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 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.D. Recordkeeping Owner/operatorshall maintain the following records for at leastfive years: VII.D.1. All GEMS 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 or 75.
VII.E. 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 emissions 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 after completion 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 Air Quality Control Commission revised Regulation Number3 (concerning requirements forfiling air pollution emission notices, obtaining emission permits, and payment offees with respect to both) for the primary purpose of bringing 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 etseq. 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") pursuant to Subsection 129(c) ofthe Federal Clean AirActAmendments of 1977. i

### f t-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 new article, 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 extent authorized by House Bill1109 and to the extent deemed appropriate by the Commission for Colorado's particularcircumstances. 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 compliance with 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 attainmentof 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 Courtofappeals forthe District of Columbia in the case ofAlabama Power Company v. Castle F.2d (D.C. Cir., 1979).
APENs
In 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 sufficientfor purposes ofkeeping the emissions inventory current. Street Sanding
With the exception ofstreet sanding (and indirect sources), the exemptions provided in the revised regulation from the APEN-filing and emission permit requirements are for minoror insignificantsources of emissions. Although notfinding that particulate emissions resulting from the application and re-entrainment of "sand" applied to snowor ice covered roadways as a traffic safety measure are insignificant, the Commission has exempted sanding from the APEN-filing and permit requirements outofadministrative necessity. Little benefit can be obtained from the filing ofAPENs in light ofthe 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 enforcement ofcontrol measures to limitemissions, which the Commission believesmay 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 "majorsources" locating in nonattainment areas and "major modifications" to existing sources in nonattainmentareas 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 new source or modification to an existing source is "major" however, have been extensively revised.
Prior to the U.S. Court ofAppeals Decision in Alabama Power Company v. Costle, EPA had defined "potential to emit"

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

-- in terms of uncontrolled 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 accountthe 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 September 5, 1979, EPA proposed amendments to its regulations concerning requirements for SIPs including those pertaining to prevention ofsignificant deterioration ofairquality ("PSL)") and new source review in nonattainment areas, as well as EPA's Emission Offset Interpretative Ruling. 44 Fed. Reg. 51924 (1979). The Commission in reviewing Regulation Number 3 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 peryear or more (for certain- listed categories ofsources; 250 tons or more for sources not listed). The 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 it would 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 at the source to offsetany 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 fact that 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 consider fugitive emissions from the twenty-seven source categories in majorsource/major modification determinations to 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 not adversely affect public health orwelfare. Banking 

# IC.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 Number 3 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 asAppendix 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 owneroroperator ofa new source up to six months after commencement ofoperation in which to demonstrate compliance with all terms and conditions ofits emission permit. The Commission determined, however, that undercertain circumstances itwould 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 Number3 for such temporary relieffrom controls underspecified limited circumstances. The provision is intended forvery limited application.

Regulation Number 3 does notaddress 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 attainment areas. Common Provisions Regulation In connection with the revision of Regulation Number 3, 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 oflegislative 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 their definitions to reflect changes in the terminology used in Regulation Number 3. 

### I.B. 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 whethera permit should 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 thatthere are four categories of small sources thatfrequently locate in nonattainmentareas, but which did not stimulate commentfrom the public. These categories are: (I) service stations; (2) restaurants; (3) land development (houses and commercial); and (4) other small sources (such as concrete batch plants). Basically, all the effort put into preparation ofpublic commentpackagesforthese 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 Ito 2 tpy. In many cases less than Itpy 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 of being 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 Statement ofoasis and Purpose for the Prevention ofSignificant Deterioration (PSD) Program Regulations complies with the State Administrative Procedure Act, CR5 1973, 24-4-103(4). The statutory authority for the PSD regulations are in the Air Quality Control Act atCR5 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 et seq. 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 & Gas Association, 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 Departmentofthe Interior; and United States Department ofAgriculture. TheAir 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 et seq.; 40 CFR 52.21 et seq. The primary reason forthis is thatthe State Act requires that the 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 EPAstatements of basis and purpose forthe federal PSD rules at43 Fed. Reg. 26380 et seq. (June 19, 1978) and 45 Fed. Reg. 52676 etseq. (August7, 1980).
The Commission has additional authorities to prevent significant deterioration ofairquality. In several important areas the Commission has tailored these regulations to meetthe concerns ofColorado citizens. These areas include the requirement for an impact analysis on waterto determine acid deposition effects, the authority to make independent determinations on adverse impactto visibility in Class I areas ifthe federal land managerfails to fulfill his responsibility to do so, the requirementto establish baselines for, and to monitorairquality 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 settlement agreement in the matterofChemical Manufacturer's Association, et al. 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 EPAatthis time. Finally, EPA's schedule 

# l 

# Ifor consideration ofsuch provisions is unknown. Subsequentto EPA action on the provisions ofthe settlement agreement, the Commission will reconsider those provisions. The PSD regulations will generally not become applicable to majorsources 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 enforcementofClass I sulfur dioxide increments in those areaslisted in CRS 1973, 25-7-209 will 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 EPAdefinition. One party proposed that reference should be made to consideration ofcontrol efficiency. The Commission did notadoptthis 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 ofnormal unitoperation" ratherthan actual emissions in determinations 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 notspecifically defined in the State Act but is simply referred to as "an area subjectto 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 attainmentand unclassifiable areas designated pursuantto Section 107(d)(I)(D) or (E) ofthe Federal Clean Air Act. Such an interpretation is also reasonable under the ColoradoAir Quality Control Actwhich states thatthe Commission shall adopt measures "to prevent significant deterioration ofambient airquality 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 isthatthe entire state is the baseline area for 502, and airquality control regions for particulate matter. Several parties proposed alternative approaches to the definition of baseline area. These approaches ranged from a modeled 1-1Jg/m3 impact area (based on 7.5 minute quadrangles, the county-townshiprange-Section system, ora metric grid) to the entire state. The Commission adopted the EPA definition for the following reasons: (1) The EPAapproach has been in effectfor several years and has proven workable. EPA has wel1-developed procedures for performing source impactanalyses 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 that would cause a discontinuity for the regulated industrieswhen the PSD program is delegated to the state.(2) The use ofareas largerthan the source impactarea meansthat baseline concentrations will be determined at an earlier date, 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 that would 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 ambient airconcentrations, especially for particulate matter, before a majorsource would locate in an area to begin the counting of increment consumption. 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 incrementconsumption expeditiously (hence, the use ofAQCRs for particulate matter ratherthan 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 intotriggered 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 individually were each less than 1 ug/m3

, with the result that the Class I area would not be a part ofa baseline area. Yetthe cumulative impactofthese sources could be greaterthan the 1 ug/m3 incrementfor particulate matter 'forClass I areas, so that deterioration ofairquality 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 Iareas in the state. This is ofparticular 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 majorcontributor, was a topic of extensive 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 plant actual 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 August 7, 1980 PSD regulations (Division Exhibit B, pp. 74-76) concerning increment consumption. 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" of increment (or modeled baseline concentrations which would exceed monitored levels) The Commission concurs with the EPA rationale and has adopted the EPA approach of using actual emissions to track incrementconsumption and determine baseline concentrations.DEFINITION OF "COMPLETE" The Environmental Defense Fund (EDF) proposed a list ofspecific elements ofa PSD permit application, for aid in determining whether an application is "complete," which was generally incorporated in the final rule. The proposed list ofitemswould add some certainty and clarification forthe applicant and 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 agreementfora source to close down orotherwise decrease emissions at some future 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 newsource 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 year ofthe decrease unless •an extension is granted. A longertime would make the reduction difficultto verify. DEFINITION 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," EPAgrants 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 consistent with'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) determine that 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 ofambient concentrations to allow impacts to Class I areas notallowed under EPA rules. EPA and 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 thatthis exemption was intended to avoid penalizing a source willing to improve particulate matter collection by converting from scrubbers to baghouses orelectrostatic precipitators. Since scrubbers collect gaseous pollutants, but baghouses and precipitators do not, the amount ofS02 emitted would increase, hence the exemption. Since there are a numberof nonattainment areas 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 nonattainmentarea may also be "an identifiable piece of process equipment" which makes it consistentwith a recent federal case. See Natural Resources Defense Council et al. V. Gorsuch, etal., 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 of incrementconsumption. C.R.S. 1973, 25-7-202(4), -202(5),-204(1)(b), and -204(2)(c). "Fugitive Dust" is defined as: Soil 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, or similaractivities 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 orsubstance 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 of particulate matter in these determinations, its regulations are arguably less stringent than EPA's, although as explained below, because ofdepositional effects, there is generally an insignificant difference 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 or substance to adversely affect public health orwelfare." However, EPA's current primary and secondary NAAQS for 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).
EPA staff review ofwelfare impacts indicates thatvisibility impacts are generally caused by fine particulates ofless than 2.5 um

.

### .!.Q. 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." ld. At 140. Further, the EPA "staff recommends consideration ofthe economic and other effects associated with soiling and nuisance when determining whethera 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 proposefine 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 of particulates. Additionally, there was public and party testimony on welfare effects from fugitive particulates, some ofwhich can be assumed to be large particles. See Markey, November 10Tr. 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 that the larger particles depositquickly and that the ambient impact is relatively the same ata distance of 1000 meters orgreater. The implication of this is that for many sources the modeling of incrementconsumption would have the same general results whetherTSP is counted orwhether only particles 10 urn or less are counted (assuming the boundary of the source is 1000 meters orfarther from the emissions point). Another implication is thatwelfare impacts from large particulates can only result within relatively short distances ofa source. Another concern was thatthe legislative intentwas notto countTSP, although there was not clear evidence of legislative 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 consistent with EPA, but also given the uncertainty surrounding the revision ofthe particulate NAAQS by EPA, the Commission determinesthat 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 permitapplicant rebuts such presumption with clearand convincing evidence. The result ofthis presumption will be that in mostcases, large particulates will be counted and there will be no difference between EPAs 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 permitapplicant shall have the burden ofproofofdemonstrating with clear and convincing evidence, which, ifany, sizes orsubstances offugitive particulates do notadversely affect, health orwelfare. This presumption of health and. welfare effects has been incorporated in the definitions of"major stationary source" and "major modification," Section XI.A.4 on Exclusions from IncrementConsumption, and Section V.D.3.c.(i)(B). Upon EPA's adoption of revised NAAQSfor particulates, the Commission may considerwhetherto revise this Statementof Basis 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 oflarge 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 for that 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 rulemaking requirement 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 emissions would be counted. However, those sources could not be considered in this proceeding due to inadequate public notice. The Commission intends to considerthose sourcesfor listing as soon as practicable.
In the CMA v. EPA SettlementAgreement, the EPA has agreed to remove these 26 listed sources on the basis of industry's argumentthat the rulemaking requirement means that 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.
Itshould be noted that measurement methods are notonly available, but have been in use for a number ofyears and have provided test results that are the basis forthe 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 at different locations on differentequipmentor operations. Both are influenced by manyvariables (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 orsimilarsource would always be used in lieu ofan emission factor. Both are intended as air managementtools to allow pre-construction assessment ofa source impact oras a representative value to average total emissions from a numberofsimilar sources (e.g., all waste incinerators, commercial boilers, or coal 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 nevertheless widely 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.) 

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# IOne party's concern involved whetherthe emission factors for a facility can be extrapolated to a larger facility, specifically, from a 7000 ton per day oil shale processing facility to a 50,000 ton perdayfacility. 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 ata proposed facility, an emission estimate would be based on mining and handling practices and on different processing equipment emission factors (e.g., refinery emission factors) which are similarto oil shale processing activities where 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 that the 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 assessment offugitive particulate emission impact. Modelswithout deposition can be used for gaseous and fine particulate fugitive emissions. Models have recognized limitations, butthey are as accurate forfugitive emissions asfor 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: Coal Cleaning. A typical plantwould process 10,000tons peryear (tpy) ofcoal and emitapproximately 280 tpy of particulate 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 emitapproximately 3,600 tpy ofparticulate matter, 64% ofwhich would be fugitive emissions. The coke plant would produce over halfa million tons ofcoke peryear and emit approximately 700 tpy of particulate matter, 10% ofwhich would be fugitive emissions, and 1,500tpy ofuncontrolled fugitive hydrocarbon emissions. Petroleum Refineries. A typical plantwould process 25,000 barrels ofoil perday and emitapproximately 1,100 tpy of hydrocarbons, 57% ofwhich would be fugitive emissions. Lime Plants. A typical plantwould produce 300,000 tpy of lime and emitapproximately 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 of particulate matter, 12% (500 tpy) ofwhich would be fugitive emissions, and 8,611 tpy of hydrocarbons, 12% (1,080 tpy) ofwhich would be fugitive emissions. Sintering Plants. A typical plantwould emitapproximately400tpy of particulate matter, 20% (80 tpy) of which would be fugitive emissions. Power Plants and Boilers. A typical, butwell-controlled, new 500 MW power plant burns 2.1 million tpy of coal and emits approximately 620 tpy of particulate matter, 18% (110 tpy) ofwhich would be fugitiveemissions. These fugitive emissions are from coal handling and storage, among the mostvisible and complaint-related ofall fugitive emission sources. Petroleum Transferand Storage. A typical plant has a capacity of476,000 barrels and an annual throughput of7,123,000 barrels peryearand emits 267 tpy ofhydrocarbons, 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 majorfor the 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 party that (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 permit application, to allow the FLM adequate response time, and (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 list as described in Division Exhibit M. The proposed rule contained a requirement thatthe Division notify the 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 permit approval ordenial 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 ofland 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 of land use factors in permitapproval determinations. The Commission did not remove this Section because it.is required by the State Act, CRS 1973, 25-7- 114(4)(f)(I)(B). Furthermore, the intent ofsoliciting such alternatives is for the assessment ofalternatives with respect to control technology and source impact, not land use. CONTROL TECHNOLOGY REVIEW One party proposed that the lastsentence in Section IV.D.3.a.(i)(C), which requires the owneroroperator ofa phased projectto demonstratethe adequacy ofa previous best available control technology (BACT) determination, be deleted. The Commission did not delete 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 

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# ! Ihas developed between the time of permit review and the next phase ofa projectforwhich construction has notyet commenced, 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 of lessening 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 ifit is necessary to determine the effectofemissions from the source on air quality. This necessitates an evaluation by the Division regarding the adequacy ofthe data, and a showing by the Division that additional monitoring is needed, before morethan a year ofmonitoring 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 owneroroperator ofa proposed PSD source to provide an analysis ofthe impairmentto waterthat would occuras a result ofemissions associated with the source. This analysis is not required bythe EPA rules. The Inclusion ofwater in the additional impactanalysis 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 lakes to acid deposition and the potential increases in acid-forming pollutants such as S02 and NOx on 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 ordenial orcontrol technology review decisions exceptfor determinations ofadverse impactto AQRVs in Class I areas. The issues, which have been raised concerning water impact analysis, are discussed in detail below.

a. Legal Authority to Require an ImpactAnalysis ofAcid Deposition The StateAirQuality Control Act requires a PSD permit hearing to consider "airquality 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 potentially significant 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 ambientair (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 whether a source has an adverse impacton 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 affect such values, and thus an analysis of its effects should be required for review by the federal land managers ofaffected Class I areas. b. 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 Flattops Wilderness area comprising 157 hectares would be sensitive to potentially harmful degrees ofacidification if precipitation 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 inputto the water system 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. 18Tr. 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.
2. 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. 18 Tr. at 140), but he does notconsider thatto be the major point in regard to the acidification question. Lewis considers the loss ofbuffering capacity to be the best indicatorofacidification effects on lakes and he has found statistically valid evidence to showthatthis has occurred. (Nov. 18 Tr. At 136-138)
In summary, there is some evidence that pH has dropped slightly in some ofthe lakes Lewis has studied, however, it does not appearthat 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 underdifferent energy development scenarios, there is a potential for acidification in sensitive lakes. (Nov. 10 Tr. at 158-159)Parkhurst states that he would not expectacidification 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 1-1.Jg/m3 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 cause 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 amountofacid, 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 "first cut" approach in estimating impacts due to acid deposition. The approach utilizes methods employed by John Turkfor 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 dangerous to aquatic ecosystems? Parkhurst stated thatfish could survive in pH's as low as 4.1. (Oct. 29 Tr. 143)
Lewis states that he feels thattrout would 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 nota natural variation and that many species would probably be eliminated and species numbers and diversities reduced. (Nov. 10 Tr. at 110)
Parkhurst also testified that there is not any evidence to showthattrout 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 notclearly 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 importantfactor to 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 pHcould be tolerated by aquatic ecosystems without causing adverse impact. Itcould 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 intends to remain vigilant in monitoring this 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, if resources permit, to develop specific guidelines for acid deposition analyses based on recent modeling innovations. In the interim, proposed PSD sources emitting acid oracid precursors will be required to analyze the impact ofthese emissions on water, utilizing the most up-to-date techniques available.
AREA CLASSIFICATIONS Several parties objected to the application ofClass I sulfur dioxide 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 VIII.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 lawand regulations. However, unlike Class I areas, the increment in these areas may be protected now. See CR5 1973, 25-7-210. The 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 StateActto 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 to whatwere 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 made without providing all ofthe information necessary for a redesignation. Who would provide such information is not specified 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 "EPA approved" terminology instead of references to specific documents. Two parties proposed language making EPA orthe state responsible for any needed meteorological data. The Commission did notadopt this proposal because it is the applicant's responsibility to demonstrate 

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# tthat it will notcause 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 or equivalentto" 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 orequivalentto" (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 not a higher level ofemissions. The preamble to the EPA RSD regulation (Div. Exhibit B, p. 84) clearly specifies thatthe "

...final emission limitation must at least representthe 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 (ifapplicable) to determine independently ifthere are an adverse impactto visibility in Class I areas ifthe federal land manager (FLM) fails to make such determination orsuch 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 problemswith the state's independent authority' to make such visibility determinations. These consisted of(1) measuring or predicting visibility impairment, (2) quantifying maninduced , 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 predictvisibility 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 of light is well documented and has been incorporated into the models described in the Workbookfor Estimating Visibility Impairment (EPA-450/4-8-031). The preface to the Workbook for Estimating Visibility Impairment states: "EPA believes these techniques are ata 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 ofairshedsources, 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 assessmentcan be made. As noted above, EPA supports the use of its 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, ratherthan fine particulates, visibility impairmentcould occurwithout the increment being violated. Furthermore, the particulate increment is a maximum allowable ground level concentration; consequently itwill not protectvisibility impaired by plumes at elevations above ground level. These facts form the basis forthe Clean AirAct requirementthat 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 impacton 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 important and necessary in aiding the federal land managerofa Class 1 area in determining whether or nota source will cause an adverse impact on 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 theircurrent monitoring activities on the basis thatthe data is necessary to determining adverse impacts on AQRV5, including visibility. See Mitchefl, Nov. 18Tr. at 122 etseq., 161 et seq.; Haddow, Oct. 28 (p.m.) Tr. At22 etseq., 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 list ofsensitive receptors ofAQRVs to applicants for monitoring Mitchell, Nov. 18 Tr. at 162. The Forest Service recognized severe technical difficulties and high costs ofmonitoring 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 1area, e.g. 2 or3 species oflichen and 2 or 3 scenic views, and proposes thatthe state require the monitoring ofsuch indicators Id. at 82-83. B. Environmental Defense Fund's (EDF) and Friends ofthe Earth's (FOE Position 

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### EDF's and FOE's general contentions in support ofthe 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, mostareas 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 AirAct 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 1area have not been identified, there is no monitoring reference method available and no validated models to project impacts of particular emissions levels; 3. 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 at 31-34. D. Commission Analysis and Decision The above-cited testimony and evidence and other portions ofthe record support the conclusion that monitoring ofAQRVs orsensitive receptors ofAQRV5 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 some AQRVs and sensitive receptors and for some Class 1areas. 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. at89. This practice is consistent with the economic philosophy that companies should internalize their environmental costs. Furthermore, the Clean AirAct does not change such practice; it places the "affirmative responsibility" on federal land managers to protect AQRVs 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 thatthere is available research and test methods, for obtaining background data and impactdata on many AQRVs thatwill be critical in making adverse impact determinations, even though there are not generally adopted reference methods or modeling techniques. For example, to perform a reasonably accurate visibility impairment analysis, background data is needed. Div. Ex. J. 

### Although there are no generally accepted reference methods for 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. at62-71. 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. Thatthe Division will consult with 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 thatthe monitoring ofAQRVs may not be economically reasonable, the rule provides that:
1. no duplication of monitoring may be required;
2. not more than three AQRVs may be required to be monitored;
3. monitoring methods must be reasonably available;
4. monitoring may only be required ifthe source is a major contributorto 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 AMBIENTAIR STANDARDS FOR THE STATE OF COLORADO The proposed rule would have revised the Colorado ambientairquality standard for sulfurdioxide to be consistentwith 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, 1982 That revisions ofthe state ambient air quality standard for S02 be removed as a subject ofthis rulemaking. The Commission agreed to reconsider the state standard if and 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 Procedures Act, C.R.S. 1973, 24-4- 103(4), to prepare a Statementof Basis and Purpose for adopted regulations. The statutory authorityfor 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 further define 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 exemptsources 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 percent are to sources with uncontrolled emissions of less than 5 tons peryear (tpy); 35 percent ofthe total permits are to sources with uncontrolled emissions below 1tpy. Thus, exceptforthe specific source categories exempted bythe 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 most sources of less than one ton peryearemissions and some of less than five tons peryear emissionswill have a negligible impacton airquality 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 of hazardous, toxic orodorous air pollutants, howeversmall the source. The Commission considers the gathering ofinformation on, and the regulation of, such pollutants to be of high priority. (b) exemptsources ofall other pollutants from both APEN filing and permit requirements when uncontrolled emissions from the sourcewould be less than one tpy. Such sources, according to a Division study, accountfor less than 1 percent oftotal uncontrolled emissions and would be anticif?ated to have 24-hour impacts, ata maximum, ofless than 2 micrograms per cubic meter (uglm3) assuming 24 hours per day operation, a negligible impactgiven 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 sources would 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 source that a permitwas required; otherwise, the sourcewould 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-hourambientair impacts as high as 10 ug/m3

, which could be significant in certain cases, especially ifsuch source would cause a violation ofa NAAQS or incrementor by itselfor in combination with similar sources cause a health orwelfare problem or interfere with reasonable further progress towards attainment. Volatile Organic Compound (VOC) sources are treated differently. The record demonstrates that 45 percent ofthe total ofall uncontrolled stationary source VOC emissions are emitted by sources ranging from 1to 5 tpy in size. Mostofthese sources locate in urban areas such as Denver, which is nonattainmentfor ozone. Since VOC emissions are an ozone precursor, suchsources should be subject to permitting requirements to ensure compliance with applicable VOC emission limitations. Therefore, VOC sources equal to or exceeding 1tpy (uncontrolled) locating in nonattainment areas must both file an APEN and obtain a permit. VOC sources ranging from 1tpy to 5 tpy locating in attainment areas where there is less concern for ozone 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 OFA 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 asthe EIS (for Emissions Inventory Subsystem), is essential for effective airquality managementand thatthe revised APENs provide an effective system for obtaining 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 ofprocessing the information (see "Fiscal Impact"). The levels setfor reporting emissions changes are significant and will allowthe effective tracking ofairquality changes and use for air quality management. It is obvious, however, thatthere has been confusion concerning these requirements in the past. The following statements should clarify the confusion: 

### A 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", except that for PSD, an "actual emission" rate can be ignored ifit is not representative of"normal" operation. TheAPEN forms should clearly distinguish an APEN filed with a permitapplication (which estimates maximum anticipated production oremission 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 of modifying an existing permit orobtaining a new permit, in which case the APEN must (1) be accompanied by an application, written request, or letterofexplanation 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 discuss with the Division the mostefficientformat in which significant changes can be reported and the degree to which similar emission sources can be combined for reporting purposes. It is the intent ofthe Commission thatthe Division carry out this 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, but similar, emission point sources to be grouped. It should be stressed that this grouping ofemission point sources for purposes of reporting significant changes to the Division does not constitute, nordoes itset any 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 pointsourceswithin 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 changes which are in the range of5 tpy for small sources or5 percentfor 100 tpy or largersources. 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 APENs filed for a source but refers simply to "air pollutant emission notice" which may be interpreted to include both initial and revised APENs. Testimony by the Division estimated the administrative costs of processing a revised APEN atover$40.00. Forthese reasons, the Commission finds that it has authority and should charge a $40.00 filing fee for revised APENs.
IV. NON-PERMITTED SOURCE APPLICABILITY
A source existing before the adoption ofthe first Colorado AirQuality Control Act and the date of its 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 nonattainmentareas were exemptfrom permit requirements. The record shows that these sources notonly 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 emit a total of 1340 tpy NOx). Small stationary internal combustion**engi~es** in terms ofemissions (less than 5 tpy) orsize (less than 50 HP) are excluded from permit requirements. In addition, the Commission has retained the exclusion from permit requirements for emergency 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 inColorado could be as high as 2200 tpy and thatthis 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 compressor stations 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 NONATTAINMENTAREA PERMITS Since the record shows that sources forwhich public comment has been received are in every case either large (greaterthan 25tpy) 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 forsources locating in attainment areas. 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 unnecessary time 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 orother significant concerns. VII. CONSTRUCTION SCHEDULE DEADLINES
Under previous rules, owners and operators applying for new permits have not been held to anytime limits for commencing construction oroperation once the permitto operate has been obtained. Sources must be evaluated (C.R.S. 1973, 25-7-114(4)(b)) to determinewhetheroperation ofthe source will comply 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 numberofyears may finally initiate operation at a time when ambient airconcentrations 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 increments which 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-REACTIVE VOLATILE 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 nonattainmentareas only), and clarifies that NRVOCswill be reviewed separately during initial approval analysis ofa new source. 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, arid 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 Number3 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) ifemissions ofany pollutant do notexceed five (5) tons peryear. This exemption only applies to flares, which do notcombust gas containing hydrogen sulfide (H2S) except in trace amounts, since H2S is classified as a hazardous air pollutant. PreviouslyAPENS were required forthese flares when emissions exceeded 1ton peryear. The Air Quality Control Commission adopts this change for the following reasons: 1) Records ofthe amount ofgas flared will be kept by the Oil and Gas Commission and made available to the Division; 2) The flaring is a temporary activity in mostcases; 3) Statewide emissions from flares are relatively low, with nitrogen oxides (NOx) being the main pollutant emitted (emissions of NOx from flares is approximately 200 tons peryear statewide, while total stationary source NOx emissions are over 160,000 tons 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 XV to 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 conformance with 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 new and existing sources, as established in Section 169Aofthe Clean Air Act. Section XV. is added to Regulation Number 3 as part ofthe State's plan to meetthe national goal of preventing future, and remedying existing, visibility impairment in Class I areas. Section XV. Togetherwith this Statementof 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 theirsuggestions 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 opportunity to provide testimony concerning the Regulation and its requirements at the hearing. Wyoming, Utah and New Mexicowere also sent notice ofthe hearing. Section XV.D. allows the FLMs to certify visibility impairmentto the Division Directorat any time. Atsuch time ofcertification the Division mustassess the impairment, identifythe contributing source(s), and conduct a BestAvailable RetrofitTechnology (BART) analysis for any contributing sources located in Colorado. The FLMs have notcertified reasonably attributable impairment as ofthis adoption date. Section D. also requires BART and is incorporated for future use, if necessary. 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 setforth 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).
In addition to existing and newsource review, the Division must develop a visibility monitoring strategy to collect information on visibility conditions and must develop 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 newsource 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 newsource visibility impact analysis;
2. Determine existing conditions, in Class I areas and the source(s) ofany certified impairment;
3. Determine actual effects from the operation ofnewsources 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. 

# I lThe goalswill 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 majorstationary 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 ofbackground conditions in the Class I area(s) of interest. Ifdata is adequate, the permittee will be notified ofthe background or base level ofvisibility againstwhich impactswill be assessed (Regulation Number 3, 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 impacton any Class I area to conduct monitoring to establish baseline status ofvisibility. The monitoring information will be used in the new source review analysis and will add to the background and trend data bank ofthat Class I area. No monitoring shall be required ifit is currently being conducted by any federal, state, or local agency (AQCC Regulation Number3, Section XIV.B.1). FLMs may atanytime identify to the Division Class I areaswhere 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 numberand type ofsources likely to impactvisibility in the Class I area; 3. 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 done for other air quality programs. The Division may be unable to make a decision regarding "reasonable attribution" ofvisibility impairment from an existing source or sources 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 impactof nearby suspected sourceswith 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 address the specific problem. The Division will sponsor orshare in the operation ofvisibility stations with FLMs as the need arises and resources allow. Fiscal, logistical, and other considerations may constrain the Division in conducting visibility monitoring in Class I areas. The Division will requestfrom each FLM responsible for Class I areas in Colorado copies ofany and all past orexisting programs designed to**manito~** orevaluate 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 other appropriate source (such as a proposed major stationary source) on an annual basis. Long-Term Strategy (LTS)The Commission shall review the strategy set forth below and prepare a public report as required in Section XV.F. The FLMs shall be consulted throughout all phases ofthe LTS development and revisions.
A Commission subcommittee will be established to address the following components ofthe L TS:
1. Statewide visibility standards
2. Smoke management 3. Vistas
4. PM10 and PM2.5 emissions
5. Any other components the subcommittee deems applicable. The Division is pursuing the adoption ofstatewide visibility standards. The subcommittee will determine how and ifstandards should be setand howthe standards will apply to various areas ofthe state. Although the end result may apply to regional haze, Class I areas will benefitfrom statewide standards. The Division presently has smoke management agreementswith the FLMs. The affected agencies are required to obtain an open burning permitfrom the Division. Virtually all controlled burns are forwildlife habitatand 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. If necessary, the existing agreements may be revised during the L TS review process. 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 (important views of landmarks or panoramas that extend outside ofthe boundaries ofthe Class I areas and considered critical to the enjoyment ofthe areas). The Commission is therefore not required to address vistas but may do so undertheir own authority. The subcommittee shall determine ifintegral 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 PM1 0 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 impairment atthis time, therefore the Commission will not address 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 six factors (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. Enforcement ofemission limitations and control measures. Consultation with Federal Land Managers (FLMs) The Division as part ofthe implementation ofthis Regulation will send within 30 days of its 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 ofimpairment ofvisibility 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 least 60 days priorto any public hearing on any elementofthe SIP. The Division is interested in the FLMs opinion regarding:
1. Assessment of impairmentofvisibility in any Class I area, and
2. Recommendation on the developmentofthe long-term strategy. The FLMs may contactthe Division Director atany time regarding the implementation ofthe SIP for Class 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. Provisions for the 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), Air Quality 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 nonattainmentareas. (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 ofequipmentor modification itself represents a majorsource orsignificant increase, nonattainment review applies. Second, ifthe piece ofequipment itself is not major, examine the entire facility as for attainment area 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 Air Quality Control act includes fugitive emissions when calculating a source's potential to emit only ifthe Commission adopts regulations to include fugitive emissions for that source category. (See Statementof Basis and Purpose, March 10, 1983). Federal law requires thatfugitive emissions are included for all"listed" sources (those listed in the definition ofmajorsource). The Commission is adopting the requirement to include fugitive emissions for all listed sources. Portions ofthe ColoradoAct notAllowed in Federal Act
Portions of Regulation Number 3 are not allowed in the Federal Regulations, but are contained in the Colorado Act and therefore cannot be removed from regulation Number 3 until removed from the Colorado Act. The items are discussed below. The Division will not honorthese items unless an applicant insists, in which case a permitfrom the EPAwill be required to meet Federal law. Best Available 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 effect at the time of application. The Division will make BACT determinations taking into consideration the mostcurrent NSPS and NESHAP regulations. Clean area in nonattainment area: The ColoradoAct 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 Act and Section I.B.2.C.viii excludes from the definition of major modification a fuel switch to shale oil orcoal/oil mixtures. This is not allowed in the Federal Act. Fugitive Dust Exemption: The Colorado Act and Regulation Number 3 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 discusses the Commission's previous position. •The discussion indicates that when 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, but some question remains as to whether or notTSP fugitive emissions should be used. The EPA is developing PM-10 increment standards. In theinterim, ifa source does notwantto include fugitive dust (TSP or PM-10) for a State permit, an EPA permit may have to be obtained. Permit Review Time Frame: The Colorado act contains specific time 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 notacceptable for majorsource review. PSD and major nonattainment applications 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 majorsource 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 longerexists. Class I areas in neighboring states are recognized in Section VIII. Section VIII.K is added to allow redesignation ofan area to class Ill ifa permit can't be obtained unless the area is redesignated and sufficient public notice is given. The Federal Act requires this. Section XIII.B exempts Innovative Control Technology from BACT only, notall 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 without the need for>additional S02 control. (See Statement of 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 as toxic air pollutants 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 mustobtain 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 hasdiscretion to issue the permits separately ifthe operatororownerofthe source orthe source type 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 EPAapproves our PM-10 State Implementation Plan. Thiswill ensure that Reasonable Further Progress will be maintained in the interim.
The PM-10 standard is implemented under Section 110 ofthe Federal clean AirAct. The othercriteria pollutants are regulated under Section 107, which includes provisions for designated 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 specificallyto 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 subjectto PSD requirements (Section 1.4.a). Such sources must also offsettheir impactto the degree which it exceeds the standard (as opposed to sources ofother criteria pollutants, which mustoffsettotal emissions). Offsets will be required as part ofthe PSD source impactanalysis, as necessary. PM-10 fugitive emissions are included when calculating potential to emit. (See discussion under Portions ofthe Colorado Act not allowed in Federal Act in this Statementof Basis, Authority and Purpose). PSD 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 ofminor sources 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. Corrections to 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 significant change 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. TheApril 1 deadline and calendaryear 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 credit will 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 prior to relocating, regardless ofthe length oftime atthe new site. This helps the Division track sources in the eventcomplaints are received. 

