XV.M.1. The PAL permitshallrequire an owneroroperatorto retain 

### a copyofallrecords necessaryto determine compliance with anyrequirementofSection XV. ofthispartand ofthe PAL, including

### a determination ofeach emissions unit's twelve-month rolling total emissions, forfive years from the date ofsuch record.
XV.M.2. The PAL permitshallrequire an owneroroperatorto retain a copyofthe following records forthe duration ofthe PAL effectiveperiodplus five years: XV.M.2.a. A copyofthe PAL permitapplication andanyapplications forrevisions to the PAL; and XV. M.2.b. Each annualcertification ofcompliance pursuantto Part

### C ofthis regulation, andthe data relied on in certifying the compliance.
XV.N. Reporting andnotification requirements. The owneroroperatorshallsubmitsemi-annualmonitoring reports andpromptdeviation reports to the Division in accordance with the requirements ofthe applicable Title VpermitandSection V.

### C.7. ofPart

### C ofthis regulation. The reports shallmeetthe requirements in Sections XV. K. 11.

### a. through XV.K.11.c. below.
XV.N.1. Semi-Annual Report. The semi-annualreportshallbe submittedto the Division within thirtydays ofthe endofeach reportingperiod. This reportshallcontain the information requiredbythe Title Vpermit, Section 

### V.C.7.a. ofPart

### C ofthis regulation, and Sections XV.N.1.a. through XV.N.1.g., below. XV.N.1.a. The identification ofownerandoperatorandthe permitnumber. XV.N.1.b. Total annualemissions (tons/year) basedon 

### a twelve-month rolling total for each month in the reportingperiodrecordedpursuantto Section XV.K.10.a. XV.N.1.c. Alldata relied upon, including, butnotlimited to, any QualityAssurance or Quality Controldata, in calculating the monthlyandannualPAL pollutant emissions shallbe made available upon requestbythe Division. XV.N.1.d. A listofanyemissions units modifiedoraddedto the majorstationarysource during thepreceding six-month period. XV.N.1.e. The number, duration, andcause ofanydeviations ormonitoring malfunctions (otherthan the time associated with zero andspan calibration checks}, andany corrective action taken. XV.N.1.f. A notification of

### a shutdown ofanymonitoring system, whetherthe shutdown waspermanentortemporary, the reason forthe shutdown, the anticipateddate that the monitoring system willbe fullyoperationalorreplaced with another monitoring system, whetherthe emissions unit(s) monitoredbythe monitoring system continued to operate, andcalculations ofemissions from those units as providedbySection XV. K.

### 7. ofthispart. XV.N.1.g. A signedstatementbythe responsible official (as definedin Section 1.8.40. of PartA ofthis regulation) certifying the truth, accuracy, andcompleteness ofthe information providedin the report. XV.N.2. Deviation report. RegulationNumber3 Adopted: October 20, 2011 Page 183The majorstationarysource owneroroperatorshallpromptlysubmitreporls ofanydeviations or exceedance ofthe PAL requirements, includingperiods where no monitoring is available. A reporl submittedpursuant to Section 

### V.C.

### 7.b. ofPari

### C ofthis regulation shallsatisfythis reponing requirement. The deviation reporls shallbe submitted within the time limitsprescribedbySection 

### V.C. 7.b. ofPari

### C. The reporls shallcontain the following information: XV.N.2.a. The identification ofownerandoperatorand the permitnumber; XV.N.2.b. The PAL requirement thatexperiencedthe deviation orthat was exceeded; XV.N.2.c. Emissions resulting from the deviation orthe exceedance; and XV.N.2.d. A signedstatementbythe responsible official (as definedin Section 1.8.40. of PariA ofthis regulation) cerlifying the truth, accuracy, andcompleteness ofthe information providedin the reporl. XV.N.3. Re-validation results The owneroroperatorshallsubmitto the Division the results ofanyrevalidation testormethod within three months aftercompletion ofsuch testormethod. XV.O. Ifanyprovision ofthis Section, orthe application ofsuchprovision to anyperson orcircumstance, is heldinvalid, the remainderofthis Section, orthe application ofsuchprovision topersons or circumstances otherthan those as to which itis heldinvalid, shallnotbe affected thereby.
PARTE RESERVED FOR ENVIRONMENTAL MANAGEMENT SYSTEMS Reserved for Environmental Management Systems
PART F REGIONAL HAZE LIMITS- BESTAVAILABLE RETROFITTECHNOLOGY (BART) AND REASONABLE PROGRESS (RP) The provisions ofSection VI (Regional Haze Determinations) and VII (MRR) of Regulation 3, Part F shall be incorporated into Colorado's Regional Haze State Implementation Plan. All other Sections of Regulation 3, Part Fare State-Only. The provisions of Part 51, Appendix Y, Title 40, ofthe Code of Federal Regulations (CFR}, promulgated by the U.S. Environmental Protection Agency listed in this Section are hereby incorporated by reference by the Air Quality Control Commission and made a part ofthe Colorado Air Quality Control Commission Regulations as modified by the following Regulation Number3, Part F. Materials incorporated by reference are those in existence as July 6, 2005 and do not include lateramendments. The material incorporated by reference is available for public inspection during regular business hours atthe Office of the Commission, located at4300 Cherry Creek Drive South, Denver, Colorado 80246, or may be examined at any state publications depository library. Parties wishing to inspectthese materials should contactthe Technical Secretary ofthe Commission, located atthe Office ofthe Commission. 

### I. Applicability The provisions ofthis regulation apply to existing stationary facilities (BARTeligible sources}, as defined in Section II.I. ofthis regulation, as well as to Reasonable Progress (RP) sources. 

### II. Definitions II

### .A. Adverse impacton visibility

Regulation Number3 Adopted: October20, 2011 Page 184Meansvisibility impairmentthat interfereswith the management, protection, preservation, or enjoymentofthe visitor's visual experience ofthe Federal Class I area. This determination must be made on a case-by-case basis taking into accountthe geographic extent, intensity, duration, frequency and time ofvisibility impairments, and howthese factors correlate with (1) times of visitor use ofthe Federal Class I area, and (2) the frequency and timing ofnatural conditions that reduce visibility. This term does not include effects on integral vistas.
II.B. Available Technology
Meansthat a technology is licensed and available through commercial sales. II.C. Applicable Technology Means a commercially available control option that has been or may soon be deployed on the same ora similarsource type or a technology that has been used on a pollutant-bearing gas stream that is the same or similarto the gas stream characteristics ofthe source. II.D. Average Cost Effectiveness
Means the total annualized costs ofcontrol divided by annual emissions reductions (the difference between baseline annual emissions and the estimate ofemissions aftercontrols). For the purposes ofcalculating average cost effectiveness, baseline annual emissions means a realistic depiction ofanticipated annual emissionsforthe source. The source orthe Division may use state or federally enforceable permit limits orestimatethe anticipated annual emissions based upon actual emissionsfrom a representative baseline period.
II.E. BARTAlternative Means an alternative measureto the installation, operation, and maintenance of BARTthatwill achieve greater reasonable progress toward nationalvisibility goalsthan would have resulted from the installation, operation, and maintenance of BART at BART-eligible sourceswithin industry source categories subjectto BART requirements.
II.F. BART-eligible source Means an existing stationary facility as defined in Section 

### 11.1.
II.G. BestAvailable RetrofitTechnology (BART) Means an emission limitation based on the degree of reduction achievable through the application ofthe bestsystem ofcontinuous emission reduction for each pollutant that is emitted by an existing stationary facility. The emission limitation must be established, on a case-by-case basis, taking into consideration the technology available, the costs ofcompliance, the energy and non-airquality environmental impacts ofcompliance, any pollution control equipment in use or in existence atthe source or unit, the remaining useful life ofthe source or unit, and the degree of improvement in visibility which may reasonably be anticipated to result from the use ofsuch technology.
II.H. Deciview Means a measurement ofvisibility impairment. A deciview is a haze index derived from calculated light extinction, such that uniform changes in haziness correspond to uniform incremental changes in perception across the entire range ofconditions, from pristine to highly impaired. The deciview haze index is calculated based on the following equation (forthe

RegulationNumber3 Adopted: October 20,2011 Page 185purposes ofcalculating deciview, the atmospheric light extinction coefficient must be calculated from aerosol measurements): Deciview haze index=10 lne (bext/10 Mm-1) Where bext= the atmospheric light extinction coefficient, expressed in inverse megameters (Mm-1). II.I. Existing stationary facility Means any ofthe following stationary sources ofair pollutants, including any reconstructed source, which was not in operation priortoAugust 7, 1962, and was in existence on August 7, 1977, and has the potential to emit 250 tons peryearormore ofany visibility impairing air pollutant. In determining potential to emit, fugitive emissions, to the extent quantifiable, must be counted.
11.1.1. Fossil-fuel fired steam electric plants ofmorethan 250 million British thermal units (BTU) per hour heat inputthat generate electricity for sale
11.1.1.a. Boiler capacities shall be aggregated to determinethe heat input ofa plant 11.1.1.b. Includes plants that co-generate steam and electricity and combined cycle turbines
11.1.2. Coal cleaning plants (thermal dryers)
11.1.3. Kraft pulp mills
11.1.4. Portland cement plants
11.1.5. Primary zinc smelters
11.1.6. Iron and steel mill plants
11.1.7. Primary aluminum ore reduction plants
11.1.8. Primary copper smelters
11.1.9. Municipal incinerators capable ofcharging more than 250 tons of refuse perday
11.1.10. Hydrofluoric, sulfuric, and nitric acid plants
11.1.11. Petroleum refineries
11.1.12. Lime plants 11.1.13. Phosphate rock processing plants Includes all types ofphosphate rock processing facilities, including elemental phosphorous plants as well as fertilizer production plants
11.1.14. Coke oven batteries

Regulation Number 3 Adopted: October20, 2011 Page 18611.1.15. Sulfur recovery plants
11.1.16. Carbon black plants (furnace process)
11.1.17. Primary lead smelters
11.1.18. Fuel conversion plants
11.1.19. Sintering plants
11.1.20. Secondary metal production facilities Includes nonferrous metal facilities included within Standard Industrial Classification code 3341, and secondary ferrous metal facilities in the category "iron and steel mill plants."
11.1.21. Chemical process plants Includesthose facilities within the 2-digit Standard Industrial Classification 28, including pharmaceutical manufacturing facilities
11.1.22. Fossil-fuel boilers of morethan 250 million BTUs per hour heat input
11.1.22.a. Individual boilers greaterthan 250 million BTU/hr, considering federally enforceable operational limits 11.1.22.b. Includes multi-fuel boilers that burn at leastfifty percentfossil fuels
11.1.23. Petroleum storage and transferfacilities with a capacity exceeding 300,000 barrels
11.1.23.a. 300,000 barrels refers to total facility-wide tank capacity fortanks put in place afterAugust 7, 1962 and in existence on August 7, 1977 11.1.23.b. Includes gasoline and other petroleum-derived liquids.
11.1.24. Taconite ore processing facilities
11.1.25. Glass fiber processing plants
11.1.26. Charcoal production facilities Includes charcoal briquette manufacturing and activated carbon production II.J. Incremental Cost Effectiveness Meansthe comparison ofthe costs and emissions performance level ofa control option to those ofthe next moststringentoption, as shown in the following formula: Incremental Cost Effectiveness (dollars per incremental ton removed)= [(Total annualized costs ofcontrol option)

- (Total annualized costs of nextcontrol option)] + [(Next Control option annual emissions)

- (control option annual emissions)]
II.K. In existence Meansthatthe owneroroperator has obtained all necessary preconstruction approvals or permits required by Federal, State, or local air pollution emissions and airquality laws or RegulationNumber 3 Adopted: October 20, 2011 Page 187regulations and either has (1) begun, orcaused to begin, a continuous program of physical onsite construction ofthe facility or (2) entered into binding agreements orcontractual obligations, which cannot be cancelled or modified without substantial loss to the owneroroperator, to undertake a program ofconstruction ofthe facility to be completed in a reasonable time.
II.

### L. In operation Means engaged in activity related to the primary design function ofthe source. II.M. Integral vista Means a view perceived from within the mandatory Class I Federal area ofa specific landmark or panorama located outside the boundary ofthe mandatory Class I Federal area. II.N. Natural conditions Means naturally occurring phenomena that reduce visibility as measured in terms oflight extinction, visual range, contrast, orcoloration.
11.0 Plant Means all emissions units ata stationary source. II.P. Visibility-Impairing Air Pollutant Includesthe following: II.P.1. Sulfurdioxide (S02), II.P.2. Nitrogen oxides (NOx) and II.P.3. Particulate matter. (PM10 will be used as the indicatorfor particulate matter. Emissions of PM10 include the components of PM2.5as a subset.). 

### Ill. Sources required to Perform a BARTAnalysis Each source that the Division determines is BART-eligible and subjectto BART shall complete a BART analysis under Section IV. The Division shall provide written notice to each source determined to be subjectto BART. Within twenty calendar days ofthe mailing ofsuch notice a source may appeal such determination to the Commission by filing a petition for a hearing with the Commission. Any such hearing shall be subjectto Section 1.6.0 ofthe Procedural Rules. Ill.A. Determining Potential to Emitfor a BART Source Forthe purposes ofdetermining whetherthe potential to emit ofan existing stationary source is greaterthan 250 tpy the potential emissions ofvisibility impairing pollutants from the existing stationary source shall include the emissions from all BART-eligible units which belong to the same industrial grouping, are located on one or more contiguous oradjacent properties, and are underthe control ofthe same person (or persons undercommon control). Pollutant-emitting activities shall be considered as part ofthe same industrial grouping ifthey belong to the same Major Group 

### (i.e., which have the sametwo-digit code) as described in the Standard Industrial Classification Manual. Ill.B. Identification ofsources subjectto BART

Regulation Number 3 Adopted: October20, 2011 Page 188

### III.B.1. Identification ofsources subjectto BART shall be performed in accordance with EPA's guidelines for BART determinations underthe regional haze rule 40 CFR Part 51, Appendix Y. A BART-eligible source described in Section liLA, above, is subjectto BART unless valid air quality dispersion modeling demonstrates that the source will not cause orcontribute to visibility impairment in any Class I area. III.B.1.a. A single source that is responsible for a 1.0 deciviewchange or more is considered to "cause" visibility impairment in any Class I area. III.B.1.b. A single source that is responsible for a 0.5 deciview change or more is considered to "contribute" visibility impairment in any Class I area. III.B.1.c. A single source is exemptfrom BART ifthe 981h 

### percentile daily change in visibility, as compared against natural background conditions, is less than 0.5 deciviews at all Class Ifederal areas foreach year modeled and for the entire multi-year modeling period. III.B.2. The Division will perform air quality dispersion modeling for each source identified as BART-eligible, forall visibility impairing pollutants, for class I areas. The modeling results will be provided to each source. 

### IV. BART Analysis


### IVA Presumptive BART for Coal Fired Power Plants IV.A.1. Plants with a Generating Capacity of750 MWorGreater BART-eligible coal fired power plants with a generating capacity of750 MWor GREATER is presumed to be able to meetthe presumptive limits. Regardless of whetheror nota unit can meetthe presumptive BART limits the source mustcomplete a BART analysis. IV.A.2. OtherCoal Fired Power Plants The Division shall use the presumptive BART limits ofsection IV.A.3. as guidelines and may establish a BART level for the unit eitherabove or belowthe presumptive BART level based on the BART determination. IV.A.3. Coal-Fired Electric Generating Units IV.A.3.a. Sulfur Dioxide Coal-Fired Electric Generating Units: 95 percent reduction or0.15 lb S02/mmBTU. IV.A.3.b. Nitrogen Oxides

UnitType Dry bottom Wall fired

Regulation Number3 Adopted: October 20,2011 

### Coal Type Bituminous Sub-bituminous NOx limit (lb/mm BTUl 0.39 0.23

Page 189

### Lignite 0.29 Tangential Fired Bituminous 0.28 Sub-bituminous 0.15 Lignite 0.17 Cell Burners Bituminous 0.40 Sub-bituminous 0.45 Dry-turbo-fired Bituminous 0.32 Sub-bituminous 0.23 Wet-bottom tangential- Bituminous 0.62 fired

IV.B. Each source subjectto BART pursuantto Section Ill shall submit a BART application for a construction permit, which shall include a BART analysis, a proposal for BART atthe source and ajustification forthe BART proposal to the Division by August 1, 2006. IV.B.1. The BART analysis must include, ata minimum:

Regulation Number 3 Adopted: October20,2011 

### IV.B.1.a. A list ofthe demonstrated and potentially applicable retrofit control options forthe units subject to BART. Sources are not required to evaluate control options, which are less effective than the controls currently installed on the BART subject source or unit. IV.B.1.b. A discussion ofthe technical feasibility ofeach ofthe technologies identified in Section IV.B.1.a. This discussion should include an analysis ofwhetherthe proposed technology is available and applicable. Ifthe source determines that a technology is nottechnically feasible the discussion shall include a factual demonstration thatthe option is not commercially available orthat unusual circumstances preclude its application to the emission unit. IV.B.1.c. A ranking ofall the technically feasible technologies identified in Section IV.B.1.b. The ranking shall take into account various emission performance characteristics ofthe technologies. The technologies should be ranked from lowestemissions to highestemissions for each pollutant and each emissions unit. The ranking should include a discussion of pollution control equipment in use atthe unit, including upgrading existing equipment iftechnically feasible. IV.B.1.d. An evaluation ofthe impacts ofthe technically feasible BART options. The impactevaluation shall include: IV.B.1.d.(i). An estimate ofthe Average Cost Effectiveness ofeach ofthe control technologies identified as technically feasible in Section IV.B.1.b. This analysis shall specify the emissions unit being controlled, the design parameters forthe emission controls and
Page 190Regulation Number 3 Adopted: October20, 2011 

### cost estimates based on those design parameters. The remaining useful life ofthe source or unit may be taken into account in the cost ofthe technologies. The remaining useful life is the difference between: (1) The date that controls will be put in place (capital and other construction costs incurred before controls are put in place can be rolled into the first year); and (2) The date the facility permanently stops operations. Where this affects the BART determination, this date should be assured by a federally- or State-enforceable restriction preventing further operation. The analysis mustalso include the energy and non-air quality environmental impacts ofcontrol options. IV.B.1.d.(ii). An analysis ofthe incremental cost effectiveness. Before a control technology can be eliminated the source shall evaluate the incremental cost effectiveness in combination with the total cost effectiveness in ordertojustify elimination ofa control option. IV.B.1.d.(iii). An evaluation ofthe visibility impacts for each BART option according to modeling guidance provided by the Division. IV.B.1.d.(iv). An evaluation of non-air quality impacts. The non-air quality impacts may include water use increases, solid waste disposal, orotheradverse environmental impacts. IV.B.1.d.(v). An evaluation ofthe energy impacts. The energy impact analysis should look atthe energy requirements ofthe control technology and any energy penalties or benefits associated with the control. The analysis should also consider directenergy consumption and may address concerns overthe use oflocally scarce fuels orthe use of locally or regionally available coal. IV.B.1.d.(v).(1). The energy impacts analysis may consider whetherthere are relative differences between alternatives regarding the use oflocally or regionally available coal, and whether a given alternative would result in significant economic disruption or unemployment. IV.B.1.e. An evaluation and justification ofthe proposed averaging time to evaluate compliancewith the proposed emission limitations. IV.B.1.f.Coal-fired power plants may, in their discretion, include in the BART analysis an evaluation of representative characteristics (including nitrogen content) ofcoal from sources they reasonably expectto use, to the extent such characteristics tend to result in higher NOx emissions than coals ofthe same classification from alternative sources. The analysis also may considerwhether a particular BART limit might lead the power plant notto use coal from a particular mine due to such coal characteristics, and the extentto which such a decision might result in economic disruption or unemploymentatthe mine or in nearby communities.

Page 191

### IV.B.1.g. Sources subjectto a MACT standard may limitthe analysis forthose pollutants covered by the MACTto a discussion of newtechnologies that have become available since the promulgation ofthe MACT. IV.B.2. Sources with a potential to emit of less than 40 tons peryear ofS02 and NOx and less than 15 tpy of PM1 0 may exclude those pollutants from the BART determination. IV.B.3. Selecting a best alternative The source shall submit a proposal for BART atthe source or unit(s), including a justification for selecting the technology proposed. Thejustification shall be based on the following factors: (1) the technology available; (2) the costs ofcompliance; (3) the energy and non-air environmental impacts ofcompliance; (4) any pollution control equipment in use atthe source or unit(s); (5) the remaining useful life ofthe source or unit(s) and; (6) the degree ofimprovement in visibility which may reasonably be anticipated to result from the use ofsuch technology. IV.B.4. Schedules to comply with BART emissions limits IV.B.4.a. The technology analysis shall include a schedule to complywith BART ora BART alternative as expeditiously as practicable following EPA approval ofthe state implementation plan for regional haze that incorporates such BART requirements. The source mustcomply with BART or BART alternative emissions limits no laterthan 5 years after approval ofthe state implementation plan by EPAfor regional haze.IV.B.4.b. A source or unit subjectto BART may implementa BART alternative in lieu of BART ifsuch BART alternative is authorized by the Division. IV.C. BARTAlternative As an alternative to BART for a source orsources, the Division may approve a BARTAlternative. Ifthe Division approves source grouping as a BARTAlternative, only sources (including BARTeligible and non-BART eligible sources) within the same source category (as defined by SIC or NAICS code) within the same airshed may be grouped together. IV.C.1. Ifa Source (s) proposes a BART Alternative, the resultant emissions reduction and visibility impacts must be compared with those that would result from the BART options evaluated forthe source(s). IV.C.2. Source (s) proposing a BART alternative shall include in the BART analysis an analysis and justification ofthe averaging period and method ofevaluating compliance with the proposed emission limitation. IV.D. Emission limits IV.D.1. Coal-Fired Electric Generating Units Compliance with the emission limitation is determined on a 30-day rolling average basis for S02 and NOx, or may be determined by the Division based on the BART analysis submitted by the source. The emission limit shall be included in thefacility's permit. IV.D.2. Other Sources Subjectto BART

Regulation Number3 Adopted: October20,2011 Page 192The Division will establish emission limits with averaging times consistentwith established reference methods and include the limit in the facility's permit.
IV.E. A source that has installed BARTfor regional haze or implemented a Division approved BART alternative for regional haze is exempted from the imposition offurther controls pursuantto regional haze BARTwith respectto those pollutants thatare controlled through BART orthe BARTalternative for Regional Haze and is exempted from the imposition offurther controls necessary for reasonable progress during the first reasonable progress planning period. Sources may be subjectto additional controls or emission reductions based on reasonable progress requirements in planning periods beyond the first planning period underthe regional haze State Implementation Plan.
IV.F. Divisiqn Review and Approval
IV.F.1. The Division shall review and approve, disapprove oramend the proposed BART technology or BARTalternative, including the emission limit, schedule for compliance forthe facility, and averaging period. The Division shall consider additional information both submitted and notsubmitted by the source that is deemed relevant. The Division shall submit its BARTdetermination to the Commission for review and approval.
IV.F.2. Iftwo or more sources are grouped together pursuantto Section IV.C. the Division shall establish recordkeeping and reporting requirements sufficientto determinethatthe sources meetthe BARTalternative emission limits. IV.F.3. Any source seeking to modify the BART determination forthatfacility must submita new BART analysis for review by the Division. 

### V. Challenge of Division BART Determinations and Enforceable Agreements.
V.A. Persons affected oraggrieved by a BARTdetermination may challenge the decision ofthe Commission pursuanttoArticle 4 ofTitle 24, C.R.S. 

### VI. Regional Haze Determinations
VIA BART Determinations
VI. A.1. The provisions ofthis Section VI.A of Regulation Number3, Part F shall be incorporated into Colorado's Regional Haze State Implementation Plan.
VI.A.2. The sources listed below shall notemitorcause to be emitted nitrogen oxides (NOx), sulfurdioxide (S02), or particulate in excess ofthe following limits:



### BART Determinations for Colorado Sources Unit NOx Emission Limit

RegulationNumber 3 Adopted: October 20, 2011 

### S02 Emission Limit Particulate Emission Limit

Page 193CENC Unit4 0.37 lb/MMBtu (30-day rolling average) 1.0 lb/MMBtu 0.07 lb/MMBtu

or (30-day rolling average)
0.26 lb/MMBtu Combined Average for Units 4 and 5 (30-day rolling average) CENC Unit 5 0.19 lb/MMBtu (30-day rolling average) 1.01b/MMBtu 0.07 lb/MMBtu

or (30-day rolling average)
0.26 lb/MMBtu Combined Average for Units 4 and 5 (30-day rolling average) Craig Unit 1 0.28 lb/MMBtu 0.11 lb/MMBtu 0.03 lb/MMBtu (30-day rolling average) (30-day rolling average) Craig Unit2 0.08 lb/MMBtu 0.11 lb/MMBtu 0.03 lb/MMBtu (30-day rolling average)* (30-day rolling average)
*The NOx emission limits for Craig Units 1and 2 constitute a BARTAlternative.



### Unit NOx Emission Limit

Comanche 0.20 lb/MMBtu Unit 1 (30-day rolling average) 0.151b/MMBtu (combined annual average for units 1 & 2)

Comanche 0.20 lb/MMBtu Unit 2 (30-day rolling average)
0.15 lb/MMBtu (combined annual average for units 1 & 2)

RegulationNumber3 Adopted: October 20, 2011 

### 502 Emission Limit Particulate Emission Limit
0.12 lb/MMBtu 0.03 lb/MMBtu (individual unit 30-day rolling average)
0.10 lb/MMBtu (combined annual average for units 1 & 2)
0.12 lb/MMBtu 0.03 lb/MMBtu (individual unit 30-day rolling average) 0.10 lb/MMBtu (combined annual average for units 1 & 2)

Page 194Hayden Unit 1 0.081b/MMBtu 0.13 lb/MMBtu 0.03 lb/MMBtu (30-day rolling average) (30-day rolling average)

Hayden Unit2 0.07 lb/MMBtu 0.13 lb/MMBtu 0.03 lb/MMBtu (30-day rolling average) (30-day rolling average)

Martin Drake 0.31 lb/MMBtu 0.26 lb/MMBtu 0.03 lb/MMBtu Unit 5 (30-day rolling average) (30-day rolling average)

Martin Drake 0.311b/MMBtu 0.131b/MMBtu 0.03 lb/MMBtu Unit6 (30-day rolling average) (30-day rolling average)

Martin Drake 0.29 lb/MMBtu 0.131b/MMBtu 0.03 lb/MMBtu Unit 7 (30-day rolling average) (30-day rolling average)

CEMEX- 255.3 lbs/hr 25.3 lbs/hr 0.275 lb/ton of Lyons Kiln dryfeed 20% (30-day rolling average) (12-month rolling average) opacity 901.0 tons/year 95.0 tons/yr (12-month rolling average) (12-month rolling average)

CEMEX- 13.9 tons/yr 36.7 tons/yr 22.8 tons/yr Lyons Dryer 10% opacity VI.A.3. Each source listed in the above tables mustcomply with the above limits and averaging times as expeditiously as practicable, but in no event laterthan five years after EPA approval ofColorado's state implementation plan for regional haze, or relevant component thereof. Each source listed in the above tables must maintain control equipment oroperational practices required to comply with the above limits and averaging times, and establish procedures to ensure that such equipment oroperational practices are properly operated and maintained.

RegulationNumber 3 Adopted: October 20,2011 Page 195VI.A.4. The sources shall submitto the Division a proposed compliance schedulewithin sixty days after EPAapproves the BART portion ofthe Regional Haze SIP. The Division shall publish these proposed schedules and provide for a thirty-day public comment period following publication. The Division shall publish its final determinations regarding the proposed schedules for compliance within sixty days afterthe close ofthe public comment period and will respond to all public comments received. VI.B. Reasonable Progress Determinations VI.B.1. The provisions ofthis Section VI.B of Regulation Number 3, Part F shall be incorporated into Colorado's Regional Haze State Implementation Plan. VI.B.2. The sources listed below shall not emitorcause to be emitted nitrogen oxides (NOx), sulfur dioxide (S02), or particulate in excess ofthe following limits:

RP Determinations for Colorado Sources

Emission Unit

Rawhide Unit 101

CENC Unit 3

Nixon

Clark Units 1 & 2 Shutdown 12/31/2013

Holcim - Florence Kiln

Nucla

Regulation Number 3 Adopted: October20,2011 NOx Emission Limit

0.145 lb/MMBtu (30-day rolling average)

246 tons peryear (12-month rolling total)

0.21 lb/MMBtu (30-day rolling average)

Shutdown 12/31/2013

2.73 lbs/ton clinker (30-day rolling average) 2,086.8 tons/year

0.5 lb/MMBtu (30-day rolling average) 502Emission Limit Particulate Emission Limit

0.11 lb/MMBtu 0.03 lb/MMBtu (30-day rolling average)

1.2 lb/MMBtu 0.07 lb/MMBtu

0.11 lb/MMBtu 0.03 lb/MMBtu (30-day rolling average)

Shutdown 12/31/2013 Shutdown 12/31/2013

1.30 lbs/ton clinker 246.3 tons/year (30-day rolling average)
721.4 tons/year

0.4 lb/MMBtu 0.03 lb/MMBtu (30-day rolling average)

Page 196

### RP DeterminationsforColorado Sources

Emission Unit NOx Emission Limit ' S02Emission Limit Particulate Emission Limit Craig 0.28 lb/MMBtu 0.15 lb/MMBtu 0.013 lb/MMBtu filterable PM Unit 3 (30-day rolling average) (30-day rolling average) 0.012 lb/MMBtu filterable PM10


### Cameo Shutdown 12/31/2011 Shutdown 12/31/2011 Shutdown 12/31/2011 Shutdown 12/31/2011
VI.B.3. Each source listed in the above table mustcomply with the above limits and averaging times as expeditiously as practicable, but in no event laterthan December 31, 2017. Each source listed in the above table must maintain control equipment or operational practices required to comply with the above limits and averaging times, and establish procedures to ensure that such equipmentoroperational practices are properly operated and maintained. VI.B.4. The sources shall submitto the Division a proposed compliance schedule within sixty days after EPA approves the RP portion ofthe Regional Haze SIP. The Division shall publish these proposed schedules and provide for a thirty-day public comment period following publication. The Division shall publish its final determinations regarding the proposed schedules for compliancewithin sixty days afterthe close ofthe public comment period and will respond to all public comments received. VI.C. Public Service Company ofColorado (PSCo) BARTAlternative Program VI.C.1. The provisions ofthis Section VI.C of Regulation Number3, Part F (with the exception of the S02 cap ofsubsection VI.C.4) shall be incorporated into Colorado's Regional Haze State Implementation Plan. VI.C.2. The sources listed below shall notemitorcause to be emitted nitrogen oxides (NOx), sulfur dioxide (S02), or particulate in excess ofthe following limits, afterthe following compliance dates:



### BART Alternative Program Determinations for PSCo Sources

Emission Unit

RegulationNumber 3 Adopted: October 20,2011 

### NOx Emission Limit S02 Emission Limit Particulate Emission Limit

Page 197Cherokee* 

### Unit 1 Shutdown No laterthan 7/1/2012 Cherokee 

### Unit 2 Shutdown 12/31/2011 Cherokee 

### Unit 3 Shutdown No laterthan 12/31/2016

Cherokee 

### Unit4

Valmont 

### Unit 5 Shutdown 12/31/2017
Pawnee

Arapahoe** 

### Unit 3 Shutdown 12/31/2013

RegulationNumber3 Adopted: October20, 2011 

### 0 Shutdown No laterthan 7/1/2012

0

Shutdown 12/31/2011
0

Shutdown No laterthan 12/31/2016

0.12 lb/MMBTU (30-day rolling average) by 12/31/2017 Natural Gas Operation 12/31/2017
0

Shutdown 12/31/2017
0.07 lb/MMBTU (30-day rolling average) by 12/31/2014
0

Shutdown 12/31/2013 0 0 Shutdown No laterthan Shutdown No later 7/1/2012 than 7/1/2012

0 0

Shutdown 12/31/2011 Shutdown 12/31/2011
0 0

Shutdown No laterthan Shutdown No later 12/31/2016 than 12/31/2016

7.81 tpy 0.03 lbs/MMBtu (rolling 12 month Natural Gas Operation average) 12/31/2017 Natural Gas Operation 12/31/2017
0 0

Shutdown 12/31/2017 Shutdown 12/31/2017
0.12 lbs/MMBtu 0.03 lbs/MMBtu (30-day rolling average) by 12/31/2014
0 0

Shutdown 12/31/2013 Shutdown 12/31/2013

Page 198Arapahoe 600tpy on 1.28tpy 0.03 lbs/MMBtu Unit4 (rolling 12 month average) (rolling 12 month Natural Gas operation average) 12/31/2014 Natural Gas operation12/31/2014 Natural Gas operation 12/31/2014
* 500 tpy NOxwill be reserved from Cherokee Station for netting oroffsets
** 300 tpy NOxwill be reserved from Arapahoe Station for netting oroffsets for additional natural gas generation VI.C.3. Each source listed in the above table must eithershutdown orcomply with the above limits and averaging times no laterthan the compliance date setforth in the above table. Each source listed in the above table must maintain any applicable control equipment required to comply with the above limits and averaging times, and establish procedures to ensure that such equipment is properly operated and maintained. VI.C.4. In addition to the above listed emission limits and compliance dates, between 1/1/2013 and 12/31/2015, Cherokee Units 3 and 4 and Valmont, considered as a whole, shall not emit in excess of4,200 tons ofS02 peryear as determined on a calendar yearannual basis. Between 1/1/2016 and 12/31/2017 Cherokee Unit4 and Valmont considered as a whole, shall not emit in excess of3,450 tons ofS02 peryear as determined on a calendaryearannual basis. VII. Monitoring, Recordkeeping, and Reporting for Regional Haze Limits The provisions ofthis Section VII of Regulation 3, Part F shall be incorporated into Colorado's Regional Haze State Implementation Plan. Federal Regulations Adopted by Reference The following regulations promulgated by the United States Environmental Protection Agency (EPA) were previously adopted bythe ColoradoAir Quality Control Commission and are thereby already incorporated by reference: 40 CFR Part 60 and Appendices (As incorporated by reference within Commission Regulation Number6, 5 CCR 1001-8)
40 CFR Part 63, SubpartA

- National Emission Standards for Hazardous Air Pollutants General Provisions and Subpart LLL

- National Emission Standards for Hazardous Air Pollutants From the Portland Cement Manufacturing Industry (As incorporated by reference within Commission Regulation Number8, PartA, 5 CCR 1001-10). 40 CFR Part 64 (As incorporated by reference within Commission Regulation Number3, Part C Section XIV., 5 CCR 1001-5) 40 CFR Part 75 including Performance Specifications and Appendices (As incorporated by reference within Commission Regulation Number6, 5 CCR 1001-8) VII.A. Definitions

RegulationNumber3 Adopted: October20, 2011 Page 199VII.A.1. "BART alternative program unit" means any unit subjectto a Regional Haze emission limit contained in the Table in Regulation Number 3, Part F, Section VI.C. VII.A.2. "BART unit" means any unit subjectto a Regional Haze emission limit contained in the Table in Regulation Number3, Part F, Section VI.A. VII.A.3. "Continuous emission monitoring system" or "GEMS" meansthe equipment required by Regulation Number 3, Part F, Section VII, to sample, analyze, measure, and provide (using an automated data acquisition and handling system (DAHS)), a permanent record ofS02 or NOx emissions, other pollutant emissions, diluent, or stack gasvolumetricflow rate. VII.A.4. "Operating day" means any twenty-four-hour period between midnightand the following midnightduring which any fuel is combusted at any time in a BART unit, BART alternative program unit, or Reasonable Progress unit. VII.A.5. "Reasonable Progress unit" or "RP unit" means any unitsubjectto a Regional Haze emission limit contained in the Table in Regulation Number3, Part F, Section VI.B. VII.A.6. "Regional Haze emission limit" means any ofthe emission limits specified in the Tables contained in Regulation Number3, Part F, Section VI. VII.B. Monitoring/Compliance Determination: S02 and NOx Regional Haze Limits VII.B.1. BART, RP, and BART alternative program unitswith S02 and NOx GEMS. VII.B.1.a. All Boilers, except CENC and Clark boilers. The owneroroperator ofa boiler subjectto this section shall complywith the Part 75 monitoring and recordkeeping requirements as incorporated by reference into this regulation with the exception ofthe continuous emission monitoring system (GEMS} data substitution and bias adjustment requirements. At all times afterthe compliance deadline specified in Regulation Number3, Part F, Section VI.A.3., VI.B.3. orVI.C.3., the owner/operator ofeach BART, RP, or BART alternative program unit shall maintain, calibrate, and operate a GEMS, in full compliance with the requirements found at 40 CFR Part 75 not excluded above, to accurately measure from such unit S02, NOx, diluent, and stack gasvolumetric flow rate as such parameters are relevant to the applicable emission limit. The GEMS shall be used to determine compliance with the S02 and NOx Regional Haze emission limits for each such unit. Such limits are expressed in units of pounds per million Btu. The owner/operator shall calculate emissions in the applicable units. In determining compliance with the S02 and NOx Regional Haze limits, all periods of emissions shall be included, including startups, shutdowns, emergencies, and malfunctions.

Regulation Number3 Adopted: October20, 2011 VII.B.1.a.(i}. Pounds Per Million Btu Regional Haze Limits For any hour in which fuel is combusted in the BART, RP, or BART alternative program unit, owner/operatorshall calculate hourly average S02 and NOx concentrations in pounds per million Btu atthe GEMS in accordance with the requirements of40 CFR Part 75 exceptfor Part 75 requirements excluded by Section VII. B.1.a. These hourly averages shall then be used to determine compliance in accordance with the particular limit's averaging period, as follows:

Page 200Regulation Number 3 Adopted: October20,2011 VII.B.1.a.(i).(1). Regional Haze limits with a 3-houraveraging period: Emissions shall be calculated on a 3-hour rolling average basis. Atthe end ofeach operating hour, the owner/operatorshall calculate and record a new3-houraverage emission rate in lb/MMBtu from the arithmetic average ofthe valid hourly emission rates from the CEMS for the previous three operating hours. (An operating hour is any hour in which fuel is combusted for any time in the unit.) VII.B.1.a.(i).(2). Regional Haze limitswith a 30-day averaging period: Before the end ofeach operating day, the owner/operator shall calculate and record the 30-day rolling average emission rate in lb/MMBtu from all valid hourly emission values from the CEMS forthe previous 30 operating days. VII.B.1.a.(i).(3). Regional Haze limits with a 90-day averaging period: Before the end ofeach operating day, the owner/operatorshall calculate and record the 90-day rolling average emission rate in lb/MMBtu from all valid hourly emission values from the CEMS for the previous 90 operating days. VII.B.1.a.(i).(4). Regional Haze limits with a 12-month averaging period: Before the end ofeach month, the owner/operatorshall calculate and record the 12-month rolling average emission rate in lb/MMBtu from all valid hourly emission values from the CEMS forthe previous 12 months. VII.B.1.a.(i).(5). Regional Haze limits with an annual calendar averaging period: Emissions shall be calculated on a calendaryear basis. Within 30 days afterthe end ofeach calendaryear, the owner/operatorshall calculate and record a newemission rate in lb/MMBtu from the arithmetic average ofall valid hourly emission rates from the CEMS forthe preceding year. VII.B.1.a.(i).(6). Comanche Units 1and 2 Regional Haze combined annual average limits. The combined annual limitations for NOX and S02 are on a 365-operating day rolling average. Before the end ofeach operating day, the owner/operatorshall calculate and record an annual rolling average using data from the previous 365 operating days in accordance with the following equation. Combined emission rate (lb/MMBtu) = [(ER1)(HI1) + (ER2)(HI2)]/(HI1 + Hl2) Where: ER1 =average emission rate overthe 365 operating day period. This is an average ofall valid hours within the 365 operating day period for Unit 1. Hl1 =total heat input overthe 365 operating day period for Unit 1. ER2 = average emission rate overthe 365 operating day period. This is an average ofall valid hours within the 365 operating day period for Unit 2. Hl2 =total heat input overthe 365 operating day period for Unit2.

Page 201VII.B.1.b. Portland Cement Kilns and CENC and Clark Boilers: At all times afterthe compliance deadline specified in Regulation Number3, Part F, Section VI.A.3., orVI.B.3., the owner/operatorofeach BART or RP unit shall maintain, calibrate and operate a CEMS in full compliance with the requirements in 40 CFR Part 60 Section 60.13 and Part 60AppendicesA, B and F to accurately measure S02, NOX and diluent, ifdiluent is required. The CEMS shall be used to determine compliance with the S02 and NOX Regional Haze emission limits for each such unit. For particular units, such limits are expressed in units ofpounds per hour, tons per year, pounds perton clinker or pounds per million Btu. The owner/operatorshall calculate emissions in the applicable units. In determining compliance with the S02 and NOX Regional Haze limits, all periods ofemissions shall be included, including startups, shutdowns, emergencies and malfunctions.

Regulation Number 3 Adopted: October 20, 2011 VII.B.1.b.(i). Pounds per Hourand Tons perYear Regional Haze Limits and Pounds per Million Btu Regional Haze Limits. For any hour in which fuel is combusted in the BART or RP unit, the owner/operator shall calculate hourly NOx and S02 emissions in the appropriate units (lbs/hr) or (lbs/MMbtu) in accordancewith the provisions in 40 CFR Part 60. These hourly values shall be used to determine compliance in accordance with the particular limits averaging time, as follows: VII.B.1.b.(i).(1). Pounds per Houror Pounds per Million Btu Regional Haze Limits on a 30-day rolling average, Before the end ofeach operating day, the owner/operatorshall calculate and record the 30-day rolling average emission rate in lb/MMBtu or lb/hrfrom all valid hourly emission values from the CEMS forthe previous 30 operating days. VII.B.1.b.i.(2). Pounds per Houron a 12-month rolling average. Before the end ofeach month, the owner/operator shall calculate and record the 12-month rolling average emission rate in lb/hrfrom all valid hourly emission values from the CEMS forthe previous 12 months. VII.B.1.b.i.(3). Tons peryear Regional Haze Limits on a 12-month rolling average. Before the end ofeach month, the owner/operatorshall calculate and record the total emissions in tons/yrfrom all valid hourly emission values from the CEMS forthe previous 12 months. VII.B.1.b.(ii). 30-Day Rolling Average Pounds perTon Clinker Regional Haze Limits

. Hourly clinker production shall be determined in accordance with the requirements in 40 CFR Part 60 Subpart F Section 60.63(b). An operating day includes all valid data obtained in any daily 24-hour period during which the kiln operates and excludes any measurements made during the daily 24-hour period when the kiln was not operating. The 3Doperating day rolling emission rate of NOX and SOx shall be calculated and recorded as the total ofall hourly emissions data for a cement kiln in the preceding 30 operating days, divided by the total tons ofclinker produced in that kiln during the same 30-day operating period in accordance with the equation in 40 CFR Part 60 Subpart F Section 60.64(c). VII.B.1.b.(iii). CENC Units 4 and 5 NOX Regional Haze limits:

Page 202

### For any hour in which fuel is combusted in CENC Unit4 or Unit 5, the owner/operator shall calculate hourly NOX emissions in the appropriate units (lbs/MMbtu) in accordance with the provisions in 40 CFR Part 60. These hourly valuesshall be used to determine compliance with the Regional Haze limits, as follows: VII.B.1.b.(iii).(1). Individual unit pound per Million Btu on a 30-day rolling average Regional Haze Limit: Before the end ofeach operating day, the owner/operatorshall calculate and record the 30-day rolling average emission rate in lb/MMBtu from all valid hourly emission values from the CEMS forthe previous 30 operating days, OR VII.B.1.b.(iii).(2). Combined units 4 and 5 lbs/MMbtu 30-day rolling average Regional Haze Limit: Before the end ofeach operating day, the owner/operator shall calculate and record a 30-day rolling average using data from the previous 30 operating days in accordance with the following equation: Average ER

# =[(ER4)(HI4)+(ER5)(HI5)] 

### I [(HI4)+(HI5)] Where: ER4 

### =average NOX emission rate, in pounds per MMbtu overthe 30 day period. This is an average ofall valid hours within the 30 operating day period for Unit4. ER5

# =average NOX emission rate, in pounds per MMbtu overthe 30 day period. This is an average ofall valid hours within the 30 operating day period for**~nit** 

### 5. Hl4 

### =Total heat input overthe 30 operating day period for Unit4. HIS 

### =Total heat input over the 30 operating day period for Unit 5. VII.B.1.b.(iii).(3). The owneroroperatorshall indicate in the excess emission reports required by Section VII.E ofthis Part F, which compliance demonstration method has been followed forthe reporting period. VII.B.2. BART and RP Units without NOX and S02 CEMS. VII.B.2.a. CENC Unit 3. Compliance with the S02 limitations shall be determined

Regulation Number3 Adopted: October20, 2011 

### by sampling and analyzing each shipment ofcoal for the sulfur and heatcontent using the appropriate ASTM Methods. In lieu ofsampling, vendor receipts may be used provided the sampling and analysis was conducted in accordance with the appropriate ASTM Method. Each sample orvendor receipt must indicate compliance with the S02 limitation. Compliance with the annual NOx limits shall be monitored by recording fuel consumption and calculating emissions monthly using the appropriate AP-42 emission factor. Monthly emissions shall be calculated by the end ofthe subsequent month and shall be used in a rolling twelve month total to monitorcompliance with the annual limitations. Each month a newtwelve month total shall be calculated using the previous 12 months data. [*Note: CENC Unit 3 is not subjectto annual S02 limits.]

Page 203

### VII.B.2.b. CEMEX Dryer. Unless performance tests were completed within the previous 6 months, within 60 days ofthe compliance deadline specified in Regulation Number3, Part F Section VI.A.3, the owner/operatorshall conduct a stack test to measure NOX and S02 emissions in accordance with the appropriate EPAtest methods. Frequency oftesting thereafter shall be every five years. Each test shall consist ofthree test runs, with each run at least60 minutes in duration. In addition to the stack tests described above, compliance with the annual NOx and S02 limits shall be monitored by calculating emissions monthly using the emission factors (in lb/hr) determined from the most recent Division-approved stack test and hours of operation for the month. Monthly emissions shall be calculated by the end ofthe subsequent month and used in a twelve month rolling total to monitor compliance with the annual limitations. Each month a newtwelve month total shall be calculated using the previous 12 months' data. VII.C. Monitoring/Compliance Determination: Particulate Regional Haze Limits VII.C.1. Particulate Regional Haze Limits for all boilers exceptCENC and Clark boilers Unless particulate compliance testing was completed within the previous 6 months, within 60 days ofthe compliance deadline specified in Regulation Number 3, Part F, Section VI.A.3., VI.B.3., orVI.C.3., the owner/operatorshall conduct a stack testto measure particulate emissions in accordance with the requirements and procedures setforth in EPATest Method 5 as setforth in 40 CFR Part 60, Appendix A. Stacktesting for particulate mattershall be performed annually, exceptthat: (1) ifany test results indicate emissions are less than or equal to 50% ofthe emission limit, anothertest is required within five years; (2) ifany test results indicate emissions are more than 50%, but less than or equal to 75% ofthe emission limit, anothertest is required within three years; and (3) if any test results indicate emissions are greaterthan 75% ofthe emission limit, an annual test is required until the provisions of(1) or (2) are met. A test run shall consist ofthree test runs, with each run at least 120 minutes in duration. Test results shall be converted to the applicable units and compliance will the based on the average ofthe three test runs. In addition, to the stack tests described above, the owner/operator shall monitorcompliance with the particulate matter limits in accordance with the applicable compliance assurance monitoring plan developed and approved in accordance with 40 CFR Part 64. VII.C.2. Portland Cement Plant Particulate Regional Haze Limits. VII.C.2.a. Kilns. Compliance with the particulate matter limitations shall be monitored using a PM CEMS that meets the requirements in 40 CFR Part63 Subpart LLL. The owneroroperator shall calculate emissions in the applicable units. Ifa PM CEMS is used to monitorcompliance with the PM limits, the opacity limits specified in this Part Fdo notapply. In the eventthatthe provisions in 40 CFR Part 63 Subpart LLL are revised, stayed or vacated, such that a PM CEMS is not required, compliance with the PM limitations shall be monitored by conducting stack tests in accordance with the requirements ofSection VII.C.3. exceptthatthe results ofthe test shall be converted to the appropriate units (lb/ton clinker or lb/ton dry feed) and compliance will be based on the average ofthree test runs. In addition, ifno PM CEMS is required, as discussed in the above paragraph, the opacity limits specified in this Part F do apply. In orderto monitor compliance with the opacity limit, the owneroroperator shall install, calibrate, maintain, and continuously operate a Regulation Number 3 Adopted: October20,2011 Page204COM located atthe outlet ofthe PM control deviceto continuously monitoropacity. The COM shall be installed, maintained, calibrated, and operated as required by40 CFR Part 63, SubpartA, and according to PS-1 of40 CFR Part 60, Appendix 8 VII.C.2.b. Dryers. Performance tests shall be conducted in accordance with the requirements in Section VII.C.3. Opacity monitoring shall be conducted in accordance with the requirements in 40 CFR Part63 Subpart LLL. VII.C.3. Particulate Regional Haze Limits for the CENC and Clark boilers and the CEMEX dryer. Within 60 days ofthe compliance deadline specified in Regulation Number3, Part F, Section VI.A.3. orVI.B.3., the owner/operatorshall conduct a stack testto measure particulate emissions in accordance with the requirements and procedures setforth in EPATest Method 5, 58, 50 or 17, as appropriate, as setforth in 40 CFR Part 60, Appendix

### A. Stacktesting for particulate matter shall be performed annually, exceptthat: (1) ifany test results indicate emissions are less than orequal to 50% ofthe emission limit, anothertest is required within five years; (2) ifany test results indicate emissions are more than 50%, but less than orequal to 75% ofthe emission limit, anothertest is required within three years; and (3) ifany test results indicate emissions are greaterthan 75% ofthe emission limit, an annual test is required until the provisions of(1) or (2) are met. Each test shall consist ofthree test runs, with each run at least60 minutes in duration. In addition, to the stack tests described above, compliance with the annual limitations (ton/yr limits) applicable to the Clark boilers and CEMEX dryershall be monitored by calculating emissions monthly using the emission factors (in lb/hr) determined from the most recent Divisionapproved stack test and hours ofoperation forthe month. Monthly emissions shall be calculated by the end ofthe subsequent month and used in a twelve month rolling total to monitor compliance with the annual limitations. Each month a newtwelve month total shall be calculated using the previous 12 months' data. In addition to the stack tests described above, the owner/operatorshall monitorcompliancewith the particulate matter limits in accordance with the applicable compliance assurance monitoring plan developed and approved in accordance with 40 CFR Part 64. VII.D. Recordkeeping Owner/operator shall maintain the following records for at leastfive years: VII.D.1. All CEMS data as required in the applicable regulation, stack test data, and data collected pursuant to the CAM plan, including the date, place, and time ofsampling, measurement, ortesting; parameters sampled, measured, ortested and results; the company, entity, or person that performed the testing, ifapplicable; and any field data sheets from testing. VII.D.2. Records ofquality assurance and quality control activities for emissions measuring systems including, but not limited to, any records required by 40 CFR Part 60, 63, or75. VII.D.3. Any other records required by 40 CFR parts 60, Subpart F, Section 60.65, 63, Subpart LLL, 64 or75. VILE. Reporting requirements The owner/operator ofa BART, RP or BART alternative program unit shall submit semi-annual excess emissions reports no laterthan the 30th dayfollowing the end ofeach semi-annual period unless more frequent reporting is required. Excess emissions means emissions that exceed the Regional Haze Regulation Number3 Adopted: October20,2011 Page 205emissions limits. Excess emission reports shall include the information specified in 40 CFR Part 60, Section 60.7(c). The owner/operator ofa BART, RP or BART alternative program unit shall submit reports ofany required performance stack tests for particulate matter, to the Division within 60 calendar days aftercompletion of the test.The owner/operator shall also submit semi-annual reports ofany excursions underthe approved compliance assurance monitoring plan in accordance with the schedule specified in the source's Title V permit. 

### PARTG STATEMENTS OF BASIS, SPECIFIC STATUTORY AUTHORITY AND PURPOSE I.A. Adopted June 5, 1980 Rational and Justification forthe Repeal and Repromulgation of Regulation Number3 and Common Provisions Regulation as Related to Regulation Number3 On December 14, 1978, the AirQuality Control Commission revised Regulation Number3 (concerning requirements for filing air pollution emission notices, obtaining emission permits, and paymentoffees with respectto both) for the primary purpose ofbringing Colorado's air pollutant emission permit program into conformity with the requirements ofthe Federal Clean AirActAmendments of 1977 to the extent authorized by the then effective State statutory authority: "The Air Pollution Control Actof 1970, "C.R.S. 1973, 25-7-101 et seq. The regulation as revised in 1978 and which became effective January 30, 1972, was submitted to the U.S. Environmental Protection Agency as a revision to the state Implementation Plan ("SIP") pursuantto Subsection 129(c) ofthe Federal Clean AirActAmendments of 1977. Since that submittal, the Colorado General Assembly has repealed and reenacted the State's basic air pollution control statute: Article 7 ofTitle 25, Colorado Revised Statutes, 1973. The newarticle, known as the "Colorado Air Quality Control Act" (designated House Bill 1109 in the 1979 legislative session), became effective June 20, 1979, and largely broughtthe State statute into conformitywith the Federal legislation, mandating the Commission to develop a comprehensive air pollution control program meeting the requirements ofthe Federal Clean AirAct. Revisions also respond to the requirements setforth in the October 5, 1979 Federal Register notice which conditionally approved portions ofthe Colorado SIP and setforth certain requirements for securing their unconditional approval. E.G., see Section IV.D.2.a.(iv) of revised Regulation Number3, which incorporates the requirements ofSection 172(b)(II)(A) ofthe Clean AirAct. 44 Fed. Reg. 57401, 57408 (1979). The Commission has made an effortto formulate a permit program meeting the requirement ofand paralleling ofthe provisions EPA policies and rules to the extentauthorized by House Bill1109 and to the extent deemed appropriate by the Commission for Colorado's particular circumstances. This has been done in orderto meetcertain specific requirements expressly setforth in the Federal Clean AirAct, to meetcertain specific requirements EPA has determined are required for compliancewith the Federal Act, and to avoid subjecting sources ofair pollution in Colorado to differing State and Federal requirements. The Commission considered the assurance of reasonable further progress toward attainment of National AmbientAir Quality Standards as the primary underlying criterion in developing permit requirements for sources located in or near nonattainmentareas. Consideration has also been given to the opinion ofthe United States Court ofappeals for the District of Columbia in the case ofAlabama Power Company v. Castle F.2d (D.C. Cir., 1979). APENs

RegulationNumber3 Adopted: October 20,2011 Page 206In orderto reduce the administrative burden on both the Air Pollution Control Division ("the Division") and owners and operators ofair pollution sources, the filing of revised air pollution emission notices forthe purpose of reporting significant changes in emissions will be required only on an annual basis, ratherthan whenever a significant change in emissions occurs. In making this revision, the Commission relied on the representations ofthe Division that annual reporting would be sufficient for purposes ofkeeping the emissions inventory current. Street Sanding With the exception ofstreet sanding (and indirectsources), the exemptions provided in the revised regulation from the APEN-filing and emission permit requirements are for minoror insignificant sources of emissions. Although notfinding that particulate emissions resulting from the application and re-entrainment of"sand" applied to snow or ice covered roadways as a traffic safety measure are insignificant, the Commission has exempted sanding from the APEN-filing and permit requirements out ofadministrative necessity. Little benefit can be obtained from the filing ofAPENs in lightofthe fact thatthe amountofemissions cannot be predicted with any reasonable accuracy due to varying factors such as weather. APENs would therefore serve little purpose as notices ofexpected emissions. It is thejudgmentofthe Commission that protection of persons and property by sanding snow and ice covered roadways is an overriding consideration and thatthe costs of nottaking such safety measures would faroutweigh any airquality benefits resulting from requiring permits for sanding. Sanding should nottherefore be prohibited --even without a permit. The only reason for imposing a permit requirement would be to facilitate enforcementofcontrol measures to limitemissions, which the Commission believes may be accomplished without a permit requirement through emission control regulations and provisions in local elements ofthe State Implementation Plan. Major Source, Major Modifications. and the "bubble" Concept The Commission has retained requirements that new "major sources" locating in nonattainment areas and "major modifications" to existing sources in nonattainment areas meetspecial requirements (Offsets, LAER, etc.) designed to allowfor continued development in such areas without interfering with reasonable further progress toward attainment of National AmbientAirQuality Standards. The criteria for determining when a newsource or modification to an existing source is "major" however, have been extensively revised. Priorto the U.S. Court ofAppeals Decision in Alabama PowerCompanyv. Castle, EPA had defined "potential to emit"

-- a key phrase in the definition of"majoremitting facility"

-- in terms ofuncontrolled emissions. The court however, interpreted the phrase "potential to emit" as used in the definition of"major emitting facility" in Section 169(1) ofthe Clean AirAct as taking "into account the anticipated functioning ofthe air pollution control equipmentdesigned into the facility," thereby drastically reducing the numberof sources qualifying as major. In response to this decision, on September5, 1979, EPA proposed amendments to its regulations concerning requirements for SIPs including those pertaining to prevention ofsignificant deterioration ofair quality ("PSL)") and new source review in nonattainmentareas, as well as EPA's Emission Offset Interpretative Ruling. 44 Fed. Reg. 51924 (1979). The Commission in reviewing Regulation Number3 and the Common Provisions Regulation has incorporated many ofthe amendments adopted by EPA in its regulations including classifications ofsources as majoror minor based on controlled emissions. The court in Alabama Power Company struck down the -PA regulation definition of"major modification" which definition required the imposition ofthe special nonattainment area requirements (Offsets, LAER, etc.) on sources when modifications resulted in an increase in emissions ofa criteria pollutants of 100 tons per year or more (for certain- listed categories ofsources; 250 tons or morefor sources not listed).
RegulationNumber 3 Adopted: October20,2011 Page 207 

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# I IThe court held thatthe special nonattainment requirements applied to all modifications ofmajoremitting facilities exceptthose resulting in only "de minimus" increases in emissions. The court stated, however, that itwould be permissible to look atthe net increase in potential emissions from a majorsource in determining whether Offsets, LAER, etc., will be required. In its proposed rules, EPA has adopted the "net increase" or "bubble" approach which generally allows a majorsource undergoing modification to avoid permit review as a major modification by allowing emission reductions elsewhere atthe source to offset any increases resulting from the proposed modification. The Commission has adopted the "bubble" concept and many of EPA's specific regulatory provisions with respect to the concept as applied to modifications. The court in Alabama Power Company also held thatfugitive emissions could be included in determining whether a source is "major" only to the extent, such emissions were expressly determined to be included by rule ofthe EPA administrator. In response, EPA has proposed a regulatory definition of"Potential to emit" by which fugitive emissions from twenty-seven (27) listed sources would be included in determinations ofwhich new sources and modifications are major. 44 Fed. Reg. 51956, 51958 (1979). In recognition ofthe factthat such emissions would be included in determinations ofwhether a source or modification was major ifthey were emitted through a stack (as opposed to being "fugitive"), recognizing that generally emissions from the twenty-seven (27) listed source categories contribute to hazards to public health and welfare, and to be consistentwith the federal scheme, the Commission has also decided to considerfugitive emissions from the twenty-seven source categories in majorsource/major modification determinationsto the extentthey are quantifiable. An owneroroperator may avoid the inclusion offugitive emissions of particulate matter by demonstrating that such emissions are ofa size and substance, which do notadversely affect public health orwelfare. Banking C.R.S. 1973, 

### 25-7-304 requires the attainment program to provide that emission reduction offsets exceeding those required forthe granting ofa permit "may be preserved for sale or use in the future." Section V of Regulation Number3 establishes an administrative framework and the basic requirements of such a procedure consistentwith the "banking" provisions established by EPA in its Emission Offset interpretative Ruling, 44 Fed. Keg. 3274, 3280, 3285 (January 16, 1979) (to be codified as Appendix S to 40 C.R.S. Part 51). Extended "Debugging" Period. Pursuantto C.R.S. 1973, 25-7-1 14(4)U), the Division may grantthe owner oroperator ofa new source up to six months aftercommencement ofoperation in which to demonstrate compliance with all terms and conditions of its emission permit. The Commission determined, however, that undercertain circumstances it would be appropriate to allow a source employing innovative control technology additional time in which to bring the operation ofthe source into full compliance. Therefore, pursuantto its authority under C.R.S. 1973, 25-7-109(5), the Commission has provided in paragraph IV. H.6. of Regulation Number 3 for such temporary relieffrom controls underspecified limited circumstances. The provision is intended for very limited application.

