of existing emissions inventories, we respond that, while the National Emissions Inventory (NEI) and state SIP inventories are evolving, their quality is sufficient for permit modeling for including the emissions sources other than the source(s) being permitted. The NEI generally uses the best
available information and much of that information is supplied by the states. States can take advantage of new data stemming from OTM 27 and OTM 28, as mentioned previously, to further improve their inventory estimates in the 2009 inventory years and beyond. A preliminary version of the 2008 NEI has
been made available to state and local agencies, tribes and EPA Regional Offices, and an updated version is scheduled to be posted on EPA’s Web site for public availability in April of 2011, to support future modeling efforts.
The NEI and state inventories will continue to improve as emission factors
become available based on the new

PM 2.5 test method.

The EPA also has been supplementing the inventories provided by the states
with estimates of condensable PM emissions for many years. These estimates have included particle sizing
at 2.5 micrometers of the filterable PM and the addition of CPM. We recognize that there are some source categories
where the condensable PM emissions may be biased high due to artifact issues and that some source categories where
the condensable PM emissions are biased low due to permitted adjustments to test data and absence of condensable PM testing. We do not think that these inventory uncertainties justify not using the available data to develop inventories; we believe that ignoring this information introduces greater error than using the data. The
EPA believes that sources and states
should use these data as criteria for identifying areas needing emissions testing to correct biases. We will respond to comments concerning the
test methods for PM 2.5 in the immediately following subsection.

c. Comments on the In-Stack Emissions
Test Method for PM 2.5

Comment: Closely tied to the comments citing a lack of adequate emissions factors for

PM 2.5 are comments claiming the lack of an adequate test method for measuring
direct PM 2.5 emissions—especially
condensable PM emissions. Some commenters argue that it would be inappropriate for EPA to repeal the grandfather provision and require applicants to complete a PM 2.5 analysis without the use of a surrogate until adequate PM 2.5 emissions test methods are adopted by EPA.

One commenter claims that without final rules on test methods, the state agency is without specific authority to require applicants to comply with this


### 28657 Federal Register / Vol. 76, No. 96 / Wednesday, May 18, 2011 / Rules and Regulations

14 Federal Register test methods are methods that have been proposed in the Federal Register for public review and comment. When those methods are promulgated they become the official Code of Federal Regulations Methods, which may be used individually or in combination with other methods by Federal, State or local agencies or sources to quantify emissions cited by the regulations for which the methods were developed and within the limitations specified in the method itself without further EPA approval.

15 http://www.epa.gov/ttnemc01/. 16 EPA guidance on predecessors for Method
201A can be found at http://www.epa.gov/ttn/emc/ prelim.html and http://www.epa.gov/ttn/emc/
ctm.html.

17 In addition to the Web sites identified in the earlier footnote, see also http://www.epa.gov/ttn/
emc/methods/method202.html. portion of the PM 2.5 requirements. An industry commenter expresses concern with being required to perform an
emissions test to demonstrate compliance with a PSD permit PM 2.5 emissions limit when there are no federally approved methods, and with significant remaining technical issues
associated with the test methods for measuring PM 2.5

.

Another industry commenter states that although EPA has proposed revisions to existing Method 201A to
allow measurement of filterable PM 2.5 , the revised method is not final, and it is not applicable to units with entrained moisture droplets in the stack ( e.g., units with wet stacks due to wet flue gas desulfurization (FGD)). Because many sources (including many large electric generating units) use wet FGD to control
sulfur dioxide emissions and therefore will be unable to use proposed revised Method 201A, the commenter sees no justification for the conclusion that the
technical issues associated with measuring PM 2.5 have been resolved.
Some commenters indicate that problems associated with unacceptable artifact levels in existing test methods can overstate the results when sampling
for PM 2.5 emissions.