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### 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 Managers testified that such a limit is not sufficientto provide even minimal AQRV monitoring. The limit is removed and the Division will determine economic feasibility 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 new source review. Due to the public's increased concern fortoxic/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 set out general principles that EPAwill use to evaluate emission trades under the Clean AirAct. The goal ofthat Policy is to create more flexibility forthe states and industryto help meetthe goals ofthe Clean AirAct more quickly and inexpensively. The purpose ofColorado adopting the salient points ofthat Policy is to create a generic regulation, which is acceptable to EPA, and thereby eliminate the need for a SIP revision for every banking or emission 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 fortrading of PM-10, lead and NOx

c. Added newcriteria 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 sources were subjectto ambient impactand new source review. f. Credit for switching to a cleaner fuel is given only ifa permit is conditioned to require control equipmentto 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 persourcewas to 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 indirect costs ofsuch permit] processing. In establishing such fees, the Commission shall provide a higher per hour charge for permitswhich require five hours or more than for permits which require less than five hours to process; exceptthatforthe fiscal year 1987-88, the fee shall be ninety six dollars per hourfor all 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 permitsufficientto cover the directand indirect costs ofadministration and periodic inspections; exceptthatfor the fiscal year 1987-88, the fee shall be sixty dollars per year for each emissions source." The Division has performed a thorough analysis ofthe direct and indirect costs ofthe permit and compliance monitoring programs and has proposed fees to the Commission designed to meet statutory requirements. StatutoryAuthority The statutory authorityfor this regulation is Section 25-7-114. Section VI

- Fees
A. General Paragraph 1 ofthis Subsection requires that all persons required to obtain an emission permit orfile an air pollution emission notice pay fees sufficientto recoverthe direct and indirectcosts 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 consistentwith the statutory language: '

...to include the reasonable costs ofsuch processing or administration, and ofenforcementofthe permit provisions. Such costs shall include the cost ofpredictive model utilization when the use ofsuch models is deemed necessary by the Division for proper evaluation ofthe permit application." Paragraph 2 is unchanged. Sub-Sections 8 and C are unchanged
D. Annual Fees Sub-Section D is changed by noting that the annual fees to be charged are in accordance with the schedule shown in the Regulation.
Fee Schedule The fee schedule shows whatthe fees are for the 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 ColoradoAir Quality Control Act. Relevant Sections are 25-7-102 Legislative declaration and 25-7-105(1)(a)(l) Duties ofCommission.
Federal Clean AirAct 

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### Additional authority for the Commission to make the 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. Statement of Basis and Purpose ofChanges to Regulation Number 3 Section XV.F. Section XV.F.1.c. Commission Regulation Number 3 required a Long-Term Strategy (LTS) review/revision reportfrom 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 report from 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. Without a regulatory change, the next L TS reviewwould be due September 1993

- approximately a yearfrom adoption ofthe August 1992 report. In order to maintain the intentthata report is to arrive to the Commission, and ultimately EPA, at least every three years and to allowthe Division to get back on schedule with a reportto the Commission in approximately three years, Section XV.F.I.c. was altered. Old language: (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 reportwill 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 forthe Commission on any progress made toward the national visibility goal since the last long-term strategy revisions. The reportwill be made available by September First at least every third yearfollowing the submittal ofthe previous report. This report shall include an assessment of: Section XV.F.I.c.vii
EPA regulations (CFR Part 40 Section 51.306) require thatthe 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 Number 3 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, 1992Revisions to Regulation Number3, Common Provisions and Regulation Number7
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 EPA has identified portions ofthe State's Prevention ofSignificant Deterioration and NewSource 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 orderfor the EPAto approve the State Implementation Plans. In addition, the State must revise the rules to include the addition of new requirements thatwere setforth 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 EPAapproval.
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. SpecificAuthority
The specific authority for this 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 new Colorado 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 adopta PSD 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 authority for adopting regulations, which are applicable to entire state, oronly within 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 compliance with 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 major sources (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 equivalent to 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 Number 3 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 Number 3 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 EPA concerns regarding the State's PSD and NSR rules. These revisions are required to eliminate discrepanciesbetween 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 Act does notallowthe exemptions. Several Sections throughout the regulation needed to be revised oreliminated: Section I.E.

- Eliminate the reference to the definitions of majorstationary source and major modification from the definition offugitive dust; Section 1.8.3.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 1.8.2, 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.
3. The new Federal Act requires majorsources in nonattainmentareas obtain to offsets from sources that are also located in the same nonattainment area, 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 notallow 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 nonattainment area 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 for the PM-10 ambientair quality standards. The provision applied until the EPAwas 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 permitconditions 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 automaticapproval of permits ifthe State fails to meet processing deadlines. The language that provides for automatic approval of permits 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 meetany Act 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 clarify this 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 ofotheraffected 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 BestAvailable 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 longer subject to Prevention ofSignificant Deterioration (PSD) requirements (which would require BestAvailable Control). The definition ofsignificant, which determines when a source is subjectto PSD, is revised to omitthese pollutants. The Federal rules do not allow an exemption from PSD and NSR rules for right ofways, pipelines, etc. The definition ofstationary source is revised to delete this exemption. Non-Reactive VOCs: On March 18, 1991, the EPAadded five halocarbon compounds and four classes ofperfluorocarbons to the list oforganic compounds, which are negligibly reactive, and thus exempt from regulation as Volatile 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 not allowed to take credit for controlling these compounds in our SIP. In otherwords, sources cannot use reductions ofemissions of these compounds to offsetVOC emissions, and we are not allowed to include emissions ofthese compounds in our SIP inventory. The EPA has determined that these compounds do not react in the atmosphere to produce ground level ozone. The EPA also revised the definition of "Volatile Organic Compound" to make slight clarifications. The definition in the Common Provisions and in Regulation Number7, Section II.A.1. is likewise revised. Municipal Waste Combustor Emissions Significant Level: On February 11, 1991, the EPA promulgated New Source Performance Standards for Municipal Waste Combustors. In addition, the EPA promulgated "significant emission levels" for municipal waste 

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### combustor emissions. 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 combustor emissions. This addition is required in orderto conform to the Federal PSD and NSR rules. Senate Bi1192-105 Revisions Senate Bill 105 revised the Colorado Clean AirAct. The new ColoradoAct contains some newand 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 Number3
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 permit applications (previously limited to 135 days).
2. Section IV.C.1.c- Change the reference date forthe 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.
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 Divisioncould allow a 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 newActsets 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. The APEN fee has changed from $60 to $75 for fiscal year 92. Common Provisions
1. Section I.C- Incorporates the new Legislative Declaration ofthe newAct. The new declaration adds to 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 now also considered" air pollutants." Precursors can be emissions such as nitrogen and sulfur oxides, 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 operational4. 

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### 7. standards. In addition, such regulations that apply to hazardous pollutants must be consistent with the newAct requirements concerning hazardous pollutants.
Revise definition of Federal Actto reference 1990. (Previously referenced 1977.)
Revise the definition of Federally Enforceable to indicate thatthe Division has authority to issue permits to synthetic minorsources. Revise definition of Hazardous Air Pollutant. The newdefinition includes the pollutants listed underthe Federal and Colorado Acts. Refers to Adverse Environmental Effect, therefore this definition is added.
8. Add definition ofOzone Depleting Compound. The fee schedule requires the Division to charge fees for emissions ofsuch compounds, therefore the definition is added. I.E. 

### I.K. Adopted June 22, 1993 Revisions to 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 subjectto public notice before construction occurs. The Commission has authority to exempt sources from these requirements, ifthe sources do not have a significant adverse impact on air quality. Regulation Number 3 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 affectairquality 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 new provisions 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 majorsources 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 adopta 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, or only 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 for the 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 provides authority for requiring construction 

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# l fpermits, and for allowing exemptions from the requirement. Section 25-7-114.5 provides authorityfor 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 definitions that are used in the Prevention ofSignificant Deterioration (PSD) and New Source Review (nonattainment, NSR) permit programs of Regulation Number3. 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 amount for permit limits). In addition, language is added to clarify that a source need not perform a stack test forthe sole purpose of providing 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 mayquestion that source regarding the choice. The emission estimate included in an APEN is not required to be an exactcalculation ofemissions, but ratherthe source's best estimate, to the extent practical, ofemissions. As stated in the Legislative Declaration ofthe ColoradoAirQuality Control Act, the APEN information is to be used to achieve the mostaccurate and complete inventory possible, and to provide forthe mostaccurate enforcement program achievable based upon that inventory. The Colorado Clean Air Act states 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 if a de minimis emission level is triggered will be based on actual uncontrolled emissions. Sourceswill not be allowed to take credit for control 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 device for 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 emit a pollutantwhich was previously not included on an APEN. Also, the Commission may add pollutants to the list of non-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 by April 30 ofthe following 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 April30 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 lastcouple ofmonths ofthe year, tothe 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 thatthe new control equipmentwill meetthe applicable requirements, and to verify that actual emissions have decreased or increased due to the use ofthe new equipment. Oftentimes, stack tests are required to ensure that control equipment meets applicable requirements. A change in the control equipmentcan affectthis compliance determination. Revised APENs will not be required for routine maintenance, repair and replacements. These routine activities should not affectthe effectiveness ofthe equipment. Permit applications must include an APEN on which the owneroroperator indicates what 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 allows the Division to be aware ofa source's location ifany concerns regarding the source are raised bythe public. Emergency and Backup Generators Electric utilities may use emergency or backup generators to ensure that blackouts do not occur 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 majorsource-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 unit facility, but are located individually in the field. These unitswill most likely obtain a synthetic minor permitto avoid majorsource permit requirements, since operation is usually intermittent. Once such sources obtain a synthetic minor permit, the Commission again will not require the source to submitannual emission updates.
APEN Requirements

- Non-Criteria Pollutants 

# IThere are 363 non-criteria reportable pollutants. The Commission divided the pollutants in two major groups: those that are required to be reported in 1993, and those that have to be reported in 1994 and subsequentyears. 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 underGeneral APEN Requirements. APENs are required ofsources in attainmentareas when the emissions ofany criteria pollutantfrom a source exceed two tons peryear (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 pollutant triggers 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 thatAPENs 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, due to requests from industries in Pueblo, and the Pueblo County Health Department. The de minimis level for lead in all areas is 100 pounds per year. For 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 for an emission point based on the release heightofthe pollutant and the distance from the release pointto the property boundary. The resulting three by three grid as well as instructions on howto apply it can be found in Appendix A. Notethat future actions by EPA may effectthe de minimis reporting levels for certain chemicals that appearon the EPA list of 189 toxic chemicals.
APEN Requirements

- Exemption List Numerous new source categories have been added to the APEN exemption list. Each category was examined for its impacton air quality in Colorado before being added to the list. 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: Notall 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 cutofffor fuel 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, sincethe lattertwo fuels may result in significant sulfurdioxide emissions. Fuel burning equipmentwhich 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 thatthe emissions from the exempted unit, based on EPAAP-42 emission factors, are negligible. Chemical storage areaswhere 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 storage tanks would not qualify for this exemption, since often the material is loaded and unloaded, and such tanks have vents from which emissions occurdue to breathing losses. See Sections II.D.1.n., ee., uu., ddd. and fff. for storage tank exemptions.
The Commission will require APENs only for pollutants that are defined as "criteria" pollutants or "reportable non-criteria" pollutants (HAPs, CFCs, SARA 313). 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 may exclusively use large amounts of aerosol cans, or may use large amounts in addition to other processes. The Commission expects that these instances will be rare. Ifthe Division, a local 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 file 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 any source from the requirements of Regulation Number2 (regarding odor limits)

. 

## .!!..£ source 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 that sufficient evidence is not available 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 equipment and pilot plants: The subcommittee forthese rule revisions held extensive discussions regarding exemptions for laboratory equipment and pilot plant activities. 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 the Title Voperating permit rules (currently scheduled 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 request that such source category oractivity be required to file APENs and/orobtain permits. Oil and Gas Exploration Activities Oil and gas exploration activities are activities forwhich it is difficult for the owneroroperatorto estimate what emission equipmentwill be required, and therefore what emissions will 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 

# I 

# Iexploration 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 or gaswell will be produced, and has filed well completion information, the owner oroperator 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 howcompliance 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 at quantifying their emissions of non-criteria pollutants, the Commission has deferred APEN reporting requirements forfive 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 ofless 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 studies to quantify emissions from dehydration units. This study is currently underway and is expected to be completed in the nearfuture.
In addition, sourceswhich 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 Ofthe 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 MACT orGACT 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 below the 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 MACT and 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 enforcementaction needs to 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 LevelsPermit de minimis levels for criteria pollutants have been increased. Levels differ based on the attainmentstatus 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 lower than the levels for attainment areas, was not adopted. See discussion above underAPEN de minimis levels. Emissions are compared againstthe de minimis levels by adding emissions from all sources atthe 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 at the facility.
Permit de minimis levels for sources of HAPs will be set atthe time thatthe MACT orGACTforthat 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 thattreat wastewaterfrom municipalities orother sources. The facility may be publicly or privately owned. Wastewater otherthan 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. Fuel 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 per year 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 equipment are notexempt because these activities may be subjectto specific airquality emission limit regulations. Applicable Requirements OverrideAPEN 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 allowa source to avoid any airquality regulation requirements. This provision applies to the source category exemptions and to the de minimis level exemptions. Forexample, a source may not claim 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 source would 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 must contain federally enforceable conditions, which limit the physical or operational capacity ofthe source so that emissions are belowthe 100 or250 ton per year level. Sources, which are subject only to the opacity orgeneral fuel burning and manufacturing requirements of Regulation Number 1, may take any applicable exemption. Likewise, sources, which are subjectto the general RACT requirements (but not the specific RACT requirements) of Regulation Number 7, and sources, which are subject to the current Regulation Number8 provisions, may take any applicableexemptions (i.e., they are exempt iftheir emissions are below de minimis levels). RACT for sources that would qualifyforthe APEN exemptions is usually "no control." Similarly, sourceswhich are subject only to Regulation Number 1opacity, 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 belowthe de minimis level (two tons peryearofVOC). Sources, which are subjectto State-only requirements of Regulation Number8, are exemptfrom permit requirements. Regulation Number 1, 7 and 8 sources, which take APEN 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 attainmentarea mustgo to public notice has been increased from 25 to 50 tons per year (exceptfor lead). In nonattainmentareas, the level remains at25 tons peryear. Lead sources are required to go to public noticewhen the emissions exceed 200 pounds peryear. The Commission has determined that raising these levels will not impactthe numberof public comments the Division receives. Any source requiring a permitfor HAPs is required to go to public notice. Notethat Section IIV.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 mustgo to public notice. Atthis time, the Commission will use this Section to ensure the EPA requirements are met. Language will be added to clarify these requirements when the next revision to Regulation Number 3 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) for adopted or modified regulations.

The 1990 Amendments 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 EPA sanctions, such as loss of highway funds 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, howeverchanges have been made to the program so that the two permit programs (construction and operating) compliment each other. SpecificAuthorityThe specific authorityfor this regulation is contained in the Colorado Air Quality 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 for the Division to administer regulations adopted by the Commission. Section 25-7-114.1 provides authorityfor requiring APENS, and for allowing exemptions from the requirement. Sections 25-7-114.2 through 114.5 set forth 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: Subcommitteedocuments, which discussthe 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?
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 'major sources"). For purposes ofthe operating permit program, air pollutant means any pollutantfor which an ambient airquality standard has been set (and their precursors), any pollutantwhich is regulated underthe New Source Performance Standard regulations (NSPS, Regulation Number6), any Class I or Class 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 Act definition ofair pollutantfor operating permit purposes. The Act defines air pollutant as being any substance emitted to the ambient air, 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 set for the particular air pollutant (see further discussion under"regulated pollutant," below).
2. Major HAP Sources Sources, which have potential to emit 10 tons peryear 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). 

# I I*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 Paper and Fact Sheet).
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 exemptsfugitive dust sources from the major source definitions atthis time. Further investigation is occurring regarding HAP emissions from such sources, and discussions with EPAwill continue to determine howto treat such sources. Once these 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 BusinessAssistance Program is available to assistsmall businesses in understanding the requirements, in determining applicability, and in complying with the requirements. No "applicability determinations" are available for other sources. The Division must recover the cost of implementing the operating permit program. Time spent reviewing informal requests for applicability determinationswould not be recovered. 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 not subjectto the operating permit requirements, the sourcewill 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 may wantto 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 make them 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 mayavoid the operating permit requirements by obtaining an emission-limiting construction permit before they are required to apply for operating 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 are federally 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 goto public notice in orderto be federally enforceable (see discussion below). "Once in always in" does not apply to the operating permit program (however it does apply to the PSD program). Ifa major source has an operating permit and reduces its emissions below majorsource levels, the source may apply for a synthetic minor permit in orderto cease being subject to operating permit requirements.
6. Minor Source Exemption The EPA allows states to give minor sources subjectto existing New Source Performance Standards (NSPS) a five-year deferral 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 EPAfirst approves any State program in Novemberof 1994, this means that minorsources may be exempt until Novemberof 1999. The EPAwill decide if minorsources subjectto new MACT orGACT (Maximum or GenerallyAvailable Control Technology) standards and NSPS should be exempton a case-by-case basis as the new rules are promulgated. 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 at such 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 permit shield provisions allowed in the operating permit program (note, however, that most ofthe 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 sources voluntarily applying, will be subjectto all ofthe operating permit procedural requirements (public notice, EPA review, etc.). B. When is operating permit applications due?
1. Existing Sources The federal act allows states to phase in processing ofexisting source applications over a three-year period. One third ofthe applications must beacted upon within each yearafter EPA approvesthe 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 mustsubmittheir operating permit applications by November 15, 1994. The Division will use the newAPEN information to identify the firstthird, and will notify the firstthird by November 15, 1993. The firstthird 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 processthese 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 applications will 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 mustdetermine ifeach application is complete within 60 days of receipt. This may not be possible during the three-year phase in, as many applicationswill be received at once. The Division will make its best effortto make the completeness determination for all permitswithin 60 days. Ifthe Division fails to dothis, the application shield applies, and the Division cannot enforce againstthe source for failure to have a complete application on file. The Federal rule provides, however, thatthe Division has the authority to askfor additional information atany time 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 effectively worktogetherto ensure that applications are processed in a timely fashion.
2. New Sources and Relationship to the Construction Permit Program New sources that wish to locate in Colorado mustobtain 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 mustapply 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 demonstratethat 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 applyfor such permit before commencing construction. The application for a combined permit mustcontain 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 mustdemonstrate compliance with all permit conditions (this 180 day requirement will be a permit condition, and the appropriate hourly processing fee will be charged for the associated inspection). The source continues to operate under its operating permitand 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 permit application requires more specific information regarding compliance monitoring, recordkeeping, etc., than a construction permitapplication. Sources that choose to obtain an operating permit before construction must be able to supply all ofthe required information for a complete operating permit application. Sources that choose to obtain an operating permit before construction will be subjectto the operating permit timeframes for processing instead ofthe shorter construction permittimeframes. Construction permit applications can take up to 90, 135, or365 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 or 50 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 undereach process. PSD sources may have to undergo public hearings twice. The EPA only reviews certain applications and draft permits underthe construction permit program, and usually does so during the public comment period. The EPA is allowed 45 days to review draftoperating permits nearthe end ofthe process, and then the Division has 90 days to 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 enforcementaction 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. 

# IC. What must be addressed in operating permitapplications and permits?
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 for the 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 may file separate APENs for all ofthe units at its facility, but a single operating permit can be obtained. Similarly, a source may file grouped APENs for similar units at its facility, and the operating permit could contain a general statementthatthe types ofunits 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 have to listthe requirements separately, and the monitoring, recordkeeping and reporting requirements can be tailored to meetthe needs ofthe source and the Division for that group ofsources. SPECIFIC EXAMPLE: Numerous degreasers are located throughout a facility, 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 forthe degreasers; 3) obtain more than 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 mustaddress each "regulated pollutant" associated with the source (exceptfor insignificant activities, see below). The definition of regulated pollutant is to be used strictly for determining 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 of majorsource. (See discussion above, regarding the definition ofair pollutant). Pollutants to be addressed in the application include each pollutantforwhich an ambientstandard 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 pollutant subjectto a standard underthe HAPs requirements (including Colorado HAPs)."Regulated HAPs"
Note that a HAP must be subject to 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, mustaddress that HAP in applications. In cases where the Commission or Division determines MACT on a case-by-case basis because the EPA has not, the HAP becomes regulated only forthe particular source subject to the case-by-case standard. Once the EPA promulgates the list of 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 for fee purposes. The Colorado Actspecifically 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 subjectto 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 exceptfor activities, which the Commission has determined are "insignificant." This regulation sets forth to what extent each activity or piece ofequipmentat a facility needs to be fully described and included in an operating permit. The Commission has tailored the insignificant list afterthe 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 insignificant activities, 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 boilers with 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 applicationjustto identify the equipment as 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 determinethe 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 insignificant activities.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 impact on airquality 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, butonly 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 not always be known. The Commission has determined that research and developmentfacilities may base APEN reporting thresholds on actual instead of uncontrolled actual emissions. In addition, since owners and operators ofsuch

.facilities do not always know in advance what projects will be undertaken, the

Commission has allowed such sources to report emissions afterthe fact, in annual APEN updates to the inventory. Research and development activities are prime candidates forthe types of operational flexibility allowed in this regulation (see discussion below). The Commission encourages research and development activities to use the operational flexibility provisions. Some ofthe activitieswere described in the Statementof Basis and Purpose for the Commission's May 1993 Regulation Number 3 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 noteasily defined. For example, the uncontrolled emissions from a degreaser may be subjectto interpretation. The emissions from this type ofoperation depend on how often it is used and howfast objects are cleaned in the unit. Uncontrolled emissions could possibly mean that a person is standing atthe degreaser using the machine continually, and as rapidly as is humanly possible. The Commission recognizes that calculation of emissions forthis and similaroperations 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 of land for housing development, or preparation of land for oil and gas activities to occur. As stated above, insignificantactivity exemptions cannot be used if it, 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 Number 7 (i.e. the source is subject only to a case by case RACT determination), may take the APEN exemption based on the 1ton peryear de minimis level. The Commission has determined that RACTfor such small sources is usually no control. For construction permits, a source may take an exemption ifit is subject solely to awork practice standard of Regulation Number7. For example, degreasers used in the ozone nonattainmentarea (metro-Denver) are subjectto a specific Section of Regulation Number 7, which requires covers and properoperation. Degreasers in the nonattainment area are subjectto a specific Section ofthe regulation, therefore they mustfile APENs, however since the Section only requires work practice standards, no permit is required ifthe emissions are below the permitde 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 MACTstandards for 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 maywish to obtain enforcement protection for regulations, which do not apply. In such cases, the application must identify which regulations do not apply to the 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 permit can be reopened and the correct req!Jirements inserted.
5. Application Form and Checklist Operating permitapplications must contain a lot ofcomplex information, including identification ofall applicable (and inapplicable, ifthe permit shield is to apply) requirements. This can be a daunting task for the applicant. The Commission has directed the Division to develop checklists for use bythe applicant. One checklistwill identify all data that must be included in an application. Another checklistwill identify all air regulations. The applicantcan use the latterchecklist to identifywhich regulations apply to their source, and which don't. The State must submit 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 commentsfrom 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 not exactly follow, procedures setforth in the SIP. For example, suppose a source is required to meet a volatile organic (VOC) compound limit by using a coating that does not contain morethan a certain amountofVOC. The source could propose to meetthe limit by some other means than using such a coating. Their application would setforth quantifiable, 

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# I treplicable, accountable procedures thatwould showthatthey could still meetthe limit even though they would not be using the required coatings. Such procedure could consist ofusing control equipment, or using a combination ofcomplying and non-complying coatings forwhich the average emissions would meetthe VOC limit. Monitoring, recordkeeping and reporting procedures would be set forth in the permit. The procedures must be sufficientto show continuous 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, except thatthe 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 submit a plan to the appropriate entity. The Commission can take enforcement action against a source forfailure to submit a plan. Enforcementaction cannot be taken for failure ofthe source to meet any 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 insufficientto 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 muststate 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 authority to require monitors. The Division has used, and will continue to use, best engineering judgmentto determine when monitors are necessary and 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 notspecify 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 may speak specifically to continuous monitoring. The Commission will take into accountthis new rule and determine ifthe operating permit monitoring requirements should be revisited once the EPA rule is promulgated. By January 1994, the EPAwill publish a listofexisting rules, which do not contain sufficient monitoring, or recordkeeping methods, and will develop criteria that could be used to determinewhat 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 bythe 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 mustcontain all recordkeeping necessary to ensure compliance with the applicable requirements. The Federal Act requires such data to be maintained forfive years. The Commission has determined that sources need not keep a full five years ofdata on site for inspection review. Instead, sources are required to make immediately available to the Commission or Division data forthe pastyear, along with the compliance certifications forthe pastfive years. The actual data for the remaining fouryears 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 indicates that sources will most likely not be able to meetthe EPA's recommended two-day written 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 orout ofcompliance with an applicable requirement when monitors malfunction, it is not appropriate to include monitor malfunctions in the emergency provisions. Monitor malfunctions which would violate provisions which set specific operating conditions and specifications for the monitor, however, could be granted the emergency protection forthose specific performance conditions, ifsuch malfunctions were due to unforeseen circumstances and reported as setforth 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 account the inherentoperational fluctuations and abilities ofthe monitors. 

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# 1Sources must report any exceedances ofstandards, which are notdue to malfunctions oremergencies "promptly." The Commission has determined that including such deviations in the six-month monitoring report is sufficient. Thiswill not impairthe Division or Commission's authority to assess penalties regarding the deviation. Public Availability 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 partofthe 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 majorColorado HAP sources. MajorColorado 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 majorforfederal HAPs must obtain an operating permit, and provisions pertaining to the federal HAPs are federal, notstate conditions.) Since the operating permit is meantto be used as an all-encompassing documentfor sources and the Division, the source maywantto refer to only one documentto determine what needs to be doneto remain in compliance. Ifthe conditions are included in an operating permit, the source may choose 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 other operating 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/GACTstandards will be state-only requirements.
12. Confidentiality Applicants are allowed to classify certain information as being confidential in terms of product 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?
1. Completeness ReviewThe Division has sixty daysfrom receipt ofan application to determine ifall information necessary to process the application is included. Ifthe application is incomplete, the Division must notify the 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 must analyze the application, prepare the permit, and ensure that all ofthe procedural steps as set out below are met. Once all requirements are met, the Division will send the source its fee 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 mustoccurwithin sixty days ofthe notice. The Commission has provided an opportunity for sources to respond to any public comments received. This source response in noway affects the Division's time constraints for issuing the permit, nordoes it affect the 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, for their review.
4. EPA Review Once public notice and hearing are completed, the Division will make any necessary revisions to the draft permit, and will submit a proposed permitto the EPAfor their 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 permit can be issued.
5. Copies ofApplication The applicant must provide a sufficient numberofcopies ofthe application for submittal to the EPA, affected states and public notice, including copies for County Commissioners.
E. Renewals
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 not change from the initial application. The renewal application may only address operations which will change and which will require new permitterms orconditions. Copies ofall 

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# Imaterial 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. The time 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 application itselfvaries depending upon the type ofapplication. A breakdown of the allotted times follows: Public Notice: 30 days Hearing: 60 days
EPA Review: 45 days Division**Re~ponse:** 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, norfortransmitting the permitfrom one step to the next. The 220 days is required for public notice and EPA review only, it does not include any time forthe Division to actually review the application and drafta permit. Sources are allowed to seekjudicial review if a 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 determinethat 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 rightto operate ceases. Given thatthe notice and review procedures alone take 220 days, and the allowed flexibility, and the requirementthat 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 if hearings 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 months will give the 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 update their applications up to the time a draft permit is issued for public notice. This will allow sources a chance to address any last minute marketconsiderations 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 defense for the failure to apply for 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. Thefirst renewals will not be due until the year 2000. F. Reopenings Operating permits must be "reopened" during the term ofthe permit if new 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 or correction, notto address the entire permit. The Division must give 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 sources the 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 meet the 18-month deadline. G. Modifications States mustadopt expeditious procedures for processing changes that require a modification to a permit.
1. Administrative Modifications Administrative modifications are *minor changes to the permit, such as change in owner, more stringent monitoring requirements, orcorrection 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 not change when administrative modifications are made.
2. Minor Modifications The existing construction permit program requires sources to obtain construction permits before they construct or 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 at the time the modification is made. The Commission was faced with a dilemma. Since the construction

### permit program is a SIP requirement, sourceswould not be allowed to make minor modifications withoutfirst 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 net emission increase) The significant levels (defined in PartA ofthis regulation) are based on the potential to emit ofa source or modification. Since no construction permit is in place to limitthe potential to emitofa minor modification, all minor modifications will be triggered based on potential emissions, not actual emissions.
2. Modification which triggers New Source Performance Standards (NSPS) (Any change that increases the amountofany air pollutant)

- This definition only applies 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 their concern regarding the construction permit SIP requirements and minor modifications. The Commission has determined that it is appropriate to submit a SIP revision forthe 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, however all substantial requirements needed for a construction permit must be met. These requirements include ambient modeling to assess the modification's impact on 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 notapply to these modifications. Sources should be confidentthat 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 EPAcan take enforcement action againstthe 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 atthe source which are not administrative modifications, and which do not qualify as minor modifications. Such changes trigger PSD or NSPS, etc., or involve 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 of making the change. Ifa construction permit is obtained first, the source should apply at leastthree to four and a half months in advance (exceptfor PSD sources, which should plan 12 months in advance). Once the construction permit is obtained, the source may commence construction. The conditions ofthe construction permitdo not need to be incorporated into the operating permit until renewal, unless more than three years remains in the term ofthe 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 aftera 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 noticetothe Division. The permit shield does not apply. The Commission will allow sources to revert back to 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 not exceeded, 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 identify various 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 request that the 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 changes without notification to the Division. 