Regulation Number 3 does not address the subject ofspecial permitsfor majorsources locating in attainment areas to insure prevention ofsignificant deterioration ofairquality. The Commission decided to wait until EPA's PSD regulations to establish a fully State-operated program. State emission permits are nonetheless still required for sources locating in attainmentareas. Common Provisions Regulation

RegulationNumber3 Adopted: October 20,2011 Page 208In connection with the revision of Regulation Number3, the Commission concurrently made limited, related revisions in its Common Provisions Regulation. Sections I.B. and I.C. ofthat regulation have been changed to reflect the renumbering ofthe Sections in the State statute authorizing the Commission to promulgate regulations and to reflect the amended language in the declaration of legislative intent. Section I.F. ofthe regulation was amended to add new abbreviations used in revised Regulation Number 3 and Section I.G. (definitions) was amended to delete, revise, and add terms and theirdefinitions to reflect changes in the terminology used in Regulation Number3. 

### 1.8. Adopted May 13, 1982 Concerning May 13, 1982Amendmentto Section IV.C. (Public Comment)for Small Sources Locating in NonattainmentAreas The rationale forthis proposed revision is based on the underlying purpose of public comment: to obtain public inputon proposed sources thatthe Air Pollution Control Division (APCD) can use in considering whether a permitshould be granted. Underthe previous regulation all sources locating in nonattainmentareas were subjectto the public comment requirement unless the APCD exercised its discretion under Section IV.C.3. (sources ofless than 6 month's duration) to exemptthem. APCD experience has shown that there are four categories of small sources thatfrequently locate in nonattainmentareas, butwhich did not stimulate commentfrom the public. These categories are: (I) service stations; (2) restaurants; (3) land development (houses and commercial); and (4) othersmall sources (such as concrete batch plants). Basically, all the effort put into preparation of public comment packages forthese sources can now be used more efficiently and the associated expense to industry saved. The limit of5 Tons PerYear (tpy) ofcontrolled annual emissions is based on calculations that show most ofthe sources in these four categories emit less than 5 tpy ofany one pollutant. Service stations, for example, generally emit I to 2 tpy. In many cases less than I tpy is emitted. Underthe revised regulation, sources less than 5 tpy can still be subjectto public comment ifthe Division determines it appropriate based on criteria setforth in the regulation. The difference is thatthe APCD would have discretion to decide instead ofbeing required to provide public notice. Controversial sources such as gravel pits, odorsources and landfill operations are subjected to public comment by the APCD regardless ofthe level ofemissions. This practice will continue in effect. 

### I.C. Adopted March 10, 1983 Prevention ofSignificant Deterioration Program Regulations in Regulation Number3 This Statementofoasis and Purpose forthe Prevention ofSignificant Deterioration (PSD) Program Regulations complies with the State Administrative Procedure Act, CR5 1973, 24-4-103(4). The statutory authority forthe PSD regulations are in the Air Quality Control Actat CR5 973, 25-7-102, 25-7-105, 25-7- 106, 25-7-108, 25-7-109, 25-7-114, 25-7-116, 25-7-201 etseq. The general purpose ofthese regulations is to preventthe significant deterioration ofairquality in those Sections ofthe state, which has attained the national ambient airquality standards. The parties to this rulemaking include: Colorado Association ofCommerce and Industry; Rocky Mountain Oil & GasAssociation, Inc.; Chevron Shale Oil Company; Union Oil Company ofCalifornia; Colorado Ute ElectricAssociation, Inc.; The Colorado Mountain Club; COAL; Public Service Company ofColorado; City ofColorado Springs; CF&I Steel; Environmental Defense Fund, Inc.; United States Department ofthe Interior; and United States DepartmentofAgriculture.

RegulationNumber 3 Adopted: October 20,2011 Page 209The Air Pollution Control Division acted as stafffor and advised the Commission during the proceeding. See CRS 1973, 25-7-111(2)(g). The PSD regulations adopted by the Commission are in many respects identical to the U.S. Environmental Protection Agency (EPA) PSD regulations. See 40 CFR 51.24 etseq.; 40 CFR 52.21 et seq. The primary reason forthis is thatthe State Act requires thatthe S-PSD program be in accordance with the federal Clean AirAct PSD provisions. See CRS 1973, 25-7-203. Thus, federal PSD requirements are generally a minimum forthe State PSD Program. Forthese reasons, to the extentthatthe federal PSD rules are identical orsubstantially identical to the state regulations, the Commission incorporates herein the EPA statements of basis and purpose for the federal PSD rules at43 Fed. Reg. 26380 etseq. (June 19, 1978) and 45 Fed. Reg. 52676 etseq. (August 7, 1980). The Commission has additional authorities to prevent significant deterioration ofairquality. In several importantareas the Commission has tailored these regulations to meetthe concerns ofColorado citizens. These areas include the requirement for an impactanalysis on waterto determine acid deposition effects, the authorityto make independent determinations on adverse impactto visibility in Class I areas ifthe federal land managerfails to fulfill his responsibility to do so, the requirement to establish baselines for, and to monitor air quality related values in, Class I areas to determinethe effects ofemissions on such values, and the application ofClass I sulfur dioxide increments to several Class II primitive areas and national monuments. The proposed PSD regulations included several provisions reflecting the terms ofa settlementagreement in the matter ofChemical Manufacturer'sAssociation. etal. V. EPA in which EPA has agreed to propose amendments to its P50 rules. The Commission has rejected the adoption ofsuch provisions for several reasons. They are arguably less stringentthan current EPA rules in thatthey would appearto permit more air pollution. Because they may be less stringent, their adoption appeared likely on the basis of EPA testimony to impede the approval ofthe state PSD program by EPA atthis time. Finally, EPA's schedule for consideration ofsuch provisions is unknown. Subsequent to EPA action on the provisions ofthe settlement agreement, the Commission will reconsider those provisions. The PSD regulations will generally not become applicable to major sources or major modifications in Colorado •until EPA has approved them. See CRS 1973, 25-7-210. However, the regulations pertaining to attainment area designations and the enforcement ofClass I sulfur dioxide increments in those areaslisted in CRS 1973,25-7-209will be applicable upon the effective date ofthese regulations. These regulations will be effective twenty (20) days from publication in the Colorado Register. DEFINITION OF "ACTUAL EMISSIONS" The definition adopted is essentially identical to the EPA definition. One party proposed that reference should be made to consideration ofcontrol efficiency. The Commission did not adoptthis proposal because the definition inferentially considers control equipment efficiency and the reference requested would create confusion, when actual test data were available, as to whether a separate "efficiency" factorwas to be applied. Another party, in commenting on the definition of "baseline concentration," expressed concern thatthe determination of "actual emissions" could take place, for example, during a low-demand period for a power plant. Such determination would result in an emission rate considerably less than the full-capacity allowable emission rate, resulting in a low baseline concentration. The power plant, operating the next year atfull capacity, could consume all or mostofthe available increment, prohibiting growth in the area. The Commission recognizes that, for certain sources such as power plants (i.e., fossil fuel-fired steam generators), the source must respond to constantly changing demandswith significant changes in emissions from yearto year. Therefore, forfossil fuel-fired steam generators, "allowable emissions" should generally be considered "representative of normal unit operation" rather than actual emissions in

RegulationNumber3 Adopted: October20, 2011 Page 210determinations of"actual emissions".for determining baseline concentration and incrementconsumption, unless it is clearly demonstrated that a lower level ofemissions will never be exceeded. DEFINITION OF "BASELINE AREA" AND "BASELINE DATE" "Baseline area" is not specifically defined in the State Act but is simply referred to as "an area subject to this article-- in the definition of baseline concentration. CRS 1973, 25-7-202. The Federal Clean AirAct definition of"baseline concentration," Section 169(4}, is identical to the state's, and EPA has interpreted" an area subjectto this article" to mean the attainment and unclassifiable areas designated pursuantto Section 107(d)(I)(D) or (E) ofthe Federal Clean AirAct. Such an interpretation is also reasonable under the Colorado Air Quality Control Actwhich states thatthe Commission shall adopt measures "to prevent significant deterioration ofambientairquality in each region, or portion thereof, ofthe state identified pursuantto Section 107{d)(1)(D) or (E) ofthe Federal Act." The result of EPA's definition is that the entire state is the baseline area for 502, and airquality control regions for particulate matter. Several parties proposed alternative approaches to the definition ofbaseline area. These approaches ranged from a modeled 1-1Jg/m3 impactarea (based on 7.5 minute quadrangles, the county-townshiprange-Section system, ora metric grid) to the entire state. The Commission adopted the EPAdefinition forthe following reasons: (1) The EPAapproach has been in effectfor several years and has proven workable. EPA has wel1-developed procedures for performing source impact analyses in large baseline areas, which the state can use. Changing the definition ofbaseline area would result in use ofan approach that has not been proven and thatwould cause a discontinuity forthe regulated industries when the PSD program is delegated to the state. (2) The use ofareas largerthan the source impact area means that baseline concentrations will be determined at an earlierdate, and incrementswill be consumed from an earlier date, thus minimizing airquality deterioration. This fulfills the primary purpose ofthe StateAct. See CRS 1973, 25-7-102. Certain parties were concerned that baseline areas largerthan the impact area might unnecessarily inhibit economic growth in the unaffected portion ofthe baseline area, but should that occur, and there are no specific examples in the record ofwhere thatwould occur, the Commission could consider subdividing baseline areas to allowfor a new baseline date and concentration. Testimony from Pitkin County and members ofthe general public indicated concern thatwith small baseline areas, minorsource emission increases would continue to raise the background ambientairconcentrations, especially for particulate matter, before a major source would locate in an area to begin the counting ofincrementconsumption. The baseline areas selected by the Commission for particulate matter represent a balance between a recognition that particulate matteremissions are often a more localized problem than are gaseous emissions (hence the use ofAQCRs for particulate matter instead ofthe entire state, as is the approach for S02) and the need to begin counting increment consumption expeditiously (hence, the use ofAQCRs for particulate matter rather than the smaller impact area). Only twoAQCRs in Colorado have been triggered during the six years PSD has been in effect. Since triggered baseline areas can in the future be subdivided into triggered and untriggered areas, the Commission considers the use of baseline areas the size ofAQCRs sufficiently flexible for purposes of reasonable application, economic growth, and prevention ofairquality deterioration. (3) Use ofa baseline area equivalent to the 1 ug/m3 impact area could result in a situation where impacts on a Class I area individuallywere each less than 1 ug/m3

, with the result that the Class I area would not be a part ofa baseline area. Yetthe cumulative impact ofthese sources RegulationNumber 3 Adopted: October20,2011 Page211could be greaterthan the 1 ug/m3 incrementfor particulate matter 'forClass I areas, so that deterioration ofair quality greaterthan that allowed by the regulation could legally occur. (4) The use ofthe entire state as an S02 baseline area provides maximum protection for all Class I areas in the state. This is of particular concern to the Commission, since the general flow ofairfrom westto eastand the long-range transport ofgaseous pollutants can result in effects on nearly all ofColorado's Class I areas by S02 sources on the West Slope. The effects and extent ofacid deposition, to which S02 is a major contributor, was a topic ofextensive testimony atthe hearings; the definition ofthe entire state as a baseline area for affords maximum protection of the environmentwhile the problem ofacid deposition receives additional study. DEFINITION OF "BASELINE CONCENTRATION" Two parties proposed changes to this definition, both suggesting the substitution of"allowable" for "actual" emissions in portions ofthe definition. The concern regarding power plantactual versus allowable emissions is discussed under "Actual Emissions," above. The other concern arises from the possibility ofa large difference between actual and allowable emissions in the calculation ofincrementconsumption or in establishing baseline concentrations. This is discussed extensively in the EPA preamble to the August7, 1980 PSD regulations (Division Exhibit B, pp. 74-76) concerning incrementconsumption. EPA's rationale is that actual emissions more reasonably represent actual airquality than allowable emissions and that because actual emissions are based on at leasttwo years ofoperation, future emissions could be reasonably expected to remain atthe same level. EPAtherefore uses actual emissions to avoid "paperconsumption" ofincrement (or modeled baseline concentrations which would exceed monitored levels) The Commission concurswith the EPA rationale and has adopted the EPAapproach of using actual emissions to track incrementconsumption and determine baseline concentrations. DEFINITION OF "COMPLETE" The Environmental Defense Fund (EDF) proposed a listofspecific elements ofa PSD permitapplication, for aid in determining whether an application is "complete," which was generally incorporated in the final rule. The proposed listofitemswould add some certainty and clarification forthe applicantand the Division ofthe specific items required demonstrating completeness ofan application. Regarding items (i) and (iii)-(iv)., opposition to the list by several parties was primarily that itwas redundantwith other requirements ofthe rules. York, Nov. 10 Tr. at 18 et seq. and 60 etseq

..Item (ii) was retained because, for many or mostapplications, such information would be necessary to verify the applicant's modeling. DEFINITION OF "NET EMISSIONS INCREASE" Several parties proposed crediting increases ordecreases in emissions, which occur up to five years after a modification, becomes operational. The Commission did not adoptthis recommendation because EPA specifically prohibits states from crediting decreases, which would occurafterthe change occurs. 40 CFR 51.24(b)(3). In addition, itwould prove difficultto exact an enforceable agreementfor a source to close down orotherwise decrease emissions atsomefuture date. Several parties proposed in paragraph f(ii) to shift "enforceable" from time ofconstruction to time of operation. This change would not be consistentwith the state statutory requirements, which prohibit construction oroperation ofa non-permitted new source or modification. The suggested change would also needlessly complicate the correlation of permits to enforceable decreases in emissions. In response to a party commentthat 90 days to report a reduction in emissions is too short, the Commission agreed and has allowed such reports to be madewithin a yearofthe decrease unless •an extension is granted. A longertime would make the reduction difficultto verify. ·

RegulationNumber3 Adopted: October 20, 2011 Page 212DEFINITION OF "SECONDARY EMISSIONS" The final definition incorporates a recent amendment by EPA, 47 Fed. Reg. 27554 (June 25, 1982) and is consistent with CRS 1973, 25-7-202(6.5). DEFINITION OF "ALLOWABLE EMISSIONS" In several Sections of EPA's PSD rules, including its definition of"allowable emissions," EPA grants credit for permit conditions only ifthey are "federally enforceable. In each ofsuch Sections, the Commission has deleted the qualification of"federally" and has in the Common Provisions Regulation defined "enforceable" so that it is consistentwith 'S definition of'federally enforceable." DEFINITION OF "SIGNIFICANT" Several parties commented that the proposed definition, which defined both "significant" and "significantly" and included a listing of"significant concentrations," was confusing and unnecessary. The proposed definition also gave the Division the discretion to (1) determinethat certain sources were not significant even ifthe source metthe definition, and (2) to determine significance levels for non-listed pollutants. In addition, it limited the definition for sources affecting Class I areas to those sources producing a "significant" impact. There were several Sections in the proposed regulations that used the "significant" definition ofambientconcentrations to allow impacts to Class I areas notallowed under EPA rules. EPAand the National Park Service commented thatthese changes resulted in a less stringent definition. The Commission agreed with these comments. The final definition is essentially identical to EPA's and uses only emission rates to define "significant," and the use of"significant" to qualify impacts to Class I areas in other Sections ofthe rules has been deleted. DEFINITION OF "MODIFICATION" One party proposed that an existing exception for increases in

- emissions caused by adding new emission control equipment (e.g., replacing scrubbers with fabric filters) be retained. The Commission acknowledges that this exemption was intended to avoid penalizing a source willing to improve particulate mattercollection by converting from scrubbers to baghouses orelectrostatic precipitators. Since scrubbers collect gaseous pollutants, but baghouses and precipitators do not, the amountofS02 emitted would increase, hence the exemption. Since there are a numberofnonattainmentareas for particulate matter, but none for S02, the Commission will continue to encourage additional control of particulate matter by including this exemption in the definition of "modification." It should, however, be noted thatthis exemption is not included in the definition of"major modification," so a significant increase in S02 emissions from a majorsource will result in P50 applicability. The effect of this is to provide the exemption only for minorsources and minor modifications. DEFINITION OF "STATIONARY SOURCE" The proposed definition was revised to include language essentially identical to that of EPA at40 CFR 51.24(b)(5) and (b)(6). The final rule allows more discretion to define stationary source on a case-by-case basis. The definition clarifies that a source in a nonattainment area may also be "an identifiable piece of process equipmenf' which makes it consistentwith a recent federal case. See Natural Resources Defense Council et al. V. Gorsuch, et al., 685 F.2d 718 (D.C. Cir. 1982). DEFINITION OF "FUGITIVE DUST" The State Act exempts "fugitive dust" from regulation underthe PSD program, including exemption from determinations ofwhether a source or modification is majorand ofincrement consumption. C.R.S. 1973, 25-7-202(4), -202(5),-204(1)(b), and -204(2)(c). "Fugitive Dust" is defined as:

RegulationNumber3 Adopted: October20, 2011 Page 213Soil orother airborne particulate matter (excluding particulates produced directly during combustion) resulting from natural forces orfrom surface use ordisturbance, including, but not limited to, all dustfrom wind erosion ofexposed surfaces orstorage piles and from agriculture, construction, forestry, unpaved roads, mining, exploration, orsimilar activities in which earth is either moved, stored, transported, or redistributed; exceptthatfugitive dustshall not include any fraction ofsuch soil orotherairborne particulate matterwhich is ofa size orsubstance to adversely affect public health orwelfare. C.R.S. 1973, 25-7-202(3). Undersuch definition, fugitive particulates are regulated in the PSD program if they are "ofa size or substance to adversely affect public health orwelfare." The exemption of"fugitive dust" is an issue because EPA counts total suspended particulates ("TSP") in determining increment consumption, maintenance of primary and secondary NMQS, and source applicability. Therefore, to the extentthatthe state excludes some sizes ofparticulate matter in these determinations, its regulations are arguably less stringentthan EPA's, although as explained below, because ofdepositional effects, there is generally an insignificantdifference between the counting ofTSP and the counting ofsmaller particulates. The basis for setting the primary NAAQS is health effects; the basis for setting the secondary NAAQS is welfare effects. These are. also the bases underthe State Actfor counting fugitive particulates in the PSD program. Because the bases forthe State's inclusion offugitive particulates and for EPA'S promulgation ofparticulate matter NAAQS are essentially identical, it is appropriate to considerwhetherthe NAAQS should be the standard for determining which particulates are "ofa size orsubstance to adversely affect public health orwelfare." However, EPA's current primary and secondary NAAQSfor particulates are based on the "Air Quality Criteria for Particulate Matter" (1969), Div. Ex. R., which has generally been superseded by more recent research and analysis. Forthat reason, EPA in the CMAv. EPA Settlement Agreement has agreed in the nearfuture to promulgate new primary, and perhaps secondary, NAAQS for particulates which would exclude particulates above a size posing no health orwelfare risks. EPA's staff review, in anticipation of revisions to the particulate matterdefinition and NAAQS, ofthe effects ofparticulate matteron health concludes thatthe size counted should be less than 10 urn, which includes those particles capable of penetrating the thoracic regions. "Reviewofthe National AmbientAir Quality Standards for Particulate Matter: Assessment ofScientific and Technical Information," EPA450/5- 82-001 (January 1982). EPAstaff review ofwelfare impacts indicates thatvisibility impacts are generally caused by fine particulates of less than 2.5 um. ld. at 122. However, such review recognizes that "the full size range of particles including dustfall can contribute to soiling, become a nuisance and result in increased cost and decreased enjoyment ofthe environment." Id. At 140. Further, the EPA "staff recommends consideration ofthe economic and other effects associated with soiling and nuisance when determining whether a secondary standard forTP orforTSP orother large particle indicator is desirable," id. at 141, and that "the basis for selecting a particular level for a secondary TP orTSP standard is a matterofjudgment." (emphasis added) ld. at 147. The EPA staff review indicates that EPAwill probably propose fine particulate secondary standard but is undecided as to whetherto establish a TSP or large particulate secondary standard, and thatthere is a basis for concluding thatwelfare impacts are being caused by all sizes ofparticulates. Additionally, there was public and party testimony on welfare effectsfrom fugitive particulates, some ofwhich can be assumed to be large particles. See Markey, November 10 Tr. at2 et seq. One ofthe apparent concerns of parties and persons opposing the use by the Commission ofTSP as a welfare standard is thatthe incrementwould be consumed and that no further developmentcould occur. Division ExhibitW, which compares the modeled ambient impacts ofTSP using a deposition model with particulates of 10 urn or less using the same model, shows thatthe larger particles depositquickly and that the ambient impact is relatively the same ata distance of 1000 meters orgreater. The implication of this is thatfor many sources the modeling of increment consumption would havethe same general results
RegulationNumber 3 Adopted: October 20,2011 Page 214whetherTSP is counted orwhether only particles 10 urn or less are counted (assuming the boundary of the source is 1000 meters orfartherfrom the emissions point). Another implication is thatwelfare impacts from large particulates can only resultwithin relatively shortdistances ofa source. Anotherconcern wasthatthe legislative intentwas not to countTSP, although there was not clear evidence oflegislative intent presented to the Commission. In any event, statutory language leaves the determination to the Commission to decide what particulates are ofa size orsubstance to adversely affect health orwelfare. Given the foregoing considerations and the Commission's general interest in interpreting health and welfare effects ofparticulates consistentwith EPA, but also given the uncertainty surrounding the revision ofthe particulate NAAQS by EPA, the Commission determines that in applying the definition of"fugitive dust", the adverse effects on health orwelfare offugitive particulate emissions should be determined individually for each source. Adverse welfare effects ofnuisance and soiling will be presumed to occur if the source would have offsite, ambient, particulate impacts unless the permit applicant rebuts such presumption with clear and convincing evidence. The result ofthis presumption will be that in most cases, large particulates will be counted and there will be no difference between EPA s treatment of particulates and the states. Other health and welfare effects shall generally be evaluated based on EPA's most recent research and analysis, butthe permit applicant shall havethe burden ofproofofdemonstrating with clear and convincing evidence, which, ifany, sizes or substances offugitive particulates do notadversely affect, health orwelfare. This presumption of health and. welfare effects has been incorporated in the definitions of"majorstationary source" and "major modification," Section XI.A.4 on Exclusions from Increment Consumption, and Section V.D.3.c.(i)(B). Upon EPA's adoption of revised NAAQS for particulates, the Commission may considerwhetherto revise this StatementofBasis and Purpose orthe definition of "fugitive**dust~'** to reflect such revisions., Should EPA decide notto have a secondary NAAQS incorporating nuisance and soiling (welfare) impacts of large particulates, the Commission will considerwhetherthe welfare effects of large particulates are significant enough to be included, orwhetherthey are relatively insignificantand, thus, should not be counted in the state PSD Program. DEFINITION OF "MAJOR SOURCE" AND "MAJOR MODIFICATION" The State Act permits the counting offugitive emissions in determining whether a source or modification is major"only ifthe Commission adopts regulations to include fugitive emissions forthat source category." CR5 1973, 25-7-202(4) and (5). The Federal Clean AirAct has a similar requirement at Sec. 302U). EPA has interpreted the rulemakingrequirement to mean simply a consideration in rulemaking ofwhether fugitive emissions should be counted and a requirement that affected industries be allowed to present policy orfactual reasons why fugitive emissions should not be counted. 45 Fed. Reg. 52676 (August 7, 1980). Based on this rationale, EPA's rules currently list26 categories ofsources forwhich fugitive emissions are counted. A similar interpretation ofthe State Act is reasonable and has been adopted by the Commission. One party recommended the addition of uranium mills and coal mines to the list ofsources forwhich fugitive emissionswould be counted. However, those sources could not be considered in this proceeding due to inadequate public notice. The Commission intends to considerthose sources for listing as soon as practicable. In the CMAv. EPA SettlementAgreement, the EPA has agreed to remove these 26 listed sources on the basis ofindustry's argumentthatthe rulemaking requirement meansthat EPA must identify reasonable methods for measuring and modeling fugitive emissions from a category ofsources. Although not agreeing thatthis is legally required understate or Federal law, the Commission has determined that Division Exhibit F, primarily, makes that demonstration for the ten categories located orexpected to locate in Colorado.

RegulationNumber3 Adopted: October20, 2011 Page 215It should be noted that measurement methods are not only available, but have been in use for a number ofyears and have provided test results that are the basis for the fugitive emission factors used by EPA and other control agencies, including the Colorado Air Pollution Control Division. The following important parallels between stack emission 'factors and fugitive emission factors support the conclusion thatfugitive emission factors are relatively as reliable and as reasonably available as stack emission factors: Both are based on numerous test data atdifferent locations on different equipmentor operations. Both are influenced by many variables (e.g., for a stack, flow rate, temperature, process variations; for a fugitive plume, wind speed, moisture content ofthe material, size distribution of the material). Neither is intended to represent actual emissions from a specific source. Actual acceptable test data for a specific or similar sourcewould always be used in lieu ofan emission factor. Both are intended as air managementtools to allow pre-construction assessment ofa source impactoras a representative value to average total emissions from a numberofsimilar sources (e.g., all waste incinerators, commercial boilers, orcoal storage piles) for such airquality management purposes as determining "reasonable further progress" in nonattainmentareas. Stack and fugitive emission factors are both estimates; such factors are neverthelesswidely used by control agencies and applicants alike. However, control agencies generally have no objection to, and would prefer, actual test data in lieu offactors whenever such information is submitted. (See Testimony of McCutchen, October28, 1982; Egley, November 18, 1982, pp. 72-75 and p. 99; Bertolin, October29, (am), p.39.) One party's concern involved whetherthe emission factors for a facility can be extrapolated to a larger facility, specifically, from a 7000 ton perday oil shale processing facility to a 50,000 ton per day facility. Scale-up is a widely used and accepted approach throughout industry for estimating the feasibility of larger-scale facilities from results at smaller-scale facilities. There are a numberofwell-known precautions that should always be considered when extrapolating, and a control agency should be at least as cautious in extrapolating emission levels as the applicant is in extrapolating process data. Of course, ifdifferentequipment, such as a retort, is to be used at a proposed facility, an emission estimate would be based on mining and handling practices and on different processing equipmentemission factors (e.g., refinery emission factors) which are similarto oil shale processing activitieswhere such would be more accurate than extrapolation. Therefore, eitherthrough extrapolation orthrough the application of other more applicable and available emissions factors, relatively accurate emissions levels from all types ofoil shale facilities can be calculated. The same modeling techniques used to model stack emissions can be and are used to model fugitive emissions (Division Appendix F). One modeling parameter, deposition, is more critical in modeling fugitive particulate emissions and should be carefully evaluated. Fugitive particulate emissions usually contain more large particles than do controlled stack emissions. These large particles generally settle out rapidly, so thatthe impact at a plant boundary is usually much less than would be anticipated by the quantity of emissions atthe source. See "Fugitive Dust." However, acceptable models existwhich incorporate deposition and thereby provide a reasonably accurate assessmentoffugitive particulate emission impact. Models without deposition can be used for gaseous and fine particulate fugitive emissions. Models have recognized limitations, butthey are as accurate forfugitive emissions as for stack emissions. The following information, which is primarily from Division Exhibit F, concerns the major policy and factual reasons for counting fugitive emissions from each often source categories: RegulationNumber 3 Adopted: October20, 2011 Page 216Coal Cleaning. A typical plantwould process 10,000tons peryear (tpy) ofcoal and emit approximately 280 tpy ofparticulate matter, 96% ofwhich would be fugitive emissions. Over 100 tpy ofthe fugitive emissions are less than 15 microns in diameterand are considered inhalable particulate (IP). Portland Cement. The typical plant produces 500,000 tpy ofcement and emits approximately 370 tpy of particulate matter, 60% ofwhich would be fugitive emissions. Iron 

### & Steel Mills (Including Coke Ovens). A typical plantwould produce several million tons ofsteel per year and emit approximately 3,600 tpy ofparticulate matter, 64% ofwhich would be fugitive emissions. The coke plantwould produce over halfa million tons of coke peryear and emit approximately 700 tpy of particulate matter, 10% ofwhich would be fugitive emissions, and 1,500tpy of uncontrolled fugitive hydrocarbon emissions. Petroleum Refineries. A typical plantwould process 25,000 barrels ofoil per day and emitapproximately 1,100tpy ofhydrocarbons, 57% ofwhich would be fugitive emissions. Lime Plants. A typical plantwould produce 300,000 tpy oflime and emit approximately 1,800tpy of particulate matter, 33% ofwhich would be fugitive emissions. Fuel Conversion. A typical shale oil plantwould produce 50,000 barrels perday ofoil and emit4,800 tpy ofparticulate matter, 12% (500 tpy) ofwhich would be fugitive emissions, and 8,611 tpy ofhydrocarbons, 12% (1,080 tpy) ofwhich would be fugitive emissions. Sintering Plants. A typical plant would emit approximately 400 tpy ofparticulate matter, 20% (80 tpy) of which would be fugitive emissions. Power Plants and Boilers. A typical, butwell-controlled, new500 MW power plant burns 2.1 million tpy of coal and emits approximately 620 tpy of particulate matter, 18% (110 tpy) ofwhich would be fugitive emissions. These fugitive emissions are from coal handling and storage, among the mostvisible and complaint-related ofall fugitive emission sources. Petroleum Transfer and Storage. A typical plant has a capacity of476,000 barrels and an annual throughput of7,123,000 barrels peryearand emits 267 tpy of hydrocarbons, 72% ofwhich are fugitive emissions. In conclusion, the Commission has determined thatfugitive emissions from the above sources should be included in determining whetherthe source or modification is majorforthe following general reasons: (a) Fugitive emissions consist ofthe same pollutants that are emitted through stacks and regulated as stack emissions; (b) The quantity offugitive emissions, both in absolute and in relative terms, is significant; and (c) Although this finding is not legally required, there are methods reasonably available for measuring and modeling fugitive emissions. PUBLIC COMMENTAND HEARING REQUIREMENTS The Commission has adopted a regulation designed to offer maximum opportunity for any interested person to learn about, and become involved in, the PSD permit review process. Adopted in the final rule are proposals by one partythat (a) the public notice be printed not only in a newspaperoflocal distribution, but also in one ofstate-wide distribution to increase the numberofpotential interested persons reached by the notice, (b) thatthe public hearing be held at least 60 days afterthe Federal Land Manager (FLM) has received the notice and permitapplication, to allowthe FLM adequate response time, RegulationNumber 3 Adopted: October20, 2011 Page 217and (c) that any interested person receive notice ofpublic hearing. In addition, the Commission agrees with the Division proposal to implementand maintain an "interested party" mailing listas described in Division Exhibit M. The proposed rule contained a requirement thatthe Division notifythe county Commissioners in affected counties when a proposed sourcewould consume 50 percent or more ofthe remaining PSD increment. Two parties proposed thatthis requirement be deleted as allowing local land use decision-makers to unduly influence air permit decisions. The intent ofthis requirement, which has been modified to notify county Commissioners ofany PSO permit applications, is notto provide opportunity for counties to commentto the Division on land use; rather, it is to provide information to the counties on proposed sources so that the counties can more adequately assess their priorities and needs. PSD permitapproval or denial is to be based solely on the criteria specified in this regulation; land use decisions are, and will remain, the responsibility of local governments. Regarding the issue of land use decisions, one party commented that Section IV.C.4.e.(iii) ofthis final rule, which solicits comments from interested parties on alternatives to a proposed PSD source or modification, constitutes the inclusion ofland use factors in permit approval determinations. The Commission did not remove this Section because it is required by the StateAct, CRS 1973, 25-7- 114(4)(f)(I)(B). Furthermore, the intent ofsoliciting such alternatives is for the assessment ofalternatives with respectto control technology and source impact, not land use. CONTROL TECHNOLOGY REVIEW One party proposed thatthe last sentence in Section IV.D.3.a.(i)(C), which requires the owneroroperator ofa phased projectto demonstrate the adequacy ofa previous bestavailable control technology (BACT) determination, be deleted. The Commission did notdelete this sentence because (1) an EPA regulation requires such a condition and deletion ofthis requirement could be considered less stringent, and (2) the requirement is intended to provide for the possibility ofa different BACT determination if newtechnology has developed between the time of permit review and the next phase ofa projectforwhich construction has notyetcommenced, a time period which can easily exceed five years on large projects. POST-CONSTRUCTION MONITORING Five parties proposed that post-construction monitoring requirements be limited to a maximum ofone year. The Commission recognizes the concern oflessening the burdens on owners oroperators, particularly ifthe information being gathered is unnecessary. But in many cases, there can be a very real need for monitoring for periods oftime greaterthan a yearto obtain reliable data. Accordingly, the final rule requires post-construction ambient monitoring for a period up to one year; additional ambient monitoring can be required only if it is necessary to determinethe effectofemissions from the source on airquality. This necessitates an evaluation by the Division regarding the adequacy ofthe data, and a showing by the Division that additional monitoring is needed, before more than a year of monitoring could be required. OPERATION OF MONITORING STATIONS Three parties proposed thatthe rule be written to allowthe latest changes in EPA-approved methods to be used withoutfirst having to amend the rule. The Commission agrees with the need to use the most upto-date approved methods. Accordingly, the final rule specifies that "EPA accepted procedures

...as approved by the Division" can be used. ADDITIONAL IMPACTANALYSIS Section IV.D.3.a.(vi) ofthe final rule requires an owner or operator ofa proposed PSD source to provide an analysis ofthe impairmentto waterthatwould occuras a result ofemissions associated with the source. Regulation Number 3 Adopted: October20, 2011 Page 218This analysis is not required by the EPA rules. The Inclusion ofwater in the additional impact analysis reflects a strong concern by the Commission based in the record regarding acid deposition. Atthis time there is neitherthe information northe evidence ofdamagetojustify regulating acid deposition in Colorado. However, the vulnerability ofhigh altitude lakesto acid deposition and the potential increases in acid-forming pollutants such as S02 and NOxon the Western Slope from sources subjectto the PSD program, particularly oil shale processing and large power plants, clearly demonstrate a need for a program to gatherdata, track and analyze this potential environmental problem. The inclusion ofwater in the additional impactanalysis is intended to gather information on the problem; this analysis is not intended to affect permit approval or denial orcontrol technology review decisions except for determinations ofadverse impactto AQRVs in Class I areas. The issues, which have been raised concerning water impactanalysis, are discussed in detail below.

a. Legal Authority to Require an ImpactAnalysis ofAcid Deposition

b. The State AirQuality Control Act requires a PSD permit hearing to consider "air quality impacts of the source

... and otherappropriate considerations." C.R.S. 1973, 25-7-114(4)(f). Acid deposition can be construed as an indirect but potentiallysignificant airquality impactwhich should be analyzed, especially in light ofone ofthe stated purposes ofthe PSD Program "to protect public health and welfare from any actual or potential adverse effectwhich

....may reasonably be anticipated to occurfrom air pollution orfrom exposures to pollutants in other media, which pollutants originate as emissions to the ambient air (emphasis added). Section 160(1) ofthe Clean AirAct. Acid deposition in water is those pollutants in other media originating as emissions to the ambient air. The Federal Land Manager (FLM) ofa Class 1 area is responsible for determining whethera source has an adverse impact on airquality related values which is generally defined as follows: Any value ofan area, which may be affected by a change in airquality. Examples include flora, fauna, soil, water, visibility, culture, and odors. Forest Service Comments, October 7, 1982, p.1. Acid deposition may adversely affectsuch values, and thus an analysis ofits effects should be required for review by the federal land managers ofaffected Class I areas. Major Issues The major issues discussed during the hearings are summarized below:
1. Are Colorado's watersheds sensitive to acid deposition? John Turk ofthe USGS is involved in acid deposition research in Colorado and stated that 370 lakes in the FlattopsWilderness area comprising 157 hectares would be sensitive to potentially harmful degrees ofacidification ifprecipitation attains an average pH of4.0. (Exhibit 3, Nov. 10 Tr. at 153) Ben Parkhurst maintains thatthere is talk ofColorado's lakes being sensitive (Oct. 29

## Tr. at 146), but states that sensitivity must be considered togetherwith acid inputs. Thus, ifacid input to the watersystem is not sufficiently large the sensitivity question is not important.
Dr. William Lewis stated that Colorado's lakes are sensitive to acid deposition as demonstrated by the measured loss in buffering capacity he found in his studies. (Nov. 18 Tr. at 136-138)
In conclusion it can be inferred that some Colorado lakes are poorly buffered and ifsufficient levels ofacidity are introduced into the lakes, these poorly buffered "sensitive" lakes could develop acidification problems.

Regulation Number3 Adopted: October20,2011 Page 2192. Has acidification occurred in any Colorado lakes? John Turk ofthe USGS states thatthere has not been any large degree ofacidification taking place in the lakes orstreams he has studied in the Flattops. (Nov. 10 Tr. at 172) Ben Parkhurst also states thatthere is no evidence to showthat any acidification has taken place in Colorado Lakes. (Oct. 29 Tr. at 144 and 150-152) Dr. William Lewis states that he has noted pH changes in lakes he has studied (Nov. 18Tr. at 140), but he does notconsiderthatto be the major point in regard to the acidification question. Lewis considers the loss of buffering capacity to be the best indicatorofacidification effects on lakes and he has found statistically valid evidence to showthatthis has occurred. (Nov. 18 Tr. At 13 6-138) In summary, there is some evidence that pH has dropped slightly in some ofthe lakes Lewis has studied, however, it does notappearthat acidification (drop in pH) has occurred to any large degree in Colorado, however, in the prediction offuture impacts, buffering capacity should be examined and this has dropped in the lakes examined by Lewis. 3. Is there a potential for acidification in the future? Paul Ferraro has done some research on estimating potential acid deposition impacts on Colorado and has determined that under differentenergy development scenarios, there is a potential for acidification in sensitive lakes. (Nov. 10 Tr. at 158-159) Parkhurst states that he would not expect acidification to be a problem in the future, unless the acid deposition reaches levels similarto those found in the Northeast. (Oct. 29 Tr. at 154-156) Parkhurst states that Ferraro's study is conservative and a pH drop to 5.8 would notaffectfish. Oppenheimer (EDF Exhibit 32 p. 6) states that ifa

### 1-~g/m**3** increase in S02 (annual average) occurs, acid deposition levels could resultwhich would be damaging to sensitive lakes. In summary, it can be inferred thatthere is a potential for energy developmentactivities to**cau~e** increased levels ofacids to be deposited in the watershed, and effects on pH may occur depending on the buffering capacity ofthe water. The degree ofthe effectwill depend on the amount ofacid, thus the amountofemissions.
4. Are there adequate methods ofmodeling for acid deposition effects on watersheds? Paul Ferraro has utilized what he refers to as a "firstcut" approach in estimating impacts due to acid deposition. The approach utilizes methods employed by John Turk for determining sensitivity ofwaters and methods for estimating deposition rates developed by SystemsApplications, Inc. (Nov. 10 Tr. at 154-176) Oppenheimer (EDF Exhibit 32 p. 12-13) states that acid deposition modeling could be conducted using presently available plume models (approved by EPA), which incorporate a plume depletion function to accountfor deposition. Results from this model could then be compared to deposition standards. In summary, there appearto be only screening techniques available atthis time for estimating the impacts ofacid deposition.
5. What level ofacidification is dangerousto aquatic ecosystems?

Regulation Number 3 Adopted: October20, 2011 Page 220Parkhurst stated that fish could survive in pH's as low as 4.1. (Oct. 29 Tr. 143) Lewis states that he feels thattroutwould be adversely impacted if pH dropped significantly below six as an average. He would not expecttrout populations to be able to reproduce and grow at a pH below six. (Nov. 18 Tr. at 152,153) Parkhurst also states that a permanent pH decrease from 6.0 to 5.0 is not a natural variation and that manyspecies would probably be eliminated and species numbers and diversities reduced. (Nov. 10 Tr. at 110) Parkhurst alsotestified that there is not any evidence to showthat trout are capable ofboth reproducing and maturing in an environment, which is consistently ofa pH of4.5 or less. (Nov. 10 Tr. at 114) In conclusion, the record does not clearly identify the point atwhich damage to fish will occur. However, testimony indicates that below a pH of4.5, and maybe below6, fish populations would not be able to reproduce and mature. Summary Few definitive conclusions could be drawn from the evidence and testimony. The main point ofagreement was that atthe presenttime there has not been any adverse acidification identified in any ofColorado's watersheds. The buffering capacity oflakes appears to be the importantfactorto consider in determining sensitivity oflakes. Testimony was given that buffering capacity has diminished in certain mountain lakes; however, the cause ofthis loss has not been identified. No agreementwas reached on what level of pH could be tolerated by aquatic ecosystemswithout causing adverse impact. It could be agreed by all parties that more research must be conducted on acid deposition so that its effects may be better understood and predicted by appropriate models. Although more information is needed, studies in the Northeastern United States, Canada, and Europe showthat acid deposition can be a serious problem (Oct. 29 Tr. at 144-145 and EDF Exhibit 32 p.3). Colorado contains many lakes, which are sensitive, exhibiting low buffering capacities. Ifenergy developmentoccurs on the Western Slope emissions ofacid precursors will grow substantially, which will result in increased acid deposition levels. The nature ofenergy industry in Colorado may result in rapid growth in a short period oftime, which will occur before all information on acid deposition is understood. If a large industry develops and new information shows that ambient airstandards and increments do not protectthe state from acidification problems, a valuable resource may be damaged. Forthese reasons, the Commission intendsto remain vigilant in monitoringthis problem, and as analytical capabilities are developed ora problem develops, to re-address this issue for possible regulatory and/or legislative solutions. A subcommittee should be formed, ifresources permit, to develop specific guidelines for acid deposition analyses based on recent modeling innovations. In the interim, proposed PSD sources emitting acid or acid precursors will be required to analyze the impactofthese emissions on water, utilizing the most up-to-date techniques available. AREA CLASSIFICATIONS Several parties objected to the application ofClass I sulfurdioxide increments to those areas ofColorado listed in Section VIII.B. which are otherwise Class II areas. The sulfurdioxide Class I increments are required to be enforced in these areas by CRS 1973, 25-7-209. However, pursuantto CRS 1973, Section 25-7-105(8) (Supp. 1982), this Section VJII.S. may not be made a part ofthe State Implementation Plan (SIP) until these areas are redesignated as Class I underthe procedures ofSection IX. Until they are redesignated, they may only be enforced understate law and regulations. However, unlike Class I areas, the increment in these areas may be protected now. See CR5 1973,25-7-210.

Regulation Number3 Adopted: October 20,2011 Page 221The Commission has also determined thatthe variances from incrementconsumption allowed by Sections XIV.C., XIV.D., XIV.E., and XIV.F. for Class I areas should also apply to the areas listed in Section VIII.B. It is a reasonable interpretation ofCRS 1973, 25-7-209 that ifthe Class I (sulfur dioxide) increments are to apply to such areas, the variances from the increments should also apply. There is nothing in the State Actto indicate thatthe areas listed in CRS 1973, 25-7-209, are to be given better air quality protection than Class I areas, which would be the result ifthe variances did not apply. REDESIGNATIQN Several parties objected towhatwere considered burdensome requirements for redesignating areas to Class I. The adopted rule incorporates only the minimal requirements for redesignation from state and federal law. See CR5 1973, 25-7-208; Sec. 164 ofthe Federal Clean AirAct; 40 CFR 517-(g). However, the Commission did lessen the burden imposed by the proposed rule on those persons requesting a redesignation by allowing such requests to be madewithout providing all ofthe information necessary for a redesignation. Whowould provide such information is notspecified so that it could be any combination offederal, state and private entities. TECHNICAL MODELING & MONITORING REQUIREMENTS Several parties proposed the inclusion offuture EPA amendments orguidelines in this Section ofthe regulation, which specifies the airquality model, monitoring and stack height requirements to be used. In response, the Commission adopted the use of "EPAapproved" terminology instead of references to specific documents. Two parties proposed language making EPA orthe state responsible for any needed meteorological data. The Commission did notadoptthis proposal because it is the applicant's responsibility to demonstrate that itwill not cause exceedance ofan NAAQS or increment, and meteorological data are nearly always needed to make such determinations. Ifthe Division has such data, it has an obligation to make that data available to the applicant. INNOVATIVE CONTROL TECHNOLOGY Several parties proposed thatthe phrase "greaterthan or" be deleted from Section XIII.B.2. which specifies thatthe innovative system achieve emission reductions "greaterthan orequivalentto" BACT. The EPA regulation uses the phrase "equivalentto" and the parties considered the proposed state rule more stringent. The Commission does not considerthe phrase "greaterthan or equivalentto" (emphasis added) to be more stringent, but instead to be a clarification that an acceptable innovation can result in either equivalent or lesser emissions from the source, but nota higher level ofemissions. The preamble to the EPA RSD regulation (Div. Exhibit B, p. 84) clearly specifies thatthe "

...final emission limitation must at least represent the BACT level thatwould have been initially defined." FEDERALCLASSIAREAS
1. (Section XIV.A.) The State's Independent Determination ofAdverse Impactto Visibility Section XIV.A. allows the Division orthe Board (if applicable) to determine independently ifthere are an adverse impactto visibility in Class I areas ifthe federal land manager (FLM) fails to make such determination or such determination is in error. This authority is intended to allowthe state to fulfill the FLM's responsibility for protection ofvisibility ifforwhatever reason, including political, the Flt4fails to do so. The Commission recognizes that scenic vistas are an important resource ofthe State ofColorado. (Colorado Mountain Club Exhibit#1) A subcommittee may be formed to further developvisibility protection for the State ofColorado. Several parties suggested problems with the state's independentauthority' to make such visibility determinations. These consisted of(1) measuring or predicting visibility impairment, (2) quantifying manRegulationNumber 3 Adopted: October20, 2011 Page 222

### induced , as opposed to naturally-occurring, visibility impairment, (3) the subjectiveness ofvisibility impairment, (4) the lack ofcorrelation ofcurrent particulate standards to visibility impairment, and (5) the lack ofguidance in the regulation regarding determinations ofsignificant and adverse visibility impacts. The Commission's response to these concerns is as follows: (1) Although it is true thatthere are notfederal reference methods for measuring visibility at this time, there are reliable means to accurately measure and predict visibility impairment. Scientific instruments such as the telephotometer, nephelometer, and the fine particulate monitor are recognized as being capable ofobtaining objective information on visibility-related parameters. Photographs are also useful in visibility assessment. Visibility theory involving scattering and absorption oflight is well documented and has been incorporated into the models described in the Workbook for Estimating Visibility Impairment (EPA-450/4-8-031). The preface to the Workbook for Estimating Visibility Impairment states: "EPA believes these techniques are at a pointwhere the results should now be employed to assist decision-makers in their assessments." "These techniques" include the Plu-Vu Model. Div. Ex. 

### J at iii. Thus, these models are appropriate for use atthis time. (2) It is possible to determine ifa source ofvisibility impairment is natural oranthropogenic through various chemical/physical analysis techniques. Improvements in airsampling and analytical techniques have made available, for the first time, detailed information on the chemical and physical nature ofthe ambient aerosol and ofsource •emissions. Using these chemical "fingerprints," particle morphology and the natural variability ofairshed sources, recent developments in receptor models have provided newtechniques of assigning source contributions. (3) Perception ofvisibility impairment is subjective and involves individual variability; however, norms do exist around which an assessment can be made. As noted above, EPA supports the use ofits Workbook for Estimating Visibility Impairmentas a guide to decision-makers. (4) Particulate standards do notaddress visibility-related effects. It is also true thatthe major anthropogenicvisibility impairing pollutant is fine particulate matter. Since the Class I incrementfor particulate is in terms oftotal mass concentration, rather than fine particulates, visibility impairment could occurwithoutthe increment being violated. Furthermore, the particulate increment is a maximum allowable ground level concentration; consequently itwill not protectvisibility impaired by plumes atelevations above ground level. These facts form the basis for the Clean AirAct requirement that visibility should be assessed and regulated in a separate analysis. Div. Ex. S. (5) The primary guidance for determinations ofadverse impactto visibility would be the Workbook for Estimating Visibility Impairment, which has very specific guidelines.
2. (Section XIV.B.) Pre-Application and Operational Monitoring ofAir Quality Related Values (AQRVs) Section XIV.B. ofthe regulation allows the Division to require a source, which will have or is likely to have an impact on any Class 1area to conduct monitoring to establish the baseline status ofand impacts on AQRVs in such Class 1 areas. EPA has not imposed this requirement on applicants, although under EPA rules and the Commission rule, Section IV.D.3.(a)(vi), an Additional ImpactAnalysis is required which would include an analysis of impacts on AQRVs based on available data, for example, through literature searches. The data gathered from such monitoring are importantand necessary in aiding the federal land manager ofa Class 1 area in determining whether or not a source will cause an adverse impacton RegulationNumber 3 Adopted: October20, 2011 Page 223

### AQRVs and the state in deciding on concurrence with such determination. The data also aid the public information function ofthe Additional ImpactsAnalysis. The authority to require submission ofsuch Information includes, but is not limited to, CRS 1973, 25-7-206(2), 25-7-106(5) and (6), and 25-7-114(4).
A. 

### National Park Service and Forest Service Testimony and Positions The National Park Service ("NPS") and the Forest Service ("FS") supported the rule as a supplementto their current monitoring activities on the basis thatthe data is necessary to determining adverse impacts on AQRV5, including visibility. See Mitchell, Nov. 18Tr. at 122 et seq., 161 et seq.; Haddow, Oct. 28 (p.m.) Tr. At22 et seq., Nov. 10Tr. at68 et. Seq.; Region 2-USDA Forest Service Comments on Proposed PSD Rule; Comments on the May 19, 1982 Proposed Colorado PSD Regulation by National Park Service Air Quality Division. The NPS stated its willingness to provide a listofsensitive receptors ofAQRVs to applicants for monitoring Mitchell, Nov. 18 Tr. at 162. The Forest Service recognized severe technical difficulties and high costs of monitoring some pollutants and visibility in wilderness areas. Haddow, Oct. 28 (p.m.) Tr. at22 -. However, lichen monitoring could be done without greatdifficulty and special use permits are available for some complex monitoring. Haddow, Nov. 10 (p.m.) Tr. at 112., The FS intends to identify sensitive indicators ofAQRVs for each Class 1 area, e.g. 2 or 3 species of lichen and 2 or3 scenicviews, and proposes thatthe state require the monitoring ofsuch indicators ld. at 82-83. B. Environmental Defense Fund's (EDF) and Friends ofthe Earth's (FOE Position EDF's and FOE's general contentions in supportofthe proposed monitoring requirements were: 1. the technology for monitoring ofAQRV's exist; 2. the Forest Service has identified AQRV's forwilderness areas; 3. although some monitoring is being done, most areas are not being monitored and will not be withoutthe participation ofindustry;
4. decisions on adverse impacts to AQRV5 cannot be made rationally without reliable scientific evidence; and
5. the state is required to have a visibility monitoring program by EPA rules, 40 CFR 51.305. "EDF and FOE Final Recommendations; Summaries ofthe Record and Legal and Policy Analyses," Section IV. C. Trade Association Parties' Position The Trade Association Parties' general contentions in opposition to the monitoring requirements were: 1. The Clean Air Act places the responsibility on the federal land managerto determine adverse impacts on AQRVs and, thus, the responsibility to obtain the data necessary to make such determination;
2. There is insufficient information available atthis time to develop an AQRV monitoring program in that sensitive receptors for each Class 1 area have not been identified, there is no monitoring reference method available and no validated models to project impacts of particular emissions levels;

RegulationNumber 3 Adopted: October 20, 2011 Page 2243. In some Class 1areas monitoring is either physically impossible or inordinately expensive; and
4. The Division's discretion in specifying sensitive receptors is too vague and broad. Trade Association Parties' Closing Argument at31-34. D. Commission Analysis and Decision The above-cited testimony and evidence and other portions ofthe record support the conclusion that monitoring ofAQRVs orsensitive receptors ofAQRVS would be helpful, and in many cases necessary, to determine whether adverse impacts on AQRVs would occur. It is also evidentthat baseline data are not available and may never be developed by federal land managers for someAQRVs and sensitive receptors and for some Class 1 areas. Thus, the primary issue is where to place the responsibility for obtaining background data on AQRVs

- the federal land manager, the state and/orthe applicant. As the Forest Service suggested, it is traditional permitting practice to require a permit applicantto obtain the data upon which the agency decides. Haddow, Nov. 10.(p.m.)Tr. at 89. This practice is consistent with the economic philosophy that companies should internalize their environmental costs. Furthermore, the Clean AirActdoes notchange such practice; it places the "affirmative responsibility" on federal land managers to protectAQRVs and to considerwhetherthere will be an adverse impacton AQRVs but does not expressly state whose responsibility it is to provide necessary data upon which to exercise their responsibility. The Commission has determined that there is available research and test methods, forobtaining background data and impactdata on manyAQRVs thatwill be critical in making adverse impact determinations, even though there are not generally adopted reference methods ormodeling techniques. Forexample, to perform a reasonably accurate visibility impairmentanalysis, background data is needed. Div. Ex. J. Although there are no generally accepted reference methodsfor estimating visibility impacts, methods for estimating visibility Impairment have been developed and are relatively sophisticated. See Div. Ex. J.; Geier, Oct. 28 (a.m.) Tr. at 62-71. The rule recognizes this potential limitation on monitoring AQRVs by only allowing monitoring if"monitoring methods are reasonably available and research and developmentofmonitoring methods are unnecessary." In response to the objection thatthe Division's discretion in selecting AQRVs for monitoring is too vague and broad, the rule provides:
1. A definition ofAQRVs (in the Common Provisions Regulation);
2. That the Division will consultwith the federal land manager in the selection ofAQRVs; and 3. Thatthe AQRVs selected must be importantto the affected Class I area and there must be cause to believe that monitoring ofthe AQRVs will provide a basis for evaluating effects to the AQRVs. In response to the objection that the monitoring ofAQRVs may not be economically reasonable, the rule provides that: 1. no duplication ofmonitoring may be required;
2. not morethan three AQRVs may be required to be monitored; 3. monitoring methods must be reasonably available;

RegulationNumber 3 Adopted: October20,2011 Page 2254. monitoring may only be required ifthe source is a majorcontributorto the expected effects on the AQRV; and
5. it is economically reasonable as compared to other monitoring and analysis expenses required ofa PSD permit applicant. SULFUR DIOXIDE AMBIENT AIR STANDARDS FOR THE STATE OF COLORADO The proposed rule would have revised the Colorado ambient air quality standard for sulfurdioxide to be consistent with the federal standard. Because the Colorado standard is notenforceable in the permitting process, see CRS 1973, 25-7-114(4)(g), the Commission ordered on November 10, 1982That revisions ofthe state ambientairquality standard for S02 be removed as a subject ofthis rulemaking. The Commission agreed to reconsiderthe state standard ifand when it becomes enforceable. PUBLIC ACCESS TO CONFIDENTIAL INFORMATION One party raised the issue ofwhether Section VII of Regulation NO. 3 improperly restricts access to confidential information, which would be available underthe Federal Clean AirAct. Section VII may not be considered for amendment in this rulemaking dueto lack of public notice. 

### 1.0. Adopted March 10, 1983 Revisions to Regulation Number3 (Excluding PSD Program Revisions) This Rationale complies with the requirement ofthe Administrative ProceduresAct, C.R.S. 1973, 24-4- 103(4), to prepare a Statementof Basis and Purpose for adopted regulations. The statutory authority for these amendments are at C.R.S. 1973, 25-7-102, 25-7-105, 25-7-106, 25-7-109, and 25-7-114. These revisions to Regulation Number3, adopted February 10, 1982, are intended to clarify and furtherdefine certain portions ofthe regulation adopted June 5, 1980. The 1980 revisions were extensive changes designed to reflectthe new provisions ofthe 1979 Colorado Air Quality Control act (HB 1109); these changes reflect policy changes and clarifications to the existing rule. The basis and purpose ofeach revision is discussed below. I. MINOR SIGNIFICANCE DETERMINATIONS FOR PERMITAND APEN EXEMPTIONS Section II.C.1.j. of Regulation Number 3 allows the Division to exempt sources from Air Pollutant Emission Notice (APEN) filing and permit requirements ifthe criteria in this Section are met. Since mid1980, the Division has granted approximately 25 exemptions under Section II.C.1.j

.. Ofthe approximately 700 permits issued by the Division annually, 55 percentare to sources with uncontrolled emissions of less than 5 tons per year (tpy); 35 percent ofthe total permits are to sources with uncontrolled emissions below 1tpy. Thus, exceptfor the specific source categories exempted by the Commission under Section II.C.1. of Regulation Number 3, nearly every air pollution source, no matter how minimal its emissions, has had to file an APEN and obtain a permit. The record supports a finding that mostsources ofless than one ton peryear emissions and some of less than five tons peryear emissions will have a negligible impacton air quality and should be exempted from the APEN and/or permit requirement. On that basis and forthe following more specific reasons and purposes the adopted revisions to Section II regarding APEN filing exemptions and to Section Ill regarding permit exemptions are intended to: (a) require APEN filing and permits for any source ofhazardous, toxic orodorous air pollutants, however small the source. The Commission considers the gathering of information on, and the regulation of, such pollutants to be of high priority.