Response: We acknowledge the problems that
some states and sources have experienced with sampling PM 2.5 emissions. Until recently, EPA Federal Register test methods have been primarily used for determining compliance with EPA regulations published in parts 60, 61, and 63. 14 We have not seen a need to publish source
test methods in the Federal Register that are primarily for other regulatory purposes, such as compliance with NAAQS-related permit limits. As a result, many air pollutants or precursor compounds do not have a promulgated Federal test method. Also, the Federal Register test methods do not address all possible stack or pollutant release conditions. We provide test methods on
our Emissions Measurement Center Web

site 15 that can be used to quantify an extended range of pollutants and an extended range of release conditions. While not complete, these measurement methods provide a resource for states to supplement the available Federal Register test methods.

We note, however, that on March 25, 2009, EPA proposed amendments to
Methods 201A and 202—in-stack test
methods for PM. See 74 FR 12970. For Method 201A, we proposed to add a particle-sizing device to allow for sampling of PM 2.5. For at least 5 years prior to the test method proposal, EPA provided guidance addressing the majority of the artifact formation associated with the 1991 published
version of that method. 16 As mentioned previously, the final test method rule was promulgated on December 21, 2010, and became effective on January 1,
2011. The amendments to Method 202 revise the sample collection and recovery procedures of the method to
reduce the formation of reaction artifact
levels that could lead to inaccurate and
overstated measurements of
condensable PM. The amendments to
Method 202 also result in increased precision of the method and improve the consistency of measurements
obtained between source tests performed under different regulatory
authorities.

As noted by the commenters, at this time there is no recognized method for quantifying PM 2.5 emissions from
sources that have entrained water droplets. We have an active effort to develop a test method that can be used under such conditions, but at this time
it is unclear whether a suitable test method can be developed. As provided in the proposed revision to Method 201A, we believe that until the test method development is complete, the use of EPA Method 5 provides a
reasonable substitute for a stack condition-specific test method that performs particulate sizing at 2.5

micrometers.

Even before the final test method rule revising Methods 201A and 202 was finalized, for a number of years, we had been posting guidance on our Web site for measuring emissions of PM 2.5 , including the condensable fraction. 17 The equipment, supplies, and procedures provided by this guidance have been improved over time by
stakeholders who have submitted
constructive comments. We believe this posted guidance has provided a reasonable means to quantify emissions that are suitable for use in developing emissions inventories; for developing information that is useful in developing appropriate achievable emissions levels for sources; and for assessing the performance of a source’s PM controls.

We recognize that it is desirable to provide detailed documentation of the
conduct of source test methods such that there is consistency between establishing the applicable requirements
and the method used to demonstrate compliance with those requirements.
We do not believe that sources and
states should be limited to Federal Register test methods for developing their emissions inventories, for developing applicable requirements, and for demonstrating compliance with applicable requirements. Accordingly, we believe that it is appropriate for
sources and states to use other test methods, even if there is a Federal Register test method, as long as the test
method used is a reliable indicator of the emissions performance for the regulated pollutant.

d. Comments on Air Quality Models

Comment: Commenters supporting EPA’s proposal to repeal the grandfather provision generally believe that sufficient modeling tools are available to complete a PM 2.5 analysis. One local agency commenter states that air quality modeling of direct PM 2.5 emissions is readily available using EPA-approved
models.

The same commenter also claims that several states (New York, New Jersey, Connecticut) have developed policies by which permit applicants use standard modeling techniques to propose permit
limits on PM 2.5 emissions that would
not cause or contribute to an exceedance
of the PM 2.5 NAAQS. The commenter acknowledges the present difficulty in modeling secondary PM 2.5 emissions, but points out that this does not preclude a permit applicant from determining whether the direct
emissions of PM 2.5 from the proposed
source or modification will cause or contribute to a violation of the NAAQS. An environmental group commenter similarly agrees with EPA’s conclusion that the challenges related to modeling are not a valid basis for using PM 10 as a surrogate.