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# IOff 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 be Title I modifications, significant monitoring changes, etc.) Notethatthe 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 not adopt. 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 SIPswithin two years. The Commission will consider this provision once it is apparentwhatthe EPAwould approve. I. General Permits General permits are standard permits that apply to specific source categories. The sources in the category have similarapplicable requirements and similar monitoring, recordkeeping and reporting requirements. The general permitwill include criteria by which a source may qualify forthe permit. Sources that are outofcompliance 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 for the 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 existatthe time a construction permitwas obtained) may operate underthe general operating permitwithin 60 days ofsubmitting a complete application for the permit, which correspondswith 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 may operate underthe general permitas 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 apply for the 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 permit. General permitswill ideally be useful for minorsources thatwill be subjectto operating permits ata laterdate. Minorsources are more likely to be subjectto similar applicable requirements. The Commission has directed the Division to devote resources asthey become available to identification ofsources thatwould be suitable for general permitsand to the development ofgeneral permits. Candidates for general operating permits include sourcesthat become subject to new MACT/GACTstandards (i.e. dry cleaners), orexisting 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 sourcewouldjust reference in their initial or renewal application thatthey 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 for an entire majorsource only in those instances where the use ofgeneral permits is appropriate (homogenous, straight-forward sources). J. Title Ill (Hazardous Air Pollutant Requirements)
The provisions ofTitle Ill must be implemented through the operating permit program. As discussed above, all majorsources of HAPs must obtain an operating permit. As the Commission adopts MACT standards, the permit must be reopened to include the new requirements. As the EPA promulgates new MACTstandards, they will decide if minorsources as well as majorsources 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 MACTdeterminations for new major sources and modifications, ifthe EPA has not yet set a MACTstandard forthat category. The EPAwill be setting emission levels atwhich modifications are triggered. Once the EPA approves the State's operating permit program, ifthe EPAfails to meet its mandated deadline for setting a particular MACTstandard, the State mustdetermine MACTforthat source category within 18 months. Permits will be reopened to incorporate the State MACTstandard. Once the EPA determines MACTforthe category, permits may need to be reopened again, and sources may need to retrofit their 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 requirements through the Title V permits, as also required underthe Federal Act. Title IV sources (power plants) are required to submit the Title 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 so that Title IV sources can apply for Title IV requirements at the same time they apply fortheir initial operating permit. This could help avoid re-opening ofthe permit. To facilitate this, the Commission has determined that Title IVsources should be included in the last group 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 deals with Clean Coal Technology Projects and other modifications at utilities. The rule is currently slated for the spring of 1994 in the Commission's regulatory agenda. In the interim, the Commission and Division will 

# I I lcontinue 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, ifenforcement action 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.
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 Number7, require a case-bycase SIP revision for equivalent procedures, which involves public notice, a mandatory Commission hearing, and EPA approval. The new SIP equivalency provisions override Regulation Number7 provisions. All SIP equivalency proposals require public notice, opportunity for hearing (but not mandated if not 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 mostofthe 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 notavailable through the construction permit program, however sources 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 asthey are developed. The Colorado Act requires new sources 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 publicwhere appropriate, before a source constructs nearthem.
As discussed above under general 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,

### Ill. general permits may be suitable for sources wishing to obtain synthetic minorstatus, such as emergency and backup generators. Emission Fees Though it was not noticed for this hearing, some parties indicated they had concerns regarding the Division's policies forcharging 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 determine the most efficient and reasonable procedures and policies forassessing fees, therefore the policy will not be included in the regulation. The Division will prepare a written policy for public distribution on the methods itwill use to calculate and collect emission fees.
IV. Where Can a Source Go ForAssistance In Understanding the New Requirements? 

### A Small BusinessAssistance Program Even though existing minorsources (small businesses) are exempt from the operating permit program, small businesseswill need help understanding the construction permit program requirements. In addition small businesses need to understand the operational flexibility requirements, and need to understand if it would be advantageous for them to applyfor an operating permit. The EPA may decide that some minorsources should be required to apply foroperating permits as new MACT and NSPS standards are promulgated. Last September, the Commission approved a plan for developing a Small Business Assistance Program. The program is underdevelopment and is expected to be implemented and fully operational by Novemberof 1994. In the interim, Division staff is available to answerany 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 or quantity 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 exist on the ability to reliably estimate these emissions. The required studies are complex and costly, and EPA has indicated that the utility and non-utility boiler study will not be concluded until the end of 1995. The original time frame contemplated 

# I 

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## ..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 wastewaterare 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 PartA, Section II.E.

. Thiswas based in large part on the recognition that it would 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 atquantifying their emissions of non-criteria pollutants, the Commission has deferred APEN reporting requirements forfive source categories until six (6) months afterthe studies have been completed or December 31, 1994, whichever is earlier."
It is now apparentthat neitherthe EPA boiler study northe POTWstudywill be timely completed for effective implementation of' II.E. The clear intentofthe regulation is to postpone report of HAP emissions by sources such as utility and non-utility industrial boilers, POTWs and municipal-type wastewatertreatmentworks, pending the results ofthe ongoing EPAstudies. The rationale forthis intention is that it is technologically infeasible forthese sources to comply with this reporting requirement withoutthe results and utilization ofthe EPAstudies. The original intentand rationale for a postponement continue to pertain atthis time and provide the basis forthis rulemaking. Additionally, highly costly testswould 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 EPA studies. Moreover, ifsources attemptto formulate tests, inconsistencies with testing procedures, resulting data and interpretation thereofwould result, thereby further complicating issues for impacted sources and administration by the state. It is believed that using the EPAstudies 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 priordeliberations on this matter, the Commission expressed intentto revisit this December 31, 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 EPAstudies 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 intent concerning the underlying reporting. This issue may be revisited in the future ifthe information expected to be derived from the EPAstudies continue to be delayed.
The specific authority forthis regulation is contained in the Colorado Air Pollution Prevention and Control Act, 1992 as amended. The Legislative Declaration,' 25-7-102, recognizes thatan 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 majorstationary sources previously notified by the Division to submit applications by that deadline. The revisions to Regulation Number3 would phase-in the required submission ofoperating permitapplications 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 publicwelfare 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 accordance with the mandates ofthe federal Clean AirAct. The earliest date by which the Commission is able, pursuantto law, to promulgate such revisions and makethem effective is September 30, 1994. Sources that are subjectto the operating permit application deadline of November 15, 1994 will 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 moneywill not be available for the 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 not act 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 money to coverthe direct and indirect costs of implementing the Title V program. These costs include those necessary for the Division to review permit applications and issue permits within certain established timeframes, as well as to perform inspections and othercompliance monitoring actions. The EPA has indicated to the State, in a letter dated 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 mustact 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 Airact. In light ofthe evidence presented at the emergency hearing qn the difficulty and cost to 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 Number 3 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 that this emergency regulation represents any risk to public health. 

### 1.0. Adopted August 18, 1994Revisions to Regulation Number3 This Statementof 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.

The 1990Amendmentsto 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 AirQuality Control Commission adopted revisions to Regulation Number3 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 minorsources not otherwise subjectto the program. 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 April 8, 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 Number3 in response to EPA's comments. EPAalso noted certain legislative changes that are required in orderforthe State ofColorado to obtain full approval of its operating permit program. Therefore, atthis time, the Commission contemplates that the Statewill receive interim approval ofthe operating permit program; within 18 months after receiving the interim approval from EPA, the State must submit legislation thatwill satisfy all ofthe federal requirements. The EPA in its April 8 letter required the Commission to revise in certain respects the Statementof Basis, Specific StatutoryAuthority, and Purpose for Revisions to Regulation Number3 that was dated July 15, 1993 and which was submitted to the EPA on November5, 1993. The required revisions are reflected in this Statementof Basis, dated August 18, 1994. SpecificAuthority The specific authority for this regulation and its revisions is contained in the ColoradoAirQuality Control Act, 25-7-101, etseq. (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 authorityfor 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 istaken pursuantto 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, 1.8.22., 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 setforth in PartC, Section X.A. This is because EPA cannot allowthe minor permit modification procedures to be used forTitle I modifications; therefore, forthe minor permit modification procedures to have any use at all, this change was necessary. All modifications must still comply with the requirements of40 CFR Part 51.165, as reflected in Regulation Number3, Part B, IV.D.1.a.-h. In effect, this change merely allows an operating permit source to modify without going through the procedural requirements ofobtaining a construction permit, but still requires the source to meetall substantive requirements.
4.

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### 6.

7.

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### 9. Part C, X.A.5., XII.A.1 and XII.B. were revised to reflectthe change described in paragraph Number3 above.
PartA, 1.8.62, a definition of"state-only condition" was added. This term is used throughout Regulation Number3.
In PartA, Section II.D.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 newsource performance standards apply to storage tanks ofcapacity > 40,000 gallons, the Commission revised these provisionsto ensure thatthe exemptions would notallow a source to avoid new source performance standards.
In PartA, 11.0.5., the Commission established an administrative procedure whereby the Division could process and grant requests forexemptions 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 procedureto 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.
PartA, 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, without the need for a SIP revision. At this time, Colorado does not have an EPA-approved generic emissions trading program. To obtain EPA approval ofthe State's operating permit program, the Commission amended this provision to clarify that the trading based on the permit may be utilized only ifthe SIP contains an EPA approved trading program. At Part B, III.A.6., the Commission clarified thatthe provisions of IV.D.1.a.-h. must be met in orderforthe 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 stringentas an applicable requirement so long as the permitcontained provisions to ensurethat the 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 ifit 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. 

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### 111.8.7., the Commission clarified that a source applying fora combined construction/operating permit mustfirst obtain the permit priorto commencing construction.
12. In Part C, III.C.12., the Commission clarified that ambient air quality standard considerations in issuing permits apply only to temporary sources (pursuantto the federal law), and to new and modified sources applying for a combined construction/operating permit (pursuantto state and federal law). Although this was alwaysthe case, the provision previously could have been read to allow consideration ofthese standards in issuing operating permits.
13. 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 minor sources, however, could avoid the public participation, EPA and affected state review provisions. The EPAwas concerned that synthetic minor sources would be able to 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 thatsynthetic 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 majorsources to avoid public participation and review. The Commission clarified these provisions to ensure that such was notthe case. 14. In Part C.Ill.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 MACT standard for a particular HAP, all sources, even those not subjectto the particular MACTstandard, and even those not in the source category, mustaddress 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 MACT standard 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 only for a particular source subjectto the case-by-case standard, pursuantto 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 thatterm is defined in PartA, SectionII.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 netout and avoid the need to revise its permit. Atthis time, the emissions trading provisions of PartA, Section V, have not been approved by EPA as generic trading provisions. Therefore, until the Colorado SIP contains a generic emissions trading policy approved by EPA, each emissions trade requestwill require a case-by-case SIP revision. EPA is intending to provide guidance for an emissions trading program in the nearfuture.


### I.P. Adopted March 16, 1995 Revisions to Regulation Number3 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 B, in orderto clarify howthe provisions relate to each and the federal regulations. These changes were necessary in orderto gain federal approval ofthe State Implementation Plan. Specific StatutorvAuthority
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 consistentwith the legislative declaration and necessary for the proper implementation and administration ofthe Colorado Pollution Prevention and Control Act, including a comprehensive state implementation plan which shall meetall 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, Parts A and B are ofa general housekeeping nature. However, three provisions require greaterexplanation: The Division originally proposed adding a definition of"construction" consistent with 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 B, in the General Provisions Regulations; that definition matches the state statutory definition. The changes to the definition of"Net Emissions Increase" in Part A, Section I.B.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 Number3. Also, the source has two choices for proving the extent ofthe emissions increase or decrease: (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 ordecrease (the difference between the twoAPENs is the amount ofcreditableincrease 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 makethe before and afterdemonstration any time during the contemporaneous period).
The general constructions permit provisions of Part B, Section IV.J. were amended to provide greater detail ofhowthe Division would actually implementthe provisions. The Division retains the discretion to determine whether it will 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 will state in the general construction permitthat goes outfor public notice all the criteria a source must meet in orderto qualifyfor coverage underthe permit, the method ofapplication (including specific application forms ifdifferentfrom a standard construction permit), the deadline forapplication, 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 determinewhetherthe 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 permit orcircumstances change such thatthe source is no longerappropriately controlled underthe general construction permit). Overall, the amendments to Regulation Number 3, Parts A and B are meantto integrate with 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 Statementof Basis, Specific StatutoryAuthority, 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 limit a 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 by the applicant, thus allowing the source to avoid a variety of requirements such as Title V operating permit requirements, Title Ill maximum achievable control technology (MACT) requirements promulgated by the U.S. Environmental Protection Agency (EPA), or Colorado MACT requirements. Specific Statutory Authority The specific authority for these 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 adopt emission 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 exempts those 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 thespecific 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 permanent addition of Regulation Number 8, Part E, Section IVand amendments to Regulation Number 3, Part B. Following is a description ofthe purpose ofeach Section within Regulation Number8, Part E, Section IV: Section A ofthe rule clarifies that Regulation Number8, Part E, Section IVapplies to sources that choose to voluntarily limit their potential to emit HAP. This Section clarifies that although the Division shall issue permits to qualified applicants, the Division will not include in the permit any 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 in the 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 forthe emission unitora numberofemission units. Ifthe permit applicant wants a thorough review ofthe facility and a determination by the Division that the facility qualifies as a synthetic minorfrom Title V and/orTitle Ill, orotherspecific 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 they wantto limitthe potential to emit hazardous or criteria pollutants. Sources may wantto bring their emissions belowTitle V majorsource thresholds or may wantto limittheir emissions below affected source thresholds underspecific MACTstandards or enhanced monitoring thresholds when those rules are eventually enacted. When a source applies for a permit under Regulation Number8, the Division uses the procedural provisions of Regulation Number3 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 applyto minororarea sources of HAP or state conditions; however, such sources may request a permitto further limitthe potential to emit HAP belowthe trigger threshold. Section 8 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 permit conditions to limita source's potential to emit shall be only as stringent as necessary to limitthe source's potential to emit the pollutant ofconcern. For instance, the Division cannot require a source to add control equipmentto reduce emissions significantly ifthe source can adequately reduce emissions without that control equipment. The applicant may consolidate reporting or monitoring requirements from this regulation and Regulation Numbersforthe emissions unit. Finally, if requested by the applicant, the permit may include alternative operating scenarios, approved bythe Division. Such alternative operating scenarios shall include specific monitoring, recordkeeping, and reporting methods as needed. However, Section IV.8.4 for alternative operating scenarios is not intended to include modifications that trigger 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 intentfor the Division to be flexible in its approach to permitting these sources. Although the Division would prefera consistent approach (i.e., all applications filled outfully), the Division recognizes that often these sourceswill 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 have the Division calculate emissions and determine the permit conditions forthem.Section D, the public participation requirements, is a requirement of EPA. This Section makes mandatory whatwas previously discretionary forthe Division. Section E clarifies thatthe Division can combine the requirements from this Regulation with those for limiting the potential to emitcriteria pollutants under Regulation Number 3 into a single permit so that it is easierfor both the Division and the source to keep track ofthe overall permit requirements. Also, this Section IVof Regulation Number 8 is not intended to restrict the ability ofa source to apply for and the Division 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 complywith that requirement. Section G informs the source that is mustcomply with the permit conditions atall times, i.e. on an ongoing basis. Section H serves as an interim mechanism for gaining federal enforceability ofthe permitand is based on EPA guidance on potential to emit; this Section does not apply 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 EPAand 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 Number 3 are necessary to implementthe provisions of Regulation Number 8, Part E, Section IVthrough 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 authorityto limitthe potential to emit HAP in a construction permit. The amendments to Section IV.C implementthe public participation requirements of Regulation Number8, Part E, Section IV. The requirement thatthe Division submita copy ofthe public notice to EPAfor sources applying for a permitto limitthe potential to emitcriteria pollutants orfederal HAP is meantto include criteria pollutants (already required underan agreement between the Division and EPA) and federal HAP listed in Appendix A of Regulation Number 8 (these are the HAP listed by EPA under Section 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 Number 3 while providing the added authority for the 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 Revisionsto 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 Number 3 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 states to inventory airemissions. C.R.S. '25-7-114.1 contains the requirements for this inventory. TheAmendments also authorized EPA to 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 forthese emissions.
Based 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 ofnon-criteria reportable pollutants forthese sources until July 31, 1995, or until six months afterthe completion ofthe national studies, whicheveroccurred first. The postponement also 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 ofMetropolitan 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 POTWsfor purposes ofthe Clean AirAct " 1120) and (g) at about this time. Authority
The specific authority forthis 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 outan 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 available to these sources in time to allow for sufficiently reliable APEN reporting. 

### I.S. 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 diameterofless than orequal to a nominal10 micrometers (PM-10) increments. TSP continues to have a significance level for newsources but no longer influences the PSD increments. Additionally the Division has identified several mistakes in the publishing of Regulation Number3. Specific Authority 

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# IThe 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 The 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 adopta permit program forthe preconstruction review of newstationary sources and modifications ofexisting stationary sources to prevent significant deterioration ofexisting airquality levels. The implementation ofthe new PM-10 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 forTSP will 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. Therewere 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 8, Section IV.D.4
This 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, Section 25-7-110.5, C.R.S.

Regulations 3, 7 and the Common Provisions establish lists of Negligibly Reactive Volatile Organic Compounds (NRVOCs). The revisions adopted consolidate the list of NRVOCs into the Common Provisions, assuring thatthe same list of NRVOCs apply to all the Colorado Regulations. This provides more consistency in those chemicals regulated as VOCs. Specific StatutoryAuthority The ColoradoAir Pollution Prevention and Control Act provides the 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., grantthe Commission the authority to 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 of non-photochemically VOCs), and adopting the EPA definition by reference, a single list ofnegligibly reactive VOCswill apply uniformly to 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 ofnon-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 ofnegligibly reactive VOC's provides additional flexibility to sources looking for an alternative to more photochemically reactive VOCs. Because the EPA has added acetone to their list ofnon-photochemically reactive VOCs many industries, which make and supply products to Colorado industries, are planning to substitute acetone for 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 benefitfrom this possible shift in product contents. 

### I.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 Number3, PartA, Section II.E.1., were designed to postpone reporting ofnon 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 enactment ofthe federal act, i.e., by November 15, 1993; however, EPA has yet to do so. During the Commission's lastdeliberations on this subject, it was stated that if EPA could not meet its deadline, then the Commission would revisit this 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 December 31, 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 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 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 at this 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 ofemission of- an application for an operating permit. This revision is administrative in nature, and is not intended to affect airemissions.
I.V. 

### Adopted March 21, 1996 Revisions to Parts A, 8 & 

### C for Insignificant Activities (Parties: Air Pollution Control Division, Colorado Association ofCommerce & Industry and the Colorado Utilities Coalition for Clean Air Division - Part A, Section 1.8.9.a; Section II.D.1.kk, 4.a, b.(iii) 

### &(vi); Part C, II.E.3.kk 

# IThe Division reviews the addition ofany requested insignificantactivities to Regulation Number3 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 degreaserexemption provides that degreasers not using any chemicals covered by a Maximum achievable Control Technology (MACT) standard and meeting the definition ofsmall remote reservoir are not required to submitan APEN to the Division. Thetorch 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 or categories ofsources, which itdeterminesto 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 airquality. Purpose
This rule change provides some clarification and additions to the APEN exemption listforthose sources that the Division believes to be ofminorsignificance. 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 power generatorswith limitations based on the size or hours ofoperation. The revisions rely on EPA guidance regarding emergency powergenerators. Authority
The specific authority for this regulatory amendment is contained in C.R.S §25-7-114.1(2), which requires the Commission to exemptthose sources orcategories ofsources, which itdeterminesto be of minor significance from the requirementthat an air pollutant emission notice be filed. C.R.S. §25-7-114.6(1) requires thatthe Commission designatethose classes ofminoror insignificantsources ofair pollution that are exemptfrom the requirement for an emission notice orthe payment ofan emission notice filing fee because oftheir negligible impact on airquality. Purpose
This rule change provides an addition to the APEN exemption listand clarification ofthe insignificant activities listfor emergency power generators that are ofminorsignificance 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).iv to 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 Number 3., 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 Number 3, Parts A and C. Alternative proposals were submitted by members ofthe public, and afterconsultation, were endorsed by the Division. SpecificAuthority Section 25-7-114.1 provides authority to the Commission to identifyAPEN 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 developmentof 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 orsources that are insignificant for 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 ofneighboring states. These revisions are administrative in nature, and are not intended to affectairemissions. Non-road Internal Combustion Engines: Machinery utilized by the construction and service industries such as various types ofpumps, light plants, compressors, and generators are powered by various sizes of internal combustion engines. Most are 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 most of these machines in the past. The sizes ofmost ofthese engines are comparable to the thousands of light and heavy trucks (gasoline and diesel powered), which travel the roads in this state without any reporting requirements. The EPA proposal ofMay 17, 1990 (58 Fed. Reg. 28809) and the EPA study 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 it did not propose manufacturing standards for spark-ignition engines because little to no emission benefitwould be achieved fortesting, 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 ofhydrocarbons, carbon monoxide and particulate matteremissions 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 forthe light commercial equipment described 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 exempt engines located on a trailer ortruck bed. These engines are relatively small (dictated by trailer size and carrying capacity limitations) and power light commercial 

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### equipment, such as welders, 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 forAPEN exemption purposes. Using emission factors from AP-42, expected emissions from a 175 horsepowerdiesel engine operating 24 hours per day, 7 days perweek, 52 weeks peryear at a load factor of0.5 would presenta "worst case" estimate underthe 8760 hours peryear "potential to emit" methodology. The following emissions are calculated: -0.5 ton peryear ofcarbon monoxide -0.2 ton peryear of hydrocarbons -0.2 ton peryear ofparticular matter -2.5 ton per year of nitrogen oxides -0.2 ton peryear ofsulfur oxides
A 300 horsepower engine could operate up to 3 hours per day, or 1095 hours peryear, and have the same emissions as the 176 horsepower engines. Similarly, an engine up to 750 horsepowercould operate 1 hour per day, 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. Surface water storage impoundment of non-potable water and storm water evaporation 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 ofnon-potable water maintains these sources as insignificant. Properflow keeps 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 of pressure in steam lines. Emissions out ofthe safety valves consist only of pure 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 of lube 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 of natural 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 of natural gas to safe areas away from personnel and ignition sources. The intermittentdischarge ofnatural 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 one ton ofVOC's or more than 110 pounds ofhexane a year. Sulfuric acid storage tanks notto exceed 10,500 gallons capacity and sodium hydroxide tanks: Sulfuric acid and sodium hydroxide, used to control pH, are stored in tank systemsvented to the atmosphere. These vents will exhaust vaporfrom 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 that the 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 ofnon-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. EPA was directed by Congress to complete those studies within three years after enactment ofthe federal act, i.e., by November 15, 1993; however, EPA has yet to do so. 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 original December 31, 1995 deadline. The EPA did 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 1996 that substantially contributed to further delaythe study's progress. SpecificAuthority Section 25-7-114.1 provides authority to the Commission to identify APEN 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 respect to APEN reporting ofemissions. 

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# IPurpose A short postponementofthe 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 effector proposed, EPA and Division interpretations provide that an applicantfor a Title V operating permit need only listnotestimate 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 affectairemissions. 

### I.W. Adopted March 21, 1996 Revisions to Part B, 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 imply that, upon such redesignation, gasoline stations in the Denverarea would not be required to obtain a permit because that area would become an attainmentarea. However, Section III.D.5 goes on to provide thatsuch exemptions do notapply because gasoline stations are subjectto the RACT requirements of Regulation Number7, Section Vl.8.3.b. The purpose ofthe revisions is simply to make it clearfrom the text of Regulation Number3, Part 8, Section III.D.1.falone thatgasoline 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 ensurethat permits for de minimis exemptions from, and alternative means ofcompliancewith, 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 Number7 provide the agency with the authority to revise the requirements that apply to a sourcewithout revising the SIP. The SIP requirements were developed and adopted following review and comment by EPAand the public. Itfollows that any change in those requirements with respectto 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 out at§ 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 necessaryfor 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 effecton any person, facility oractivity. 

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### II omm1sS1on a op· e t ese regu at1on rev1s1ons as o ows: Regulation Revision Ozone SIP and Maintenance Plan
Part 8, Section III.D.1.f Exists in Appendix C ofthe Ozone Maintenance Plan to be come a partofthat documentapproved March 21, 1996
Part 8, 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, 1996Revisions 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 letter ofSeptember 19, 1994, which provided comments on the revisions to Regulation Number3 forthe operating permit program. The comment made by EPAwas for clarification, nota requirement thatthe State should not charge for fugitive 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 emissions 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 that the revenues from fees collected by the Division approximate the annual appropriations to the Division to carry out its duties with respect to 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 for fugitive dust orfugitive emissions as those terms were defined atthe time in "Commission rule I.B.1 of regulation number 3, 5 CCR 1001-5." That rule defined only fugitive dustand 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 for fugitive 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 determinesthat these revisions are administrative in nature and are not intended to reduce air pollution.
I.Y. Adopted June 20, 1996 Revisions to Part A, 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 Dfor Hydrogen Sulfide Background The Division requests thatthe Commission adopt changes to Parts A and C and the Appendices within Regulation Number3 to better reflect current EPA implementation ofthe Title V operating permit program. These changes include: (1) noting that a source majoronly for Total 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 B, C, and D of Regulation Number 3 to reflect the federal delisting ofthis pollutant, and; (3) expanding the definition of "applicable requirement" in PartA 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 thatthe 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 reflectthe federal program requirements. Currently, H2S is reflected as a HazardousAir Pollutant in Appendices B, 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 theAppendices, sources emitting H2S have been charged annual fees for HAPs and sources majorfor H2S emissions could be required to getan Operating Permit. The current definition ofapplicable requirement in PartA, Section I.B.9.a does not provide authorityfor 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 the federal act. Section 25-7-114.4(1)(I) and Section 25-7-114.4(3)(a) provide authorityfor promulgating regulations forthe effective administration ofconstruction and operating permits, and complying with all applicable requirements for operating permits. Section 25-7-114.5 provides authority for evaluating permitapplications to determinewhether operation and emissions comply with all applicable emission control regulations. Relevantfederal law includes42 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 forTSP is not required to receive an Operating Permit. This amendmentensures conformity with the federal law. The amendments delete the reference to Hazardous Air Pollutant noted nextto hydrogen sulfide in Appendices B, C, and D. This ensures consistency with the Federal delisting and eliminates the potential confusion for sources thatwill be majoronly based on emissions of hydrogen sulfide as a Hazardous Air Pollutantto obtain an Operating Permit. The amendments expand the definition ofapplicable requirement in PartA 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 mostcosteffective manner by enabling sources to incorporate federally issued PSD permit into their Operating Permit. Thereby, these sourceswill only be reporting to one enforcementauthority. 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
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, 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 Number5 and revisions to Regulation Number3 for the purpose of implementing 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 that these 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. This will 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 that will 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 AirAct 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) everexpire? Some believe that an ERC once used, even iffrom a permanent reduction, should expire aftersome period (e.g., 20 years). Conclusion: The Commission, based on the experience in the previous trading rules, decided that the permanent credits should notexpire afterthey are put into use. 

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### 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 fartoo difficultto verify thatthere had been a decrease in demand (a decrease in actual emissions) and not a variation in the grid structure, and therefore atthis time finds it is inappropriate to allow a decrease in demand to generate ERCs. 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 thatthe Division staff is not placed in the position of having to develop information and protocol to supportan inter-pollutanttrade proposal, the Commission finds thatthe burden of proving the acceptability ofan inter-pollutanttrade 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 opportunity to make their case to the Division and EPAfor approval. This amendmentattempts to address the EPA concern. 7. Issue: The proposed rule states thattemporary credits must be credited and traded within the same "season" for seasonal pollutants. Should temporary credits be allowed to be traded from a season of lower concern to a season of higher concern? Conclusion: The Commission finds thatthe use oftemporary credits should be restricted to the same season in which they were generated, ora season oflowerconcern. Thiswill 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 not currently available and funding may be needed for this program. 8. Issue: Should the rule contain procedures or criteria specificto trading Hazardous Air 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 or greatertoxicity than the HAPs contained in the emissions forwhich the ERC will be used in lieu ofsatisfying an applicable requirement. Section VI.G.8 does not operate 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 at a 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 likely to be representative ofnormal operating conditions. Where the source can showthat the period is not representative, the rule allows source flexibility in determining their pre-reduction actual emissions. 10. Issue: Should the Commission give authority to the Division to allowdiscounts from the ten percent contribution ofemission reductions for air quality benefitsforgenerators 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 or other 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 awayfrom 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 BACTtechnology requirements in situations where such technology requirements are not cost-effective orexacerbate other pollutant emissions, and the use ofan ERC would achieve the same purposes more efficiently. In such instances, itwill be incumbent on the source to demonstrate that 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 not to allow a source to remove BACTwhere it has already been installed. The Commission concludes that use of ERCs in lieu ofemissions reductions from LAER is not appropriate because ofthe potential impacts on nonattainment areas. 12. Issue: Howwill the local effect of "hot spot" pollutanttrades be analyzed to prevent a local criteria pollutant exceedance dueto 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.? of Regulation Number 5 requiring modeling for all trades in orderto ensure that trades do not cause or contribute to a NAAQS exceedance, an increment exceedance, orany 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 that the trade has a negligible impact. 13. Issue: How and who modifies the conformity budget for intersectortrading? With mobile to stationary source trades, does the emission budget increase afterthe life ofthe credit has expired, and how is this accomplished? 

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# !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 either a SIP revision ora 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, ifmobile 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.
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 existto 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 imperative that 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 determinetheir own permitted emissions levels when they file theirAir Pollution Emission Notices. For example, a source with a ninety-five ton peryear 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 thatthe source has a five-ton buffer. The source may then fluctuate its emissions between forty and forty-five tons withoutviolating 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, for example, simplyfile an APEN with higheremissions estimates and thereby increase its permitted emissions. The effectwould be to allow emissions forwhich 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 notacknowledge any sub-regional emission budgets, dispersion modeling requirements, or other spatial considerations contained in attainment and maintenance demonstrations for specific SIP elements. Conclusion: The original proposed regulation did not have a modeling requirementfor 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 showthatthe ERC use would have a "negligible" impact. The Colorado Association ofCommerce and Industry expressed a concern thatthe Division would require costly or unnecessary modeling in most cases. This concern stems from the lack ofdefinition ofwhat is "negligible" in thejudgmentofthe 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 incrementexceedance, orviolation ofa SIP provision such as neara "hotspot" in a nonattainment area orwhere ambientconditions 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/AirQuality 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 

### 1 areas from long-distance trades.
In addition to the issues discussed above, the Commission also considered concerns about granting ERGs for emission reductions that occurred in the past. This rule allows a source to use credits generated underthe 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 attainment or reasonable further progress for SIP purposes are rrot eligible to qualify as ERGs.
The Commission recognizes that use of ERGs 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 ERGs. 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 ofproposed permits and modifications will also apply to permitactions to approve use of ERGs. 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 ERGs. Accordingly, the Commission has included a requirement thatthe Division notify local governments in the affected area when the trade will result in the use of ERGs, which would exceed the threshold for, or otherwise trigger, public notice and comment pursuant to Section IV.C.1 of Part B, Regulation Number 3. The Commission anticipates that local governments will be able to usethis 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 comment fortrades that involve HAPs, which would be implemented by notifying the local government pursuant to 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 ERGs 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 that this program does notgrant credit for "paper" reductions, the rule prohibits generating ERGs where this business shiftwill replace emissions within the same airshed. This determination will be made on a case-by-case, fact-specific basis. Specific StatutoryAuthority 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 forcredits. The Commission makesthe 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 that the provisions adopted will result in a demonstrable reduction in air pollution. This reduction is accomplished through the retirement of 10% ofthe achieved reduction in emissions.
3. The revisions selected maximize the air quality benefits ofthe emissions standards that apply. The revisions selected are the mostcost-effective based on the documents submitted by the parties under Section 25-7-110.5, and provide the regulated community with flexibility in meeting emissions limitations. Although the requirementfor increased emissions modeling may impose additional costs, the Commission believes this requirement is necessary to ensure that no violations ofairstandards will occuras a result of using ERGs. 

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

### 8, C
This 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, Section 25-7-110.5, C.R.S.

Regulations 3, 7 and the Common Provisions establish lists of Negligibly Reactive Volatile Organic

. Compounds (NRVOCs). The revisions adopted update the list of NRVOCs so thatthe state list remains

consistentwith 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 Number 8 and 3 listthe federal Hazardous Air Pollutants (HAPs). In the June 8, 1996 Federal Registerthe EPA removed Caprolactam (CAS 105-60-2) from the federal list of Hazardous Air Pollutants. The conforming changes in Regulation Number 3Appendices 8, C and D have been madeto keep the list offederal HAPs in Regulation Number 3 consistentwith the federal list. The list of HAPs in Regulation Number 8 has been removed and a reference to the list in Regulation Number 3 has been added. Specific Statutory Authority The Colorado Air Pollution Prevention and Control Act provides the authority for the 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., grantthe Commission the authority to promulgate regulations pertaining to organic solvents and photochemical substances. Sections 25-7- 105(1)(1)(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 Number 3, 7, 8 and the Common Provisions are intended to update the state lists of NRVOCs, the Ozone SIP, and HAPs for consistency with the federal lists. 

