( 

# " STATE 

## OF NEBRASKA .'**Pa~e' tIeln~man**  Governor DEPARTMENT OF ENVIRONMENTAL QUAJlTY '

To: From: Date: RE: , Michael J.Linder 

# MEMORANDUM

Jon Bruning, Attorney Gen al Shelley

# KadeS~r Quality 

### August 28, 2 007 Dir{!ctqr Suite 400, Th{! Atrium 1200 eN' Street P.O. Bol<**989~2** Lincoln, Nebraskil 68509-8922 Phone (402)**471-218~**

FAX (402) 471-2909 website: www.deq.state.ne.us

Title 129

- Nebraska Air Quality Regulations, Concise Explanatory Statement for Rules Related to PSD and Regional**H~e,** for August 2007 EQCHearing
SHORTDESCRIPTION: The purpose ofthis memorandum is to provide an explanation ofadditions and revisions to Title 129 that were adopted by the Environmental Quality Council (EQC) on August 17,2007
. A majorpart bfthis package is the same package of rules adoptedby the C01:lncil on September 8, 2006. Subsequent to its adoption by the EQC, the package was submitted to the Attorney General for review
. In a letter dated December 15, 2006 (capy attached), the A_ttorney General rejected the entire package. Therefore the entire package was, with changes required by the Attorney General plus some additional changes. The package was adopted'by the EQC with only minor typographical amendments as shownin the amendments listed onpage 8 ofthis document. The numbers changed by the ameridments were not valid,NArCS codes, so the meaning ofthe amended sections was not altered. ", The.changes originallyadopted by the EQC 

### in September 2006 that were adopted again on August 17, 2007 (a) revised Chapter Ito respondto comments received from the U.S. EnvironmentalProtection Agency(EPA) regarding Prevention ofSigillficant Deterioration(PSD) rules, corrected an omission and typographical errors, and corrected an error in alphabetical ordering ofterms; (b) revised Chapter 14 to clarify language in , response to EPA's request; (c) revised Chapter 15 to respond to**comm~nts** from EPA and clarify language describIng a source's ohligation when a facility's**equipment- -~'------**  ..- ..",-- configura,tion is changed but**th~** change does not result 

### in, increased**emis~ions;** (d) revised Chapter 17 tocorrect language, to clarify the policyrequiring sources to pay a construction permit application fee when reqvesting a significant revIsion to a '

, construction permit, and to allow the construction perniitting process to be used to

An Equal Opportunit!lAf/irmative Action Empl oyer @ Print ed w ith soy'lnk on'recycled paper**~** \

### establish BestAvailable Retrofit Teclmology (BART) permits; (e) revised Chapter 19 to correct 

### psb rules adopted in September 2005 and eliminate the option for early
. termination ofa Plantwide Applicability Liinitation (PAL); (f) cOrrected references 

### in Chapter 27; (g) revised Chapter 34 to clarify NDEQ's authority to require re-testing; and (h) 

### adopted a new Chapter 43 

### in Title 129 to include rules regulating iegiomil haze: Besides re-adoptingthepackage**alr~ady** 

### adopted in September 2006, three additional categories ofrevisions and additional were adopted by the Council. 'The first category· was the**change~Hequired** 

### by theAttomey General. They included (a) adding, in Chapter 17, the provision that 

## the construction pemlit applicatioh fee maybebased either on direct ermssions or oli the potential to emit; and (b) in Chapter 28, asecti.on infonning the reader that the federal regWatlons referred to 

### iri this chapter may be obtained upon request from the Department.
. The second additional category incorporated changes to the definition of"major source" in Chapter 2. These changes bring Title 129 into alignment with changes to fedetalrules issued on May 5,
.2007
. The changes remove ethanol plants from the list ofspeCific sources subject to the Prevention ofSignificant Deterioration (PSD) program 