Other commenters, however, express concern about the lack of adequate modeling techniques to fully address
the PM 2.5 impacts resulting from both
direct PM 2.5 emissions and PM 2.5 precursors. One commenter describes current problems associated with trying to model the impacts of PM 2.5 precursors and expresses concern that by not including formation of PM 2.5 from precursor emissions, the complete


### 28658 Federal Register / Vol. 76, No. 96 / Wednesday, May 18, 2011 / Rules and Regulations

18 http://www.epa.gov/ttn/scram. impact cannot be assessed. Another commenter acknowledges that the air quality dispersion model, AERMOD, can accurately estimate the impact of
direct PM 2.5 emissions, but believes that this is inadequate because elevated ground level readings of PM 2.5 seem to have little to do with local direct PM 2.5 emissions, but instead result from several days of stagnating atmospheric conditions that lead to the build-up of secondary nitrates and sulfates in the air. The commenter points out that
AERMOD does not address the chemical
transformations that lead to the creation
of these nitrates and sulfates from precursor emissions.

Response: We agree with the commenters who indicate that our proposal to repeal the grandfather provision should be finalized despite the technical difficulties with estimating the impacts
from emissions of PM 2.5 precursors. We acknowledge that current modeling techniques do not adequately account for the secondarily-formed ambient impacts of PM 2.5 caused by PM 2.5 precursors. We are currently working on techniques to address such deficiencies in order to improve the ability to estimate overall impacts of PM 2.5 against the NAAQS and upcoming increments. Nevertheless, models are available to model the ambient impact of direct

PM 2.5 emissions, and we believe that it is reasonable to carry out the required air quality impact analyses with these models. In a March 23, 2010, EPA modeling guidance memorandum titled,

‘‘ Modeling Procedures for Demonstrating Compliance with PM 2.5 NAAQS, ’’ we provided procedures that enable an applicant to complete both a preliminary significant impact analysis and a cumulative impact analysis to determine the impact of a PSD source or
modification on the PM 2.5 NAAQS. 18 The guidance memorandum refers to the recommended procedures as a screening-level analysis or a ‘‘ First Tier modeling analysis ’’ for demonstrating compliance with PM 2.5 NAAQS and increments. The guidance memorandum acknowledges that techniques for modeling the individual source contributions to secondary formation of

PM 2.5 from precursor emissions are not currently provided for within EPA’s

‘‘ Guideline on Air Quality Models ’’ (also published as Appendix W of 40 CFR part 51). However, the March 2010 guideline memorandum provides procedures to account for the secondary contribution from regional and local sources of precursor emissions as part of the cumulative impact analysis for appropriate comparison to the annual and daily PM 2.5 NAAQS through the use of monitored background ambient concentrations. We are planning to provide additional guidance on PM 2.5 modeling for PSD permitting that will include more details on conducting such modeling, including options to enable more complete accounting for
individual source contributions to secondary PM 2.5 formation when their precursor emissions are sufficient to warrant inclusion. Therefore, we believe
that the tools and models now available
to address direct PM 2.5 emissions, and to a lesser extent secondarily-formed

PM 2.5 , are in total sufficient, along with our other reasons provided in this preamble, to support our conclusion that it is appropriate to repeal the grandfather provision for PM 2.5 , thereby ending the use of the 1997 PM 10 Surrogate Policy under the Federal PSD

program. 6. Comments on the Lack of Key PM 2.5 Implementation Requirements

Comment: Several state agency, state/local agency association, private citizen, and industry commenters oppose EPA’s proposed repeal of the grandfather provision because EPA has yet to take
final action under 40 CFR 51.166 and 52.21 to address key parameters needed to implement the PSD permit program
for PM 2.5 . The key parameters include SILs, an SMC, and increments for PM 2.5

.

Response: On October 20, 2010, we promulgated
a final rule at 75 FR 64864 that contains
the PM 2.5 increments, SILs, and SMC. Under that rule, the SILs and SMC
became effective in the Federal PSD program as of December 20, 2010, and
the PM 2.5 increments will become effective on October 20, 2011. Thus, under the Federal program there is no longer cause for the commenters’ concern that implementation of PSD for

PM 2.5 will be difficult and burdensome due to the absence of the screening
levels embodied in the SILs and SMC.