### 1.88. Adopted November 18, 1999Revisions 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
This Statement ofBasis, 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 implement compliance assurance monitoring ("CAM") for pollutant specific emission units at major stationary 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 datafrom 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 other statistical 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 that satisfies 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 by which CAM plans must be submitted by owners and f ff d operators 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 INITIAL Application REVISION Ap_Qiication RENEWALAp_plication "Large" PSEU (see 40 IfTitle V permit Ifa significant permit IfTitle V permit C.F.R. Section 64.5(a)) application is not revision1 at an existing application was complete by 4/20/98 OR Title V source complete before 4/20/98 if PSEU part ofa greenfield permit application after4/20/98 "Other" PSEU (see 40 Never Never Always C.F.R. Section 64.5(b))

· 1. "significant permit revision" is defined as "significant permit modification" in Colorado Air Quality 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 Colorado Air Quality Control Commission.In the eventofa significant proposed operating permit modification that may triggerthe earlier application ofthe CAM rule, the rule's provisions only become applicablewith respectto those pollutant specific emission units forwhich the proposed operating permit revision is applicable. See 40 C.F.R. Section 64.5(a)(2).

Regulations 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 approximately 2,000 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 testimony from members ofthe publicwhowere concerned thatthe implementation ofthe rule would have the effectof making existing applicable requirements more stringent. It is the Commission's understanding howeverthatthis is notthe purpose nor should bethe 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 authority to 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 underColorado 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 B: Concerning Construction Permits, Including Regulations forthe Prevention ofSignificant Deterioration 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., 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 Number 3 contains permitting, monitoring, reporting, visibility protection, and fee requirements. Specific StatutoryAuthorityThe 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 forall state land managementagencieswith 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 affectany mandatory federal class I area within Colorado. This Section also directs the Commission to use the inventories to develop control strategies for 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 for the state to develop information importantto its efforts to protect and enhance visibility, particularly in mandatory federal class I areas. This bill specifies the types of information 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 ofemissions within 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 December31, 2002 and at least every 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 of inventory information by the federal land management agencies by December31, 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 about this requirement for more than two years. The Commission anticipates that submittal ofthe regional emission inventorywill provide enough information to reasonably meetthe December 31, 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 per day ofcriteria pollutants and that this 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 ofminor significance. This rule does notcontain such an exemption because little is known aboutseveral ofthe source categories (e.g., biogenic sources). The Commission may consider at a latertime whether such an exemption is appropriate based on additional information that may be gathered. The Commission elected forthe 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 intended to exemptagencieswith relatively small amounts ofland (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 smaller agencies did notjustify the 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 managementagencies 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 everyfive 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 adoptalternative 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 Statementof Basis, Specific StatutoryAuthority and Purpose complywith 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 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 of basis, 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 make the 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 discussionswith 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 The 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 Air Quality Control Commission authority to promulgate rules and regulations necessary for the proper implementation ofthe Act, including regulations to assure attainmentand maintenance of national ambientairquality 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, 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 Number 3 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 made to 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 perspective while 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 other general 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 or duplicative 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 of major 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. Changes were made to 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 amount ofactual emissions exists, this information can be used to demonstrate a netemissions decrease. The definition ofsignificantwas also changed to clarify thatthe Prevention ofSignificant Deterioration (PSD) and New Source Review (NSR)- nonattainment area (NM) programs do not apply to certain hazardous air pollutants. Specifically, the state PSD and NSR/NM programs exemptthose hazardous air pollutants that are exemptfrom the federal PSD and NSR/NM programs pursuantto Section 112(b)(6) ofthe Federal Act. In addition to the clarifications, formatting and readability changes madeto the definition Section, a number ofdefinitionswere added or modified to reflect developments in federal law. For example, the Commission revised the definitions ofactual emissions and major modification to inc:lude specialprovisions governing physical oroperational changes at electric utility steam generating units. These changes were necessitated by changes in the federal regulations arising out ofthe 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 consistentwith federal requirements since 1994when the Colorado General Assembly enacted HB94- 1264, Section 25-7-109, C.R.S. The WEPCO definitions have been added, consistentwith EPA's regulations, in orderto clarify the meaning and scope ofthe changes to the definitions ofactual emissions and 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 periodic APENs which sources file pursuantto Regulation Number3, Part

### A, orfrom other credible information, such as data from continuous monitoring systems. The filings by sources in the past, such asAPENs, 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 of major modification was further changed to restrict what constituted a temporary activity. Under both the old and new regulations, temporary activities are notconsidered 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 new version 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 asto what constitutes ongoing construction. Such a determination must be made on a case-by-case basis, but generally, construction lasting more than two years will be considered ongoing.
Atthe suggestion ofthe regulated community, the definition ofcommenced construction was supplemented to identify the entire range ofpre-construction activities that may be undertaken without obtaining a construction permit. Provisions governing regulation of non-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 notapply 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 CourtofAppeals, 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 ofambient airquality standards. To reconcile these conflicting concerns the regulatory revisions create a new state-only non-road engine program for certain non-road engines. The Commission's authority to establish a non-road engine program and to regulate the operation ofnonroad 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 submit an APEN and pay appropriate APEN fees. Ifspecifiedemission levels are tripped in the APEN, the program further requires thatthe source obtain a temporary permit and pay applicable permitfees. The permitwill include such use restrictions as are necessary to prevent an exceedance ofambient airquality standards. Non-road engines that are mobile orself-propelled equipmentsuch as bulldozers, haul trucks, watertrucks, loaders, shovels, backhoes, road graders, cranes orsimilar mobile equipmentare not subjectto the state-only permit program and are not required to obtain an APEN. Whether an engine qualifies as a non-road engine as opposed to a stationary source will 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 not constitute use ata single location. This provision, however, is not intended to allow a 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, Part A, 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/or emission 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 conditions when 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 permit actions subjectto public notice requirements.
B. Changes to APEN Program The Division proposed to add record keeping requirements to a number ofAPEN exemptions. The Commission did notadoptthe specific record keeping language in PartA ofthe regulation. The intent of the Commission, however, is that sources should have records or other 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 requirement for 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 for the 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 throughput threshold for the 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, languagewas added to clarify that sources in the Denver ozone attainment-maintenance area must stillutilize Stage 1vapor recovery on all tankswith a capacity greaterthan 550 gallons, as required by Regulation Number7. While ordinarily sources subjectto 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 thatthe Regulation Number7 vapor recovery requirements are met. An APEN exemption forwet screening 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 comply with a zero visible emissions standard. Ordinarily, a source that is subjectto a New Source Performance standard precludes the source from taking an APEN exemption pursuantto the catchall provision in Section II.D.4. It is the Commission's intentthat in this particular case, application of NSPS Subpart 

### 000 shall 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 nonattainment areas. Underthe prior regulation, ifan area was nonattainmentfor any pollutantthe lower nonattainmentde 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 operationswas changed to provide greater clarity and to be consistentwith the requirements ofthe StateAct. Conforming changeswere also made to the agricultural exemption set forth in Part C.
Because Regulation Number 3 and the Common Provisions Regulation underwentcontemporaneous review, the primary focus with respect to duplicative provisions was to eliminate duplications between the two regulations. Duplicative provisions thatwere only applicable to Regulation Number 3 were deleted from the Common Provisions Regulation. Provisions applicable to multiple regulations remain in the Common Provisions and were deleted from Regulation Number 3. Certain non-Regulation Number 3 duplications were also addressed. A full review ofall the Commission's regulations was not undertaken atthis time. It is expected thatthere are additional duplications that 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 accordance with the procedures and amounts setforth in the Act. This change alleviates the requirement of revising the regulation every time the 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 provisionswere 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 difficultforthe Division to determine whethera 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 for evaluating such claims. This should benefitthe Division and the regulated community by providing a clear understanding ofconfidentiality protections. Pursuantto the State Act, information submitted as partofan air pollutant emission notice, Permit Application orOperating Permit reports is confidential only if it 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 enforcementaction may be entitled to confidential treatment if it constitutes a trade secret. The current regulatory revision is not intended to alter oraffectthe protections offered under Section 25-7-111(4), C.R.S.
In cases where the Division determines that certain information is not subjectto 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 of public records within three days after a request for such records. The notification period is intended to allowthe source the opportunity to obtainjudicial 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 necessary to provide actual notice to the source as soon as a determination is made, so thatthe 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 improve the 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 conduct an inspection to determine compliance. Because an inspection during the initial approval period is not required by law, the new regulation makes the inspection discretionary. This provides necessary protections in those instances where an inspection may be needed. The provision was further modified to give the 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 sources when 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 permit exempt source loses its exemption based on addition of new 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 that these plans must be submitted priorto obtaining final approval. Significant changes were made to the post construction monitoring requirements for the 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 made within 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 C at Section V.E. Section V.B. has been changed to reflect that the 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 made throughoutthe regulation to address changes in areas from the nonattainment classification to the attainment/maintenance classification. A search ofthe regulation was conducted to identify those provisions that depended on the area being classified as nonattainment. When a requirement remains in place afterthe reclassification ofan area, the word nonattainmentwas changed to attainment/maintenance. Otherwise, no change was made. A substantive change was madeto the applicable de minimis levels for permit exemptions in attainment and nonattainmentareas. Under the prior regulation, ifan area was nonattainmentfor any pollutantthe lower nonattainment de minimis levels applied for all pollutants. This has been revised so thatthe 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 Aswith Parts A 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 other Sections regarding exemptions included in Part C were madeto conform to exemptions in PartA and B. Provisions regarding the phase-in ofthe operating permit program were deleted since these provisions are now obsolete. Section III.B.2., sets forth certain timing requirements with respect to submitting operating permit applications. The prior regulation was unclearas to the new legal requirements for sources subjectto the operating permit requirement afterstart-up by operation of law. The revised provision clarifies that sources shall submitan 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 Prior to this rulemaking, Regulation Number 3 included four appendices: Appendix A, Method for Determining De Minimis Levels for Non-Criteria Reportable Pollutants; Appendix B, 1993 Non-Criteria Reportable Pollutants; Appendix C, 1994 and SubsequentYears 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 Bin orderto maintain continuity in the regulation. 

### I.EE. Adopted October 17, 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 Number 3 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 are deemed to be insignificant. The Commission is revising the exemptions for condensate and crude oil tanks and condensate and crude oil loading equipmentto ensure thatthe exemptions apply onlywherethe 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 allow sources to avoid other state and federal requirements. This revision clarifies when application of other requirements prohibit sources from claiming exemptions. Specific Statutory Authority
The specific statutory authority for these revisions is setforth in various Sections ofthe Colorado Air Pollution Prevention and Control Act ("Act"). Section, 25-7-105(1), C.R.S., gives the Air Quality Control Commission authority to promulgate rules and regulations necessary for the proper implementation ofthe Act, including regulations to assure attainmentand maintenance of national ambientairquality 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 exemptcertain 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 equipmentexemption in Part A, Section II.D.1.ee., were proposed to address the 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 that can 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 fact that flashing 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 orequipment qualifies underthe revised APEN exemption orconstructions permit exemption. During the revision process there was some discussion aboutwhat mightconstitute a modification that would trigger construction permit requirements. Based on the information provided to date, the Division and Commission do not currently 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 notes to permit applicants that this 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 permits fortanks atcrude oil and natural gas exploration and production sites. The Commission enacted this provision in 1993to allow sources sufficient time to determine production levels before being required to submitAPENs or construction permit applications. To affectthis, Section II.D.1.111. provided that APENs 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 permits for such operations were due at the same time 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 that theprovision should have referenced the report offirst production. Therefore, the Commission has revised Section 11.0.1.111. to clarify and effectuate the intent ofthe 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 intentthat for the purposes ofthese exemptions, aswell as APEN reporting, condensate should only include hydrocarbon liquids thatfitwithin the Common Provisions definition and that have an API gravity of40 degrees orabove. The Commission anticipates revising the Common Provisions definition to more clearly reflectthis intentthe nexttime the Common Provisions regulation is opened for revision.
II. APEN Catchall Changes to the APEN catchall in PartA, Section 11.0.4. and the construction permit catchalls in Part B, Section 111.0.5., were significantly reworked to add clarity. The priorversions were somewhat unclearas to both the effectofAPEN and permitting exemptions on otherapplicable requirements and when otherwise exempt sourceswould be required to file 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, for example, a source that is exemptfrom APEN or permitting requirements, must still complywith the Regulation Number 120% opacity standard. Likewise, an APEN exemptemission point at a major source 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 pointwould cause a source to avoid PSD, NSR-NAAorTitle V information regarding that emission point cannot be omitted from any permitapplication, notwithstanding the factthatthe emission point standing alone might be exemptfrom APEN orConstruction Permit requirements. The Commission also requires that ifthe potential to emit, taking into accountfull design rate and continuous operation, triggers PSD or NSR requirements, the source must submitan Air Pollutant Emission Notice and apply for the 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 1.8.59 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 Number 8 (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 subjectto 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 April16, 2004 Revisions to Colorado Air Quality Control Commission Regulation Number3 Stationary Source Permitting and Air Pollutant Emissions Notice Requirements
This Statementof Basis, 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.Regulation Number 3 sets forth the Air Quality 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. The existing regulation was composed offour parts. PartA contained general provisions and the Air Pollution Emission Notice [APEN] program; Part B addressed majorand minorsource construction permits; Part C setforth the Operating Permit Program; and Part D included the statements of basis, specific statutory authority and purpose for historical revisions to the regulation. The Commission reorganized the rule in orderto make it easierfor sources to find and complywith applicable requirements. PartA now contains 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. Minorsources will only be subjectto Parts A and B; majorsources (as defined for the Operating Permit program) are governed by Parts A, B and C. Majorstationary sources must complywith PartsA, B, C and D. In particular, this reorganization separated the majorstationary source NSR provisions from the construction permit requirements applicable to all sources. Thiswill make it easierfor minorsources 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 Management Systems and Part G contains the historical and current Statements of Basis, Specific StatutoryAuthority 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 StatutoryAuthority 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 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. General Revisions to Regulation Number 3The 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 nowcontained in Part D. In the past, these various components ofthe rule were intermingled to an extentthat caused confusion and unnecessaryworkfor 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. As part ofthe reorganization, the Commission relocated some definitions. Ifa definition relates only to one part, it can be found atthe beginning ofthat part. Definitions that are used in more than one part are placed in PartA. This approach will allow minorsources to identify applicable provisions without having to address the differences between construction permit, operating permitand 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 thatthis 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 for the NSR revisions as the date of EPAapproval 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 "attainment/maintenance" 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 thatthe revisions to Regulation Number 3 do notchange the procedural, administrative nature ofthe regulation and are notspecifically intended to reduce air pollution. Accordingly, the Commission did not make the determinations addressed in Section 25-7-110.8, C.R.S., although this Statement of Basis and Purpose includes discussion to inform interested parties ofthe Commission's intent. PartA Changes Changes to Part A largely clarify orcorrect existing provisions. Where EPA changed specific language used in this part, the Commission adopted identical phrasing absent an identified reason for a distinction

.. The term "annual actual emissions" in Section I.B.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. Thiswill distinguish reported emissions from the two-year average of"actual emissions" used for major NSR purposes. Section II.D.1.g. has been modified to referto a "major source" ratherthan a "major stationary source," a term that is specificto the major NSR program. This conforms to Section 25-7-109, C.R.S. The Commission changed Section VI.C.3 to permit sources sixty days from issuance ofan invoice to pay annual emissions fees. This approach will allow sources 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 for the state. This extended payment period will reduce the numberof instances 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 I.B.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. Part D Changes
Nonattainment New Source Review and Prevention ofSignificant Deterioration Provisions On December31, 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 air quality 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, EPA added 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 subject to the major NSR requirements underthe routine maintenance, repair and replacement ("RMRR") exclusion. That rule has been challenged in U.S. Court ofAppeals 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 Number 3 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 Statementof Basis and Purpose, as required by Section 25-7-110.5, C.R.S. General
The Commission required Division review and/orapproval 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 programswill 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 oractivities with small emissions that have a minimal impact on air quality. In Section I.B.5., the Commission imposed a requirementthat owners oroperators using the actual-toprojected-actual applicability testfor a projectthat requires a minorsource permit or modification [pursuant to Part A, Section I.B.26., Part C, Section I.A.4. or Part C, Section X., orany minor source permit under any provisions of Part B), to submit an otherwise-required permitapplication and include documentation adequate to substantiate calculations made forthe test. The federal rule requires thatthe owner or operator retain, but not report to the permitting authority, this information. However, the information listed in this Section would necessarily be generated by the owneror operatorto 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 ColoradoAir 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's Title 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. The Commission noted discrepancies in the use in the federal rule ofthe terms "regulated NSR pollutant" and "regulated air pollutant." The latter includes Hazardous Air 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" netemissions increase. PartA, Section I.B.37.b. ofthe old rule specified a period offive years. The Commission retained thatfive-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 of Baseline Actual 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. For example, 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, subjectto approval by the Division; however, sources utilizing Continuous Emissions Monitors should be able to quantify these emissionswith relative ease. In any event, the Baseline Actual Emissions calculations must be approved by the Division for use in the applicability test.
In calculating Baseline Actual 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 for failing to limit, as much as possible, emissions during these events. Existing rules relating to these periods and "upsets" are not otherwise changed by the 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 that will be developed as necessary by the Division and/or EPA. These includewhat "could" increase emissions and what constitutes "regular operations" 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 owneroroperator uses emission factors to monitor PAL pollutant emissions [Section V.A.7.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 forthe Division to exempta source from having to validate the factors. Sections II.A.4.a. and VI.B.5.c. include the concept ofa period that is "more representative of normal source operations" in the definition of Baseline 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 peryear, 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 meetthe 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 two 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" forthis purpose because they would not yet have operated during a representative period. Allowing PALs forthese sources would effectively create an "allowable PAL." EPA clearly indicated in the December 31, 2002 preamble that it did not intend to create provisions for allowable PALs in that promulgation. The phrasing here comports with EPA's intent.
Process and control equipmentchanges 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 oroperator. 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 XVII.I.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 owner oroperator's calculations is well accepted, this addition places the PAL applicant on notice that a request may be made. The Commission also departed from the federal wording in Section XVII.N.1. that addressed the semiannual report to 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 if itfinds 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 gothrough the major source NSR program if it 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 Permit orOperating Permitfor future changes atthe CU that meetthe definition of modification for Part B orC purposes even though it need not evaluate the project for major source NSR applicability. The Division will acton a permitapplication during the period otherwise provided in Part B orC ofthis regulation. Section XV.A.3. requires an owner oroperatorto submit a request for designation as a Clean Unit ("CU"), although this requirement does notaffect automatic qualification as a CU. This provision ensures thatthe Division may conduct an initial, cursory review to confirm the qualification. Absent this provision, sources mistakenly using the CU option mightoperate for years in the beliefthat the designation protects operation ofthe unit. One principal concern forthe Commission in adopting any regulation is to provide a high level ofcertainty for sources to 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 The 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 submitan 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 oroperators 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 about the retention period. Finally, in orderto complywith the federal rule, the Commission included a public notice and comment opportunity for PCPs. 

### I.GG. Adopted December 16, 2004 Revisions to Regulation Number3 The primary purpose ofthis rule revision is to clarify the applicability ofvarious permitting and APEN provisions to sources within areas designated as attainment/maintenance. Such clarification merely makes express the rule that applied by interpretation. In mostcases, the revision makes the requirements applicable to attainment areas applicable to attainment/maintenance areas. One notable exception is the requirementfor construction permits for gasoline stationswithin the Denver 1-hourozone attainment/maintenance 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 subjectto Regulation Number 3, 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 for findings pursuantto Section 25-7-110.8, C.R.S. 

### I.HH. Adopted July 21, 2005 Revisions to Regulation Number3 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, Sections 25-7-110 and 25-7-110.5, C.R.S.

Regulation Number3 sets forth the AirQuality Control Commission's permitting and air pollutant emission notice programs for stationary sources. The Commission amended Regulation Number3, PartA, Section V. to make it consistent with the repeal ofthe Emissions Trading Rule in Regulation Number5 in December2004. Itwas originally anticipated that Regulation Number 5 would replace Part A, Section V. in Regulation Number 3 as the Commission's trading program, essentially identical to EPA's. The text of PartA, Section V. was italicized to represent provisions that would remain effective until EPAapproved the program in Regulation Number5. EPA decided notto finalize its trading program; therefore, it would neverapprove Regulation Number5 as a SIP component. The Commission deleted Section V.A.3., PartA that contained the outmoded effective date. The Commission also replaced the italicized textwith normal font in all of PartA, Section V. to conform the textto these circumstances. In addition, one hazardous 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 for the proper implementation ofthe act. 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 forthese programs are set forth in Sections 25-7-114 through 25-7-114.7 of the actand 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, PartA, Section V. was to prevent any ambiguity aboutthe applicability ofthose provisions. Changing the font ofthe text does not have any regulatory impactsince the provisions were already in effectand will remain in effect. Section V.A.3. was deleted because itwas an outmoded provision that was only necessary ifSection V. was to be replaced by Regulation Number 5. The Commission's repeal of Regulation Number5 madethat provision unnecessary. Removing the italics from Section V. also will 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 Number 3 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 makethese 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 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, Sections 25-7-110 and 25-7-110.5, C.R.S. Specific Statutory AuthorityThe 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 attainmentand maintenance ofnational AmbientAir 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 permit and operating permit programs. Some ofthe statutory parameters forthese 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 Air Act. EPA changed the several Federal provisions that were 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 new applicability 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 go through a traditional NSR applicability determination if it makes certain types ofchanges in the future. The Commission's 2004 Rule adopted the clean unit exemption virtually without change. The 2002 Rule also expanded the exemption from major modifications for pollution control projects (PCPS), originally provided only to electric utility steam generating units in the 1992WEPCO Rule. Under the 2002 Rule, collateral emissions increases resulting from a PCP atan 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 their actual 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 or operatorto calculate its emissions. The Commission did notfollow the Federal Rule in this regard. In Section 1.8.5., the Commission imposed a requirement that owners oroperators using the actual-to-projected-actual applicability test for a projectthat requires a minorsource permit or modification [pursuantto PartA, Section 1.8.26.; Part C, Section I.A.3.; or Part C, Section X.; orany minorsource permit under any provisions of Part B], submit an otherwise-required permit application and include documentation adequate to substantiate calculations made for the test. On June 24, 2005, the United States Court ofAppeals for the 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 Air Act indicated that Congress intended to apply NSR to changes that increase actual emissions instead of potential 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 of both the 1992Wepco Rule and the 2002 rule. By vacating those portions ofthe Federal NSR rule, the courtterminated 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 use 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 re.cordkeeping 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 that there 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 EPA to 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 permit application 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 Permit or as 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 uncertainty whethera projecttriggered NSR. Accordingly, the Commission elected not to modify this part of Regulation Number3. 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 notto modify Part D, Section I.B.5. and to modify Part D, Sections V.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 Number3, 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 StatutoryAuthority 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 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); 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 ofsignificant deterioration ofvisibility in class I Federal areas).Basis and Purpose On July 1, 1999, the U.S. Environmental Protection Agency promulgated final regulations that require each state to submit a State Implementation Plan (SIP) to address regional haze. Those regulations require the State to establish a mechanism to identify sources that mustanalyze installation of Best Available Retrofit Technology (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 subjectto BART mustcomplete an analysis and submit a proposal for determination by the State ofthe BestAvailable Retrofit Technology applicable to that source. This regulation establishes the mechanisms for this 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 sourceswill cause orcontribute to 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 sourceswould also have the opportunity to demonstrate thatthey are not eligible or notsubjectto BART. This approach will provide information necessary to develop the regional haze SIP on the schedule required by Federal law and allows for challenges to decisions on whether individual sources mustcomplete BART analyses and to BART determinations by the State. Sources subjectto BART mustevaluate 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) EvaluateVisibility 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 mustevaluate the visibility impacts ofeach technology option using CALPUFF and/or Division-approved modeling protocols. This rule requires a source subjectto BART to file an application for a construction permit as the mechanism for submitting its BART analysis and proposal, and for seeking a Division determination of BART for the source. The Commission concluded that using the existing permitting mechanism was the mostexpedientway to presentthe analysis for Division determination. The Commission further determined that applications for BART determinations should be subjectto the public comment process applicable to construction permit applications 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 developmentstages of licensing 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 demonstrate thatthe same technology excluded underthe EPAanalyses would not be appropriate for the Colorado source by showing sufficient similarity between the source evaluated by EPAand the Colorado source. Sources that identify specific options as technically infeasible must show to the Division's satisfaction that the technology is notcommercially available orthat specific physical orchemical characteristics ofthe unit(s) oremission(s) involved will notallowthe technology to operate effectively. The control effectiveness ofany technology must be evaluated based on the highest removal efficiency available for the technology. Sources may also look at lowerefficiencies in addition, but must include consideration ofthe best removal efficiency. Ifa source has existing controls in place, improvements tothe 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 hazardous waste, 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 itwill meetthe presumptive limits, then the source will be presumed to have metthe BART-analysis requirements, absent an adequate showing to the contrary. Ifa source proposes a BART limit that exceeds EPA's presumptive limits, the Division would determinewhetherthe 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 either adopt BART controls or adopt a 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 that will be used to makethe 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, but for 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 intent ofthe Commission thatthe Division should evaluate this issue as part of 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 permit determinations underthe BART rule that will be become open to public comment aboutthe same time, the Commission intends thatthe Division consider reasonable flexibility in applying procedures and time periods for public comment. The Commission also intends that all agreements and BART alternatives be noticed togetherwith the construction permitfor public comment purposes. The Air 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, 2006Revisions 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.

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 of$ignificant Deterioration programs (collectively referred to as "NSR") into Colorado's state implementation plan (SIP). In June 2005, 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 Number 3 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 listof hazardous air pollutants (HAPs) subjectto regulation underthat Section. EPA occasionally revises the list by adding or removing pollutants based on updated scientific evidence ofhealth 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 Number 3, PartA, Appendix B. On November29, 2004, EPA revised the federal definition ofvolatile organic compounds (VOCs) to specifically treat tertiary butyl (t-butyl) acetate as a VOC only forcertain 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, Part A, 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 counttheirt-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 forthe proper implementation ofthe Act, including rules to assure attainment and maintenance of national AmbientAir 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 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 authorityfor the 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 pursuantto procedures and requirements set forth in Sections 25-7-105, 25-7-110 and 25-7-110.5, C.R.S. Purpose The Commission is revising Regulation Number 3 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 New Source Review program, to revise the definition ofvolatileorganic 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 Number3, 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 Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements ofthe Colorado Administrative ProcedureAct 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 are within the statutory limit set by Section 25-7-114.7, C.R.S. The increase is necessary to 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 effort ofthe Division and interested stakeholders. Specific StatutoryAuthority 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 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 that will 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 Number3, Part A, Section VI.D.1.
This Statement of 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 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 are atthe statutory limit set 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 forthe program. Specific Statutory Authority 

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rThe specific statutory authority for these revisions is setforth in Sections 25-7-114.7 ofthe Colorado Air 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 that will 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 December 21, 2007 Revisions to Regulation Number3, Part E, 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 Statutorv Authority The Commission promulgates this regulation pursuantto 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 forthe 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 Number 3, 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 of BART 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 Statement ofBasis, Specific Statutory Authority and Purpose complies with the requirements ofthe ColoradoAdministrative Procedure Act Sections 24-4-103(4), C.R.S. for new and revised regulations. Basis and PurposeThe 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 ambient air quality standard ("NAAQS") for PM2.5 emissions on October 17, 2006. The effective date for the newstandard 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 Number 3. Note that the Commission intends to deferany decision to exclude ethanol production facilities from the major stationary source definition of"chemical process plant" as proposed in the Federal Register on May 1, 2007 [see 72FR24060] until all relevant pending matters at the 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 under the "air pollutant" and "criteria pollutant" definitions found in Part A, 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 II.D.3). Note that the 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 major source NSR sources. Upon promulgation, the Commission intends to incorporate those changes into Regulation Number3, 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 Number3 rulemaking, VOCs were inadvertently removed from the RACT requirements. Since the minor source RACT requirement forVOC emissions were part ofthe State Implementation Plan, EPAconsiders removal of VOCs from minor source RACT requirements as backsliding. Therefore this revision should be reinserted into Regulation Number 3, Part 8, Section III.D.2. Re-insert the inadvertent removal ofthe following text previously adopted by the Commission on December 16, 2004: Reference to "attainmenUmaintenance" areas in Part 8, Sections II.D.1.c.(iii)(8), 111.8.5.d., and III.C.1.a., and Remove exemption reference to Denver Metropolitan PM10 attainmenUmaintenance area and change reference to "Denver Metropolitan PM10 and ozone attainmenUmaintenance area" to "Denver 1-hour ozone attainmenUmaintenance area" in Part 8, Section II.D.1.f. Typographical, Grammatical and Formatting Errors The Commission intends to correct several specific typographical errors in Regulation Number3.Specifically, the Commission intends to: Revise "citric acid plants" to "nitric acid plants" in PartA, Section I.B.23.b.(ix), and Revise incorrectcitation in Part B, Section I.A. In addition, the Commission intends to correct grammatical and formatting errors in Regulation Number 3. Specific Statutory Authority The Colorado Air Pollution Prevention and Control Act, Section 25-7-105, C.R.S., gives the Commission authorityto promulgate regulations necessary for the 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 authorityto establish emission notice, construction permit and operating permit programs. Key statutory parameters forthese programs are setforth in Sections 25-7-114 through 25-7- 114.7 ofthe Act and 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 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 Statementof Basis, Specific StatutoryAuthority 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 pursuantto 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 adoptemission control regulations pertaining to visible pollutants); 25-7-114.4(1) (authority to adopt rules forthe 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 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 NOx control. 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 of post combustion NOx controls as it relates to non-EGUs and nonboilers. The Commission believes this narrow amendmentto Regulation Number3 is appropriate and supported by the evidence in the hearing record. 

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

### Revisions to Regulation Number3, PartA
This Statement of Basis, Specific StatutoryAuthority and Purpose complies with the requirements ofthe ColoradoAdministrative 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 StatutorvAuthority
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 set annual 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, Part A, B and C
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.