RegulationNumber3 Adopted: October 20,2011 Page 226

### (b) exemptsources ofall other pollutants from both APEN filing and permit requirements when uncontrolled emissions from the source would be less than one tpy. Such sources, according to a Division study, accountfor less than 1 percent oftotal uncontrolled emissions and would be anticiJ)ated to have 24-hour impacts, ata maximum, ofless than 2 micrograms per cubic meter (uglm3) 

### assuming 24 hours perday operation, a negligible impact given the localized area ofthe Impact. (c) require sources ofotherthan hazardous, toxic orodorous pollutants whose uncontrolled emissions are less than five tpy but greaterthan orequal to one tpy to file an APEN. These sourceswould be exempttrain permit requirements (with one exception) unless the Division demonstrated using specific guidelines thatthe source was significant. The Division would have to notify the sourcethat a permitwas required; otherwise, the source would be exemptfrom permit requirements. The APEN should provide all needed information to preclude unnecessary delay in making such determinations. Emissions from these 1to 5 tpy sources, according to a Division study, accountfor no more than two percent oftotal emissions, yet comprise 20 percent ofthe total sources obtaining permits. Such sources could, however, produce 24-hourambient air impacts as high as 10 ug/m3

, 

### which could be significant in certain cases, especially ifsuch sourcewould cause a violation ofa NAAQS or increment or by itselfor in combination with similar sources cause a health orwelfare problem orinterfere with reasonable further progress towards attainment. Volatile Organic Compound (VOC) sources are treated differently. The record demonstratesthat 45 percent ofthe total ofall uncontrolled stationary sourceVOC emissions are emitted by sources ranging from 1to 5tpy in size. Most ofthese sources locate in urban areas such as Denver, which is nonattainmentfor ozone. Since VOC emissions are an ozone precursor, such sources should be subject to permitting requirements to ensure compliance with applicable VOC emission limitations. Therefore, VOC sources equal to orexceeding 1tpy (uncontrolled) locating in nonattainment areas must both file an APEN and obtain a permit. VOC sources ranging from 1tpy to 5tpy locating in attainment areaswhere there is less concern forozone will be treated like other sources and will be at least required to file an APEN. (d) require sources ofother pollutants whose uncontrolled emissions equal orexceed five tpy to file APENs and obtain permits unless specifically exempted from such requirements. These sources constitute approximately 98 percent oftotal uncontrolled emissions, and the Commission feels that such sources should be required to submitAPENs and obtain permits unless specifically exempted as a class oras an individual source. II. "SIGNIFICANT CHANGE" IN EMISSIONS REQUIRING THE FILING OF A REVISED APEN The purpose ofthis revision to Sections II.B. and II.C. is to clarify and revise the requirements for reporting changes in emissions (either increases ordecreases) to the Division. The record shows that an acceptable emissions inventory, usually referred to as the EIS (for Emissions Inventory Subsystem), is essential for effective airquality management and thatthe revised APENs provide an effective system forobtaining EIS data. Revised APENs reporting significant changes in emissions are required by statute, C.R.S. 1973, 25-7-114(1), and the $40 fee for a revised APEN defrays the cost of processing the information (see "Fiscal Impact"). The levels set for reporting emissions changes are significant and will allowthe effective tracking ofairquality changes and use forairquality management. It is obvious, however, that there has been confusion concerning these requirements in the past. The following statements should clarify the confusion:
RegulationNumber 3 Adopted: October20, 2011 Page227A. Revised APENs reporting significant changes in emissions are to reflect actual emissions forthe preceding year, not projected or maximum emissions. Actual emissions are the emissions actually emitted by a source into the atmosphere on an annual basis, determined as accurately as is feasible using production or processing orcombustion rates, and emission factors, ortest results, orother accepted methods for estimating emission rates. These actual emission rates are the "actual emissions used in the PSD definition of"actual emissions", exceptthatfor PSD, an "actual emission" rate can be ignored if it is not representative of "normal" operation. The APEN forms should clearly distinguish an APEN filed with a permit application (which estimates maximum anticipated production or emission levels) and a revised APEN (which reports actual emissionswhen a significant change in emissions has occurred). Changes in emission rates reported on a revised APEN shall not be used to modify allowable emissions rates or permit conditions forthe source unless the revised APEN is filed specifically for the purpose ofmodifying an existing permit orobtaining a new'permit, in which case the APEN must (1) be accompanied by an application, written request, or letter ofexplanation from the applicant and (2) reflect maximum anticipated production oremission level changes resulting from the requested action, not "actual" emissions from the existing source. B. Each affected source should discusswith the Division the mostefficientformat in which significant changes can be reported and the degreeto which similar emission sources can be combined for reporting purposes. It is the intentofthe Commission thatthe Division carry outthis flexible approach to the maximum extent possible in orderto reduce the burden on regulated sources. The Commission has made these revisions economically reasonable by easing the burden of reporting by allowing the use ofany mutually convenient reporting format in lieu ofa "standard" form and by allowing individual, butsimilar, emission point sources to be grouped. It should be stressed thatthis grouping ofemission point sources for purposes of reporting significant changes to the Division does not constitute, nor does itsetany precedentfor, any netting or bubbling orother emission trading approach; emission trading can be conducted only through specific regulations pertaining to this activity. These APEN groupings also do not relieve the source ofany obligation to meetany emission control limitations for specific point sourceswithin the group. In general, the reporting requirements for significant changes have been given greater latitude than existed before, partly in response to concerns that, atcertain reporting levels, the accuracy requested exceeds the accuracy ofthe available data, and in response to EPA requirements for reporting EIS changeswhich are in the range of5 tpy for small sources or5 percentfor 100tpy or larger sources. The adopted "significant change" definition reflects a deliberate selection based on the public hearing testimony and the exhibits and testimony submitted by the Division and interested parties during these deliberations. Forodorous, hazardous ortoxic pollutants, any emissions change must be reported (again, on an annual basis). With changes ofonly 0.0004 tpy (for beryllium), for example, considered "significant" by EPA, close scrutiny ofall hazardous, toxic and odorous pollutants is needed. Ill. REVISED APEN FEES An issue raised is whetherthe Commission has statutory authority to require a $40.00 filing fee with a revised APEN. The statutory authority for a fee states, "Any person required by the Commission to file an air pollutant emission notice shall pay a nonrefundable fee offorty dollars

...." C.R.S. 1973, 25-7-114(5)(a). The statutory authority for requiring the filing ofAPENs and revised APENs refers to: "air pollutant emission notice" and "revised emission notice", C.R.S. 1973, 25-7-114, the latter reference being to "revised (air pollutant) emission notice". Section 25-7-114(5)(a) does not limitthe $40.00 fee to initial APENsfiled for a source but refers simplyto "air pollutant emission notice" which may be interpreted to include both initial and revised APENs. Testimony by the Division estimated the administrative costs of

Regulation Number 3 Adopted: October20, 2011 Page 228processing a revised APEN at over$40.00. Forthese reasons, the Commission finds that it has authority and should charge a $40.00 filing fee for revised APENs. IV. NON-PERMITIED SOURCE APPLICABILITY
A source existing before the adoption ofthe first Colorado AirQuality Control Act and the date ofits implementing regulations of February 1, 1972, is not required to obtain a permit. This revision is intended to clarify the date priorto which existing sources are considered "grandfathered" and exemptfrom a permit requirement.
V. STATIONARY INTERNAL COMBUSTION ENGINE EXEMPTION The purpose ofthis revision is to decrease the extent ofthe exemption for stationary internal combustion engines. Priorto this revision, stationary internal combustion engines less than 1000 HP in attainment areas and less than 250 HP in nonattainment areas were exemptfrom permit requirements. The record shows thatthese sources not only constitute large individual sources (a 1000 HP engine can emit 96 tpy of NOx), but also can be situated close to each other (one compressor station in Colorado consists of 15 925 HP stationary internal combustion engines which can emita total of 1340 tpy NOx). Small stationary internal combustion engines in terms ofemissions (less than 5 tpy) or size (less than 50 HP) are excluded from permit requirements. In addition, the Commission has retained the exclusion from permit requirements foremergency power generators and added exclusion for stationary internal combustion engines powering portable oil drilling rigs. The exclusion for stationary internal combustion engines on portable oil drilling rigs is based on testimony and on information developed by the Division which indicates thatthese sources move frequently (average 10 days perwell site), generally are located at remote sites, and emitonly 1.3 tons N02 perwell drilled. The Division indicated thatthe total estimated NOx emissions from portable oil drilling rigs in Colorado could be as high as 2200 tpy and that this could increase the total NO emissions inventory in specific active drilling areas by as much as 50 percent. To determine ifan airquality problem exists for these sources, testimony from the Colorado Petroleum Association (CPA) indicates a willingness to provide the information needed by the Division to assess emissions by modifying existing data-gathering reports. One party requested a delayed effective date for this revision so that compressorstations planned for construction during the summerof 1983would not be held up by an unanticipated requirement that permits be obtained. Such a request is reasonable, and the delayed effective date ofOctober 1; 1983, has been adopted. VI. PUBLIC COMMENT FOR DEMOLITION AND NONATIAINMENTAREA PERMITS Since the record shows that sources forwhich public comment has been received are in every case either large (greaterthan 25 tpy) orcontroversial (e.g., odorous emissions), the public comment requirement for sources in nonattainmentareas is being raised from 5 tpy to 25 tpy, which makes it the same as for sources locating in attainmentareas. Demolition projects have been exempted from public comment requirements because they often need to be completed, by contract agreement, in a short period oftime, and the need for public comment has on occasion been an unnecessarytime delay. Very few public responses have been received for small demolition projects. The Division retains the authority to require public commentfor demolition projects ifconsidered warranted for reasons ofasbestos emissions orothersignificant concerns. VII. CONSTRUCTION SCHEDULE DEADLINES Under previous rules, owners and operators applying for new permits have not been held to any time limits for coml')'lencing construction oroperation once the permitto operate has been obtained. Sources must be evaluated (C.R.S. 1973, 25-7-114(4)(b)) to determine whether operation ofthe source will RegulationNumber 3 Adopted: October20,2011 Page 229comply with all applicable regulations, an evaluation that can be made with an acceptable degree of certainty provided thatthe source actually does construct and operate within a reasonable period oftime following receipt ofthe permit. However, a source which delays construction for a number ofyears may finally initiate operation at a timewhen ambientairconcentrations or otherfactors used in evaluating compliance have changed; in addition, delaying construction and operation results in the reserving of emissions that could have been used by other applicants. This provision implements an 18-month construction deadline, imposed by the Division, to all sources, majorand minor, statewide. Owners and operators will be prevented from applying for a permitwithout intending to construct in the nearfuture, a form of "reserving" emissions or incrementswhich makes compliance analysis difficult and could inhibit real economic growth in the state. Underthese provisions, the Division will grant necessary extensions to permits that are issued, so a source with good reason for delaying a projectwould not be penalized by loss ofa permit. VIII. NON-REACTIVEVOLATILE ORGANIC COMPOUNDS (NRVOCs) The EPA maintains a list of NRVOCs, which are considered eithertotally non-reactive or insignificantly reactive in the formation ofozone. NRVOCs can therefore be used to replace reactive VOCs as offsets. A list ofadditions to this list appeared in the July 22, 1980 Federal Register. The revision to Regulation Number3 updates the list of NRVOC5, which are non-hazardous, to conform to EPA's revised list of NRVOC. In addition to this, the revision extends the concept of NRVOC Statewide (instead of nonattainment areas only), and clarifies that NRVOCswill be reviewed separately during initial approval analysis ofa newsource. Previously, NRVOCs pertained to nonattainmentareas only and were used only based on emission-offset credit. The revision clarifies that NRVOCs can be substituted forVOCs for banking and other emission reduction credits. IX. CLEAN PORTION OF NON-ATTAINMENTAREA No revisions to Sections IV.D.2.c. or IV.D.3.b. were made because the State Act provides for the exemption ofSection IV.D.2.c. at C.R.S. 1973, 25-7-303. 

### I.E. Adopted March 19, 1987 Revisions to Regulation Number3 Section II.C.1 The specific statutory authority underwhich the Commission shall hold and conductthis hearing is prescribed by 24-4-103, 25-7-105, -106, -110, and the hearing will be conducted in accord with provisions of24-4-103 and 25-7-110, C.R.S. 1982 and the Procedural Rules. The revision to Regulation Number 3 Section II. C. 1. is an addition to the list ofsources, which are exemptfrom filing Air Pollution Emission notices. Addition of Part 

### I. (small L) to this regulation exempts petroleum industry flares, approved by the Oil and Gas Conservation Commission, from having to file an Air Pollution Emission Notice (APEN) if emissions ofany pollutant do notexceed five (5) tons peryear. This exemption only applies to flares, which do not combust gas containing hydrogen sulfide (H2S) except in trace amounts, since H2S is classified as a hazardous air pollutant. Previously APENS were required forthese flares when emissions exceeded 1ton peryear. TheAir Quality Control Commission adopts this change for the following reasons: 1) Records ofthe amountofgas flared will be kept by the Oil and Gas Commission and made available to the Division; 2) The flaring is a temporary activity in most cases;

Regulation Number 3 Adopted: October20, 2011 Page 230

### 3) Statewide emissions from flares are relatively low, with nitrogen oxides (NOx) being the main pollutant emitted (emissions of NOx from flares is approximately200tons peryear statewide, while total stationary source NOx emissions are over 160,000tons peryear in Colorado); 4) Ambient impacts from flares are low; 5) No hazardous pollutants will be emitted; 6) Largerflares will still have to be permitted by the Division. I.F. Adopted November 19, 1987 Addition ofSection XVto Air Quality Control Commission Regulation Number3 Regulation Requiring an Air Contaminant Emission Notice, Emission Permit Fees This Statementof Basis, Specific Statutory Authority and Purpose complies with the requirement ofthe Administrative Procedures Act, C.R.S. 1973, Section 24-4-103 (4) for adopted or modified regulations. This revision to Regulation Number 3, adopted November 19, 1987, is intended to bring the Colorado regulations into conformancewith current U.S. EPA regulations. U.S. EPA's regulations were revised in response to a court orderwhich required each state to develop a program to assess and remedy visibility impairment in Class I areas from newand existing sources, as established in Section 169Aofthe Clean AirAct. Section XV. is added to Regulation Number3 as part ofthe State's plan to meetthe national goal of preventing future, and remedying existing, visibility impairment in Class I areas. Section XV. Together with this Statement of Basis, Specific StatutoryAuthority and Purpose and the monitoring and long-term strategies represents Colorado's State Implementation Plan (SIP). This Regulation addresses a type ofvisibility impairment, which can be traced to a single source orsmall group ofsources known as reasonably attributable impairment. The U.S. EPA deferred action on the regulation of regional haze and urban plumes due to scientific and technical limitations in visibility monitoring techniques and modeling methods. The FLMs were consulted and their suggestions considered in developing the plan. In addition, the Commission provided public notice 60 days priorto the public hearing stating that interested parties would be given the opportunityto providetestimony concerning the Regulation and its requirements at the hearing. Wyoming, Utah and New Mexico were also sent notice ofthe hearing. Section XV.D. allows the FLMs to certify visibility impairmentto the Division Directoratany time. Atsuch time ofcertification the Division mustassess the impairment, identify the contributing source(s), and conduct a BestAvailable Retrofit Technology (BART) analysis for any contributing sources located in Colorado. The FLMs have not certified reasonably attributable impairmentas ofthis adoption date. Section D. also requires BART and is incorporated forfuture use, ifnecessary. Any source subjectto the BART requirements ofthis Section may apply to the U.S. EPAAdministratorfor an exemption. The application to the U.S. EPA must include a written concurrence from the Division and Commission; therefore, the source mustfirst apply to the Division, as set forth in Section D.2.c. An exemption granted by the Division and approved by the Commission will constitute the written concurrence required by U.S. EPA The New Source Review requirement ofSection XV.E. is included for purpose of reinforcing Sections IV.D.2.a. (vi) and IV.D.3.a. (vi).

RegulationNumber 3 Adopted: October20,2011 Page 231In addition to existing and newsource review, the Division mustdevelop a visibility monitoring strategy to collect information on visibility conditions and mustdevelop a long-term (10-15 year) strategy to assure progress towards the national goal. The monitoring plan and the long-term strategy are setforth in the SIP submitted to the U.S. EPA. Section XV.F. provides procedures for reviewing and revising the longterm strategy. State Implementation Plan for Class IVisibility Protection State ofColorado The purpose ofthis plan is to assure reasonable progress towards meeting the national goal of preventing future, and remedying existing, visibility impairment in Class I areas. The plan includes provisions for existing and new source review (attached as Regulation Number3, Section XV.), a monitoring strategy, a long-term strategy, and consultation with FLMs. Monitoring Strategy The State ofColorado's Class IVisibility monitoring strategy is based on meeting four goals:
1. Provide information for new source visibility impactanalysis;
2. Determine existing conditions, in Class I areas and the source(s) ofany certified impairment; 3. Determine actual effectsfrom the operation ofnew sources or modifications to majorsources on nearby Class I areas; and
4. Establish visibility trends in Class I areas in orderto evaluate progress toward meeting the national goals ofvisibility protection. The goals will be achieved through a combination ofobjectives concerning monitoring, gathering and evaluating existing visibility data, and mechanisms for the use ofvisibility data in decision-making. Potential new major stationary sources or major modifications to existing stationary sources subjectto the Air Quality Control Commission (AQCC) Regulation Number3, Section IV.3, are required to perform an analysis ofvisibility impacts on potentially affected Class I areas. The analysis must be conducted utilizing existing visibility data, ifany. The Division mustconsider and evaluate available data from potentially affected Class I areas orotherareas that may be representative of background conditions in the Class I area(s) ofinterest. Ifdata is adequate, the permitteewill be notified ofthe background or base level ofvisibility againstwhich impactswill be assessed (Regulation Number3, Section IV.3.(a)(iii)(D)). If visibility data is notadequate, Regulation Number3, Section XIV. allows the Division to require any source, which will have or is likely to have an impact on any Class I area to conduct monitoring to establish baseline status ofvisibility. The monitoring information will be used in the newsource review analysis and will add to the background and trend data bank ofthat Class I area. No monitoring shall be required if it is currently being conducted by any federal, state, or local agency (AQCC Regulation Number3, Section XIV.B.1). FLMs may atany time identify to the Division Class I areas where emissions from a specific source or small group ofsources may be causing orcontributing to visibility impairment in the Class I area. The Division will determine ifemissions from any local sources can be reasonably attributed to cause or contribute to the documented visibility impairment. In making this determination the Division will consider all available data including the following:
1. Data supplied by the FLM;
2. The number and type ofsources likely to impactvisibility in the Class I area;

Regulation Number 3 Adopted: October20, 2011 Page 2323. The existing emissions and control measures on the source{s);
4. The prevailing meteorology nearthe Class I area; and
5. Any modeling, which may have been donefor other airquality programs. The Division may be unable to make a decision regarding "reasonable attribution" ofvisibility impairment from an existing source orsources using available data. The Division will make available to the affected FLML and the U.S. EPA a discussion ofwhat data was considered and what measures the Division is taking, ifany, to resolve the situation. The Division may consider modeling the impact ofnearby suspected sources with existing visibility models. Funding and otherfactors may limitthe Division's ability to unilaterally initiate studies designed to establish "reasonable attribution". Therefore, the Division may join with the FLMs, the suspected source(s), the U.S. EPA, and others in implementing special monitoring and analysis programs to addressthe specific problem. The Division will sponsororshare in the operation ofvisibility stations with FLMs asthe need arises and resources allow. Fiscal, logistical, and otherconsiderations may constrain the Division in conducting visibility monitoring in Class I areas. The Division will request from each FLM responsible for Class I areas in Colorado copies ofany and all past orexisting programs designed to monitororevaluate visibility. All future visibility data gathered by each FLM will also be requested, including any analysis and interpretation. The Division will assemble and evaluate the visibility data supplied by the FLM in addition to any other data collected by the Division orany otherappropriate l)ource (such as a proposed majorstationary source) on an annual basis. Long-Term Strategy (l TS) The Commission shall review the strategy setforth below and prepare a public report as required in Section XV.F. The FLMs shall be consulted throughout all phases ofthe L TS development and revisions. A Commission subcommittee will be established to address the following components ofthe L TS:
1. Statewidevisibility standards
2. Smoke management 3. Vistas
4. PM10 and PM2.5 emissions
5. Any othercomponents the subcommittee deems applicable. The Division is pursuing the adoption ofstatewide visibility standards. The subcommittee will determine howand ifstandards should be setand howthe standardswill apply to various areas ofthe state. Although the end result may apply to regional haze, Class I areas will benefit from statewide standards. The Division presently has smoke management agreements with the FLMs. The affected agencies are required to obtain an open burning permitfrom the Division. Virtually all controlled burns are forwildlife habitat and range management; little slash/timber management burning occurs. The Division believes existing smoke managementtechniques do not adversely affectvisibility in Class I areas. The subcommittee will address this issue to determine howsmoke management should be integrated into the L TS. Ifnecessary, the existing agreements may be revised during the L TS review RegulationNumber 3 Adopted: October20,2011 Page 233process. The Division will continue to coordinate with the FLMs to insure that best smoke management techniques are employed. The FLMs declined to identify integral vistas (importantviews of landmarks or panoramas that extend outside ofthe boundaries ofthe Class I areas and considered critical to the enjoymentofthe areas). The Commission is therefore not required to address vistas but may do so undertheir own authority. The subcommittee shall determine if integral vistas and/orother scenic vistas should be identified, and ifso, the criteria to be used for such identification. Any vistas shall be identified using the specific criteria developed by the subcommittee. The Division is in process ofstudying PM10 emissions and their role in the formation of Denver's brown cloud. Conceivably, such studies could lead to information and strategies related to visibility impairment. The subcommitteewill address the integration ofthis component into the L TS. The FLMs and Division have not identified reasonably attributable impairmentatthis time, therefore the Commission will notaddress source retirement and replacement, construction activities, and enforceability ofemission limitations. Should the FLMs or Division identify impairmentfrom a specific source orsmall groups ofsources, the Commission will address these issues during the L TS review process. Each time the L TS is reviewed, the following sixfactors (at minimum) must be addressed.
1. Emission reductions due to ongoing air pollution control programs. 2. Additional emission limitations and schedules for compliance. 3. Measures to mitigate the impacts ofconstruction activities.
4. Source retirement and replacement schedules.
5. Smoke managementtechniques for agricultural and forestry management purposes including such plans as currently existwithin the State for these purpose, and 6. Enforcementofemission limitations and control measures. Consultation with Federal Land Managers (FLMs) The Division as part ofthe implementation ofthis Regulation will send within 30 days ofits adoption written notification to the FLMs stating thatthe Division Director is the official to whom any recommendations may be sent regarding Colorado's SIP for Class Ivisibility protection, including but not limited to: 1. Integral vistas to be listed by the state; 2. Identification ofimpairmentofvisibility in any Class I area(s), and 3. Identification ofelements for inclusion in the monitoring strategy. The Division will provide the opportunity for consultation with the FLMs, in person and at least60 days priorto any public hearing on any element ofthe SIP. The Division is interested in the FLMs opinion regarding:
1. Assessment of impairment ofvisibility in any Class I area, and
2. Recommendation on the developmentofthe long-term strategy. Regulation Number 3 Adopted: October20, 2011 Page 234The FLMs may contactthe Division Director at any time regarding the implementation ofthe SIP forClass Ivisibility protection. 

### I.G. Adopted August 8, 1988 Revisions to Regulation Number3 and the Common Provisions Definitions Revisions are made to Regulation Number 3 and definitions in the Common Provisions. Prevention of Significant Deterioration (PSD) and New Source Review (nonattainment) requirements are revised to conform to the Federal regulations. Provisionsforthe regulation ofthe National AmbientAirQuality Standard (NAAQS) for particulate matter (PM-10) are added. Section V, concerning certification of Emission reduction, is revised to conform to Federal requirements. Other minorchanges are made to clarify existing policies. Requirements for Revised Air Pollution Emission Notices (APENS), AirQuality Related Value (AQRV) monitoring, solid waste fuel, and temporary sources are revised. Dual Definition ofSource
Federal regulations require the use ofthe dual definition ofsource for nonattainment areas. (See discussion, in the August 7, 1980 Federal Register, 45 FR52680 and 52693). The concept is intended to provide for more air pollution control in nonattainment areas, such that more rapid progress can be made toward attaining the standards. When determining ifa source locating in an attainment area is major, emission increases and decreases atthe entire facility are considered. When determining ifa source located in a nonattainmentarea is major, two cases are examined. First, ifthe single piece ofequipment or modification itself represents a majorsource orsignificant increase, nonattainment review applies. Second, ifthe piece ofequipment itself is not major, examine the entire facility as for attainmentarea sources. Ifa significant increase occurs, nonattainment review applies. The definition of"Stationary Source" in the Common Provisions indicates the Commission intended to use the dual definition (see also the Statement of Basis and Purpose, March 10, 1983). The definition of"Net Emission Increase", Part K, however, incorrectly stated that only the single piece ofequipment is examined. This was less stringentthan Federal law and allowed facilities to install a series ofde minimus units whose aggregate emissions could be significant, without undergoing nonattainment review. Part K is corrected to allowthe Division to use the dual definition. When the dual definition is used, nonattainment review applies to reconstructed sources. Section IV.D.2.a clarifies this. Section IV.D.2.a also clarifies that nonattainment review applies only to nonattainment pollutants emitted in majoramounts. This differs from PSD requirements, which apply to attainment pollutants emitted in significant amounts ifthe source is majorfor any pollutant (attainmentor nonattainment). (See discussion, 45FR52676.) Fugitive Emissions The Colorado AirQuality Control act includes fugitive emissions when calculating a source's potential to emit only ifthe Commission adopts regulations to include fugitive emissions forthat source category. (See Statementof Basis and Purpose, March 10, 1983). Federal law requires that fugitive emissions are included for all "listed" sources (those listed in the definition ofmajor source). The Commission is adopting the requirement to include fugitive emissions for all listed sources. Portions ofthe ColoradoAct notAllowed in Federal Act

RegulationNumber 3 Adopted: October20, 2011 Page 235Portions of Regulation Number 3 are notallowed in the Federal Regulations, butare contained in the Colorado Act and therefore cannot be removed from regulation Number3 until removed from the Colorado Act. The items are discussed below. The Division will not honor these items unless an applicant insists, in which case a permitfrom the EPAwill be required to meet Federal law. BestAvailable Control Technology (BACT): The Colorado Act's definition of BACT states that revisions to New Source Performance Standards (NSPS, Regulation 6) or National Emission Standards for Hazardous Air Pollutants (NESHAPS, Regulation 8) made afterApril 10, 1983 (the effective date ofthe definition) can't be used to determine BACT. The Federal Act requires that BACT can't exceed the NSPS or NESHAP in effectatthe time of application. The Division will make BACT determinationstaking into consideration the most current NSPS and NESHAP regulations. Clean area in nonattainment area: The Colorado Act and Section IV.d.2.B.ii allows exemption from nonattainment requirements ifthe source proves they are located in a clean portion ofa nonattainment area. This is not allowed in the Federal Act. Shale oil exemption: The Colorado Actand Section I.B.2.C.viii excludes from the definition of major modification a fuel switch to shale oil or coal/oil mixtures. This is not allowed in the Federal Act. Fugitive Dust Exemption: The Colorado Actand Regulation Number3 does not include fugitive dustthat does notadversely affect public health orwelfare when calculating a source's potential to emit. The March 10, 1983 Statementof Basis, Authority, and Purpose discussesthe Commission's previous position. •The discussion indicates thatwhen the EPA promulgates new standards for particulate matter the fugitive dust issue will be resolved. The EPA has promulgated a new NAAQSfor PM-10, which replaces the TSP NAAOS. The PSD increments, however, are still based on TSP. PM-10 fugitive emissions can thus be used to determine potential to emit, butsome question remains as towhether or notTSP fugitive emissions should be used. The EPA is developing PM-10 increment standards. In the interim, ifa source does notwantto include fugitive dust (TSP or PM-10) for a State permit, an EPA permit may have to be obtained. Permit ReviewTime Frame: The Colorado actcontains specifictime frames for processing permits (60 days, etc.). Section IV.F of Regulation Number3 states that a permit is automatically issued ifthe Division fails to meetthe time constraints. This is not acceptable for major source review. PSD and major nonattainmentapplications are often complex. The Federal Actallows one yearto complete the review process (including public notice, hearings, etc). The Division will automatically askfor a time extension for major source applications. Ifan extension is not granted and/orthe time frame is not met, an EPA permit will be required. Other Minor Revisions These definitions are revised as follows to conform to the Federal Act: "construction" now includes demolition and modification; "enforceable" now includes Regulations Number6 and 8; "Lowest Achievable Emission Rate" does notallow BACT to be exceeded. References to the "Board" are deleted and replaced with "Commission" throughoutthe Regulation. The (Hearings) Board no longer exists. Class Iareas in neighboring states are recognized in Section VIII. Section VIII.K is added to allow redesignation ofan area to class Ill ifa permitcan't be obtained unless the area is redesignated and sufficient public notice is given. The Federal Act requires this.

Regulation Number 3 Adopted: October20,2011 Page 236Section XIII.B exempts Innovative Control Technology from BACT only, not all ofthe PSD requirements. This conforms to the Federal Act.
Public notice procedures (Section IV.C) for majorsources are expanded and clarified to conform to the Federal Act.
Theword "new' is removed from Section IV.D.2.a.ivto clarify that alternate sitting studies apply to new and modified sources. Exemption c underthe definition ofmodification is removed. This exemption allowed sources choosing to improve control of particulate matterto increase S02 emissions withoutthe need for>additional S02 control. (See Statementof Basis, Authority and Purpose, March 10, 1983). This exemption is no longer allowed, since it is inconsistentwith the Federal Act. The language pertaining to interim PSD authority is deleted. The State received full authority on September2, 1986. Annual fee requirements are added to Section VI. This provision was added to Section 25-7-114(5)(a) of the Colorado Act on July 1, 1987. Household use ofpaints and solvents is exemptfrom APEN and permit requirements. The Division classifies these materials astoxic airpollutants which would require permits ifemitted in any amount. The Division does not have available resources to regulate this activity. The six-month, 25 acre APEN and permit exemption clarifies that all mining operations must obtain a permit (unless exemptelsewhere). Temporary sources operating less than one month may receive initial and final permits atthe same time. The Division will thus avoid issuing final permits for sources that no longerexist. The Division has discretion to issue the permits separately ifthe operatororownerofthe source orthe sourcetype has a history ofcompliance problems. PM-10 NAAQS This new standard replaces the Total Suspended Particulate (TSP) standard for Federal purposes only. The State is adopting the PM-10 requirements and is also retaining the TSP standard at least until the EPA approves our PM-10 State Implementation Plan. Thiswill ensure that Reasonable Further Progress will be maintained in the interim. The PM-10 standard is implemented underSection 110 ofthe Federal clean AirAct. The othercriteria pollutants are regulated under Section 107, which includes provisions fordesignated nonattainment areas, emission offsets, and sanctions for areas where the standard is exceeded. Section 110 does not utilize nonattainmentareas; it requires that the standard be met in all areas. The State regulations applied specifically to designated attainment and nonattainment areas. Since there are no PM-10 designated areas, reference to pollutants regulated under Section 110 is added in several places to ensure regulation of PM-10. PM-10 sources that impactan area where the standard is exceeded are "major" ifthey emit 100 tons per year or more of PM-10. Such a source is then subject to PSD requirements (Section 1.4.a). Such sources must also offset their impactto the degree which itexceeds the standard (as opposed to sources ofother criteria pollutants, which must offset total emissions). Offsets will be required as part ofthe PSD source impact analysis, as necessary. PM-10 fugitive emissions are included when calculating potential to emit. (See discussion under Portions ofthe ColoradoAct not allowed in Federal Act in this Statement of Basis, Authority and Purpose). Regulation Number3 Adopted: October20, 2011 Page 237PSD increments are still regulated in the TSP form, therefore significant emissions and impact levels exist for both PM-10 and TSP. PSD will apply to TSP until the EPA promulgates PM-10 increments. New definitions are added to the Common Provisions to differentiate between particulate matter, PM-10 and TSP. The EPA has left regulation ofminorsources to the state. Section IV.D.3.E is added to require minor sources locating in areas where the PM-10 standard is being exceeded to apply BACT. The Commission had the option to add PM-10 monitoring "phase in" provisions. Methods and equipment are reasonably available, therefore, phase in is not necessary. Correctionsto typographical errors are made for significant ambient levels of beryllium, lead, and hydrogen sulfide. (Section IV.D.3.b.iii) Revised Air Pollution Emission Notices (APENS) Section II.B requires Revised APENS when a significantchange in emissions occurs. The definition of net emission increase requires that a Revised APEN be filed to receive creditfor decreases. Historically, the Division has not received all ofthe APENS required. The April 1 deadline and calendar year requirement are added for clarification. The removal ofa piece ofequipment represents a significant change and the requirement for submittal ofan APEN to cancel a permit is added for clarification. These clarifications will help the Division update the Emission Inventory System; proper creditwill be received for emission decreases; and sources will avoid being charged an annual fee for equipment, which no longerexists. The Regulation now requires all portable sources to submit revised APENS priorto relocating, regardless ofthe length oftime atthe new site. This helps the Division track sources in the event complaints are received. Air Quality Related Value (AQRV) Monitoring Section XIV.B.4.c limited the cost ofAORV monitoring to 1/4 ofthe cost ofthe Additional ImpactAnalysis, including preconstruction monitoring. The Federal Land Managerstestified that such a limit is not sufficientto provide even minimal AQRV monitoring. The limit is removed and the Division will determine economicfeasibility on a case-by-case basis. Section XIV.B.1. is revised to requirejoint monitoring among all majorsources affecting an AQRV in the same Class I area. This will provide for ongoing, high quality data. · Waste Fuel Exemptions Sections I.B.2.C.iii and IV.D.1.c.i (F) exempted switches to fuel derived from municipal solid waste from newsource review. Due to the public's increased concern for toxic/hazardous emissions, many sources now undergo scrutiny for such emissions. All sources should be treated equallywhen proposing to burn municipal solid waste and should be required to apply the best control for reducing toxic/hazardous emissions. The exemptions for solid waste fuel are deleted. Emission Reduction Credits Revisions made to this portion ofthe Regulation are based on the Emission Trading Policy Statement; General Principles for Creation, Banking and Use of Emission Reduction Credits as published in 51 FR43814. That Policy setout general principles that EPAwill use to evaluate emission trades under the Clean AirAct. The goal ofthat Policy is to create more flexibility for the states and industry to help meetthe goals ofthe Clean AirAct morequickly and inexpensively. The purpose ofColorado adopting the salient points ofthat Policy is to create a generic regulation, which is acceptable to EPA, and thereby RegulationNumber 3 Adopted: October20, 2011 Page 238

### eliminate the need for a SIP revision for every banking oremission trading action. Otherthan clarifications and procedural changes the key changes to this portion ofthe Regulation include:

a. A greaterthan 20% discountwill be taken in areas without approved SIPs. The discount will be based on the level of reduction in emissions needed in that area to achieve attainment status. b. Added provisions for trading of PM-10, lead and NOx

c. Added new criteria for modeling to determine ambient equivalence oftrades. d. Shutdowns and curtailments in production emission reductions may be used for on-site replacement ofequipment only.

e. Specify no credit allowed for reduction in emissions from mobile sources unless those sourceswere subjectto ambient impact and new source review. f. Creditfor switching to a cleanerfuel is given only ifa permit is conditioned to require control equipment to achieve the same reduction ifthe source switches back to the dirtier fuel. 

### I.H. Adopted September 15, 1998 "A Regulation Requiring Air Contaminant Emission Notices, Emission permits and Fees" With the passage of HB 1372, 1stsession ofthe 56TH GA, two stationary source fees were established for FY 1987-88. An annual compliance-monitoring fee of$60.00 per source wasto be charged .to each permitted source. An hourly rate of$96.00 was to be applied to all permit processing time. After 1987-88 these fees were to be set by the Commission. These fees were to coverthe "direct and indirectcosts of such permit] processing. In establishing such fees, the Commission shall provide a higher per hour charge for permits which require five hours or more than for permits which require less than five hours to process; exceptthatfor the fiscal year 1987-88, the fee shall be ninety six dollars per hourforall permits. In addition to such fee for processing, the Commission shall establish and as necessary revise nonrefundable annual fees for each emissions source covered by a stationary source permitsufficient to coverthe directand indirectcosts ofadministration and periodic inspections; exceptthatfor the fiscal year 1987-88, the fee shall be sixty dollars peryearfor each emissions source." The Division has performed a thorough analysis ofthe directand indirect costs ofthe permit and compliance monitoring programs and has proposed fees to the Commission designed to meet statutory requirements. StatutoryAuthority The statutory authority forthis regulation is Section 25-7-114. Section VI

- Fees 

### A General Paragraph 1ofthis Subsection requires that all persons required to obtain an emission permit orfile an air pollution emission notice pay fees sufficientto recover the direct and indirect costs of processing and issuing permits in accordance with the fee schedule shown in the Regulation. With this regulatory change, the following language was struck to be consistent with the statutory language: '

...to include the reasonable costs ofsuch processing oradministration, and ofenforcementofthe permit provisions. Such

Regulation Number 3 Adopted: October20, 2011 Page 239costs shall include the costofpredictive model utilization when the use ofsuch models is deemed necessary by the Division for proper evaluation ofthe permitapplication." Paragraph 2 is unchanged. Sub-Sections B and C are unchanged D. Annual Fees Sub-Section D is changed by noting thatthe annual fees to be charged are in accordance with the schedule shown in the Regulation. Fee Schedule The fee schedule shows whatthe fees are forthe hourly processing charge, the annual charge, and the APEN. 

### 1.1. Adopted August 

### 20, 1992 Revisions Concerning the Long-Term Strategy to ProtectVisibility in Class I Areas (Section XV.F) Authority Colorado Air Quality Control Act The Colorado Air Quality Control Commission's (Commission) authority to revise Regulation Number 3.XV.F, concerning the Long-Term Strategy Review ofColorado's State Implementation Plan for Class I Visibility Protection, is in the ColoradoAirQuality Control Act. Relevant Sections are 25-7-102 Legislative declaration and 25-7-105(1)(a){l) Duties ofCommission. Federal Clean AirAct Additional authority for the Commission to makethe regulatory revisions can be traced to the 1977 Amendments to the Federal Clean AirAct. Section 169(A) requires the federal Environmental Protection Agency to promulgate regulations that in turn require states to amend their State Implementation Plans (SIPs) to provide for Class Ivisibility protection -including a long-term strategy for making reasonable progress toward the national visibility goal. On December2, 1980, EPA released final regulations to states detailing the specific requirements

- including the developmentand periodic revision ofa long-term strategy as specified by federal law. Statementof Basis and Purpose ofChangesto Regulation Number 3 Section XV.F. Section XV.F.1.c. Commission Regulation Number 3 required a Long-Term Strategy (LTS) review/revision report from the Colorado Air Pollution Control Division (Division) to the Commission every three years following the effective date ofthe regulation (November 1987). The August 1992 L TS reportfrom the Division is late in arriving to the Commission. The purpose ofthe regulatory change is to clarify when subsequent L TS review and revision report cycles will occur. Withouta regulatory change, the next L TS reviewwould be due September 1993

- approximately a yearfrom adoption ofthe August 1992 report. In orderto maintain the intentthat a report is to arrive to the Commission, and ultimately EPA, at least every three years and to allowthe Division to get backon schedule with a report to the Commission in approximately three years, Section XV.F.I.c. was altered. Old language:

RegulationNumber 3 Adopted: October20,2011 Page 240

### (c) The Division shall prepare a report forthe Commission on any progress madetoward the national visibility goal since the last long-term strategy revisions. The report will be made available on September First ofevery third yearfollowing the effective date ofthis regulation. This report shall include an assessment of: New language (changes underlined): (c) The Division shall prepare a report for the Commission on any progress made toward the national visibility goal since the last long-term strategy revisions. The report will be made available by September First at least every third yearfollowing the submittal ofthe previous report. This report shall include an assessmentof: Section XV.F.I.c.vii
EPA regulations (CFR Part 40 Section 51.306) require that the L TS be reviewed in seven areas. There was a discrepancy between EPA requirements and State regulations regarding the seventh item to be assessed. The purpose ofthe regulatory change is to bring Commission Regulation Number3 into conformance with EPA requirements. Old language: (vii) The progress achieved in developing the components ofthe strategy. New language (changes underlined): (vii) The need for BART to remedy existing impairment in an integral vista declared since plan approval. I.D. Adopted November 19, 1992 

### I.J. Adopted November 19, 1992 Revisions to Regulation Number3, Common Provisions and Regulation Number7 

### This Statement ofBasis, Specific Statutory Authority and Purpose complies with the requirements ofthe Administrative Procedure Act, C.R.S. 1973, Section 24-4-103(4) for adopted or modified regulations.

The EPA has identified portions ofthe State's Prevention ofSignificant Deterioration and New Source Review (PSD and NSR) rules, which do notconform to the Federal rules. The State rules must be at least as stringent as the Federal rules in orderforthe EPAto approve the State Implementation Plans. In addition, the State must revise the rules to include the addition of new requirements that were set forth in the 1990 Federal Clean AirAct. The EPA has also identified additional non-reactive volatile organic compounds, and a significant level for municipal waste combustor emissions. All ofthese revisions must be made for EPA approval. The 1992 State Legislature revised the Colorado Clean AirActto include newdefinitions and fee requirements. In addition, the revisions allowthe Commission to make necessary revisions to the State's PSD and NSR rules, as described above. Specific Authority The specific authorityforthis regulation is contained in the Colorado Air Quality Control Act, 1992 as amended. Section 25-7-103 sets forth definitions for use in implementing the newColorado Act. Section 25-7-105 (1)(A)(I) requires the Commission to adopt into the State Implementation Plan all requirements ofthe federal act. Sections 25-7-105(1){c), 203, 204, 205, 206, 210 and 301 provide authority to adopt a RegulationNumber3 Adopted: October20,2011 Page 241PSD and NSR program in conformancewith the Federal and Colorado Acts. Section 25-7-105.1 sets forth the Commission's authority regarding Federal enforceability. Section 25-7-106 (1)(c) provides authorityfor adopting regulations, which are applicable to entire state, oronlywithin specific areas or zones, oronly to a particular pollutant. Section 25-7-114.5 sets forth time frames for the Division to review permit applications, and procedures for owners and operators to demonstrate compliancewith construction permits. Section 25-7-114.7 sets forth fee requirements. Commission action in promulgating these revisions is taken pursuantto Sections 25-7-105 through 25-7-109 and 25-7-114, C.R.S., as amended. Purpose New Source Review Rules Regulation Number3 contains the permit requirements for majorsources (Prevention ofSignificant Deterioration, PSD and New Source Review, NSR). The Common Provisions Regulation contains definitions that are used in the permit requirements of Regulation Number3. The PSD and NSR requirements and definitions must be equivalentto the Federal requirements. The EPA has identified the portions of Regulation Number 3 and the Common Provisions, which do notconform to the Federal rules. On October 17, 1991, the Commission adopted revisions to Regulation Number3 and the Common Provisions, to address some ofthe EPA's concerns. Additional concerns remained, however, because some ofthem could not be addressed until the Colorado Clean AirActwas revised. On May 27, 1992, the Governorsigned Senate Bill 105, which revised the Colorado Clean AirActto allowthe Commission to proceed with the remaining necessary revisions to Regulation Number3 and the Common Provisions. The new Colorado Act is effective as ofJuly 1, 1992. The 1990 Federal Clean AirAct revisions setforth additional revisions, which must be madeto all State PSD and NSR rules. The Commission has adopted the necessary revisions, which address the remaining EPAconcerns regarding the State's PSD and NSR rules. These revisions are required to eliminate discrepancies between the State and Federal rules, and for approval ofourState Implementation Plan. The required revisions are as follows. Regulation Number 3
1. The regulation previously allowed sources offugitive emissions to be exemptfrom the NSR and PSD requirements. The Federal Actdoes not allowthe exemptions. Several Sections throughoutthe regulation needed to be revised oreliminated: Section I.E.

- Eliminate the reference to the definitions ofmajorstationary source and major modification from the definition offugitive dust; Section I.B.3.e. and f- Eliminate the references to fugitive dustfrom the definition of major source; Section IV.D.3.b.(i)(B)- Eliminate the fugitive dustexemption from the PSD rules; Section XI

- Eliminate the fugitive dustexemption from incrementconsumption requirements.
2. Section I.8.2, Section (vii) ofthe regulation allowed sources, which switched from oil or gas to a coal-derived fuel (shale oil) to be exemptfrom the PSD and NSR requirements. This is not allowed underthe Federal Act, therefore (vii) is removed from the definition of major modification.

RegulationNumber 3 Adopted: October 20, 2011 Page 242

### 3. The new Federal Act requires majorsources in nonattainmentareas obtain to offsets from sources that are also located in the same nonattainmentarea, unless a source outside ofthe area contributes to nonattainment in the area in which the majorsource is located. Section IV.D.2.a(iii) is revised to add this new requirement. 4. The Federal Act does not allow majorsources located in a "clean portion" ofa nonattainment area to be exemptfrom the NSR requirements. Section IV.D.2.c.(ii) is revised to eliminate the clean portion ofa nonattainmentarea exemption.
5. Section IV.D.3.e. required minorsourceswhich contribute to the exceedance ofan ambient airstandard in a non-designated area (not designated attainmentor nonattainment) to apply best available control technology. This requirementwas previously adopted to comply with the EPA's interim policy forthe PM-10 ambient air quality standards. The provision applied until the EPA was able to formally designate areas as attainmentor nonattainmentfor PM-10. Nowthatthe EPA has designated areas, the PSD and NSR (nonattainment) rules apply and Section IV.D.3.e. has been removed. 6. The regulation previously stated that certain permit conditions had to be removed from the permit upon issuance offinal approval. The conditions on a final permitwere limited to the list of items required to obtain a permit. The Federal Act requires that permits must contain all conditions necessary to ensure compliance with all applicable requirements, and any conditions necessary to make limits on production rates, hours ofoperation, the potential to emit, etc. federally enforceable. The language that limits the enforceability of permit conditions after Final Approval is removed from Section IV.E.
7. The Federal Act does not allow automatic approval of permits ifthe State fails to meet processing deadlines. The language that providesforautomatic approval ofpermits if processing deadlines are not met is removed from Section IV.F. Likewise, confidentiality determinations do not affectthe time constraints in the regulation. Section VII is revised to reflect this. 8. The new Federal Act does not allow reductions ofpollutants required to meetanyAct requirements to be credited for use as offsets. Language is added to Section V.E.9 of the State's Emission Reduction Credit rules to clarifythis requirement. 9. The new Federal Act no longer limits the boundaries ofClass I areas to those that existed in 1977. Section VIII is revised to eliminate this restriction. 10. The Federal rules state that ifinnovative technology is used by a PSD source, they are only exemptfrom the BACT requirements, notall ofthe PSD requirements, and thatthe consent ofgovernors ofother affected states must be obtained. Section XIII previously exempted such source from all PSD requirements. The Section is revised to clarify this allowance. Common Provisions Definitions: 1. The EPA has added visible emission standards to applicable emission limitations under the definition of Best Available Control Technology. The State's definition is likewise revised. 2. Underthe new Federal Act, Asbestos, Beryllium, Mercury, and Vinyl Chloride are now regulated under new hazardous pollutant requirements (Maximum Achievable Control Technology). These compounds are no longersubjectto Prevention ofSignificant Deterioration (PSD) requirements (which would require BestAvailable Control). The
RegulationNumber3 Adopted: October20, 2011 Page 243definition ofsignificant, which determineswhen a source is subjectto PSD, is revised to omitthese pollutants. The Federal rules do notallowan exemption from PSD and NSR rules for rightofways, pipelines, etc. The definition ofstationary source is revised to deletethis exemption. Non-Reactive VOCs: On March 18, 1991, the EPAadded five halocarbon compounds and four classes of perfluorocarbons to the listoforganic compounds, which are negligibly reactive, and thus exemptfrom regulation asVolatile Organic Compounds under Regulation Number3, the Common Provisions, and Regulation Number7. In addition, the EPA revised the definition ofVolatile Organic Compound. The Non-reactive Volatile Organic Compound (VOC) list, as amended by the EPA, is incorporated into Regulation Number 3, Section IV.D.4, the Common Provisions (definition of Net Emission Increase, paragraph h.), and Regulation Number7, Section II.B. The State is notallowed to take creditfor controlling these compounds in our SIP. In otherwords, sources cannot use reductions ofemissions of these compoundsto offsetVOC emissions, and we are notallowed to include emissions ofthese compounds in our SIP inventory. The EPA has determined thatthese compounds do not react in the atmosphere to produce ground level ozone. The EPAalso revised the definition of "Volatile Organic Compound" to make slight clarifications. The definition in the Common Provisions and in Regulation Number 7, Section II.A.1. is likewise revised. MunicipalWaste Combustor Emissions Significant Level: On February 11, 1991, the EPA promulgated New Source Performance Standards for MunicipalWaste Combustors. In addition, the EPA promulgated "significant emission levels" for municipal waste combustoremissions. These significant levels are used to determine if PSD requirements apply to major sources. The Commission revised the definition of"Significant" in the Common Provisions Regulation, to add the emission level for municipal waste combustqremissions. This addition is required in orderto conform to the Federal PSD and NSR rules. Senate Bill92-105 Revisions Senate Bill 105 revised the Colorado Clean Air Act. The new Colorado Act contains some new and revised provisions which are relatively simple and straightforward, and which could therefore be easily adopted into Regulation Number 3 and the Common Provisions atthis time. These particular revisions were adopted to facilitate transition from the old Actto the newAct, and to eliminate confusion that could occur due to differences between the new Act and the existing regulations. The proposed revisions are as follows. Regulation Number 3
1. Sections IV.B.3, 4 and 5- The newAct gives the Division 60 days (instead ofthe previous 20 days) to determine ifan application is complete. In addition, the Division has 12 months to complete the application process for PSD construction permitapplications (previously limited to 135 days).
2. Section IV.C.1.c- Change the reference date for the definition of hazardous pollutant. A new definition has been adopted in the newAct. The definition includes the list of 189 chemicals from the Federal Act, and an additional list contained in the Colorado Act.

RegulationNumber 3 Adopted: October20,2011 Page 244

### 3. Section IV.H- Change the procedures for granting offinal approval construction permits. Previously, the Division had only 30 days once a source commenced operation to inspect the source to determine that all permit conditions were being met. The source now has 180 days to demonstrate compliance. Also previously, the Division could allowa source additional time to come into compliance before Final Approval was issued. Nowthe Division mustgrant Final Approval or revoke the permit.
4. Section VI- The newAct sets forth newfee schedules for permits, annual fees, and APENS. The permitfees have changed from a schedule based on the type offacility to $50 per hourfor all applications. The Division cannot exceed 30 hours in processing time unless the applicant is first notified that 30 hours will be exceeded. The annual fees are no longer based on the numberofsources at, orthe size and complexity ofa facility. Instead annual fees are based on actual emissions. TheAPEN fee has changed from $60 to $75 forfiscal year 92. Common Provisions
1. Section I.C- Incorporates the new Legislative Declaration ofthe newAct. The new declaration addsto the existing declaration that an accurate emission inventory is necessary for implementation ofthe air quality requirements.. 2. Incorporates the newActs definition ofAir Pollutant. The definition is the same as previous exceptthat precursors are nowalso considered" air pollutants." Precursors can be emissions such as nitrogen and sulfuroxides, which can contribute to particulate matteremissions. 3. Revise definition of Emission Control Regulation. The newdefinition is the same, except such regulations can now include work practices and design, equipment, and operational standards. In addition, such regulations that apply to hazardous pollutants must be consistent with the newAct requirements concerning hazardous pollutants. 4. Revise definition of Federal Actto reference 1990. (Previously referenced 1977.) 5. Revise the definition of Federally Enforceable to indicate thatthe Division has authority to issue permits to synthetic minorsources. 6. Revise definition of Hazardous Air Pollutant. The new definition includes the pollutants listed underthe Federal and Colorado Acts.
7. Refers to Adverse Environmental Effect, therefore this definition is added. 8. Add definition ofOzone Depleting Compound. Thefee schedule requires the Division to charge fees for emissions ofsuch compounds, therefore the definition is added. I.E. I.K. Adopted June 22, 1993 Revisionsto Regulation Number3 Regarding Construction Permits 

### This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements ofthe Administrative Procedure Act, C.R.S. 1973, Section 24-4-103(4) for adopted or modified regulations.

The Colorado Clean AirAct requires stationary sources to report their emissions, obtain construction permits, and be subject to public notice before construction occurs. The Commission has authority to RegulationNumber 3 Adopted: October20, 2011 Page 245exempt sources from these requirements, ifthe sources do not have a significant adverse impacton air quality. Regulation Number3 has been in effectfor approximately twenty years, and contains exemption lists forAPEN and permit requirements. Based on twenty years ofexperience, the Commission believes it is appropriate atthis time to revise the exemption lists to include additional sources, which do not adversely affectair quality in Colorado. In addition, it is appropriate to revise the public notice requirements to address the sources forwhich is public comment is most likely to be received. The 1992 State Legislature revised the Colorado Clean AirActto include newprovisions concerning noncriteria pollutants. The Commission needs to address these provisions and revise the APEN reporting, permitting, and public notice requirements regarding these pollutants. A technical revision must be made to the definition of"significant," contained in the Common Provisions, to address major sources in nonattainmentareas, as required underthe Federal Act. SpecificAuthority The specific authority forthis regulation is contained in the Colorado Air Quality Control Act, 1992 as amended. The Legislative Declaration, Section 25-7-102, recognizes that an accurate emission inventory is needed in orderto adequately manage air resources in Colorado. Section 25-7-105 (1)(A)(1) requires the Commission to adopt into the State Implementation Plan all requirements ofthe federal act. Sections 25-7-105(1)(c), 203, 204, 205, 206, 210 and 301 provide authority to adopt a PSD and NSR program in conformance with the Federal and Colorado Acts. Section 25-7-105(12) provides authority to adopt regulations to implementthe emission notice and construction permit programs. Section 25-7-106 (1)(c) provides authority for adopting regulations, which are applicable to the entire state, oronly within specific areas orzones, oronly to a particular pollutant. Section 25-7-109.3 provides authority for regulating noncriteria pollutants. Section 25-7-111 provides authority forthe Division to administer regulations adopted by the Commission. Section 25-7-114.1 provides authority for requiring APENS, and for allowing exemptions from the requirement. Section 25-7-114.2 providesauthority for requiring construction permits, and for allowing exemptions from the requirement. Section 25-7-114.5 provides authority for requiring public notice ofconstruction permits. Commission action in promulgating these revisions is taken pursuantto Sections 25-7-105 to -109 and 25-7-114, C.R.S., as amended. Purpose Definition of "Significant" The Common Provisions Regulation contains definitionsthat are used in the Prevention of Significant Deterioration (PSD) and New Source Review (nonattainment, NSR) permit programs of Regulation Number 3. The PSD and NSR requirements and definitions must be equivalentto the Federal requirements. The definition ofsignificant lists emission levels atwhich modifications at majorsources become subjectto the PSD and NSR requirements. Currently, the language in the definition indicates that the emission levels only trigger PSD requirements. The definition is changed to indicate thatthe levels also apply to the NSR nonattainment rules. APEN Requirements

- General This language is revised to clarify what emission estimates must be included in an APEN (actual emissions for annual fee purposes, and requested amountfor permit limits). In addition, language is added to clarify that a source need not perform a stacktestforthe sole purpose ofproviding an APEN emission estimate. Otheracceptable estimation methods are usually available forAPEN purposes. In some instances, it is possible that an emission factor may supply a more accurate estimate than mass balance calculations, and vice versa. In such cases, a source may choose to use either mass balance, or emission calculations. Ifthe Division believes that estimates can be better made using the method of these two thatthe source does not choose, the Division may question that source regarding the choice. The emission estimate included in an APEN is notrequired to be an exactcalculation ofemissions, but RegulationNumber 3 Adopted: October20, 2011 Page 246rather the source's best estimate, tothe extent practical, ofemissions. As stated in the Legislative Declaration ofthe Colorado AirQuality Control Act, the APEN information is to be used to achieve the mostaccurate and complete inventory possible, and to provide for the mostaccurate enforcement program achievable based upon that inventory.
The Colorado Clean AirActstates thatAPENs are valid forfive years, unless a significant change in emissions occurs. This provision is added to the regulation. Language is added to clarify that each unit is considered to be a "source" forAPEN purposes, unless similar sources can be grouped together.
Emission calculations for purposes ofdetermining ifa de minimis emission level is triggered will be based on actual uncontrolled emissions. Sources will not be allowed to take creditforcontrol devices in the de minimis calculation because the Commission has no method ofdetermining ifthe control equipmentwill be used, or used continuously and properly. The Commission believes there may be cases where the source demonstratesthat it is notfeasible to estimate the control efficiency ofa devicefor non-criteria pollutants. In such instances, the Commission gives the Division discretion to allowthe de minimis level to be triggered based on actual, instead of uncontrolled actual, emissions. New language is added regarding non-criteria pollutantAPEN requirements. Revised APEN Requirements The Colorado Act requires revised APENs to be submitted whenever a "significant change" in emissions occurs. The significant levels for criteria pollutants remain unchanged from the previous regulation, exceptthat a significant level has been added for lead emissions. For non-criteria pollutants, the significant change level is set at 50% orfive (5) tons peryear, whichever is less. Sources should note thatAPENs must be submitted ifthe source begins to emita pollutantwhich was previously not included on an APEN. Also, the Commission may add pollutants to the list ofnon-criteria reportable pollutants. When chemicals are added, the Commission will determine the schedule for submitting newor revised APENs to report the new pollutant emissions. NOTE: Significant change criteria are used to report changes in emissions for inventory purposes only. If a planned change in emissions requires a new permit, or modification ofan existing permit (violates an emission limit, triggers PSD or NSR), then an APEN must be filed and the permit must be revised before the change atthe facility occurs. Revised APENs for emission updates must be submitted byApril 30 ofthefollowing year. The EPA requires states to update the emission inventory by July 1 ofeach year, to include the previous year's emissions (Code of Federal Regulations, 40 CFR 51.321). The Commission believes the April 30 date should give sources enough time to compile their inventory, and will also give the Division enough time to update the system by July 1. Sources should plan ahead and have as much oftheir inventory completed as possible before the end ofthe year. In this way, the source would then only need to add December, or atworst information for the last couple ofmonths ofthe year, to the data in orderto meetthe April 30 deadline. Revised APENs are required when a change in the type ofcontrol equipment being used is made. This allows the Commission to ensure that the new control equipmentwill meetthe applicable requirements, and to verify that actual emissions have decreased or increased due to the use ofthe newequipment. Oftentimes, stack tests are required to ensure that control equipment meets applicable requirements. A change in the control equipment can affectthis compliance determination. Revised APENs will not be required for routine maintenance, repair and replacements. These routine activities should notaffect the effectiveness ofthe equipment. RegulationNumber3 Adopted: October 20,2011 Page 247Permit applications must include an APEN on which the owneroroperator indicateswhat production or emission level the source wishes to be permitted at. Any desire to increase the permitted emission level requires the submittal ofa revised APEN, so that the Division can evaluate the change againstthe regulations before modifying the permit. Portable Facilities Revised APENs are no longer required when a portable source changes location. The Commission does not believe it is reasonable to charge the APEN filing fee each time a source moves. Portable sources will still be required to notify the Division at leastten (10) days before relocating. This allowsthe Division to be aware ofa source's location ifany concerns regarding the source are raised by the public. Emergency and Backup Generators Electric utilities may use emergency or backup generatorsto ensure that blackouts do notoccur in the electrical grid. These units are usually operated instead of, orfor short periods in addition to, main utility boilers. Facilities that include the main boilers are usually major sources, and therefore have a major source construction permit, orwill in the future have a major source-operating permit. Once the facility is covered underone ofthese permits, the Commission sees no need forthe owneroroperatorto submit annual updates regarding the emissions from the emergency units. Otheremergency units are not located atthe main unitfacility, but are located individually in the field. These unitswill most likely obtain a synthetic minor permitto avoid major source permit requirements, since operation is usually intermittent. Once such sources obtain a synthetic minor permit, the Commission again will not require the source to submit annual emission updates. APEN Requirements

- Non-Criteria Pollutants There are 363 non-criteria reportable pollutants. The Commission divided the pollutants in two major groups: those thatare required to be reported in 1993, and those that have to be reported in 1994 and subsequent years. There are also two groups ofchemicals (Radionuclides and Polycyclic Organic Matter) whose reporting requirements were postponed until such time as the Commission determines that they can be accurately quantified and reported. APEN Requirements

- De Minimis Levels
All de minimis levels are based on uncontrolled actual emissions (exceptwhere the control efficiency cannot be estimated), as discussed above under General APEN Requirements. APENs are required ofsources in attainmentareas when the emissions ofany criteria pollutantfrom a source exceed two tons per year (exceptfor lead). Sources in nonattainmentareas mustfile when emissions ofany criteria pollutant exceed one ton per year. Note thatthe pollutant being emitted above the de minimis level does not have to be a nonattainment pollutant. Any pollutanttriggers the one-ton peryear level, regardless ofthe pollutant's attainment designation. Because the area is a growth area, and inversions occur in the area, a Grand Junction group requested that APENs be filed when emissions ofany criteria pollutant exceed one ton peryear. The Commission determined that hearings should be held in the Grand Junction area, and that Grand Junction should pursue their own rules. Language thatwould have treated Pueblo likewise is not included, dueto requests from industries in Pueblo, and the Pueblo County Health Department. The de minimis level for lead in all areas is 100 pounds peryear.