### if they emit 100 tons or more per year ofa regulated NSR pollutant. Ethanol plants thatemit 250 tons or more per year ofa regulated NSR pollutant will continue to be subject toPSD
. The federal rule change and out rule also remove ethanol plants from the list ofsources for which fugitive emissions must be included when measuring the amount ofemissions for PSD or operating pemiit purposes. The EQC also changed the lists in Chapter 17 of sources that must count**fugitiv~** 

### emissions for non-PSD construction pennits
. The third additional category changed Chapter 15 to allow pennittees· requesting a mihor permit revision ' to do so by submitting a written request rather than by submitting a permit application
. . RATIONALE: Following adoption ofmajor revisions to the PSD program in September 2005,NDEQ 

### andthe Region 7 office oftheEPA worked together on several minor revisions to asSUre EPA approval ofNDEQ;S State Implementation Plan (SIP)revision.

, ' 

### Most ofthe revisions adopted in September 2006 were related to this effort. The federal rule revision thatrelaxes the PSD requirements for ethanol plants were Issued in May , 2007. The chEinge in the EQC meeting date from June :to August allqwedthe Departplent additional time to prepare rule changeproposals' for the EQC's consideration, it was ' decided to**~cludethe** 

### .change affecting ethart.ol plants
. . Additionally, in 2007, NDEQ must submit to EPA a SIP revision describing how Nebraskawill 

### meet itsobligations underfederal Regional. Haze rules to protect visibility
. .
, in Class 1**fed~ral** 

### areas, including ntlescoveringBest Available Retrofit TechD.ology

(BART). As part of preparing the SIP, it is' necessary to establish,**~ithin** 

### Title 129, the Department's iegalauthority'to operate the program. For that reasoil, : the EQC adopted a new Chapter 43 

### on Visibiljty Protection and also adopted a provision 

### in Chapter 17
. allowing the establlshrrient ofBART pern1its under the constructionpennitting'process; \,
2

### (

### ( Significant revisions ofconstruction pennits require a substantial expenditure ofstaff time. Therefore, a revision to the rules related to construction pennit application fees were adopted clarifying that theapplicati6n fee requirement for initial construction pennits extends to significant revisions as well. Minor revisions, on the other hand, shollld be as simple as possible to make which prompts the proposed change in the application procedure in Chapter 15
.. The Att.orney General is required to assure that rules in the Nebraska Administrative**Cod~** 

### are internally cop.sistent 

### and consistent with**~tate** 

### .andfooeralstatu.tes .and coristitutions, For that reason, the Attorney General advised and we are implementingthe changes describeEi in the description section above. SECTION-BY-SECTION DESCRIPTION: Chapter 1, 005: Clarifiesdefinitionof"Administnitor" as relating to the Administrator of the UIiitedStates Envitoi:1lnental Protection Agency rather than ofthe "Agency". Chapter 1, 

### 010: Removes definition of"Agency" and leaves section 010 as "reserved". Chapter 1, 018.11: Adds phrase to assUre coverage by the definition of"applicable requirement" ofall pennits ever issued under the PSD program.. Chapter 1, 024:. Revises definition of

## "aest Available Control Technology" to include all definitions ofthis**t~nn** 

### as used in different programs. Chapter 1, 031: Add the word "or" at the end ofthe sectiOh. Chapter 1, 033: Adds aphrase stating that, for PSD purposes, the definition does not include the word "actual". Chapter 1, 051: Adds omitted section to rlefmitionof"emissions unit" 

### Chapter 1, 076.02El: Adds back language related to prohibiting use ofcertain alternative fuel or raw material under pertnit.requirements established pursuant t040 CFR 52.21 or 40 CFR 51.166 in addition to Chapter 19
. . Chapter 1,**076~02E2:** 

### Adds back language related to prohibiting use ofcertain alternative fuel onaw material undetpennit requ,lrements established pursuantto 40 CPR 52.21 or 40 CFR 51.166 ip. addition to Chapter 19.
. . Chapter 1, 076.02F: Adds
. back**langu~ge** 

### relatedto prohibiting use ofcertain alternative fuel or raw material under pennit requirements established pursuant to 40CFR 5221 or 40 CFR 51-.166 in addition to Chapter 19.
. .. .