As of November20, 2007, the EPA's deferral ofa nonattainmentdesignation forthe 8-Hour Ozone NonattainmentArea expired, signifying that the area is nowconsidered nonattainment, or in violation of the 1997 8-HourOzone 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 (DMA/NFR) NonattainmentArea. The DMA/NRF NonattainmentArea includes all ofAdams, Arapahoe, Boulder, Broomfield, Denver, Douglas, and Jefferson Counties as well as portions of Larimerand Weld Counties.
Pursuantto the Federal Clean AirAct, Colorado must prepare and submit a 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 sufficient to ensure that ozone is reduced to belowthe 8-Hour Ozone 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 implement a Federal Implementation Plan in Colorado.
Pursuantto C.R.S. § 25-7-105(1)(a)(l), the Commission must adopt such measures as are necessaryto ensure compliance with the NAAQS. The Commission has adopted these rules to carry outthis mandate. Specifically, the Commission has adopted revisions to Regulation Number3, Parts A, B and C to address ozone formation in the DMA/NFR 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 attainment ofthe current 8-Hour Ozone NAAQS set at 0.08 ppm. Also, these revisions help Colorado make progress toward eventualcompliance with the newozone NAAQS setat 0.075 ppm aswell as the Governor's directive to proactively and pragmatically reduce ozone levels. Photochemical grid dispersion modeling indicates thatwithoutfurther emission controls, Coloradowill attain the 8-hour standard by 2010. The dispersion modeling reflects that Coloradowould 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 present and future qirqulaity trends, and is requried for EPAto approve the state attainmentdemonstration in the SIP. Dispersion modeling results have an inherent level ofuncertainty, 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 thatthe predicted modeling results are accurate and borne-out in future air qulaity monitoring demonstrating attainentwith the 8-HourOzone NAAQS.
In addition, pursuantto EPAguidance, if modeling results indicate thatthe highestozone levelswill fall between 0.082 and 0.087 ppm, Colorado mustconduct a "weightofthe evidence" analysis and other supplemental analysis in orderto corroborate the modeling results. Colorado's model results arewithin 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 weightofevidence demonstration, the Commission concludes thatthese additional control measures are necessaryto carry out its mandate to adopt a SIP that contains those elements that are necessary to assure attainment ofthe 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 attainmentand 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), 109(1)(a}, (2) and (3) (authorizing rules requiring effective practical air pollution controls for significant sources and categories ofsources, including rules pertaining to nitrogen oxides and hydrocarbons, photochemical substances,**a~** well as rule s pertaining to the storage and transfer of petroleum products and any otherVOCs) and§ 25-7-301 (authorizing the developmentofa program for the attainmentand maintenance ofthe NAAQS). Purpose
These revisions to Regulation Number 3 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 nonattainmentarea, 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 nonattainmentareas 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:• 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 water storage impoundment, and

• Condensate tankswith production 730 88L/yearor less.
The Commission is also adopting revisions to Part 8 to exemptthe following facilities from construction permit requirements:

• Petroleum industry flares less than 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 that the chemical storage tank exemption and surface waterstorage impoundment exemptions do notapplyto specified production wastewater.
In support ofobjectives A and E above, the Commission adopts these revisions to Regulation Number3, PartsA, 8 and C to revise APEN reporting exemptions for specific source categories (Regulation Number 3, PartA, Section II.D., Part 8, 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, 8 and C in orderto improve the Division's emissions inventory and forthe sake ofequity. These changes fall in three categories: 1) specificAPEN and permitting exemptions were removed altogether; 2) specificAPEN exemptions were removed and permit exemptions were kept in place; and 3) specificAPEN and permit exemptions were clarified, but kept in place.
Remove APEN and Permitting Exemptions
The Commission has eliminated theAPEN exemption for condensate tanks because the exemption was based on an emission level used in attainmentareas. The Division will now be able to develop a complete inventory ofcondensate tanks and their emissions. Condensate tanks are now subjectto the same APEN requirements as othersource categories in the 8- HourOzone NonattainmentArea. Additionally, the condensate tank exemption is based on a standardized emission factor, 13.7 pounds ofVOC emissions per barrel ofproduction, which may not be representative ofeach natural gasfield. Even though the exemption was removed sources maystill make use ofthe genericAPEN exemption, upon determining thatactual annual uncontrolled emissions fall belowthe applicable de minimis levels identified in Regulation Number3, Part

### A If based on this generic exemption, a source is determined to be APEN exempt, the source is also permitexempt.
RemoveAPEN Exemptions. Keep Permit ExemptionsThe 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 datajustify the need for permitting activities. Revise APEN and/or Permitting Exemptions Similarly, based on the Division's experience, actual emissions from several source categories specificto oil and gas-related operations may be higherthan previously believed. Thus the APEN and permitting exemptions for surfacewater 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, the APEN 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 or commercial facilities' operations (similarto Regulation Number3, Part A, Section II.D.1.uuu. and Part C, Section II.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 NonattainmentorAttainment/Maintenance Area to any ozone nonattainment area for the sake ofequity. I.SS. Adopted December 19, 2008 Revisionsto 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 The Commission promulgates this regulation pursuantto 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 adoptemission control regulations pertaining to visible pollutants); 25-7-114.4(1) (authority to adopt rules forthe administration of permits); 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 updates the Division's BART determinations by adding determinations for Colorado Springs Utilities Drake Units 5, 6, and 7 and CEMEX Portland cementfacility regarding limits and averaging times for sulfur dioxide, 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 Dto Address Greenhouse Gases orGHGsThis Statementof Basis, Specific Statutory Authority and Purpose complies with the requirements ofthe Colorado Administrative ProcedureAct Sections 24-4-103(4) and (12.5), C.R.S. for new and revised regulations.

Regulation Number3 is designed to implement substantive 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), as well 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 June3, 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 determine which stationary sources and modification projects become subject to permitting requirements for GHGs underthe Prevention ofSignificant Deterioration (PSD) and Title V Permitting Programs ofthe Clean AirAct (CAA). Specific StatutoryAuthority
TheAct, underC.R.S. Section 25-7-105(1)(a) authorizes the AirQuality Control Commission (Commission) to adopt rules necessary to implementthe Act, and to adoptand revise comprehensive State Implementation Plans (SIP) to assure attainmentand maintenance of national ambient airquality 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 ofnitrogen 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 authorityforthese 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 majorsource or majorstationary source applicability thresholds specificto GHGs. EPA's GHG Tailoring 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 different components including permitting thresholds and timing, commitments to the next steps, implementation options, and information requests. On April 2, 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 airpollutant 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).Court mandated EPAto determine under CAA Section 202(a) whether GHG emissions from new motor vehicles endanger public health orwelfare, or iftoo much scientific uncertainty remains to make such a determination.2
On December7, 2009, EPA issued the Endangerment Finding and the Cause or Contribute Finding, both addressing GHGs under CAA 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 or Contribute Finding found thatthe combination ofthe sixwell-mixed GHGs from new motorvehicles contributes to the GHG pollution which threatens public health and welfare. EPA'sfindings were a prerequisite to establishing GHG standards for light-duty vehicles, butthey did not in themselves impose any requirements on GHG stationary sources. On May 7, 2010, EPA published the Light-Duty Vehicle Rule (LDVR)jointly with the National Highway Traffic Safety Administration 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 new GHG emissions standards underthe LDVR first apply to model year2012 vehicles and become increasingly more stringentthrough model year2016. 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 of Significant 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 requirementtakes effect. Accordingly, EPA concluded that once the LDVR takes effecton January 2, 2011 (the earliestdate that a model year 2012 vehicle could be put on the market), GHGswill 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 100/250 tons 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 Massachusettsv. EPA, GHGs are included in the definition ofair pollutant underCAA Section 302(g). Colorado's PSD program applies PSD permitting requirements to new majorstationary 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 peryear or more ofany air pollutant." C.R.S. Section 25-7-114(3)(b). Furthermore, aTitle V permit is required for any major source. C.R.S. Section 25-7-114.3(1)(b). The Division's proposed changes to Regulation Number3 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 the Tailoring 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 or appropriate." 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 setforth in section 25-7-102 [and] Federal recommendations and requirements." C.R.S. Section 25-7-109(1)(b).

2 CAA Section202(a) requires EPAto "prescribe (and from time to time revise)

... standards applicableto the emission ofany airpollutant from anyclass orclasses ofnew motorvehicles

... which

... cause, or contribute to, airpollutionwhich may reasonablybe anticipatedto endanger publichealth orwelfare." 3. TheCAA defines "airpollutant" as"

... any airpollution agent orcombination ofsuch agents, including any physical, chemical, biological, radioactive[

...] substance ormatterwhich is emitted into orotherwise enters the ambient air." CAASection 302(g). Colorado's statute defines "airpollutant"as"

... means any fume, smoke, particulate matter, vapor, orgas or any combinationthereofwhichis emittedinto or otherwise enters the atmosphere, including, butnot limited to, anyphysical, chemical, biological, radioactive[

...] substanceormatter

..." C.R.S. Section 25-7-103(1.5).In 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 GHGs to 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 prevent significant deterioration ofair quality

..." CAA Section 161. UnderTitle V, the CAA provides that "Wheneverthe Administrator makes a determination that a permitting authority is not adequately administering and enforcing a program, or portion thereof, in accordance with 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 for failure to complywith EPA's permitting programs, as well as the unsustainable workload of regulating GHGs atthe existing permitting thresholds of 100 

### I 250 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 as well as addresses Steps 1and 2 as identified in EPA's GHG Tailoring Rule. Step 1 spans from January2, 2011 through June 30, 2011, and applies PSD and Title V permitting requirements to GHG emissions at "anyway sources," orstationary sources that are already subject to these permitting requirements for non-GHG pollutants. During Step 1, no source shall be required to obtain a Title V operating permitor PSD permit solely due to GHG emissions. Step 2 spans from July 1, 2011 through June 30, 2013. In Step 2, in addition to the requirements ofStep 1, PSD and Title V permitting requirements apply to stationary sources which may be major 5 for GHG emissions and no other regulated pollutant. EPA's GHG Tailoring Rule sets a 100,000 tpy 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 must occur 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 at 75,000 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 I, 2012. It is anticipated that this Step 3 will span from July I, 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 otherdetails are provided. 5. Major source ormajor stationary source.Permitting and Application Requirements The Commission recognizes the difficulties in developing a GHG inventory in short order, and directs the Division to request permitapplicants which are required to provide a GHG inventoryto submitone by a reasonable deadline set by the Division. See the citations belowfor further information. CompleteApplication In Regulation Number 3, 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 Number 3, Part C, Section IV.B.4, the Commission requires that a source update its permit application to address any requirements that become applicable afterthe date the source has submitted its application, priorto issuance ofthe draft permitfor public comment. Application Shield
In Regulation Number 3, 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 deadline for 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 Number 3, Part C, Sections IV.B.3. and IV.B.4." Applicable Requirement
In Regulation Number 3, 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 permit conditions necessary to avoid majorsource or major stationary source thresholds are considered applicable requirements. Regulation Number 3, Part C, Section V.B.4. requires that any operating permitaddress "all applicable requirements," howeverexisting Title V sources that do not undergo PSD review should nottrigger any GHG applicable requirements. "Subjectto Regulation or Requirement" Prior to 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 "subjectto regulation or requirement", followed by a specific reference to the Federal Actor another part of Regulation Number 3. 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 later codified in the GHG Tailoring Rule and Regulation Number 3, 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 "subjectto regulation or requirement" relates to the reference atthe end ofthose statements.Rescission 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 Subject To Regulation dependent upon federal enforceability. Should eitherfederal legislation orCourt rulings from the District ofColumbia Circuit Court ofAppeals orthe U.S. Supreme Court limit or 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 Number 3 shall no longer be enforceable. Example 2: ifthe Court remands the regulation ofGHG 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 seek to 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 Number 3 to the same extent ofthe federal action orcourt ruling and may require a new rulemaking action by the Commission to regulate GHGs for the affected permitting program, including any new details ofsuch future regulation. Synthetic Minor Permits for GHGs
No minorsource air pollution construction permits are required atthis time for GHGs, exceptwhere stationary sources voluntarily seek federally enforceable limits for GHGs to avoid majorsource PSD and Title V permitting requirements. (Regulation Number3, Part 8, Section II.A.7.) An application for a voluntary synthetic minorconstruction 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 permit condition. (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 longer enforceable. 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 Number 3 as approved by the Commission are summarized below.
PartA Add Regulation Outline Add new definitions ofGreenhouse Gas and Carbon Dioxide Equivalent. The C02e definition incorporates by reference EPA's GWP codified 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.)Add new definition 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 GHGs where stationary sources voluntarily choose to seek federally enforceable limits for GHG ifthey would 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 subjectto requirements applicable to the source, but notair 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 January 2, 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 consistentwith EPA's GHG Tailoring Rule so that it becomes effective by January 2, 2011 (Section II.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 New Source Review and Prevention ofSignificant Deterioration) and Part F (BestAvailable Retrofit Technology (BART) and Reasonable Progress for Regional Haze) 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 (the Act). 

### Specific Statutory Authority The Colorado Air Quality Control Commission (Commission) promulgates this regulation pursuantto the authority granted underColorado Revised Statutes, Sections 25-7-105(1)(c}, (authority to adopta prevention ofsignificant deterioration program); 25-7-109(1)(a) (authority to require the use ofair pollution 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 of permits); 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 PurposePARTD
These revisions to Regulation Number 3, Part D change the review and revision period for the Regional Haze Long Term Strategy (LTS) from every three years to every five years. This change aligns the reporting periods for the 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). PARTF 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 must develop 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 ofgreat scenic importance, such as national parks and wilderness areas. There are 12 Glass I areas in Colorado, and 156 nationwide.
A key element of EPA's regional haze program is BestAvailable Retrofit Technology (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 BARTemission limits for each subject-to-BART sourcethat may reasonably be anticipated to impairvisibility in any Class I area, unless the state demonstrates that 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 "BARTAlternative" 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. States were required to submittheir regional haze SIPs to EPA by December 17, 2007. The Regional Haze Rule establishes the year 2064 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 years thereafter. See 40 CFR Section 51.308(f). Colorado submitted much of its regional haze SIP (including most ofits 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 Element ofthe SIP, including the basis for and enforceability of BART determinations and the lack of reasonable progress goals (RPGs) and RP source determinations. These alleged deficiencies must be addressed in orderfor EPAto approve the Regional Haze element ofthe 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 attendantconsequences (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 Bill10-1365, 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 to the Colorado Public Utilities Commission (PUC), and provides thatthe Commission shall considerthe air quality 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 Number3 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 1 and 2 would be emission rates associated with the assumed installation and operation ofselective non-catalytic reduction (SNCR). As an alternative to BART, it was proposed and the Commission adopted, a more stringent NOx emissions control plan that consists ofemission limits associated with the assumed operation ofSNCR for Unit 1 and 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 BART Alternative is based on reductions achieved as a result ofa combination ofshutdowns and retrofit emissions controls atcertain PSCo facilities planned as part of HB 10-1365. The BARTAlternative includes ten units atfour PSCo facilities. The facilities included in the BARTAlternative include Arapahoe Units 3 and 4, Cherokee Units 1-4, Valmont and Pawnee. The BARTAlternative includes both BART and non-BART sources. The nonBART sources are olderthan the BART timeframe, and in effectwill all be controlled by 2017 and reduce their NOx and 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, Valmont will 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 that the BART Alternative achieves greater reasonable progress than would be achieved through the installation and operation ofsource-by-source BART and RP determinations atthe covered sources, and thus meets the 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 CACJAand 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 BART Alternative, and believes that the BARTAlternative is clearly superiorto, and will result in greater reasonable progress than, source-by-source BART. For example, the state has determined and demonstrated that PSCo's BARTAlternative emissions reductions are greaterthan, and would provide greater reasonable progress than, the presumptive orsource-by-source BART limits. The Commission also adopted retirement dates of"no laterthan" July 1, 2012 and December 31, 2016 for Cherokee Units 1 and 3, respectively. In doing so, the Commission is no way rejecting any portion of PSCo's emissionreduction 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 light of PSCo's pending application for rehearing, reargument or reconsideration (RRR) before the PUC, in which PSCo states that the revised dates are importantfor providing sequencing ofactivities that will 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 ofhowthe PUC rules on PSCo's RRR application. The Commission also notesthat 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 forthe least-impaired (20% best) days overthe same period. The Commission adopted into Regulation Number3 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 December31, 2017). This exemption applies only to regional haze, and does not apply 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 edits while otherchanges address comments from Federal Land Managers, incorporate thejustification forthe BART and reasonable progress determinations, and provide thejustification for the reasonable progress goals. The following presents an overview ofthe content ofColorado's Regional Haze SIP document: Chapter 1

- Overview Chapter 2- Plan Development and Consultation Chapter 3

- Monitoring Strategy Chapter4- Baseline and Natural Visibility Conditions in Colorado, and Uniform Progress for Each Class I area Chapter 5- Sources of Impairment in Colorado Chapter 6- BestAvailable Retrofit Technology Chapter 7- Visibility Modeling and ApportionmentChapter 8 - Reasonable Progress Chapter 9- 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 Supportfor the BART Determinations Appendix D- Technical Supportfor the Reasonable Progress Determinations The revised chapters are intended to fully replace previously adopted SIP chapters.
Additional Considerations The Commission provides the following additional statement, consistentwith Sections 25-7-110.5(5)(a) and 110.8, C.R.S. ()Colorado's proposed Regional Haze regulations and SIP revisions are consistentwith 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 BART and RP and establishing RPGs. The mannerand method ofconsideration is leftto 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 Stateswould be the decision makers."). States also have flexibility to consider any otherfactors thatthe state determines to be relevant. See U.S. EPA, "Guidance for 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 consistentwith 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 forthe consideration ofalternative proposals for the appropriate controls forthose 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 bevacated and a new proceeding initiated, making it impossible for Colorado to submita timely and complete SIP revision to address Regional Haze, and resulting in a FIP. Underthese circumstances, it is reasonable to conclude thatthe Commission rules regarding "1365" sources are being adopted to implement prescriptive state requirements, thatthe Commission has no significant policy-making options with 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 act ordiffering 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 mustconsiderwhen 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, impairment ofvisibility in mandatory Class 1 Federal areas which impairment results from man-made air pollution." 42 U.S.C. Section 7491. To help facilitate this goal, EPA finalized 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 (particularlythe SIP forthe 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 numberoffederal Clean AirAct requirements in a comprehensive and more efficientfashion than in a step-by-step (or regulation by regulation) approach. The legislation specifically declares that it is intended to create "a coordinated plan of emissions reductions

...to meetthe requirements ofthe federal act.

..at a lowercost than 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 otherair 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 to the promulgation of the Regional Haze Rule. See. e.g., EPA's 'Technical Support Documentfor BART S02 Limits for Electric Generating Units," April 1, 2005, and "Technical Support Document for BART NOx Limits for Electric Generating Units and Technical Support Documentfor BART NOx Limits for Electric Generating Units Excel Spreadsheet," April15, 2005, Memoranda to 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 AirVisibility Rule orthe Guidelines for BestAvailable RetrofitTechnology (BART) Determinations Underthe Regional Haze Regulations," U.S. EPA, June 2005. Additionally, the state determines that the 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 cleartiming 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 it will 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 EPA approval ofthe 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 equity for sources subjectto the rule by providing the same standards for similarly situated sources. BART and RP determinations are very source specific; differentcontrols 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 it will promulgate a FIP. This would likely result in more costly control requirements for sourceswhich 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 notaddress 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 supports the finding thatthe 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 justify the costto government, the regulated community, and to the publicto 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 air pollution. The alternative will 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 ata 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. 

### I.W. Adopted October20, 2011 Regulation Number 3. PartA. 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 partiallydisapproved 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 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 (the Act). Specific Statutory Authority
The Colorado AirQuality Control Commission (AQCC) promulgates this regulation pursuantto the authority granted underColorado Revised Statutes. Sections 25-7-105(1)(c). (authority to adopta prevention ofsignificant deterioration program); 25-7-109(1)(a) (authority to require the use ofair pollution controls); 25-7-109(2)(a) (authority to adoptemission control regulations pertaining to visible pollutants); and 25-7-114.4(1) (authority to adopt rules forthe administration ofpermits). Basis and Purpose
EPA promulgated federal changes to the New Source Review (NSR) Program. which must be incorporated into Regulation 3 in orderto maintain consistency with the federal NSR Program related to PM2.5 National AmbientAir Quality Standards (NAAQS). Subsequently, EPA disapproved and proposed to disapprove Air Pollutant Emission Notice (APEN) exemption provisions in Regulation 3. associated with Colorado's September 1997. April2003 June 2003. July 2005. August 2006. 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 3 provisions were identified in need of revision. Source 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 3. Parts A and B to identify PM2.5 as a criteria pollutant. trigger reporting and minorsource permitting requirements. However. the AQCC did not make corresponding revisions to majorstationary source permitting requirements underthe 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 FR28321, May 16, 2008), "Prevention ofSignificant Deterioration (PSD) for Particulate Matter Less Than 2.5 Micrometers (PM2.5)

- Increments. Significant Impact Levels (SILs) and Significant Monitoring Concentration (SMC)" (75 

### FR 64864, October20. 2010), "Requirements for Preparation. Adoption. and Submittal of Implementation Plans" (76 FR 18870. April 6. 2011). and "Implementation ofthe New Source Review (NSR) Program for Particulate Matter Less Than 2.5 Micrometers (PM2.5); 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 testfor 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 of PM2.5 implementation rules until afterthe last piece ofthe PM2.5 implementation rules. the 2010 PM2.5 testing methodology, was finalized. The May 16. 2008 rule provided flexibility in designating PM2.5 precursor pollutants. While sulfur oxides (S02) must be treated as a PM2.5 precursor in all areas ofthe state. more flexibility is afforded to nitrogen oxides (NOx), volatile organic compounds (VOCs) and ammonia (NH3). This rule requires thatNOx be presumed a PM2.5 precursorstate-wide unless a state demonstratesthat 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 low vapor pressure) will be addressed as a condensable particulate. See 

### 73 FR28329-283330. Atthis time. the AQCC has identified S02 and NOx as PM2.5 precursors. state-wide. Based on the limited PM2.5 modeling and monitoring data available for Colorado. the AQCC determined thatthere is insufficient evidence to claim eitherway that NOx emissions do ordo notcontribute significantly to the concentration of PM2.5 in any area in Colorado. Without evidence to narrowthe identification of NOxas a precursorto specific areas. Colorado must identify NOx as a PM2.5 precursorstate-wide. Less is known aboutVOCs and NH3 and their contribution 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 [date], 2011. EPA partially disapproved revised Air Pollution Emission Notice (APEN) and permitting exemptions the Commission submitted to EPA in September 1997. June 2003. July 2005. August 2006, and August 2007. ([FR cite]). EPA partially disapproved APEN exemptions for open burning. mobile sources. stationary internal combustion engines. emergency generators. oil and gas surfacewater 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 repealed as follows: Open burning APEN exemption reference was corrected reference federally enforceable Regulation 1 (Part

### A. Section II.D.1.q.). EPAcommented thatthe change in reference from Regulation 1. which is part ofColorado's SIP. to Regulation 9, which is not part ofColorado's SIP. was notapprovable. Mobile sourcesAPEN exemption was clarified (Part

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

### A. Section II.D.1.sss.) and related revisions were made to 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. The AQCC repealed the APEN exemption and revise the permit exemption to be consistentwith current SIP approved language instead of requiring additional recordkeeping and reporting. Note that while the categorical exemption is being repealed. sources may still utilize the general one and two ton APEN exemption found in Part

### A. Section II.D.1.a. Emergency generatorAPEN exemption was repealed (Part

### A. Section II.D.1.ttt.l. and related revisions were made to the associated permitting exemption (Part B. Sections II.D.2.c

.. and II.D.2.c.(i)-(iii)) and insignificant activities list (Part C. Section II.E.3.nnn.). EPAcommented thatthe APEN exemption should require recordkeeping and reporting. The AQCC repealed the APEN exemption. and revise the permit exemption to be consistent with current SIP approved language instead of requiring additional recordkeeping and reporting. Note thatwhile the categorical exemption is being repealed. sources may still utilize the general one and two ton APEN exemption found in PartA, Section II.D.1.a. Surfacewater impoundmentAPEN exemption was clarified (Part

### A. Section II.D.1.uuu.) and related revisions were made to the associated permitting exemption (Part B, Sections II.D.1.m.) and insignificant activities list (Part C, Section II.E.3.vvy.). EPA commented thatthe APEN exemption should be clarified to confirm that the exemption applied to oil and gas produced water. In addition to making this revision. the AQCC also clarified exceptions to these exemptions and insignificant activityDeaerator/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 unclearwhat these activities were. TheAQCC is unaware ofany source making use ofthis exemption. and thus has removed this exemption and associated insignificant activity.
Air curtain destructorAPEN exemption removal (Part

### A. Section II.D.1.ffff.). EPAcommented that because air curtain destructors meet the SIP approved definition ofan incineratorand as such are required to submitAPENs and obtain permits. thatthis exemption should be removed. On February 4. 2011. EPA partially approved and partially disapproved SIP revisions submitted to EPA in April2003 and June 2003 (76 FR 6331). Those 2003 SIP revisions to Regulation 3 revised APEN exemptions and permitting exemptions in Regulation 3. Parts A and B. respectively. To address EPA's concerns the following provisions that EPA disapproved oron which EPA otherwise provided comment, were revised or removed as follows: Stationary internal combustion engines 10ton peryear permitting exemption in attainment areas (Part B. Sections II.D.1.c

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

### A. Sections I.B.31.c. and I.B.31.d.). EPA commented that it could not approve provisionswhich are identified as state-only provisions. The AQCC 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 promulgated the "Prevention ofSignificant Deterioration and Title V Greenhouse Gas (GHG) Tailoring Rule." commonly called the GHG Tailoring Rule. 75 FR 31514. EPA's GHG Tailoring Rule was designed to tailorthe applicability criteria that determine which stationary sources and modification projects become subjectto permitting requirements for GHGs underthe Prevention of Significant Deterioration (PSD) and Title V Permitting Programs ofthe Clean AirAct (CAA). On [date]. 2011. EPAfinalized the "Deferral for C02 Emissions from Bioenergy and Other Biogenic Sources Underthe Prevention ofSignificant Deterioration (PSD) and Title V Programs." commonly called the Biogenic Deferral, ([FR cite]). 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 year deferral 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: Revise 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 3 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 Bill10-1042. as codified in 25-7-114.5(12)(a). C.R.S.; including NOx as a precursorto ozone in ozone significant monitoringconcentration (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 law and 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 ofSections 25-7-110.5(5) and 110.8, C.R.S. do notapplyto these revisions.
With respectto EPA's SIP disapproval actions. while the AQCC must address 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 makes the 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 aircurtain destructors is limited. although more is known aboutthe engines. generators and aircurtain destructors. TheAQCC concluded thatthe adopted rule will clarifv 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. aswell as ensuring that reporting and permitting requirements are reasonably uniform and equitable. (V) The AQCC is notaware ofany timing issue that could justify changing the timeframe in which these rules are implemented. There are deadlines by which states are expected to implementfederally mandated changes. with potential sanctions forfailing to meetthese deadlines. (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) Ifrevisions to the APEN and permitting exemptions and insignificant activities are notadopted. 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 accurateemissions inventory may translate into a public health and welfare and environmental cost. by delaying the time necessary to improve the inventory when 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 comply with 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 address the requirements in question. Further, pursuantto 25-7-110.8(1), C.R.S., the AQCC makes the 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 as they relate to APEN reporting. permitting exemptions and insignificant activities. (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 implementand complywith the rule. (IV) The rule is the mostcost effective. provides the regulated communityflexibility. and achieves any necessary reduction in air pollution. (V) The selected regulatory alternative will maximize the airquality benefits of regulation in the most costeffective manner.

# MeetingAgendawhere PublicHearing Occurredand Noticepublishedinthe LegalAds ofthe DenverPost


# 40 CFRPart51Appendix V2.1(f)

# STATEOFCOLORADO

John W. Hickenlooper, Governor Christopher E. Urbina, MD, MPH, Executive Director and ChiefMedical Officer COLORADOAIR QUALITY CONTROL COMMISSION http://www.cdphe.state.co.us 4300 Cherry Creek Drive South OED-OLRA-A5 Denver, Colorado 80246-1530 Phone (303) 692-3100 Fax (303) 691-7702 TDD (303) 691-7700 Colorado Department ofPublic Health and Environment 

# Notice ofMeeting andAgenda Air Quality Control Commission & 

# BoardofHealth October20,2011 Colorado DepartmentofPublic Health & Environment 4300 Cherry CreekDrive South, Sabin Room

Callto Order: Approval ofMinutes:

Public Comment:

CONSENTAGENDA 

## Denver, Colorado



# 9:00a.m.

Determinationofa Quorum Review/Approval ofthe September 15, 2011 meeting minutes of theAirQualityControl Commission. The public is invited to comment on any air pollution issue not on the agenda. The Commission will not take action on issues discussed under this item today; however, items may be scheduled for further discussion or action.

The Commission willvote on itemsnumber 1and2aspartof a ConsentAgenda. Adoptionof a ConsentAgendaallows the Commission to consolidate votingon agenda items thatdo notneed to be discussedindividuallyand for whichpresentation of additional information is notrequired.

### Atthe Request forHearing, the Commission willnotacceptoralpublic comments on this one item: it is recommendedthatthepublicsubmitwritten comments on this one item to the Commission no later thanJanuary 19, 2012. However, thepubliccanprovide oralandwritten comments on this item at the RulemakingHearing on February 16, 2012.
REQUESTFOR WRITTEN COMMENT 0NL Y RULEMAKING HEARING 

### 1. 

### Regulation Number 6, PartA The Divisionwillpresentto the Commissionaproposalto revise RegulationNt,unber 6, Part A (NSPS)to incorporate by reference changes the EPAmadeto itsNewSource Performance Standardsrules.
Thepublic is invitedtoprovide oralandwritten comments on thefollowing two items:

RULEMAKING HEARINGS 

### 2. Regulation Number 12, PartA The Divisionwill presentto the Commissionrevisionsto RegulationNumber 12, PartA to establishemissions exemptionandenforcementproceduresfor fleet-owned heavy-duty vehiclesbasedoutsidetheprogram area as partofa fleet registered intheprogramarea, pursuantto the passage ofHB11-1157. 

### 3. Regulation Number3, Parts A, B, Cand D The Divisionwill presentto the Commissionproposedchangesto considerincorporatingthe PM2.5 NAAQS ImplementationRules, including significance levels, significantmonitoring concentrations, significantimpact levelsthat are consistentwithfederal requirements. The Commissionis also requestedto considerrevisions addressing currentexemptionsfor open burning, mobile sourceenginetesting, vacuumpump exhaust, air curtaindestructors, backup generators, and surface waterimpoundments.
BRIEFINGS, DISCUSSIONS AND REPORTS 

### 4. Annual Report to the Public The Commission'sAdministratorwill reviewthe annual reportto the public and discuss air quality inthe various regions ofthe state. The Commissionwill provide an opportunity for public comment. 

### 5. Review ofthe 2011 Ozone Season The Divisionwill presentthe 2011 summertime ozonemonitoringdata and report onany exceedances orviolations ofthe ozone standards. The Divisionwill also reviewthe historical data andprojectfuture valuesthatwillbeneededto remainbelowthe national standardin the next summer season for 2012. Furtherdiscussion ofEPA'sdecisions on revisingthe ozoneNAAQS andpolicies will occur. 

### 6. AnnualAssessment ofthe Air Quality Impacts from Oiland Gas Operations The Divisionwill presentits assessmentofthe air quality impacts from oil and gas operations. Anupdate onthe implementationofRegulationNumber7'soil and gas requirements will also be provided. Any oil andgasregulatory initiatives will also be described.

2

## 7. ColoradoEnvironmentalPublicHealthTracking(COEPHT)Program Colorado Environmental Public Health Tracking will providethe Commissionwith a slide presentationcoveringthe background, purpose, and national scope ofEnvironmental Public Health Tracking. COEPHTwill also provide abriefdemonstrationoftheirnewwebsite includinghowto query the dataand viewthe results in multiple formats. 

## 8. PulmonaryBriefing Dr. Carl White, MD from National JewishHealthwill provide his perspectives on air quality and the impacts on children'shealth. Dr. White'sresearch focuses oncellularand molecularbiology andpulmonary disease. 

## 9. DemographicTrendsin Colorado The next 30 years will bring significantdemographic changeto the Denverregion and the state ofColorado. The quintessential babyboomer state is projectedto becomethe quintessential retirement state. This demographic shift will affecthousehold size and composition, the compositionofthe laborforce, and as aresult, behavioral trends such as those related to trips andtravel. Thispresentationwill summarizethe demographic trends expected overthe next 30 years and theirprojectedimpact on, among otherthings, vehicle miles traveled inthe state and the Denverregion. 

## 10. CommissionerInformationalItems Commissioners will discuss amongthemselves activities thattheyhaveparticipatedin over the pastmonththatthey believe otherCommissioners and/ormembers ofthepublic may be interested inhearing about. 

## 11. Division Director'sReport- Will Allison Monthly activities report 

## 12. Attorney General'sReport- Andrea Gelfuso-Goetz Update ofanyrecent court actions on air quality issues 

## 13. Administrator'sReport- Mike Silverstein • ReviewNovemberagenda items • Review ofAction Items from Today's Commissionmeeting Adjourn

3

## The DenverNewspaperAgency
PUBLISHER'S AFFIDAVIT 

## City and County ofDenver ) State ofColorado )

The undersigned 

## Jean Birch being first duly sworn under oath, states and affirms as follows: 

### )

1. 

### He/she is the legalAdvertisingReviewer ofthe Denver NewspaperAgency, publisher of The DenverPost

### and YourHub. 

### 2. The DenverPost

### and Your Hub

### are newspapers ofgeneral circulation that have been published continuouslyand without interruption for at least fifty-two weeks in Denver County and meetthe legalrequisites for a legal newspaper under Colo. Rev. Stat. 24-70-103. 