RegulationNumber 3 Adopted: October20, 2011 Page 248For non-criteria pollutants, the Commission assigned each pollutantto one ofthree "bins" based on information concerning the health effects ofthe pollutant. The Commission also developed a series of three scenarios foran emission point based on the release height ofthe pollutant and the distance from the release point to the property boundary. The resulting three by three grid as well as instructions on howto apply it can be found in Appendix

### A. Note that future actions by EPA may effectthe de minimis reporting levels for certain chemicals that appear on the EPA fist of 189 toxic chemicals. APEN Requirements

- Exemption List
Numerous new source categories have been added to the APEN exemption fist. Each category was examined for its impacton airquality in Colorado before being added to the fist. Each category thatwas added is believed to have a negligible impact on airquality.
The source category exemptions override the de minimis levels. Sources thatfit into the category are exempt, even ifemissions exceed the de minimis levels. Each category will not be addressed individually in this statement, howeverthe following categories deserve specific comment. Fires and equipment used for cooking offood for human consumption: Not all cooking equipment has been exempted in this category. The Commission has concerns regarding equipment in which grease from the food being cooked comes into contactwith the flame ofthe equipment, thus leading to potential opacity and particulate matter problems. This is especially ofconcern in PM-10 nonattainmentareas. This exemption applies only to noncommercial cooking and to food service establishments, such as restaurants and cafeterias. The exemption does not apply to manufacturing facilities. Fuel burning equipment: The design rate cutoffforfuel burning equipment has been raised from 750,000 BTU/hourto 5 MMBTU/hour. The fuel use is still restricted to gas, and does not include oil orcoal, since the fatter two fuels may result in significant sulfur dioxide emissions. Fuel burning equipment which uses gaseous fuel and which is used solely for building heat is exempt ifthe design rate is below 10 MMBTU/hour. The Commission has determined that the emissions from the exempted unit, based on EPAAP-42 emission factors, are negligible. Chemical storage areas where chemicals are stored in closed containers

...: This exemption only applies to the storage ofchemicals atqualifying facilities. The exemption does not include facilities where chemicals are loaded into oroutof, ortransferred between, storage containers. Bulk storagetanks would not qualify forthis exemption, since often the material is loaded and unloaded, and such tanks have vents from which emissions occurdueto breathing losses. See Sections ff.D.1.n., ee., uu., ddd. and fff. for storage tank exemptions. The Commission will require APENs onlyfor pollutants that are defined as "criteria" pollutants or "reportable non-criteria" pollutants (HAPs, CFCs, SARA313). Any other pollutants such as carbon dioxide, methane, nitrogen, oxygen, do not require APEN submittals. Aerosol Can Usage: There may be instances where a source mayexclusively use farge amounts of aerosol cans, or may use farge amounts in addition to other processes. The Commission expects that these instances will be rare. Ifthe Division, a focal agency, or others discoversuch a source, and ifthe source emits amounts ofpollutants, which are believed notto be negligible, such concern can be brought before the Commission as a request to require such source to fife APENs and/orobtain a permit. (See discussion under "Adding and Deleting Exemptions," below) Odorous emission sources: This exemption only applies to odoremissions, and notto any other emissions ofcriteria or non-criteria pollutants, which may be associated with the odor. This exemption does not absolve anysource from the requirements of Regulation Number2 (regarding odor limits)

. 

### .!.f..g

RegulationNumber3 Adopted: October20, 2011 Page 249source emits any pollutantthat is above an APEN de minimis level, the source mustfile an APEN, regardless ofodor. Portable 5 mm btu/hour engines: One party requested thatthese sources be exemptfrom APEN and permit requirements. The Commission has determined thatsufficient evidence is notavailable to indicate that emissions from these sources have a negligible impacton airquality in Colorado, therefore they are not exempt until such evidence is forthcoming. Laboratory equipmentand pilot plants: The subcommittee for these rule revisions held extensive discussions regarding exemptions for laboratory equipmentand pilot plantactivities. More work is needed to define these activities, determine ifthe emissions are negligible, and ifsuch activities should be exemptfrom APENS, permits, or both. The Commission recommends that subcommittee discussion ofthis issue continue, and that it be addressed when Regulation Number 3 is revised to include theTitle V operating permit rules (currently**~cheduled** to occur in July of 1993). Adding and Deleting Exemptions The Commission has delegated authority to the Division for adding source categories and activities to the APEN and permit exemption lists. Ifany person believes that a source category oractivity should be removed from the exemption lists, because it is discovered that emissions have an impacton airquality or health that is not negligible, such person may at any time go before the Commission to requestthat such source category oractivity be required to file APENs and/or obtain permits. Oil and Gas Exploration Activities Oil and gas exploration activities are activities forwhich it is difficultfor the owneroroperatorto estimate what emission equipment

# will be required, and therefore whatemissionswill occur, until the exploration activities are already underway, and nearcompletion. Forthis reason, the Commission has extended a temporary exemption from APEN and permit requirements for such activities. Before commencing exploration activities, the source must notify the Division. In this way, the Division is aware ofthe activities and will be able to address any concerns that are raised by the public. Once an owneror operator has determined that an oil orgas well will be produced, and has filed well completion information, the owneroroperator mustfile an APEN and a permitapplication within 30 days ofthat completion filing. The permit application must indicate what regulations are applicable to the source, and how compliance will occur, until the construction permit is issued. This helps the source and the Division to ensure that air pollution regulations are being met. Ifthe well will not be produced, the source must notify the Division so thatthe Division does not expend resources following up on unproduced wells. APEN Reporting Deferrals for Source Categories Due to ongoing studies aimed atquantifying their emissions of non-criteria pollutants, the Commission has deferred APEN reporting requirements for five source categories until six (6) months afterthe studies have been completed or December 31, 1994, whichever is earlier. The categories are industrial boilers, municipal wastewatertreatment plants, publicly owned watertreatment plants, municipal power generators of less than ten (10) megawatts, which operate for250 hours or less peryear, and natural gas glycol dehydration units. The EPA is conducting studies regarding the firstfour categories. The oil and gas industry is conducting studiesto quantify emissions from dehydration units. This study is currently underway and is expected to be completed in the nearfuture. In addition, sources which are not undergoing study, butwhich believe sufficient information is not available for estimating their non-criteria pollutant emissions, may petition the Division for deferral of those emissions until sufficient information is available. HAP Permit Requirements

RegulationNumber.3 Adopted: October 20, 2011 Page 250Ofthe 363 non-criteria pollutants/compounds, 330 are defined as hazardous air pollutants (HAPs). Sources emitting HAPs are required to obtain permits ifthey are subjectto Colorado MACTorGACT or the Federal Title Ill orTitle V provisions. Synthetic Minor HAP Sources Some parties to the hearing requested that sources which emit HAPs be allowed to avoid future Maximum Achievable Control Technology (MACT) and operating permit requirements by obtaining "synthetic minor'' permits. These permits would contain federally enforceable limits, which would keep emissions belowthe levels, which triggerthe MACTand operating permit requirements. The Colorado Act appears to restrict synthetic minor permits to criteria pollutants only. The subcommittee recommended thatthis issue be deferred to the HAP subcommittee, which will meet in the nearfuture to address Colorado MACTand other HAP issues. Synthetic minor permits for HAP sources are therefore not addressed in this revision. PermitTransfer ofOwnership The party to which a permit is issued, whose name is included on the permit, is legally responsible for ensuring that all conditions and terms in the permit are met. The permit mustcontain the correct legal name, reflecting the correct responsible party, in case an enforcement action needsto be taken. In some cases, the legal name ofa company may change, while no modifications are madeto the equipment. In such cases, the source need only file a single APEN indicating the change. In all cases, the Division must have on file an application and APEN form with the correct name ofthe responsible party, and including the signature ofthe person legally responsible for the information. Permit Requirements

- De Minimis Levels Permit de minimis levels for criteria pollutants have been increased. Levels differ based on the attainment status ofthe area. As forthe APEN de minimis levels, the nonattainment area levels are triggered by any pollutant, notjustthe nonattainment pollutants. Language, which would have set permit levels for the Grand Junction area lowerthan the levels for attainment areas, was not adopted. See discussion above underAPEN de minimis levels. Emissions are compared against the de minimis levels by adding emissions from all sources at the facility that are required to file and APEN. In some cases, a source may initially be belowthe de minimis levels, but as new units are added to the facility, the de minimis level is eventually exceeded. At such time that addition ofnew units causes the permit de minimis level to be exceeded, the source mustfile a permit application for all units atthe facility. Permit de minimis levelsforsources of HAPs will be set atthe time thatthe MACTor GACTfor that source category is determined. Permit Requirements

- Exemption List A few new source categories have been added to the permit exemption list. As forAPENs, the source category exemptions override the de minimis levels. Domesticwastewatertreatmentworks: This exemption applies only to treatment facilities which handle wastewater strictly from domestic homes, orwastewaterthat is similar in nature. It does not include facilities that treat wastewaterfrom municipalities orothersources. The facility may be publicly or privately owned. Wastewaterotherthan domesticwastewater, including municipal wastewater, may contain contaminants from industry and othersources which would result in emissions which are much more significantthan the emissions from domesticwastewater.

RegulationNumber3 Adopted: October20, 2011 Page 251Fuel burning equipment: Fuel burning equipmentwith a design rate less than 10 MMBTU/hour, using natural gas as a fuel, are exemptfrom permit requirements because this is the rate atwhich the New Source Performance Standard for small boilers is applicable (Regulation Number6). Surface Mining Activities: 70,000 tons peryear is the production rate atwhich the Mine Land Reclamation Bureau exempts mining operations from MLRB permit requirements. Oftentimes, these small operations are only temporary, in orderto provide material for highway construction projects. The source has often ceased operation before an Air Pollution Control inspectorcan visitthe source to determine compliance. Crushers, screens and other processing equipmentare notexempt because these activities may be subjectto specific air quality emission limit regulations. Applicable Requirements Override APEN and Permit Exemptions To ensure that sources comply with all applicable air quality regulations, an APEN or permit exemption may not be used iftaking the exemption would allow a source to avoid any airquality regulation requirements. This provision applies to the source category exemptions and to the de minimis level exemptions. For example, a source may notclaim that it is exemptfrom permit requirements because it has numerous sources, which are below a de minimis level, ifthe potential emissions from those sources would exceed the PSD majorsource limit of 100 or250 tons peryear. In such a case, the sourcewould be required to apply for a PSD permit, or mustobtain a permitto limit its potential to emit. In orderto limit potential to emit, the permit mustcontain federally enforceable conditions, which limitthe physical or operational capacity ofthe source so that emissions are belowthe 100 or250 ton peryear level. Sources, which are subject only to the opacity orgeneral fuel burning and manufacturing requirements of Regulation Number 1, maytake any applicable exemption. Likewise, sources, which are subjectto the general RACT requirements (but notthe specific RACT requirements) of Regulation Number7, and sources, which are subjectto the current Regulation Number 8 provisions, may take any applicable exemptions (i.e., they are exempt iftheir emissions are below de minimis levels). RACT for sources that would qualify for the APEN exemptions is usually "no control." Similarly, sources which are subject only to Regulation Number 1 opacity, general fuel burning, and general manufacturing requirements are exemptfrom permit requirements. Sourceswhich are subjectto Regulation 7, butwhich mustadoptonlywork practice standards, are exemptfrom permit requirements if their emissions fall below the de minimis level (two tons peryear ofVOC). Sources, which are subjectto State-only requirements of Regulation Number 8, are exemptfrom permit requirements. Regulation Number 1, 7 and 8 sources, which takeAPEN or permit exemptions muststill meetthe regulation requirements, even though an APEN or permit is not required. The provisions thatwould apply to these sources are straightforward and can therefore be easily enforced by the Commission through the regulation, without requiring a permit. Public Notice Requirements The criteria pollutant emission level atwhich a source in an attainment area mustgo to public notice has been increased from 25 to 50 tons peryear (exceptfor lead). In nonattainmentareas, the level remains at25 tons peryear. Lead sources are required to go to public notice when the emissions exceed 200 pounds per year. The Commission has determined that raising these levelswill not impactthe numberof public comments the Division receives. Any source requiring a permitfor HAPs is required to go to public notice. Note that Section I IV.C.3 provides thatthe Division may require any source to be subjectto public comment, ifit is determined that such source warrants public comment. The EPA requires that all sources subjectto PSD or NSR go to public comment. In addition, in orderto make limits on potential to emitfederally enforceable, permits containing such limits must go to public notice. Atthis time, the Commission will use this Section to ensure the EPA requirements are met. Language will be added to RegulationNumber3 Adopted: October 20,2011 Page 252clarify these requirements when the next revision to Regulation Number3 occurs (currently scheduled to occur in July of 1993). 

### I.L. Adopted July 15, 1993 Revisions to Regulation Number3
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements ofthe Administrative Procedure Act, C.R.S. 1973, Section 24-4-103(4) foradopted or modified regulations.

The 1990Amendments to the Federal Clean AirAct requires states to implementan operating permit program. This program is applicable to certain sources, and requires the sources to obtain detailed permits, which are to be renewed every five years. Failure ofa state to implement an operating permit program will result in EPAsanctions, such as loss of highwayfunds and increased offset requirements for sourceswishing to locate in Colorado nonattainment areas. In addition, the EPA may implementthe operating permit program ifa state fails to implementa program. The existing construction permit program will continue to exist, however changes have been madeto the program so thatthe two permit programs (construction and operating) compliment each other. SpecificAuthority The specific authorityforthis regulation is contained in the Colorado AirQuality Control Act, 1992 as amended. Section 25-7-105(1)(A)(I) requires the Commission to adopt into the State Implementation Plan all requirements ofthe federal act. Sections 25-7-105(12) provide authority to implementthe operating permit provisions ofTitle V ofthe Federal Act. Section 25-7-105.1 sets forth federal enforceability provisions. Section 25-7-106(6) provides authority for monitoring, recordkeeping and reporting requirements, Section 25-7- 109.3 provides authority for regulating hazardous air pollutants (HAPs). Section 25-7-111 provides authority forthe Division to administer regulations adopted by the Commission. Section 25-7-114.1 provides authority for requiring APENS, and for allowing exemptions from the requirement. Sections 25-7-114.2 through 114.5 setforth construction and operating permit requirements, and application and public participation requirements. Commission action in promulgating these revisions is taken pursuantto Sections 25-7-105 to -109 and 25-7-114, C.R.S., as amended. Purpose NOTE: Subcommittee documents, which discuss the issues and decisions regarding this regulation in detail, and provide fact sheets forvarious provisions, are available atthe Division and Commission offices. I. Operating Permit Program: 

### A Who is subjectto the Operating Permit Program?

Regulation Number3 Adopted: October20,2011 1. Definition ofAir Pollutant Sources with potential to emit* 100 tons peryearofany air pollutant must obtain an operating permit (these sources are referred to as 'majorsources"). For purposes ofthe operating permit program, air pollutant means any pollutant for which an ambientair quality standard has been set (and their precursors), any pollutantwhich is regulated underthe New Source Performance Standard

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## ' f fregulations (NSPS, Regulation Number6), any Class I orClass II ozone depleting compound, and any hazardous air pollutant (all HAPs listed in either the Federal or Colorado Acts). The Commission has determined that it is not appropriate to use the Colorado Actdefinition ofair pollutantfor operating permit purposes. The Actdefines air pollutant as being any substance emitted to the ambientair, exceptforwater vapor. Since many substances occur naturally in ambient air, and others will never be subjectto any air regulations, operating permits are not needed for emissions ofsuch pollutants. Major sources ofany air pollutant as defined for operating permit purposes must obtain an operating permit, even if no specific standard has been setforthe particular air pollutant (see further discussion under "regulated pollutant," below).
2. Major HAP Sources Sources, which have potential to emit 10tons per year or more ofa single HAP or25 tons peryear or more ofa combination of HAPs, are considered" major sources," and mustobtain an operating permit, even if no standard forthe HAP has yet been set. Major sources ofColorado HAPs mustobtain an operating permit. Permit conditions related to Colorado HAPswill be treated as state only conditions (see further discussion below). *See definition of potential to emit, Part A ofthis regulation. Potential emissions are calculated assuming the source operates continuously, atfull design rate, using no pollution control equipment. See additional information and details in subcommittee papers (Group D, Synthetic Minors Issue Paperand Fact Sheet).

RegulationNumber 3 Adopted: October20, 2011 3. Fugitive Emissions Fugitive emissions must be included when determining ifa source is majorfor HAPS. Fugitive emissions must be included when using the 100-ton peryear threshold (to determine ifthe source is major) ifthe source is listed, or ifthe source and pollutant is subjectto any NSPS orTitle Ill regulation. Fugitive emissions must be included as required forthe Prevention ofSignificant Deterioration (PSD) and nonattainment new source review (NSR) programs. The Commission has not included language,·which exempts fugitive dust sources from the majorsource definitions atthis time. Further investigation is occurring regarding HAP emissions from such sources, and discussions with EPAwill continue to determine how to treatsuch sources. Oncethese activities are completed, the Commission will considerthis issue.
4. Applicability Determinations Sources are ultimately responsible for determining ifthey are subjectto operating permit requirements. The Small Business Assistance Program is available to assist small businesses in understanding the requirements, in determining applicability, and in complying with the requirements. No "applicability determinations" are available for othersources. The Division must recoverthe cost of implementing the operating permit program. Time spent reviewing informal requests for applicability determinations would not be recovered.

Page 254RegulationNumber 3 

### Sources who believe they are subjectto the operating permit program should file an application. During the sixty-day completeness determination, ifthe Division discovers thatthe source is notsubjectto the operating permit requirements, the source will be notified. In addition, ifthe source has obtained a construction permit, itwill most likely have been determined then ifan operating permit is required. Also, preapplication meetings with the Division are available to sources. All time spent by the Division in reviewing applications will be charged to the source. 5. Synthetic Minor Sources Existing sources are subjectto the operating permit requirements. Some existing sources maywantto obtain federally enforceable limits on their production rates or hours ofoperation, oremission limits in orderto avoid the operating permit requirements (known as synthetic minorsources because such limits are needed to makethem minor). Construction permits can be obtained to keep emissions belowthe majorsource thresholds. Some existing sources do not have construction permits. Others may have construction permits, which do not currently limitemissions belowthe majorsource thresholds. Sources may avoid the operating permit requirements by obtaining an emission-limiting construction permit before they are required to applyforoperating permits. Sources must obtain a synthetic minorconstruction permit before the November 1994 due date, or before one year after EPA program approval, whichever applies (see discussion below). Ifa synthetic minor permit is notobtained before the applicable date, an operating permitapplication must be submitted. The Division will review all existing construction permits overa period oftime as resources allow, to determine ifthe existing permits arefederally enforceable. In the interim, the Division will assume that all previously issued construction permits are federally enforceable. Newsources may likewise obtain synthetic minorconstruction permits before they construct in orderto avoid the operating permit requirements. All synthetic minor permits must go to public notice in orderto be federally enforceable (see discussion below). "Once in always in" does notapply to the operating permit program (however it does apply to the PSD program). Ifa majorsource has an operating permit and reduces its emissions below majorsource levels, the source mayapply for a synthetic minor permit in orderto cease being subjectto operating permit requirements. 6. Minor Source Exemption The EPAallows states to give minor sources subjectto existing New Source Performance Standards (NSPS) a five-yeardeferral from the operating permit requirements. Within five years ofthe approval ofany State program, the EPA will determine ifthe deferral should be extended further, or ifsome orall minor sources should be permanently exemptfrom operating permit requirements. If the EPA first approves any State program in Novemberof 1994, this means that minorsources may be exempt until Novemberof 1999. The EPAwill decide if minor sources subject to new MACTor GACT (Maximum orGenerallyAvailable Control Technology) standards and NSPS should be exempton a case-by-case basis as the new rules are promulgated.

Adopted: October20, 2011 Page 255

### The Commission has exempted existing minor NSPS sources from the operating permit program atthis time. New NSPS and MACT standards will be adopted by the Commission as EPA promulgates them, and atsuch time, the Commission shall determine operating permit applicability.
7. Voluntary Operating Permits Any source which is not required to obtain an operating permit (minor sources) can request an operating permit, ifdesired. An operating permit allows minor sources to obtain the operational flexibility and permitshield provisions allowed in the operating permit program (note, however, that mostofthe operational flexibility provisions are available underthe construction permit program, see discussion underconstruction permit program Section). The operating permitwill replace the source's construction permit. A construction permit is a SIP requirement, and conditions in the construction permit are federally enforceable (exceptfor state only conditions). All conditions in the operating permit must therefore be federally enforceable. Operating permits, which are issued to sourcesvoluntarily applying, will be subjectto all ofthe operating permit procedural requirements (public notice, EPA review, etc.). B. When is operating permit applications due?

RegulationNumber 3 Adopted: October20, 2011 

### 1. Existing Sources The federal actallows states to phase in processing ofexisting source applications overa three-year period. One third ofthe applications must be acted upon within each year after EPA approves the state's program. The program will be submitted to the EPA by November 15, 1993. The EPA has one yearto approve the program, therefore the Division must begin processing applications beginning November 15, 1994. The Commission has directed the Division to divide the existing sources into thirds. One third ofthe existing sources must submittheir operating permit applications by November 15, 1994. The Division will use the newAPEN information to identify the first third, and will notify the firstthird by November 15, 1993. The first third will consist ofthe leastcomplex sources. The least complex sources should find it easierto prepare their operating permit applications, and the Division should find it easierto process these applications first. The Division will be able to identify any problemswith the review procedures, etc. during the first year. NOTE: The Division cannot issue an operating permit until the EPA has approved the program and is thus ready to begin receiving permits for review. The Division will therefore "hold" applications processed during the first year until the EPA is ready to acceptthem for review. Once EPA has reviewed and approved the permits, the permits can be issued. The remaining existing source applicationswill be due one year afterthe EPA approves the state's program. The Division will provide notice ofthe EPA approval date and sources are responsible for submitting their applications on time. The Division must determine ifeach application is complete within 60 days of receipt. This may not be possible during the three-year phase in, as many applications will be received atonce. The Division will make its best effortto

Page 256Regulation Number3 Adopted: October20, 2011 make the completeness determination for all permits within 60 days. Ifthe Division fails to do this, the application shield applies, and the Division cannot enforce againstthe source forfailure to have a complete application on file

.. The Federal rule provides, however, that the Division has the authority to askfor additional information atanytime during the process, and to set a reasonable date by which the information must be submitted. Ifthe source fails to submitthe additional information by the due date, the application shield no longerapplies. The Commission is confidentthat underthese provisions sources and the Division can effectivelyworktogetherto ensure that applications are processed in a timely fashion.
2. NewSources and Relationship to the Construction Permit Program Newsources thatwish to locate in Colorado must obtain a construction permit, or a combined construction/operating permit before commencing construction. The source may choose to obtain a construction permit ora combined permit. Sources that choose to obtain a construction permit must apply for a construction permit according to the provisions of Part 8 ofthis regulation. Once a construction permit is obtained, the source can commence construction and begin operating. Within 180 days ofcommencing operation the source must undergo a "final approval" inspection to demonstrate that all permit conditions are being met. Within 12 months ofcommencing operation, the source mustapply for its operating permit. Once a complete operating permit application is submitted, the source can continue to operate under its construction permit until it receives its operating permit. Sources that choose to obtain a combined construction/operating permit must apply for such permit before commencing construction. The application for a combined permit must contain all ofthe required information for an operating permit. The Division will issue the permit, which will essentially be an operating permit. The source can then commence construction and operation. Within 180 days ofcommencing operation, the source must demonstrate compliance with all permit conditions (this 180 day requirement will be a permit condition, and the appropriate hourly processing fee will be charged forthe associated inspection). The source continues to operate under its operating permit and no further action is required until permit renewal. The procedures for obtaining construction permits are not as intense as those required to obtain an operating permit. More extensive public and EPA participation is required in the operating permit process. In addition, more information and requirements must be incorporated into an operating permitthan into a construction permit. Nevertheless, it may be advantageous for sources to combine the processing ofthese two types of permits in orderto avoid duplication ofeffort. The advantage ofa combined permit is that an additional application step is avoided. Sources should note, however, that an operating permitapplication requires more specific information regarding compliance monitoring, recordkeeping, etc., than a construction permit application. Sources that choose to obtain an operating permit before construction must be able to supply all ofthe required information fora complete operating permitapplication. Sources that choose to obtain an operating permit before construction will be subjectto the operating permit timeframes for processing instead ofthe shorter

Page 257construction permittimeframes. Construction permitapplications can take up to 90, 135, or 365 days, depending on type and size ofsource. Operating permit applications can take up to 540 days. Construction permits require public notice and opportunity for comment only for sources emitting morethan 25 or50 tons/year ofany criteria pollutant, and requires opportunity for public hearing for Prevention ofSignificant Deterioration (PSD) sources only. The operating permit program requires public notice and opportunity for hearing for all sources. Ifthe programs are notcombined, a source may have to undergo public notice twice, once under each process. PSD sources may have to undergo public hearings twice. The EPAonly reviews certain applications and draft permits underthe construction permit program, and usually does so during the public comment period. The EPA is allowed 45 daysto review draftoperating permits nearthe end ofthe process, and then the Division has 90 daysto revise the permit, if necessary. Sources should consider carefully their confidence in their ability to operate as expected or planned after construction before choosing to obtain a combined permit. 3. Application Shield Once a source has submitted a complete operating permit application the source is protected from enforcement action for operating without an operating permit, and can continue to operate until the operating permit is issued. Sources that submitan application for a combined permit may notconstructthe source until they receive their combined permit. C. What must be addressed in operating permitapplications and permits?

RegulationNumber 3 Adopted: October20,2011 1. Configuration and Grouping ofSources Total emissions at an entire site (including fugitive emissions at listed and HAP sources) must be considered to determine ifa source is subjectto the operating permit requirements. Once a source is subject, however, the owneroroperator may choose how many operating permits to obtain forthe source. A single permit may be issued for the entire source, or individual permits may be issued for individual units, buildings, processes, etc. For example, research and developmentactivities may be permitted separately from the rest ofa facility, in orderto take full advantage ofthe operational flexibility provisions for constantly changing research and developmentactivities. In addition, portions ofa source could be covered undergeneral permits. See discussions below under operational flexibility and general permits. The configuration for operating permits may, but is not required to, conform to the way in which a source chooses to file APENS. For example, a source mayfile separate APENs for all ofthe units at its facility, buta single operating permitcan be obtained. Similarly, a source may file grouped APENs for similar units at its facility, and the operating permitcould contain a general statementthatthe types of units exist atthe facility, and could then state whatthe applicable requirement and associated monitoring, recordkeeping and reporting requirements are forthat group ofsources. The permit does not haveto listthe requirements separately, and the monitoring, recordkeeping and reporting requirements can be tailored to meetthe needs ofthe source and the Division forthatgroup ofsources. SPECIFIC EXAMPLE: Numerous degreasers are located throughout a facility,

Page 258RegulationNumber 3 Adopted: October 20,2011 which is located in the ozone nonattainmentarea (metro-Denver). A grouped APEN is filed for all ofthe degreasers. Since Regulation Number7 applies to the degreasers, they must be addressed in the operating permit. The operating permit choices are: 1) obtain an operating permitfor the degreasers only, separate from the rest ofthe facility; 2) obtain a single permitfor the whole facility, and include a general statement/applicable requirement condition as described above for the degreasers; 3) obtain morethan one operating permitfor the facility, placing the degreasers in whatever permit(s) the owneroroperator chooses. The Commission believes substantial flexibility is available for issuing operating permits thatthe source can mostefficiently deal with, while still meeting the Clean AirAct requirements.
2. "Regulated Pollutants" Once subjectto operating permit requirements, a majorsource must include all applicable requirements and emission units in their application and must address each "regulated pollutant" associated with the source (except for insignificant activities, see below). The definition of regulated pollutant is to be used strictly fordetermining what must be addressed in an operating permit once a source is required to obtain the permit. The definition of regulated pollutant has nothing to dowith the definition ofmajorsource. (See discussion above, regarding the definition ofair pollutant). Pollutants to be addressed in the application include each pollutantforwhich an ambient standard has been set (and precursors to such standards, such as volatile organic compounds), ozone depleting chemicals (CFCs), any pollutant subjectto a standard under regulation Number6, and any pollutantsubject to a standard underthe HAPs requirements (including Colorado HAPs). "Regulated HAPs" Note that a HAP must be subjectto a standard before the applicant is required to address it in the permit application. Oncethe EPA adopts a MACTstandard for a particular HAP, all sources, even those notsubjecttothe particular MACT standard, and even those not in the source category, must address that HAP in applications. In cases where the Commission or Division determines MACTon a case-by-case basis because the EPA has not, the HAP becomes regulated only for the particular source subjectto the case-by-case standard. Once the EPA promulgatesthe listof 112(r) (accidental release) pollutants, those pollutants will be considered to be "regulated" for all sources. Fees The definition of regulated pollutant contained in PartA ofthis regulation is not used forfee purposes. The Colorado Act specifically sets forth which pollutants are to be assessed fees, and the fee pollutants are setforth in Section VI of Part 

### A A pollutant does not need to be subject to a standard before the Commission can assess fees. 3. InsignificantActivities Once subjectto operating permit requirements, a majorsource must include all applicable requirements and emission units in their application and mustaddress each "regulated pollutant" associated with the source except for activities, which

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### f. [ i iRegulationNumber 3 Adopted: October20, 2011 the Commission has determined are "insignificant." This regulation setsforth to what extent each activity or piece ofequipmentata facility needs to be fully described and included in an operating permit. The Commission hastailored the insignificant listafterthe Air Pollution Emission Notice (APEN) and construction permit exemptions, to promote consistency and reduce confusion. The lists are repeated in Part C ofthe regulation, for convenience. The activities and sources listed in the APEN and construction permit exemption Sections are considered to be insignificantactivities, with two exceptions. The lowerAPEN emission de minimis levels are used instead ofthe higherconstruction permit de minimis levels for insignificantactivity purposes. Since the permit de minimis levels apply to the facility, the Commission does not believe it is appropriate to use the permit levels. The APEN 5 MMBTU per hour boiler design rate is controlling, rather than the higher 10 MMBTU per hour permit boiler exemption. All boilerswith design rates greaterthan 5 MMBTU per hour must be addressed in the application and operating permit. Exemptions based on emissions, size or production rate muststill be listed in the permit. Enough information must be submitted in the application justto identify the equipmentas qualifying for an exemption. An asterisk appears nextto each activity listed in Part C, which must be listed in the application. Applications do not have to list activities that are exempted based on category. Applications cannot omit information needed to determine the applicability of, or to impose any applicable requirements on a source. In addition, the exemptions cannot interferewith fee determinations. Since the mechanism used to assess fees is the APEN and not operating permits, this should not pose a problem for purposes of insignificantactivities. The Commission has added APEN exemptions for research and development and laboratory activities. The exemptions apply to small research and developmentfacilities, and to lab activities thatthe Commission has determined have a negligible impacton air quality in Colorado. Owners and operators of research and developmentfacilities that are subjectto APEN reporting are expected to report emissions from samples received from clients for evaluation, but only to the extent, the information is available. The Commission believes that facilities that accept material for evaluation should have some responsibility and knowledge regarding what is being accepted. Research and developmentfacilities may continually change the types of projects under investigation, therefore the control efficiency ofequipment may notalways be known. The Commission has determined that research and developmentfacilities may baseAPEN reporting thresholds on actual instead of uncontrolled actual emissions. In addition, since owners and operators ofsuch facilities do not always know in advance what projectswill be undertaken, the Commission has allowed such sources to report emissions after the fact, in annual APEN updates to the inventory. Research and development activities are prime candidates for the types of operational flexibility allowed in this regulation (see discussion below). The Commission encourages research and developmentactivities to use the operational flexibility provisions.

Page 260RegulationNumber 3 Adopted: October20,2011 

### Some ofthe activities were described in the Statement of Basis and Purpose for the Commission's May 1993 Regulation Number3 hearing. Parties to this hearing have asked for clarification regarding some ofthe provisions. The emission levels fortriggering APEN reporting requirements are based on uncontrolled actual emissions. The Commission recognizes that in some cases, "uncontrolled" emissions are not easily defined. For example, the uncontrolled emissions from a degreaser may be subject to interpretation. The emissions from this type ofoperation depend on howoften it is used and howfast objects are cleaned in the unit. Uncontrolled emissions could possibly mean that a person is standing at the degreaser using the machine continually, and as rapidly as is humanly possible. The Commission recognizes that calculation of emissions forthis and similar operations involves somejudgment, and will take into consideration reasonable assumptions used in determining uncontrolled emissions. The exemption for land development (less than 25 acres in size and 6 months in duration) applies to all land clearing activities, such as preparation ofland for housing development, or preparation ofland for oil and gas activities to occur. As stated above, insignificantactivity exemptions cannot be used ifit, would result in an applicable requirements being avoided. The EPA requires all applicable requirements to be addressed in operating permits. Similarly, APEN and construction permit exemptions cannot be taken ifan applicable requirement would be avoided. The Commission has given certain sources an exemption from the applicable requirement provisions, forAPEN and construction permit purposes. Forexample, a source that is subjectto Regulation Number 7, but not to a specific source category requirement of regulation Number7 (i.e. the source is subject only to a case bycase RACT determination), may take the APEN exemption based on the 1ton per year de minimis level. The Commission has determined that RACTfor such small sources is usually no control. For construction permits, a source maytake an exemption ifit is subject solely to a work practice standard of Regulation Number 7. For example, degreasers used in the ozone nonattainment area (metro-Denver) are subjectto a specific Section of Regulation Number7, which requires covers and properoperation. Degreasers in the nonattainment area are subject to a specific Section ofthe regulation, therefore they mustfile APENs, howeversince the Section only requires work practice standards, no permit is required ifthe emissions are below the permit de minimis levels. It should be noted that since an applicable requirement exists, the degreaserand associated work practices must be addressed in the operating permit. Degreasers in the rest ofthe State are exemptfrom APEN and permit requirements ifthey are belowthe de minimis levels. Note thatthe EPA is required to set Maximum Achievable Control Technology (MACT) limits for degreasers in 1994. When the Commission adopts the MACT standardsfor degreasers, all degreasers subjectto the MACT standard will be required to file APENs and obtain permits. 4. Inapplicability Determinations Operating permits must list all applicable requirements and must state how continuous compliance with the requirements will be demonstrated. The source is provided with protection from enforcement as long as each permit condition and compliance requirement is met (known as the permit shield). The source may wish to obtain enforcement protection for regulations, which do notapply. In such cases, the application must identifywhich regulations do notapply to the

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# I**~ ~** RegulationNumber 3 Adopted: October 20,2011 source. These regulations will then be identified in the permit, and the permit shield will apply. This protects the source in the eventthat a mistake is made and the regulation really does apply to the source. The source is protected from enforcementaction until the permitcan be reopened and the correct requirements inserted.
5. Application Form and Checklist Operating permit applications mustcontain a lot ofcomplex information, including identification ofall applicable (and inapplicable, ifthe permitshield is to apply) requirements. This can be a daunting taskfor the applicant. The Commission has directed the Division to develop checklists for use by the applicant. One checklistwill identify all datathat must be included in an application. Another checklistwill identify all air regulations. The applicant can use the latterchecklist to identify which regulations apply to their source, and which don't. The State mustsubmit an application form to the EPA along with the operating permit regulations. The Commission has directed the Division to develop an application form, taking into account suggestions and comments from the public.
6. SIP Equivalency The Commission has determined that it is appropriate to allow sources to set forth procedures in their permitthatwill showthat a SIP limit is being metthrough methods that are equivalentto, but do notexactly follow, procedures setforth in the SIP. For example, suppose a source is required to meeta volatile organic (VOC) compound limit by using a coating that does notcontain more than a certain amountofVOC. The source could propose to meetthe limit by some other meansthan using such a coating. Their application would setforth quantifiable, replicable, accountable procedures thatwould showthatthey could still meetthe limit even though theywould not be using the required coatings. Such procedure could consist of using control equipment, or using a combination ofcomplying and non-complying coatings forwhich the average emissionswould meetthe VOC limit. Monitoring, recordkeeping and reporting procedures would be set forth in the permit. The procedures must be sufficientto showcontinuous compliance with the underlying applicable requirement. This procedure allows sources to show compliance through alternative methods without having to go through the Commission and the EPAfor a case-by-case SIP revision. The EPAwould review the process during its 45-day review period. The publicwould have opportunity for comment and hearing. NOTE: This procedure overrides the requirement in Regulation Number7, which states that all such alternativeswill undergo a case-by-case SIP revision.
7. 112(r) (Accidental Release) Requirements Operating permits mustaddress any requirements established underTitle Ill (hazardous air pollutants) ofthe Federal Act, exceptthatthe accidental release plans required under Section 112(r) do not have to be incorporated into the permit. The permit must merely state thatthe source is required to submita plan to the appropriate entity. The Commission can take enforcement action against

Page 262RegulationNumber3 

### a source forfailure to submit a plan. Enforcementaction cannot be taken for failure ofthe source to meetany ofthe requirements contained in the plan. 8. Compliance Monitoring Operating permits must contain monitoring sufficientto demonstrate compliance with the applicable requirements. Methods and procedures may be setforth in the applicable requirements. Ifmethods and procedures in the applicable requirement are insufficient to demonstrate compliance, the operating permit must "fill the gap" by specifying appropriate methods. Compliance methods may be as simple as recordkeeping, or may require continuous monitoring equipment. The source must state in their application howthey will demonstrate compliance. The Division reviews this proposal and agrees with it or recommends something else. The Common Provisions provides the Division with the authorityto require monitors. The Division has used, and will continue to use, best engineering judgmentto determine when monitors are necessaryand feasible. The Commission has determined that in some instances it may be appropriate to require continuous emission monitors, even in cases where the applicable requirement does not specify monitors, and that sufficient opportunity for discussion and appeal are available to the source, therefore monitors can be required even ifthe applicable requirement does not specifically require monitors. The EPA is in process ofdeveloping and promulgating their enhanced monitoring rules. These rules mayspeak specifically to continuous monitoring. The Commission will take into account this new rule and determine ifthe operating permit monitoring requirements should be revisited once the EPA rule is promulgated. By January 1994, the EPA will publish a list ofexisting rules, which do not contain sufficient monitoring, or recordkeeping methods, and will develop criteria that could be used to determine what is sufficient. Afterthe rules are identified, the EPAwill proceed to revise the rules to make them sufficient. The need for "gap filling" will then decrease. 9. Compliance Certifications Each operating permit application must be accompanied by a "compliance certification" indicating that all information presented is true and accurate. The certification must be signed by a "responsible official," usually a CEO, ofthe company. Likewise, compliance certifications must be submitted every six months, indicating the compliance status ofthe source. Such certifications must also be signed by the responsible official. The burden is on the source owneror operatorto ensure that all permit conditions are addressed in the certification, and all information is complete and correct. The Commission's definition of"responsible official" allows delegation of responsible official authority to plant managers undercertain conditions, including prior approval from the Division. 10. Recordkeeping and Reports The operating permit must contain all recordkeeping necessary to ensure compliance with the applicable requirements. The Federal Act requires such data to be maintained for five years. The Commission has determined that sources need not keep a full five years ofdata on site for inspection review.

Adopted: October20, 2011 Page 263RegulationNumber 3 Adopted: October 20, 2011 Instead, sources are required to make immediately available to the Commission or Division data forthe pastyear, along with the compliance certifications for the pastfive years. The actual data for the remaining four years must be provided to the Commission or Division within 48 hours of request. Monitoring data must be reported at least every six months. The Commission will allow sources flexibility in determining what records are appropriate, and in determining the schedule for reporting, in orderto allow coordination with other reporting requirements (such as Community Right To Know, etc.). Such flexibility is allowed provided the requirements ofthe Clean Air Act are met. Malfunctions and emergencies

- The Commission has adopted the Federal provisions for emergency and malfunction protection, exceptthat sources are required to provide oral noticewithin two hours ofthe nextworking day, and written notice with one month afterthe emergency occurs. Past experience indicatesthat sourceswill most likely not be able to meetthe EPA's recommended two-daywritten notice. The Commission does not include continuous monitor malfunctions in the emergency provisions. The emergency provisions serve to provide an absolute defense ifan applicable requirement is violated. Since the Commission cannot tell ifa source is in oroutofcompliance with an applicable requirementwhen monitors malfunction, it is not appropriate to include monitor malfunctions in the emergency provisions. Monitor malfunctionswhich would violate provisions which set specific operating conditions and specifications for the monitor, however, could be granted the emergency protection for those specific performance conditions, ifsuch malfunctionswere due to unforeseen circumstances and reported as set forth in the emergency provisions. The Commission has determined that extra protection for monitor malfunctions is not warranted, as procedures and specifications for monitors include performance requirements which take into accountthe inherentoperational fluctuations and abilities ofthe monitors. Sources must report any exceedances ofstandards, which are not due to malfunctions or emergencies "promptly." The Commission has determined that including such deviations in the six-month monitoring report is sufficient. Thiswill not impairthe Division orCommission's authority to assess penalties regarding the deviation. PublicAvailability of Reports: Copies ofall reports and compliance certifications will be made available atthe local health departments. As always, such information is available atthe Division offices.
11. State-Only Conditions Certain Commission regulations are not part ofthe State Implementation Plan, and therefore are notfederally enforceable. The Commission has given sources the option of including state only conditions in operating permits, orof maintaining such conditions in a separate construction permit. This option is available for all state-only conditions exceptthose pertaining to major Colorado HAP sources. Major Colorado HAP sources are required by statute to obtain an operating permit. "State-only" conditions will be listed separately from federal conditions in operating permit. (Sources that are majorfor federal HAPs must

Page 264

### obtain an operating permit, and provisions pertaining to the federal HAPs are federal, not state conditions.) Since the operating permit is meantto be used as an all-encompassing documentfor sources and the Division, the source may wantto refer to only one documentto determine what needs to be done to remain in compliance. Ifthe conditions are included in an operating permit, the source maychoose whether or notto have the permit shield, operational flexibility, and otheroperating permit allowances and requirements apply to the conditions. State-only conditions do not have to undergo the same procedural requirements as otheroperating permit conditions. Affected state and EPA review is not required. Currently, the following regulations are state-only requirements: odor Regulation Number2, municipal waste combustor Regulation Number6, Part B. Future Colorado MACT/GACT standards will be state-only requirements. 12. Confidentiality Applicants are allowed to classify certain information as being confidential in terms ofproduct or processes. In no case may emission information be kept confidential, and in no case may compliance certifications be kept confidential. Records and reports may be kept confidential, however, instances where this will be allowed will most likely be rare, since emissions data or information related to emissions data may not be kept confidential. The current confidentiality provisions and procedures remain in effect, however the Commission has directed the Division to examine the provisions and procedures and to recommend improvements. D. How Long Does It Take To Obtain the Permit?

RegulationNumber3 Adopted: October20, 2011 

### 1. Completeness Review The Division has sixty days from receipt ofan application to determine ifall information necessary to process the application is included. Ifthe application is incomplete, the Division must notifythe source and request the additional information. Additional information must be submitted by the applicantwithin a reasonable amount oftime. Once a complete application is received, the Division mustact on the application within 18 months. The Division mustanalyze the application, prepare the permit, and ensure that all ofthe procedural steps as setout below are met. Once all requirements are met, the Division will send the source itsfee letter, and will not issue the permit until all applicable processing fees are paid. The fee letter must be sentwithin 18 months of receipt ofa complete application. 2. Public Notice and Hearing Once the Division analyzes the application and prepares a draft permit, the permit and application must undergo a thirty-day public notice. Ifa hearing is requested during the public notice, thirty-day notice ofthe hearing must be provided, and the hearing must occurwithin sixty days ofthe notice.

Page 265The Commission has provided an opportunity for sources to respond to any public comments received. This source response in no way affects the Division's time constraints for issuing the permit, nordoes itaffectthe permit, which the Division ultimately issues. 3. Affected State Review During the public notice, a copy ofthe draft permitwill also be sentto any affected, nearby states, fortheir review.
4. EPA Review Once public notice and hearing are completed, the Division will make any necessary revisions to the draft permit, and will submita proposed permitto the EPAfortheir review. The EPA has 45 days to review the permit. The Division then has up to 90 days to make any necessary revisions to the permitto address EPA concerns, before the permitcan be issued.
5. Copies ofApplication The applicant must provide a sufficient number ofcopies ofthe application for submittal to the EPA, affected states and public notice, including copies for County Commissioners. 

### E. Renewals

RegulationNumber3 Adopted: October 20, 2011 1. Renewal Application Content Operating permits must be renewed every five years. Renewal applications must undergo all ofthe review procedures (public notice, EPA review) as the initial operating permit. Applicants may incorporate by reference any previous application material or permits for portions ofthe operation which will notchange from the initial application. The renewal application may only address operations which will change and which will require new permitterms orconditions. Copies ofall material incorporated by reference must be included with the renewal application. All material must be provided for public comment, affected state review, and EPA review.
2. Renewal Application Due Date The federal rule states that permitting authorities should be able to process "90%" of renewal applicationswithin six months. The federal rule does not mandate that states process renewals within six months. The rule gives states flexibility to require applications for renewals, and specifically states that other times may be approved, which are necessary to issue the permit before it lapses. The application can be due as soon as 18 months before expiration, and as late as six months. Renewed permits must be issued before the old permit expires. As described above, the public comment, hearing notice, hearing, EPA review, and revision periods required in the Federal rule take up 220 days, or approximately seven and a half months. ·Thetime allotted forthese activities is fixed in the Acts and rules (exceptfor the time allowed for States to revise draft permits, based on EPA review). The amountoftime for actual review ofthe

Page 266RegulationNumber3 

### application itselfvaries depending upon the type ofapplication. A breakdown of the allotted timesfollows: Public Notice: 30 days Hearing: 60 days EPA Review: 45 days Division Response: 90 days TOTAL 220 days Two hundred and twenty (220) days is the minimum required. No time is allotted for revising the permit between each step as necessary, norfor transmitting the permitfrom one step to the next. The 220 days is required for public notice and EPA review only, it does not include anytime forthe Division to actually review the application and draft a permit. Sources are allowed to seekjudicial review ifa permit is not issued in time. This could potentially result in wasted Division and court resources dealing with an impossible situation. In addition, the EPA may determine that the program is not adequate ifthe Division continually fails to issue renewed permits before expiration. Finally, ifpermits are not issued in time, the EPAcan revoke and reissue permits, orcan terminate the permits, in which case the source's right to operate ceases. Given thatthe notice and review procedures alone take 220 days, and the allowed flexibility, and the requirement that renewed permits be issued before expiration, the Commission has determined that it is not reasonable to allow renewal applications to be submitted as late as six months before expiration. Nine months may be adequate ifhearings are not requested for such renewals, however, no one can predict how many applications will orwill not require public hearing. Itwould not make sense to acceptapplications only six or nine months before expiration, knowing that ifa hearing is requested, the new permitwill not be issued before expiration. The twelve monthswill givethe Division sufficient time to review the application, and in addition, will give the source some time to ensure thatthey have submitted a complete application before the permit expires. Sources are allowed to updatetheir applications up to the time a draft permit is issued for public notice. This will allowsources a chance to address any last minute market considerations orchanges in theirapplication. The Division will send written notice ofthe need to apply for a permit renewal to permittees six months priorto the date a renewal application is due. This notice is to aid permittees, and the failure ofthe Division to provide notice to any individual permittee is not contended to be used as a defenseforthe failure to applyfor a permit renewal. As sources and the Division gain experience with the newoperating permit program, the Commission and the Division will determine ifthe timeframe for renewals can be shortened. The first renewals will not be due until the year 2000. F. Reopenings

Adopted: October20,2011 Page267

### Operating permits must be "reopened" during the term ofthe permit ifnew regulations become applicable to the source, ifa mistake is found in the permit, or ifadditional measures need to be incorporated to ensure compliance with applicable requirements. A permit is reopened to address only the new requirement orcorrection, notto addressthe entire permit. The Division mustgive the source 30 days notice before reopening the permit. Reopenings must undergo all ofthe same procedures and requirements as the original permit (notice, EPA review, etc.). The Commission will allow sourcesthe option to reopen an entire permit instead ofjustthe necessary portion. This would require, however, that a source be able to submita complete application for renewal within 30 days of notice, so thatthe Division can meetthe 18-month deadline. G. Modifications States mustadopt expeditious procedures for processing changes that require a modification to a permit.

RegulationNumber3 Adopted: October20, 2011 

### 1. Administrative Modifications Administrative modifications are *minor changes to the permit, such as change in owner, more stringent monitoring requirements, or correction oftypographical errors. The change atthe source can be made upon submittal, and the Division must revise the permitwithin 60 days. No public notice or EPA review is required. The original expiration date does notchange when administrative modifications are made. 2. Minor Modifications The existing construction permit program requires sources to obtain construction permits before they constructor modify. Revisions to construction permits are required before any changes atthe source are made. In contrast, the Federal rule allows changes to be madewithout revisions to the operating permit, provided no SIP requirements are violated. Sources are allowed to make "minor modifications" upon notice to the Division. The source must supply a draft permit, which is submitted for affected state and EPA review. The permit is revised within 90 days. No public notice is required atthe time the modification is made. The Commission was faced with a dilemma. Since the construction permit program is a SIP requirement, sources would not be allowed to make minor modificationswithoutfirst obtaining a construction permit. This in effect would negate the operational flexibility envisioned in the Federal Act. Only certain modifications atthe source may qualify as "minor modifications" for operating permit purposes. The change cannot be a "Title 1" modification. Title I contains requirements applicable to new sources. Title I revisions include the following changes:
1. Modification thattriggers Prevention ofSignificant Deterioration and New Source Review (significant netemission increase) The significant levels (defined in PartA ofthis regulation) are based on the potential to emitofa source or modification. Since no construction permit is in place to limitthe potential to emitofa minor modification, all minor modificationswill betriggered based on potential emissions. not actual emissions.

Page 268RegulationNumber3 Adopted: October20, 2011 

### 2. Modification which triggers NewSource Performance Standards (NSPS) (Any change that increases the amount ofany air pollutant)

- This definition onlyapplies to specific NSPS sources, unless it is referenced in an applicable requirement 3. Modification thattriggers Section 112 (hazardous pollutants). EPAwill be adopting "de minimis" levels that will trigger a modification. Minor modifications cannot involve any significant change or relaxation in monitoring, recordkeeping, or reporting requirements. Minor modifications also cannotviolate any permit condition, which the source has voluntarily obtained in orderto limit potential emissions for avoidance of requirements (such as PSD requirements). The EPA expressed theirconcern regarding the construction permit SIP requirements and minor modifications. The Commission has determined that it is appropriate to submita SIP revision for the construction permit program, in order to allow sources the flexibility allowed under minor modifications. The Commission will allow minor modifications underthe operating permit procedure, and changes before obtaining a permit, howeverall substantial requirements needed for a construction permit must be met. These requirements include ambient modeling to assess the modification's impacton airquality in Colorado, as required in the SIP. As underthe current construction permit program, minor modification procedures cannot be used to circumvent PSD or NSR requirements by making individual changes, which togetherwould otherwise trigger PSD or NSR. The enforcement protection ofthe permit shield does not apply to these modifications. Sources should be confident that all applicable requirements would be met before submitting a change as a minor modification. Ifthe source errs in its determination, the Division, the Commission, and the EPA can take enforcementaction against the source and the source's right to operate under the modification is terminated (the source must revert back to the permit as it existed before the modification was requested). Upon permit renewal, the minor modification undergoes public notice along with the rest ofthe permit, and the permit shield can be extended to the minor modification provisions. 3. Significant Modifications Significant modifications are changes at the source which are not administrative modifications, and which do not qualify as minor modifications. Such changes trigger PSD or NSPS, etc., orinvolve significant changes in or relaxation of monitoring, recordkeeping and reporting requirements. A revised permit must be obtained before the source is allowed to commence construction for the change. A source may choose to obtain a revision to its operating permit, or it may choose to obtain a construction permit before making the change. Significant modifications to operating permits must undergo all ofthe public notice and EPA review requirements, therefore a source should plan on submitting its application well in advance ofmaking the change. Ifa construction permit is obtained first, the source should apply at leastthree to four and a halfmonths in advance (except for PSD sources, which should plan 12 months in advance). Once the construction permit is obtained, the source may commence construction. The conditions ofthe construction permit do not need to be incorporated into the operating permit until renewal, unless more than three years remains in the term

Page 269ofthe operating permit, in which case the operating permit must be reopened, and the significant modification provisions incorporated.
H. Operational Flexibility The Federal rule requires a State's program to include operational flexibility provisions, which allow a source to make certain changes without having to obtain a modification to their operating permit. The changes are simply incorporated into the operating permit when it is renewed. The types ofoperational flexibility are described briefly below. Subcommittee papers and fact sheets, which explain the provisions in more detail, and give specific examples, are available atthe Division and Commission offices. The Commission has directed the Division to devise simplified explanations ofall ofthe provisions. "502(b)(10)" Changes (named after a Section ofthe Federal Act): A source is allowed to make a change, which would violate an express permitterm, provided no applicable requirements are violated. The source can make the change aftera seven-day advance notice to the Division. The permit shield does not apply. The Commission will allow sources to revert backto the original permitterm, provided seven-day notice is given to the Division. The permit shield can then apply again to the provision, which is contained in the permit. Permit Caps: A source may askfor an upper limit in total facility emissions. Changes may occurwithin the facility, as long as the upper limit is notexceeded, and all applicable requirements are met. The permit shield applies to these changes. Seven-day notice is required before the change is made. This type ofoperational flexibility may be suitable for research and developmentfacilities. Alternative Scenarios: The source can identifyvarious operational scenarios in its application, along with the applicable requirements and compliance demonstrations. The source can then switch from one scenario to anotherwithout notification to the Division. The permit shield applies to these changes. Emission Trading Based on the Permit: The applicant can requestthatthe trading provisions (for netting out) provided for in PartA ofthis regulation be incorporated into their operating permit. As long as all ofthe provisions are met, the source can use the provisions to make changeswithout notification to the Division. Off Permit Changes: These changes can be made atthe source with seven-day notice to the Division. The changes involve activities that are not addressed in the operating permit. The same qualifications as those for minor modifications apply to these changes (cannot beTitle I modifications, significant monitoring changes, etc.) Note thatthe same SIP concerns apply to these changes that are discussed above under minor modifications. A construction permitwould be required before these changes could be made. The Commission has decided to submita SIP revision to allowthese changes. Emission trading based on the SIP: This is the only federally allowed operational flexibility provision thatthe Commission did notadopt. This provision would allow sources to use the emission trading provisions of PartA without specifically stating the procedures in the permit. The Commission does notcurrently have an approved SIP thatwould allowthis, therefore the EPAwould notapprove this procedure atthis time. The EPA is expected to develop guidelines for approvable SIPs within two years. The Commission will consider this provision once it is apparentwhatthe EPAwould approve. 

### I. General Permits RegulationNumber3 Adopted: October20,2011 Page 270

### General permits are standard permits that apply to specific source categories. The sources in the category have similar applicable requirements and similar monitoring, recordkeeping and reporting requirements. The general permitwill include criteria by which a source may qualify forthe permit. Sources that are out ofcompliance may not qualify for a general permit, since a separate individual compliance plan would be required. The general permit undergoes one-time public notice and hearing and EPA review when it is initially developed. Qualifying sources can use standard, simplified applications and obtain the general permitwithout having to go through the entire application process (public notice and hearing) individually. A list ofall sources that have been issued a general permit shall be maintained by the Division and made available upon request. The general permit (as originally developed) undergoes five-year renewal, including public notice and EPA review. General permits will also be developed forthe construction permit program, and will usually be identical to the general operating permitfor that source category. Existing sources that have notobtained a general construction permitthrough the construction permit program (probably because a general permit did not exist atthetime a construction permitwas obtained) may operate underthe general operating permitwithin 60 days ofsubmitting a complete application for the permit, which corresponds with the amountoftime allowed for a completeness determination. The application shield becomes effective upon submission ofa complete application. The Division will issue the general permitto the source upon completion ofthe analysis. The permit shield becomes effective upon issuance ofthe operating permit. Sources which receive a general construction permitthrough the construction permit program mayoperate underthe general permit as an operating permit 60 days aftera complete operating permitapplication is submitted, provided the required compliance demonstration has been performed in the required time (180 days). Such source must applyforthe operating permitwithin 12 months ofcommencing operation. Once such application is received and determined to be complete, the Division will issue a certification, which states thatthe construction permit now becomes the operating**p~rmit.** 

### General permits will ideally be useful for minorsources that will be subjectto operating permits ata laterdate. Minorsources are more likelyto be subjectto similarapplicable requirements. The Commission has directed the Division to devote resources as they become available to identification ofsources thatwould be suitable for general permits and to the developmentofgeneral permits. Candidates for general operating permits include sources that become subjectto new MACT/GACTstandards (i.e. dry cleaners), or existing and new NSPS sources (i.e. asphalt plants). The Commission will allow majorsources to have general permits as part oftheir overall operating permit. As general permits are developed, majorsources may use them. The source wouldjust reference in their initial or renewal application that they have a general permit. General permits, however, cannot be issued to majorsources ifthe issuance of the general permitwould cause a violation ofany ofthe applicable requirements in any other operating permits they have, or ifissuance ofa general permitwould trigger a Title I orTitle Ill modification. The Commission will allow general permits to be used foran entire majorsource only in those instances where the use ofgeneral permits is appropriate (homogenous, straight-forward sources). 

### J. Title Ill (Hazardous Air Pollutant Requirements)

Regulation Number3 Adopted: October20,2011 Page 271The provisions ofTitle Ill must be implemented through the operating permit program. As discussed above, all major sources of HAPs mustobtain an operating permit. Asthe Commission adopts MACT standards, the permit must be reopened to include the new requirements. As the EPA promulgates new MACT standards, they will decide if minorsources aswell as major sources affected by the standard mustobtain operating permits. Once the EPA approves the State's operating permit program, the Division and Commission must begin making case by case MACT determinationsfor new major sources and modifications, ifthe EPA has notyet seta MACT standard forthat category. The EPAwill be setting emission levels atwhich modifications are triggered. Oncethe EPAapproves the State's operating permit program, ifthe EPAfails to meet its mandated deadline forsetting a particular MACT standard, the State mustdetermine MACTforthat source categorywithin 18 months. Permitswill be reopened to incorporate the State MACT standard. Oncethe EPAdetermines MACT forthe category, permits may need to be reopened again, and sources may need to retrofittheir units, depending upon the difference between the State and EPA MACTdeterminations.
K. Title IV (Acid Rain Provisions) The Commission is required, and fully intends, to adoptthe acid precipitation rules and requirements as promulgated by the EPA, and to implementthe requirementsthrough the Title V permits, as also required underthe Federal Act. Title IV sources (power plants) are required to submittheTitle IV portion oftheir operating permits by January 1, 1996. The permits must be issued by December 31, 1997. The EPA is planning on having all ofthe requirements and forms finalized sothat Title IV sources can apply forTitle IV requirements atthe sametime they apply fortheir initial operating permit. This could help avoid re-opening ofthe permit. Tofacilitate this, the Commission has determined thatTitle IVsources should be included in the lastgroup ofexisting sources required to apply for operating permits (due one yearafter EPA approves the program, see discussion above). The Commission also intends to adopt provisions related to the WEPCO rule promulgated by the EPA, which dealswith Clean Coal Technology Projects and other modifications at utilities. The rule is currently slated forthe spring of 1994 in the Commission's regulatory agenda. In the interim, the Commission and Division will continue the existing policy oftreating such projects as allowed by the EPA. Also, the Commission wishes to encourage Clean Coal Technology Projects, which are used to develop and identify better methods ofcontrolling and preventing air pollution. The Commission has directed the Division to consider research and developmentfactors, and the importance ofdeveloping newtechnologies, ifenforcementaction may be necessary dueto violations related to such projects. II. Construction Permit Program
A. Synthetic Minors As discussed above, construction permits are the vehicles through which sources can obtain federally enforceable limits on their emissions in orderto avoid the operating permit requirements. In some cases, sources may also choose to obtain limits to avoid PSD or NSR requirements. Such synthetic minor permits must undergo public notice in orderto be federally enforceable. RegulationNumber 3 Adopted: October 20, 2011 Page 272

### B. SIP Equivalency The Commission has determined that it is appropriate to allow construction permit sources to use the SIP equivalency procedure that is provided for operating permits in the Federal Act. Current regulations, such as Regulation Number 7, require a case-bycase SIP revision for equivalent procedures, which involves public notice, a mandatory Commission hearing, and EPAapproval. The new SIP equivalency provisions override Regulation Number7 provisions. All SIP equivalency proposals require public notice, opportunity for hearing (but not mandated ifnot requested), and EPA review. The Commission will require such construction permits to follow the PSD track, which requires public notice and an opportunity for public hearing. The EPAwill review the proposal during the public comment period. C. Minor Modifications and Operational Flexibility The Commission has extended most ofthe operational flexibility provisions directly to the construction permit program, since no modification to a permit is required. These provisions include Administrative Modifications, Alternative Scenarios, Emission Trading Based on the Permit, and Permit Caps. The remaining operational flexibility provisions, and the minor modification provisions are not available through the construction permit program, howeversources may obtain these additional allowances by voluntarily applying for an operating permit. D. General Permits The Commission has determined thatthe general permit processwill be allowed only for the operating permit program. The general application and permitforms, however, should be used for construction permits as they are developed. The Colorado Act requires newsources to obtain a construction permit before commencing construction, therefore the source must have their construction permit in hand before constructing. In addition, Regulation Number3 requires certain sources to undergo public notice before construction. The Commission believes that notice should continue to be provided to the public where appropriate, before a source constructs nearthem. As discussed above undergeneral operating permits, the Division will identify candidates for general construction permits as resources are available. The same sources identified in the discussion above are candidates for general construction permits. In addition, general permits may be suitablefor sourceswishing to obtain synthetic minorstatus, such as emergency and backup generators. Ill. Emission Fees Though it was not noticed for this hearing, some parties indicated they had concerns regarding the Division's policies for charging annual emission fees. A request was made to include the Division's policy in the regulation. The Commission believes the Division should be given the flexibility to determinethe most efficient and reasonable procedures and policies for assessing fees, therefore the policy will not be included in the regulation. The Division will prepare a written policy for public distribution on the methods it will use to calculate and collect emission fees. IV. Where Can a Source Go ForAssistance In Understanding the New Requirements?
A. 