There will be some period after the repeal of the grandfather provision
under this final rule before the PM 2.5 increments become effective. However, note that in the preamble to the October 20, 2010, final rule for PM 2.5 increments, SILs, and SMC we stated that under that rule, sources applying for a PSD permit under the Federal PSD program after the major source baseline date for PM 2.5 ( i.e., after October 20, 2010), but before
the PM 2.5 increments become effective ( i.e., before October 20, 2011), will be
considered to consume PM 2.5 increment. (Under section 169(4) of the Act and the implementing regulations at 40 CFR 52.21(b)(13) and (14), any major source
that commences construction after the major source baseline date consumes increment, which will be the case for any source that receives its permit after that date.) We stated further that, while EPA will not require any such source to
include a PM 2.5 increment analysis as part of its initial PSD application, an increment analysis ultimately will be required before the permit may be
issued if the date of issuance will occur after October 20, 2011 (the trigger date
for the PM 2.5 increment), when the

PM 2.5 increments can be triggered under the Federal PSD program. See 74 FR 64899. Any formerly grandfathered source that has not yet received its final permit will be subject to the same transition provisions for PM 2.5 increments.

D. What final action is EPA taking on the grandfather provision for PM 2.5 ?
We have decided to repeal the grandfather provision for PM 2.5 contained in the Federal PSD program at 40 CFR 52.21(i)(1)(xi). As the result of this final action, any PSD permit application previously covered by the grandfather provision that is not issued a final and effective PSD permit before
the effective date of this rule will not be able to rely on the 1997 PM 10 Surrogate Policy to satisfy the PSD requirements
for PM 2.5 . Unless the application includes a valid surrogacy demonstration ( i.e., the applicant can show that meeting the requirements for

PM 10 will also meet the requirements for

PM 2.5 ), the application will need to

contain PM 2.5 data and analyses to meet
the PM 2.5 requirements to ensure that the applicable administrative record for the permit application is sufficient to demonstrate compliance with those requirements. Such requirements include the analyses necessary to (1) establish the appropriate BACT emissions limitation(s) for PM 2.5 in the permit, as required by section 165(a)(4) of the Act, and (2) demonstrate that the emissions increase from the proposed new or modified major stationary source
will not cause or contribute to a
violation of the PM 2.5 NAAQS, as required by section 165(a)(3) of the Act. For any application that previously was relying completely on a PM 10 surrogate analysis based solely on the 1997 PM 10 Surrogate Policy, additional information will be required to fulfill these requirements.

The EPA is aware of 27 sources that had submitted PSD permit applications under the Federal PSD program prior to July 15, 2008—the effective date of the

2008 PM 2.5 NSR Implementation Rule— but did not receive their permits by that


### 28659 Federal Register / Vol. 76, No. 96 / Wednesday, May 18, 2011 / Rules and Regulations

date. While some of these applicants for PSD permits have already sought alternative means of obtaining the necessary permit, those that have not yet done so will be required to provide

a PM 2.5 analysis that demonstrates the application of BACT and that the
source’s emissions will not cause or
contribute to a violation of the PM 2.5 NAAQS or use a surrogate approach, as long as that approach comports with the conditions set forth by previous court determinations concerning surrogacy
demonstrations. This final rule ensures
that the 1997 PM 10 Surrogate Policy will no longer be applicable to satisfy the PSD requirements for PM 2.5 under the Federal PSD program.

V. What action is EPA taking on the

1997 PM 10 Surrogate Policy for state PSD programs?

On February 11, 2010, EPA proposed
to end the 1997 PM 10 Surrogate Policy in SIP-approved states before May 16, 2008. In that notice, EPA described the
current status of the 1997 PM 10 Surrogate Policy under state PSD programs that are part of an approved SIP, and explained why EPA was proposing to end the use of the 1997

PM 10 Surrogate Policy early. 75 FR 6833–34 (Feb. 11, 2010). As indicated above, EPA in this Federal Register notice is taking no action concerning its proposal to end early the use of the 1997

PM 10 Surrogate Policy under state PSD programs that are part of an approved SIP. Accordingly, the use of the 1997

PM 10 Surrogate Policy under such state programs will end on May 16, 2011, in
accordance with the discussion in the May 16, 2008, preamble. 73 FR 28321,

at 28340–41.

