ra Domsky

Arizona Department of Environmental Quality 3033 North Central Avenue

Phoenix, AZ 85012

Dear Ira:

This letter is in response to your request for guidance from EPA on acceptable levels of a minor source permitting program. The lack of an adequate minor source permitting program remains an outstanding issue related to the Arizona Department of Environmental Quality’s (ADEQ) New Source Review (NSR) regulations submitted as part of the Arizona State Implementation Plan (SIP). ADEQ has committed to correcting other deficiencies identified by EPA in the State’s NSR and Title V programs in a letter dated March 12, 1996. EPA now believes that the changes identified in the committal letter will satisfy all our concerns with ADEQ’s NSR rules, except for the State’s minor source trigger levels for NSR permitting. Below we have attached a detailed discussion of the minor source NSR permitting requirements under the Clean Air Act and implementing regulations.

It is clear that both of our agencies would like for EPA to approve the State’s NSR rules as part of the applicable SIP promptly and efficiently. You have indicated that the development of a minor source permitting program acceptable to EPA may take some time, and you encouraged EPA to begin the process of approving the major source provisions into the applicable SIP without delay. Because minor source permitting provisions represent an integral aspect of an approvable .NSR program, we are reluctant to delink the minor and major source provisions into two separate regulatory actions. In the alternative, we explored the possibility that our agencies engage in parallel rulemaking, contingent upon receipt of a general commitment from the State to develop a minor source permitting program (or equivalent) consistent with the enclosed guidance. This framework would provide ADEQ additional time to develop an acceptable program, while letting EPA begin formal rulemaking to approve ADEQ’s NSR provisions for inclusion in the applicable SIP. ADEQ’s minor source program would need to be in effect by the time EPA took final action on the NSR SIP submittal.

If you have any questions or would like to discuss these matters in further detail, please contact me at (415) 744-1254, or the following members of my staff: Jessica Gaylord at (415) 744-1290, or Steve Ringer at (415) 744-1260.

Sincerely,

Chief, New Source Section

Enclosures

cc: Jo Crumbaker, Mancopa County ESD

Richard Grimaldi, Pima County DEQ

Donald Gabrielson, Pinal County AQCD
significance levels. ADEQ

indicated

modifications with potential emissions less than the

requirements would be necessary that specific guidance from EPA regarding minor NSR thresholds and before the State could make any revisions to its rules. EPA is providing the

to

following

meet that

summary

request.

of

As

statutory

an alternative,

and regulatory

ADEQ

requirements, as well as preamble language and related case law could develop a source registration program for smaller facilities

specified

that would

requirements.

achieve the same environmental benefit as a traditional permitting program, and also meet the

for... regulation

Section

of

1 l0(a)(2)(C)

the modification

of the Clean Air Act requires that each SIP must “include a program to provide and construction of any stationary source within the areas coverhd by the

regulation

plan...” [emphasis

based on

added].

the type

In

and

40

size

CFR

of

§51.160(e)

the

EPA provides for States to exempt certain sources from

must discuss the basis for determining whichfacility. In this section, however, EPA requires that “[t]he plan programs have been the focus of much facilities will be subject to review.” In addition, minor source attention, especially in terms of the type and amount of public notice

guidance

required.

on

EPA’s

which

Part

modifications

70 Supplemental Proposal (60 FR 45530, August 31, 1995) provides more detailed should be subject to review. We believe that this guidance may reasonably be applied to new sources as well. At 60 FR 45548, EPA states that “States may exempt from minor NSR those changes that are not environmentally Alabama Power’.” significant, consistent with the de minimis exemption criteria set forth in

The significance levels may represent an acceptable threshold for applying the requirements of parts

C

however,

and

D of Title

does not

I of

feel

the Act (e.g., best available control technology and air quality impact analysis). EPA,

preconstruction requirements

that the significance levels represent an acceptable threshold for applying the basic that sources undergo some form of public review (s 40 CFR part 51.161) and comply enforceable emission limitations and control measures (s CAA § 1 10(a)(2)(A)). Under the de minimis standard, only those activities which would yield trivial benefits from regulation should be exempt from these

Counties

basic requirements.

(“the Counties”)

The approach

represents

taken in the August 1994 SIP submittals for Maricopa, Pinal, and Pima

recommend that ADEQ adopt an acceptable application of this de minimis standard. We therefore

a similar approach. For example, it would be acceptable for ADEQ to exempt those activities listed as “Insignificant Activities” at Ri 8-2-101.54. In general, however, ADEQ may exempt would any activity yield from trivialtheor basic no benefits. requirements, upon making an adequate showing that regulation of such activities

more

EPAis moreover concerned that state requirements limit the Counties from adopting standards that are stringent than ADEQ’s. In describing the determination of the de minimis level, the Court stated that [d]etermination of when matters are truly de minimis naturally wifi turn on the assessment of particular

In the Alabama Power case, the Court stated:

minimis

Unless Congress

authority

has

to provide

been extraordinarily rigid, there is likely a basis for an implication of de

or no value. That exemption when the burdens of regulation yield a gain of trivial

function does implied authority is not available for a situation where the regulatory provide benefits,

agency concludes

in the sense of furthering the regulatory objectives, but the that the acknowledged benefits are exceeded by the costs.
limits, (2) monitoring, recordkeeping, and reporting requirements, and (3) inspection and enforcement provisions. The public review process should include the requirements outlined at 40 CFR §51.161.

Once acceptable de miniuins thresholds have been established, EPA goes on to provide in the Part 70 Supplemental Proposal additional flexibility for minor source public notice requirements. Specifically, at 60 FR 45548, EPA stated:

Since States may exempt de minimis changes from minor NSR altogether, it follows that they may provide a partial or full exemption from the full public process requirements of 51.160(e), consistent with the environmental significance of the change.

At 60 FR 44549, EPA states that permitting agencies should apply “30 day public notice and comment requirements for any... minor NSR action (including establishment of a PAL) that would allow a Part 70 source

to net out of major NSR.” EPA goes on to state that for minor permitting actions which do not shield a source from major NSR, “the permitting authority may match the public participation process to the environmental significance of the project.” EPA envisions that these more limited forms of public participation may take the form of a shorter public comment period (e.g., 15 days) or batch processing (e.g., notice all minor NSR actions for each month at one time), and is willing to consider other forms of limited public notice for minor sources.