### Small BusinessAssistance Program

RegulationNumber 3 Adopted: October20,2011 Page 273Even though existing minor sources (small businesses) are exemptfrom the operating permit program, small businesses will need help understanding the construction permit program requirements. In addition small businesses need to understand the operational flexibility requirements, and need to understand if itwould be advantageous for them to apply for an operating permit. The EPA may decide thatsome minor sources should be required to apply for operating permits as new MACTand NSPS standards are promulgated. Last September, the Commission approved a plan for developing a Small Business Assistance Program. The program is under developmentand is expected to be implemented and fully operational by Novemberof 1994. In the interim, Division staff is available to answer any questions, which a small business may have regarding airquality regulations and requirements. Some information has already been developed regarding APEN requirements and simplified calculation procedures. B. Pre-application Meetings This regulation provides opportunity for any source to request a preapplication meeting with the Division, to discuss what requirements may be applicable to a source. C. Division Staff Division staffwill remain available to all sources and the public, to answerquestions regarding the operating permit and construction permit programs. 

### I.M. Adopted March 17, 1994 Revisions to Regulation Number3 Part A, Section II.E. Pursuantto Section 112(n) ofthe federal Clean AirAct, the US Environmental Protection Agency (EPA) is required to conduct an extensive study to create a reliable estimate ofthe existence orquantity of hazardous air pollutants (HAPS) emissions from certain sources such as utility and non-utility industrial boilers. Another study under Section 112(n) relates to emissions from publicly owned treatmentworks (POTWs). Section 112(n) recognizes that technological limitations existon the ability to reliably estimate these emissions. The required studies are complex and costly, and EPA has indicated thatthe utility and non-utility boiler study will not be concluded until the end of 1995. The original time frame contemplated by Congress anticipated thatthe studywould be completed by November 15, 1993. Unlike the mandatory boiler study, the Clean AirAct merely authorized EPAto study POTWemissions and EPA has decided notto continue with the study. Thus, the emissions information thatwas originally expected will not be developed in time to facilitate APEN reporting by December 1994. Since the emissions from facilities thattreat municipal-type wastewater are virtually identical to those from POTWs, the lack of POTWemissions data also affects this category ofsources aswell. During rulemaking in 1993, a deferral for HAP reporting from boilers and other listed sourceswas granted until six months from the date federal studies are complete or until December 31, 1994. This deferral appears in Part A, Section II.E. This was based in large part on the recognition that itwould be unreasonable and infeasible to expect these sources to attemptto duplicate the EPA studies and to provide meaningful data earlierthan EPA. The postponementwas not intended to forgo reporting obligations (it applied to emissions points and processes only, notto entire facilities), but rather, to recognize technical limitations and to await (not duplicate) the results ofthe EPA studies. The Statementof Basis, Specific Statutory Authority and Purpose forthe 1993 rulemaking session explained, "Due to ongoing studies aimed at quantifying their RegulationNumber3 Adopted: October 20, 2011 Page274emissions ofnon-criteria pollutants, the Commission has deferred APEN reporting requirements for five source categories until six (6) months afterthe studies have been completed or December31, 1994, whichever is earlier." It is now apparentthat neitherthe EPA boilerstudy northe POTWstudywill be timely completed for effective implementation of' II.E. The clear intent ofthe regulation is to postpone report ofHAP emissions by sources such as utility and non-utility industrial boilers, POTWs and municipal-type wastewatertreatmentworks, pending the results ofthe ongoing EPA studies. The rationale forthis intention is that it is technologically infeasible forthese sourcesto comply with this reporting requirement without the results and utilization ofthe EPA studies. The original intent and rationale for a postponement continue to pertain atthis time and provide the basis forthis rulemaking. Additionally, highly costly tests would be required if reporting is required priorto the results ofthe EPA studies. There is a serious question aboutthe accuracy ofany reporting priorto the conclusions ofthe EPAstudies. Moreover, ifsources attemptto formulate tests, inconsistencies with testing procedures, resulting data and interpretation thereofwould result, thereby furthercomplicating issues for impacted sources and administration by the state. It is believed that using the EPA studies results will allow avoidance ofsuch costs and result in more accurate APENS, which, in turn, will facilitate easier administration by the state. During the Commission's prior deliberations on this matter, the Commission expressed intent to revisit this December31, 1994 deadline ifthe EPA studies would not be timely completed. Impacted sources must be placed on notice as early as possible concerning any deadline because lead-time to conduct studies and extensive planning would be necessary. This rulemaking postpones to December31, 1995, orsix (6) months afterthe EPA studies are complete, whichever are earlier, for utility and non-utility industrial boilers, and POTWs and municipal-type wastewatertreatment plants. This decision furthers the Commission's original intentconcerning the underlying reporting. This issue may be revisited in the future ifthe information expected to be derived from the EPA studies continue to be delayed. The specific authority forthis regulation is contained in the ColoradoAir Pollution Prevention and Control Act, 1992 as amended. The Legislative Declaration,' 25-7-102, recognizes that an accurate emission inventory is needed to adequately manage air resources in Colorado. Section 25-7-109.3 provides authority for regulating HAPs. Section 25-7-114.1 provides authority for requiring APENS, and for allowing exemptions from the requirements. Section 25-7-109(4) requires the Commission to promulgate regulations pertaining to HAPs. 

### I.N. Adopted May 19, 1994 Findings Regarding the Basis forthe Emergency Rule Revisions to Regulation Number3, Concerning the Operating Permit Program The Air Quality Control Commission held this emergency rulemaking hearing on May 19, 1994, aftersuch notice of rulemaking as practical, to postpone the November 15, 1994 deadline for submission of operating permit applications by those existing major stationary sources previously notified by the Division to submit applications by that deadline. The revisions to Regulation Number3 would phase-in the required submission ofoperating permit applications by these sources overa three-month period beginning January 1, 1995. The Commission finds thatthe immediate adoption ofthis emergency regulation is imperatively necessary forthe preservation ofthe public welfare and to ensure compliance with the federal law, and that compliance wit normal notice requirements for rulemaking would be contrary to the public interest. This emergency regulation is necessary for three reasons. First, the Environmental Protection Agency (EPA) has issued a formal letterto the State ofColorado advising the State that its Title V operating permit program submission, contained in the Commission's Regulation Number3, must be revised in orderto obtain federal approval ofthe State operating permit program in accordancewith the mandates
RegulationNumber3 Adopted: October 20,2011 Page 275ofthe federal Clean AirAct. The earliest date by which the Commission is able, pursuantto law, to promulgate such revisions and make them effective is September 30, 1994. Sources that are subjectto the operating permit application deadline of November 15, 1994will not have sufficienttime to complete their applications and submitthem by thattime afterthe promulgation ofthe revisions. Secondly, and more importantly, itwas not until the 1994 Colorado legislative session thatthe legislature appropriated money for the necessary FTE's atthe Division to process operating permitapplications and to implementthe program. The money will not be available forthe Division's use until July 1994, and given the shortcomings ofthe State personnel system, the new Division employees will not, in all likelihood, begin their employment until on oraround November 1, 1994. Ifthe Commission did notact on an emergency basis to postpone the application deadline of November 15, 1994, persons subjectto the application deadline will be required to apply to the Division priorto its ability to fully train the new employees orto provide sources any services necessary underthe mandates ofthe federal Clean Air Act. This imposes an unnecessary burden on sources, as well as the Division. Finally, the federal Clean AirAct requires thatthe State have sufficient moneyto coverthe directand indirect costs of implementing the Title V program. These costs include those necessaryfor the Division to review permit applications and issue permitswithin certain established timeframes, as well as to perform inspections and othercompliance monitoring actions. The EPA has indicated to the State, in a letterdated April 8, 1994, that ifthe State does not have sufficient money to coverthese costs, the EPA cannot grant any type ofapproval, including interim program approval. In this event, EPA musttake over the Title V program in Colorado, and has threatened to impose sanctions on the State. Therefore, the Commission must act on an emergency basis to postpone the operating permit application deadline in orderto give sources sufficient advance notice ofthe changed deadline and in orderto ensure thatthe Division will be able to review and process those applications within the timeframes setforth in the federal Clean Air act. In light ofthe evidence presented atthe emergency hearing on the difficulty and costto sources of completing operating permit applications, given the shorttimeframe between the Commission's ability to revise and make effective changes to Regulation Number 3 required by the EPA and the current deadline; on the difficulty and cost ofevaluating operating permitapplications filed with the Division and of the Division's inability to perform services required by the current Regulation Number3 and deadline of November 15, 1994; and on the EPA's letterevidencing its concern thatthe Division will not be sufficiently financed to perform those federally-mandated services, the Commission finds that an emergency exists which warrants the passage ofthis emergency regulation. The Commission does not believe thatthis emergency regulation represents any risk to public health. 

### 1.0. Adopted August 18, 1994 Revisions to Regulation Number3 This Statementof Basis, Specific Statutory Authority, and Purpose complywith the requirements ofthe Administrative Procedures Act, Section 24-4-103(4}, C.R.S. (1994) for adopted or modified regulations.

The 1990Amendments to the Federal Clean AirAct require states to implementan operating permit program. Failure ofa state to implementthe operating permit program will result in EPA sanctions. On July 15, 1993, the Air Quality Control Commission adopted revisions to Regulation Number 3 necessaryto implementthe State's operating permit program. The Commission also adopted revisions to Regulation Number 3 thatwere necessary to integrate the operating permit program with the existing construction permit program, and thatwere necessary to extend certain provisions ofthe operating permit program to minor sources not otherwise subjectto the program.

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### On November5, 1993, the Governor submitted Colorado's operating permit program to the Region VIII, Environmental Protection Agency (EPA) for its approval. The EPA reviewed Colorado's submittal and on AprilS, 1994 responded to the State's submittal, noting certain deficiencies in the program. These deficiencies must be corrected and the revisions submitted to the EPA no laterthan October 1, 1994. The Commission promulgated these revisions to Regulation Number 3 in response to EPA's comments. EPA also noted certain legislative changes that are required in orderfor the State ofColorado to obtain full approval ofits operating permit program. Therefore, atthis time, the Commission contemplates that the State will receive interim approval ofthe operating permit program; within 18 months after receiving the interim approval from EPA, the State must submit legislation that will satisfy all ofthe federal requirements. The EPA in itsApril 8 letter required the Commission to revise in certain respects the Statement of Basis, Specific StatutoryAuthority, and Purpose for Revisions to Regulation Number3 that was dated July 15, 1993 and which was submitted to the EPAon November 5, 1993. The required revisions are reflected in this StatementofBasis, dated August 18, 1994. SpecificAuthority The specific authority forthis regulation and its revisions is contained in the ColoradoAirQuality Control Act, 25-7-101, et seq. (1989 

### &1994 Supp.). Section 25-7-105(1)(A)(1) requires the Commission to adopt into the State Implementation Plan all requirements ofthe federal act. Sections 25-7-105(12) provide authority to implementthe operating permit provisions ofTitle V ofthe federal act. Section 25-7-105.1 sets forth the federal enforceability provisions. Section 25-7-106(6) provides authority for monitoring, recordkeeping and reporting requirements. Section 25-7-114.1 provides authority forAPEN requirements and for allowing exemptions from the requirements. Section 25-7-114.2 through 114.5 setforth construction and operating permit requirements, and application and public participation requirements. Commission action in promulgating these revisions is taken pursuant to Sections 25-7-105 to 109 and 25- 7-114. Statementof Basis and Purposes ofChanges to Regulation
1. In PartA, I.B.9.e., the definition of"applicable requirement" concerning enhanced monitoring was changed to comply with the federal definition, incorporating all monitoring and enhanced monitoring requirements established pursuantto Sections 504(b) and 114(a)(3) ofthe federal act. 2. In PartA, I.B.22., the definition of"federally enforceable" was amended to mirrorthe definition found in Section 25-7-105.1 ofthe Colorado Air Pollution Prevention and Control Act. 3. In PartA, I.B.35.D.e., the Commission exempted any modifications that are not "major modifications" from the definition ofTitle I modifications, for sourceswith operating permits that utilize the minor permit modification procedures setf6rth in Part C, Section X.A. This is because EPA cannot allow the minor permit modification procedures to be used forTitle I modifications; therefore, for the minor permit modification procedures to have any use at all, this change was necessary. All modifications muststill comply with the requirements of40 CFR Part 51.165, as reflected in Regulation Number 3, Part B, IV.D.1.a.-h. In effect, this change merely allows an operating permitsource to modify without going through the procedural requirements ofobtaining a construction permit, but still requires the source to meetall substantive requirements. 4. Part C, X.A.5., XII.A.1 and XII.B. were revised to reflect the change described in paragraph Number 3 above.

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### 5. Part A, 1.8.62, a definition of"state-only condition" was added. This term is used throughout Regulation Number3. 6. In PartA, Section 11.0.1.aaa. (APEN exemptions), and in Part C, Section II.E.3.aaa. (insignificant activities for operating permits), the Commission exempted storage of lubricating oils from notice and permit requirements. Because new source performance standards apply to storage tanks ofcapacity> 40,000 gallons,the Commission revised these provisions to ensure thatthe exemptions would notallowa source to avoid new source performance standards.
7. In PartA, 11.0.5., the Commission established an administrative procedurewhereby the Division could process and grant requests for exemptions from permit and APEN requirements. However, this amounted to a SIP revision without allowing EPAthe opportunity to review and approve the revisions. Therefore, the Commission amended this procedure to require thatthe Commission adoptthe exemptions pursuantto rulemaking, on an annual basis, and submitthe revisions to EPA priorto a source being able to take the exemptions. 8. Part A, IV.B. contains operational flexibility provisions concerning "trading based on the permit." The federal rule allows a source to take advantage ofany EPA-approved emissions trading program, withoutthe need for a SIP revision. Atthis time, Colorado does not have an EPA-approved generic emissionstrading program. To obtain EPA approval ofthe State's operating permit program, the Commission amended this provision to clarify thatthe trading based on the permit may be utilized only ifthe SIP contains an EPA approved trading program. 9. At Part 8, III.A.6., the Commission clarified thatthe provisions of IV.D.1.a.-h. must be met in orderfor the source to utilize the minor permit modification procedures. Previously, the Commission had merely cross-referenced Section IV.D.1., which contained time periods for review that conflicted with the minor permit modification procedures. 10. At Part 8, IV.D.1.i. and in Part C, V.C.1.c., the Commission had provided authority for a source to use an alternative emissions limitation that is as stringent as an applicable requirement so long as the permit contained provisions to ensurethatthe limitation is quantifiable, accountable, enforceable and based on replicable procedures. The preamble to the operating permit rule, 40 CFR Part 70 makes clearthat it is the SIP, not the permitthat mustcontain these replicable procedures. Therefore, in Part C, the Commission amended V.C.1.c. to clarify thatthe alternative emissions limitation may be taken only if it is allowed by the SIP; then in Part 8, IV.D.1.i., the Commission removed the alternative emissions limitation language because the SIP must itselfcontain the replicable procedures. EPA is expected to have guidance in the nearfuture on alternative emissions limitation. 11. In Part C, 111.8.7., the Commission clarified that a source applying for a combined construction/operating permit mustfirst obtain the permit priorto commencing construction. 12. In Part C, III.C.12., the Commission clarified that ambient airquality standard considerations in issuing permits apply.only to temporary sources (pursuantto the federal law), and to newand modified sources applying for a combined construction/operating permit (pursuantto state and federal law). Although this was always the case, the provision previously could have been read to allow consideration ofthese standards in issuing operating permits.

RegulationNumber 3 Adopted: October20, 2011 Page 27813. In Part C, V.B.3. & 5., the Commission allowed minorsources to voluntarily opt into the operating permit program in orderto gain the operational flexibility ofoperating permits. These minorsources, however, could avoid the public participation, EPA and affected state review provisions. The EPAwas concerned that synthetic minor sources would be ableto opt into the program, and in so doing would lose theirfederally enforceable · limitation (imposed by the construction permitwhich would be lost), without going through the required public participation and EPAand affected state review. The Commission revised these provisions to clarify that synthetic minors opting into the program mustgo through all the necessary reviews. In addition, majorsources ofColorado-only HAPs need not go through the public review process attendantto operating permits. The EPA was concerned thatthe provision could be read to allowfederal HAP majorsourcesto avoid public participation and review. The Commission clarified these provisions to ensure that such was notthe case. 14. In Part C.III.B., the Commission revised the schedule for submission ofoperating permit applications by the remaining two-thirds ofsources in orderto reflect the anticipated interim approval date ofthe operating permit program ofJanuary 1, 1995. This revision would also allowthe Division to notify some sources ofthe need to submit an application before January 1, 1996, but on orafter November 15, 1995, upon twelve months' notice. Changes to the Statementof Basis and Purpose dated July 15, 1993 I.C.2. "Regulated HAPS" Revise this paragraph to read: Note that a HAP must be subjectto a standard before the applicant is required to address it in the permit application. Once the EPA adopts a MACTstandard for a particular HAP, all sources, even those not subjectto the particular MACT standard, and even those not in the source category, must address that HAP in applications. In cases where the Commission or Division determines MACTon a case-by-case basis because the EPA has nottimely promulgated a MACTstandard for a source category or subcategory ofsources, the MACT becomes applicable to all sources within that source category, pursuantto 112(g) ofthe federal act. In cases where the Commission or Division determines MACTon a case-by-case basis for an existing source that modifies priorto promulgation ofan applicable MACT standard, the HAP becomes regulated onlyfora particular source subjectto the case-by-case standard, pursuant to 112(g) ofthe federal act. Once the EPA promulgates the list of 112(r) (accidental release) pollutants, those pollutants will be considered to be "regulated" for all sources. I.G.2. Minor Modifications Revise the second paragraph underthis heading to read: Only certain modifications atthe source may qualify as "minor modifications" for operating permit purposes. The change cannot constitute a "major modification" as that term is defined in PartA, Section II.B.35.B. The change cannot otherwise be a "Title I" modification. OtherTitle I requirements are applicable to newsources. These Title revisions include the following changes: (same). I.H. Operational Flexibility Emission Trading Based on the Permit: Revise this paragraph to read: The federal rule allows a source to change its operations, using the emissions trading provisions ofan EPA-approved SIP to netoutand avoid the need to revise its permit. Atthis time, the emissions trading provisions of PartA, Section V, have not been approved by EPA as generictrading provisions. Therefore, until the Colorado SIP contains a generic emissions trading policy approved by EPA, each emissions trade requestwill require a

Regulation Number3 Adopted: October20, 2011 Page 279 

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# Icase-by-case SIP revision. EPA is intending to provide guidance for an emissions trading program in the nearfuture. 

### J.P. Adopted March 16, 1995 Revisions to Regulation Number 3 Construction Permit Program Background Atthe request ofthe U.S. Environmental Protection Agency, Region 8, the Air Quality Control Commission adopted amendments to Regulation Number 3, Parts A and 

### 8, in orderto clarify how the provisions relate to each and the federal regulations. These changes were necessary in orderto gain federal approval ofthe State Implementation Plan. Specific StatutoryAuthority The Specific authority for this regulation is found in the Colorado Air Quality Control Act. Section 25-7- 105(1) provides thatthe Commission shall promulgate such rules and regulations as are consistent with the legislative declaration and necessary forthe proper implementation and administration ofthe Colorado Pollution Prevention and Control Act, including a comprehensive state implementation plan which shall meet all requirements ofthe federal actand shall be revised whenever necessary or appropriate. Section 25-7-109 provides that the Commission shall adopt, promulgate and from time to time modify or repeal emission control regulations that require the use ofeffective practical air pollution controls. Section 24-4-103 provides the rule making procedure followed during the promulgation ofthis rule. Section 25-7-110 provides the specific Commission procedures followed during the setting of standards and regulations. Commission action in promulgating these regulations is taken pursuantto the above statutory provisions. Purpose Mostofthe amendments to Regulation Number3, PartsA and 8 are ofa general housekeeping nature. However, three provisions require greater explanation: The Division originally proposed adding a definition of "construction" consistentwith the federal definition for New Source Review and Prevention ofSignificant Deterioration. To eliminate the potential for confusion and conflictwith the state statutory definition, the Division has removed that provision from the amendments. There is a definition for construction, which applies to Regulation Number3, Parts A and 8, in the General Provisions Regulations; that definition matches the state statutory definition. The changes to the definition of "Net Emissions Increase" in PartA, Section 1.8.37 needs some explanation. In orderfor an increase ordecrease to be creditable, the Division could not have relied on the increase ordecrease in issuing a permit under Regulation Number 3. Also, the source has two choices for proving the extentofthe emissions increase ordecrease: (1) the source submits or has on file an APEN indicating the baseline emissions rate and then submits a revised APEN within one year after making the increase or decrease (the difference between the twoAPENs is the amountofcreditable increase ordecrease) or (2) the source provides credible, demonstrable evidence to the Division ofactual emission rates both before and after making the increase ordecrease (the source can make the before and afterdemonstration any time during the contemporaneous period). The general constructions permit provisions of Part 8, Section IV.J. were amended to provide greater detail ofhowthe Division would actually implementthe provisions. The Division retains the discretion to determine whether itwill issue a general construction permit, although a source orgroup ofsources can request thatthe Division do so. These provisions are meantonly for minorsources, including sources wishing to obtain federally enforceable limits on their potential to emit, making them synthetic minors. The contents ofa general construction permitwill vary depending on the type ofsource involved. The Division Regulation Number 3 Adopted: October20,2011 Page 280will state in the general construction permitthat goes out for public notice all the criteria a source must meet in orderto qualify for coverage underthe permit, the method ofapplication (including specific application forms ifdifferentfrom a standard construction permit), the deadlinefor application, and other requirements as necessary and specified in the permit (i.e. monitoring, reporting, and recordkeeping requirements). After receiving an application to be covered by a general construction permit, the Division will determine whetherthe source fits within the intended coverage ofthe general construction permit, meets all applicable requirements, and satisfies all the criteria as laid out in the general construction permit. Ifthe Division grants a source the right to construct and operate undera general construction permit, there are still some situations underwhich the Division may require the source to obtain an individual construction permit (i.e., the source makes changes that bring itoutofcompliance with the general construction permitorcircumstances change such thatthe source is no longerappropriately controlled underthe general construction permit). Overall, the amendments to Regulation Number3, Parts A and B are meantto integratewith the existing rules and meetthe federal requirements forthe State Implementation Plan. 

### I.Q. Adopted May 18, 1995 Revisions to Regulation Numbers 8 and 3 Synthetic Minor Permit Program This Statement of Basis, Specific Statutory Authority, and Purpose comply with the requirements ofthe Administrative Procedures Act, Section 24-4-103(4), C.R.S. (1994) for adopted or modified regulations. Background
Atthe request ofthe Division, the regulated community and the state legislature (HB94-1264), the Air Quality Control Commission adopted rules thatwould allowthe Division to issue permits to limita source's potential to emit hazardous air pollutants (HAP). Such a mechanism is necessary and important because it enables the Division to issue a permitto a source of HAP in orderto limitthe source's potential to emit below emission thresholds requested bythe applicant, thus allowing the source to avoid a variety of requirements such asTitle V operating permit requirements, Title Ill maximum achievable control technology (MACT) requirements promulgated bythe U.S. Environmental Protection Agency (EPA), or Colorado MACT requirements. Specific StatutoryAuthority The specific authority forthese revisions is contained in the ColoradoAirQuality Control Act, 25-7-101, et seq. (1989 & 1994 Supp.). Section 25-7-109.3(2) provides the specific authority forthe Commission to adopt provisions allowing the Division to create synthetic minorsources of hazardous air pollutants. Section 25-7-109 provides thatthe Commission shall adoptemission control regulations requiring the use ofeffective practical air pollution controls. Section 25-7-109.3(2) provides that in orderto minimize additional regulatory and compliance costs to the state's economy, any program created by the Commission shall contain a provision, which exemptsthose sources orcategories ofsources, which it determines to be ofminorsignificance from the requirements ofthe program. Section 24-4-103 provides the rule making procedure followed during the promulgation ofthis rule. Section 25-7-110 provides the specific Commission procedures followed during the setting ofstandards and regulations. Commission action in promulgating these regulations is taken pursuantto the above statutory provisions. Purpose The rulemaking includes the permanentaddition of Regulation Number8, PartE, Section IVand amendments to Regulation Number3, Part B. Following is a description ofthe purpose ofeach Section within Regulation Number8, Part E, Section IV:

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# I fSection A ofthe rule clarifies that Regulation Number8, PartE, Section IVapplies to sources that choose to voluntarily limittheir potential to emit HAP. This Section clarifies that although the Division shall issue permits to qualified applicants, the Division will not include in the permitany indication ofthe source's exemption status for other requirements (i.e. Title V orTitle Ill ofthe federal Act) unless the source asks the Division to include all relevant emissions units and pollutants inthe permit review. Underthis regulation, the applicant chooses which emission units to cover in the particular permit: that can be all HAP emission points, some orone HAP emission points, all criteria pollutant emission points, and/or some orone criteria pollutant emission points. Unless there is a need for a state-only orfederally enforceable permit condition, the Division will not impose any additional applicable requirements on criteria pollutants or HAPs for the emission unitora numberofemission units. Ifthe permitapplicant wants a thorough review ofthe facility and a determination by the Division thatthe facility qualifies as a synthetic minorfrom Title V and/orTitle Ill, orother specific provisions ofthe state orfederal Act, then the applicant can choose to have a comprehensive Division review in the permit. Sources choose in the permit application the threshold level belowwhich theywantto limitthe potential to emit hazardous or criteria pollutants. Sources maywantto bring their emissions belowTitle V majorsource thresholds or may wantto limittheir emissions below affected source thresholds underspecific MACT standards or enhanced monitoring thresholds when those rules are eventually enacted. When a source applies for a permit under Regulation Number 8, the Division uses the procedural provisions of Regulation Number 3 to issue the permit. Finally, this Section clarifies that receiving a permit underthis regulation will not relieve a source from possible future EPA requirements that apply to minoror area sources of HAP or state conditions; however, such sources may request a permitto further limitthe potential to emit HAP belowthetriggerthreshold. Section B describes the elements ofa permit issued underthis regulation. The permit needs to include practically enforceable permit conditions. The Division makes the final determination on whatthose conditions are on a case-by-case basis for each permit. The monitoring, recordkeeping, and reporting requirements will depend on the specific source, for instance, practical enforceability may require calculating mass balances, installing a continuous emission monitor, keeping track ofconsumption rates forvarious materials, etc. However, the permitconditions to limita source's potential to emitshall be only as stringent as necessary to limitthe source's potential to emitthe pollutant ofconcern. For instance, the Division cannot require a source to add control equipmentto reduce emissions significantly ifthe source can adequately reduce emissions withoutthat control equipment. The applicant may consolidate reporting or monitoring requirements from this regulation and Regulation Number3 for the emissions unit. Finally, if requested by the applicant, the permit may include alternative operating scenarios, approved by the Division. Such alternative operating scenarios shall include specific monitoring, recordkeeping, and reporting methods as needed. However, Section IV.B.4for alternative operating scenarios is not intended to include modifications thattrigger new source review unless such sources go through all the specific requirements ofthe construction permit program for modifications under new source review. Section 

### C tells the source what information to turn in to the Division, increasing the efficiency of communications between the source and the Division and streamlining the application process. The application forms will reflect the intentforthe Division to be flexible in its approach to permitting these sources. Although the Division would prefer a consistent approach (i.e., all applications filled outfully), the Division recognizes that often these sources will have unique circumstances that cannot be adequately addressed in a standard application form. The Division further intends thatthe application forms be flexible enough so that sources can choose to havethe Division calculate emissions and determine the permit conditions for them. Section D, the public participation requirements, is a requirement of EPA. This Section makes mandatory whatwas previously discretionary for the Division. Section Eclarifies thatthe Division can combine the requirements from this Regulation with those for limiting the potential to emitcriteria pollutants under Regulation Number3 into a single permitso that it is easierfor both the Division and the source to keep track ofthe overall permit requirements. Also, this Section IV of Regulation Number 8 is not intended to restrict the ability ofa source to apply for and the
Regulation Number 3 Adopted: October20, 2011 Page 282Division to issue a construction permit under Regulation Number3 with limits on the potential to emit criteria or hazardous air pollutants. Section F explains to the source that ifa physical oroperational change triggers another requirement, the permit issued underthis Section will not relieve the source ofthe obligation to comply with that requirement. Section G informs the source that is must comply with the permitconditions atall times, i.e. on an ongoing basis. Section H serves as an interim mechanism for gaining federal enforceability ofthe permit and is based on EPA guidance on potential to emit; this Section does notapply once EPA has approved these rules for limiting the potential to emit HAP. In orderfor a permitto be federally enforceable, EPA must receive a certification ofcompliance from the source indicating the source will complywith the permitterms. The source should send a copy ofthe initial permit approval with the certification ofcompliance to EPA and a copy ofthe certification to the Division (to keep in the permitfile). The responsible official, defined in Regulation Number3, needs to sign the certification. The revisions to Regulation Number3 are necessary to implementthe provisions of Regulation Number 8, Part E, Section IV through the construction permit program. Note, thatthe operating permit program already has the necessary provisions to integrate Regulation Number8, Part E, Section IV. The amendmentto Section III.A.4 is not intended to extend any new rights to the applicant in the eventthe applicant declines permit conditions set by the Division, this amendmentjust makes explicitthatthe permit is strictly voluntary and that a dissatisfied applicant has normal rights ofappeal associated with construction permits issued under Regulation Number3. The addition ofSection III.A.7 is to clarify that if a source wants to request a limiton the potential to emit in a standard construction permit, the source may do so. This Section also gives the Division the authority to limit the potential to emit HAP in a construction permit. The amendments to Section IV.C implementthe public participation requirements of Regulation Number 8, Part E, Section IV. The requirement thatthe Division submita copy ofthe public notice to EPAfor sources applying fora permit to limitthe potential to emit criteria pollutants orfederal HAP is meantto include criteria pollutants (already required underan agreement between the Division and EPA) and federal HAP listed in AppendixA of Regulation Number8 (these are the HAP listed by EPA underSection 112(b) ofthe federal Act). Permits for sources limiting the potential to emit Colorado HAP do not need to be sentto EPAfor comment. Overall, these rules are intended to meld with the existing permit provisions within Regulation Number3 while providing the added authority forthe Division to issue permits to limitthe potential to emit hazardous air pollutants and the opportunity for Colorado sources to get outofmore rigorous permit requirements. 

### I.R. Adopted May 18, 1995 Revisions to Regulation Number3 Part A, Section II.E.2 (As requested by MetroWastewater Reclamation District) This Statementof Basis, Specific Statutory Authority and Purpose for revisions to Regulation Number3 complies with the requirements ofthe Administrative Procedures Act, C.R.S. '24-4-103(4) for adopted or modified regulations.

The 1990 Clean AirActAmendments required statesto inventory air emissions. C.R.S. ' 25-7-114.1 contains the requirements for this inventory. The Amendments also authorized EPAto conduct emissions studies for certain source categories, included publicly owned treatmentworks (POTWs). No adequate, reliable, and economically reasonable emissions estimations methods are currently widely available for these emissions. Regulation Number3 Adopted: October 20, 2011 Page 283Based on the expectation that publication ofthese studies would result in the creation and dissemination ofpractical emission estimation techniques, revisions to Regulation Number3 were promulgated in March of 1994which postponed reporting of non-criteria reportable pollutants forthese sources until July 31, 1995, or until six months afterthe completion ofthe national studies, whichever occurred first. The postponementalso applied to facilities, which treat municipal-type wastewater, since such facilities' emissions are virtually identical to those from POTWs. EPA has eliminated funding forthe federal POTWstudy. However, the Association of Metropolitan Sewerage Agencies (AMSA) has been assisting EPA in preparing its guidance document, and AMSA has also been preparing its own guidance. These documents are expected to be useful in estimating POTW air emissions. A final draftofAMSA's report is expected to be issued in the summerof 1995. EPA is also expected to issue its finding of presumptive MACTfor POTWs for purposes ofthe Clean AirAct " 112U) and (g) at aboutthis time. Authority The specific authority for this regulatory amendment is contained in C.R.S. '25-7-106(1), which authorizes the AirQuality Control Commission to promulgate such regulations as are necessary or desirable to carry out an effective airquality control program, and ' 25-7-114.1, which authorizes the Commission to promulgate the APEN inventory program. Purpose In orderto give POTWs and facilities thattreat municipal-type wastewater sufficienttime to prepare reliable APENs, the Commission has extended the postponementof reporting for non-criteria reportable pollutants forthese sources until December 31, 1995. The Commission finds that extending the APEN reporting deadline is in the public interest because the information to be published by EPA and AMSAwill not become availableto these sources in time to allowfor sufficiently reliable APEN reporting. 

### 1.5. Adopted August 17, 1995 Revisions to Regulation Number3 to Change TSP to PM-10 for PSD Increments and Housekeeping This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements ofthe Administrative Procedure Act, C.R.S. 1973, Section 24-4-103(4) for adopted or modified regulations.

On June 3, 1993 the U.S. EPA promulgated changes to the Prevention ofSignificant Deterioration (PSD) rules replacing the Total Suspended Particulate (TSP) incrementwith particles with an aerodynamic diameterof less than orequal to a nominal10 micrometers (PM-10) increments. TSP continues to have a significance level for new sources but no longer influences the PSD increments. Additionally the Division has identified several mistakes in the publishing of Regulation Number3. SpecificAuthority The specific authority forthis regulation is contained in the Colorado Air Pollution Prevention And Control Act, 1992 as amended. Section 25-7-105 (1) (a) (I) requires the Commission to promulgate a comprehensive state implementation plan that meets all requirements ofthe federal Clean AirAct. Section 25-7-105(1) (c) requires the Commission to promulgate a prevention ofsignificant deterioration program. Purpose RegulationNumber3 Adopted: October 20,2011 Page 284The Regulation Number 3 PSD rules implementthe Federal PSD rules in Colorado. Underthe PSD program areas that are in compliance with the National AmbientAirQuality Standards (NAAQS) are required to adopt a permit program for the preconstruction review of new stationary sources and modifications ofexisting stationary sources to prevent significant deterioration ofexisting air quality levels. The implementation ofthe new PM-1 0 incrementswill utilize the existing baseline dates and baseline areas for PM. The PM increments measured, and PM-10 already consumed since the original baseline dates established forTSPwill continue to be accounted for, but all future calculations ofthe amountof increments consumed will be based on PM-10 emissions. The Division is also proposing some minor housekeeping while revising this regulation. There were several Sections where the language published in the Colorado Registerwas either repeated orthe changed paragraph and the original paragraph were both printed. There was also an outside request that submitted an outdated version ofthe regulation thatwas inadvertently published. 

### I.T. Adopted December21, 1995 Part A, Sections 

### 1.8.37 & 

### 67; Part B, Section IV.D.4 This Statement of Basis, Specific StatutoryAuthority and Purpose complies with the requirements ofthe Colorado Administrative Procedures Act, Section 24-4-103, C.R.S. and the Colorado Air Pollution Prevention and Control Act, Section 25-7-110.5, C.R.S.

Regulations 3, 7 and the Common Provisions establish lists of Negligibly ReactiveVolatile Organic Compounds (NRVOCs). The revisions adopted consolidate the list of NRVOCs intothe Common Provisions, assuring thatthe same list of NRVOCs apply to all the Colorado Regulations. This provides more consistency in those chemicals regulated asVOCs. Specific Statutory Authority The Colorado Air Pollution Prevention and Control Act providesthe authorityforthe ColoradoAirQuality Control Commission to adoptand modify Regulations pertaining to organic solvents and photochemical substances. Section 25-7-109(2)(f) and 25-7-109(2)(g), C.R.S., grant the Commission the authorityto promulgate regulations pertaining to Organic solvents and photochemical substances. The Commission's action is taken pursuantto authority granted and procedures setforth in Sections 25-7-105, 25-7-109, and 25-7-110, C.R.S. Purpose Ofthe EPA list ofnon-photochemicallyVOCs), and adopting the EPA definition by reference, a single list ofnegligibly reactive VOCs will apply uniformlyto all These revisions to Regulations Number3, 7, and the Common Provisions are intended to clarify substances that are negligibly reactive VOCs, which are reflected in the EPA list of non-photochemically reactive VOCs. By consolidating the list (which consists Colorado Air Quality Control Commission Regulations. This revision will also include EPA's recent addition ofacetone to the negligibly reactive VOC list. The addition ofacetone to the list of negligibly reactive VOC's provides additional flexibility to sources looking for an alternativeto more photochemically reactive VOCs. Because the EPA has added acetone to their list of non-photochemically reactive VOCs many industries, which make and supply products to Colorado industries, are planning to substitute acetonefor more reactive VOCs. This change in the content of products purchased by industry for use in Colorado would adversely affect industries in Colorado if acetone remains a regulated VOC in Colorado. By adopting acetone as a negligibly reactive VOC industries will be able to take advantage ofand benefit from this possible shift in product contents.

RegulationNumber3 Adopted: October 20, 2011 Page 285I.U. Adopted February 15, 1996 Revision to Part A, Section II.E.1 APEN Deferral for Utility and Non-Utility Boilers This Statementof Basis, Specific Statutory Authority and Purpose complies with the requirements ofthe Administrative Procedures Act, CRS 1793, Section 24-4-103(4) for adopted or modified regulations.

The current provisions of Regulation Number 3, PartA, Section II.E.1., were designed to postpone reporting of non criteria reportable pollutants by sources such as utility and non-utility industrial boilers and small municipal generators pending the results ofongoing studies being conducted by EPA pursuant to Section 112(n) ofthe federal Clean AirAct. EPAwas directed by Congress to complete those studies within three years after enactmentofthe federal act, i.e., by November 15, 1993; however, EPA has yet to do so. During the Commission's last deliberations on this subject, it was stated that if EPA could not meet its deadline, then the Commission would revisitthis deadline. Both the Commission and the regulated community were hopeful that EPAwould be able to finish its work by the fall of 1995 so sufficienttime was available for utilities to meetthe December31, 1995 deadline. SpecificAuthority Section 25-7-114.1 provides authority to the Commission to identifyAPEN reporting requirements. There currently are no federal reporting requirements concerning emissions ofnon-criteria reportable pollutants (NCRPs) or hazardous air pollutants (HAPs) from boilers. The current state regulations exceed federal regulatory requirements with respectto APEN reporting ofemissions. Purpose
A short postponement ofthe original deadline serves a significant dual purpose and both the state and the regulated community benefitfrom a deferral in this instance. The postponement avoids forcing an uneconomic and non-beneficial compliance requirement atthis time on the regulated community. Since there are no compliance obligations respecting HAP emissions from boilers, either in effector proposed, EPAand Division interpretations provide that an applicantfor a Title V operating permit need only listnot estimate quantities ofemission of- an application for an operating permit. This revision is administrative in nature, and is not intended to affectairemissions. I.V. Adopted March 21, 1996 Revisions to Parts A, B & C for InsignificantActivities (Parties: Air Pollution Control Division, Colorado Association ofCommerce 

### &Industry and the Colorado Utilities Coalition for Clean Air Division- PartA, Section I.B.9.a; Section II.D.1.kk, 4.a, b.(iii) & (vi); Part C, II.E.3.kk

The Division reviews the addition ofany requested insignificantactivities to Regulation Number 3 once each year. The additions requested included small remote reservoir degreasers and torch cutting activities. Both ofthese itemswere reviewed by EPA Region VIII priorto the hearing date and given verbal approval. The degreaser exemption provides that degreasers not using any chemicals covered by a Maximum achievable Control Technology (MACT) standard and meeting the definition ofsmall remote reservoir are

Regulation Number3 Adopted: October20, 2011 Page 286not required to submitan APEN to the Division. The torch cutting exemption clarifies the status oftorch cutting as an exempt activity. Authority The specific authority forthis regulatory amendment is contained in §25-7-114.1(2), C.R.S., which requires the Commission to exemptthose sources orcategories ofsources, which it determinesto be of minorsignificance from the requirement than an air pollutant emission notice is filed. Section 25-7- 114.6(1), C.R.S., requires thatthe Commission designatethose classes ofminoror insignificantsources ofair pollution which are exemptfrom the requirementfor an emission notice orthe payment ofan emission notice filing fee because oftheir negligible impact upon air quality. Purpose This rule change provides some clarification and additions to the APEN exemption listforthose sources thatthe Division believes to be of minorsignificance. Colorado Association ofCommerce and Industry- PartA, Section II.D.1.ttt; Part C, Section II.E.3.nnn.

The Division reviews the addition ofany requested insignificant activities to Regulation Number 3 once each year. The Colorado Association ofCommerce and Industry (CACI) requested the addition of emergency powergeneratorswith limitations based on the size or hours ofoperation. The revisions rely on EPAguidance regarding emergency powergenerators. Authority The specific authority forthis regulatory amendment is contained in C.R.S §25-7-114.1(2), which requires the Commission to exemptthose sources orcategories ofsources, which it determinesto be of minor significance from the requirement that an air pollutant emission notice be filed. C.R.S. §25-7-114.6(1) requires that the Commission designatethose classes of minoror insignificantsources ofair pollution that are exemptfrom the requirement for an emission notice orthe payment ofan emission notice filing fee because oftheir negligible impact on air quality. Purpose This rule change provides an addition to the APEN exemption list and clarification ofthe insignificant activities list for emergency powergeneratorsthatare ofminor significance base on size and/or hours of operation. Colorado Utilities Coalition for Clean Air- PartA, Section II.D.1.aaa.(i), (ii); sss.(1).iv to vii; uuu; vvv; www; xxx; yyy; zzz; aaaa.(i), (ii); Part C, II.E.3.aaa.(i), (ii), xxx.(1).ivto vii; yyy; zzz; aaaa; bbbb; ecce; dddd; eeee This Statementof Basis, Specific Statutory Authority and Purpose complies with the requirements ofthe Administrative Procedure Act, C.R.S. 1973, Section 24-4-103(4) for adopted or modified regulations.

The current provisions of Regulation Number3., PartA and Part C both contain lists ofactivities and sources considered to be "insignificant" orexemptfrom reporting requirements. On December29, 1995, the Commission proposed revisions to its existing Regulation Number3, PartsA and C. Alternative proposals were submitted by members ofthe public, and afterconsultation, were endorsed by the Division. Regulation Number3 Adopted: October20,2011 Page287SpecificAuthority Section 25-7-114.1 provides authority to the Commission to identify APEN reporting requirements. Further, the rulemaking authority ofthe Commission is found in Sections 25-7-105 to 109 CRS, as amended. The regulations ofthe Commission currently contain lists ofactivities and sources exempt from APEN and reporting requirements. On July 10, 1995, the U.S. EPA issued a White Paper designed to streamline and simplify the development of Part 70, Title V permit applications. TheWhite Paper explains that Part 70 provides permitting authorities considerable flexibility in defining certain activities or sources as "insignificant" upon proper showing ofsuch. TheWhite Paper itselfcontains substantial lists ofactivities or sources that are insignificantfor reporting purposes. Purpose The addition ofthe following sources oractivities to existing APEN exemption and reporting requirements serves a significant dual purpose and both the state and regulated community benefitfrom the alternate proposals. The revision ofexisting regulation avoids forcing an uneconomic and non-beneficial compliance requirement on the regulated community. Several ofthe following activities orsources are on federal lists as "insignificant," as well as those of neighboring states. These revisions are administrative in nature, and are not intended to affectair emissions. Non-road Internal Combustion Engines: Machinery utilized by the construction and service industries such as various types of pumps, light plants, compressors, and generators are powered by various sizes of internal combustion engines. Mostare relatively small. Some emergency equipmentsuch as fire pumps are powered by largerengines, but are operated infrequently. The exemptions listed above identify those within this category that have insignificant emissions. This exemption is consistentwith other exemptions in the regulation (see, for example, Subsections k. and 

### 1.). As a practical matter, APENS have not been required from mostof these machines in the past. The sizes ofmostofthese engines are comparable to the thousands of light and heavy trucks (gasoline and diesel powered), which travel the roads in this state withoutany reporting requirements. The EPA proposal of May 17, 1990 (58 Fed. Reg. 28809) and the EPAstudy it references contains useful findings. It exempts all spark-ignition (gasoline, propane and natural gas powered) engines. On page 28816 ofthe Federal Register notice, EPAfinds that itdid not propose manufacturing standards for spark-ignition engines because little to no emission benefitwould be achieved for testing, record keeping and reporting requirements on these engines. Cost burdens industry would have to bearwould not be reasonable. It also found thattest procedures have not been demonstrated to be capable ofaccurately predicting the levels of hydrocarbons, carbon monoxide and particulate matter emissions generated by these engines in actual use. In addition, the economics and failure problems associated with gasolinepowered engines dictate that relatively small sizes ofgasoline engines are used for the lightcommercial equipmentdescribed above. As a result, all spark-ignition engines should be exemptfrom APEN reporting and classified as an insignificant activity. The EPA study found that it could also exemptengines located on a trailer ortruck bed. These engines are relatively small (dictated by trailer size and carrying capacity limitations) and power light commercial equipment, such aswelders, compressors and generators, see page 28815 ofthe Federal Register notice. Larger machines are typically powered by diesel engines ofvarying sizes. A review ofemission factor data from AP-42 supports a Division ofdiesel-powered engines into three categories for APEN exemption purposes. Using emission factors from AP-42, expected emissions from a 175 horsepower diesel engine operating 24 hours per day, 7 days perweek, 52 weeks peryear at a load factor of0.5 would present a "worstcase" estimate underthe 8760 hours peryear "potential to emit" methodology. The following emissions are calculated:
Regulation Number 3 Adopted: October20,2011 Page 288

### -0.5 ton per year ofcarbon monoxide -0.2 ton peryear of hydrocarbons -0.2 ton per year ofparticular matter -2.5 ton peryear of nitrogen oxides -0.2 ton peryear ofsulfur oxides A 300 horsepowerengine could operate up to 3 hours perday, or 1095 hours peryear, and have the same emissions as the 176 horsepowerengines. Similarly, an engine up to 750 horsepowercould operate 1 hour perday, or 365 hours peryear and have the same emissions as the 175 horsepower engine class. This approach is consistent with the approach taken by the EPA in its Guidance Documentfor "Calculating Potential To Emitfor Emergency Generators," issued September6, 1995. There, the EPA agreed thatthe use of8,760 hours peryearfor calculating the potential to emitfor emergency generators did not control. Instead, EPA recommended thatthe potential to emit be based upon an estimate ofthe maximum amount of hours the generators could operate based on a case-by-case basis wherejustified by the source owneror permitting authority. Surfacewater storage impoundment ofnon-potable water and storm waterevaporation ponds: Chemical analysis and observation ofthese sources has consistently demonstrated thatthey are a negligible emission source ofany regulated air pollutant. Non-potable water pipeline vents: Properflow through of non-potable water maintains these sources as insignificant. Properflowkeeps the water in line from becoming septic and therefore a negligible source ofany regulated air pollutant.
1. Steam vents and safety release valves: Safety release valve vents enable immediate reduction ofpressure in steam lines. Emissions out ofthe safety valves consist only ofpure watervapor. 2. Deaerator/vacuum pump exhausts: These are negligible sources ofemission ofany regulated air pollutant. 3. Seal and lubricating oil systems for steam turbine electric generators: Atmosphericvents exist in coal-fired utility turbine lube oil systems enable removal ofwatervapor from lube oil return lines from the turbine and generator bearings. This enables atmospheric pressure operation oflube oil storage tanks. These are not storage systems, but actual service operations. Calculations reveal thatthese activities would emit less than one ton ofVOC's a year, perfacility.
4. Venting ofnatural gas lines for safety purposes: To enable the safe delivery offuel gas to the utility boilers, and provide the ability to safely purge natural gas from fuel lines within a generation building, vent lines existto allowthe intermittent discharge ofnatural gasto safe areas away from personnel and ignition sources. The intermittentdischarge of natural gas would occurduring start-up and shutdown ofthe natural gas supply to generating unit burners to purge airor natural gas from the piping system within the generation building. These activities are not expected to emit more than oneton ofVOC's or morethan 110 pounds of hexane a year. Sulfuric acid storage tanks notto exceed 10,500 gallons capacity and sodium hydroxide tanks:

Regulation Number3 Adopted: October20, 2011 Page 289Sulfuric acid and sodium hydroxide, used to control pH, are stored in tank systems vented to the atmosphere. These vents will exhaustvapor from a tank system through vapor extraction and contraction because ofchanges in temperature and barometric pressure. These losses, which are referred to as breathing losses, occurwithout any significant change in liquid level in the tank, and are negligible. Waste lubricating oil storage tanks not largerthan 40,000 gallons and lubricating oil-conditioning systems: Lowvolatility waste turbine and motor lube oil generated by utility plant machinery and mobile heavy equipment is stored in tanks. These tanks are equipped with atmosphericvents on the tops ofthe tanks. Emissions through these vents are expected to occurduring the filling and emptying ofthe tanks. These emissions contain trace amounts ofVOC's, with no other reportable emissions expected. Based on the low annual throughput ofthese tanks, emissions are insignificant, assuming thatthe tanks are emptied approximately five times peryear or less. Colorado Utilities Coalition for Clean Air

- PartA, Section II.E.1 This Statementof Basis, Specific Statutory Authority and Purpose complies 24-4- with the requirements ofthe Administrative Procedure Act, C.R.S. 1973, Section 103(4) for adopted or modified regulations.

The current provisions of Regulation Number 3, PartA, Section II.E.1, were designed to postpone reporting of non-criteria reportable pollutants by sources such as utility and non-utility industrial boilers and small municipal generators pending the results ofongoing studies being conducted by EPA pursuant to Section 112(n) ofthe federal Clean AirAct. EPAwas directed by Congress to complete those studies within three years after enactmentofthe federal act, i.e., by November 15, 1993; however, EPA has yet to do so. Both the Commission and the regulated communitywere hopeful that EPAwould be able to finish itswork by the fall of 1995 so sufficienttimewas available for utilities to meetthe original December31, 1995 deadline. The EPAdid not meetthat deadline, and the Commission granted a deferral until June 30, 1996. The EPA study is nowthe subject offurther delay due to one ofthe individual constituent hazardous air pollutant studies and the extensive federal governmentfurloughs in both late 1995 and early 1996that substantially contributed to further delay the study's progress. Specific Authority Section 25-7-114.1 provides authority to the Commission to identify APEN reporting requirements. There currently are no federal reporting requirements concerning emissions of non-criteria reportable pollutants (NCRPs) or hazardous air pollutants (HAPs) from boilers. The current state regulations exceed federal regulatory requirements with respect to APEN reporting ofemissions. Purpose A short postponement ofthe amended deadline serves a significant dual purpose and both the state and the regulated community benefitfrom a deferral in this instance. The postponementavoids forcing an uneconomic and non-beneficial compliance requirement atthis time on the regulated community. Since there are no compliance obligations respecting HAP emissions from boilers, either in effect or proposed, EPA and Division interpretations provide that an applicantfor a Title V operating permit need only listnot estimate quantities ofemissions of- HAPs reasonable believed to be contained in the boiler emissions in an application for an operating permit. This revision is administrative in nature, and is not intended to affect air emissions.

Regulation Number 3 Adopted: October 20, 2011 Page 290

### I.W. Adopted March 21, 1996 Revisions to Part 8, Section III.D.1.f, Section IV.C.1.e, Section IV.C.1.f, and Section IV.C. The changes to Regulation Number3 were adopted in orderto make it clearthatthe redesignation ofthe Denver metropolitan area as an attainment maintenance area for ozone does not change the requirement for gasoline stations in the Denver metropolitan area are to obtain a construction permit. Section III.D.1.fappears to implythat, upon such redesignation, gasoline stations in the Denver area would not be required to obtain a permit because that area would become an attainment area. However, Section III.D.5 goes on to provide that such exemptions do not apply because gasoline stations are subjectto the RACT requirements of Regulation Number7, Section VI.B.3.b. The purpose ofthe revisions is simply to make it clearfrom the text of Regulation Number3, Part B, Section III.D.1.falone that gasoline stations in the Denverarea are still required to obtain a construction permit. The revisions to Sections IV.C.1 and IV.C.4 were necessary to ensure that permits forde minimis exemptions from, and alternative means ofcompliance with, the requirements of Regulation Number? are subjectto review and comment by the public and by EPA Such comment and review is necessary because the Sections I.A. and II.D of Regulation Number 7 provide the agency with the authority to revise the requirements that apply to a source without revising the SIP. The SIP requirements were developed and adopted following review and comment by EPA and the public. It follows that any change in those requirements with respect to any source orcategory ofsources should also be subjectto such public comment and review. The specific statutory authority to amend this regulation pertaining to exemptions from permit requirements is set outat§ 25-7-114.2. Furtherstatutory authority can be found in the Commission's authority to redesignate the area because such redesignation must include an approvable maintenance plan. The specific statutory authority to promulgate the rules necessary for redesignation is set out in§§ 25-7-105(1)(a)(l) and (2); -106(1)(a); -107 (1) and (2.5); and -301. This revision to Regulation Number3 is not intended to reduce air pollution and will have no regulatory effect on any person, facility oractivity. Forclarification, the Commission adopted these re_g_ulat1on revisions as fo lows: Regulation Revision Ozone SIP and Maintenance Plan
Part B, Section III.D.1.f Exists in Appendix C ofthe Ozone Maintenance Plan to be come a part ofthat document approved March 21, 1996 Part B, Section IV.C.1.e and f; Section IV.C.4 Adopted as subsequent regulation revisions to be submitted to the Governor and EPA Separately and concurrently as a revision to the SIP (and Maintenance Plan). 

### I.X. Adopted June 20, 1996 Revisions to Part A, Section V.C.1.f (Fees Correction)

This revision corrects an erroneous regulation change requested by the Division in response to an EPA letterofSeptember 19, 1994, which provided comments on the revisions to Regulation Number3 for the operating permit program. The comment made by EPAwas for clarification, nota requirement thatthe State should not chargeforfugitive emissions. The change requested by the Division in 1995 included the term fugitive emissions in the paragraph ofexclusions from the definition of regulated pollutant. Because ofthis change, the Division's authority underthe statute to charge annual fees for fugitive RegulationNumber 3 Adopted: October20, 2011 Page 291emissions became confused which affected the Division's ability to cover its operating costs through fees. The regulation text also no longerconformed to Section 25-7-114.7, as revised in the 1996 legislative session. Authority Section 25-7-114.6.(3), C.R.S., requires thatthe revenues from fees collected by the Division approximate the annual appropriations to the Division to carry out its duties with respectto stationary sources. Section 25-7-114.7, C.R.S., requires imposition ofan annual emission fee on stationary sources, and defines what is a regulated pollutantfor purposes ofthese fees. Purpose These changes address an erroneous March 1995 revision made with respect to the charging offees for fugitive emissions. The revision specifically exempted fugitive emissions and would significantly reduce the Division's ability to collectfees sufficientto cover duties with respect to stationary sources. In 1992 the General Assembly prohibited imposition ofannual fees forfugitive dustorfugitive emissions as those terms were defined atthe time in "Commission rule 1.8.1 of regulation number 3, 5 CCR 1001-5." That rule defined only fugitive dust and the March 1995 regulatory revision inadvertently addressed fees on fugitive emissions as well. This rule conforms the regulation to statute, and eliminates any ambiguity between the two. Moreover, during the 1996 legislative session, the legislature in HB1271 amended Section 25-7-114.7(1) to clarify the authority ofthe Commission to assess fees forfugitive emissions. The Commission intends that all forms of"fugitive dust," regardless ofwhetherthe dust is ofa size or substance to adversely affect public health orwelfare, is excluded from the definition of"regulated pollutant", for purposes ofannual fees. The Commission determines that these revisions are administrative in nature and are not intended to reduce air pollution. 