VI. Statutory and Executive Order

Reviews

A. Executive Order 12866: Regulatory Planning and Review

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is a

‘‘ significant regulatory action ’’ because it raises novel legal or policy issues. Accordingly, EPA submitted this action to the Office of Management and Budget (OMB) for review under Executive Order 12866 and any changes made in response to OMB recommendations
have been documented in the docket for
this action.

B. Paperwork Reduction Act

This action does not impose any new
information collection burden that is not already accounted for in the approved information collection request (ICR) for the NSR program. We are not adding any new paperwork requirements ( e.g., monitoring, reporting, and recordkeeping) as part of
this final action. This action amends one part of the regulations at 40 CFR 52.21 by repealing the grandfather provision that affects fewer than 30 sources. However, the approved ICR for the NSR program was prepared as if the

2008 PM 2.5 NSR Implementation Rule,
which added PM 2.5 to the NSR program, would be fully implemented immediately upon the effective date of the rule without any phase-in period during which either the grandfather provision or 1997 PM 10 Surrogate Policy would apply. Thus, while this action will result in increased permitting
burden for those sources who would
have otherwise been able to use the grandfather provision or 1997 PM 10 Surrogate Policy, this burden is already included in the approved ICR. The OMB previously approved the information collection requirements contained in the existing regulations (40 CFR parts 51 and 52) under the provisions of the Paperwork Reduction Act , 44 U.S.C.

3501 et seq. , and assigned OMB control
number 2060–0003. The OMB control numbers for EPA’s regulations in 40 CFR are listed in 40 CFR part 9.

C. Regulatory Flexibility Act

The Regulatory Flexibility Act 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
number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.

For purposes of assessing the impacts of this final 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-for-profit 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. This final rule will not impose any new requirements or burdens on small
entities. We have determined that small entities will not incur any adverse impacts as a result of this action to amend the regulations at 40 CFR 52.21 (by repealing the grandfather provision that affects fewer than 30 sources).
Small businesses and other small entities generally are not subject to the PSD program, which applies only to new major stationary sources and major modifications at existing major stationary sources. In addition, we do not believe that any small governments serve as PSD reviewing authorities.

D. Unfunded Mandates Reform Act

This rule does not contain a Federal mandate that may result in expenditures of $100 million or more for state, local, and tribal governments, in the aggregate, or the private sector in any 1 year. This action only amends one part of the regulations at 40 CFR 52.21 by repealing the grandfather provision that affects fewer than 30 sources. Therefore, this action is not subject to the requirements
of sections 202 or 205 of UMRA.

This action 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. This final rule applies only to new major stationary sources and to major modifications at existing major stationary sources, and we have no indication that small governments own or operate any major sources that are potentially affected by this action. In addition, we do not believe that any small governments serve as PSD reviewing authorities.

E. Executive Order 13132: Federalism

This action 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 action only amends one part of the regulations at 40 CFR 52.21 by repealing the grandfather provision for PM 2.5 that affects fewer than 30 sources. Thus, Executive Order 13132 does not apply to this final rule.

In the spirit of Executive Order 13132, and consistent with EPA policy to promote communications between EPA and state and local governments, EPA specifically solicited comment on the proposed rule from state and local
officials. We received comments from 11 state/local regulatory agency and regulatory agency association commenters concerning the proposed repeal of the grandfather provision under the Federal PSD program and the early end of the 1997 PM 10 Surrogate


### 28660 Federal Register / Vol. 76, No. 96 / Wednesday, May 18, 2011 / Rules and Regulations

Policy under SIP-approved state PSD programs. The comments pertaining to our repeal of the grandfather provision
are summarized and addressed in this preamble and in a Technical Support
Document in the Docket for this rulemaking.

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 will not impose any new obligations or enforceable duties on tribal governments. 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 Executive Order 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. In fact, this action will help
ensure that the health-based national
standards for PM 2.5 are adequately protected against the adverse effects of

PM 2.5 emissions from new and modified sources of air pollution by ending the
use of the 1997 PM 10 Surrogate Policy as a substitute approach for satisfying
the PM 2.5 requirements under the Federal PSD program.

H. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution, or Use

This action is not subject to Executive Order 13211 (66 FR 28355 (May 22, 2001)), because it is not a significant regulatory action under Executive Order 12866. The EPA is amending one part of the regulations at 40 CFR 52.21 (expected to affect fewer than 30 regulated entities). Only a portion of the sources involved in the production or distribution of energy could be impacted.

I. National Technology Transfer and
Advancement Act

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 ( ‘‘ NTTAA ’’ ), Public Law No. 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.

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 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 concluded that this final
rule does not result in disproportionately high and adverse
human health or environmental effects on minority and/or low income populations. The rule only amends one part of the regulations at 40 CFR 52.21 by repealing the grandfather provision
that affects fewer than 30 sources. The affected sources, after further analysis and data collection, may receive permitted emissions limits that are equally or more protective of public health than would be likely in the
absence of this final rule.

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 on July 18, 2011.

L. Conclusion and Determination Under Section 307(d)

Pursuant to section 307(d)(1)(J) of the CAA, this action is subject to the provisions of section 307(d). Further, to the extent that any aspects of this rule are not subject to the provisions of section 307(d) pursuant to section 307(d)(1)(J), the Administrator determines that this rule is subject to the provisions of section 307(d) pursuant to section 307(d)(1)(V).

VII. 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 July 18, 2011. 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.

VIII. Statutory Authority

The statutory authority for this action is provided by the CAA, as amended (42

U.S.C. 7401 et seq .). Relevant portions of the Act include, but are not necessarily limited to, sections 101, 110, 165, and 301 of the CAA as amended (42 U.S.C. 7401, 7410, 7475, and 7601). This action is also subject to section 307(d) of the Act (42 U.S.C. 7607(d)).

List of Subjects in 40 CFR Part 52

Administrative practices and procedures, Air pollution control, Environmental protection, Incorporation by reference, Intergovernmental
relations.

Dated: May 10, 2011.
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
follows:


### 28661 Federal Register / Vol. 76, No. 96 / Wednesday, May 18, 2011 / Rules and Regulations

**PART 52—[AMENDED]**

■ 1. The authority citation for part 52
continues to read as follows:

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

.
**§ 52.21 [Amended]**

■ 2. In § 52.21, remove paragraph (i)(1)(xi).

[FR Doc. 2011–12089 Filed 5–17–11; 8:45 am]

**BILLING CODE 6560–50–P**

**ENVIRONMENTAL PROTECTION**
**AGENCY**

**40 CFR Part 52**

**[EPA–R09–OAR–2011–0372; FRL–9307–3]**

**Interim Final Determination To Defer Sanctions, Sacramento Metro 1-Hour**  **Ozone Nonattainment Area, California**

**AGENCY :**  Environmental Protection Agency (EPA).

**ACTION :**  Interim final rule.

**SUMMARY :**  EPA is making an interim final determination to defer imposition of sanctions based on a proposed determination, published elsewhere in
this Federal Register , that the State of California is no longer required to submit or implement a Clean Air Act (CAA) Section 185 fee program (Termination Determination) for the
Sacramento Metro 1-hour Ozone nonattainment area (Sacramento Metro Area) to satisfy anti-backsliding requirements for the 1-hour Ozone
standard.

**DATES :**  This interim final determination is effective on May 18, 2011. However, comments will be accepted until June

17, 2011.

**ADDRESSES :**  Submit comments, identified by docket number EPA–R09– OAR–2011–0372, by one of the following methods:

1. Federal eRulemaking Portal: http:// www.regulations.gov. Follow the on-line

instructions.

2. E-mail: steckel.andrew@epa.gov

. 3. Mail or deliver: Andrew Steckel (Air–4), U.S. Environmental Protection Agency Region IX, 75 Hawthorne Street, San Francisco, CA 94105–3901.