### 3. 

### The notice that is attached hereto is a true copy, published in The DenverPost 

### on the folio g date(s):

# 3 Je-7

# II

Signature Subscribed and sworn to before me this_25

__ 

### day 

### of_July_ '•

# ;:/t' " tJitp.d¥f

My 

### commission expires October 15, 2011



### (SEAL) 

### Mary o coulter Notary 

## Public State of Colorado

# -

# Procedural Documents ofthe Commission AgendaItem Control Sheet Memorandum ofNotice

- Economic ImpactAnalysis (initial andfinal)

- Errata Sheet

### COLORADOAIR Ql'ALITY CONTROL COMMISSION**A<;t:~D,\** ITEM CONTROL SHEET



### Item Title: 

### J{evisionLj_Q__fu,!g!JJ<J!jqn)_,__par!;; A,J},

__<!I}_Q_Q

__

### ful..l!lcorporation 111 

### the**Sta_t~** 

### InwJcm**~!!!Jlli**

### Q!Lf_l_<t.n.J.., ')JP) 

### amlt

### c2.R e



### g

### ul<tti_on

### _J, _ J>arL(
Meeting thtte: 

### Octobl!r 20. 20II

TYPES OFACTION

Notv-llf.ARJWi

## Acno.vs RI:"QCESTFOR J/1:.',-tR/NG IlEARING' 

### \

.-·r·Public Rulcmaking
t.l

# ~--···J-**~~~;i~ Ru;~-~,,:ing--** 

# ~~ Informational 

# r Informational I '



### - -

# ---~ Policy 

# r-··---' --·-··

# ·--·--------------~'--**~** Area Designations j

_ . ..**>--···········~-----------------_j__- -~···**  ·---- ---- 

### Administrative Brieling

RECOMMENDED ACTION 

# j Adoption

·--··· ··---··-- ······- --· 

# -----··-·r-··········r-·-----

- JDenial 

## l I**MOTIO~**



### --------····--- -- -----· -,---·-··-···--·-T-- -··· -- ·-----------···-·····**---~-----··** 

# ___j X RcyuireJ I Attached

. _Not applicable**~--~** -------· 

### STATUTORY AVTIIORITY 

# ;J General 

# r------------**P~** this issue considered 

### a SIP rcYJsJon'! 

## I Which 

### SIP'.' X 

# I Spccilic I -----"·-···-" 

### EPA SU8MITTAL

Yes, specific to Reg 3, Parts A, B, and I> 

### only. 

### NSR lnfntstrut'ture 

### SIP

----· ----- ------**--~---·-·:**

# I

LPA submission deadline: May 16,2011 and .July 20,2012 !

-- --- - .**-------------~-------'** 

### Yes, Title V l)ermitting housed in Reg3, Part Cis a**cl_e!egate~ p~~gr~_!U._**  

## _ ____ ._____ _ ___ _ Is 

### this a delegated 

### program?

, *R.:quire.1· I:P:I approvalanddelegation ofawhorityto Colorado tu impl.:ment :\fACT 

### programs.

9/l.:!iI I Agenda Item Control Sheet Page I of9**l'ropo~cd** Rcg 3 Rcvi>ions PM1.5!SIP Fi;vOther Revisions

### ISSlJE: 

### The Colorado Department of Puhlic Health and Environment, Air Pollution Control Division (Division). requests that the Colorado Air Quality Control Commission (AQCC) adopt revisions to the Regulation :1, 

### Parts A. B. 

### C and D. Proposed revisions primarily address federal changes to th..: :--Jew Source Review (:'-JSR) Program related to PM2.5 National Ambient Air Quality Standards (NAAQS); these proposed revisions are necessary for consistent state implementation 

# orthe tt:dcral NSR program. In 

### addition. the Division is proposing revisions that address several recent Environmental Protection Agency (l:PA) State Implementation Plan (SIP) actions in whid1 EPA partially disapproved various SIP revisions. The Division is also proposing to incorporate into Colorado's PSD and Title V Permitting Programs EPA's Deferral of Biogenic Sources orC02 Emissions to ensure consistent statl: implementation ofgreenhouse gas (Gl-IG) regulation under the federal Prevention ofSignilicant Deterioration (PSD) and Title V Permitting Programs. Finally. the Di'ision is proposing to make other miscellaneous revisions and to correct typographicaL grammatical and formatting enors. Proposed revision details arc provided below. Note the revisions to Regulation 3. Parts /\., 13. and D are SIP revisions. Regulation 3. Part C houses Colorado·s Title V Operating Permitting Program, which is a delegated program. Thus. revisions to Regulation 

### 3. Part C arc not SIP revisions. Source affected by this proposal include PM2.5 and C02 emission sources. as \VCll 

### asopen burning sources. mobile sources, stationary internal combustionengines. emergency generators, oil and gas**surl~1ce** 

### water impoundments. deaerator/vacuum pump exhaust. and air curtain destructors.

PROI'OSEU REVISIONS:



### PM2.5 Related Rules On February 21. 2008, the AQCC adopted revisions to Regulation 3, Parts A and B, identifying PM2.5 as a criteria pollutant and applying Air Pollutant !·:mission Notice (APEN) and minor source permitting requirements for PM2.5. At that time, no corresponding revisions were made to Colorado's NSR Program because EPA had failed to promulgate the associated PM2.5 implementation rules. EPA has since promulgated revisions to 40 CFR Part 51. establishing additional provisions f(x 

### implementation of the PY12.5 N/\.AQS standard under the NSR Program in SIPs in stages. On May 16.2008, October 20.2010, Apri\6, 2011 and !vtay 18.2011, EPA promulgated a series ofrules regarding the regulation of Prvt2.5 under the NSR program. The 2008 and 2010 rules. combined with the December 21. 2010 promulgation ofthe methodology to test for PM2.5 (Sec 7

### 5 FR. t\0118). provide a complete framework establishing how to apply**P\1~.5** 

### to the NSR Program. EPA set SIP submittal deadlines relating to these revisions to the NSR program. However. prior to the promulgation ol' the December 2010 rules, application of PM2.5 to the NSR Program made little sense because the implementing rules did not exist. Nowthat the 2010 PM2.5 testing methodology is finalized. the Division proposes to adopt the suite of PM2.5 tmpkmentation rules. So. while Colorado did not meet the May 16. 20II SIP submittal deadline associated with the 2008 rule. Colorado should meet the July 20. 2012 SIP submittal deadline

9/12111 Agenda Item Control Sheet Proposed Reg 3 Rcvbion!> Pl'vC.S:SJP Fix/Other Rcvisil>ns Page 2 of9

### associated with the 2010 rule. In addition. the PM2.5 related revisions are necessary in order for EPA to approve Colorado's lntc.rstatc Transport SIP. On May 16, 2008. EPA promulgated "Implementation of the 1\cw Source Review (NSR) Program h.lr Particulate Mattl'r Less than 

### 2.5 Micrometers (P:'v12.5).'' 

### 73 FR 28321. Key revisions includl' identifying PM2.5 precursor pollutants. including condensable particulate when determining NSR applicability. identifying P\-12.5 major stationary source thresholds, identifying PM2.5 offset ratios and addressing interpollutant trading. This rule provided some flexibility in designating PM2.5 precursor pollutants. While sulfur oxicks (S02) must be treated as a PM2.5 precursor in all areas ofthe state. more flexibility is atTorded to nitrogen oxides (NOx), volatile organic compounds (VOCs) and ammonia (NII3). 

### NOx is presumed to be a 

### PM2.5 precursor state-wide unless, a state demonstrates that NOx is not a "significant contributor'' to PM2.5 concentrations within Colorado. Sec 

### 73 FR :!832R. However. VOCs and \IH3 arc not required to be treated as P\-12.5 precursors, except that high molecular weight VOCs (equal to or greater than 25 carbon atoms and low vapor prl!ssun:) \\ill be addressl!d as a condensable particulate. See 

### 73 FR 28329-283330.
At 

### this time. the Division proposes to idl!ntify S02 

### and NOx as PM2.5 precursors, state-wide. Rased on the limited Piv12.5 modeling and monitoring data available l(lr Colorado, the Division detennined that there is insu!'Jicient evidence to claim either wa) that NOx emissions do ordo not contribute signilicantly to the**conc~.:ntrati\lll** 

### ofPM2.5 in any area in Colorado. Less is known about VOCs and Nll3 and their contribution to PM2.5 in Colorado. With the exception ofcondensable particulate matter. the associated revisions have not previously been incorporated into Colorado's permitting process. The \1ay 16,2008 

### rule established a SIP submittal deadline ofMay 16.2011.
On October 20. 2010. EPA's 

### "Pn:vention of Signilicant Deterioration (PSD) for Particulate Matter Less Than 2.5 ,'vticromctcrs (I'M2.5) Increments. Signillcant Impact Levels (SILs) and Signilicant Monitoring l'om:cntration (S\-1Cf 

### rule was posted in the Federal Register. Sec 75 

### FR 6-/StJ-1. 

### Key revisions include st:tting**P~vt2.5** 

### increments, S!Ls. and SMCs. and detining the PM2.5 baseline. The associated revisions have not previously been incorporated into Colorado's permitting process. EPA's October 20.2010 ruk established a 

### SIP submittal deadline ofJuly 20. 2012. On April 6. 

### 20II. EPA's "Requirements for Preparation, Adoption. and Submittal of Implementation Plans" rule was posted in thL' Federal Register. Sec 76 

### FR 18870. 

### Key revisions include clarifying that condensable particulate must be included when determining NSR applicability. Colorado already addresses condensable particulate matter in the permitting process. Finally. on May 18. 2011, EPA's

..Implementation of the New Source Review (NSR) Program !(Jr Particulate Matter Less Than 2.5 Micrometers (J>f\'12.5): Final Rule to Repeal Grandfitther Provision" rule was posted in thl: Federal Register. Sl!e 76 

### FR**2~()-16.** 

### Key revisions include ending the use ofthe PMIO Surrogate Policy. EPA's P\110 Surrogate Policy allowed permitting agl'ncics to usc Pr·vtl0 emissions as a surrogate for PM2.5, since little emissions data was available and EPA had not yet finalized a PM2.5 testing methodology to determine PM2.5 emissions. Colorado confirmed to 1-:PA Region VIII, that it no longer relies upon the PMI0 Surrogate Policy. See

..Colorado's Positinn on the Usc of PM 10 as a Surrogate for PM2.5.

Agenda lt<.:nl Control Sheet Page 3 of9 Proposed Reg 3 Revisions · Pl\12.5 SIP**Fix'Oth~r** Revisions

### Relevant to Both the PM2.5 Implementation Rules and Interstate Transport,'' January 13. 2011 letter from Paul Tourangeau, Division Director. to Callie Vidctich. EPA Region VIII Air Pmgram Director (attached). The 

### associated proposed revisions made to Regulation } arc as follows:

7



### 3 FR 2?5321. May 16. 2008. 

### associated revisions:

• Revise the delinition of

### ·'criteria pollutants"" to 

### address Pf\.·12.5 precursors (Part A, Section 1.13.17.)



### • Re\ise the ddinition of '·net emtsstons increase"" to address PM2.5 (Part D. Section ll./\.26.d.)

• Revise the detimtion of

### •·regulated NSR pollutant"" to identify PM2.5 precursors (Part D, 

### Section ll.A.38.c

.. and II.A.38.c.(i)-(iii))

• Revise the definition of·'signilicant'" to 

### address P\12.5 (Part D, Section li.A.42.a.)

• Revise 0.:SR 

### o!Tsct requirements to address PM2.5 and f(>r consistency with federal requirements 

### (Part D. Sections V./\.3

.. and V.AJ.a.-c.)



### 75 FR 6./Ro-1. October 20. 

### 2010. associatt:d revisions:

• Revise the definition ot'"basclinc area" to include PM2.5 (Part 

### D. Section ll./\.5.)

• Revise the dclinition or•·majnr source baseline date'' to address PM2.5 (Part D. Section ll./\.23.(a){i) and ll.A.23.(a)(iii))

• Revise the dclinition of'·minor source baseline date" to address PM2.5 (Part D, 

### Section ll.A25.(a)(i) and ll.J\.:25.(a)(iii))

• RcviSl' source impact analysis to address PM2.5 SILs (Part 

### D, Sections VI.A.2. and VI.A.2.a.-c.

• Revise monitoring exemption to address PM2.5 SMC (Part 

### D. Section VI.B.3.a.(iii)

• Revise the Tahle of 

### Signilicani.:e Levels major stationary sources in attainment areas affecting nonattainment areas 

### to address PM2.5 (Part 

### D. Section VI.D.2.)

• Revise Ambient Air Increments to audn.:ss 

### PM2.5 Increments (Part 

### D. Sections 

### X.A. 1., X.A.l.a. -c.)

• Revise the Class 1Variances Maximum Allowable Increase to address PM2.5 Increment (Part D. Section Xlli.D.)

• Correct references to the Clean Air Act (Part D, Section li.A.S.b., ll.i\.25.b.(i), and X.A.2.)



### 76 FR 18870. 

### April6. 2011, 

### associated ro:\'isions:

• Re\isc the dclinition of "regulated NSR pollutant"' to require condensable particulate
Agenda !tern Control Sheet Page .t of9 Proposed Reg 3 ReVIsions PM2YSIP Fix/Other Revisions

### matter be included when determining NSR applicability (Part D, Section ll.A.38.q.)

76 FR 2N6.J6, 

### May 18. 20II, 

### associated revisions:

• Revise monitoring exemption to end the use of 

### the Ptvll U 

### Surrogate Policy (Part D. 

### Section VI.B.J.e.



### EPA Partial Disapproval Actions On October .\ 2!lll, EPA's final action partiall) approving and partially disapproving Colorado's SIP revisions that revised Air Pollutant Emission Notice (APEN) and permitting exemptions the AQCC submitted to EPA in September 1997. 

### June 2003. 

### July 2005, 

### August 2006, 

### and August 2007 

### was published in the Federal Register. Sec 76 FR ()JtJ5.1. 

### EPA partially disapproved APEN exemptions for open burning, mobile sources. stationary internal combustion engines, emergency generators, oil and gas surlitcc v.at<.:r impoundments. dcaerator/vacuum pump exhaust. and air curtain destructors. To 

### address EPA's concerns the Division proposes to revise the folltming provisions that EPA 

### disappron.:d or on which EPA otherwise provided comment. as follows:

• Open burning APFN exemption was corrected to reference federally enforceable Regulation I 

### (!'art A. 

### Section II.D

### .l.q.). EPA commented that th<: change in reference 

### ti·01n Regulation I, 

### which is part of Colorado's SJP, to Regulation 9, 

### which is not part of

### Colorado's SIP, \vas not approvable. The Division agrees.
• :\1obile sources APE:-i 

### exemption was clarified (Part A, 

### Section li.D.l.ppp.) and associated revisions \\l're made to 

### the insignilicant activities list (Part C, Section II.L3.uuu.). EPA commented that these exemptions on!

### y apply to stationary sources. not non-road engines and not sources being used l{lr transportation purposes. The Division agrees.
• Stationary internal combustion engine 

### APE:-J exemption was repealed (Part 

### A, Section II.D.l.sss.) and related revisions were made to the associated pcnnitting exemption (Part 

### B. Sections II.D.2.c

.. and II.D.2.c.(i)-(iii)) and insignificant activities list (Part 

### C. Section II.EJ.nnn.). EPA commented that the /\PEN exemption should require rccorclkeeping and reporting. The Division opted to propose to repeal the /\PEN exemption and revise the permit exemption to be consistent with current SIP approved language instead of requiring additional recordkeeping and reponing. Note that whik the categorical exemption is being repealed. sources may still utilize the general one and two ton /\PEN exemption f(>und in Part A, Section II.D.l.a.

• Emergency generator /\PEN exemption was repealed (Part A. Section II.D.I.ttt.), and relateJ revisions were made to the associated permitting exemption (Part B, Sections II.D.2.c., and II.D.2.c.(i)-(iii)) and insigniticant activities list (Part C. Section IJ.E.3.nnn.). EPA commented that the APEN exemption should require recordkccping and reporting.

912'11 Agenda Item Control Sheet Page 5 of9 Proposed Reg 3**Rcvi~ions ~**  PM2.5iS!P Fix Other Revisiom

### The Division opted to propose to repeal the !\PEN exemption and revise the permit exemption to be consistent vvith current SIP approved language instead of requiring auditional rccordkccping and reporting. Note that \\bile the categorical exemption is being repealed. sources may still utilize the general one ;;mu two ton APEN exemption l()und in Part A. 

### Section II.D. I.a.

• Surface water impoundment APE:\ exemption was clarified (Part A. Section II.D.l.uuu.) ami n.:lated revisions \\ere made to the associated permitting exemption (Part B. Sections ll.D.I.m.) and insignificant activities list (Part C, 

### Section ll.E.3.yyy.). EPA commented that the APE!'\ exemption should be clarified to confirm that the exemption applied to oil 

### andgas produced \\ater. The Di,ision agrees. and is proposing additional clarilications on the activities for \\hich this exemption docs not apply, as well as proposing corresponding clarifying revisions to the associated permitting exemption and insignilieant acti\'ity.

• lkaeratorivacuum pump e:-.:haust APEN exemption was repealed (Part A, Section II.D.I.xxx.) and associated revisions were made to the insignificant activities list (Part C. Section II.E.3.uuu.). EPA commented that it was unclear \\hat these activities were. The Division agrees. is unaware ofany source making use ofthis exemption, and thus has proposed to remove this exemption and associated insignilil:ant activity. '

• Air curtain destructor APFN exemption removal (Part ;\, Section II.D.l.ffTf.). EPA commented that because air curtain destructors meet the SIP approved definition of an incinerator and as such arc required to submit APENs and obtain permits, that this exemption should be removed. The Division agrees.

On February 4, 20II, EPA's partial approval and partial disapproval ofColorado·s SIP revisions submitted to EPA in April 2003 and June 2003 was published in the Federal Register. See 

### 76 FR. 633/. 

### Those 2003 SIP revisions to Regulation 3 

### revised APEN exemptions and permitting exemptions in Regulation 3. Pans A and B. respectively. As a result. the Div·ision proposes to revise the following provisions that EPA disapprov·ed or on which EPA otherwise provided comment.

• Stationary internal combustion engines I0 ton per year permitting exemption in attainment areas was revised (Part B, Sections ll.D.l.c., and ll.D.l.c.(iii)). EPA commented that Colorado did not**mak~:** 

### the anti-haeksliding demonstration necessary to increase the permitting exemption threshold from 5tons per yearto I0tons per year. The Division agrees and has opted to revert to SIP approved exemption language instead of making the necessary demonstration at this time. Note that this revision docs not prevent any source from making use of the**I~Kility-wide** 

### permit exemptions found in Part B, Sections II.D.2. or ll.DJ.

• Non-road engine state-only requirements (Part A. Sections l.B.3l.c. and LB.3l.d.) were revised. EPA commented that it could not approve provisions which arc identified as state-on!; provtstons. The Division agrees and has rurthcr placed "(State-only

9'12 II i\gend<t Item Control Sheet Page 6of9 ProposL·d Reg 3 Revisions- l'M2.5,SIP Fix/Other Revisions

### Requirl:ment)" at the beginning of these sections to clearly identify that they arc stateonly provisions.

Biol!enics Deferral Revisions On June 3. 20I0. EPA's ·'Preventinn of Signilicant Deterioration and Title V Greenhouse Gas (CJIJG) Tailoring Rule." commonly called the (!JIG Tailoring Rule, was published in the Federal Register. Sec 75 FR 3151-1. l·:P,\'s Gil<.! Tailoring Rule was 1.ksigncd to tuilor the applicability criteria that determine which stationary sources and modification projects become subject to permitting rcquireml!nts for GIIGs under the Prevl!ntion ofSignilicant Deterioration (PSD) and l'itlc V 

### Permitting Programs orthe Clcan Air Act (CAl\).**0~** 

### July 

### 20.2011, EPA's '·Deferral for 

### C02Emissions from Biocnergy and Other Biogenic Sources lJ

### nder the Preventinn ofSignificant Deterioration (PSD) and Title V 

### Programs." final rule. commonly called the Biogenic Dcfl!rral. was published in the Federal Register. See 

### 76 FR I52-IY. 

### EPA's Biogenic Deferral proposes to temporaril: exclude biogenic C02 emissions from the ckfinition of"'subject to regulation'' to allovv biogeni\.: sources of'\:arbon dioxide (C02) 

### emissions a three year deferral f'wm the J>SD anJ Title V 

### permitting requirements; the three year dcft:rral applies even ifthe source·s Gll<.1 emissions exct:ed the threshold established in the Tailoring Rule. While the tina! rule was sigm:d by 

### the LPA Administrator on July l. 

### 20II, and becomes effective on that date (the beginning ofthe Tailoring Rule's Step 2), no final rule has yet been published in the FeJerul Rcgister. In the expectation that EPA will promulgate its final rule prior to the October 20. 2011 hearing. and to maintain \.:onsistency with implementation of federal requirements associated \Vith the Tailoring Rule and the associated Biogenic Deferral. the Division proposes to incorporate EPA's 13iogcnic Deferral into Colorado's PSD and Title V 

### Permitting Programs. as follows:

• Existing definition of Subject to Rcgulation was rc\iscd for consistency \\ith EPA's proposed I3iogenic lkferral (Part i\. 

### Section I.B.44.h.). {)Jher Revisions In addition to revisions incorporating or addressing l'cderal requirements as listed above, the Division proposes the following miscellaneous revisions:

• Clarify signilicance level for VOC 

### and NOX minor sources in the ozone nonattainment area for APEN reporting purposes (:\:li.C.2.b.(iil)

• Change the Notice of Startup rcporting timcframc from 30 

### days prior to commencing operation to 15 days afterward. consistent with Colorado's House Bill 10-1042, as coJilied in 25-7-114.5(12)(a), C.R.S. (Part B, Section lll.Ci.l.)

• lin-italicize text as it is not pan of the l\SR Reform rule adoption (Part C. Section l.,\.7.j.)



### • :Vlo\'e creditable emissions changes documentation requirement using J\PE!'\s (Part D. Section 1l.A.26.<.:.(iii))

91211 Agenda IIem Control Sheet !'age 7 oflJ Proposed R.:g 3**I\~'\'!.'>**tons PM2.5'SlP Fix'Otlll·r Rcvtstons 

# !

§ 

# t 

# I

f

### • Include NOx as aprecursor to 03 in SMC for consistency with federal requirements (Part D. Section**VI.B.3.~:.)** 

### • Remove total suspended solid**S~1C** 

### for consistency with federal requirements (Part D. Section VJ.BJ.a.(iii))

• \1ake typographical. grammatical and li.mnalling corrections

RECOMMENDED ACTION: 

### The Division recommends that the Commission adopt all ofthe above-referenced revisions.

ATTACHMENTS: 

### I. "Colorado's Position on the tJse of Ptv11 0 

### as a Surrogate f()r PM2.5. Relevant to Both the P\12.5 Implementation Rules and Interstate Transport.'' January 13. 20

### II letter from Paul Tourangeau, Division Director. to Callie Vidl'tich, EPA Region VIII Air Program Director 

### .2. Regulation No. 3, Parts A. B. C and D Proposed Rule Text (affected pages only) .\ Regulation :1\o. 3. Part G. Section I.VV.

- Statement of Basis. Specific Statutory Authority and Purpose 4. Final Economic Impact Analysis 5. Presentation Slides

9 12 ll Agenda Item Control Stwct Pagc8of9 PrDposcd Reg 3 Revisions P!\12.5 SIP Fix:Othcr Revisions

# _____ 1p5/LL

Date**Dat~**



### Di\ision Director: Will Allison

# --··~

# ..)**S~f** lc t (**Dat~**

912 II**A~~nde1 lt~m**  Control**Sh~ct** Page 9 of9 l'rnpo,.;d R.:l!**~** Rni,ions P\12

..'i.SJP h\**Oth~r Rc:vision~** 

# STATE OF COLOMDO

John W. Hickenlooper, Governor Christopher E. Urbina, MD, MPH

Executive Director and Chief Medical Officer Dedicated to protecting and improving the health and environment of the people of Colorado 4300 Cherry Creek Dr. S. Laboratory Services Division Denver, Colorado 80246-1530 8100 Lowry Blvd. Phone (303) 692-2000 Denver, Colorado 80230-6928 Located in Glendale, Colorado (303) 692-3090 http://www.cdphe.state.co.us



# MEMORANDUM OFNOTICE
Date: July 5, 2011
To: Colorado Air QualityControl Commission Subject: Revisions to Regulation 3 ColoradoDepartment of

### PublicHealth andEnvironment



### The Department ofPublic Health and Environment (Department), AirPollution Control Division (Division) requeststhatthe Air QualityControl Commission (AQCC) considerrevisions to Regulation 

### 3. 

# What's in this Package?
The following documents provide details on the proposed changes: • Language oftheproposed rules (including the Statements ofBasis and Specific Statutory Authority and Purpose) • Initial Economic ImpactAnalysis 

# Explanation ofthe Proposed Rule The Colorado Department ofPublic Health and Environment, Air Pollution Control Division (Division), requests thatthe ColoradoAirQualityControl Commission (AQCC) considerrevisions to the Regulation 3, Parts A, B, C, and D. Proposed revisions primarily address federal changes to the New Source Review (NSR) Program related to PM2.5 National AmbientAirQuality Standards (NAAQS). These proposed revisions are necessary for consistent state implementation ofthe federal NSRprogram. In addition, the Division is proposingrevisionsthat address several recent Environmental Protection Agency (EPA) State ImplementationPlan (SIP) actions in which EPApartiallydisapproved various Colorado SIP revisions. The Division is also proposing to incorporate into Colorado's PSD and Title V Permitting Programs EPA'sDeferral ofBiogenic Sources ofC02Emissionsto ensure consistent state implementation ofgreenhouse gas (GHG) regulation underthe federal Prevention ofSignificant Deterioration (PSD) and TitleV PermittingPrograms. The Division is also proposing several miscellaneous revisions. Finally, the Division is proposingto correcttypographical, grammatical and formatting errors.

7/5/11 Memorandum ofNotice Page 

### 1oflO Proposed Reg 3Revisions- PM2.5/SIP Fix/Other Revisions

### Source affected bythis proposal include PM2.5 and C02emission 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 air curtain destructors.
PM2.5 Related Rules On February 21, 2008, the AQCC adopted revisions to Regulation 3, Parts A and B, identifying PM2.5 as a criteria pollutant and applying Air Pollutant Emission Notice (APEN) and minor source permitting requirements for PM2.5. At that time, no corresponding revisions were made to Colorado's NSR Program because EPA had failed to promulgate the associated PM2.5 implementation rules. EPA has since promulgated revisions to 40 CFRPart 51, establishing additional provisions for implementation of the PM2.5 NAAQS standard under theNSRProgram in SIPs in stages. On May 16, 2008, October 20, 2010, April 6, 2011 and May 18, 2011, EPA promulgated a series of rules regarding the regulation ofPM2.5 under the NSR program. The 2008 and 2010 rules, combined with the December 21, 2010 promulgation ofthe methodology to test for PM2.5 (See 75 FR 80118), provide a complete framework establishing how to apply PM2.5 to the NSR Program. EPA set SIP submittal deadlines relating to these revisions to the NSRprogram. However, priorto the promulgation ofthe December 2010 rules, application ofPM2.5 to the NSR Program made little sense because the implementing rules did not exist. Now that the 2010 PM2.5 testing methodology is finalized, the Division proposes to adopt the suite ofPM2.5 implementation rules. So, while Colorado did not meet the May 16, 2011 SIP submittal deadline associated with the 2008 rule, Colorado should meet the July 20, 2012 SIP submittal deadline associated with the 2010 rule. In addition, the PM2.5 related revisions are necessary in order for EPAto approve Colorado's InterstateTransport SIP. On May 16, 2008, EPA promulgated "Implementation ofthe New Source Review (NSR) Program for Particulate Matter Lessthan 2.5 Micrometers (PM2.5)," 73 FR28321. Key revisions include identifying PM2.5 precursor pollutants, including condensable particulate when determining NSR applicability, identifying PM2.5 major stationary source thresholds, identifies PM2.5 offset ratios and addresses interpollutant trading. This rule provided some flexibility in designating PM2.5 precursor pollutants. While sulfur oxides (S02) must be treated as a PM2.5 precursor in all areas ofthe state, more flexibility is afforded to nitrogen oxides (NOx), volatile organic compounds (VOCs) and ammonia (NH3). NOx is presumed to be a PM2.5 precursor state-wide unless, a state demonstrates thatNOx is not a "significant contributor" to PM2.5 concentrations within Colorado. See 73 FR 28328. However, VOCs and NH3 are not required to be treated as PM2.5 precursors, exceptthat high molecular weight VOCs (equal to or greater than 25 carbon atoms and low vapor pressure) will be addressed as a condensable particulate. See 73 FR 28329-283330.
At this time, the Division proposesto identify S02 and NOx as PM2.5 precursors, state-wide. Based on the limited PM2.5 modeling and monitoringdata available for Colorado, the Division determinedthat there is insufficient evidenceto claim either waythatNOxemissions do ordo notcontribute significantlyto the concentration ofPM2.5 in any area in Colorado. Without evidenceto narrowthe identification ofNOxas aprecursorto specific areas, Colorado must identifyNOx as a PM2.5 precursor state-wide. Less is known about VOCs and NH3 and theircontribution to PM2.5 in Colorado, and so Colorado has chosento not identifythem as PM2.5 precursors atthis time. Withthe exception of condensable particulate matter, the associated revisions have not previouslybeen incorporated·into Colorado'spermittingprocess. The May 16, 2008 rule established a SIP submittal deadline ofMay 16, 2011.

7/5/11 Memorandum ofNotice Page 2oflO Proposed Reg 3 Revisians- PM2.5/SIP Fix/OtherRevisions

### On October 20, 20I0, EPA promulgated "Prevention ofSignificant Deterioration (PSD) for Particulate Matter Less Than 2.5 Micrometers (PM2.5)

- Increments, Significant Impact Levels (SILs) and Significant Monitoring Concentration (SMC)", 

### 75 FR 64864. Key revisions include setting PM2.5 increments, SILs, and SMCs, and defining the PM2.5 baseline. The associated revisions have not previously been incorporated into Colorado's permitting process. EPA's October 20, 2010 rule established a SIP submittal deadline ofJuly 20, 2012. On April 6, 2011, EPA promulgated "Requirements for Preparation, Adoption, and Submittal of Implementation Plans," 

### 76FR 18870. Key revisions include clarifyingthat condensableparticulate must be included when determining NSR applicability. Colorado already addresses condensable particulate matter in the permittingprocess. Finally, on May 18, 2011, EPA promulgated "Implementation of the New Source Review (NSR) Program for Particulate Matter Less Than 2.5 Micrometers (PM2.5); Final Rule to Repeal Grandfather Provision," 

### 76 FR 28646. Key revisions include endingthe use ofthe PMIO Surrogate Policy. EPA's PMIO Surrogate Policy allowed permitting agencies to use PMIO emissions as a surrogate for PM2.5, since little emissions data was available and EPA had not yet finalized a PM2.5 testing methodology to determine PM2.5 emissions. Colorado confirmed to EPA Region VIII, that it no longer relies upon the PMIO Surrogate Policy. See "Colorado's Position on the Use of PMIO as a Surrogate for PM2.5, Relevant to Both the PM2.5 Implementation Rules and Interstate Transport," January 13, 2011 letter from Paul Tourangeau, Division Director, to Callie Videtich, EPA Region VIII Air Program Director (attached). The associated proposed revisions made to Regulation 3 are as follows:



### 73 FR 28321, May 16, 2008, associated revisions:

• Revise the definition of "criteria pollutants" to address PM2.5 precursors (Part A, Section I.B.l7.)

• Revise the definition of"netemissions increase"to address PM2.5 (Part D, Section II.A.26.d.)

• Revise the definition of"regulated NSRpollutant"to identify PM2.5 precursors (Part D, Section II.A.38.c., and II.A.38.c.(i)-(iii))

• Revise the definition of"significant"to address PM2.5 (Part D, Section II.A.42.a.)

• Revise NSR offset requirements to address PM2.5 and for consistency with federal requirements (Part D, Sections V.A.3., and V.A.3.a.-c.)