### I.Y. Adopted June 20, 1996 Revisions to PartA, Section 1.8.9, 59, Section V.C.12; Part 8, Section 111.0.2; Part C, Section II.A.1.b, Section VI.A, E, H.3 and Section XII.A.1;Appendices 8, C and D for Hydrogen Sulfide Background The Division requests thatthe Commission adoptchanges to Parts A and C and the Appendices within Regulation Number 3 to better reflect current EPA implementation ofthe Title V operating permit program. These changes include: (1) noting that a source majoronly forTotal Suspended Particulate (TSP) is not required to obtain an Operating Permit in Part C; (2) deleting the Hazardous Air Pollutant reference beside the pollutant Hydrogen Sulfide (H2S) in Appendices 8, C, and D of Regulation Number 3 to reflect the federal delisting ofthis pollutant, and; (3) expanding the definition of "applicable requirement" in Part A to clarify that EPA-issued PSD permits are applicable requirements ofthe Operating Permit Program. A discussion ofeach ofthese changes follows. The current notation under Regulation Number 3, Part C Section II.A, General Considerations, lists all major sources as being required to obtain Operating Permits. The EPA has issued a written guidance document indicating that the definition of regulated air pollutantfor purposes ofTitle V applies only to emissions of PM-10, and notTSP. The current requirements reflected in Part C, Section II.A.1.b does not reflect the federal program requirements. Currently, H2S is reflected as a Hazardous Air Pollutant in Appendices 8, C, and D. The EPA stated that the inclusion of H2S on the federal listwas a typographical errorand removed the pollutantfrom the federal list. As a result ofthe reference to H2S as a hazardous air pollutant in the Appendices, sources Regulation Number 3 Adopted: October20, 2011 Page 292emitting H2S have been charged annual fees for HAPs and sources majorfor H2S emissions could be required to get an Operating Permit. The current definition ofapplicable requirement in PartA, Section I.B.9.a does not provide authority for EPA-issued PSD permits to be incorporated into Operating Permits. The definition of"applicable requirement" in Part 70 ofthe federal program includes permits issued by EPA. The State needs this regulatory change to make the rules consistentwith the federal law. Currently, regulated entities subject to these requirements can obtain a permitfrom EPA orcan voluntarily have the requirement placed in theirTitle V permits, butthis situation does not supportthe intent behind the Title V program. SpecificAuthority The specific authority for changes to this regulation is found in the Colorado Pollution Prevention and Control Act. Section 25-7-105(12) provides authority to promulgate regulations, which are necessary to implementthe minimum elements ofTitle V. Section 25-7-103(1.5) allows the Commission to define air pollutant consistent with thefederal act. Section 25-7-114.4(1)(I) and Section 25-7-114.4(3)(a) provide authority for promulgating regulations for the effective administration ofconstruction and operating permits, and complying with all applicable requirements for operating permits. Section 25-7-114.5 provides authorityfor evaluating permit applications to determine whether operation and emissions comply with all applicable emission control regulations. Relevantfederal law includes 42 U.S.C. Section 7661a(b)(5)(A), and 40 C.F.R. Sections 70.1(b), 70.3, and 70.6(a)(1) regarding applicable requirements. Commission action in making changes to Regulation Number3 is taken pursuantto the above statutory provisions. Purpose The amendments adopted by the Commission add language in Regulation Number3, Part C, Section II.A.1.b indicating that a source that is majoronly for TSP is not required to receive an Operating Permit. This amendment ensures conformity with the federal law. The amendments delete the reference to HazardousAir Pollutant noted nextto hydrogen sulfide in Appendices B, C, and D. This ensures consistencywith the Federal delisting and eliminates the potential confusion for sources that will be majoronly based on emissions ofhydrogen sulfide as a Hazardous Air Pollutant to obtain an Operating Permit. The amendments expand the definition ofapplicable requirement in Part A to include those permits issued by EPA under Part C and Part D ofthe federal act. This ensures conformity with the federal law. The amendments correct a few typographical errors that existed in Regulation Number3, Parts A, B, and 

## c. Finally, the amendmentto Part C, Section II.A.1.b, regarding TSP, is administrative in nature and is intended to reflect current EPA policy; it is not intended to reduce air pollution. The amendmentto PartA, Section I.B.9.a, regarding the definition ofapplicable requirement, is administrative in nature and reflects the requirements of Part 70. This action regarding the definition ofapplicable requirement maximizes air quality benefits in the mostcost effective manner by enabling sources to incorporate federally issued PSD permit into their Operating Permit. Thereby, these sources will only be reporting to one enforcement authority. These revisions applicable to Part C are notto be submitted as part ofthe State Implementation Plan. 

### I.Z. Adopted October24, 1996 Revisions to Generic Part A, Section V, (with Regulation Number5, Emissions Trading and Banking

RegulationNumber3 Adopted: October20, 2011 Page293This Statementof Basis, Specific Statutory Authority and Purpose complieswith the requirements ofthe Colorado Administrative Procedures Act, Section 24-4-103, C.R.S. and the Colorado Air Pollution Prevention and Control Act, Sections 25-7-110, 25-7-110.5 and 25-7-110.8, C.R.S.

The Division has worked with the emissions trading and banking subcommittee to develop Regulation Number 5 and revisions to Regulation Number3 for the purpose ofimplementing an EPA-approvable emissions trading program. The subcommittee has developed a trading rule combining elements from the existing EPA guidance and the prior Commission rule. The subcommittee spent a great deal oftime discussing the issues around the possible uses for credits, how credits could be certified, and howthey should be traded and tracked. Emission reduction credits are intended to be granted only for reductions beyond compliance levels that are actual, quantifiable, surplus and enforceable. This rule is not intended to impose additional control limitations on sources. The rule does impose requirements to ensure thatthese basic criteria are met in orderto guarantee thatthe source flexibility afforded by this program does not occuratthe expense ofair quality. This rule is a revision to the SIP done only underthe Commission's general authority. Thus, the trading and banking rule will not be state enforceable until after legislative review. Section 25-7-133(2), C.R.S. Additionally, because EPA mustapprove this change into the SIP, the Commission finds it appropriate to delay the effective date ofthese revisions until EPA approval as a SIP revision. Thiswill provide the sources that mightwish to participate the assurance thatthe rule is approved and thatthe credits are useable priorto the implementation ofthe program. The existing trading provisions in Regulation Number 3 will remain in effect until the newtrading rules are approved by EPA. These constraints on the effective date ofthese revisions are reflected in the rule text approved by the Commission. In addition, in orderto avoid confusion aboutwhat portions ofthe regulations are effective until EPAapproval ofthe SIP change, the parts of Regulation Number3 thatwill be repealed are printed in italics. State implementation plans are to include, among otherthings, enforceable emissions limitations and other control measures, means ortechniques to meetthe requirements ofthe Clean AirAct. These are to include economic incentives such as fees, marketable permits, and auctions ofemissions rights. 42 U.S.C. 7410(a)(2)(A). These regulation revisions are being submitted as a SIP revision pursuantto the foregoing Clean Air Act requirements. The following issues were identified by the subcommittee and noticed by the Commission for further consideration. The Commission discussed and resolved these issues in the course ofthis rulemaking proceeding and makes the following findings regarding these issues. Issue: Once used, does a permanent emission reduction credit (ERC) ever expire? Some believe that an ERC once used, even iffrom a permanent reduction, should expire after some period (e.g., 20 years). Conclusion: The Commission, based on the experience in the previous trading rules, decided thatthe permanent credits should not expire afterthey are put into use. 5. Issue: Should a decrease in electrical demand be usable to generate emission reduction credits? Conclusion: Because ofthe existence and operation ofthe national electrical grid system, the Commission believes that itwould be far too difficultto verify thatthere had been a decrease in demand (a decrease in actual emissions) and nota variation in the grid structure, and therefore atthis time finds it is inappropriate to allow a decrease in demand to generate ERCs.

RegulationNumber 3 Adopted: October 20,2011 Page294

### 6. Issue: As the proposed rule is written, inter-pollutanttrading is allowed on a case-bycase basis subjectto Division approval. The subcommittee and the Division recognized that a universal orstandard protocol for approving such trades would be desirable, but that no officially approved protocols for any inter-pollutanttrades exist. Conclusion: The Commission agrees thatthere is currently insufficient scientific information available to support inter-pollutanttrades in most cases. In orderto ensure that the Division staff is not placed in the position ofhaving to develop information and protocol to support an inter-pollutant trade proposal, the Commission finds thatthe burden of proving the acceptability ofan inter-pollutant trade shall be placed on the source. Because ofconcerns expressed by the EPAthatthe protocol for inter-pollutanttrades has notyet been developed, the language ofVI.B. was amended to allow proponents ofsuch trades the opportunityto make their case to the Division and EPAfor approval. This amendment attempts to address the EPA concern. 7. Issue: The proposed rule states thattemporary credits must be credited and traded within the same "season" forseasonal pollutants. Should temporary credits be allowed to be traded from a season oflowerconcern to a season of higherconcern? Conclusion: The Commission finds that the use oftemporary credits should be restricted to the same season in which they were generated, ora season oflowerconcern. This will help mitigate any significant increases in seasons that may cause a violation ofthe NAAQS. Issue: Atthis time no internal provisions existfor program developmentand implementation. How should the cost ofthe program implementation and development be addressed? Conclusion: The Commission acknowledges thatthe Division will monitorthe activity in the trading program and, ifneeded, legislative fee authority will be sought. Fees for permit changes required by this rule will be charged pursuantto Regulation Number3. Nevertheless, the Commission acknowledges that resources are notcurrently available and funding may be needed for this program. 8. Issue: Should the rule contain procedures or criteria specific to trading HazardousAir Pollutants (HAPs)? The subcommittee and the Division agreed notto address this issue of HAPs in the proposed rule. Conclusion: The Commission is concerned that use of ERCs for criteria pollutants that contain orconsist of HAPs could unduly increase the risks to communities and the environment in the vicinity ofthe creditusing source. Assessing relative risk is difficult, time-consuming and highly fact-specific to a particular source and trade. In orderto address this concern, the Commission adopted Section VI.G.8 that requires that the HAPs reduced to generate the ERC must be ofequal orgreatertoxicity than the HAPs contained in the emissions forwhich the ERC will be used in lieu ofsatisfying an applicable requirement. Section VI.G.8 does notoperate as an emissions control regulation on any HAPs, but is simply a limitation on participation in the trading program. 9. Issue: How is the base emission rate set? In orderto showthe level ofactual emissions ata source before reductions forwhich credits are claimed, a period representative of normal operating conditions must be used. Conclusion: The Commission adopts provisions that require using the lasttwelve months' actual emission rate unless the lasttwelve months are not representative. The source may propose to the Division to use any consecutive twelve months in the lastten years as more representative ofnormal unit operations. This allows mostsources to use a period, which the Commission believes is likelyto be representative ofnormal operating conditions. Where the source can show that the period is not representative, the rule allows source flexibility in determining their pre-reduction actual emissions. RegulationNumber 3 Adopted: October20,2011 Page 295

### 10. Issue: Should the Commission give authority to the Division to allowdiscounts from the ten percentcontribution ofemission reductions for airquality benefits for generators that participate in a voluntary pollution prevention program orothervoluntary "beyondcompliance" programs? Should a generator be allowed to contribute only five percent of its their emissions reductions for airquality benefits as an incentive for participation in pollution prevention programs? Conclusion: The Commission agreed to provide such flexibility to the Division for generators that have voluntarily adopted comprehensive and facility-wide environmental programs such as a Pollution Prevention Program orother similarvoluntary "beyond-compliance" programs. 11. Issue: Should ERCs be used to satisfy BestAvailable Control Technology (BACT) or Lowest Achievable Emission Rate (LAER) requirements where a source triggers PSD or nonattainment New Source Review and must install BACT or LAER control technologies? Recent reports in the national press have indicated that EPA is giving serious consideration to allowing ERC use for BACT as it attempts to move away from commandand-control approaches to more contemporary marketapproaches. Conclusion: The Commission believes that ERCs may appropriately be used in lieu ofthe emissions reductions which would otherwise be achieved by application ofthe BACT technology requirements in situationswhere such technology requirements are notcost-effective or exacerbate other pollutant emissions, and the use ofan ERC would achieve the same purposes more efficiently. In such instances, itwill be incumbenton the source to demonstratethat such a situation exists. In any case, however, the other PSD provisions and required analyses would apply to the source. PSD requirements are performed on future allowable emission rates. Because ofconcerns aboutthe use of ERCs for BACT requirements, although the Commission has allowed ERCs to be used to meet BACT requirements in limited instances, it believes thatthis provision should only be applied prospectively for new BACT requirements and notto allow a source to remove BACTwhere it has already been installed. The Commission concludesthat use of ERCs in lieu ofemissions reductions from LAER is notappropriate because ofthe potential impacts on nonattainmentareas. 12. Issue: Howwill the local effectof "hot spot" pollutanttrades be analyzed to prevent a local criteria pollutant exceedance due to emission credittransactions? Should the rule require modeling ofcriteria, pollutants to assure there are no exceedances ofthe National AmbientAir Quality Standards? Conclusion: The Commission adopts the language in Section VI.G.7 of Regulation Number 5 requiring modeling for all trades in orderto ensure thattrades do notcause orcontribute to a NAAQS exceedance, an increment exceedance, or any violation ofa required SIP provision. As that Section reflects, the source may request thatthe Division waive the modeling requirement ifthe source can documentto the Division's satisfaction thatthe trade has a negligible impact. 13. Issue: How and who modifies the conformity budgetfor intersectortrading? With mobile to stationary source trades, does the emission budget increase afterthe life ofthe credit has expired, and how is this accomplished? Conclusion: The Commission has provided for ERCs to be available to satisfy conformity requirements in accordance with the federal rules. The Transportation Conformity requirements (40 CFR Parts 51 and 93) presently allowfortrades among emissions budgetswhere eithera SIP revision or a SIP establishes mechanisms for such trades. 40 CFR §93.124{c). The Colorado emissions trading rule is intended to be a SIP revision establishing such a "mechanism" to allowfor such trades. The Commission recognizes that, if mobile source emissions rise above the mobile source emissions budget in the state implementation plan, a plan revision may be necessary as otherwise required by state and federal law.

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### 14. Issue: What becomes ofthe "buffer" between a credit-generating source's potential to emitand its actual emissions before the reduction forwhich the credit is claimed? Does the generatorgetto keep a portion, all, or none of it? Conclusion: The Commission finds that methods exist to allow a source to retain the operating flexibility from a pre-reduction "buffer." When a source wants such flexibility, it may claim credits for less than the entire reduction in emissions accomplished; the difference constitutes a new "buffer." A source may use temporary credits to meet short-term operating needs. These methods retain flexibility forthe source without relying on "paper reductions." The Commission concludes that it is imperativethat reductions forwhich credits are granted must be actual reductions. Allowing a source to retain a bufferfrom within the credits granted, as proposed by the Colorado Association ofCommerce and Industry, would result in credits for "reductions" which did notactually occur. This result is unacceptable, particularly because sources determinetheirown permitted emissions levels when they file theirAir Pollution Emission Notices. Forexample, a source with a ninety-five ton per year permitted level that actually emits fifty tons reduces its emissions to forty tons. The source should take a new permitwith a level between forty and fifty tons (e.g., forty-five tons) so that the source has a five-ton buffer. The source may then fluctuate its emissions between forty and forty-five tons without violating the permit, and generate temporary credits for any emissions reductions belowforty-five tons. In orderto ensure that reductions are actual, an ERG-generating source will not be able to increase its permitted emissions in the absence ofa process orcontrol modification. The source cannot, forexample, simply file an APEN with higher emissions estimates and thereby increase its permitted emissions. The effectwould be to allow emissionsforwhich credits were already granted, resulting in "paper reductions." This consequence is unacceptable. 15. Issue: Should a closer relationship be established between emission trades and the various pollutant-specific SIP elements? With regard to the spatial distribution of emissions, the rule as proposed did not acknowledge any sub-regional emission budgets, dispersion modeling requirements, orother spatial considerations contained in attainment and maintenance demonstrations for specific SIP elements. Conclusion: The original proposed regulation did not have a modeling requirement for ERC use. The Division subsequently proposed that modeling be required priorto an ERC use unless the source requests that such modeling be waived and the source can showthat the ERC use would have a "negligible" impact. The ColoradoAssociation ofCommerce and Industry expressed a concern that the Division would require costly or unnecessary modeling in mostcases. This concern stems from the lack ofdefinition ofwhat is "negligible" in thejudgment ofthe Division. The Commission believes that modeling should only be required where the location orcircumstances ofthe ERC use would reasonably be expected to cause orcontribute to a NAAQS violation, an increment exceedance, orviolation ofa SIP provision such as neara "hot spot" in a nonattainment area orwhere ambient conditions are within 5% of any applicable standard. The Commission, based on the explanation offered by the Division, believes that the modeling required by the rule as adopted will adequately address this issue. 16. Issue: Should the emission trading rule clarify whethertrades can take place among differentairsheds/Air Quality Control Regions. Conclusion: The Commission adopts two levels of limitations on the geographic scope oftrading. First, trades are limited to sources within the same nonattainmentarea orfrom a source in a nonattainment area to one in an attainment area. Second, all trades must be between sources within the same PM-10 PSD areas. These limitations are intended to avoid excessive impacts on local communities and Class I areas from long-distance trades.

RegulationNumber 3 Adopted: October20,2011 Page 297In addition to the issues discussed above, the Commission also considered concerns about granting ERCs for emission reductions that occurred in the past. This rule allows a source to use credits generated under the old rule and to seek credit certification for reductions, which occurred priorto adoption ofthis rule. However, the Commission wants to emphasize that past emission reductions, which have been used to demonstrate attainmentor reasonable further progress for SIP purposes are not eligible to qualify as ERCs. The Commission recognizes that use of ERCs in lieu ofcompliance with an emission limitation may raise public concerns in the vicinity ofthe credit-using source. Forthis reason, the rule anticipates that notice to the Division will be required priorto use of ERCs. Permanent ERC use must be accomplished through a permit change. Temporary ERC use may occuronly afteran APEN is filed with the Division. Each of these documents is available to the public. Notices of ERC use will be published on the ERC Trading Network by the Division. The provisions of Regulation Number3 requiring and allowing public notice and comment of proposed permits and modifications will also apply to permitactions to approve use of ERCs. The Commission believes that use ofthe Division's discretion to seek public comment needs to be supplemented in orderto provide sufficient information to the public regarding proposed uses of ERCs. Accordingly, the Commission has included a requirementthatthe Division notify local governments in the affected area when the trade will result in the use of ERCs, which would exceed the threshold for, or otherwise trigger, public notice and comment pursuantto Section IV.C.1 of Part B, Regulation Number3. The Commission anticipates that local governments will be able to use this notice to schedule informational meetings for citizens, which Commission members and appropriate Division staffwill be able to attend. The Commission also emphasizes thatthe Division should exercise appropriate discretion to provide public notice and commentfortrades that involve HAPs, which would be implemented by notifying the local government pursuantto the process described above. The Commission elected to preclude trading ofelemental lead because ofthat pollutant's particular· characteristics and modified the definition ofcriteria pollutantfor the purposes ofthis regulation. The Commission included Section IV.A.1.d. in this regulation to ensure that ERCs are granted only for real overall reductions in emissions. This provision ensures that reductions will be creditable only ifthe emissions are not replaced in the airshed by anothergenerator in a business oflike kind. In orderto assure thatthis program does not grantcreditfor "paper'' reductions, the rule prohibits generating ERCs where this business shiftwill replace emissionswithin the same airshed. This determination will be made on a case-by-case, fact-specific basis. Specific Statutory Authority These regulation revisions are adopted underthe general authority ofthe Commission found in Section 25-7-105(1), C.R.S. and are consistentwith 42 U.S.C. 7410(a)(2)(A). Purpose This rule was proposed in orderto provide the maximum flexibility for sources in meeting the state and federal requirements outlined underthe possible uses for credits. The Commission makes the following findings in regards to the adoption ofthis regulation: 1. The Commission has considered, and has based its decision, on the reasonably available, validated, reviewed and sound scientific methodologies and information made available by interested parties.
2. Where these revisions are notadministrative in nature, the record supports the conclusion thatthe provisions adopted will result in a demonstrable reduction in air pollution. This reduction is accomplished through the retirementof 10% ofthe achieved reduction in emissions.

RegulationNumber 3 Adopted: October 20, 2011 Page 2983. The revisions selected maximize the airquality benefits ofthe emissions standards that apply. The revisions selected are the most cost-effective based on the documents submitted by the parties under Section 25-7-110.5, and provide the regulated communitywith flexibility in meeting emissions limitations. Although the requirement for increased emissions modeling may impose additional costs, the Commission believes this requirement is necessary to ensure that no violations ofair standards will occuras a result ofusing ERGs. 

### I.AA. Adopted November21, 1996 Revisions to Appendices 

### 8, C This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements ofthe Colorado Administrative Procedures Act, Section 24-4-103, C.R.S. and the Colorado Air Pollution Prevention and Control Act, Section 25-7-110.5, C.R.S.

Regulations 3, 7 and the Common Provisions establish lists ofNegligibly Reactive Volatile Organic Compounds (NRVOCs). The revisions adopted update the list of NRVOCs so thatthe state list remains consistent with the federal list. Additionally because perchloroethylene will no longer be listed as a VOC in Regulation Number7, Section XII, Control ofVOC Emissions from Dry Cleaning Facilities using Perchloroethylene as a Solvent, is being deleted. Regulation Number8 and 3 listthe federal HazardousAir Pollutants (HAPs). In the June 8, 1996 Federal Registerthe EPA removed Caprolactam (CAS 105-60-2) from the federal list ofHazardous Air Pollutants. The conforming changes in Regulation Number3 Appendices B, C and D have been made to keep the list offederal HAPs in Regulation Number3 consistentwith the federal list. The list of HAPs in Regulation Number8 has been removed and a reference to the list in Regulation Number3 has been added. Specific Statutory Authority The Colorado Air Pollution Prevention and Control Act provides the authority for the ColoradoAirQuality Control Commission to adopt and modify Regulations pertaining to organic solvents and photochemical substances. Section 25-7-109(2)(f) and 25-7-109(2)(g}, C.R.S., grantthe Commission the authority to promulgate regulations pertaining to organic solvents and photochemical substances. Sections 25-7- 105(1)(l)(b) and 25-7-109(2)(h) provide authority to adopt emission control regulations and emission control regulations relating to HAPs respectively. The Commission's action is taken pursuantto authority granted and procedures setforth in Sections 25-7-105, 25-7-109, and 25-7-110, C.R.S. Purpose

. These revisions to Regulations Number3, 7, 8 and the Common Provisions are intended to update the

state lists of NRVOCs, the Ozone SIP, and HAPsfor consistency with the federal lists. 

### 1.88. Adopted November 18, 1999 Revisions to Part C Incorporation by Reference of Newand Revised Federal Regulations Concerning Compliance Assurance Monitoring (40 C.F.R. Parts 64, 70, and 71) into Colorado Air Quality Control Commission Regulation Number3, Part C, Addition of Section XIV. Background

RegulationNumber3 Adopted: October20,2011 Page 299This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements ofthe Administrative Procedures Act, C.R.S. (1988), Sections 24-4-103(4) and (12.5) for adopted or modified regulations. Pursuantto Section 114 ofthe 1990 Clean AirActAmendments ("CAAA"), the U.S. Environmental Protection Agency ("EPA") promulgated new regulations in 40 C.F.R. Part 64 and revised regulations to 40 C.F.R. Parts 70 and 71 to implementcompliance assurance monitoring ("CAM") for pollutant specific emission units at majorstationary sources ofair pollution that are required to obtain Title V operating permits. The requirements imposed by the CAM rule are separate from the requirements of EPA's "periodic monitoring" rule found at40 C.F.R. Section 70.6(a)(3)(i). The periodic monitoring rule requires that each operating permit contain any emissions monitoring ortest methods already required by an applicable requirement including any "periodic monitoring sufficientto yield reliable data from the relevant time period that are representative ofthe source's compliance with the permit

... such monitoring shall assure use ofterms, test methods, units, averaging periods, and otherstatistical conventions consistent with the applicable requirement." See 40 C.F.R. Section 70.6(a)(3)(i)(B) (emphasis added). Subjectto certain exemptions, the new CAM regulations require owners oroperators ofsuch sources to conduct monitoring thatsatisfies particular criteria established in the rule to provide a reasonable assurance ofcompliance with applicable requirements ofthe Act. Monitoring requirements contained in the rules focus on emissions units that rely on pollution control equipmentto achieve compliance with applicable standards. The CAM regulations also provide procedures for coordinating these new requirements with the Operating Permits Program regulations. The CAM regulation generally will not require implementation of its requirements for most units subjectto CAM until the first round ofTitle V permit renewals, which will generally be five years after initial Title V permit issuance. The following table reflects the schedule bywhich CAM plans must be submitted by owners and t 

### f ff d 

### "t opera ors o a ecte emiSSIOnS Unl s: Pollutant Specific CAM Plan Due as part CAM Plan Due as part CAM Plan Due as part Emission Unit (PSEU) ofthe Operating Permit ofthe Operating Permit ofthe Operating Permit Size INITIALApQiication REVISION Application RENEWALApplication "Large" PSEU (see 40 IfTitle V permit Ifa significant permit IfTitle V permit C.F.R. Section 64.5(a)) application is not revision1 atan existing application was complete by 4/20/98 OR Title V source complete before 4/20/98 if PSEU partofa greenfield permit application after4/20/98 "Other" PSEU (see 40 Never Never Always C.F.R. Section 64.5(b_l}_ 1. "significant permit revision" is defined as "significant permit modification" in Colorado AirQuality Control Commission Regulation Number3, PartA, Section I.B.36.h. This definition is subjectto change when the federal Part 70 revisions are promulgated and adopted by the ColoradoAir Quality Control Commission. In the eventofa significant proposed operating permit modification that may triggerthe earlierapplication ofthe CAM rule, the rule's provisions only become applicable with respect to those pollutant specific emission units forwhich the proposed operating permit revision is applicable. See 40 C.F.R. Section 64.5(a)(2).

RegulationNumber 3 Adopted: October20, 2011 Page 300Regulations to implementthese CAAA mandates were originally proposed in 1993 as the "enhanced monitoring" program. The enhanced monitoring proposal focused on monitoring airemissions as a means ofensuring source compliance with CAAA emission limitations and operating permit conditions. The EPA received approximately2,000 comment letters to the enhanced monitoring proposal. In response to these comments and through a series ofstakeholder meetings, the agency decided to redesign the Part 64 program. In 1995, the EPA promulgated a revised draft Part 64 rule, which is now known as the CAM rule. The final CAM rule was promulgated on October22, 1997. The Commission heard testimonyfrom members ofthe publicwho were concerned thatthe implementation ofthe rule would have the effect ofmaking existing applicable requirements more stringent. It is the Commission's understanding howeverthatthis is notthe purpose norshould be the result ofimplementation ofthe CAM rule. In adopting the CAM rule by reference, the Commission does not intend that existing applicable requirements become more stringent. Authority Section 25-7-105(12), C.R.S. (1997) provides authorityto promulgate regulations that are necessary to implementthe minimum elements ofTitle V ofthe Clean AirAct. Section 25-7-106(6), C.R.S. (1997) provides the Commission with the authority to require testing, monitoring and record keeping. Commission action in promulgating these regulations is taken pursuantto the above statutory provisions. The Commission is notadopting the CAM rule in this incorporation by reference as part ofthe Colorado State Implementation Plan. Forthat reason, the provisions ofSection 25-7-105.1 C.R.S. (1999) regarding federal enforceability do notapply. Purpose Adoption by reference ofthe Federal CAM regulations contained in 40 C.F.R. Part 64, and the revisions to 40 C.F.R. Parts 70 and 71 make the regulations enforceable under Colorado law. Adoption ofthe regulations will not impose upon sources additional requirements beyond the minimum required by Federal law, and may benefitthe regulated community by providing sources with up-to-date information. 

### I.CC. Adopted November 15, 2001 Revisions to Regulation Number3, Part 8: Concerning Construction Permits, Including Regulations forthe Prevention ofSignificant Deterioration This StatementofBasis, Specific StatutoryAuthority and Purpose complies with the requirements ofthe Colorado Administrative Procedures Act, Section 24-4-103, C.R.S., and the Colorado Air Pollution Prevention and Control Act, Sections 25-7-110 and 25-7-110.5, C.R.S., and implements Sections 25-7- 105(17) and 25-7-212, C.R.S.

The rule revisions adopted implementthe provisions of House Bill 99-1351. Regulation Number3 contains permitting, monitoring, reporting, visibility protection, and fee requirements. Specific StatutoryAuthority The Colorado Air Pollution Prevention and Control Act, Section 25-7-105(17), C.R.S., provides the authorityfor the Commission to hold hearings to approve emission inventories related to state and federal lands. That subsection also directs the Air Pollution Control Division to prepare inventories for all state land managementagencies with jurisdiction overstate lands. Section 25-7-212, C.R.S., requires federal land managers to develop a plan for evaluating visibility in mandatory class Ifederal areas and to provide to the state an emission inventory for pollutants that affect any mandatory federal class I area within Colorado. This Section also directs the Commission to use the inventories to develop control strategies Regulation Number3 Adopted: October 20, 2011 Page 301for reducing emissionswithin the state ofColorado as a primary component ofthe visibility long-term strategies. The Commission's action is taken pursuantto procedures setforth in Sections 25-7-105, 25-7-110 and 25-7-110.5, C.R.S. Purpose In general, HB 99-1351 was intended to provide mechanisms forthe state to develop information importantto its efforts to protect and enhance visibility, particularly in mandatory federal class I areas. This bill specifies the types ofinformation that must be reported, collected and approved for use in the state implementation plan. Federal agencies own and administer approximately 36% ofthe land in Colorado. Accordingly, the federal government hasjurisdiction over many sources ofemissionswithin the state. The inventory information developed underthis regulation will provide additional information needed regarding these emissions, as well as those from similar state lands. The rule requires that all federal and state lands have emission inventories approved by the Commission by December 31, 2002 and at leastevery five years thereafter. The emission inventories must include emissions in both Colorado and otherstates that may affectvisibility in mandatory federal Class I areas in Colorado. House Bill 99-1351 requires the first submittal ofinventory information by the federal land management agencies by December 31, 2001. The Commission anticipates thatthe affected federal land managers may rely upon regional inventory information to satisfy in partthe requirements ofthis rule. The regional inventory development process is in its early stages. In addition, this hearing has been continued once and accordingly this rule may not become effective before the statutory deadline for the initial federal public lands emission inventory submittal. The Commission recognizes thatthis created uncertainty for the federal land managers. Nevertheless, the General Assembly established the deadline for submittal of the federal public lands inventory in 1999 and the federal agencies have known aboutthis requirement for more than two years. The Commission anticipates that submittal ofthe regional emission inventory will provide enough information to reasonably meetthe December31, 2001 deadline. In orderto ensure that inventories reflect the best information available, however, the Commission allowed the federal agencies an additional six months to provide supplemental information to fully meetthe requirements ofthis rule. Any such additional information must be submitted to the Commission by July 1, 2002. The Commission is to hold a public hearing on the inventories and approve them by December 31, 2002. This schedule will still allow sufficienttime for the Commission to consider and approve, ifappropriate, the inventory information submitted. The Commission believes thatthe emissions subjectto the reporting requirements ofthis rule are in the order of hundreds oftons perday ofcriteria pollutants and thatthis level ofemissionsjustifies application to federal and state land managers of reporting requirements similarto those that apply to owners and operators ofother large emissions sources. The Commission has the authority to exemptfrom the inventory requirements any sources orcategories ofsources that it determines to be of minorsignificance. This rule does notcontain such an exemption because little is known aboutseveral ofthe source categories (e.g., biogenic sources). The Commission may consider ata latertime whether such an exemption is appropriate based on additional information that may be gathered. The Commission elected for the purposes ofthis regulation to define federal land managementagencies as those agencies that own and manage at least 50,000 acres of land in Colorado. The Commission Regulation Number 3 Adopted: October20, 2011 Page302intended to exemptagencieswith relatively small amounts of land (e.g., Department ofCommerce, Bureau of Reclamation) from having to prepare inventories. In the Commission's view, the benefit of developing information relative to emissions from lands managed by smalleragencies did notjustifythe administrative burden and costs of preparing such emission inventories. The Division is required by the bill's provisions to provide an inventory ofemissions from activities ofall state ofColorado land management agencies on state ofColorado lands that may affectvisibility in Colorado's Class I areas. The inventory is to be delivered to the Commission by July 31, 2002 and at least every five years thereafter. There are several requirements in the statute that have not been included in the regulation as they are largely policy directives to the Commission and Division from the General Assembly The rule revisions adopted address the procedural mechanisms foraccomplishing the mandatory requirements of House Bill 99-1351. The Commission concludes thatthese rule revisions are adopted to implement prescriptive state statutory requirements, where the Commission is allowed no significant policy-making options, forthe purposes of§25-7-110.5, C.R.S. The Commission also concludes that it has no discretion understate lawto adopt alternative rules that differsignificantly from these revisions, for the purposes of§25-7-110.8(1}, C.R.S. Accordingly, the Commission did not include in the record some ofthe portions ofthe rulemaking prerequisites addressed in§25-7-110.5, C.R.S. and did not make specific determinations regarding the factors listed in§25-7-110.8(1}, C.R.S. The Commission took into consideration the appropriate items enumerated in Section 25-7-109(1)(b}, C.R.S. 

### I.DD. Adopted July 18,2002 Revisions to Regulation Number3 This Statement of Basis, Specific Statutory Authority and Purpose complywith the requirements ofthe Colorado Administrative Procedure Act Sections 24-4-103(4) and (12.5}, C.R.S. for newand revised regulations.

Regulation Number3 sets forth the AirQuality Control Commission's permitting and air pollutant emission notice programs for stationary sources. The regulation is organized into four parts: PartA contains general provisions and the Air Pollution Emission Notice (APEN) program; Part B deals with majorand minorsource Construction Permits; Part C sets forth the Operating Permit program; and, Part D provides the statements ofbasis, specific statutory authority and purpose for revisions to the regulation. Changes have been made to each ofthese parts to clarify ambiguous language, eliminate duplicative or unnecessary provisions and to makethe requirements more understandable and easierto read. Additionally, some substantive changes have been madeto address inconsistencies between the regulation and state and federal law, to improve the permit program from an airquality protection perspective and to eliminate unnecessary burdens on the regulated community. Appendices B and C to the regulation were deleted because they were duplicative ofAppendix D. The majority ofthe revisions were proposed by the Air Pollution Control Division based on internal review and extensive discussions with interested parties. The Division's initial proposals were addressed at length during a subcommittee process involving the Commission, the Division, stakeholders and other interested parties. During this process, participants commented on the initial proposal and offered additional suggestions. The proposal presented to the Commission is a collaborative effort ofthe Division and interested stakeholders. Specific StatutoryAuthority

RegulationNumber 3 Adopted: October 20, 2011 Page 303The specific statutory authority forthese revisions is setforth in various Sections ofthe Colorado Air Pollution Prevention and Control Act ("Act"). Section, 25-7-105(1), C.R.S., givesthe Air Quality Control Commission authority to promulgate rules and regulations necessary forthe proper implementation ofthe Act, including regulations to assure attainment and maintenance of national ambientairquality standards, emission control regulations and a prevention ofsignificantdeterioration program. Section, 25-7-105(12), C.R.S., provides specific authority to establish, emission notice, construction permitand operating permit programs. Some ofthe statutory parameters forthese programs are setforth in Sections 25-7-114, through 25-7-114.7 ofthe Act, and these Sections in turn, provide statutory authority forthe current revisions. Additional authority forthese revisions is setforth in Section 25-7-106, C.R.S., in Section 25-7- 119, C.R.S., and in Section 25-7-132, C.R.S. Purpose A review ofthe previous Regulation Number3 revealed numerous stylistic, grammatical and formatting problems, language ambiguities and obsolete orduplicative provisions. These revisions are intended to update, clarify and streamline this regulation. Additionally, changes have been madeto address developments in state and federal law, to eliminate inconsistencies between the regulation and state and federal law, and to improve the programs setforth in the regulation from an airquality perspectivewhile eliminating or minimizing undue and unnecessary burdens on the regulated community.
I. PartA Revisions PartA of Regulation Number 3 contains a definitional Section and provisions that setforth the Air Pollution Emission Notice program and othergeneral provisions relevant to the notice and permit programs. 

### A. Definition Changes Numerous changes to the definition Section were made. Primarily, these changes were designed to fix ambiguous language, to make the definitions more readable orto delete obsolete orduplicative definitions. For example, the definition ofapplicable requirementwas modified to clarify that it included construction permit requirements that may have been modified during the operating permit process. This definition was always intended to include such modifications, butthe old language failed to clearly explain that intent. Similarly, a change to the definition ofmajor modification was necessary to clarify thatthe term included both physical changes and changes in the method ofoperation. The priorversion omitted language resulting in an ambiguity regarding this intended meaning. Changeswere madeto the definition of net emissions increase to clarify that in calculating an increase ordecrease ofemissions, sources are not committed to use the emission numbers contained in an APEN. Forexample, when credible demonstrable evidence indicates a different amountofactual emissions exists, this information can be used to demonstrate a netemissions decrease. The definition ofsignificantwas also changed to clarify thatthe Prevention of Significant Deterioration (PSD) and New Source Review (NSR)- nonattainmentarea (NAA) programs do notapply to certain hazardous air pollutants. Specifically, the state PSD and NSR/NAA programs exemptthose hazardous air pollutants that are exemptfrom the federal PSD and NSR/NAA programs pursuantto Section 112(b)(6) ofthe Federal Act. In addition to the clarifications, formatting and readability changes madeto the definition Section, a numberofdefinitions were added or modified to reflect developments in federal law. For example, the Commission revised the definitions ofactual emissions and majormodification to include special provisions governing physical oroperational changes atelectric utility steam generating units. These changes were necessitated by changes in the federal regulations arising outofthe decision in the Wisconsin Electric Power Company ("WEPCO") case. The changes are applicable only to coal-fired electric utility steam generating units. Colorado law has required that NSR provisions be interpreted consistent with federal requirements since 1994 when the Colorado General Assembly enacted HB94- 1264, Section 25-7-109, C.R.S. TheWEPCO definitions have been added, consistentwith EPA's regulations, in orderto clarify the meaning and scope ofthe changes to the definitions ofactual emissions
RegulationNumber3 Adopted: October20,2011 Page 304and major modification. Units need not have obtained a formal applicability determination from the Division before proceeding with the physical oroperational change, although doing so is atthe risk ofthe source. Actual emissions levels may be determined from the information found in periodicAPENs which sources file pursuantto Regulation Number3, Part

### A, orfrom othercredible information, such as data from continuous monitoring systems. The filings by sources in the past, such as APENs, have enabled the Division to track sources' emission increases and decreases in a mannerconsistentwith the provisions in the WEPCO rule, therefore, the Commission believes this formal adoption should not impose a greater burden on sources in Colorado than they have historically experienced. The Commission notes that, consistentwith the legislature's intent, the WEPCO provisions have been implemented by the Division in recent years. One example is the flexibility provided a change qualifying as a pollution control project. The definition ofmajor modification was further changed to restrict what constituted a temporary activity. Under both the old and new regulations, temporary activities are not considered to be part ofa major stationary source. The old definition could be read, however, to exclude activities that constituted temporary sources underthe PSD program. Such sources are subjectto certain limited PSD requirements, and could be classified as an exempttemporary activity resulting in an exemption from those limited requirements. The newversion clarifies that only temporary construction orexploration activities are exempt, thus preserving the applicability ofthe PSD temporary source requirements. Underthe definitions for major modification and majorsource, while emissions from temporary construction are not included in determining whetherthere is a major modification orsource, emissions from ongoing construction are included. Several parties requested clarification astowhatconstitutes ongoing construction. Such a determination must be made on a case-by-case basis, but generally, construction lasting morethan two years will be considered ongoing. Atthe suggestion ofthe regulated community, the definition ofcommenced construction was supplemented to identify the entire range of pre-construction activities that may be undertaken without obtaining a construction permit. Provisions governing regulation ofnon-road engines have undergone a complete overhaul. In addition, the definition of non-road engines was moved from the APEN exemption provisions in PartA, Section II.D.1.sss., to the definition Section of Part

### A The prior regulation (Section II.D.1.sss.) exempted certain non-road engines from APEN and permitting requirements, provided these exemptions did not apply where the engines would otherwise trigger PSD, NSR-NAA review orotherapplicable requirements. Since the promulgation ofthat regulation, Congress amended the federal Clean AirAct. These amendments, as interpreted by the D.C. Circuit Court ofAppeals, precluded the states from enacting emission control regulations for non-road engines except undervery restricted circumstances. The Court ofAppeals held, however, that states could enact use restrictions such as restrictions on the hours of operation oramountoffuel usage. To address this situation, the regulated community requested that non-road engines be specifically identified as non-stationary sources, thus exempting them from most, if not all, ofthe requirements of Regulation Number3. While agreeing that non-road engines should not be treated as stationary sources, the Division expressed a concern that a large aggregation ofthese engines might result in a violation ofambientairquality standards. To reconcile these conflicting concerns the regulatory revisions create a newstate-only non-road engine program forcertain non-road engines. The Commission's authority to establish a non-road engine program and to regulate the operation of nonroad engines is setforth in 27-7-106(1) C.R.S., and through the legislative declaration in 25-7-102 C.R.S. Non-road engines subjectto the program must submitan APEN and pay appropriate APEN fees. If specified emission levels are tripped in the APEN, the program further requires that the source obtain a temporary permit and pay applicable permit fees. The permitwill include such use restrictions as are necessary to prevent an exceedance ofambient airquality standards. Non-road engines that are mobile orself-propelled equipment such as bulldozers, haul trucks, watertrucks, loaders, shovels, backhoes, road graders, cranes orsimilar mobile equipmentare not subject to the state-only permit program and are not required to obtain an APEN.
RegulationNumber 3 Adopted: October20,2011 Page 305Whether an engine qualifies as a non-road engine as opposed to a stationary sourcewill depend on the facts ofa particular case. To qualify as a non-road engine under Regulation Number3, PartA, Section I.B.40.a.iii., the engine must be portable. Whatconstitutes portable will be determined on a case-by-case basis. Additionally, such portable engines lose their status as non-road engines ifthey remain at a location for more than twelve consecutive months. The regulation narrowly defines location such that use ofa portable engine at multiple sites at a given source does notconstitute use ata single location. This provision, however, is not intended to allowa source to circumventthe regulation by moving a given engine forthe purpose ofavoiding expiration ofthe twelve-month period. For sources that have voluntarily obtained permits fora non-road engine(s) as defined in Regulation Number3, PartA, Section 1.8.40., priorto the effective date ofthis rule revision, a source may continue to operate underthe existing permit. A modification or re-opening ofthe existing permitwill effectively subject a source to the requirements setforth in the non-road engine state-only permit program (PartA, Sections I.B.40.c. and I.B.40.d.) During the public hearing on this rulemaking, the Commission raised concerns regarding the flexibility and responsiveness ofthe newstate-only non-road engine permit program in emergency orother unforeseen situations. In these situations, it is an operator's obligation to file an APEN and obtain a state-only nonroad engine permit under Sections I.B.40.c., and I.B.40.d., priorto the exceedance ofany trigger level (i.e., hours ofoperation and/oremission limitation). This clarification is intended to increase program flexibility by ensuring that operators, including local and state government, will not be penalized when responding to emergencies and business planning conditionswhen such conditions subsequently trigger APEN and permit application requirements underthe program. To enhance and foster program responsiveness, the Commission expects thatthe Division shall actto complete state-only non-road engine permit applications as expeditiously as possible. In addition, under the authority setforth in Section 25-7-114.5(5), C.R.S., the Commission has determined that state-only non-road engine permit applications shall not be designated as permitactions subjectto public notice requirements. B. Changes to APEN Program The Division proposed to add record keeping requirements to a numberofAPEN exemptions. The Commission did notadoptthe specific record keeping language in PartA ofthe regulation. The intentof the Commission, however, is that sources should have records orother information sufficientto verify that an exemption from APEN requirements can be taken in accordance with the regulatory requirements. The Commission revised Section II.D.4.a.(vi), deleting the solvent return opening size requirementfor small remote reservoir cold solvent degreasers contained in Section II.D.4.a.(vi)(A). The Commission also revised the emissions limit in Section II.D.4.a.(vi)(C) from 350 pounds ofvolatile organic compounds per yearto one ton ofemissions peryear. These changes were requested by industry based on the argument that the existing provision was specifically designed for one particular source and is not useful forthe broader industry. While sources are no longer required to meetthe solvent return opening provision in orderto claim the exemption, they are subjectto the requirements contained in Regulation Number7, Section X.B. Measurementofthe throughputthreshold forthe fuel storage and dispensing equipmentAPEN Exemption in Section II.D.1.ccc., was changed from a 30-day average to an annual average. In addition, language was added to clarify that sources in the Denverozone attainment-maintenance area muststill utilize Stage 1vapor recovery on all tanks with a capacity greaterthan 550 gallons, as required by Regulation Number 7. While ordinarily sources subject to otherapplicable requirements would be precluded from taking the exemption underthe APEN and constructions permit exemption catchall provisions, in this particular instance, it is the Commission's intentthat sources may take this exemption providing that the Regulation Number7 vapor recovery requirements are met.

Regulation Number 3 Adopted: October 20,2011 Page 306An APEN exemption forwetscreening operations was added at Section I.D.1.cccc. Certain wet screening operations are subjectto New Source Performance Standard ("NSPS") Subpart 000. This federal requirement requires that such facilities complywith a zero visible emissions standard. Ordinarily, a source that is subject to a New Source Performance standard precludes the source from taking an APEN exemption pursuant tothe catchall provision in Section II.D.4. It is the Commission's intentthat in this particularcase, application ofNSPS Subpart 000shall not prevent a wet screening operation from taking the exemption. A substantive change was made to the applicable de minimis levels forAPEN exemptions in attainment and nonattainmentareas. Underthe prior regulation, ifan area was nonattainmentfor any pollutantthe lower nonattainment de minimis levels applied for all pollutants. This has been revised so thatthe lower levels will only apply to the pollutants forwhich the area is not in attainment. The exemption for agricultural operations was changed to provide greaterclarity and to be consistentwith the requirements ofthe StateAct. Conforming changes were also made to the agricultural exemption set forth in Part C. Because Regulation Number3 and the Common Provisions Regulation underwent contemporaneous review, the primaryfocus with respect to duplicative provisions was to eliminate duplications between the two regulations. Duplicative provisions thatwere only applicable to Regulation Number3 were deleted from the Common Provisions Regulation. Provisions applicable to multiple regulations remain in the Common Provisions and were deleted from Regulation Number3. Certain non-Regulation Number3 duplications were also addressed. A full review ofall the Commission's regulations was not undertaken atthis time. It is expected thatthere are additional duplicationsthat should be addressed as other regulations are opened for revision. C. Fee Schedule Revisions The language governing the fee schedule forAPENs and permit processing was simplified to provide that fees will be charged in accordancewith the procedures and amounts setforth in the Act. This change alleviates the requirement of revising the regulation everytimethe statutory fee schedules change. D. Confidentiality Provisions The rules governing confidentiality ofdocuments submitted in connection with APENs and permit applications were changed to be consistentwith the Act, and to clarify ambiguities in the prior regulation. In addition, more specific provisions were added regarding the process involved in asserting confidentiality and determining whether documents are in fact confidential. Underthe prior regulation, the evaluation ofconfidentiality claims was very ambiguous making it difficultfor the Division to determine whether a documentwas confidential, and providing sources no guidance as to the steps they should take to ensure confidential treatment ofdocuments. The new provisions clearly setforth the rules for claiming confidentiality and forevaluating such claims. This should benefitthe Division and the regulated community by providing a clear understanding ofconfidentiality protections. Pursuantto the State Act, information submitted as part ofan air pollutant emission notice, Permit Application orOperating Permit reports is confidential only ifit relates to secret processes or methods of manufacture or production. This limitation is reflected in the revised regulation. In contrast, Section 25-7- 111(4), C.R.S. provides that information obtained by the Division in connection with an enforcement action may be entitled to confidential treatment ifit constitutes a trade secret. The current regulatory revision is not intended to alteroraffectthe protections offered under Section 25-7-111(4), C.R.S. In cases where the Division determines that certain information is not subject to confidential treatmentthe revisions shorten the notification period from fifteen to three days. This change was made based on the statutory mandate in the Colorado Open Records Act requiring release ofpublic records within three days aftera requestfor such records. The notification period is intended to allowthe source the opportunity to RegulationNumber 3 Adopted: October20,2011 Page 307obtainjudicial relieffrom the Division's determination underthe State Administrative Procedures Act prior to release ofthe information. While it is recognized thatthe three-day notification period may make it difficultfor a source to institute a timely action, the requirements ofCORA preclude a longer period. It is expected thatthe Division will take the steps necessaryto provide actual notice to the source as soon as a determination is made, sothatthe source will have adequate time to protect its rights.
II. Part B Revisions
The majority of revisions to Part B involve stylistic changes intended to improvethe readability ofthe regulation. A small numberofsubstantive revisions were made as described below.
The provisions in Section IV.H., were changed to clarify the requirements for obtaining a final approval construction permit. The previous regulation required the source to demonstrate compliance with the initial approval construction permit. The Division was then required to conductan inspection to determine compliance. Because an inspection during the initial approval period is not required by law, the new regulation makesthe inspection discretionary. This provides necessary protections in those instances where an inspection may be needed. The provision was further modified to givethe Division discretion as to whetherto issue a final approval permitwhen there is a pending operating permit application. Requiring the issuance ofa final approval permitwas often an unnecessary step in situations where an operating permitwould be issued shortly thereafter. To avoid confusion among sourceswhen the Division elects notto issue a final approval construction permit, a notice will be provided to the source in writing. Similarflexibility was added to Section III.D.6., in cases where a previously permitexemptsource loses its exemption based on addition ofnew emission points.
The prior regulation required submission ofan operation, maintenance, and record keeping plan with the construction permit application. This provision ignored the reality that such plans are difficultto provide until afterthe source has been constructed. The new regulation provides thatthese plans must be submitted priorto obtaining final approval. Significant changes were madeto the post construction monitoring requirements forthe PSD program. The changes were made to be consistentwith the federal PSD regulations. The revisions provide flexibility to either require orwaive post-construction monitoring.
The revisions expand the provisions governing appeals ofconstruction permits. The prior regulation provided that a source could appeal the Division's decision to the Commission, butfailed to identify the process for such an appeal. The revision provides thatthe appeal must be madewithin thirty days after the issuance ofthe permit, denial or revocation, and will be held in accordance with the general rules for adjudicatory hearings. A similar provision was also added in Part Cat Section V.E. Section V.B. has been changed to reflectthatthe Black Canyon ofthe Gunnison has been reclassified as a National Park. The boundaries ofthis area remain the same, and there is no change in the classification ofthis area as Class I orClass II. Revisions have been madethroughoutthe regulation to address changes in areas from the nonattainment classification to the attainment/maintenance classification. A search ofthe regulation was conducted to identifythose provisions that depended on the area being classified as nonattainment. When a requirement remains in place afterthe reclassification ofan area, theword nonattainmentwas changed to attainment/maintenance. Otherwise, no change was made. A substantive change was made to the applicable de minimis levels for permitexemptions in attainmentand nonattainmentareas. Under the prior regulation, ifan area was nonattainmentfor any pollutantthe lower nonattainmentde minimis levels applied for all pollutants. This has been revised sothatthe lower levelswill only apply to the pollutants forwhich the area is not in attainmentto be consistentwith a similar revision in PartA.
Ill. Part C Revisions

RegulationNumber3 Adopted: October 20, 2011 Page 308As with PartsA and B, the majority of revisions to Part C include changes to improve readability and to clarify ambiguous provisions. Revisions were madeto Section II.E., to fix poorlyworded language. The new provision more clearly explains when an insignificantactivity exemption can be taken. In addition, changes in II.E., and to either Sections regarding exemptions included in Part C were made to conform to exemptions in PartA and B.
Provisions regarding the phase-in ofthe operating permit program were deleted since these provisions are nowobsolete. Section III.B.2., sets forth certain timing requirements with respectto submitting operating permit applications. The prior regulation was unclearas to the new legal requirements forsources subject to the operating permit requirement afterstart-up by operation oflaw. The revised provision clarifies that sources shall submit an application within twelve months ofthe effective date ofthe new requirements or at such othertime specified in those requirements. The revisions also clarify that when a source subject to an operating permit is modified, an application to revise the permit must be submitted within twelve months ofthe modification.
In the past, significant confusion has arisen when a source seeks an operating permit priorto obtaining a final approval construction permit under Part B. Revisions to Sections VA, and IV.B.3., clarify the rules governing these situations. These revisions also conform to the changes made in Part B, Section IV.H. The flexibility given to the Division to issue an operating permit absent a final approval construction permit under Section VA, is intended to apply regardless ofwhetherthe source has commenced operation of the emission unit(s) at issue.
IV. Appendices Priorto this rulemaking, Regulation Number3 included fourappendices: AppendixA, Method for Determining De Minimis Levels for Non-Criteria Reportable Pollutants; Appendix B, 1993 Non-Criteria Reportable Pollutants; Appendix C, 1994 and Subsequent Years Non-Criteria Reportable Pollutants; and Appendix D, Non-Criteria Reportable Pollutants. This rulemaking deletes the original Appendix B and Appendix C because they are duplicative ofAppendix D. Appendix D has been revised to Appendix B in orderto maintain continuity in the regulation. 

### I.EE. Adopted October 17, 2002 Revisions to Regulation Number3
This Statementof Basis, Specific StatutoryAuthority and Purpose complywith the requirements ofthe ColoradoAdministrative ProcedureAct Sections 24-4-103(4) and (12.5), C.R.S. for newand revised regulations.

Regulation Number3 sets forth the Air Quality Control Commission's permitting and air pollutant emission notice programs for stationary sources. Pursuantto its statutory authority, the Commission may exempt certain stationary sources from permitting and APEN requirements where emissions from such sources aredeemed to be insignificant. The Commission is revising the exemptions forcondensate and crude oil tanks and condensate and crude oil loading equipmentto ensurethat the exemptions apply only where the emissions are truly insignificant. Additionally, the Commission is revising the provisions designed to ensure that in exempting certain sources from APEN and permit requirements, the regulation does not allowsources to avoid otherstate and federal requirements. This revision clarifieswhen application of other requirements prohibit sources from claiming exemptions. Specific Statutory Authority

RegulationNumber3 Adopted: October 20, 2011 Page 309The specific statutory authority for these revisions is setforth in various Sections ofthe ColoradoAir Pollution Prevention and Control Act ("Act"). Section, 25-7-105(1), C.R.S., gives the AirQuality Control Commission authority to promulgate rules and regulations necessary for the proper implementation ofthe Act, including regulations to assure attainmentand maintenance of national ambient airquality standards, emission control regulations and a prevention ofsignificant deterioration program. Section, 25-7-105(12), C.R.S., provides specific authority to establish, emission notice, construction permit and operating permit programs. Some ofthe statutory parameters for these programs are setforth in Sections 25-7-114.1, and 25-7-114.2 ofthe Act, including the authority to exempt certain sources from APEN and Permitting requirements. These Sections in turn, provide additional statutory authority for the current revisions. Purpose I. Condensate Tanks and Truck Loading Equipment Revisions to the crude oil and condensate storage tank exemption in PartA, Section II.D.1.ddd.and crude oil and condensate truck loading equipment exemption in PartA, Section II.D.1.ee., were proposed to addressthe issue offlashing emissions in condensate tanks. The exemptions, and a corresponding exemption in Part C, Section II.E.3.ee. and ddd., did nottake flash emissions into accountwhen the Commission initially adopted the exemption. The large quantity ofvolatile organic emissions thatcan be released during a flash event led to changes in the exemptions. Additionally, separate exemptions have been established for crude oil tanks and equipmentand condensate tanks and equipment in recognition ofthe factthatflashing emissions from crude oil and condensate are significantly different. The Commission recognizes that in changing these exemptions a numberoftanks and equipmentthat were previously exemptfrom APEN reporting, and therefore exemptfrom construction permitting requirements, will now be required to file APENs. The Commission does not believe, however, thatthese existing sources will now be required to obtain state construction permits, since such a requirement is triggered by construction or modification ofa source, and not by a change in a previously applicable exemption. If, however, the tanks orequipment is modified after December 30, 2002, a construction permitwill be required for the modification unless the tanks orequipmentqualifies underthe revised APEN exemption orconstructions permit exemption. During the revision process there was some discussion aboutwhat mightconstitute a modification thatwould trigger construction permit requirements. Based on the information provided to date, the Division and Commission do notcurrently believe that reworking ofan existing well would constitute a modification underthe regulations. Additionally, sources subjectto PSD, NSR-NAA and Title V permitting requirements are required to have such permits regardless oftheir exemption status. The Commission notesto permit applicants thatthis change becomes effective on the effective date ofthis regulation. In connection with these revisions, the Commission has also looked atthe timing requirements setforth in Part A, Section II.D.1.111., for submitting APENs and obtaining construction permitsfor tanks atcrude oil and natural gas exploration and production sites. The Commission enacted this provision in 1993to allow sources sufficienttime to determine production levels before being required to submitAPENs or construction permitapplications. To affectthis, Section II.D.1.111. provided thatAPENs for oil and gas exploration and production operations were not required until 30 days afterfiling the well completion or recompletion reportwith the appropriate state orfederal agency. Additionally, Part B, Section III.D.8. provided that applications for construction permitsfor such operations were due atthe sametime as the APEN filing. Based on discussions during the regulation revision process the Commission discovered that the well completion report must be filed before production levels can be determined and thatthe provision should have referenced the report offirst production. Therefore, the Commission has revised Section II.D.1.111. to clarify and effectuate the intentofthe 1993 revisions. The Commission also recognizes the definition ofcondensate that appears in the Common Provisions Regulation does not include reference to an API gravity and therefore could be read to include crude oil. It is the Commission's intentthatfor the purposes ofthese exemptions, as well as APEN reporting, condensate should only include hydrocarbon liquids thatfitwithin the Common Provisions definition and
RegulationNumber 3 Adopted: October 20, 2011 Page310that have an API gravity of40 degrees orabove. The Commission anticipates revising the Common Provisions definition to more clearly reflectthis intent the nexttime the Common Provisions regulation is opened for revision.
II. APEN Catchall Changes to the APEN catchall in PartA, Section II.0.4. and the construction permitcatchalls in Part 8, Section 111.0.5., were significantly reworked to add clarity. The prior versions were somewhat unclearas to both the effectofAPEN and permitting exemptions on otherapplicable requirements and when otherwise exemptsources would be required tofile APENs. While the revisions minimally change the substantive requirements ofthe two catchall provisions the new language is intended to more clearly express these requirements. The new language clarifies that sources that are exemptfrom APEN and/or construction-permitting requirements are not, by virtue ofthat exemption, exemptfrom any other applicable requirements. Thus, forexample, a source that is exemptfrom APEN or permitting requirements, muststill complywith the Regulation Number 1 20% opacity standard. Likewise, anAPEN exempt emission point ata majorsource is excused from paying APEN fees but may still need to be listed as an insignificant activity underthe requirements ofthe Title V program. Additionally, where the emissions from a particular emission point would cause a source to avoid PSD, NSR-NAAorTitle V information regarding that emission point cannot be omitted from any permitapplication, notwithstanding the fact that the emission point standing alone might be exemptfrom APEN orConstruction Permit requirements. The Commission also requires that ifthe potential to emit, taking into account full design rate and continuous operation, triggers PSD or NSR requirements, the source mustsubmitan Air Pollutant Emission Notice and apply forthe appropriate permit, or mustapply for a permitto limitthe physical or operational capacity ofthe source such that the source is notconsidered to be a majorsource as defined in Section I.8.59 of PartA ofthis regulation. This language previously appeared in the catchalls, butwas relocated to this statement ofbasis. Finally, the revised catchall provisions subject certain emission points and sources to APEN and Construction Permit requirements notwithstanding the factthat such points and sourceswould otherwise be exempt. Sources specifically identified in the applicability Section ofany subpart of PartA of Regulation Number6 (New Source Performance Standards), or Regulation Number8 (Hazardous Air Pollutants), Parts A, C, D, and E. This provision allows the Division to keep track ofthese points and sources, and ensure thatthe requirements ofthese programs are being properly followed. It must be noted, however, thatwet screening operations subject to the exemption setforth at PartA, Section II.D.1.cccc may claim exemptions notwithstanding the fact that such sources are subjectto New Source Performance Standard 

### 000. I.FF. Adopted Apri116, 2004 Revisions to Colorado Air Quality Control Commission Regulation Number3 Stationary Source Permitting and Air Pollutant Emissions Notice Requirements
This Statementof Basis, Specific StatutoryAuthority and Purpose complies with the requirements ofthe Colorado Administrative Procedures Act, Section 24-4-103, C.R.S., and the Colorado Air Pollution Prevention and Control Act, Sections 25-7-110 and 25-7-110.5, C.R.S.

Regulation Number3 sets forth the AirQuality Control Commission's ("Commission") permitting and air pollutant emission notice programs for stationary sources. The rule revisions adopted reorganize and clarify the permitting, monitoring, reporting and fee requirements of Regulation Number3. In addition, new provisions were added to conform the state program to the federal rules.