Instructions: All comments will be included in the public docket without change and may be made available
online at http://www.regulations.gov, including any personal information provided, unless the comment includes Confidential Business Information (CBI)
or other information whose disclosure is restricted by statute. Information that you consider CBI or otherwise protected should be clearly identified as such and should not be submitted through http:// www.regulations.gov or e-mail. http:// www.regulations.gov is an ‘‘ anonymous

access ’’ system, and EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send e-mail directly to EPA, your e-mail address will be automatically captured and included as part of the public comment. If EPA cannot read your comment due
to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment.

Docket: Generally, documents in the
docket for this action are available electronically at http:// www.regulations.gov and in hard copy at EPA Region IX, 75 Hawthorne Street, San Francisco, California. While all
documents in the docket are listed at http://www.regulations.gov, some information may be publicly available only at the hard copy location ( e.g., copyrighted material, large maps), and some may not be publicly available in either location ( e.g., CBI). To inspect the hard copy materials, please schedule an appointment during normal business
hours with the contact listed in the **FOR**

**FURTHER INFORMATION CONTACT** section.

**FOR FURTHER INFORMATION CONTACT :**  Lily Wong, EPA Region IX, (415) 947–4114, wong.lily@epa.gov.

**SUPPLEMENTARY INFORMATION :**  Throughout this document, ‘‘ we, ’’ ‘‘ us ’’
and ‘‘ our ’’ refer to EPA.

I. Background

On January 5, 2010 (75 FR 232), we published a finding that the State of
California failed to submit State Implementation Plans (SIPs) to satisfy
CAA section 185 for three 1-hour Ozone

nonattainment areas: Sacramento Metro Area, Southeast Desert, and Los Angeles-South Coast Air Basin. As discussed in our January 2010 action, the finding regarding the Sacramento
Metro Area addressed the Yolo/Solano Air Quality Management District, Feather River Air Quality Management District, Placer County Air Pollution Control District and El Dorado County Air Quality Management District. It did
not address the Sacramento Metropolitan Air Quality Management District. This finding started a sanctions clock for imposition of offset sanctions 18 months after January 5, 2010 and highway sanctions 6 months later, pursuant to section 179 of the CAA and our regulations at 40 CFR 52.31.

On July 7, 2010 and in an update on April 13, 2011, the California Air Resources Board (CARB) submitted a request that EPA determine that the CAA section 185 obligation has been terminated for the Sacramento Metro
Area. This termination determination request was supported by data demonstrating that the Sacramento
Metro Area has attained the 1-hour
Ozone standard based on the mostrecent three years of complete, qualityassured and certified data (2007–2009), and that the improvement in air quality resulted from permanent and
enforceable emissions reductions. In the Proposed Rules section of today’s Federal Register , we have proposed approval of this submittal. Based on today’s proposed approval, we are taking this final rulemaking action, effective on publication, to defer imposition of sanctions that were triggered by our January 5, 2010 finding
of failure to submit for the Sacramento Metro Area based on a finding that it is more likely than not that the Sacramento Metro Area is no longer obligated to submit a 185 program.

EPA is providing the public with an opportunity to comment on this deferral
of sanctions. If comments are submitted that change our assessment described in
this final determination and the proposed CAA section 185 termination
determination for the Sacramento Metro Area, we would take final action proposing to deny or denying the termination determination request and lifting this deferral of the sanctions. If no comments are submitted that change our assessment, then with regard to the finding of failure to submit discussed previously, any imposed sanctions would no longer apply and any sanction clocks would be permanently
terminated on the effective date of a
final CAA section 185 termination
determination.

II. EPA Action

We are making an interim final
determination to defer CAA section 179
sanctions associated with the
Sacramento Metro Area’s 1-hour Ozone CAA section 185 obligation based on our concurrent proposal to approve a

CAA section 185 termination
determination which would remove the obligation of the state to submit a
section 185 SIP when finalized.

Because EPA has preliminarily
determined that the State is not obligated to submit the SIP that was the basis of EPA’s finding of failure to submit, relief from sanctions should be provided as quickly as possible. Therefore, EPA is invoking the good cause exception under the Administrative Procedure Act (APA) in not providing an opportunity for
comment before this action takes effect (5 U.S.C. 553(b)(3)). However, by this action EPA is providing the public with