### 75 FR 64864, October 20, 2010, associated revisions:

• Revise the definition of"baselinearea"to include PM2.5 (Part D, Section II.A.5.) 

# • Revise the definition of "major source baseline date" to address PM2.5 (Part D, Section II.A.23.(a)(i) and II.A.23.(a)(iii)) 

# • Revise the definition of "minor source baseline date" to address PM2.5 (Part D, Section II.A.25.(a)(i) and II.A.25.(a)(iii))

• Revise source impact analysis to address PM2.5 SILs (Part D, SectionsVI.A.2. and VI.A.2.a.-c.

• Revise monitoring exemption to address PM2.5 SMC (Part D, Section VI.B.3.a.(iii) 7/5/11 Memorandum ofNotice Page 3 oflO Proposed Reg 3Revisions- PM2.5/SIP Fix/OtherRevisions 

# t 

# I I • 

# I

### • Revise the Table of Significance Levels major stationary sources in attainment areas affecting nonattainment areas to address PM2.5 (Part D, Section VI.D.2.)

• Revise Ambient Air Increments to address PM2.5 Increments (Part D, Sections X.A.l., X.A.l.a. -c.)



### • Revise the Class IVariances Maximum Allowable Increase to address PM2.5 Increment (Part D, Section XIII.D.)

• Correctreferences to the Clean AirAct (Part D, Section II.A.5.b., Il.A.25.b.(i), and X.A.2.)

76FR 18870, 

### April6, 2011, associated revisions:

• Revise the definition of"regulated NSR pollutant" to require condensable particulate matter be included when determiningNSRapplicability (Part D, Section II.A.38.q.)

76FR 28646, 

### May 18, 2011, associated revisions:

• Revise monitoring exemption to end the use of the PMlO Surrogate Policy (Part D, Section VI.B.3.e.

EPA Partial Disapproval Actions On January 25, 2011, EPA proposed to partially disapprove revised Air Pollutant Emission Notice (APEN) and permitting exemptions the AQCC submitted to EPA in September 1997, June 2003, July 2005, August 2006, and August 2007 (76 FR 4271). 

### EPA proposed to partially disapprove APEN exemptions for open burning, mobile sources, stationary internal combustion engines, emergency generators, oil and gas surface water impoundments, deaerator/vacuum pump exhaust, and air curtain destructors. While EPA has confirmed thatthe final rule has been signed by the Regional Administrator and that the final rule identifies the same issues as found in the proposal, logistical issues have delayed the final publication in the Federal Register. To address EPA'sconcerns the Division proposes to revise the following provisions that EPA disapproved or on which EPA otherwise provided comment, as follows:

• Open burning APEN exemption reference was corrected reference federally enforceable Regulation 1(Part A, Section II.D.l.q.). EPA commented that the change in reference from Regulation 1, which is part ofColorado's SIP, to Regulation 9, which is not part ofColorado's SIP, was not approvable. The Division agrees.
• Mobile sources APEN exemption was clarified (Part A, Section II.D.l.ppp.) and associated revisions were madeto the insignificant activities list (PartC, Section II.E.3.uuu.). EPA commented that these exemptions only apply to stationary sources, not non-road engines and not sources being used for transportation purposes. The Division agrees.
• Stationary internal combustion engine APEN exemption was repealed (Part A, Section II.D.l.sss.) and related revisions were made to the associated permitting exemption (Part B, Sections II.D.2.c., and II.D.2.c.(i)-(iii)) and insignificant activities list (Part C, Section II.E.3.nnn.). 7/5/11 Memorandum ofNotice Page 4 oflO Proposed Reg 3Revisions- PM2.5/SIP Fix/Other Revisions

### EPA commented that the APEN exemption should require recordkeeping and reporting. The Division opted to repeal the APEN exemption, and revise the permit exemption to be consistent with current SIP approved language instead ofrequiring additional recordkeeping and reporting. Note that while the categorical exemption is being repealed, sources may still utilize the general one and twoton APEN exemption found in PartA, Section II.D.l.a.

• Emergency generator APEN exemption was repealed (Part A, Section II.D.l.ttt.), and related revisions were made to the associated permitting exemption (Part B, 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. The Division opted to repeal the APEN exemption, and revise the permit exemption to be consistent with current SIP approved language instead ofrequiring additional recordkeeping and reporting. Note that while the categorical exemption is being repealed, sources may still utilize the general one and twotonAPEN exemptionfound in PartA, Section II.D.l.a.

• Surface water impoundment APEN exemption was clarified (Part A, Section II.D.l.uuu.) and related revisions were made to the associated permitting exemption (Part B, Sections II.D.l.m.) and insignificant activities list (Part C, Section II.E.3.yyy.). EPA commented that the APEN exemption should be clarified to confirm that the exemption applied to oil 

### and gas produced water. The Division agrees, and is proposing additional clarifications on the activities for which this exemption does not apply, as well as proposing corresponding clarifying revisions to the associated permitting exemption and insignificant activity.

• Deaerator/vacuum pump exhaust APEN exemption was repealed (Part A, Section II.D.l.xxx.) and associated revisions were made to the insignificant activities list (Part C, Section II.E.3.uuu.). EPA commented that it was unclear what these activities were. The Division·agrees, is unaware ofany source making use ofthis exemption, and thus has proposed to removethis exemption and associated insignificant activity.

• Air curtain destructor APEN exemption removal (Part A, Section II.D.l.ffff.). EPA commented that because air curtain destructors meet the SIP approved definition of an incinerator and as such are required to submit APENs and obtain permits, that this exemption should be removed. The Division agrees.
IfEPA does not promulgate a final rule onthisproposed SIP action bythe October20, 2011 hearing, the AQCC should consider optionsto either delayor disapprove adoption oftheserevisions until EPA finalizes this rule.

On February 4, 2011, EPA partially approved and partially disapproved SIP revisions submitted to EPA in April 2003 and June 2003 

### (76 FR 6331). Those 2003 SIP revisions to Regulation 3 revised APEN exemptions and permitting exemptions in Regulation 3, Parts A and B, respectively. As a result, the Division proposes to revise the following provisions that EPA disapproved or on which EPA otherwise provided comment.

• Stationary internal combustion engines 10 ton peryear permitting exemption in attainment areas was revised (Part B, Sections II.D.l.c., and II.D.l.c.(iii)). EPA commented that Colorado did not
7/5/11 Memorandum ofNotice Page 5 oflO Proposed Reg 3 Revisions- PM2.5/SIPFix/Other Revisions

### make the anti-backsliding demonstration necessary to increase the permitting exemption threshold from 5tons peryearto 10 tons per year. The Division agrees and has optedto revertto SIP approved exemption language instead ofmaking the necessary demonstration at this time. Note that this revision does not prevent any source from making use ofthe facility-wide permit exemptions found in PartB, Sections II.D.2. or II.D.3.

• Non-road engine state-only requirements (Part A, Sections I.B.31.c. and I.B.31.d.) were revised. EPA commented that it could not approve provisions which are identified as state-only prov1s1ons. The Division agrees and has further placed "(State-only Requirement)" at the beginningofthese sectionsto clearly identifythatthey are state-onlyprovisions.
Biogenics Deferral Revisions On June 3, 2010, EPA promulgated the "Prevention ofSignificantDeterioration and Title V Greenhouse Gas (GHG) Tailoring Rule," commonly called the GHG Tailoring Rule, 75 

### FR 31514. EPA's GHG Tailoring Rule was designed to tailor the applicability criteria that determine which stationary sources and modification projects become subject to permitting requirements for GHGs under the Prevention of Significant Deterioration (PSD) andTitle

### V PermittingPrograms ofthe CleanAirAct (CAA). On March 21, 2011, EPA proposed the "Deferral for C02Emissions from Bioenergy and Other Biogenic Sources Underthe Prevention ofSignificantDeterioration (PSD) and Title 

### VPrograms," commonly calledthe Biogenic Deferral, 76 

### FR 15249. EPA'sBiogenicDeferral proposesto temporarily exclude biogenic C02emissions from the definition of"subjectto regulation" to allow biogenic sources ofcarbon dioxide (C02)emissions athree yeardeferral from the PSD andTitle V 

### permitting requirements; thethree year deferral applies even ifthe source's GHG emissionsexceedthe threshold established in the Tailoring Rule. Whilethe final rule was signedbythe EPA Administratoron July 1, 2011, and becomes effective onthat date (the beginning ofthe Tailoring Rule's Step 2), no final rule has yet been pub'lished in the Federal Register. In the expectationthat EPAwill promulgate its final rule priorto the October20, 2011 hearing, and to maintain consistencywith implementation offederal requirements associated with the Tailoring Rule and the associated Biogenic Deferral, the Division proposes to incorporate EPA'sBiogenicDeferral into Colorado's PSD andTitle

### VPermittingPrograms, as follows:

• Definition ofSubject to Regulation was revised for consistency with EPA's proposed Biogenic Deferral (Part A, Section I.B.44.b.).
Again, ifEPA does notpromulgate a final rule on thisproposed SIP action bythe October20, 2011 hearing, the AQCC shouldconsideroptions to eitherdelay ordisapprove adoption ofthese revisions until EPA finalizes this rule.

Other Revisions In addition to revisions incorporating or addressing federal requirements as listed above, the Division proposesthe following miscellaneous revisions:

• Clarify 100 tons per year change in NOx is considered a significant change for APEN reporting purposes (A:II.C.2.b.(ii))
7/5/11 Memorandum ofNotice Page 6 oflO Proposed Reg 3 Revisions- PM2.5/SIP Fix/Other Revisions

### • Change the Notice ofStartup reporting timeframe from 30 days prior to commencing operation to 15 days afterward, consistent with Colorado's House Bill 10-1042, as codified in 25-7- 114.5(12)(a), C.R.S. (Part B, Section III.G.l.)

• On-italicizetext as it is not part oftheNSR Reform rule adoption (PartC, Section I.A.7.j.)

• Move creditable emissions changes documentation requirement using APENs (Part D, Section II.A.26.c.(iii))

• Include NOx as a precursor to 03 in SMC for consistency with federal requirements (Part D, Section VI.B.3.c.)

• Remove total suspended solid SMC for consistency with federal requirements (Part D, Section VI.B.3.a.(iii))

• Make typographical, grammatical and formatting corrections


# Materials Contained in the Proposed Rule The redline-strikeoutversion ofproposed revisions to Regulation 3 are attached. 

# Public Meetings Plan No public meetings priorto this rulemaking have been held with the public, as the revisions are primarily addressing federal requirements and EPA partial disapproval actions on Colorado's SIP. 

# Background on Developmentofthe Rulemaking Proposal
What is theproblem? EPA promulgated federal changestotheNew Source Review (NSR) Program, which mustbe incorporated into Regulation 3 in orderto maintain consistency with the federal NSRProgram related to PM2.5 National AmbientAir Quality Standards (NAAQS). Subsequently, EPA disapproved and proposed to disapprove Air PollutantEmissionNotice (APEN) exemption provisions in Regulation 3, associated with Colorado's September 1997, April 2003 June 2003, July2005, August2006, and August 2007 SIP submittals. Also, EPAproposed its Deferral ofBiogenic 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 addressingthese actions, the Division identified several additional Regulation 3 provisions in need ofrevision.
How doesthis proposed rule help solvethe problem? The proposed rule incorporates federal rules and EPA disapproval actionsto maintain consistency with the federal NSRProgram and obtain SIP approval, respectively. Theproposed rule also incorporates EPA'sproposed deferral ofbiogenic C02to maintain consistencywith the federal PSD and Title V Permitting Programs.
As mentioned earlier, some proposed revisions relateto EPA proposed rules, for which no final rule has yet been promulgated. OnJanuary 25, 2011, EPA proposed to partially disapprove Colorado SIP revisions submitted to EPA in September 1997, June 2003, July2005, August2006, and August 2007, specific to Regulation 3revised APEN exemptions 

### (76FR 4271). EPA has confirmedthatthe final rule

7/5/11 Memorandum ofNotice Page 7 oflO Proposed Reg 3Revisions- PM2.5/SIP Fix/OtherRevisions

### has been signed bythe Regional Administrator andthatthe final rule identifiesthe same issues as found in the proposal andthat logistical issues have delayedthefinal publication in the Federal Register.
On March 21,2011,EPA proposedthe "Deferral for C02Emissions from Bioenergy and Other Biogenic Sources Underthe Prevention ofSignificantDeterioration (PSD) and Title V Programs," commonly calledthe Biogenic Deferral, 

### 76FR 15249. While the final rule was signed by the EPA Administratoron July 1, 2011, and becomes effective on that date (the beginning oftheTailoring Rule's Step 2), no final rule has yetbeen published in the Federal Register. EPA is expectedto promulgateboth ofthese final rules priorto the October 20, 2011 hearing. Tobe responsiveto EPA's disapproval actions and to maintain consistencywith implementation offederal requirements associated withthe Tailoring Rule andthe associated Biogenic Deferral, the Division proposesto incorporatethe associated revisions into Regulation 3 at thistime.
Howwas the rule developed? The Division incorporated federal requirements directly into Regulation 3 and workedwith the Attorney General's Officeto address EPA'sdisapproval actions.
How doesthe rule affectthe public, regulated community, and otheragencies? Adoption ofthe proposed revisions helps ensure consistent application ofthe federal NSRProgram by both EPA andthe Division. Adoption oftheproposedrevisions will also ensure consistentapplication ofrequirements for sources ofthatemitPM2.5, orprecursors, sulfurdioxide (SOx) and nitrogen oxides (NOx). Adoption ofthe proposed revisions maybenefittheregulated communitybyproviding sources with current information.
How doesthe rule compareto federal requirements oradjacent staterequirements?
Federal Requirements Revising provisions pertainingto the federal major sourceNSR, PSD and Title

### V Programs maintains consistencybetween state and federal requirements. Revising provisions related to EPA's disapproval ofColorado's SIP addresses EPAconcerns and helps Colorado obtain SIP approval from EPA.
State Requirements Utah, New Mexico and Arizonahave already or are inthe processofincorporating PM2.5 into theirmajor sourceNSRPrograms. Utah, NewMexico andArizonaare all workingto address various SIP disapproval actions. Utah, NewMexico and Arizonaare waiting for final promulgation ofEPA'sBiogenicDeferralto incorporatethe deferral intotheirregulations.

How will the rule be implemented? The rules will be implementedthrough Regulation 3. These changes are self-implementing.
The amended rules will bepublished on the AQCC'swebsite. Divisionpersonnel will be informed of these changesto ensure thatthe changes will bereflected in the applicable permitting and regulatory actions.
Are there time constraints? Yes. In February 2008, the AQCC adopted revisions to Regulation 3, Parts A and B, identifying PM2.5 7/5/11 Memorandum ofNotice Page 8 oflO Proposed Reg 3 Revisions- PM2.5/SIP Fix/Other Revisions

### as a criteria pollutant and applying Air Pollutant Emission Notice (APEN) and minor source permitting requirements for PM2.5. At that time, no corresponding revisions were made to Colorado's NSR Program because EPA had failed to promulgate the associated PM2.5 implementation rules. EPA has since promulgated revisions to 40 CFR Part 51, establishing additional provisions for implementation of the PM2.5 NAAQS standard undertheNSRProgram in SIPs in stages. 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 ofSignificant Deterioration (PSD) for Particulate Matter Less Than 2.5 Micrometers (PM2.5)

- Increments, Significant Impact Levels (SILs) and Significant Monitoring Concentration (SMC)" (75 

### FR 64864, October 20, 2010), "Requirements for Preparation, Adoption, and Submittal ofImplementation Plans" 

### (76 FR 18870, April 6, 2011), and "Implementation ofthe New Source Review (NSR) Program for Particulate Matter Less Than 2.5 Micrometers (PM2.5); Final Rule to Repeal Grandfather Provision" 

### (76 FR 28646, May 18, 2011). The 2008 and 2010 rules, combined with the December 21, 2010 promulgation of the methodology to test for PM2.5 provide a complete framework establishing how to apply PM2.5 to the NSR Program. EPA set SIP submittal deadlines relating to these 2008 and 20010 PM2.5 rules. The May 16, 2008 

### (73 FR 28321) rule established a SIP submittal deadline ofMay 16, 2011. EPA's October 20, 2010 (75 

### FR 64864) rule established a SIP submittal deadline ofJuly 20, 2012. Prior to the promulgation ofthe December 2010 rules, application ofPM2.5 to the NSR Program made little sense. Consequently, the Division chose to wait to initiate a rulemaking proposing to adopt the suite ofPM2.5 implementation rules until the 2010 PM2.5 testing methodology, was finalized. So, while Colorado did not meet the May 16, 2011 SIP submittal deadline associated with the 2008 rule, the Division expects that Colorado can and will meet the July 20, 2012 SIP submittal deadline associated with the 2010 rule. In addition, the PM2.5 related revisions are necessary in order for EPA to approve Colorado's Interstate Transport SIP. The fact that EPA has not finalized all rules for whichthe Division is proposingto address viathis rulemaking is problematic. lfthe associated final rules are not promulgated bythe October20, 2011 hearing, the AQCC should consideroptionsto eitherdelayor disapprove adoption ofthoserevisions until EPA finalizes those rules. Finally, while there are no real time constraints associated with addressing EPA'spartial disapproval actions, some ofthe APEN and permitting exemptprovisions in question have been implemented in Colorado since 1996 and as such are widely used and commonlyrelied upon. Makingthe associated revisions soonerratherthan latermakes sense. What ifthe AQCC does not adoptthe proposed rule? Ifthe AQCC does not adoptthe proposedrule, Colorado'sNSR Program will be inconsistent, and less stringentthan federal requirements. Colorado'sRegulation 3will be inconsistentwith federal requirements and will include provisions that EPA has disapproved. EPA could eventuallymake a finding ofsubstantial inadequacyto comply with federal requirements and subject Coloradoto an EPA SIP Call. Colorado has alreadymissed one associated SIP submittal deadline, May 16, 2011, and will likely missthe second, July20, 2012.
Ifthe AQCC does not adoptthe proposed rule specificto the EPA SIP disapproval actions, Colorado will need to address EPA concerns and revise Regulation 3. IftheAQCC does not address EPA's

7/5/11 Memorandum ofNotice Page 9 

### oflO Proposed Reg 3 Revisions- PM2.5/SIP Fix/Other Revisions

### concerns, EPA may make a finding ofsubstantial inadequacyto complywith federal requirements and subject Colorado to an EPA SIP Call.

Contact for more information: Formore information onthis rulemaking, please contactDenaWojtach at (303)692-3147 or dena.wojtach@state.co.us.

7/5/11 Memorandum ofNotice Page 

### 10 oflO Proposed Reg 3 Revisions- PM2.5/SIPFix/Other Revisions

# Initial Economic ImpactAnalysis

For Revisions to 

## AQCC Regulation 3, Parts A, B, C and D CRS 25-7-110.5(2) and (4) July 6, 2011 

### ISSUES
The Colorado Department ofPublic Health and Environment, Air Pollution Control Division (Division) is petitioning the Colorado Air Quality Control Commission (AQCC) to adopt revisions to Regulation 3, Parts A, B, C, and D. The proposed revisions primarily address federal changes to the PM2.5 National Ambient Air Quality Standard (NAAQS) under the New Source Review (NSR) program, which are necessary for consistent state implementation ofthe federal NSRprogram. In addition to the PM2.5 related revisions, the Division proposes to address federal rulemaking activities related to State Implementation Plan (SIP) reviews and greenhouse gas (GHG) permitting implementation. Specifically, the Division is proposing revisions that address recent U.S. Environmental Protection Agency (EPA) SIP actions in which EPA disapproved or provided comments on rule text in previous SIP submittals. Additionally, the Division is proposing to adopt the federal rule allowing for a deferral of greenhouse gas permitting requirements for biogenic sources of carbon dioxide emissions under the Prevention of Significant Deterioration (PSD) and Title V programs. Finally, the Division is proposing to make other miscellaneous clarifications and to correct typographical, grammatical and formatting errors.

STATUTORY REQUIREMENTS
Section 25-7-110.5(4)(a), C.R.S. sets forth the requirements for the initial and final Economic Impact Analysis, as statedbelow:

7/6111 

### Before any permanent rule is proposed pursuant to this section, an initial economic impact analysis shall be conducted in compliance with this subsection (4) of the proposed rule or alternative proposed rules. Such economic impact analysis shall be in writing, developed by the proponent, or the Division in cooperation with the proponent and made available to the public at the time any request for hearing on a proposed rule is heard by the commission. A final economic impact analysis shall be in writing and delivered to the technical secretary and to all parties ofrecord five working days prior to the prehearing conference. If no prehearing conference is scheduled, the economic impact

Initial Economic Impacts Analysis Page 1of9 Proposed Reg 3 Revisions- PM2.5/SIP Fix/Other Revisions

### analysis shall be submitted at least ten working days before the date ofthe rulemaking hearing. The proponent of an alternative proposal will provide, in conjunction with the Division, a final economic impact analysis five workingdays prior to the prehearing conference. The economic impact analyses shall be based upon reasonably available data. Except where data is not reasonably available, or as otherwise provided in this section, the failure to provide an economic impact analysis of any noticed proposed rule or any alternative proposed rule will preclude such proposed rule or alternative proposed rule from being considered by the Commission. Nothing in this section shall be construed to restrict the Commission's authority to consider alternative proposals and alternative economic impact analyses that have not been submitted prior to the prehearing conference for good cause and so long as parties have adequate time to review them.
Per Section 25-7-110.5(2), C.R.S., the requirements ofSection 25-7-110.5(4) shall not apply to rules which: (1) 

### adopt by reference applicable federal rules; (2) adopt rules to implement prescriptive state statutory requirements where the AQCC is allowed no significant policymaking options; or, (3) adopt rules that have no regulatory impact on any person, facility or activity.

DISCUSSION
The Division has proposed changes to Regulation 3 on three primary topics: PM2.5 Related Rules, EPA Partial Disapproval Actions, and the Biogenic GHG Deferral. The economic impacts ofeach are discussed in detail in this section.
PM 2.5 Related Rules
The Division is petitioningthe AQCC to adopt four federal rules:

• "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 (PM2.5)

- Increments, Significant Impact Levels (SILs) and Significant Monitoring Concentration (SMC)" (75 FR 64864, October20, 2010)

• "Requirements for Preparation, Adoption, and Submittal ofImplementation Plans" (76 FR 18870, April6, 2011)

• "Implementation ofthe New Source Review (NSR) Program for Particulate Matter Less Than 2.5 Micrometers (PM2.5); Final Rule to Repeal Grandfather Provision" (76 FR 28646, May 18, 2011)

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### While this proposed rulemaking does not technically conform to an adoption by reference procedure, the proposed PM2.5 revisions mirror EPA's regulatory language for the inclusion of PM2.5 as a regulated NSR pollutant in the NSR program under Colorado regulations. The proposed PM2.5 revisions have been prescribed in federal rules, and the AQCC has few policymaking options due to the requirement to maintain consistency with federal NSR permitting program requirements and the desire to maintain federal delegation of authority of the NSR program. (Sections 25-7-109(9)(a) and 25-7-301(1), C.R.S.) Accordingly, the Division maintains that a "No Analysis Justification" satisfies the EIA requirement under Section 25-7- 110.5(2), C.R.S. for the PM2.5 related revisions.
EPA's May 16, 2008 PM2.5 Implementation Rule provided some flexibility in designating PM2.5 precursor pollutants. While sulfur dioxide (S02) must be treated as a PM2.5 precursor in all areas ofthe state, more flexibility is afforded to nitrogen oxides (NOx), volatile organic compounds (VOCs) and ammonia (NH3). NOx is presumedto be a PM2.5 precursor state-wide unless the state demonstrates that NOx is not a "significant contributor" to PM2.5 concentrations within Colorado. 

### (73 FR 28328.) However, VOCs and NH3 are not required to be treated as PM2.5 precursors, except that high molecular weight VOCs (equal to or greater than 25 carbon atoms and low vaporpressure) will be addressed as a condensable particulate. 

### (73 FR 28329-283330.)
At this time, the Division proposesto identify S02 and NOx as PM2.5 precursors state-wide. Based on the limited PM2.5 modeling and monitoring data available for Colorado, the Division determined thatthere is insufficient evidenceto claim eitherwaythatNOxemissions do or do not contribute significantlyto the concentration ofPM2.5 in any area in Colorado. Without evidenceto narrowthe identification ofNOxas a precursorto specific areas, Coloradomust identifyNOx as a PM2.5 precursor state-wide. Less is known about VOCs and NH3 and their contribution to PM2.5 in Colorado, and so Colorado has chosen to not identifythem as PM2.5 precursors at thistime.
In designatingNOx as a PM2.5 precursor state-wide rather than having made a demonstration to narrow the NOx precursor designation, the Division acknowledges that there will be an associated cost to sources with emissions ofNOx, including the possibility ofPSD applicability and Best Available Control Technology (BACT) determinations for the pollutant PM2.5 as a result ofa significant emissions increase (as defined in Regulation 3, Part D, Section II.A.42.) of NOx. The cost increase is limited to the:
I. Cost ofcompleting a BACT analysis for PM2.5 in the situations where the increase of direct PM2.5 emissions does not exceed the significance level; 2. Cost ofthe Division engineerreviewtime for the BACTanalysis; and 3. Cost ofimplementing any control requirements arising oftheBACTanalysis for PM2.5. However, these costs are allayed by the fact that a major stationary source with NOx emissions exceeding the significance level will already be required to undergo a PSD review and BACT analysis for their NOx emissions (including as a contributor to PM2.5). Therefore, the designation does not impose PSD review in itself, but instead requires the consideration of PM2.5 in an ongoing PSDreview.

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### EPA Partial Disapproval Actions
The Division is petitioning the AQCC to adopt revisions to multiple Air Pollution Emission Notice (APEN) and construction permit exemptions in Parts A and B in response to EPA disapproval and language suggestions arising out ofEPA's SIP review. The proposed revisions are required under Section 25-7-105(1)(a)(I), C.R.S., wherein the SIP shall meet all requirements ofthe Clean Air Act (CAA) and be revised whenever necessary or appropriate, and the AQCC has few policy-making options related to these adjustments. Further, most of the proposed changes should have no regulatory impact on any person, facility, or activity. Accordingly, the Division maintainsthat a "NoAnalysis Justification" satisfies the EIA requirement under Section 25-7-110.5(2), C.R.S. However, the Division recognizes that there are sources which may be impacted by the revision, and in some cases deletion, of APEN and permitting exemptions. To that end, based on reasonably available information, the Division prepared the following economic analysis which satisfiesthe statutory requirementsto prepare athree-part regulatory analysisthat: (A) Identifiesthe industrial and business sectorsthatwill be impacted bythe proposal; and (B) Quantifies the directcostto the primaryaffected business or industrial sector; and (C) 

### Incorporates an estimate of the economic impact of the proposal on the supporting business and industrial sectors associated with the primary affected business or industry sectors. Section 25-7-110.5(4)(c)(III), C.R.S.
Industrialandbusinesssectors impacted


### There are no anticipated regulatory effects on any industrial or business sectors as a result of: correcting the open burning and surface water impoundment APEN exemptions; clarifying the mobile sources APEN exemption and non-road engine state-only permit exemption; or removing the deaerator/vacuum pump exhaustand air curtain destructorAPEN exemptions.
There are anticipated regulatory effects on industrial and business sectors as a result ofrepealing the APEN exemptions for stationary internal combustion engines (ICE) and emergency generators and reverting to the originally EPA SIP approved construction permit exemption for ICE. Therefore, the industrial and business sectors impacted by this proposal are any that utilize internal combustion engines, including but not limited to oil and gas, construction, sand and gravel, landfills, and any that utilize emergency generators as aback-up power source. Directcostto theprimaryaffectedbusinessorindustrialsector 

### The Division proposes to repeal the APEN exemptions for ICE and emergency generators, located in Regulation 3, Part A, Sections II.D.1.sss. and II.D.1.ttt. These exemptions allowed for ICE and generators of a certain design horsepower and annual hours of operation to be categorically exempt from APEN submittal requirements. The values in the exemptions were

7/6ill Initial Economic Impacts Analysis Page 4 of9 Proposed Reg 3Revisions- PM2.5/SIP Fix/Other Revisions

### based on calculations utilizing criteria pollutant emission factors from EPA's AP-42, Chapter 3.3, Gasoline and Diesel Industrial Engines, assuming the combinations ofhorsepowerand hours of operation listed would not result in emissions exceeding two (2) tons per year (tpy). Therefore, the repeal of these exemptions may affect sources currently designated as APEN Exempt, but which have criteria pollutant actual uncontrolled emissions greater than either one (I) tpy ortwo (2) tpy, depending on whether the engine is located in the ozone nonattainment or attainment area. According to the Division's inventory, as ofJune 29, 20II, there are I7 APEN Exempt ICE and generators in the nonattainment area and 36 APEN Exempt ICE and generators in the attainment area. It is assumed that even more sources that have not actively obtained APEN exemptions will be affected because sources with APEN Exempt equipment are not required to provide emissions data, oreven notify the Division oftheir equipment's existence. Thus, it is difficult to determinethe actual numberofsources maybecome subjectto APENrequirements due to repeal ofthe ICE exemption.
This analysis focuses on the information available to the Division. Assuming that all of the APEN Exempt engines in the Division's inventory will be required to submit APENs, using the currently approved APEN fee of$I52.90, the associated cost ofcomplying with the Division's proposal is listed in Table I, below. The initial cost per ICE or generator is up to $I52.90, with no associated fees for hours spent by the Division on reviewing the APENs. The APEN would expire afterfive (5) years, and the source would be required to submit an updated APEN with the APEN submittal costat thattime.
T bl 1 I

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a e : 

### mtla ostto

# sources o

### fRemOVID! th APENE e xem f**~** 

### E 

### pIOnS or f!_g_IDCS Nonattainment Attainment Total Area Area Statewide NumberofSources1 

### I7 36 53 APENFee $152.90 persource TotalAPENSubmittalCose $2,599.30 $5,504.40 $8,103.70 1. Does not include sources which may become subjectto APEN reporting which have not submitted an APEN orrequested APEN exempt status from the Division. Because sources which are APENexempt are not required to notify the Division oftheir existence ortheir emissions, the Division does not have an accurate inventory ofall APEN Exemptsourcesthroughoutthe State. 2. Assuming that all APEN Exempt sources will become subject to APEN reporting.


### After submission of an APEN, there are annual fees charged for emissions of criteria and hazardous air pollutants (HAP). The currently approved annual emissions fees are $22.90 per ton ofcriteria pollutants and $I52.90 per ton ofHAP. Engines, including ICE and generators, are likelyto emitthe following:

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### Criteria ollutants: • oxides ofnitrogen (NOx), • volatile organic compounds (VOC), 

### • carbon monoxide (CO), and • particulate matter (PMl0). • benzene, • toluene, • ethylbenzene, and • xylene. Assuming the emission of criteria pollutants are all at the facility permitting thresholds in Regulation 3, Part B, Sections 11.0.2. and 11.0.3. and the emission ofHAP are the at the de minimus thresholds in Regulation 3, Part A, Appendix A, Scenario 1, the annual cost of complying with the Division's proposal is listed in Table 2, below. 