RegulationNumber 3 Adopted: October20, 2011 Page 311The existing regulation was composed offour parts. PartA contained general provisions and the Air Pollution Emission Notice [APEN] program; Part B addressed majorand minor source construction permits; Part C setforth the Operating Permit Program; and Part D included the statements ofbasis, specific statutory authority and purpose for historical revisions to the regulation. The Commission reorganized the rule in orderto make it easierfor sourcesto find and comply with applicable requirements. PartA nowcontains general provisions applicable to reporting and permitting, including the Air Pollution Emission Notice requirements; Part B addresses construction permits; Part C includes the operating permit program; and Part D deals with the Nonattainment New Source Review and Prevention ofSignificant Deterioration ["New Source Review" or "NSR"] programs for majorstationary sources. Minorsourceswill only be subjectto Parts A and B; major sources (as defined forthe Operating Permit program) are governed by Parts A, B and C. Majorstationary sources mustcomply with Parts A, B, C and D. In particular, this reorganization separated the major stationary source NSR provisions from the construction permit requirements applicable to all sources. Thiswill make iteasierfor minor sources to comply with the regulation. The Commission also made changes to each part in orderto clarify ambiguous language, eliminate duplicative or unnecessary provisions, increase the level ofcertainty for the regulated community and make the regulation more understandable. Part E is now reserved for Environmental ManagementSystems and Part G contains the historical and current Statements of Basis, Specific Statutory Authority and Purpose for Commission rulemaking actions.
In addition, the changes incorporate modifications to the nonattainment newsource review and prevention ofsignificant deterioration programs. Changes to these programswere necessary to comply with federal rule revisions that must be incorporated into the Colorado State Implementation Plan ("SIP"). The Commission tailored the federal requirements to Colorado's airquality program to ensure efficient and flexible operation and administration ofthe program while eliminating or minimizing undue and unnecessary burdens on the regulated community. Specific Statutory Authority The Colorado Air Pollution Prevention and Control Act, Section 25-7-105(17), C.R.S., gives the Commission authority to promulgate regulations necessary for the proper implementation ofthe Act, including rules to assure attainmentand maintenance of national ambient air quality standards and a prevention ofsignificant deterioration program. Section 25-7-105(12), C.R.S, provides specific authority to establish emission notice, construction permitand operating permit programs. Some ofthe statutory parameters for these programs are setforth in Sections 25-7-114 through 25-7-114.7 ofthe Act and these Sections, in turn, provide statutory authority for the current revisions. Additional authority for these revisions is setforth in Sections 25-7-106,25-7-119 and 25-7-132, C.R.S. The Commission's adoption ofthis rule is taken pursuantto procedures set forth in Sections 25-7-105, 25-7-110 and 25-7-110.5, C.R.S. Purpose The Commission took into consideration the appropriate items enumerated in Section 25-7-109(1)(b), C.R.S. General Revisions to Regulation Number 3 The Commission's reorganization ofthis rule separates the provisions applicable to all sources (PartA), the construction permit program (Part B) and the operating permit program (Part C). The NSR provisions for majorstationary sources are now contained in Part D. In the past, these various components ofthe rule were intermingled to an extentthat caused confusion and unnecessary work for both sources and for the Air Pollution Control Division ("Division"). By separating the majorcomponents of Regulation Number 3, the Commission intends to make the provisions more readily usable, particularly for minorsources.

RegulationNumber 3 Adopted: October20,2011 Page 312As part ofthe reorganization, the Commission relocated some definitions. Ifa definition relates only to one part, it can befound atthe beginning ofthat part. Definitions that are used in morethan one part are placed in Part

### A. This approach will allow minorsources to identify applicable provisions without having to address the differences between construction permit, operating permit and major NSR requirements. The Commission in this rulemaking did not amend Section V. of PartA ofthe existing rule. That Section addresses emissions trading and changes to it are beyond the scope ofthis proceeding. Likewise, the Commission specifically concluded that this rulemaking should not extend to changes to the constructionpermitting program for minorsources unrelated to the federal NSR revisions; this restriction appeared in the notice of rulemaking. The Commission understands that discussions between the Division and stakeholders prompted by this proceeding may lead to policy and implementation changes. The Commission established the effective date forthe NSR revisions as the date of EPA approval ofthe changes as part ofthe Colorado SIP. An earlier effective date would have created differences between federal and state rules that could expose the regulated community to inconsistent requirements. Forthe remainder ofthe rule, the Commission concluded thatthe effective date need not await EPA action. Those provisions will become effective following publication in the Colorado Register. Finally, an issue arose regarding the use ofthe term "attainmenUmaintenance" areas. Although this terminology is used in Colorado's State Implementation Plan, its relationship to these rule changes is unclear. The Commission decided to address this question at a latertime. Finally, the Commission concluded that the revisions to Regulation Number3 do notchange the procedural, administrative nature ofthe regulation and are not specifically intended to reduce air pollution. Accordingly, the Commission did not makethe determinations addressed in Section 25-7-110.8, C.R.S., although this Statementof Basis and Purpose includes discussion to inform interested parties ofthe Commission's intent. PartA Changes Changes to PartA largely clarify orcorrect existing provisions. Where EPA changed specific language used in this part, the Commission adopted identical phrasing absentan identified reason for a distinction. The term "annual actual emissions" in Section 1.8.9. replaces "actual emissions" throughout Part A in references to Air Pollutant Emissions Notices ("APENs") so that a source's reported emissions are those actually emitted during a single calendaryear. This will distinguish reported emissions from thetwo-year average of"actual emissions" used for major NSR purposes. Section II.D.1.g. has been modified to referto a "major source" rather than a "majorstationary source," a term that is specific to the major NSR program. This conforms to Section 25-7-109, C.R.S. The Commission changed Section VI.C.3 to permit sources sixtydaysfrom issuance ofan invoice to pay annual emissions fees. This approach will allowsources additional time to process fee payments. In addition, the Division is required to forward any bills more than thirty days overdue to the collections office forthe state. This extended payment period will reduce the numberofinstances in which delays in payment result in a fee bill being sentto collections. The Commission adopted a change to the definition of"stationary source" reflected in Section PartA, Section 1.8.41 to conform it to federal and state law. Changes to Parts B and C The Commission made only conforming changes in Parts B and C after moving the provisions applying to major NSR to Part D.

RegulationNumber3 Adopted: October20, 2011 Page 313Part D Changes Nonattainment New Source Review and Prevention ofSignificant Deterioration Provisions On December 31, 2002, the Environmental Protection Agency ("EPA") promulgated a final rule addressing the major NSR programs mandated by Parts C and D ofTitle I ofthe federal Clean AirAct. The Agency changed the requirements applicable to Colorado's SIP. The Commission adopted these revisions in orderto comport Colorado's airquality program to the EPA rules. The revised regulation references to "NSR requirements" include both the nonattainment new source review and prevention of significant deterioration programs. EPA's major NSR changes modified the method for determining whether a proposed facility modification results in a significant emissions increase, thus triggering major NSR evaluation and technology requirements. In addition, EPAadded new applicability options, Plant-wide Applicability Limitations and Clean Units, and an exclusion from major modification provisions for Pollution Control Projects. On October27, 2003, EPA adopted further revisions to the major NSR program. In that rule, EPA provided a category ofequipment replacement activities thatwould not be subjectto the major NSR requirements underthe routine maintenance, repair and replacement ("RMRR") exclusion. That rule has been challenged in U.S. CourtofAppeals in Washington, D.C. The Court issued a stay, because of which the rule was notyet effective atthe time ofthe hearing in this proceeding. The Commission elected to address RMRR issues in the future and not consider RMRR rule changes atthis time. In general, the Commission changed Part D of Regulation Number3 to mirrorthe EPA major NSR rules. There are instances in which the Commission's rule differs from the federal provisions. These cases are specifically identified in this Statement of Basis and Purpose, as required by Section 25-7-110.5, C.R.S. General The Commission required Division review and/or approval ofcertain actions in instances in which the federal rule was eithersilent orcontained no similar specific requirement. The EPA rule preamble anticipates that state minorsource permit programs will continue and the Commission agreed. Colorado's Air Pollution Prevention and Control Act ("the State Act") specifically requires permits for construction and modification ofair pollution sources. The Commission has historically used permits as the basic administrative structure for its stationary source programs. Exceptions to permit requirements exist in the rule for sources oractivitieswith small emissions that have a minimal impacton airquality. In Section I.B.5., the Commission imposed a requirement that owners oroperators using the actual-toprojected-actual applicability testfor a projectthat requires a minor source permit or modification [pursuantto Part A, Section I.B.26., Part C, Section I.A.4. or Part C, Section X., orany minor source permit underany provisions of Part B), to submit an otherwise-required permitapplication and include documentation adequate to substantiate calculations madefor the test. The federal rule requires thatthe owner oroperator retain, but not report to the permitting authority, this information. However, the information listed in this Section would necessarily be generated by the owneroroperatorto satisfy the federal requirements and need only be submitted with an otherwise-necessary construction permit application. Accordingly, the Commission concluded thatthis requirement does not exceed federal requirements for the purposes ofthe Colorado Air Pollution Prevention and Control Act. The Commission also concluded thatthe emissions calculated for the actual-to-projected actual test did not need to be the subject ofa permit limitation. Accordingly, the information submitted will only be placed in an appendix to the majorstationary source'sTitle V and/or in a construction permit note. This provision will assistthe Division in evaluating the results ofthe applicability test before the relevant project is begun. Both the Division and the owneroroperatorwill benefitfrom early identification ofany disagreements aboutthe applicability test.

RegulationNumber3 Adopted: October 20,2011 Page 314The Commission noted discrepancies in the use in the federal rule ofthe terms "regulated NSR pollutant" and "regulated air pollutant." The latter includes HazardousAir Pollutants by definition. In orderto conform all ofthe Sections using these terms, the Commission used "regulated NSR pollutant" throughout Part D. The federal rule allows a reviewing authorityto establish a "reasonable period" fordetermining what constitutes a "contemporaneous" net emissions increase. PartA, Section I.B.37.b. ofthe old rule specified a period offive years. The Commission retained that five-year period in the revisions adopted. This period remains reasonable, justas itwas underthe priorversion, serves to increase certainty and should assure that any net emission increase calculations are more accurate. For calculation ofBaselineActual Emissions levels in Part D, Section II.A.4., the Commission concluded that emissions during periods ofstartup, shutdown and malfunction must be quantified based on the rate ofoperation during that period. Forexample, during a control equipment malfunction the calculation must assume that no controls were used to reduce emissions during that period unless the source can demonstrate the actual level ofcontrol provided during the malfunction. The Commission will allowa source to use estimation methods based on best engineeringjudgment, subject to approval by the Division; however, sources utilizing Continuous Emissions Monitors should be able to quantify these emissions with relative ease. In any event, the Baseline Actual Emissions calculations must be approved by the Division for use in the applicability test. In calculating BaselineActual Emissions, Part D, Section II.A.3., the emissions from malfunctions/upsets that exceed any enforceable limitations effective atthe time ofthe event must be excluded. Allowing inclusion ofthese emissions in the calculation could reward a source forfailing to limit, as much as possible, emissions during these events. Existing rules relating to these periods and "upsets" are not otherwise changed bythe revisions. The federal rule requires that emissions from "demand growth" be excluded from the Projected Actual Emissions calculation. Demand growth is any increased utilization that could have been accommodated by the source priorto any change. In no case, however, may demand growth emissions exceed an enforceable limitation existing priorto the change or modification. The Commission elected notto elaborate on orfurther define some issues in the rule, instead relying on policy and practice thatwill be developed as necessary by the Division and/or EPA. These inClude what "could" increase emissions and what constitutes "regularoperations" in Section VI.B.5.c. as well as the approach for evaluating "design capacity" in Section II.A.38.a. In another provision, Section VI.B.5., the Commission intends thatthe Division will implementthe wording "reasonable possibility" consistentwith, though not necessarily identical to, EPA's rule preamble and the Notice of Reconsideration issued by EPA regarding this issue. Likewise, when an owner oroperator uses emission factors to monitor PAL pollutant emissions [Section V.A.?.c.(iii)], it and the Division will adjust, as appropriate, those factors to accountfor uncertainties or limitations inherent in the factor. The federal preamble may be consulted for guidance on such issues, including the option for the Division to exempt a source from having to validate the factors. Sections II.A.4.a. and VI.B.S.c. include the concept ofa period that is "more representative of normal source operations" in the definition ofBaseline Actual Emissions. The Commission decided that such determinations will continue to be resolved on a case-by-case basis by the Division. Plant-wide Applicability Limitations ("PAL") Forthe purpose ofsetting a PAL, a unit planned but notyet constructed as ofthe date of PAL determination has Baseline Actual Emissions of0 tons per year, as it does not have actual emissions as ofthat date. These units do not differ in practice from those later planned but notyet constructed under the PAL. Both types of units must meet the emissions limitations and otherconditions assessed in the PAL. Emissions units constructed at the time the PAL is set, butthat have not yet operated for more than
RegulationNumber3 Adopted: October20,2011 Page 315two years are new units. The Division, after consultation with EPA, recommended thatthe Commission not allow PALs for majorstationary sources that have not been in operation for at leasttwo years. The Commission agreed. These sources would not have "actual emissions" for this purpose because they would notyet have operated during a representative period. Allowing PALs forthese sources would effectively create an "allowable PAL." EPAclearly indicated in the December 31, 2002 preamblethat it did not intend to create provisions for allowable PALs in that promulgation. The phrasing here comports with EPA's intent. Process and control equipment changes under PALs require application and approval ofa permit under existing provisions ofColorado law. PALs, since they establish a new emissions limitation for an entire facility, will necessitate a revision to the Operating Permit held by the owner or operator. The Division will act on any such permit application during the period otherwise provided in Part C. Once a source has obtained a PAL, the PAL emission limits and conditions must remain in place for the entire ten-year effective period ofthe PAL. Allowing a source to obtain and renounce a PAL at a shorter interval would create confusion and potentially allow manipulation ofthe PAL option to avoid major NSR. The Commission adopted language differing in minor respects from the federal rule in Sections XVII.B.2. and XVI1.1.2. The federal language used to construct Section XVII.B.2. was incomplete and unclear in that it did not specify that baseline actual emissions calculations must be provided for each emissions unit as parts ofa PAL permit application. The phrase added creates no additional burden for sources that would have to evaluate emissions from these units in any event. In Section XVII.I.2., the Commission added the phrase "including any additional information requested by the Division." Although the Division's authority to request information in orderto confirm an owneroroperator's calculations is well accepted, this addition placesthe PAL applicant on notice thata request may be made. The Commission also departed from the federal wording in Section XVII.N.1. that addressed the semiannual reportto be provided by PAL sources. The Commission concluded that requiring submittal with the report ofall data relied upon imposed an unnecessary and undue burden on sources. Instead, the rule allows the Division to request these data ifitfinds it necessary to implement its administration ofthe PAL permit. Clean Units The CU provisions ofthis regulation address only the emissions from a specific unit. Ifa unit is designated as a Clean Unit, the source does not need to go through the majorsource NSR program ifit makes certain types ofchanges in the future. This allows greaterflexibility to a source. The source must acceptthe changes to its Title V permitthat are required by the rule. Additionally, an owneror operator must apply for and obtain either a Construction PermitorOperating Permitfor future changes atthe CU that meetthe definition of modification for Part B orC purposes even though it need not evaluate the projectfor majorsource NSR applicability. The Division will acton a permit application during the period otherwise provided in Part B orC ofthis regulation. Section XV.A.3. requires an owner oroperatorto submita request for designation as a Clean Unit ("CU"), although this requirement does notaffectautomatic qualification as a CU. This provision ensures thatthe Division may conduct an initial, cursory review to confirm the qualification. Absentthis provision, sources mistakenly using the CU option mightoperate for years in the beliefthatthe designation protects operation ofthe unit. One principal concern forthe Commission in adopting any regulation is to provide a high level ofcertainty for sourcesto avoid delayed compliance issues. By allowing the Division to review the information the source used to qualify as a CU, the Commission is providing that certainty for sources. In addition, this provision simplifies field and other inspections by assuring thatthe Division has an accurate record ofthe operations and equipmentatthe source. Pollution Control Projects

Regulation Number3 Adopted: October20, 2011 Page 316The Commission believes thatthe Pollution Control Project ("PCP") exclusion will only be used for projects that result in a significant emissions increase in a "collateral" pollutant. Ifthe project does not cause increases in any regulated pollutant, it would not need an exclusion from major modification requirements. Therefore, Section XVI.A. requires that a source intending to use the PCP exclusion must submit an APEN and a permit application, whetherthe PCP is listed or unlisted, as a significant emissions increase is likely to occur. Underthe federal rule, unlisted PCPs are required to obtain permits or permit modifications. The Commission omitted the provision in the federal rule requiring a written notice for listed projects to streamline duplicative requirements in the federal PCP provisions and Parts B and C of the regulation. However, recognizing the nature of PCPs, the Commission has retained the listofthe information that must be submitted to the Division. This list differs in some respects from the information required in the permit provisions of Regulation Number3. The Commission also adopted a provision requiring owners or operators of PCPs to retain records for a minimum offive years, consistentwith the Operating Permit recordkeeping timeframe. The federal rule does notspecify a retention period. This Commission action was appropriate to assure that sources and the Division have a common understanding aboutthe retention period. Finally, in orderto comply with thefederal rule, the Commission included a public notice and commentopportunity for PCPs. 

### I.GG. Adopted December 16, 2004 Revisions to Regulation Number 3 The primary purpose ofthis rule revision is to clarify the applicability ofvarious permitting and APEN provisions to sources within areas designated as attainmenUmaintenance. Such clarification merely makes express the rule that applied by interpretation. In most cases, the revision makes the requirements applicableto attainmentareas applicable to attainmenUmaintenance areas. One notable exception is the requirement for construction permits for gasoline stations within the Denver 1-hourozone attainmenUmaintenance area, which requirement is specified in the SIP. 40 CFR 52.320(c)(94). This rule revision also includes other minor revisions, including reporting requirements for condensate storage tanks subject to Regulation Number3, Section XII., and corrections for accuracy. This rule revision makes no significant, substantive changes to the regulation. Nothing in this rule change exceeds the requirements offederal law. This rule change is administrative in nature, is not intended to cause reductions in air pollution, and therefore is exemptfrom the requirement forfindings pursuantto Section 25-7-110.8, C.R.S. 

### I.HH. Adopted July 21, 2005 Revisions to Regulation Number3 This StatementofBasis, Specific StatutoryAuthority and Purpose complies with the requirements ofthe Colorado Administrative Procedures Act, Section 24-4-103, C.R.S., and the Colorado Air Pollution Prevention and Control Act, Sections 25-7-110 and 25-7-110.5, C.R.S.

Regulation Number 3 sets forth the Air Quality Control Commission's permitting and air pollutant emission notice programsfor stationary sources. The Commission amended Regulation Number3, Part A, Section V. to make it consistentwith the repeal ofthe Emissions Trading Rule in Regulation Number5 in December2004. Itwas originally anticipated that Regulation Number5 would replace Part A, Section V. in Regulation Number 3 as the Commission's trading program, essentially identical to EPA's. The text of Part A, Section V. was italicized to represent provisions thatwould remain effective until EPA approved the program in Regulation Number5. EPA decided notto finalize itstrading program; therefore, it would neverapprove Regulation Number5 as a SIP component. The Commission deleted Section V.A.3., Part A that contained the outmoded effective date. The Commission also replaced the italicized text with normal font in all of PartA, Section V. to conform the textto these circumstances. In addition, one RegulationNumber 3 Adopted: October20, 2011 Page 317hazardous air pollutant (2-butoxyethanol) was deleted to conform the State's list (in appendix b) to the Federal list of hazardous air pollutants. The Common Provisions Regulation sets forth requirements and definitions that pertain or may pertain to all ofthe other Commission regulations. EPA added four compounds to its list ofcompounds (known as non reactive volatile organic compounds) to be excluded from the definition ofvolatile organic compound on the basis thatthese compounds make a negligible contribution to tropospheric ozone formation. The Commission adopted a conforming change to the definition of non-reactive volatile organic compounds in the Common Provisions Regulation, Section I.G. Specific Statutory Authority The Colorado Air Pollution Prevention and Control Act give the Commission authority to promulgate regulations necessary forthe proper implementation ofthe act. Section 25-7-105(12), C.R.S, provides specific authority to establish emission notice, construction permitand operating permit programs. Some ofthe statutory parameters for these programs are setforth in Sections 25-7-114 through 25-7-114.7 of the act and these Sections, in turn, provide statutory authority for the current revisions. Additional authority forthese revisions is setforth in Sections 25-7-106, 25-7-119 and 25-7-132, C.R.S. The Commission's adoption ofthis rule is taken pursuantto procedures setforth in Sections 25-7-105, 25-7-110 and 25-7-110.5, C.R.S. Purpose The Commission took into consideration the appropriate items enumerated in Section 25-7-109(1)(b}, C.R.S. The purpose of removing the italicized textfrom Regulation Number3, Part

### 'A, Section V. was to prevent any ambiguity aboutthe applicability ofthose provisions. Changing the font ofthe text does not have any regulatory impact since the provisions were already in effect and will remain in effect. Section V.A.3. was deleted because it was an outmoded provision thatwas only necessary if Section V. was to be replaced by Regulation Number 5. The Commission's repeal of Regulation Number 5 made that provision unnecessary. Removing the italics from Section V. alsowill eliminate confusion with the italicized text in Part D of Regulation Number 3. The purpose ofthe deletion ofone hazardous air pollutant in appendix b of Regulation Number3 and the addition offour non-reactive volatile organic compounds to the list in Section I.G. ofthe Common Provisions Regulation is to conform the Commission's rules to Federal regulations. The Federal rule changes were published on November29, 2004. Ifthe Commission did not make these revisions, the State rules would be more restrictive than the Federal rules because these revisions serve to exemptthe compounds from emission standards, monitoring, reporting and record keeping requirements. 

### 1.11. Adopted December 15, 2005 Revisions to Regulation Number3 This Statementof Basis, Specific Statutory Authority and Purpose complies with the requirements ofthe Colorado Administrative Procedures Act, Section 24-4-103, C.R.S., and the Colorado Air Pollution Prevention and Control Act, Sections 25-7-110 and 25-7-110.5, C.R.S. Specific Statutory Authority The Colorado Air Pollution Prevention and Control Act, Section 25-7-105, C.R.S., gives the Commission authority to promulgate regulations necessary forthe proper implementation ofthe Act, including rules to assure attainment and maintenance of national AmbientAir Quality Standards and a prevention of RegulationNumber 3 Adopted: October20, 2011 Page 318significant deterioration program. Section 25-7-105(12), C.R.S. provides specific authority to establish emission notice, construction permit and operating permit programs. Some ofthe statutory parameters for these programs are setforth in Sections 25-7-114 through 25-7-114.7 ofthe Actand these Sections, in turn, provide statutory authority forthe current revisions. Additional authority forthese revisions is set forth in Sections 25-7-106,25-7-119 and 25-7-132, C.R.S.
The Commission's adoption ofthis rule is taken pursuantto procedures and requirements setforth in Sections 25-7-105, 25-7-110 and 25-7-110.5, C.R.S. Purpose On December 31, 2002, the Environmental Protection Agency ("EPA") promulgated a final rule revising the Major New Source Review ["NSR"] programs mandated by Parts C and D ofTitle I ofthe Federal Clean AirAct. EPA changed the several Federal provisions thatwere reflected in Colorado's SIP and in 2004 the Commission made revisions to match the new Federal Rule.
In the 2002 Rule, EPA provided several newapplicability options for stationary sources. Among those options is treatment ofsome sources as clean units. To qualify, the source operators must employ stateof-the-art pollution control technology as a result ofa major NSR determination within the lastten years, ordemonstrate that control technology being employed is comparable to the best available control technology or lowestachievable emission rate. A source that qualifies as a clean unitwould not have to gothrough a traditional NSR applicability determination ifit makes certain types ofchanges in the future. The Commission's 2004 Rule adopted the clean unit exemption virtuallywithout change. The 2002 Rule also expanded the exemption from major modificationsfor pollution control projects (PCPS), originally provided onlyto electric utility steam generating units in the 1992 WEPCO Rule. Under the 2002 Rule, collateral emissions increases resulting from a PCP at an existing unitwould not be included in calculations to determine ifa project involving that unitwould trigger NSR.
As part ofthe 2002 rule, EPA allowed sources to calculate theiractual and projected actual emissions to determine whether a modification will trigger NSR. Ifa source concludes thatthere is no "reasonable possibility" that emissions from a projectwill trigger NSR, the source is not required to keep records substantiating that calculation. However, the data and records would necessarily be generated by the owner oroperatorto calculate its emissions. The Commission did notfollow the Federal Rule in this regard. In Section I.B.5., the Commission imposed a requirement that owners oroperators using the actual-to-projected-actual applicability testfor a projectthat requires a minorsource permit or modification [pursuant to PartA, Section I.B.26.; Part C, Section I.A.3.; or Part C, Section X.; orany minorsource permit underany provisions of Part B), submit an otherwise-required permit application and include documentation adequate to substantiate calculations made forthe test. On June 24, 2005, the United States Court ofAppeals forthe District ofColumbia Circuit issued its decision and opinion in the case ofState of NewYork v. U.S. Environmental Protection Agency,----F.3D--

-- 2005 WL 1489698, 35 Envtl. L. Rep. 20,135, D.C.Cir., June 24, 2005. The court concluded that, regarding the clean unit exemption from NSR, the plain language ofthe Clean AirAct indicated that Congress intended to apply NSR to changes that increase actual emissions instead ofpotential or allowable emissions. As a result, the court vacated the clean units portions ofthe Federal Rule. The court also concluded that EPA lacks the authority to create pollution control project exemptions from NSR and vacated the PCP portions ofboth the 1992Wepco Rule and the 2002 rule. By vacating those portions ofthe Federal NSR rule, the court terminated those exemptions to new source review. In view ofthe court's decision, the Commission concluded that there was no basis to retain the clean unit and pollution control project provisions in Regulation no. 3. The federal rule no longerallows operators to

RegulationNumber3 Adopted: October20, 2011 Page 319use those provisions to determine applicability of NSR to the source and Colorado law and the Colorado State Implementation Plan should be conformed to federal law in this instance. The D.C. Circuit court also addressed the recordkeeping and reporting requirements ofthe federal rule. The 2002 rule excused a source from maintaining records ofthe information and calculations used in the actual-to-projected actual applicability test ifthe source determined thatthere was no "reasonable possibility" thatthe modification would trigger NSR. These are the same records necessary to substantiate calculations made for the applicability test. The court concluded that lack ofevidence, in the form ofdata and records, could inhibit enforceability ofthe NSR program in this context. The court remanded this part ofthe rule. By remanding this portion ofthe 2002 rule, the court allowed EPAto further consider its position and return to the court at some time in the future for more proceedings in support ofthe rule. In this case, EPA has the opportunity to explain how it can ensure NSR compliance withoutthe relevant data. There is no deadline, or requirement, for EPAto take further action. The Commission, in its 2004 rulemaking, elected to require that sources retain records that, among other things, are essential to substantiate sources' calculations using the actual-to-projected-actual applicability test. The Commission also chose to require that a source submit its data and calculations along with a permitapplication thatwould otherwise be required for the physical oroperational change. The Division reviews the data and calculations only to confirm a source's conclusions whether it triggers NSR. The information submitted is then included in a non-enforceable appendix to a source's Title V Permitoras a permit note in the source's construction permit The recordkeeping requirement adopted by the Commission has benefits to both sources and the Division, one ofwhich is to avoid later uncertaintywhethera projecttriggered NSR. Accordingly, the Commission elected not to modify this part of Regulation Number 3. The recordkeeping requirement adopted by the Commission has benefits to both sources and the Division, one ofwhich is to avoid later uncertainty whether a projecttriggered NSR. Accordingly, the Commission elected not to modify Part D, Section I.B.5. and to modify Part D, SectionsV.A.7.c. and VI.B.5. in a manner, that maintains consistency with Section I.B.5. 

### I.JJ. Adopted March 16, 2006 Revisions to Regulation Number 3, Part F, Best Available Retrofit Technology This Statementof Basis, Specific Statutory Authority and Purpose complies with the requirements ofthe Colorado Administrative Procedures Act,§ 24-4-103, C.R.S., and the Colorado Air Pollution Prevention and Control Act,§§ 25-7-110 and 25-7-110.5, C.R.S ("the Act"). Specific Statutory Authority The Commission promulgates this regulation pursuant to the authority granted in C.R.S., Sections 25-7- 105 (general authorities and duties ofthe Commission for airquality control); 25-7-105(1)(c), (authority to adopt a prevention ofsignificant deterioration program); 25-7-106 (additional authorities ofthe Commission for air quality control); 25-7-106(1) (authority to exercise flexibility in developing effective air quality control program); 25-7-106(2) (authority to hold public hearings); 25-7-109(1)(a) (authority to require the use ofairpollution controls); 25-7-109(2)(a) (authority to adoptemission control regulations pertaining to visible pollutants); 25-7-114.4(1) (authority to adopt rules for the administration ofpermits); 25-5-114.5 (authority to require permit applications and make determinations, and to provide for public participation), and 25-7- 1002 (authority to maintain a program that complies with the requirements ofthe Federal actfor prevention and remediation ofsignificantdeterioration ofvisibility in class I Federal areas). Basis and Purpose RegulationNumber 3 Adopted: October20, 2011 Page 320On July 1, 1999, the U.S. Environmental Protection Agency promulgated final regulations that require each state to submita State Implementation Plan (SIP) to address regional haze. Those regulations require the State to establish a mechanism to identify sources that mustanalyze installation ofBest Available RetrofitTechnology (BART) and to require those analyses and implementation of resulting determinations.
The process begins with defining air pollution facilities that are "BART-eligible." Among the BART-eligible sources, some sources are "subjectto BART." Sources that are subject to BART mustcomplete an analysis and submita proposal for determination by the State ofthe BestAvailable RetrofitTechnology applicable to that source. This regulation establishes the mechanisms forthis process. In many instances, the regulation matches the Federal BART rule, including provision for a BART-Alternative approach that would yield "betterthan BART" results. The Commission elected to assume that all BART-eligible sources are subjectto BART, but require the Division to perform modeling to determine whether BART eligible sources will cause orcontributeto visibility impairment in any class I area. BART-eligible sources that do notcause orcontribute to visibility impairment in any class I area would not be subjectto BART. Individual sources would also have the opportunity to demonstrate that they are not eligible or not subjectto BART. This approach will provide information necessaryto developthe regional haze SIP on the schedule required by Federal lawand allows forchallenges to decisions on whether individual sources must complete BART analyses and to BART determinations by the State. Sources subject to BART must evaluate all technologies through a five step case-by-case BART analysis. The five steps require sources to: 1) IdentifyAll Available Retrofit Control Technologies; 2) Eliminate Technically Infeasible Options; 3) Evaluate Control Effectiveness of Remaining Control Technologies, 4) Evaluate Impacts and Documentthe Results and 5) Evaluate Visibility Impacts. The Commission intends that sources conducting a case-by-case analysis will follow EPA'sAppendix Y to 40 CFR, Part 51

- Guidelines for BART Determinations underthe Regional Haze Rule. Sources must evaluate the visibility impacts ofeach technology option using CALPUFF and/or Division-approved modeling protocols. This rule requires a source subjectto BARTto file an application fora construction permit as the mechanism for submitting its BART analysis and proposal, and for seeking a Division determination of BARTforthe source. The Commission concluded that using the existing permitting mechanism was the most expedientway to presentthe analysis for Division determination. The Commission further determined that applications for BART determinations should be subject to the public comment process applicable to construction permitapplications for newor modified major sources. When identifying the available retrofit control technologies, sources must include appropriate BACT, LAER, NSPS, Pollution Prevention (P2) and othercontrols used by similarsources. This can include new control technologies that are in the development stages oflicensing and commercial demonstration or commercial sales. Where EPA has already conducted extensive analyses for a source category (e.g., EGUs) in relation to the Federal BART Rule and determined that certain control technology would not be required underthe pertinent BART analyses, the Commission intends that a Colorado source subjectto BART may adequately demonstratethat the same technology excluded underthe EPA analyses would not be appropriate for the Colorado source by showing sufficient similarity between the source evaluated by EPA and the Colorado source. Sources that identify specific options as technically infeasible must showto the Division's satisfaction that the technology is not commercially available orthat specific physical orchemical characteristics ofthe unit(s) oremission(s) involved will not allowthe technology to operate effectively. The control effectiveness ofany technology must be evaluated based on the highest removal efficiency available forthetechnology. Sources mayalso look at lowerefficiencies in addition, but must include consideration ofthe best removal efficiency. Ifa source has existing controls in place, improvements to

RegulationNumber3 Adopted: October20, 2011 Page 321the existing controls or running the existing controls at a higherefficiency must be included in the analysis. The Commission realizes that emission controls often have secondary impacts. Sources mustevaluate the costs ofcompliance including the average cost effectiveness and the incremental cost effectiveness ofeach technology that is feasible forthe source. Energy impacts including the directenergy consumption for each technology and any locally scarce fuels must be evaluated. Many control options have secondary impacts on other media. Sources mustevaluate any increases in hazardouswaste, wastewater, orotherwaste products, including increased usage ofscarce resources such as water. In cases where a facility has a limited remaining operating life, the source can place a federally enforceable shutdown date in its operating permit. The Commission intends thatthe Division use EPA's presumptive limits as guidelines when evaluating the BART analyses, with the understanding thatthere is a strong presumption that power plants capable ofgenerating 750 megawatts orgreaterwill meetthese limits ordo better, while the coal-fired electric generating units at smaller plants need to considerthe presumptive limits as part ofthe BART analysis. Further, ifa source submits an analysis demonstrating that it will meetthe presumptive limits, then the source will be presumed to have metthe BART-analysis requirements, absentan adequate showing to the contrary. Ifa source proposes a BART limitthat exceeds EPA's presumptive limits, the Division would determine whetherthe BART analysis sufficiently supports the higher limitorwhether othercontrols or increased control efficiencies are feasible. The Commission intends thatthe Division would establish a BART .limit higherthan the presumptive limit ifsupported by the BART analysis. The Federal rules require the State to submit a SIP that identifies BART-eligible sources in the State, and requires the State to eitheradopt BART controls oradopta BARTAlternative. In some respects, the approach in the proposed State rule to applying the requirements ofthe Federal Act is not specifically mandated by the Federal rule, but leftto the discretion ofthe State. The Federal Actdoes not specify the administrative decision-making process thatwill be used to make the relevant BART determinations. The State rule establishes such a procedure, relying on existing permitting procedures to the extent possible and appropriate. The procedure established by the State rule affords sources an opportunity for a hearing on the relevant BART decisions. This process is consistentwith permitting practices and otherwise not more stringentthan Federal requirements. NOx emissions from coal-fired power plants vary considerably depending on the design ofthe boiler, the type ofcombustion controls and the type ofcoal used. Each ofthese factors has an impact on the BART analysis. In setting presumptive BART limits for NOx, EPAtook into account available types of combustion control equipment, the differences between boilertypes, and ranks ofcoal (bituminous, subbituminous and lignite), thereby indicating these factors should be a part of BART analyses-notsolely for large power plants subjectto the presumptive levels for NOx, butfor all coal-fired power plants. These NOx-related characteristics should be taken into account in setting BART limits. The BART guidelines allow states to take these characteristics into account and it is the intentofthe Commission thatthe Division should evaluate this issue as partof BART analyses. Consistentwith the Federal BART Guidelines, BART determinations should take into account possible local economic disruption and unemploymentthat might result from adverse impacts on coal sales related to BART determinations. In consideration ofthe unusual numberofsignificant and complex permitdeterminations underthe BART rule thatwill be become open to public comment aboutthe sametime, the Commission intends thatthe Division consider reasonable flexibility in applying procedures and time periods for public comment. The Commission also intends thatall agreements and BART alternatives be noticed togetherwith the construction permitfor public comment purposes. TheAir Quality Control Commission expects that the Division will provide the information required by 40 CFR 51.308.(d)(1) and (2) for the July 20,2006 regular monthly meeting ofthe Commission. 

### I.KK. Adopted August 17, 2006
RegulationNumber 3 Adopted: October20, 2011 Page 322Revisions to Regulation Number3
This StatementofBasis, Specific Statutory Authority and Purpose complies with the requirements ofthe ColoradoAdministrative Procedures Act, Section 24-4-103, C.R.S., and the Colorado Air Pollution Prevention and Control Act, Sections 25-7-110 and 25-7-110.5, C.R.S.

In accordance with the 1990Amendments to the Federal Clean AirAct, the U.S. Environmental Protection Agency (EPA) has approved incorporation ofthe provisions for the New Source Review and Prevention ofSignificant Deterioration programs (collectively referred to as "NSR") into Colorado's state implementation plan (SIP). In June2005, the Governorsubmitted revisions to Colorado's NSR program to EPA Region VIII for review and approval. During review ofthe submittal, Region VIII identified minor issues with provisions in Regulation Number3 thatthe Commission is correcting to ensure continuing federal approval ofColorado's NSR program. The Commission is also adopting language to treat nitrogen oxides as an ozone precursor, consistentwith EPA's promulgation ofcorresponding language on November29, 2005. Section 112 ofthe Clean AirAct requires EPAto maintain a list of hazardous air pollutants (HAPs) subject to regulation underthat Section. EPA occasionally revises the list by adding or removing pollutants based on updated scientific evidence of health impacts. EPA removed methyl ethyl ketone (MEK) from the list on December 19, 2005. Therefore, the Commission is removing MEKfrom the list of HAPs in Regulation Number3, Part A, Appendix B. On November29, 2004, EPA revised the federal definition ofvolatile organic compounds (VOCs) to specificallytreattertiary butyl (t-butyl) acetate as a VOC only for certain purposes, including reporting and photochemical dispersion modeling. The Commission is making corresponding changes to the definition ofVOCs in the Common Provisions Regulation, and is adding t-butyl acetate as a non-criteria reportable pollutant in Regulation Number3, PartA, Appendix B. Sources oft-butyl acetate will be required to report the pollutant separately from theirVOC emissions on an Air Pollutant Emission Notice, and should not count their t-butyl acetate emissions when evaluating compliance with applicable VOC emission limitations. The Division should combine VOC emissions and reported t-butyl acetate emissions when conducting dispersion modeling for sources oft-butyl acetate. The Commission is also correcting several regulatory reference errors in Parts A, C, and D. Specific Statutory Authority The Colorado Air Pollution Prevention and Control Act, Section 25-7-105, C.R.S., gives the Commission authority to promulgate regulations necessary for the proper implementation ofthe Act, including rules to assure attainment and maintenance ofnationalAmbientAir Quality Standards and a prevention of significant deterioration program. Section 25-7-105(12), C.R.S. provides specific authority to establish emission notice, construction permitand operating permit programs. Some ofthe statutory parameters for these programs are set forth in Sections 25-7-114 through 25-7-114.7 ofthe Actand these Sections, in turn, provide statutory authority forthe current revisions. Additional authority for these revisions is set forth in Sections 25-7-106, 25-7-119 and 25-7-132, C.R.S. The Commission's adoption ofthis rule is taken pursuant to procedures and requirements setforth in Sections 25-7-105, 25-7-110 and 25-7-110.5, C.R.S. Purpose The Commission is revising Regulation Number3 to address issues identified by the U.S. Environmental Protection Agency (EPA) during review ofColorado's state implementation plan (SIP) in 2005, to incorporate federal changes to the NewSource Review program, to revise the definition ofvolatile Regulation Number3 Adopted: October20, 2011 Page 323organic compounds and the list of hazardous air pollutants consistentwith federal actions, and to make miscellaneous technical corrections. These changes will help to ensure continued approval by EPA of Colorado's New Source Review program and will provide consistenttreatment by EPAand the Division of hazardous air pollutants and volatile organic compounds. These changes will also correct regulatory cross-references within Regulation Number 3, which will makethe regulation easierto understand. Further, these revisions include any typographical errors within the regulation. 

### I.LL. Adopted December 15, 2006 Revisions to Regulation Number3, Part A, Section VI.D.1. This Statementof Basis, Specific Statutory Authority and Purpose complieswith the requirements ofthe Colorado Administrative Procedure Act Sections 24-4-103(4}, C.R.S. for new and revised regulations.

The Air Quality Control Commission has adopted revisions to PartA, Section VI.D.1. in orderto increase the annual emission fees charged to air pollution sources in Colorado commencing in 2007. The revised fees arewithin the statutory limit set by Section 25-7-114.7, C.R.S. The increase is necessaryto address decreasing fee revenues used to fund existing programs, aswell as to provide additional funding for requested additional permitting and inspection personnel. The proposed increase was addressed at length during a subcommittee process involving the Commission, the Division, stakeholders and other interested parties. The revision is a collaborative effortofthe Division and interested stakeholders. Specific Statutory Authority The specific statutory authority forthese revisions is setforth in Sections 25-7-114.7 ofthe ColoradoAir Pollution Prevention and Control Act ("Act"), which allows the Commission to setannual emission fees for regulated and hazardous air pollutants. Purpose The revisions to PartA, Section VI.D.1. were adopted to cover anticipated revenue shortfalls and fund requested additional FTE thatwill be used to address the Division's permitting backlog and the increased workload arising from the rapid growth ofoil and gas sources in Colorado. 

### I.MM. Adopted October 18,2007 Revisions to Regulation Number 3, Part A, Section VI.D.1. This Statementof Basis, Specific Statutory Authority and Purpose complies with the requirements ofthe Colorado Administrative Procedure Act Sections 24-4-103(4), C.R.S. for new and revised regulations.

The Air Quality Control Commission has adopted revisions to Part A, Section VI.D.1. in orderto increase the annual emission fees charged to air pollution sources in Colorado commencing in 2007. The revised fees are atthe statutory limitset by Section 25-7-114.7, C.R.S. The increase is necessary to address decreasing fee revenues used to fund existing programs. These revisions are concurrentwith other recent fee adjustments to ensure appropriate funding for the program. Specific Statutory Authority

RegulationNumber3 Adopted: October20, 2011 Page 324The specific statutory authority forthese revisions is set forth in Sections 25-7-114.7 ofthe ColoradoAir Pollution Prevention and Control Act ("Act"), which allows the Commission to set annual emission fees for regulated and hazardous air pollutants. Purpose The revisions to PartA, Section VI.D.1. were adopted to cover anticipated revenue shortfalls and fund requested additional FTE thatwill be used to address the Division's permitting backlog and the increased workload arising from the rapid growth ofoil and gas sources in Colorado. 

### I.NN. Adopted December21, 2007 Revisions to Regulation Number3, Part E, Best Available Retrofit Technology This Statement ofBasis, Specific Statutory Authority and Purpose complies with the requirements ofthe Colorado Administrative Procedures Act,§ 24-4-103, C.R.S., and the Colorado Air Pollution Prevention and Control Act,§§ 25-7-110 and 25-7-110.5, C.R.S ("the Act"). Specific Statutory Authority The Commission promulgates this regulation pursuant to the authority granted in Sections 25-7-105(1)(c), C.R.S. (authority to adopt a prevention ofsignificant deterioration program); 25-7-109(1)(a) (authority to require the use ofair pollution controls); 25-7-109(2)(a) (authority to adopt emission control regulations pertaining to visible pollutants); 25-7-114.4(1) (authority to adopt rules for the administration ofpermits); and 25-7-1002 (authority to maintain a program that complies with the requirements ofthe federal actfor prevention and remediation ofsignificant deterioration ofvisibility in class Ifederal areas). Basis and Purpose This regulatory change places the Division's BART determinations and associated requirements in a new section of Regulation Number3, Part E - Section VI. EPA has raised concerns regarding the practical enforceability ofthe Colorado's BART determinations. The emission limits and averaging times for each ofColorado's BART sources will be included in each Title V permit, and included in the proposed SIP. The Title V permits and the SIP are each federally enforceable when approved by EPA. Nonetheless, EPA believes that more is needed to ensure the practical enforceability ofthese BART limits. To address EPA's concerns the BART emission limits and related provisions concerning the installation, operation and maintenance ofBART controls have also been added to Regulation Number3, and new Section VI will become part ofColorado's SIP. The foregoing approach is largely similarto the approach taken on the state's PM-10 SIP in 2001, where the state agreed to include certain emission limits in Regulation Number 1. 

### 1.00. Adopted February 21, 2008 Revisions to Regulation Number3 This StatementofBasis, Specific StatutoryAuthority and Purpose complies with the requirements ofthe Colorado Administrative Procedure Act Sections 24-4-103(4), C.R.S. for newand revised regulations. Basis and Purpose

Regulation Number3 Adopted: October20, 2011 Page 325The Colorado Air Quality Control Commission ("Commission") intends to revise the provisions of Regulation Number 3, PartA and 8 to include PM2.5 as a Colorado regulated pollutant, to address inadvertent removals of rule revisions previously adopted by the Commission, and finally to correct typographical, grammatical and formatting errors found throughout Regulation Number3. Regarding PM2.5 emissions, the EPA promulgated a revised national ambientairquality standard ("NAAQS") for PM2.5 emissions on October 17, 2006. The effective date for the new standard was December 18, 2006. The Commission intends to apply the Regulation Number 3 requirements to PM2.5 emissions. Additionally, the Commission intends to reinstate several previously adopted revisions and to correct several typographical errors in Regulation Number3. Note thatthe Commission intends to defer any decision to exclude ethanol production facilities from the majorstationary source definition of "chemical process plant" as proposed in the Federal Register on May 1, 2007 (see 72FR24060] until all relevant pending matters atthe federal level are resolved. PM2.5 Emissions The Commission intends to apply the Regulation Number3, PartA and 8 requirements to PM2.5 emissions by 1) including PM2.5 emissions underthe "air pollutant" and "criteria pollutant" definitions found in PartA, Sections 1.8.6 and 1.8.16, and 2) setting permitting thresholds as the same level as PM10 emissions (revise Part 8, Sections II.D.2 and li.D.3). Note thatthe EPA has notyet promulgated the PM2.5 New Source Review ("NSR") Implementation Rule, which will specify how PM2.5 emissions should be treated for Prevention ofSignificant Deterioration ("PSD") and majorsource NSR sources. Upon promulgation, the Commission intends to incorporate those changes into Regulation Number 3, Part D as well. Inadvertent Removals of Rule Revisions Several previously adopted rule revisions were discovered as having been inadvertently removed from Regulation Number 3. The Commission intends to reinstate these previously adopted revisions. Specifically, the Commission intends to: Re-identify volatile organic compounds ("VOCs") as being subjectto the Reasonably Available Control Technology ("RACT") requirements. During the December 16, 2004 Regulation Number 3 rulemaking, VOCs were inadvertently removed from the RACT requirements. Since the minorsource RACT requirementforVOC emissions were part ofthe State Implementation Plan, EPA considers removal of VOCs from minor source RACT requirements as backsliding. Therefore this revision should be reinserted into Regulation Number3, Part 8, Section III.D.2. Re-insertthe inadvertent removal ofthe following text previously adopted by the Commission on December 16, 2004: Reference to "attainment/maintenance" areas in Part 8, Sections li.D.1.c.(iii)(8), 111.8.5.d., and III.C.1.a., and Remove exemption reference to Denver Metropolitan PM10 attainment/maintenance area and change reference to "Denver Metropolitan PM10 and ozone attainment/maintenance area" to "Denver 1-hour ozone attainment/maintenance area" in Part 8, Section II.D.1.f. Typographical, Grammatical and Formatting Errors The Commission intends to correct several specifictypographical errors in Regulation Number 3. RegulationNumber3 Adopted: October20,2011 Page 326Specifically, the Commission intends to: Revise "citric acid plants" to "nitric acid plants" in PartA, Section I.B.23.b.(ix), and Revise incorrect citation in Part B, Section I.A.
In addition, the Commission intends to correct grammatical and formatting errors in Regulation Number3. Specific StatutoryAuthority The Colorado Air Pollution Prevention and Control Act, Section 25-7-105, C.R.S., gives the Commission authorityto promulgate regulations necessary forthe proper implementation ofthe Act, including rules to assure attainment and maintenance ofthe NAAQS and a PSD program. Section 25-7-105(12), C.R.S. provides specific authority to establish emission notice, construction permit and operating permit programs. Key statutory parameters for these programs are setforth in Sections 25-7-114 through 25-7- 114.7 ofthe Actand provide statutory authority forthe current revisions. Additional authorityforthese revisions is setforth in Sections 25-7-106, 25-7-119 and 25-7-132, C.R.S. The Commission's adoption ofthis rule is taken pursuantto procedures and requirements setforth in Sections 25-7-105, 25-7-110 and 25-7-110.5, C.R.S. 

### I.PP. Adopted May 14, 2008 Revisions to Regulation Number3, Part F This StatementofBasis, Specific Statutory Authority and Purpose complies with the requirements ofthe Colorado Administrative Procedures Act,§ 24-4-103, C.R.S., and the Colorado Air Pollution Prevention and Control Act,§§ 25-7-110 and 25-7-110.5, C.R.S ("the Act"). Specific StatutoryAuthority The Commission promulgates this regulation pursuant to the authority granted in Sections 25-7-105(1)(c), C.R.S. (authority to adopt a prevention ofsignificant deterioration program); 25-7-109(1)(a) (authority to require the use ofair pollution controls); 25-7-109(2)(a) (authority to adopt emission control regulations pertaining to visible pollutants); 25-7-114.4(1) (authority to adopt rules for the administration ofpermits); and 25-7-1002 (authorityto maintain a program that complies with the requirements ofthe federal act for prevention and remediation ofsignificant deterioration ofvisibility in Class I federal areas). Basis and Purpose The original language in Section IV.B established thatthe Division could not require post combustion NOx controls for any BART source. The Division has reviewed the data available on post combustion NOx controls in the EPA BART regulation and requested thatthe Commission narrowly modify the exclusion of post combustion NOxcontrol. The EPA BART regulation investigated post combustion NOx control for Electric Utility Generators (EGUs) and generally determined that post combustion NOx control was only necessary in limited cases. The Commission believes thatthis analysis should be extended to boilers, as they are similartypes ofequipment. The Commission does not believe thatthe analysis done by EPA in the BART rule can be extended to cement production because ofthe dissimilar nature ofthe overall process ofoperation between boilers and cement kilns. The Commission narrowly modifies the provisions regarding the analysis ofpost combustion NOxcontrols as it relates to non-EGUs and nonboilers. The Commission believes this narrowamendmentto Regulation Number3 is appropriate and supported by the evidence in the hearing record. 

### I.QQ. Adopted September 18, 2008

Regulation Number3 Adopted: October20, 2011 Page 327

### Revisions to Regulation Number3, Part A This Statement of Basis, Specific Statutory Authority and Purpose complieswith the requirements ofthe Colorado Administrative Procedures Act,§ 24-4-103(4), C.R.S., for new and revised regulations.

TheAir Quality Control Commission has adopted revisions to PartA, Section VI.D.1. in orderto increase the annual emission fees charged to air pollution sources in Colorado commencing in 2008. The revised fees are atthe statutory limit set by Section 25-7-114.7, C.R.S. The proposal increases the fees to the levels enacted by the General Assembly, and signed by the Governor, in SB08-055, reflected in Section 25-7-114.7, C.R.S. as amended. Specific Statutory Authority The specific statutory authority for these revisions is setforth in Sections 25-7-114.7 ofthe ColoradoAir Pollution Prevention and Control Act ("Act"), which allows the Commission to setannual emission fees for regulated and hazardous air pollutants. Purpose The revisions to PartA, Section VI.D.1. were adopted to provide necessary revenue for existing and anticipated revenue shortfalls, and fund additional legislatively-authorized FTE and legislatively-directed air quality monitoring. 

### I.RR. Adopted December 12, 2008 Revisions to Regulation Number3, PartA, Band C This Statementof Basis, Specific Statutory Authority and Purpose complieswith the requirements ofthe Colorado Administrative Procedure Act Sections 24-4-103(4), C.R.S. for new and revised regulations.

As of November20, 2007, the EPA's deferral ofa nonattainmentdesignation forthe 8-Hour Ozone NonattainmentArea expired, signifying thatthe area is nowconsidered nonattainment, or in violation of the 1997 8-Hour Ozone NAAQS of0.08 parts per million (ppm) for ground level ozone. This area is now known as the Denver Metro Area/North Front Range Nonattainment (DMNNFR) NonattainmentArea. The DMNNRF NonattainmentArea includes all ofAdams, Arapahoe, Boulder, Broomfield, Denver, Douglas, and Jefferson Counties as well as portions of Larimer and Weld Counties. Pursuantto the Federal Clean AirAct, Colorado must prepare and submita State Implementation Plan (SIP) to the EPA no laterthan by June 30, 2009. This plan must propose measures designed to reduce ground level ozone precursor pollutants. The plan must provide for reductions in these precursor pollutants sufficientto ensure that ozone is reduced to belowthe 8-HourOzone NAAQS no laterthan 2010. IfColorado fails to submit a sufficient SIP by the aforementioned deadline, the Clean AirAct mandates thatthe U.S.E.P.A. prepare and implementa Federal Implementation Plan in Colorado. Pursuantto C.R.S. § 25-7-105(1)(a)(l), the Commission mustadopt such measures as are necessary to ensure compliance with the NAAQS. The Commission has adopted these rules to carry outthis mandate. Specifically, the Commission has adopted revisions to Regulation Number 3, PartsA, B and C to address ozone formation in the DMNNFR NonattainmentArea. Specifically, the Commission has adopted revisions to reduce an ozone precursor, volatile organic compound (VOC) emissions, and thus reduce ozone formation. These revisions are necessary to ensure attainmentofthe current 8-HourOzone NAAQS set at 0.08 ppm. Also, these revisions help Colorado make progress toward eventual RegulationNumber3 Adopted: October20,2011 Page 328compliance with the newozone NAAQS set at 0.075 ppm aswell as the Governor's directive to proactively and pragmatically reduce ozone levels. Photochemical grid dispersion modeling indicates thatwithout further emission controls, Colorado will attain the 8-hourstandard by2010. The dispersion modeling reflects that Colorado would attain the standard by a narrow margin -within 0.001 ppm on a standard of0.08 ppm. Photochemical dispersion modeling analysis is the primary tool used to assess presentand future qir qulaity trends, and is requried for EPA to approve the state attainment demonstration in the SIP. Dispersion modeling results have an inherent level of uncertainty, as recognized in EPA guidance, and it is appropriate for a state to use other tools at its disposal, including further control measures, to address and mitigate any uncertainties that can be present in dispersion modeling. It is appropriate forthe state to use such tools to increase the confidence in and otherwise ensure that the predicted modeling results are accurate and borne-out in future air qulaity monitoring demonstrating attainentwith the 8-HourOzone NAAQS. In addition, pursuant to EPA guidance, if modeling results indicate that the highestozone levels will fall between 0.082 and 0.087 ppm, Colorado mustconduct a "weight ofthe evidence" analysis and other supplemental analysis in orderto corroborate the modeling results. Colorado's model results are within this range, and thus the state has conducted this analysis. The analysis supports the conclusion that Colorado will attain the standard by 2010, although by a narrow margin. To encrease the certainty ofthe model results and the weight ofevidence demonstration, the Commission concludes thatthese additional control measures are necessaryto carry out its mandateto adopt a SIP that contains those elements that are necessary to assure attainmentofthe 8-Hour Ozone NAAQS. In orderto maintain consistancy between state regulations and federally enforceable regulations contained in the SIP, specifically changes to the exemptions, the Commission intends these revisions be adopted into the SIP. StatutoryAuthority The statutory authority for these revisions is setforth in the ColoradoAir Pollution Prevention and Control Act ("Act"), C.R.S. § 25-7-101, etseq., specifically, C.R.S. §25-7-105(1)(a) (authorizing a comprehensive state implementation plan which will assure attainment and maintenance ofthe NAAQS), 105(12) (authorizing rules necessary to implementthe provisions ofthe emission notice and construction permit programs and the minimum elements ofthe operating permit program), 

## 1 09(1)(a), (2) and (3) (authorizing rules requiring effective practical air pollution controlsforsignificant sources and categories ofsources, including rules pertaining to nitrogen oxides and hydrocarbons, photochemical substances, as well as rule s pertaining to the storage and transfer ofpetroleum products and any otherVOCs) and§ 25-7-301 (authorizing the developmentofa program forthe attainment and maintenance ofthe NAAQS). Purpose These revisions to Regulation Number3 are part ofan overall ozone reduction strategy to be incorporated into Colorado's SIP for ozone. The Commission intends thatthis overall ozone reduction strategy accomplishes five objectives: A) reduce VOC and nitrogen oxides' (NOx) emissions from oil and gas operations in the ozone nonattainment area, B) revise the control requirements for condensate tanks by transitioning from a system-wide to an emissions threshold control strategy in the ozone nonattainment area, C) expand VOC RACT requirements such that all ozone nonattainment areas are subjectto Regulation 7's RACT requirements, D) clarify howthe RACT requirements in Regulations 3 and 7 interact in the ozone nonattainmentarea, E) improve the Division's inventory ofspecific source category emissions state-wide; and F) make typographical, grammatical and formatting changes for greaterclarity and readability. The Commission is adopting revisions to Part A to eliminate exemptions for certain facilities from air pollution emission notice requirements. These facilities include:

RegulationNumber3 Adopted: October20, 2011 Page 329• Petroleum industry flares less than 5 tons peryear (tpy) emissions,

• Specified crude oil truck loading equipment,

• Oil/gas production wastewater

• Crude oil storage tanks,

• Surface waterstorage impoundment, and

• Condensate tankswith production 730 BBUyearor less. The Commission is also adopting revisions to Part B to exemptthe following facilities from construction permit requirements:

• Petroleum industry flares lessthan 5 tons peryear (tpy) emissions,

• Specified crude oil truck loading equipment,

• Oil/gas production wastewater, exceptfor commercial wastewater processing facilities, and

• Specified crude oil storage tanks.
The Commission is adopting revisions to Part C to clarify thatthe chemical storage tank exemption and surfacewaterstorage impoundmentexemptions do notapply to specified production wastewater. In supportofobjectives A and E above, the Commission adoptsthese revisions to Regulation Number3, PartsA, B and C to revise APEN reporting exemptions for specific source categories (Regulation Number 3, PartA, Section II.D., Part B, Section II.D., and Part C, Section II.E.). Improve Emissions Inventory
The Commission is changing several categorical APEN reporting and/or permitting exemptions in Regulation Number3, Parts A, B and C in orderto improvethe Division's emissions inventory and forthe sake ofequity. These changes fall in three categories: 1) specificAPEN and permitting exemptionswere removed altogether; 2) specificAPEN exemptions were removed and permitexemptions were kept in place; and 3) specificAPEN and permitexemptionswere clarified, but kept in place. RemoveAPEN and Permitting Exemptions
The Commission has eliminated the APEN exemption for condensate tanks because the exemption was based on an emission level used in attainment areas. The Division will now be able to develop a complete inventory ofcondensate tanks and their emissions. Condensate tanks are nowsubjectto the sameAPEN requirements as other source categories in the 8- Hour Ozone NonattainmentArea. Additionally, the condensate tank exemption is based on a standardized emission factor, 13.7 pounds ofVOC emissions per barrel of production, which may not be representative ofeach natural gasfield. Even though the exemption was removed sources may still make use ofthe genericAPEN exemption, upon determining that actual annual uncontrolled emissions fall below the applicable de minimis levels identified in Regulation Number 3, PartA. Ifbased on this generic exemption, a source is determined to be APEN exempt, the source is also permitexempt. Remove APEN Exemptions, Keep Permit Exemptions

RegulationNumber 3 Adopted: October20, 2011 Page 330The Commission has removed specific source category APEN exemptions for petroleum industry flares, crude oil truck loading, oil production wastewater and crude oil storage tanks to improve the inventory of actual uncontrolled emissions. Sources may still use the genericAPEN exemption, upon determining that actual annual uncontrolled emissions fall belowthe applicable de minimis levels. The Commission is maintaining current permitting exemptions until such time thatthe APEN datajustifythe need for permitting activities. Revise APEN and/or Permitting Exemptions Similarly, based on the Division's experience, actual emissions from several source categories specific to oil and gas-related operations may be higherthan previously believed. Thus the APEN and permitting exemptions for surface water impoundments (Regulation Number3, PartA, Section II.D.1.uuu. and Part C, Section II.E.3.yyy.) were revised to exclude from the exemption, oil and gas production wastewater (similarto Regulation Number 3, Part

### A, Section II.D.1.uu.). Also, theAPEN and permitting exemptions for chemical storage tanks (Regulation Number 3, Part C, Section II.E.3.n.) were revised to exclude oil and gas production wastewater orcommercial facilities' operations (similarto Regulation Number3, Part A, Section II.D.1.uuu. and Part C, Section ll.E.3.yyy.). Finally, the APEN and permitting exemptions for fuel storage dispensing (Regulation Number3, PartA, Section II.D.1.cccc. and Part C, Section II.E.3.cccc.) were revised to expand the applicability ofthe current exemption from specifically the 1-HourOzone Nonattainment orAttainment/Maintenance Area to any ozone nonattainment area for the sake ofequity. 