J I

### Chapter 1, 083: Adds back the phrase "subject to 40 CFR 52.21 or rules approved by EPA-under 

### 40 CFR '5

### L 166." Chapter 1, 088: Renumbers and refoi:mats section to chlrlfy meaning ofdefinition Chapter 1, 088:01C(cilrrently 088.03): Changes definitionof"contemporaneous" to match definitionm Chapter 19, seCtion 009.Ot· Chapter 1, 088.05C (currentlywould be 088,07C): Adds hack language inadvertently omitted which assures that double counting ofany emissions reductions previously considered by the Department (or ill 

### aprior EPA permit) is not allowed'for a netting exercise; Chapter 1, 090: Changes definition of"non-attainment.area" by substituting United States Environmental Protection Agency for the "Agency". ' Chapter 1, 099 through 110: Ren1.l11lbers terins to cortect errors in alphabetical ordering. Other changes to terms in these sections ru;e as follows: Chapter 1, 101 (now proposed as 100): ·Changes definition of"particulate matter emissions" by substitutingUnited States Environmental Protection Agency for the "Agency"
. '
. Chapter 1, 102 (now proposed as 1.Q2): 

### Changes definitioh of"PMIO emissions" by· substituting United States Environmental Protection Agency for the "Agency". Chapter. 1, 1 03: Removes "permit modification" because it is an obsolete term no longer used in Title 129.
. Chapter 1, 105 (now proposed as 103): Changes definitiOIl O'f"permit revision" to apply to both operating andconstructlon permits as described iIi Chapter,15.
. Chapter 1, 130: Adds defmitjon**of~'rephicemeIit** 

### unit" as used in the PSD**progr~:** 

### Chapter 1, 131 throug!iJ34: Renumbered due to insertion of.new term as'

### sectiori'130~ Chapter 1, 135:
.RenumbGrs, revises and clarifies definition of"section 502(b)(1O) , changes" '
. . , Chapter 1, 136 through 149: Rehuplbered que to insertion of-new term as section :130.' Chapter 1, 149: Removes defiirition of"State· agency". Chapter 2, 002.20: Adds language from the federal nile excluding ethanol plants from the ,definition of"chymical processplants''; thereby no longer requiqngethanol plants to . include fugitive emissions when measuring air emissions. '

4 I : ,Chapter 2, 008.01: Removes ethanol plants emitting less than 250 tons per year ofa regulat({d air**pollut~t** from being 'subject to P

### SD
.

.Chapter 14, 001: Clarifies that both.administrative and minor permit revisions are exempt from public participation requirements. Clfirifies that, unless otherwise provided "by rule", all constructiohpemiits shallprovide for public notice, opporfunity for comment, . and, ifrequested, a hearing. Chapter 

### i5, 001.01C:Changes**'~and"** to "or" at end ofsection. Chapter 15, 001.01E: Adds section specifyingthatfor a PALpermit only, the minor revision process maybe used to correct.either a typographical or a calculation error. Chapter 15, 002: Changes the term "modification" to "revision" to fit recently changed definitions. Chapter 15, 003 .01C: Adds a phrase clarifying that the rtiinorrevision process Clll1110t be used to revise a plantwide applicability limit contained in a·PAL permit and clarifies.that the determinations mentioned include Best Available Control Technology (BACT) determinations. Chapter 15, 003.03: Change to allow permittees requesting a minor permit revision to do so by submitting a written request rather than by SUbmitting a permit application. Chapter 15, 005.02: Changes the instructions for submittihg a request for a ·significant permitrevision by directing the source to Chapter 7for operatingpermits and·Chapter 17 for construction permits, rather than directing them to instructionswithin Chapter 15. Chapter 15, 006.01A: Revises wording to clarify that reopening a permit for additional applicable requirements is applicable only to sources holding a Class I or Class II
.. operating permit.
. . Chapter 15; 007: Removes "Class I" from second to last sentence. Clarifies language describing source's obligation to provide notification when facility's equipment is reconfigured but change does not result in increased emissions. Chapter 