### I.SS. Adopted December 19, 2008 Revisions to Regulation Number3, Part F
This Statementof Basis, Specific Statutory Authority and Purpose complies with the requirements ofthe Colorado Administrative Procedure Act Sections 24-4-103, C.R.S. and the ColoradoAir Pollution Prevention and Control Act Sections 25-7-110 and 25-7-110.5, C.R.S. ("the Act"). Specific Statutory Authority TheCommission promulgates this regulation pursuant to the authority granted in Sections 25-7-105(1)(c), C.R.S. (authority to adopt a prevention ofsignificant deterioration program); 25-7-109(1){a) (authority to require the use ofairpollution controls); 25-7-109(2)(a) (authority to adoptemission control regulations pertaining to visible pollutants); 25-7-114.4(1) (authority to adopt rules for the administration ofpermits); and 25-7-1002(authority to maintain a program that complieswith the requirements ofthe federal actfor prevention and remediation of**sig~ificant** deterioration ofvisibility in Class Ifederal areas. Basis and Purpose This regulatory change updatesthe Division's BART determinations by adding determinations for Colorado Springs Utilities Drake Units 5, 6, and 7 and CEMEX Portland cement facility regarding limits and averaging times for sulfurdioxide, nitrogen oxides and particulates. The proposed change provides state and federally enforceable limitations for the BART sources. States mustensure that "each source subjectto BART maintain the control equipment required by this subpart and establish procedures to ensure such equipment is properly operated and maintained". 40 CFR 51.308(e)(v). This is required for SIP approval. 

### I.TT. Adopted October21, 2010 Revisions to Parts A, B, C and D to Address Greenhouse Gases or GHGs

RegulationNumber3 Adopted: October20, 2011 Page 331 ' 

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# { ' ! tThis Statementof Basis, Specific Statutory Authority and Purpose complieswith the requirements ofthe Colorado Administrative Procedure Act Sections 24-4-103(4) and (12.5), C.R.S. for new and revised regulations.

Regulation Number 3 is designed to implementsubstantive regulatory programs authorized underthe Colorado Air Pollution Prevention and Control Act ("Act") including provisions ofthe State Implementation Plan addressed in C.R.S. Section 25-7-105(1)(a), emission control regulations addressed in C.R.S. Section 25-7-105(1)(b}, Prevention ofSignificant Deterioration requirements addressed in C.R.S. Section 25-7-105(1)(c), regulations as may be necessary and properforthe orderly and effective administration ofconstruction permits and renewable operating permits addressed in C.R.S. Section 25- 7-114.4(1), aswell as other authorized programs underthe Act. The current revisions have been promulgated in orderto facilitate this goal. The revisions were proposed by the Air Pollution Control Division based on EPA's GHG Tailoring Rule. On June 3, 2010, EPA promulgated the "Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule." See 75 Fed. Reg. 31514 (June 3, 2010). EPA's Greenhouse Gas (GHG) Tailoring Rule was designed to tailorthe applicability criteria that determinewhich stationary sources and modification projects become subjectto permitting requirements for GHGs underthe Prevention ofSignificant Deterioration (PSD) and Title V Permitting Programs ofthe Clean AirAct (CAA). Specific Statutory Authority The Act, under C.R.S. Section 25-7-105(1)(a) authorizes the Air Quality Control Commission (Commission) to adopt rules necessary to implementthe Act, and to adopt and revise comprehensive State Implementation Plans (SIP) to assure attainment and maintenance of national ambientairquality standards. C.R.S. Section 25-7-109 authorizes the Commission to adopt rules that are consistentwith state policy regarding air pollution and with federal recommendations and requirements. C.R.S. Section 25-7-109(2) authorizes the Commission to regulate oxides ofcarbon, oxides of nitrogen and other chemicals, which encompasses the pollutant GHG. Additionally, Colorado is authorized to regulate GHGs under PSD and Title V in C.R.S. Sections 25-7-103(1.5), 25-7-114(3}, 25-7-114.3, and 25-7-201. Additional authority for these revisions is setforth in C.R.S. Sections 25-7-106 and 25-7-109, and 25-7- 114. In orderto maintain consistency between state regulations and federally enforceable regulations contained in Colorado SIP, the Commission intends these revisions be adopted into the SIP. Purpose The Commission has adopted revisions throughout Regulation Number3 to address GHG regulation in Colorado. These revisions were made to incorporate EPA's GHG Tailoring Rule into Colorado's Title V and PSD Permitting Programs, and to extend synthetic minor permitting to Colorado's stationary sources seeking federally enforceable limits to avoid major source or major stationary source applicability thresholds specificto GHGs. EPA's GHGTailoring Rule establishes a phased approach for applying the CAA's PSD and Title V Permitting Programs to the sum ofsix GHGs1

. The GHG Tailoring Rule has several differentcomponents including permitting thresholds and timing, commitments to the next steps, implementation options, and information requests. On April2, 2007, the U.S. Supreme Court held that GHGs are included in the definition of"air pollutant" under CAA Section 302(g). Massachusetts v. EPA, 549 U.S. 497 (2007). As part ofthis decision, the

1The GHG air pollutant consists ofthe aggregate sum ofsix GHG gases: carbon dioxide (C02), nitrous oxide (N20), methane (CH4), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6). These species ofeach GHG class are treated in aggregate, based on the total carbon dioxide equivalent (C02e). Regulation Number3 Adopted: October 20, 2011 Page 332Court mandated EPAto determine under CAA Section 202(a) whether GHG emissionsfrom new motor vehicles endanger public health orwelfare, or iftoo much scientific uncertainty remains to make such a determination.2
On December 7, 2009, EPA issued the Endangerment Finding and the Cause or Contribute Finding, both addressing GHGs underCAA Section 202(a). See 74 Fed. Reg. 66496 (Dec. 15, 2009). EPA's Endangerment Finding found that GHGs endangerthe public health and welfare ofcurrent and future generations. The Cause orContribute Finding found thatthe combination ofthe six well-mixed GHGs from new motorvehicles contributes to the GHG pollution which threatens public health and welfare. EPA's findings were a prerequisite to establishing GHG standards for light-dutyvehicles, butthey did not in themselves impose any requirements on GHG stationary sources. On May 7, 2010, EPA published the Light-DutyVehicle Rule (LDVR)jointlywith the National Highway Traffic SafetyAdministration to reduce GHG emissions and improve fuel economy of new passenger cars, light-duty trucks, and medium-duty passengervehicles. See 75 Fed. Reg. 25324 (May 7, 2010). The newGHG emissions standards underthe LDVR first apply to model year2012 vehicles and become increasingly more stringentthrough model year 2016. EPA addressed the implications ofGHGs as a newly regulated pollutant underthe LDVR through the Johnson Memo ("EPA's Interpretation of Regulations that Determine Pollutants Covered by Federal Prevention ofSignificant Deterioration (PSD) Permit Program"). See 75 Fed. Reg. 17004 (March 29, 2010). EPA concluded that a previously unregulated pollutant is subjectto regulation once it is subjectto actual control ofemissions underthe CAAor EPA regulation, and that control requirement takes effect. Accordingly, EPA concluded that once the LDVR takes effecton January 2, 2011 (the earliest date that a model year2012 vehicle could be put on the market), GHGs will become regulated pollutants underthe PSD and Title V permitting programs. Absentthe Tailoring Rule, GHGswould then be subjectto regulation atthe existing PSD and Title V thresholds of 100 

### 1250tons peryear (tpy). The foregoing federal actions now require appropriate changes to Colorado's regulations. Colorado law already provides the Commission authority and an obligation to regulate GHGs underthe state's PSD and Title V permitting programs. Colorado's definition of "air pollutant" mirrors EPA's definition underthe CAA. See C.R.S. Section 25-7-103(1.5) and CAA Section 302(g).3 Following the U.S. Supreme Court's holding in Massachusetts v. EPA, GHGs are included in the definition ofair pollutant under CAA Section 302(g). Colorado's PSD program applies PSD permitting requirements to new major stationary sources and major modifications. C.R.S. Section 25-7-210. Similarly, Colorado defines a Title V "majorsource" as "any stationary source[

...] that directly emits, or has the potential to emit, one hundred tons per year or more ofany air pollutant." C.R.S. Section 25-7-114(3)(b). Furthermore, a Title V permit is required for any majorsource. C.R.S. Section 25-7-114.3(1)(b). The Division's proposed changes to Regulation Number 3 align these key definitions to Colorado's statute (which in turn map to the CAA) and add a definition of"subjectto regulation," as defined in theTailoring Rule. The Commission's mandate includes promulgation of regulations to reduce air pollution, including the promulgation ofa comprehensive state implementation plan which "shall meetall requirements ofthe federal act and shall be revised whenever necessary orappropriate." C.R.S. Section 25-7-105; see also C.R.S. Section 25-7-102 (legislative declaration). Furthermore, Colorado's statutes provide that "In the formulation ofeach emission control regulation, the commission shall take into consideration [

...] the state policy regarding air pollution, as set forth in section 25-7-102 [and] Federal recommendations and requirements." C.R.S. Section 25-7-109(1)(b).

2 CAA Section 202(a) requires EPAto "prescribe (and from time to time revise)

... standards applicabletothe emission ofany airpollutantfrom any class orclasses ofnewmotorvehicles

... which

... cause, orcontributeto, airpollutionwhich mayreasonably be anticipated to endanger publichealth orwelfare." 3. The CAAdefines "airpollutant" as"

... any airpollution agentor combination ofsuch agents, including anyphysical, chemical,biological, radioactive[

...] substance ormatterwhich is emittedinto orotherwise enters the ambient air." CAA Section 302(g). Colorado's statute defines "airpollutant" as"

... means any fume, smoke, particulate matter, vapor, orgas oranycombinationthereofwhich is emitted into orotherwise enters the atmosphere, including,butnot limitedto, anyphysical, chemical,biological, radioactive [

...] substanceormatter

..." C.R.S. Section 25-7-103(1.5). RegulationNumber 3 Adopted: October20, 2011 Page 333In addition to Colorado's statutory authority, federal PSD and Title V provisions underthe CAA also place requirements on states to maintain PSD and Title V Permitting Programs in compliance with federal requirements. The chain ofevents described above renders GHGsto be considered a regulated pollutant subjectto the federal PSD and Title V permitting requirements. Under PSD, EPA mandates that "each applicable implementation plan shall contain emission limitations and such other measures as may be necessary, as determined under regulations promulgated underthis part, to preventsignificant deterioration ofair quality

..." CAA Section 161. UnderTitle V, the CAA provides that "Wheneverthe Administrator makes a determination that a permitting authority is notadequately administering and enforcing a program, or portion thereof, in accordancewith the requirements ofthis title, the Administrator shall provide notice to the State and may, priorto the expiration ofthe 18-month period referred to in paragraph (2), in the Administrator's discretion, apply any ofthe sanctions specified in section 179(b)." CAA Section 502(i)(1). In orderto avoid both the possibility ofsanctions forfailure to complywith EPA's permitting programs, as well as the unsustainable workload of regulating GHGs atthe existing permitting thresholds of 100 

### I250 tpy, the Division proposes regulatory revisions to comportwith EPA's GHG Tailoring Rule. Permitting Thresholds and Timing Regarding permitting thresholds and timing, EPA's GHG Tailoring Rule identifies three steps- Steps 1, 2 and 3 - to phase in GHG permitting requirements overtime. This rulemaking addresses only Steps 1 and 2, as discussed in EPA's GHG Tailoring Rule. While EPA's GHG Tailoring Rule generally discusses a Step 3, 4 it provides few details on any associated timing and thresholds; instead EPA's GHG Tailoring Rule establishes an enforceable commitmentto complete another rulemaking no laterthan by July 1, 2012 for Step 3 and beyond. The Commission intends to expressly address these future actions expeditiously as they arise. This rulemaking establishes key definitions and the authority to regulate GHGs aswell as addresses Steps 1 and 2 as identified in EPA's GHG Tailoring Rule. Step 1 spans from January 2, 2011 through June 30, 2011, and applies PSD and Title V permitting requirements to GHG emissions at"anyway sources," or stationary sources that are already subjectto these permitting requirements for non-GHG pollutants. During Step 1, no source shall be required to obtain a Title V operating permit or PSD permit solely due to GHG emissions. Step 2 spans from July 1, 2011 through June 30, 2013. In Step 2, in addition tothe requirements of Step 1, PSD and Title V permitting requirements apply to stationary sourceswhich may be major5 for GHG emissions and no other regulated pollutant. EPA's GHG Tailoring Rule sets a 100,000tpy carbon dioxide equivalent (C02e) applicability threshold for stationary sources that are majorfor GHG and no other non-GHG NSR regulated pollutantfor PSD, and re-affirms that a significant emissions increase and a significant net emissions increase mustoccur in orderto trigger PSD review. PSD and Title V permitting applicability thresholds and significance levels have traditionally been determined on a mass-basis. However, the Tailoring Rule sets a PSD significance level for GHG at75,000 tpy on a C02e basis. There are distinct units ofmeasure used in identifying GHG applicability thresholds and significance levels. Some are mass-based and some are C02e-based. The distinction between the two focuses on whether or notthe global warming potential (GWP) is applied to each individual GHG species before summing the total ofGHG classes for comparison to the appropriate value. The Commission recognizes thatthe EPA is currently developing GHG permitting guidance. At its earliest convenience priorto January 2, 2011, the Division is instructed to provide permitting guidance to sources to minimize uncertainty.

4. EPA proposes to promulgate a separate rule specific to Step 3 by July 1, 2012. It is anticipated that this Step 3 will span from July 1, 2013 through April 30, 2016. EPA offers limited regulatory details, but states that no stationary sources having potential to emit GHG emissions of less than 50,000 tons per year C02ewould trigger PSD or Title V Permitting Programs under the Tailoring Rule due to GHG emissions alone. No other details are provided. 5. M1Yor source orml)jor stationary source. RegulationNumber3 Adopted: October20, 2011 Page 334Permitting and Application Requirements
The Commission recognizes the difficulties in developing a GHG inventory in shortorder, and directs the Division to request permit applicants which are required to provide a GHG inventory to submitone by a reasonable deadline set by the Division. See the citations belowfor further information. Complete Application
In Regulation Number3, Part C, Section III.C.3.a., the Commission requires that all information related to the "emissions of pollutants sufficientto verify which requirements are applicable to the source" (which includes GHG) must be included in a complete application. Similarly, 40 C.F.R. 70.5(c)(3)(i) requires that Title V applications must include emissions ofall regulated air pollutants. Further, in Regulation Number3, Part C, Section IV.B.4, the Commission requires that a source update its permit application to address any requirements that become applicable afterthe datethe source has submitted its application, priorto issuance ofthe draft permitfor public comment. Application Shield
In Regulation Number3, Part C, Section II.B., the Commission grants a defense to an enforcementaction to sources which submit a timely and complete application under Part C until a final determination on the permit has been made. Per Regulation Number3, Part C, Section IV.D., afteran application is deemed complete, the Division may request additional information in writing and set a reasonable deadlinefor response. However, the application shield defense is not available ifthe source "fails to submit by the deadline specified in writing by the Division any additional information identified as necessary to process the application, orto otherwise supplement its application in accordance with the provisions of Regulation Number3, Part C, Sectic>ns IV.B.3. and IV.B.4." Applicable Requirement In Regulation Number3, PartA, Section I.B.9., the Commission defines applicable requirement consistently with that definition found in 40 C.F.R. Part 70, Section 70.2. Based on these definitions the mandatory GHG Reporting Rule requirements codified in 40 C.F.R. Part 98 do not meetthe definitions of applicable requirements atthis time; however, any GHG BACT requirement orotherfederally enforceable GHG requirements, including GHG synthetic minor permitconditions necessary to avoid majorsource or majorstationary source thresholds are considered applicable requirements. Regulation Number3, Part C, Section V.B.4. requires that any operating permit address "all applicable requirements," howeverexisting TitleV sources that do not undergo PSD review should nottrigger any GHG applicable requirements. "Subjectto Regulation or Requirement" Priorto this rulemaking the Title V operating permit requirements of Regulation Number3, Part C, Sections II.A.1.g., II.E.1. and II.E.2. already contained the language "subject to regulation or requirement", followed bya specific reference to the Federal Act oranother part of Regulation Number3. The phrase "subjectto regulation" was addressed in the Johnson Memo, "EPA's Interpretation of Regulations that Determine Pollutants Covered by the Federal Prevention ofSignificant Deterioration (PSD) Permit Program" and latercodified in the GHG Tailoring Rule and Regulation Number3, Part A, Section I.B.44. See 75 Fed. Reg. 17004 (March 29, 2010). Forthe purpose ofthese sections, the definition of"subjectto regulation" is not applicable and the full phrase "subject to regulation or requirement" relates to the reference atthe end ofthose statements.

Regulation Number3 Adopted: October20,2011 Page 335Rescission Clause The Commission recognizes the uncertainty facing GHG stationary sources, given the potential forfuture federal legislation and the extensive pending legal challenges to GHG regulation underthe CAA. The Commission intends GHG regulation in Colorado be consistentwith the Federal Act, and has inserted a rescission clause making the effectiveness ofthe term SubjectTo Regulation dependent upon federal enforceability. Should eitherfederal legislation or Court rulings from the District ofColumbia Circuit Court ofAppeals orthe U.S. Supreme Court limitor render ineffective the regulation ofGHG emissions under the PSD orTitle V provisions ofthe Federal Act, then GHGs shall only be subjectto regulation underthis Regulation Number 3 for the affected permitting program(s) to the same extent. Example 1: ifthe regulation ofGHGs under both PSD and Title V is vacated in whole, then all GHG emissions limitations or requirements included in any construction oroperating permit issued underthis Regulation Number3 shall no longer be enforceable. Example 2: ifthe Court remands the regulation of GHG emissions to EPA such that GHG regulation underthe Federal Act is temporarily ineffective, either in whole or in part, any GHG emissions limitation or requirement included in any permit issued underthis Regulation Number 3 shall be limited or rendered ineffective to the same extent. Sources may actively seekto maintain those permit conditions ifthey so choose pursuantto Regulation Number3, PartA, Section I.A. These examples are not intended to address all potential outcomes, but ratherto provide some degree of implementation guidance. The Commission intends thatthis rescission will be automatically and immediately effective final ofapplicable court action or legislation. When triggered, this clause prevents regulation ofGHG under Regulation Number3 to the same extentofthe federal action orcourt ruling and may require a new rulemaking action by the Commission to regulate GHGs forthe affected permitting program, including any new details ofsuch future regulation. Synthetic Minor Permits for GHGs No minor source air pollution construction permits are required atthis time for GHGs, exceptwhere stationary sources voluntarily seekfederally enforceable limits for GHGsto avoid majorsource PSD and Title V permitting requirements. (Regulation Number3, Part 8, Section ll.A.7.) An application for a voluntary synthetic minor construction permit must include GHG emissions reported on Division-approved forms. Construction permits shall be issued based on production/process rates requested in the application, and the emission limit requested shall be a permitcondition. (Regulation Number 3, Part 8, Section II.A.4.) Ifthe above-mentioned rescission clause is triggered, any federally enforceable GHG emission limits contained in synthetic minor permits are no longerenforceable. The stationary source is requested to submit a cancellation request to the Division to cancel GHG emissions points and permits. Regulation Number3 Revisions: The revisions to Regulation Number3 as approved by the Commission are summarized below. Part A Add Regulation Outline Add new definitions ofGreenhouse Gas and Carbon Dioxide Equivalent. The C02e definition incorporates by reference EPA's GWPcodified via the GHG Mandatory Reporting Rule (Sections 1.8.10., 1.8.23.) Revise Major Source definition so that it applied to regulated NSR pollutant (which includes GHG) as well as to air pollutants (which does not included GHG) so that GHG is addressed and the definition may be used to establish the mass based GHG threshold (Section 1.8.25.b.)

RegulationNumber 3 Adopted: October20,2011 Page 336Add newdefinition ofSubjectto Regulation consistentwith EPA's GHG Tailoring Rule and include the rescission clause as discussed above (Section I.B.44.) Revise annual emission fees to exclude GHGs (Section VI.D.) 

### Part B
Revise general permitting requirements to authorize the Division to issue synthetic minor permits for GHGswhere stationary sources voluntarily choose to seek federally enforceable limits for GHG iftheywould otherwise be subjectto PSD orTitle V Permitting Programs (Sections II.A.4., II.A.7.) 

### Part C Clarify that complete Title V Operating Permitapplications include the reporting ofGHG emissions as they are pollutants which may be subject to requirements applicable to the source, but not air pollutants, under Regulation 3 definitions (Section III.C.3.a.). 

### Part D Revise the Definitions (Section II.A.): Revise BACT, Major Modification and Major Stationary Source Definition to use the term Regulated .NSR Pollutantfor consistency and remove italics consistentwith EPA's GHG Tailoring Rule so thatthese definitions become effective by January2, 2011 (Sections II.A.8., II.A.22., II.A.24.a., II.A.24.a.(ii) and II.A.24.b.) Revise Regulated NSR Pollutant definition and remove italics consistent with EPA's GHG Tailoring Rule so that it becomes effective by January2, 2011 (Section li.A.38.) Additionally, the Commission approves typographical, grammatical and formatting changes, as necessary. 

### I.UU. Adopted January 7, 2011 Regulation Number 3, Part D (Concerning Major Stationary Source NewSource Review and Prevention ofSignificant Deterioration) and Part F (BestAvailable Retrofit Technology (BART) and Reasonable Progress for Regional Haze) This Statement of Basis, Specific StatutoryAuthority and Purpose complies with the requirements ofthe Colorado Administrative ProceduresAct, Section 24-4-103, C.R.S, and the Colorado Air Pollution Prevention and Control Act, Sections 25-7-110 and 25-7-110.5, C.R.S (the Act). 

### Specific Statutory Authority The Colorado AirQuality Control Commission (Commission) promulgates this regulation pursuantto the authority granted underColorado Revised Statutes, Sections 25-7-105(1)(c), (authority to adopt a prevention ofsignificant deterioration program); 25-7-109(1)(a) (authority to require the use ofair pollution controls); 25-7-109(2)(a) (authority to adopt emission control regulations pertaining to visible pollutants); 25-7-114.4(1) (authority to adopt rules for the administration ofpermits); and 40-3.2-208 (authority to incorporate emission reduction plans for rate-regulated utilities within the state's Regional Haze State Implementation Plan). 

### Basis and Purpose

RegulationNumber 3 Adopted: October20, 2011 Page 337PARTD These revisions to Regulation Number 3, Part D change the review and revision period forthe Regional Haze Long Term Strategy (LTS) from every three years to every five years. This change aligns the reporting periods forthe Regional Haze L TS and the Regional Haze progress reports that are required every five years pursuantto 40 C.F.R. Section 51.308(g). PART F On July 1, 1999, the U.S. Environmental Protection Agency (EPA) promulgated the final Regional Haze Rule (Rule), which went into effect, on August 30, 1999, and which requires each state to submita State Implementation Plan (SIP) to address regional haze. The Rule is intended to achieve the national visibility goals as expressed in Section 169(a) ofthe Clean AirAct, 42 U.S.C. Section 7491. Colorado mustdevelop a SIP revision in coordination and consultation with otherstates, tribes, federal land managers, EPA and Regional Planning Organizations (RPOs) designated by EPA. In the west, the RPO is the Western Regional Air Partnership (WRAP). Regional Haze is a visibility impairmentthat is caused by multiple sources overa broad geographic region. EPA's Regional Haze Rule requires every state to submita SIP designed to improve visibility in its mandatory Class Ifederal areas (Class I areas). Class I areas are areas ofgreatscenic importance, such as national parks and wilderness areas. There are 12 Class I areas in Colorado, and 156 nationwide. A key elementof EPA's regional haze program is BestAvailable RetrofitTechnology (BART) for certain emission sources. Section 169A(b)(2)(A) ofthe Clean AirAct requires BART for certain existing major facilities, placed into operation between August 7, 1962 and August 7, 1977, that have the potential to emit more than 250 tons ofvisibility-reducing pollution a year. EPA's Regional Haze Rule requires SIPs to include BART emission limits for each subject-to-BART source that may reasonably be anticipated to impairvisibility in any Class I area, unless the state demonstratesthat an emissions trading program or other alternative measureswill achieve greater reasonable progress toward natural visibility conditions. See 40 CFR Part 51 Section 308(e). EPA promulgated a BART Rule separate from its Regional Haze Rule. EPA's BART Rule includes guidelines (AppendixY) regarding how states should make BART determinations. See 70 Fed. Reg. 39104 (July 6, 2005). EPA also promulgated a "BART Alternative" Rule. See 71 Fed. Reg. 60612 (October 13, 2006). The BARTAlternative Rule allows an alternative program to source-by-source BART, ifthe program results in greater reasonable progress than would occur pursuantto individual BART. Stateswere required to submittheir regional haze SIPs to EPA by December 17, 2007. The Regional Haze Rule establishes the year2064 as the date by which a goal ofvisibility at natural background levels is desired in all Class I areas. The Rule divides the 2007-2064 time periods into numerous planning periods. States were required to submittheir initial RH SIP by December 31, 2007, then a revised Regional Haze SIP to EPA by July 31, 2018, and every ten yearsthereafter. See 40 CFR Section 51.308(f). Colorado submitted much of its regional haze SIP (including mostofits BART determinations) to EPA in early 2008 for review. Following additional revisions, the Commission approved the remainder of Colorado's BART determinations in December2008, and submitted Colorado's Regional Haze SIP to EPA's Region 8 for review in 2009. Upon review, EPA Region 8 informed Colorado that its regional haze SIP submittal was not approvable and needed to be revised before EPAcould reconsider it for inclusion in the State Implementation Plan. EPA has identified deficiencies with Colorado's Regional Haze Elementofthe SIP, including the basis for and enforceability of BART determinations and the lackof reasonable progress goals (RPGs) and RP source determinations. These alleged deficiencies must be addressed in orderfor EPAto approve the

RegulationNumber 3 Adopted: October 20, 2011 Page 338Regional Haze elementofthe SIP. This regulation is the second part ofa bifurcated rulemaking process in which the Commission adopted the remaining outstanding Regional Haze SIP elements.
EPA made a finding on January 15, 2009 that 37 states, including Colorado, had failed to make all or part ofthe required Regional Haze SIP submissions. See 74 Fed. Reg. 2393 (January 15, 2009). This action started a clock by which states must have approved SIPs, or EPA must promulgate Federal Implementation Plans (FIPs) within two years 

### (i.e., by January 15, 2011). EPA initiated actions in Colorado to begin preparing a FIP, and this action by the Commission is taken to complete the adoption ofa regional haze element ofthe SIP, address the deficiencies that Region 8 EPA has identified, and to prevent such a federal action in Colorado, with its attendant consequences 

### (e.g., federal determinations of BART, federal reasonable progress determinations, federal permits, and state loss ofCAAgrant monies so EPA can prepare a FIP). During the 2010 legislative session, the Colorado legislature passed House Bill 10-1365, the "Clean AirClean Jobs Act" (CACJA). The CACJA sets forth requirements applicable to investorowned utilities in Colorado (Public Service Company ofColorado (PSCo) and Black Hills Energy) and certain oftheir electric generating units. The CACJA requires the investorowned utilities to submitemission reduction plans tothe Colorado Public Utilities Commission (PUC), and provides that the Commission shall considerthe airquality provisions ofthe emission reduction plans for incorporation·into the regional haze element ofColorado's SIP. See Section 40-3.2-208, C.R.S. PSCo and Black Hills submitted their emission reduction plans to the PUC on August 13, 2010, and the PUC approved the plans on December 15, 2010. The Commission adopted into Regulation Number 3 BART determinations for PSCo's Hayden and Comanche plants, two units at CENC's Golden plant, CEMEX's Lyons Portland cement plant, and Colorado Springs Utilities' Drake power plant. The Commission also adopted an Alternative to BART program for two units atTri-State Generation and Transmission Association's Craig power plant. The Commission determined that, for nitrogen oxide (NOx) emissions, the appropriate BART control for Craig Units 1and 2 would be emission rates associated with the assumed installation and operation ofselective non-catalytic reduction (SNCR). As an alternative to BART, itwas proposed and the Commission adopted, a more stringent NOx emissions control plan that consists ofemission limits associated with the assumed operation ofSNCR for Unit 1and the assumed operation ofSCR for Unit2. The state has determined thatthe alternative program achieves greater reasonable progress than would be achieved through the installation and operation ofsource-by-source BART, and thus meets the requirements ofthe regional haze rule. The Commission also adopted into Regulation Number3 a BARTAlternative for a numberof PSCo plants and incorporated it into the Regional Haze SIP. The BARTAlternative is based on reductions achieved as a result ofa combination ofshutdowns and retrofit emissions controls at certain PSCo facilities planned as part of HB 10-1365. The BARTAlternative includes ten units atfour PSCo facilities. The facilities included in the BARTAlternative includeArapahoe Units 3 and 4, Cherokee Units 1-4, Valmont and Pawnee. The BARTAlternative includes both BART and non-BART sources. The nonBARTsources are olderthan the BART timeframe, and in effectwill all be controlled by 2017 and reduce their NOxand S02 emissions as a result ofenforceable facility retirement dates and, for one unit, fuel switching to natural gas as a peaking unit. Forthe BART sources, Cherokee 4, Pawnee and Valmont, Valmontwill be retired by 2018, Pawnee will be fully controlled by mid-2015, and Cherokee will operate on natural gas by 2018. The state has determined thatthe BARTAlternative achieves greater reasonable progress than would be achieved through the installation and operation ofsource-by-source BART and RP determinations at the covered sources, and thus meetsthe requirements ofthe Regional Haze rule. PSCo has designed and proposed the BARTAlternative to meetthe state CACJA. The Commission determined thatto the extent there is any inconsistency between the CACJA and older, more generic legal requirements, the more recent and specific CACJA controls. The state has used simplifying assumptions to compare the emission reductions and visibility impacts associated with the PSCo BARTAlternative, and believes that the BARTAlternative is clearly superiorto, and will result in greater reasonable progress than, source-by-source BART. Forexample, the state has determined and
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# Idemonstrated that PSCo's BART Alternative emissions reductions are greaterthan, and would provide greater reasonable progress than, the presumptive or source-by-source BART limits. The Commission also adopted retirement dates of"no laterthan" July 1, 2012 and December31, 2016 for Cherokee Units 1and 3, respectively. In doing so, the Commission is noway rejecting any portion of PSCo's emission reduction plan as approved by the PUC on December 15, 2010 (Decision No. C10-1328). Rather, the Commission's action is intended to provide flexibility and consistency in lightof PSCo's pending application for rehearing, reargument or reconsideration (RRR) before the PUC, in which PSCo states thatthe revised dates are importantfor providing sequencing ofactivities thatwill ensure electrical system reliability in the Denver Metropolitan area. These dates are also wholly consistentwith the PUC's decision because PSCo can comply with the dates established by both the PUC and the Commission, regardless of howthe PUC rules on PSCo's RRR application. The Commission also notes that Hayden, another PSCo BART source, is not part ofthe BARTAlternative program. The PUC approved controls for Hayden as part of PSCo's emission reduction plan under HB 10-1365, consistentwith the state's BART determination forthat source. The Commission also established non-binding goals for each Class I area in Colorado (expressed in deciviews) that provide for Reasonable Progress (RP) towards achieving natural visibility conditions in 2018 and to 2064. See 40 C.F.R. Section 51.308(d)(1). The reasonable progress goals (RPGs) provide for improvement in visibility for the most-impaired (20% worst) days overthe period ofthe SIP and ensure no degradation in visibility for the least-impaired (20% best) days overthe same period. The Commission adopted into Regulation Number 3 emission limits for "reasonable progress" sources that have a significant impacton visibility impairment in Class I areas, in orderto help the state make reasonable progress towards improving visibility in this first planning period. These sources include Black Hills Energy Clark Station (a HB10-1365 facility), the Holcim Cement Plant, Tri-State Generation and Transmission Association's Craig Station Unit 3 and Nucla Station, Platte River PowerAuthority's Rawhide Station, Colorado Springs Utilities' Nixon Power Plant, PSCo's Cameo plant, and CENC's Unit 3. For all BART and BARTAlternative determinations made by the Commission in the November2010- January 2011 proceedings, a source that has installed BART or implemented a state-approved BART Alternative is exempted from the imposition offurther regional haze controls during this first regional haze planning period (i.e., through December 31, 2017). This exemption applies only to regional haze, and does notapply to controls oremission reductions that may be required orotherwise imposed pursuantto other air pollution programs (including, but not limited to, ozone standards). The revisions to Regulation Number 3, Part F also apply Monitoring, Recordkeeping and Recording (MRR) Provisions to BART, BARTAlternative and Reasonable Progress emission limits. In addition to the regulatory changes described above, the Commission adopted changes to Colorado's Regional Haze SIP. Many ofthe changes are non-substantive editswhile other changes address comments from Federal Land Managers, incorporate thejustification forthe BART and reasonable progress determinations, and provide thejustification forthe reasonable progress goals. The following presents an overview ofthe content ofColorado's Regional Haze SIP document: Chapter 1

- Overview Chapter2 - Plan Development and Consultation Chapter 3

- Monitoring Strategy Chapter 4- Baseline and Natural Visibility Conditions in Colorado, and Uniform Progress for Each Class I area Chapter 5- Sources of Impairment in Colorado

Regulation Number3 Adopted: October 20, 2011 Page 340

### Chapter6- BestAvailable Retrofit Technology Chapter 7- Visibility Modeling and Apportionment Chapter 8

- Reasonable Progress Chapter9- Long Term Strategy Chapter 10

- Commitmentto Consultation, Progress Reports, Periodic Evaluations of Plan Adequacy, and Future SIP Revisions Chapter 11

- Resource and Reference Documents Appendix A- Periodic Review ofColorado RAVI Long Term Strategy Appendix B- SIP Revision for RAVI Long Term Strategy Appendix C- Technical Support forthe BART Determinations Appendix D- Technical Supportforthe Reasonable Progress Determinations The revised chapters are intended to fully replace previously adopted SIP chapters. Additional Considerations The Commission provides the following additional statement, consistent with Sections 25-7-110.5(5)(a) and 110.8, C.R.S. ()Colorado's proposed Regional Haze regulations and SIP revisions are consistent with EPA's federal requirements underthe Regional Haze rule. There is no binding requirement on howa State may "consider" the federal statutory and regulatory factors in determining BARTand RP and establishing RPGs. The mannerand method ofconsideration is left to the state's discretion. States are free to determine the weight and significance to be assigned to each factor. See 70 Fed. Reg. 39104, 39170 (July 6, 2005). State discretion is a cornerstone ofthe regional haze rule. See id., at 39137 ("Congress evinced a special concern with insuring that States would be the decision makers."). States also have flexibility to consider any otherfactors thatthe state determines to be relevant. See U.S. EPA, "Guidancefor Setting Reasonable Progress Goals Underthe Regional Haze Program," p. 5-1 (June 2007). Federal law also allows states flexibility to adopt alternative programs that provide greater reasonable progress than BART. The Commission has adopted such alternatives for PSCo and Tri-State sources. The Commission finds that the revisions adopted in this hearing are wholly consistent with the discretion and expertise to be applied by state agencies underthe federal act. Accordingly, the proposed revisions are no more stringent ordifferentthan federal law, and Sections 25-7-110.5 and 110.8 do not appearto apply. Additionally, HB10-1365 provides, in part, thatthe Commission mustvacate this rulemaking proceeding and must initiate a new proceeding for the consideration ofalternative proposals for the appropriate controls for those units covered by the utility plans for inclusion in the regional haze element ofthe state implementation plan if, among otherthings, the Commission rejects any portion ofthe plans as approved by the PUC. Section 40-3.2-208(2)(b), C.R.S. Ifthe Commission were to reject any portion ofthe utility plans, this proceeding would be vacated and a new proceeding initiated, making it impossible for Colorado to submit a timely and complete SIP revision to address Regional Haze, and resulting in a FIP. Underthese circumstances, it is reasonable to conclude that the Commission rules regarding "1365" sources are being adopted to implement prescriptive state requirements, thatthe Commission has no significant policy-making RegulationNumber3 Adopted: October20,2011 Page 341optionswith respect to these sources, and that many provisions ofSections 25-7-110.5 and 110.8 do notapply. See Section 25-7-110.5(2), C.R.S. Despite the foregoing, certain elements ofthis proceeding could be viewed (as certain parties have alleged) as exceeding the federal actor differing from the federal act. Forexample, the closure or repowering of PSCo facilities would not be required solely by EPA's Regional Haze Rule. Accordingly, the Commission is providing this additional statement, consistentwith Sections 25-7-110.5(5)(a) and 110.8, C.R.S. (II) EPA's regional haze requirements are performance based, and the regional haze rule sets forth factors that states mustconsider when assessing controls and emission limits for sources emitting visibility impairing pollutants. Section 169Aofthe federal Clean AirAct (1977) sets forth the following national visibility goal: "Congress hereby declares as a national goal the prevention ofany future, and the remedying ofany existing, impairmentofvisibility in mandatory Class I Federal areas which impairment results from man-made air pollution." 42 U.S.C. Section 7491. To helpfacilitate this goal, EPAfinalized the regional haze rule in 1999. The Rule requires States to adopt SIPs to address visibility impairment in the Class I areas. Critical components ofsuch SIPs (particularly the SIP for the first planning period) are BART and RP. EPA provides flexibility to states regarding howto apply the relevant factors to BART and RP analyses. (Ill) Applicable federal requirements specifically address the issues regarding visibility impairment in Class I areas that are ofconcern to Colorado. Applicable federal requirements do not specifically address all ofthe issues that are ofconcern to Colorado. House Bill 10-1365 is intended to address Colorado's compliance with a number offederal Clean AirAct requirements in a comprehensive and more efficientfashion than in a step-by-step (or regulation by regulation) approach. The legislation specifically declaresthat it is intended to create "a coordinated plan of emissions reductions

...to meetthe requirements ofthe federal act.

..at a lowercostthan a piecemeal approach." Section 40-3.2-202(1), C.R.S. While regional haze is an important consideration in the context of HB10-1365, it is notthe only one. HB10-1365 aims to address other air pollution issues as well, including national standards for ozone. See. e.g., Sections 40- 3.2-204(1), 204(2)(b)(II)(B) and 205(1)(c), C.R.S. Data regarding visibility impairing emissions and control technologies was considered in the federal process leading up tothe promulgation of the Regional Haze Rule. See. e.g., EPA's "Technical Support Documentfor BART S02 Limitsfor Electric Generating Units," Apri11, 2005, and "Technical Support Documentfor BART NOx Limits for Electric Generating Units and Technical Support Documentfor BART NOx Limits for Electric Generating Units Excel Spreadsheet," April15, 2005, Memorandato Docket Number2002-0076. These Memoranda reflect an analysis ofall individual BART-eligible units in the country, including Colorado. See 70 Fed. Reg. at 39131-35. See also EPA's "Regulatory ImpactAnalysis for the Final Clean Air Visibility Rule orthe Guidelinesfor BestAvailable RetrofitTechnology (BART) Determinations Underthe Regional Haze Regulations," U.S. EPA, June 2005. Additionally, the state determines thatthe regulatory requirements do not exceed the requirements ofthe federal act because the state is not imposing the BART alternative measures on an unwilling entity. Rather, the sources voluntarily proposed the packages as BART alternative measures and, in the case of PSCo, in orderto complywith HB10-1365. (IV) The adopted rule will provide certainty to sources, by providing necessary monitoring, recordkeeping and reporting mechanisms and clear timing requirements to ensure the achievability ofthe specified closure or performance based standards. With respect to the "1365" sources in particular, the requirements improve the utilities' ability to comply in a cost-effective mannerwhile preventing or reducing the need for costly retrofits to meet more stringent requirements later. (V) Ifthe state does nottake action by January 2011, EPA has indicated itwill promulgate a FIP. The state and federal rules also have similartime frames for implementation. BART controls must be installed as soon as practicable but in no event laterthan five years after EPAapproval
RegulationNumber 3 Adopted: October20, 2011 Page 342ofthe regional haze SIP, and all BART, BART alternatives and RP controls must be implemented within this first planning period (i.e., before January 1, 2018). (VI) The adopted rule will assist in establishing and maintaining a reasonable margin for accommodation of uncertainty and future growth. (VII) The adopted rule establishes reasonable equityfor sources subjectto the rule by providing the same standards for similarly situated sources. BARTand RP determinations are very source specific; different controls and emission limits are to be expected and reflect the State's sourcespecific consideration offederal statutory and legal factors, and ofthe state's implementation of HB10-1365. (VIII) Ifthe state rule were notadopted, EPA has indicated itwill promulgate a FIP. This would likely result in more costly control requirements for sources which would be passed on to consumers. (IX) The Regional Haze Rule requires associated State procedural, reporting and monitoring and recordkeeping requirements. The procedural, reporting, monitoring and recordkeeping requirements provided in Colorado's rule do not differfrom, and often incorporate by reference, federal requirements. (X) Demonstrated technology is available to control and monitorvisibility impairing emissions. (XI) The adopted rule will contribute to the prevention of pollution by reducing visibility impairing emissions. (XII) A no action alternative would not address the required standard, and could result in EPA's promulgation ofa FIP. (XIII) All regulatory changes in this proceeding are based on reasonably available, validated, reviewed, and sound scientific methodologies. All information made available by interested parties has been reviewed and considered by the Commission. (XIV) Evidence in the record supportsthe finding that the rule shall result in a demonstrable reduction ofpollutants that contribute to regional haze. (XV) Evidence in the record supports the finding thatthe rule shall bring about reductions in risks to human health orenvironment, and provide other benefits (e.g., protection ofvisibility) that justifythe costto government, the regulated community, and to the public to implement and comply with the rule. (XVI) The Commission has chosen the alternative that is the mostcost effective, provides the regulated community flexibility, and which achieves the necessary reductions in airpollution. The alternativewill maximize the airquality benefits of regulation in the mostcost effective manner. The Commission notes that no parties provided alternate proposals to the PSCo BART Alternative during this proceeding. The Commission also notes that in approving PSCo's emission reduction plan, the Colorado Public Utilities Commission thoroughly considered the economic impacts and concluded thatthatthe approved plan comes at a lowercostto ratepayers than an all-controls option. Even iffor some reason PSCo's BARTAlternative were not determined to be the mostcost effective option, the Commission finds that approval ofthe BART Alternative and incorporation ofthe alternative into the Regional Haze SIP is consistentwith the legislature's intent in adopting the CACJA. PARTG STATEMENTS OF BASIS, SPECIFIC STATUTORYAUTHORITYAND PURPOSE

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### I.W. Adopted October 20, 2011 Regulation Number 3. Part

### A. B. C and D- addressing federal changes to the New Source Review (NSR) Program related to PM2.5 National AmbientAirQuality Standards (NAAQS), several recent Environmental Protection Agency (EPA) State Implementation Plan (SIP) actions in which EPA partially disapproved various SIP revisions. EPA's Deferral of Biogenic Sources ofC02 Emissions. other miscellaneous revisions, and typographical, grammatical and formatting errors. This Statement of Basis, Specific Statutory Authority and Purpose complieswith the requirements ofthe Colorado Administrative Procedures Act, Section 24-4-103, C.R.S, and the Colorado Air Pollution Prevention and Control Act, Sections 25-7-110 and 25-7-110.5. C.R.S (the Act). Specific Statutory Authority The Colorado Air Quality Control Commission (AQCC) promulgates this regulation pursuantto the authority granted underColorado Revised Statutes. Sections 25-7-105(1){c), (authority to adopt a prevention ofsignificant deterioration program); 25-7-109(1)(a) (authority to require the use ofair pollution controls); 25-7-109(2)(a) (authority to adopt emission control regulations pertaining to visible pollutants); and 25-7-114.4(1) (authority to adopt rules for the administration ofpermits). Basis and Purpose EPA promulgated federal changes tothe New Source Review (NSR) Program, which must be incorporated into Regulation Number3 in orderto maintain consistency with the federal NSR Program related to PM2.5 National AmbientAir Quality Standards (NAAQS). Subsequently, EPAdisapproved and proposed to disapprove Air Pollutant Emission Notice (APENl exemption provisions in Regulation Number3, associated with Colorado's September 1997. April 2003 June2003, July 2005. August2006, and August 2007 SIP submittals. Also, EPA proposed its Deferral of Biogenic Sources ofC02 Emissions, deferring biogenic carbon dioxide (C02) from regulation underthe federal Prevention ofSignificant Deterioration (PSD) and Title V Permitting Programs for three years. In addressing the above actions, several additional Regulation Number 3 provisions were identified in need of revision. Sources affected by this proposal include PM2.5 and C02 emission sources, as well as open burning sources. mobile sources, stationary internal combustion engines. emergency generators. oil and gas surface water impoundments, deaerator/vacuum pump exhaust, and aircurtain destructors. PM2.5 Related Rules On February 21, 2008, the AQCC adopted revisions to Regulation Number 3, Parts A and B to identify PM2.5 as a criteria pollutant, triggering reporting and minor source permitting requirements. However. the AQCC did not make corresponding revisions to majorstationary source permitting requirements under the New Source Review (NSR) Program as the EPA had notyet promulgated the associated PM2.5 implementation rules. Since thattime, EPA promulgated a series of rules regarding the regulation of PM2.5 underthe NSR program. See "Implementation ofthe New Source Review (NSR) Program for Particulate Matter Less than 2.5 Micrometers (PM2.5)" (73 

### FR 28321, May 16. 2008). "Prevention of Significant Deterioration (PSD) for Particulate Matter Less Than 2.5 Micrometers (PM2.5l -Increments, Significant Impact Levels (SILs) and Significant Monitoring Concentration (SMC)" (75 

### FR 64864, October 20. 2010), "Requirements for Preparation, Adoption, and Submittal of Implementation Plans" (76 FR 18870, April6. 2011). and "Implementation ofthe New Source Review (NSR) Program for Particulate Matter Less Than 2.5 Micrometers (PM2.5l: Final Rule to Repeal Grandfather Provision" (76 

### FR 28646, May 18. 2011). The 2008 and 2010 rules, combined with the December21, 2010 promulgation ofthe methodology to test for PM2.5, provide a complete framework establishing howto apply PM2.5 to the NSR Program. Priorto the promulgation ofthe December2010 rules. application of PM2.5 to the NSR Program made little sense. See 75 

### FR 80118. Consequently, the AQCC chose to waitto adoptthe suite

RegulationNumber 3 Adopted: October 20, 2011 Page 344of PM2.5 implementation rules until afterthe last ofthe PM2.5 implementation rules and the 2010 PM2.5 testing methodology were finalized. The May 16, 2008 rule provided flexibility in designating PM2.5 precursor pollutants. While sulfuroxides (S02) must be treated as a PM2.5 precursor in all areas ofthe state, moreflexibility is afforded to nitrogen oxides (NOx), volatile organic compounds (VOCs) and ammonia (NH3). This rule requires that NOx be presumed a PM2.5 precursorstate-wide unless a state demonstrates that NOx is not a "significant contributor" to PM2.5 concentrations within any area. See 

### 73 FR28328. However, VOCs and NH3 are not required to be treated as PM2.5 precursors, exceptthat high molecularweightVOCs (equal to orgreaterthan 25 carbon atoms and lowvapor pressure) will be addressed as a condensable particulate. See 

### 73 FR28329-283330. At this time, the AQCC has identified S02 and NOxas PM2.5 precursors, state-wide. Based on the limited PM2.5 modeling and monitoring data available for Colorado, the AQCC determined that there is insufficient evidence to claim eitherway that NOx emissions do ordo not contribute significantly to the concentration of PM2.5 in any area in Colorado. Without evidence to narrowthe identification ofNOx as a precursorto specific areas, Colorado must identify NOxas a PM2.5 precursorstate-wide. Less is known aboutVOCs and NH3 and theircontribution to PM2.5 in Colorado, and so Colorado has chosen to not identify them as PM2.5 precursors atthis time. EPA Partial Disapproval Actions On October3, 2011, EPA's action granting partial disapproval and partial approval of revised Air Pollution Emission Notice (APEN) and permitting exemptions that the Commission submitted to EPA as SIP revisions in September 1997, June2003, July 2005, August 2006, and August2007, was published in the Federal Register. See 

### 76 FR 61054. EPA partially disapproved APEN exemptions for open burning, mobile sources, stationary internal combustion engines, emergency generators, oil and gas surface water impoundments, deaerator/vacuum pump exhaust. and aircurtain destructors. The basis for EPA's disapproval ofthe subject provisions and the revisions intended to address each provision are as follows: Open burning APEN exemption was corrected to reference federally enforceable Regulation Number 1 (Part

### A Section II.D.1.q.). EPA commented that the change in reference from Regulation Number 1, which is part ofColorado's SIP, to Regulation Number9, which is not part ofColorado's SIP, was not approvable. Mobile sources APEN exemption was clarified (Part

### A Section II.D.1.ppp.) and associated revisions were madeto the insignificantactivities list (Part C, Section II.E.3.uuu.). EPAcommented thatthese exemptions only apply to stationary sources, not non-road engines and not sources being used for transportation purposes. Stationary internal combustion engineAPEN exemption was repealed (Part

### A Section II.D.1.sss.) and related revisions were madeto the associated permitting exemption (Part B, Sections II.D.2.c., and II.D.2.c.(i)-(iii)) and insignificantactivities list (Part C, Section II.E.3.nnn.). EPA commented thatthe APEN exemption should require recordkeeping and reporting. TheAQCC repealed the APEN exemption and revised the permit exemption to be consistentwith current SIP approved language instead of requiring additional recordkeeping and reporting. Note thatwhile thecategorical exemption is being repealed, sources may still utilize the general one and two ton APEN exemptions found in PartA, Section II.D.1.a. Emergency generatorAPEN exemption was repealed (Part

### A Section II.D.1.ttt.), and related revisions were made to the associated permitting exemption (Part 8, Sections II.D.2.c., and II.D.2.c.(i)-(iii)) and insignificant activities list (Part C, Section II.E.3.nnn.). EPA commented that the APEN exemption should require recordkeeping and reporting. TheAQCC repealed the APEN exemption, and revised the permit exemption to be consistent with current SIP approved language instead of requiring additional recordkeeping and reporting. Notethatwhile the categorical exemption is being repealed, sources may still utilize the general one and two ton APEN exemptions found in Part

### A Section II.D.1.a.
RegulationNumber3 Adopted: October20, 2011 Page345 I 

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# t !**~** t )Surfacewater impoundmentAPEN exemption was clarified (PartA. Section II.D.1.uuu.) and related revisions were made to the associated permitting exemption (Part B. Section II.D.1.m.) and insignificant activities list (Part C. Section II.E.3.vvy.). EPAcommented thatthe APEN exemption should be clarified to confirm thatthe exemption applied to oil and gas produced water. In addition to making this revision. the AQCC also clarified exceptions to these exemptions and insignificantactivity. Deaerator/vacuum pump exhaustAPEN exemption was repealed (Part

### A. Section II.D.1.xxx.) and associated revisions were made to the insignificant activities list{Part C. Section II.E.3.uuu.). EPA commented that it was unclearwhatthese activities were. The AQCC is unaware ofany source making use ofthis exemption. and thus has removed this exemption and associated insignificantactivity. Air curtain destructor APEN exemption removal (Part

### A. Section II.D.1.ffff.}. EPA commented that because air curtain destructors meetthe SIP approved definition ofan incinerator and as such are required to submitAPENs and obtain permits. thatthis exemption should be removed. On February 4. 2011. EPA's action granting partial approval and partial disapproval ofSIP revisions submitted to EPA in April2003 and June 2003, was published in the Federal Register. See 76 FR 6331. Those 2003 SIP revisions to Regulation Number3 revised APEN exemptions and permitting exemptions in Regulation Number 3. Parts A and B. respectively. To address EPA's concerns. the following provisions that EPA disapproved oron which EPAotherwise provided comment. were revised or removed as follows: Stationary internal combustion engines 10 ton per year permitting exemption in attainment areas (Part B. Sections II.D.1.c

.. and li.D.1.c.(iii)). EPAcommented that Colorado did not makethe anti-backsliding demonstration necessary to increase the permitting exemption threshold from 5 tons per yearto 10 tons peryear. The AQCC opted to revert backto the 5 tons peryearthreshold that EPA previously approved instead ofmaking the necessary demonstration atthis time. Note thatthis revision does not prevent any source from making use ofthe facility-wide permitexemptions found in Part B. Sections II.D.2. or li.D.3. Non-road engine state-only requirements (Part

### A. Sections I.B.31.c. and I.B.31.d.}. EPAcommented that itcould notapprove provisionswhich are identified as state-only provisions. TheAQCC agrees and has further placed "{State-only Requirement)" atthe beginning ofthese sections to clearly identify thatthey are state-only provisions. Biogenics Deferral Revisions: On June 3. 2010. EPA's "Prevention ofSignificant Deterioration and Title V Greenhouse Gas (GHG) Tailoring Rule," commonly called the GHG Tailoring Rule. was published in the Federal Register. See 75 FR 31514. EPA's GHG Tailoring Rule was designed to tailorthe applicability criteria thatdetermine which stationary sources and modification projects become subjectto permitting requirements for GHGs under the Prevention ofSignificant Deterioration {PSD} and TitleV Permitting Programs ofthe Clean AirAct (CAA). On July20. 2011. EPA's "Deferral for C02 Emissions from Bioenergy and Other Biogenic Sources Under the Prevention ofSignificant Deterioration (PSD} and Title V Programs." commonly called the Biogenic Deferral. was published in the Federal Register. See 76 FR 43490. Beginning July 1. 2011, EPA's Biogenic Deferral temporarily excludes biogenic C02 emissions from the definition of "subjectto regulation" to allow biogenic sources ofcarbon dioxide (C02} emissions a three year deferral from the PSD and Title V permitting requirements; the three yeardeferral applies even ifthe source's GHG emissions exceed the threshold established in the Tailoring Rule. To maintain consistency with implementation offederal requirements associated with the Tailoring Rule and the associated Biogenic Deferral. the AQCC incorporated EPA's Biogenic Deferral into Colorado's PSD and Title V Permitting Programs, as follows:

RegulationNumber3 Adopted: October20,2011 Page 346Revise the existing definition ofSubjectto Regulation consistentwith EPA's proposed Biogenic Deferral (Part

### A Section I.B.44.b.). Other Revisions:
In addressing the above actions, the AQCC made several additional Regulation Number3 revisions that relate to: revising the time frame for reporting the Notice ofStartup to the Division from thirty days priorto fifteen days aftercommencing operation, which is consistentwith Colorado's House Bill 10-1042, as codified in 25-7-114.5(12)(a), C.R.S.; including NOxas a precursorto ozone in ozone significant monitoring concentration (SMC) and removing the total suspended solid SMC. both consistentwith federal requirements; and making typographical, grammatical and formatting corrections. Additional Considerations These adopted rules are mandated by federal lawand necessary to maintain EPA approval ofColorado's SIP. The revisions associated with the PM2.5 Implementation Rules and Biogenics Deferral mirrorthe federal requirements. While the PM2.5 Implementation Rules do allow States the opportunity to deviate from the specified PM2.5 precursor pollutants, Colorado does not have sufficient modeling and monitoring data available to support a decision to identifyVOC and NH3 as PM2.5 precursors or narrowthe area in which NOx is identified as a PM2.5 precursor in Colorado. The related revisions adhere to federal requirements [as required by Sections 25-7-105(1). 25-7-201(a) and 25-7-203. and 25-7-302. C.R.S.l and therefore the provisions ofSections25-7-110.5(5) and 110.8. C.R.S. do not apply to these revisions. With respect to EPA's SIP disapproval actions, while the AQCC mustaddress EPA's comments, Colorado has some flexibility in addressing those comments. Here, the provisions ofSections 25-7- 110.5(5) and 110.8. C.R.S. apply to this rulemaking. Thus. the AQCC makesthe following determinations only as they pertain to the SIP disapproval actions, and only where the AQCC has flexibility in addressing EPA's comments. Pursuantto 25-7-110.5(5). C.R.S

.. the AQCC makes the determination that: (I) EPA's SIP disapproval actions are federal requirements that may apply to this rulemaking. (II) The applicable federal requirements imposing emission reporting and permitting are performance based. While the AQCC mustaddress EPA's comments. there is some flexibility in how bestto address those comments. (Ill) Regarding EPA's comments on the APEN exemptions, accurate actual emissions data for open burning sources, mobile sources. stationary internal combustion engines. emergency generators. oil and gas surface water impoundments. deaerator/vacuum pump exhaust. and air curtain destructors is limited, although more is known aboutthe engines. generators and air curtain destructors. The AQCC concluded thatthe adopted rule will clarify and generally improve Colorado's inventory ofemissions from these sources in Colorado. and thus the reporting components are essential to this effort. (IV) With respect to APEN associated permitting exemption revisions, these revisions strike an appropriate balance between exempting small emission sources, ensuring that Colorado has a reasonably accurate inventory, as well as ensuring that reporting and permitting requirements are reasonably uniform and equitable. (V} The AQCC is not aware ofany timing issue that could justify changing the timeframe in which these rules are implemented. There are deadlines by which states are expected to implement federally mandated changes. with potential sanctions forfailing to meetthese deadlines.

RegulationNumber3 Adopted: October20,2011 Page 347(VI) The APEN and associated permitting exemption and insignificantactivity requirements in question are notspecifically designed with a margin for accommodation. but instead will rely on the opportunityfor future revisions. as necessary, to adjustfor uncertainty and future growth. (VII) The adopted revisions establish reasonable equity for sources subjectto the revisions by providing the same requirements for similarly situated sources. (VIII) If revisions to the APEN and permitting exemptions and insignificantactivities are not adopted. while there would be no change in costto industry, Colorado's emissions inventory accuracywill not improve. Emissions inventories are essential tools in protecting public health and the environment. A less accurate emissions inventory may translate into a public health and welfare and environmental cost. by delaying the time necessary to improve the inventorywhen developing plans to address future NAAQS. (IX) The proposed revisions include no requirements that differfrom applicable federal requirements. (X) Demonstrated technology is available to comply with the particulate matter permitting requirements. Sources are already using the control devices intended to be used to complywith this rule. (XI) The adopted rules will contribute to prevention of pollution. by having sources more accurately assess emissions to determine ifAPEN reporting or permitting requirements apply. Understanding emissions is essential in preventing pollution. (XII) Because these rules are federally mandated, no alternative rules would addressthe requirements in question. Further. pursuantto 25-7-110.8(1), C.R.S., the AQCC makesthe determination that: (I)The rule is based upon reasonably available, validated, reviewed, and sound scientific methodologies. and the AQCC has considered all information submitted by interested parties. (II) These amendments are largely administrative in nature asthey relate to APEN reporting, permitting exemptions and insignificantactivities. (Ill) Evidence in this record supports the finding thatthe rule shall bring about reductions in risks to human health and the environmentthat justify the costs to implement and comply with the rule. (IV) The rule is the mostcost effective. provides the regulated community flexibility, and achieves any necessary reduction in air pollution. (V) The selected regulatory alternativewill maximize the airquality benefits of regulation in the mostcost-effective manner.

RegulationNumber 3 Adopted: October 20, 2011 Page 348