### IS, 007.01: Allows changes in the facility's equipment configuration without a permit revision, ifthe changes fit the Chapter 1 definition 

## ()fa "502(b)(10) change". The Chapter 

### 1. definitionis changed to reflectsection 502{b)(10) ofthe Clean Air Act. Chapter 17, 001: Adds reference'to. Chapter 19 to indicate thata source maybe subject to permitting under Chapters 19 or 

### 42 il1stead ofunderChapter 17. Chapter 17, 001.02T: Excludes ethanol plants from the list 

### 6fsourcesrequired to include fugitive emissions in measuring**emis~iops.** .. .

5

### Chapter 17, 003: Adds therequireinentthat a**sourc~** 

### pay

# a**constru~tion** 

### pennit application fee when requesting a significant pennit revision. Chapter'17, 003.01: li1 response to the Attorney General's d,irectiori, this section is reworded to clanfythat, in describing the criteria for detennining the constniction pennit application fee, the source is subject to the fee based on either direct emissions or the '

.potential to emit. The table beneath this section also reflects 

### this change.
. ' Chapter 17, 013.04T: Excludes ethanol plants froni,the list ofsources required to include fugitive emissions inmeasuring emissions. ' Chapter 17, 014.02: Corrects tenninology regarding instructions for processing '**si~ficant** 

### revisions to constiuction pennits. ' Chapter 17, 014.04: Adds section to establish the construction pennitting process as the me¢hft!lism for BART pennits
. Chapter 19, 001: Deletes adoption by reference to 40 CPR 52.21 

### sections (b) (2)(iii) (i), (j), 

### and (k), 

### related to clean coal technology demonstration projects. The rules contained in t:hesesectionsare already included in Chapter 1, section 076, within the definition of "major modification "
. Chapter 19, 002: Adds sentence to clarify that projects not subject to PSD penpitting may still require a construction pennit pursuant to Chapter 17. Chapter 19, OOS.OSA: Arilends detennination.ofwhether fugitive emissions are quantifiable, to include.other means ofmeasurement acceptable to the Department, in addition tothe use ofemission factors or mass balance equations. Chapter 1.9, 005.09: Adds phrase to clarify that, in calculating baseline actual emissions,
. the average rate perUnit cannot be based on any period for which there is inadequate "infonnation ooncerriing**non~cOmpliant** 

### emissions or the effect on emissions ofnew

regulatoryrequirements. '

. . . . . . .

, . 

### Chapter 19, 006.03A:**Ame~ds** 

### determination ofwhether fugitive emissions are quantifiable,to ip.clude other;Pleans ofmeasurement acceptable to the Department, in additionto the use ofemissionfactors.or mass balance equations. ' Chapter 19, 007: Adds sentence**ini~dvertent1yomitted** 

### from definition of "potentiaito emit", '
. Chapter 19, 008.02: Adds section to clarify that "potential toerilif' may be used to calculate emissions increases for existing units as an alternative to using 

### the "actual

-to
projected-actual"**meth6d~** 

### ',.
. '



### 6Chapter 19, 008.03:**Renumb~red** due to insertion ofriew section 008.02
. Chapter 19, ·008.04: Renumbered due to insertion ofnyw section**008.02~** Also adds reference to new section 008.02.
. . Chapter 19, 008.05: Renumbered due to insertion ofnew section 008.02.**Ch~pter** 19, 011.18: In accordance with direction from EPA, removes provision for early

. termination ofa PAL. Early termination is riot included in the federal PSD ' rule and EPA advised that**~dding** 

### it to

# our rule could constitute a disallowable relaxation ofour State Implementation Plan. Chapter 19, 014.01: Reinove the inappropriate phrase "provided, that" from the end of the sentence. Chapter 19, 024.03A3:Eliminate reference to electric utility steam generating units because the requirements regarding emissions due to demand growth apply: to 

# all categories ofsources. Chapter 

### 27, 002 and 003: Corrects references and adds clarifying acronyms.

. Chapter 28, 002: Adds section, as required by the Attorney General, to inform the

regulated conimunity that the federal regulations referred to in Chapter 28 may be obtained upon request from the Department. Chapter 34, .001: Change clarifies authorityofNDEQ to order sources to do testing when I?epartment authorities deem it necessary. Chapter 43: Adds**ch~pter** entitled Visibility Protection to add authority for the Department to comply with federal rules related to Regional Haze and Best Available

. Retrofit Technology (BART).

Chapter 43, 001:· Adopts byreference the definitions for thefederal Regional Haze rule at 40 CPR 51.301. Also adopts Appendix Y(Guidelines for BARTDeterminations Under the Regional HazeRule)**·~o** 40 CFR 51 

### by reference.

. . . Chapter 43, 002: Specifies the Departinent's authorityto require sources to conduct

,.BART determinations .and submit them: to the Deparb:llent for**review~** Requires the
.

Department to·issue a BARtpennitbased on itsreview ofthe BART detemiination. Chapter43, 003: Specifies that BARrpennits will hfi"issued through the.

### cdnstructio~ permitting**proce~s** described in Chapter 17.



### 7Amendments to Title 129 Public Noticed Proposed Revisions 

### PSDIBARTpackage Proposed and Adopted by the EQC on August 17, 2007
1. Chapter 2, section 00220: change NAICS code "313140" to "312140". 2. Chapter 2, section 008.01: changeNAICS code "215193" to "325193". 3. Chapter 17, section 001.02T:'change NAICS code "313140" to "312140". 4. Chapter 17, section 013.04T: change NAICS qode "313140" to "312140".
These proposed amendments are typographical corrections 

### only, The incorrect numbers are not valid NAICS codes.



### 8FISCAL IMPACT STATEMENT Agency: Environrn:ental Quality Prepared 

### by: Title: 129 pate Prepared: Chapter 1,**2,14,15,17,19~27,34,43** Phone: Title**Nam~:** Title 129
. StatementStatus: Nebraska Air Quality Regulations Type ofFiscal Impact: State Agency No Fiscal Impact Increase Costs Decrease Costs (X) BART ( X)PSD ( )
Estimated Quantification ofImpact: State Agency: Political Subdivision (X) 

### ( ) 

## ( ) ShelleyKadedy June 26, 2007
. 471-4299 ( ) Draft (X) Final
Regulated Public

. (X)BART



## ( } (X) PSD

There may be some cost to the agency dueto requests to modify permits for existing ethanol plants, but the cost is not expected to be significant. Political Subdivision: Regulated Public: The requirement already existed in Chapter 17, section 014;02 that the Gonstruction permitting process was the means ofprocessing significant revisions to construction permits: The language .and instructions are clarified inChapters 15 and 17 in this proposal. Therefore,
. the requirement for sources to pay the permit. application fee for significant revisions is .not an increased cost to the reg1Jlatedpublic.
. There is a substantial cost to .BART-eligible sources·for therequired modeling under the BART program. As**ofnow~** it is unknown whether and what cqntrols any soUrce in Nebraska**~ay** have to**insta1~** to cOniply with BART, but the cost for controls could also be substantial (A portion of IP1 analysis ·preparedby EPA ofprojected costs and benefitS ofthe BARTprogram nationally is attached). However, these sOurces would be subjectto these requirenients and costs whether the

. state adopts the proposed rules and the program is admiiris.tered 

### by**NDEQ~** or whethedhe

..program is adininistered in Nebraskaby EPA. Therefore, there are no additional costs to the

regulated public incurred throughadoption ofthese rules
.. Theremaybe a some savings to new and existing ethanol plants due to the chaIi.ges in ethanol rules, butthe change is'not expected to besignificant.
..NEBRASKA ADMINISTRATIVE CODE Title 129

- Department ofEnvironmental Quality Chapter 27

- HAZARDOUS AIR POLLUTANTS, MAXIMUM ACHIEVABLE CONTROL TECHNOLOGY (MACT) 001 Notwithstanding any other provisions ofthese regulations, Sections 63.70 through 63.81 ofTitle 40 Code ofFederal Regulations (CFR) Part 63, Subpart D, effective December 29, 1992, pertaining to compliance extensions for early reductions, are hereby adopted and incorporated byreference. 002 Requirement for new, modified, or reconstructed sources ofhazardous air pollutants. A permit as required under section OOl.OIHG ofChapter 17 will be issued for construction, reconstruction, or modification ofa source with the potential to emit any hazardous air pollutant in an amount equal to or in excess of two and one-half(2.5) tons/year or more ofany hazardous air pollutant or an aggregate often (10.0) tons/year or more ofany hazardous air pollutants only if best available control technology (BACT), as determined by the Director, is applied for each hazardous air pollutant and the source will comply with all other requirements ofthese regulations. In no event shall application ofbest available control technology result in emissions ofany pollutant which would exceed the emissions allowed by any applicable standard under Chapters 18,23,27, or 28. 003 Requirements for new or reconstructed major sources ofhazardous air pollutants. A permit as required under section 00I.01HG ofChapter 17 for construction or reconstruction ofa source with the potential to emit an amount equal to or in excess of 10 tons per year ofany hazardous air pollutant or 25 tons per year or more ofany combination ofhazardous air pollutants, will only be issued ifmaximum achievable control technology (MACT), as determined by the Director, is applied, and the source is required to comply with all other requirements ofthese regulations. 003
.01 For purposes ofthis section, 40 CFR Pari 63, sections 63.40(b); 63.41; 63.42(c); 63.43(a), (b), and (d); and 63.44, as in effect on December 27, 1996, are hereby adopted and incorporated by reference.

Proposed changes to August 2007 on page 1. 

## I

.\

27-1

### Title 129 Chapter 27 003.02 Except as provided in 003.01, the provisions and procedures of Chapter 17 and 002 above apply. 004 This section is reserved for requirements to be established under Section 112(i) ofthe Act. 005 Notwithstanding any other provisions ofthese regulations, Sections 63 .50 through 63 .5 6 ofTitle 40 Code ofFederal Regulations (CFR) Part 63, Subpart B, as amended at 67 Federal Register 16582 on April 5, 2002, pertaining to maximum achievable control technology determinations for emission units subject to case-by-case determination ofequivalent emission limitations, are hereby adopted and incorporated by reference. 006 This section is reserved for requirements to be established under Section 112(r) ofthe Act. Enabling Legislation: Neb. Rev. Stat. §§81-1504(1)(2); 81-1505(12)(16) Legal Citation: Title 129, Ch. 27, Nebraska Department ofEnvironmental Quality

27-2 Proposed changes to August 2007 on page 1.NEBRASKA ADMINISTRATIVE CODE Title 129

- Department ofEnvironmental Quality Chapter 43

- VISIBILITY PROTECTION 001 Code ofFederal Regulations, Title 40, pmi 51.301 (Definitions), as amended, is incorporated by reference. Appendix Y (Guidelines for BART Detenllinations Under the Regional Haze Rule) of40 CFR 51, is incorporated by reference. 002 The owner or operator ofa stationary source shall submit a Best Available Retrofit Technology (BART) detel111ination to the Department ifthe Department detenllines the stationary source is subject to BART according to 40 CFR 51, Appendix Y
. The owner or operator shall prepare the BART determination in accordance with Appendix Y of40 CFR 51 as directed by the Director. The owner or operator ofa stationary source shall submit the BART detennination to the Depmiment for review. The Depmiment will issue a pennit to the source, pursuant to section 003, giving consideration to the source' s BART determination. 003 The BART requirements for any BART-eligible source that is subject to BART shall be incorporated into a construction pennit in accordance with Chapter 17, section 014.04.

Enabling Legislation: Neb. Rev. Stat. §§81-1504(1)(2); 81-1505(12)(16) Legal Citation: Title 129, Ch. 43, Nebraska Department ofEnvironmental Quality

Proposed addition ofentirely new chapter for August 2007 EQC 43-1 

## I