### Table2: AnnualCostto SourcesofRemovin2theAPENExemptionsfor En2ines Nonattainment Attainment Total Area Area Statewide NumberofSources1 

### 17 36 53 13 tons peryear 30 tons per



# -- Maximum Criteria per source year per source 

### PollutantEmissions2• 3 

### 221 tons per 1,080tons per 1,301 tons year year peryear 

### CRITERIA AnnualFee $22.90perton 

### POLLUTANT $297.70 per $687.00 per



# -- AnnualInvoice source source $5,061 $24,732 $29,793 1.6tons per 1.6tons per



# -- MinimumHAP yearper source yearpersource 

### Emissions2'4 

### 27.2 tons per 84.8tonsper 112 tons 

### HAZARDOUS year year peryear 

### AIR AnnualFee $152.90 perton 

### POLLUTANT $36.64 per $36.64 per



# -- AnnualInvoice source source $623 $1,319 $1,942 

### TOTAL AnnualInvoice $334.34 per $723.64 per



## -- source source

716111 Initial Economic Impacts Analysis Page 6 of9 Proposed Reg 3 Revisions- PM2.5/SIP Fix/Other Revisions1 1 

### $5,684 1 

### $26,051 1 

### $31,735 I. Doesnot include sources which may become subjectto APEN reporting which have not submitted an APEN orrequested APEN exempt status from the Djyision. Because sources which are APEN exempt are not required to notify the Division oftheir existence ortheiremissions, the Division does not have an accurate inventory ofall APEN Exempt sourcesthroughoutthe State. 2. Assumingthat all APEN Exempt sources will become subjectto APEN reporting. 3. CriteriaPollutant (tonsperyearpersource): Nonattainment: NOx= 5tpy; CO= 5tpy; VOC = 2 tpy; PMIO =I tpy Attainment: NOx = 10tpy; CO= 10 tpy; VOC = 5tpy; PM10 = 5tpy 4. HAP (tonsperyearper source): Formaldehyde=50Ib/yr; Acetaldehyde= 50 lb/yr; Acrolein = 50 lb/yr; Benzene=50 lb/yr Toluene= 1,000 lb/yr; Ethylbenzene= 1,000 lb/yr; Xylene= 1,000 lb/yr 

### Finally, the Division proposes to revert to the previously approved construction permitting exemption for ICE, located in Regulation 3, Part B, Section II.D.1.c.(iii)(B). The current exemption allows for ICE in the attainment area to be categorically exempt from obtaining a construction permit when the criteria pollutant actual uncontrolled emissions from the engine alone were less thanten (10) tpy and/or ifthe engine had a design horsepower less than 100. The proposed exemption will apply statewide and exempt from permitting those ICE with actual uncontrolled emissions ofany criteria pollutant less than five (5) tpy and/or a design horsepower less than 50. Therefore, the revision ofthis exemption may affect sources currently designated as Permit Exempt, but which have actual uncontrolled emissions greater than either five (5) tpy orhave a design horsepower greaterthan 50, as is currentlyapproved in the SIP. According to the Division's inventory, as ofJune 29, 2011, there are 201 Permit Exempt ICE statewide with emissions greater than five (5) tpy ofany criteria pollutant. Assuming that all of these engines will be required to obtain a construction permit, the associated cost ofcomplying with the Division's proposal is listed in Table 3, below.
The initial cost per ICE is $152.90, with additional associated fees for hours spent by the Division on reviewing the permit application and issuing the permit. The number ofhours that the Division must spend reviewing a permit application and APEN vary dependant on many factors, including, but not limited to, the completeness ofthe permit application, the complexity ofthepermitted activity, and the regulatory requirements on the source. The Division is required under Regulation 3, Part A, Section VI.B.4. to provide notice to the applicant with an estimate of projected processing time iftotal processing time is anticipated to exceed 30 hours. Therefore, for the purposes ofthis analysis, the Division assumes that each ICE permit application will take 30 hours to process. 

### Tabl 3 p e : 

### ermJttmg

# costto

# sourcesofCh h 

### p angmgt e 'E 

### ermJt**~** 

## E xem_l)tlon or**ng~nes** 

### TotalStatewide NumberofSources1 

### 201 

### APENFee $152.90 persource APENCOST TotalAPENCost $30,732.90

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### PERMIT PermittingTime2 

### 30 hourspersource PROCESSING TIME TotalPermittingTime 

### 6,030 hours

PERMIT PermitProcessingFee 

### $76.45 perhour PROCESSING PermitProcessing Cost $2,293.50 per source COST TotalPermitProcessing Cost 

### $460,993.50

1. Assumingthat all PermitExempt sourceswith any criteriapollutantemissions greaterthan 5tpy will be required to obtain aconstructionpermit. 2. Only for the purposes ofthisanalysis, assumedthepermittinghoursrequired equalthemaximum allowed to the Division priorto notifyingthe applicant. (Regulation 3, PartA, Section VI.B.4.)



### Economic impacton supportingbusiness andindustrialsectors 

### There is no anticipated economic impact on businesses and industrial sectors supporting the primary industrial sectors. Biogenic GHG Deferral
On October 21, 2010, the AQCC adopted revisions to Regulation 3, Parts A, B, C and D in accordance with the "Prevention of Significant Deterioration and Title V Greenhouse Gas (GHG) Tailoring Rule," commonly called the GHGTailoring Rule. (75FR31514, 

### June 3, 2010.) EPA's GHG Tailoring Rule was designed to tailor the applicability criteriathat determine which stationary sources and modification projects become subject to permitting requirements for GHGs underthe PSD and Title V Programs ofthe Clean AirAct (CAA).
The Division is petitioning the AQCC to adopt the applicable federal rule: "Deferral for C02 Emissions from Bioenergy and Other Biogenic Sources Under the Prevention of Significant Deterioration (PSD) and Title V Programs," commonly called the Biogenic Deferral. (76FR15249, 

### March 21, 2011.) While this proposed rulemaking does nottechnically conform to an adoption by reference procedure, the changes which have been proposed mirror EPA's regulatory language. The proposed revisions have been prescribed in the Biogenic Deferral, and the AQCC has few policy-making options due to the framework within which EPA promulgated

- this rulemaking. Accordingly, the Division maintains that a "No Analysis Justification" satisfies

the EIA requirementunder Section 25-7-110.5(2), C.R.S.
EPA promulgated the GHG Tailoring Rule in an effort to avoid an untenable workload on states and sources. EPA promulgated the Biogenic Deferral to allow sources of biogenic C02 emissions a three year deferral from the permitting requirements of the PSD and Title V programs while EPA completes a study on the effect ofbiogenic C02 on the atmosphere and climate. The proposed rulemaking may significantly reduce the number ofpermitting actions, and therefore costs, within the State of Colorado during the deferral. For this reason, the adoption of this proposed rulemaking will reduce the regulatory impact on GHG emission sources in Colorado duringthe three-year deferral.

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### SUMMARYAND CONCLUSION
As discussed in detail in the previous section, the Division is petitioning the AQCC to adopt revisions to Regulation 3 on three primary topics: PM2.5 Related Rules, EPA Partial Disapproval Actions, and the Biogenic GHG Deferral. The proposed revisions are required under Section 25-7-105(l)(a)(I), C.R.S., wherein the SIP shall meet all requirements oftheClean Air Act (CAA) and be revised whenever necessary or appropriate, and the AQCC has few policy-making options related to these revisions. Further, many ofthe proposed changes should have no or abeneficial regulatory impact on sources.

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# I

# Final Economic ImpactAnalysis

ForRevisions to 

## AQCC Regulation 3, Parts A, B, C and D CRS 25-7-II0.5(2) and (4) September I2, 20II 

### ISSUES
The Colorado Department ofPublic Health and Environment, Air Pollution Control Division (Division) is petitioning the Colorado Air Quality Control Commission (AQCC) to adopt revisions to Regulation 3, Parts A, B, C, and D. The proposed revisions primarily address federal changes to the PM2.5 National Ambient Air Quality Standard (NAAQS) under the New Source Review (NSR) program, which are necessary for consistent state implementation ofthe federal NSRprogram. In addition to the PM2.5 related revisions, the Division proposes to address federal rulemaking activities related to State Implementation Plan (SIP) reviews and greenhouse gas (GHG) permitting implementation. Specifically, the Division is proposing revisions that address recent U.S. Environmental Protection Agency (EPA) SIP actions in which EPA disapproved or provided comments on rule text in previous SIP submittals. Additionally, the Division is proposing to adopt the federal rule allowing for a deferral of greenhouse gas permitting requirements for biogenic sources of carbon dioxide emissions under the Prevention of Significant Deterioration (PSD) and Title Vprograms. Finally, the Division is proposing to make other miscellaneous clarifications and to correct typographical, grammatical and formatting errors.



### STATUTORYREQUIREMENTS
Section 25-7-II0.5(4)(a), C.R.S. sets forth the requirements for the initial and final Economic Impact Analysis, as stated below:

9/12/11 

### Before any permanent rule is proposed pursuant to this section, an initial economic impact analysis shall be conducted in compliance with this subsection (4) of the proposed rule or alternative proposed rules. Such economic impact analysis shall be in writing, developed by the proponent, or the Division in cooperation with the proponent and made available to the public at the time any request for hearing on a proposed rule is heard by the commission. A final economic impact analysis shall be in writing and delivered to the technical secretary and to all parties ofrecord five working days prior to the prehearing conference. If no prehearing conference is scheduled, the economic impact

Initial Economic Impacts Analysis Page I of9 Proposed Reg 3 Revisions- PM2.5/SIP Fix/Other Revisions i 

### I

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### analysis shall be submitted at least ten working days before the date ofthe rulemaking hearing. The proponent of an alternative proposal will provide, in conjunctionwiththe Division, a final economic impact analysis five working days prior to the prehearing conference. The economic impact analyses shall be based upon reasonably available data. Except where data is not reasonably available, or as otherwise provided in this section, the failure to provide an economic impact analysis of any noticed proposed rule or any alternative proposed rule will preclude such proposed rule or alternative proposed rule from being considered by the Commission. Nothing in this section shall be construed to restrict the Commission's authority to consider alternative proposals and alternative economic impact analyses that have not been submitted prior to the prehearing conference for good cause and so long as parties have adequate time to review them.
Per Section 25-7-110.5(2), C.R.S., the requirements ofSection 25-7-110.5(4) shall not apply to rules which: (1) adopt by reference applicable federal rules; (2) adopt rules to implement prescriptive state statutory requirements where the AQCC is allowed no significant policymaking options; or, (3) adopt rules that have no regulatory impact on any person, facility or activity.

DISCUSSION The Division has proposed changes to Regulation 3 on three primary topics: PM2.5 Related Rules, EPA Partial Disapproval Actions, and the Biogenic GHG Deferral. The economic impacts ofeach are discussed in detail in this section.
PM 2.5 Related Rules
The Division is petitioningthe AQCC to adopt four federal rules:

• "Implementation ofthe New Source Review (NSR) Program for Particulate Matter Less than 2.5 Micrometers (PM2.5)" (73FR 28321, May 16, 2008)

• "Prevention of Significant Deterioration (PSD) for Particulate Matter Less Than 2.5 Micrometers (PM2.5)

- 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, Apri16, 2011)

• "Implementation ofthe New Source Review (NSR) Program for Particulate Matter Less Than 2.5 Micrometers (PM2.5); Final Rule to Repeal Grandfather Provision" (76 FR 28646, May 18, 2011)

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### While this proposed rulemaking does not technically conform to an adoption by reference procedure, the proposed PM2.5 revisions mirror EPA's regulatory language for the inclusion of PM2.5 as a regulated NSR pollutant in the NSR program under Colorado regulations. The proposed PM2.5 revisions have been prescribed in federal rules, and the AQCC has few policymaking options due to the requirement to maintain consistency with federal NSR permitting program requirements and the desire to maintain federal delegation of authority of the NSR program. (Sections 25-7-109(9)(a) and 25-7-301(1), C.R.S.) Accordingly, the Division maintains that a "No Analysis Justification" satisfies the EIA requirement under Section 25-7- 110.5(2), C.R.S. for the PM2.5 related revisions.
EPA's May 16, 2008 PM2.5 Implementation Rule provided some flexibility in designating PM2.5 precursor pollutants. While sulfur dioxide (S02) must be treated as a PM2.5 precursor in all areas of the state, more flexibility is afforded to nitrogen oxides (NOx), volatile organic compounds (VOCs) and ammonia (NH3). NOx is presumed to be a PM2.5 precursor state-wide unless the state demonstrates that NOx is not a "significant contributor" to PM2.5 concentrations within Colorado. (73 FR 28328.) However, VOCs and NH3 are not required to be treated as PM2.5 precursors, except that high molecular weight VOCs (equal to or greater than 25 carbon atoms and low vaporpressure) will be addressed as a condensableparticulate. (73 FR28329-283330.)
At this time, the Divisionproposesto identify S02 and NOx as PM2.5 precursors state-wide. Based on the limited PM2.5 modeling and monitoring data available for Colorado, the Division determined thatthere is insufficient evidenceto claim eitherwaythatNOx emissions do ordo not contribute significantlyto the concentration ofPM2.5 in any area in Colorado. Without evidenceto narrowthe identification ofNOxas a precursorto specific areas, Colorado must identify NOx as a PM2.5 precursor state-wide. Less is known about VOCs and NH3 and their contribution to PM2.5 in Colorado, and so Coloradohas chosento not identify them as PM2.5 precursors at this time.
In designating NOx as a PM2.5 precursor state-wide rather than having made a demonstration to narrow the NOx precursor designation, the Division acknowledges that there will be an associated cost to sources with emissions ofNOx, including the possibility ofPSD applicability and Best Available Control Technology (BACT) determinations for the pollutant PM2.5 as a result ofa significant emissions increase (as defined in Regulation 3, Part D, Section II.A.42.) of NOx. The cost increase is limited tothe:
I. Cost ofcompleting a BACT analysis for PM2.5 in the situations where the increase of direct PM2.5 emissions does not exceed the significance level; 2. Cost ofthe Division engineerreviewtime for the BACTanalysis; and 3. Cost ofimplementing any control requirements arising oftheBACTanalysis for PM2.5. However, these costs are allayed by the fact that a major stationary source with NOx emissions exceeding the significance level will already be required to undergo a PSD review and BACT analysis for their NOx emissions (including as a contributor to PM2.5). Therefore, the designation does not impose PSD review in itself, but instead requires the consideration of PM2.5 in an ongoing PSD review.

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### EPA Partial Disapproval Actions
The Division is petitioning the AQCC to adopt revisions to multiple Air Pollution Emission Notice (APEN) and construction permit exemptions in Parts A and B in response to EPA disapproval and language suggestions arising out ofEPA's SIP review. The proposed revisions are required under Section 25-7-105(1)(a)(l), C.R.S., wherein the SIP shall meet all requirements ofthe Clean Air Act (CAA) and be revised whenever necessary or appropriate, and the AQCC has few policy-making options related to these adjustments. Further, most of the proposed changes should have no regulatory impact on any person, facility, or activity. Accordingly, the Division maintainsthat a "NoAnalysis Justification" satisfiesthe EIA requirement under Section 25-7-110.5(2), C.R.S. However, the Division recognizes that there are sources which may be impacted by the revision, and in some cases deletion, of APEN and permitting exemptions. To that end, based on reasonably available information, the Division prepared the following economic analysis which satisfies the statutoryrequirementsto prepare athree-partregulatory analysisthat: (A) Identifiesthe industrial and business sectorsthatwill be impacted bythe proposal; and (B) Quantifiesthe direct costto the primary affected businessorindustrial sector; and (C) 

### Incorporates an estimate of the economic impact of the proposal on the supporting business and industrial sectors associated with the primary affected business or industry sectors. Section 25-7-110.5(4)(c)(III), C.R.S.
Industrialandbusinesssectors impacted


### There are no anticipated regulatory effects on any industrial or business sectors as a result of: correcting the open burning and surface water impoundment APEN exemptions; clarifying the mobile sources APEN exemption and non-road engine state-onlypermit exemption; orremoving the deaerator/vacuum pump exhaust and air curtain destructorAPEN exemptions.
There are anticipated regulatory effects on industrial and business sectors as a result ofrepealing the APEN exemptions for stationary internal combustion engines (ICE) and emergency generators and reverting to the originally EPA SIP approved construction permit exemption for ICE. Therefore, the industrial and business sectors impacted by this proposal are any thatutilize internal combustion engines, including but not limited to oil and gas, construction, sand and gravel, landfills, and anythat utilize emergency generators as a back-up powersource. Directcostto theprimaryaffectedbusiness orindustrialsector 

### The Division proposes to repeal the APEN exemptions for ICE and emergency generators, located in Regulation 3, Part A, Sections Il.D.1.sss. and Il.D.1.ttt. These exemptions allowed for ICE and generators of a certain design horsepower and annual hours of operation to be categorically exempt from APEN submittal requirements. The values in the exemptions were

9/12/11 Initial Economic Impacts Analysis Page 4 of9 Proposed Reg 3 Revisions- PM2.5/SIP Fix/Other Revisions

### based on calculations utilizing criteria pollutant emission factors from EPA's AP-42, Chapter 3.3, Gasoline and Diesel Industrial Engines, assumingthe combinations ofhorsepowerand hours of operation listed would not result in emissions exceeding two (2) tons per year (tpy). Therefore, the repeal of these exemptions may affect sources currently designated as APEN Exempt, but which have criteria pollutant actual uncontrolled emissions greater than either one (I)

### tpy ortwo (2) tpy, depending on whether the engine is located in the ozone nonattainment or attainment area. According to the Division's inventory, as ofJune 29, 2011, there are 17 APEN Exempt ICE and generators in the nonattainment area and 36 APEN Exempt ICE and generators in the attainment area. It is assumed that even more sources that have not actively obtained APEN exemptions will be affected because sources with APEN Exempt equipment are not required to provide emissions data, or even notifythe Division oftheir equipment's existence. Thus, it is difficult to determinethe actual number ofsources maybecome subjectto APEN requirements due to repeal oftheICE exemption.
This analysis focuses on the information available to the Division. Assuming that all of the APEN Exempt engines in the Division's inventory will be required to submit APENs, using the currently approved APEN fee of$152.90, the associated cost ofcomplying with the Division's proposal is listed in Table 1, below. The initial cost per ICE or generator is up to $152.90, with no associated fees for hours spent by the Division on reviewing the APENs. The APEN would expire after five (5) years, and the source would be required to submit an updated APEN with the APEN submittal cost atthattime. 

### T 

### bl 1 I

.. I

### C

a e : 

### mtla ostto

# sourcesofR

### emOVIDl h APENE t e xem f 

### f< 

## E J! IODS 

### or ngmes Nonattainment Attainment Total Area Area Statewide NumberofSources1 

### 17 36 53 

### APENFee $152.90 persource TotalAPEN SubmittalCost2 

### $2,599.30 $5,504.40 $8,103.70 I. Does not include sources which may become subject to APEN reporting which have not submitted an APEN orrequested APEN exempt status from the Division. Because sources which are APEN exempt are not required to notify the Division oftheir existence ortheir emissions, the Division does not have an accurate inventory ofall APEN Exempt sourcesthroughoutthe State. 2. Assuming that all APEN Exempt sources will become subject to APEN reporting.


### After submission of an APEN, there are annual fees charged for emissions of criteria and hazardous air pollutants (HAP). The currently approved annual emissions fees are $22.90 per ton ofcriteria pollutants and $152.90 per ton ofHAP. Engines, including ICE and generators, are likelyto emitthe following:

9/12/11 Initial Economic Impacts Analysis Page 5 of9 Proposed Reg 3 Revisions- PM2.5/SIP Fix/Other Revisions

### Criteria ollutants: • oxides ofnitrogen (NOx), • volatile organic compounds (VOC), • carbon monoxide (CO), and • particulate matter (PM1 0). • acrolein, • benzene, • toluene, • ethylbenzene, and • xylene. Assuming the emission of criteria pollutants are all at the facility permitting thresholds in Regulation 3, Part B, Sections II.D.2. and II.D.3. and the emission of HAP are the at the de minimus thresholds in Regulation 3, Part A, Appendix A, Scenario 1, the annual cost of complyingwith the Division'sproposal is listed in Table 2, below.

a e : 

### T 

### bl 2 A

### nnua IC t 

### S ost o ources ofRemovmgth APENE e xemp1aons or (! 

## E f 

### ngmes Nonattainment Attainment Total Area Area Statewide NumberofSources1 

### 17 36 53 13 tons peryear 30tonsper



## -- Maximum Criteria _Q_er source yearp_er source PollutantEmissions2• 3 

### 221 tons per 1,080 tons per 1,301 tons ·year year peryear CRITERIA AnnualFee $22.90 perton POLLUTANT $297.70 per $687.00 per



# -- AnnualInvoice source source $5,061 $24,732 $29,793 1.6 tons per 1.6tonsper



# -- MinimumHAP yearpersource yearpersource Emissions2'4 

### 27.2 tons per 84.8 tonsper 112 tons HAZARDOUS year year peryear AIR AnnualFee $152.90 perton POLLUTANT $36.64 per $36.64 per



# -- AnnualInvoice source source $623 $1,319 $1,942
TOTAL AnnualInvoice $334.34 per $723.64 per



# -- source source

9/12/1 1 Initial Economic Impacts Analysis Page 6 of9 Proposed Reg 3Revisions- PM2.5/SIP Fix/Other Revisions1 1 

### $5,684 1 

### $26,051 1 

### $31,735 1. Does not include sources which may become subjectto APEN reporting which have not submitted an APEN orrequested APEN exempt status from the Division. Because sources which are APEN exempt are not required to notify theDivision oftheirexistence ortheir emissions, the Divisiondoes not have an accurate inventory ofall APEN Exempt sourcesthroughoutthe State. 2. Assuming that all APEN Exempt sources will pecome subjectto APEN reporting. 3. CriteriaPollutant (tons peryearper source): Nonattainment: NOx= 5tpy; CO=5tpy; VOC = 2 tpy; PMlO = 1tpy Attainment: NOx= 10tpy; CO= 10 tpy; VOC = 5tpy; PM10 = 5tpy 4. HAP (tons peryearper source): Formaldehyde=50 lb/yr; Acetaldehyde = 50 lb/yr; Acrolein = 50 lb/yr; Benzene=50 lb/yr Toluene= 1,000 lb/yr; Ethylbenzene = 1,000lb/yr; Xyjene = 1,000 lb/yr 

### Finally, the Division proposes to revert to the previously approved construction permitting exemption for ICE, located in Regulation 3, Part B, Section II.D.1.c.(iii)(B). The current exemption allows for ICE in the attainment area to be categorically exempt from obtaining a construction permit when the criteria pollutant actual uncontrolled emissions from the engine alone were lessthan ten (10)tpy and/or iftheenginehad a design horsepower less than 100. The proposed exemption will apply statewide and exempt from permitting those ICE with actual uncontrolled emissions ofany criteriapollutant less than five (5) tpy and/or a design horsepower less than 50. Therefore, the revision ofthis exemption may affect sources currently designated as Permit Exempt, but which have actual uncontrolled emissions greater than either five (5) tpy or have a design horsepower greaterthan 50, as is currently approved in the SIP. According to the Division's inventory, as ofJune 29, 2011, there are 201 Permit Exempt ICE statewide with emissions greater than five (5) tpy ofany criteria pollutant. Assuming that all of these engines will be required to obtain a construction permit, the associated cost ofcomplying with the Division's proposal is listed in Table 3, below.
The initial cost per ICE is $152.90, with additional associated fees for hours spent by the Division on reviewing the permit application and issuing the permit. The number ofhours that the Division must spend reviewing a permit application and APEN vary dependant on many factors, including, but not limited to, the completeness ofthe permit application, the complexity ofthepermitted activity, and theregulatory requirements on the source. The Division is required under Regulation 3, Part A, Section VI.B.4. to provide notice to the applicant with an estimate of projected processing time iftotal processing time is anticipated to exceed 30 hours. Therefore, for the purposes ofthis analysis, the Division assumes that each ICE permit application will take 30 hoursto process. T bl 3 P

a e : 

### ermlttmg

# costto

# sourcesofChangmg_th p 

### e 'E 

### erm1t f fi 

### E xem_l! 100 

### or ngmes Total Statewide NumberofSources1 

### 201 APENFee $152.90 persource APENCOST TotalAPENCost $30,732.90

9/12/11 Initial Economic Impacts Analysis Page 7 of9 Proposed Reg 3 Revisions- PM2.5/SIP Fix/Other Revisions

### PERMIT PermittingTime2 

### 30 hours per source 

### PROCESSING TIME TotalPermittingTime 6,030 hours



### PERMIT PermitProcessingFee $76.45 perhour 

### PROCESSING PermitProcessingCost $2,293.50 persource COST $460,993.50 

### TotalPermitProcessingCost

1. Assumingthat all PermitExempt sourceswith any criteriapollutantemissions greaterthan 5tpy will be required to obtain a constructionpermit. 2. Only for the purposes ofthis analysis, assumedthe permittinghours required equal the maximum allowedto the Divisionpriorto notifyingthe applicant. (Regulation 3, PartA, Section Vl.B.4.)



### Economic impactonsupportingbusinessandindustrialsectors 

### There is no anticipated economic impact on businesses and industrial sectors supporting the primary industrial sectors. Biogenic GHG Deferral
On October 21, 2010, the AQCC adopted revisions to Regulation 3, Parts A, B, C and D in accordance with the "Prevention of Significant Deterioration and Title V Greenhouse Gas (GHG) Tailoring Rule," commonly called the GHG Tailoring Rule. (75FR31514, 

### June 3, 2010.) EPA's GHG Tailoring Rule was designed to tailor the applicability criteriathat determine which stationary sources and modification projects become subject to permitting requirements for GHGs underthe PSD and Title V Programs ofthe Clean AirAct (CAA).
The Division is petitioning the AQCC to adopt the applicable federal rule: "Deferral for C02 Emissions from Bioenergy and Other Biogenic Sources Under the Prevention of Significant Deterioration (PSD) and Title V Programs," commonly called the Biogenic Deferral. (76FR15249, 

### March 21, 2011.) While this proposedrulemaking does not technically conform to an adoption by reference procedure, the changes which have been proposed mirror EPA's regulatory language. The proposed revisions have been prescribed in the Biogenic Deferral, and the AQCC has few policy-making options due to the framework within which EPA promulgated this rulemaking. Accordingly, the Division maintains that a "No Analysis Justification" satisfies the EIA requirement under Section 25-7-110.5(2), C.R.S.
EPA promulgated the GHG Tailoring Rule in an effort to avoid an untenable workload on states and sources. EPA promulgated the Biogenic Deferral to allow sources of biogenic C02 emissions a three year deferral from the permitting requirements of the PSD and Title V programs while EPA completes a study on the effect ofbiogenic C02 on the atmosphere and climate. The proposed rulemaking may significantly reduce the number ofpermitting actions, and therefore costs, within the State of Colorado during the deferral. For this reason, the adoption of this proposed rulemaking will reduce the regulatory impact on GHG emission sources in Colorado duringthethree-yeardeferral.

9/12/11 Initial Economic Impacts Analysis Page 8 of9 Proposed Reg 3 Revisions- PM2.5/SIP Fix/Other Revisions

### SUMMARY AND CONCLUSION


### As discussed in detail in the previous section, the Division is petitioning the AQCC to adopt revisions to Regulation 3 on three primary topics: PM2.5 Related Rules, EPA Partial Disapproval Actions, and the Biogenic GHG Deferral. The proposed revisions are required under Section 25-7-105(l)(a)(l), C.R.S., wherein the SIP shall meet all requirements oftheClean Air Act (CAA) and be revised whenever necessary or appropriate, and the AQCC has few policy-making options related to these revisions. Further, many ofthe proposed changes should have no or a beneficial regulatory impact on sources.

9112111 Initial Economic Impacts Analysis Page 9 of9 Proposed Reg 3 Revisions- PM2.5/SIP Fix/Other Revisions

# Errata Sheetand Revised Rule TextExcerpts Regulation 3, Parts A, B, C & D 

# PM2.5/SIP FIX/OTHER
AQCC Hearing: October20, 2011

This document supplementsthe rulemaking package submittedto the Air QualityControl Commission (AQCC) as part oftheRegulation 3, Parts A, Band D rulemaking hearing. The proposal incorporates EPA'sPM2.5 Implementation Rules, EPA's comments from partial disapproval State Implementation Plan (SIP) actions, EPA's Biogenic Deferral, and other revisionsthat includetypographical, grammatical and formatting corrections into Regulation 3. The Division has since identified an additional typographical error in Regulation 3, specific to PartA, Section II.D.l.dddd., in thatthis section makes reference to a non-road engine definition in Section I.B.29. ofPartA. 

### However, non-road engine definition is found in Part A, Section I.B.31. Thus, theDivisionhas madethe correspondingtypographical correction to its rule text.

Theexcerpted regulatorytext as corrected is attached. This documentprovides a summary of these proposedrevisions for the record.

10117/ll Errata Sheetand Revised Rule TextExcerpts Pagelof3 Proposed Reg 3 Revisions- PM2.5/SIP Fix/Other Revisions

## DEPARTMENT OF PUBLIC HEALTH AND ENVIRONMENT 

## AirQuality Control Commission REGULATION NUMBER 3 STATIONARY SOURCE PERMITTING AND AIR POLLUTANT EMISSION NOTICE REQUIREMENTS

5 CCR 1001-5

PartA

- Excerpt Only II.D.1.dddd. Non-road engines as defined in Section 1.8.2-911.. ofthis Part A, except

10117/11 certain non-road engines subjectto state-only air pollutant emission notice and permitting requirements pursuantto Section I.B.2-9l1_.c. ofthis part.

Errata Sheet and Revised Rule TextExcerpts Page 2 of3 Proposed Reg 3Revisions- PM2.5/SIP Fix/OtherRevisions

# Parties Hearing Documents

- Party Status List

- AirPollutionControl Division 

# o Prehearing Statement 

# o Exhibit 1 

# o Exhibit2

- NobleEnergy Inc. o Request for Party Status o Party Status Withdrawal

## COLORADOAIRQUALITYCONTROLCOMMISSION PARTYSTATUSLIST FORTHE RULEMAKING HEARINGREGARDINGPROPOSED REVISIONS TO: 

### REGULATIONNUMBER3 

## HearingOfficer: CommissionerBarbaraRoberts COLORADO DEPARTMENTOF PUBLIC HEALTH & 

### ENVIRONMENT 4300 Cherry CreekDrive South

NAME Noble Energy Inc.

Air Quality Control Commission

Air Pollution Control Division

Office ofthe Attorney General 

### Denver, Colorado 80246 

### October20, 2011
REPRESENTED BY/ADDRESS John R. Jacus, Esq. Radcliffe Dann IV, Esq. Davis Graham & Stubbs LLP 1550 17th Street, Suite 500 Denver, CO 80202-1500

Barbara Roberts

- Commission HearingOfficer
Mike Silverstein -Administrator 4300 Cherry CreekDrive South, EDO-AQCC-A5 Denver, CO 80246
TheresaMartin

- Program Assistant 4300 Cherry CreekDrive South, EDO-AQCC-A5 Denver CO 80246 Dena Wojtach- Unit Supervisor 4300 Cherry CreekDrive South, APCD BI Denver CO 80246 Andrea Gelfuso-Goetz

- CommissionAttorney Casey Shpall

- CommissionAttorney 1525 Sherman Street, 7th Floor Denver, CO 80202
Tom Roan

- Division Attorney Megan Lowe

- Division Attorney 1525 Sherman Street, 7th Floor Denver, CO 80202 TELEPHONE/FAX/EMAIL Ph: 303-892-9400 Fax: 303-893-1379 Email: john.jacus@dgslaw.com Email: randy.dann@dgslaw.com

Email: barbarawroberts@gmail.com
Ph: 303-692-3478 Fax: 303-691-7702 Email: Mike.Silverstein@state.co.us
Ph: 303-692-3476 Fax: 303-691-7702 Email: Theresa.Martin@state.co.us Ph: 303-692-3147 Email: Dena.Wojtach@state.co.us

Ph: 303-866-3782 Email: Andrea.Goetz@state.co.us Ph: 303-866-5069 Email: Casey.Shpall@state.co.us
Ph: 303-866-5280 Email: Tom.Roan@state.co.us Ph: 303-866-4065 Email: Megan.Lowe@state.co.us
Fax: 303-866-3558NOTETOTHE PARTIES: Email service betweenthe parties for prehearing statements and any othermaterialsto be filed with the Commission Office is allowed. Please be sure that all parties are copied onthe emails. Party Status Statements due to the August 18, 2011 at 5:00p.m. 4300 Cherry Creek Drive South Commission Office, Attorney General's EDO-AQCC-A5 Office Division Office Denver CO 80246

Status Conference August 25, 2011 at 2:00p.m. 4300Cherry Creek Drive South BuildingA Carson Conference Room Final Prehearing Statementdue to the September 19,2011 at 5:00p.m. 4300 Cherry Creek Drive South Commission Office and everyone listed on EDO-AQCC-A5 the Partv Status List Denver CO 80246 Pre-Hearing Conference September29, 2011 at 9:00a.m. 4300 Cherry Creek Drive South BuildingA Snow ConferenceRoom Rebuttal Statements due to the October5, 2011 at 5:00p.m. 4300 Cherry Creek Drive South Commission Office and everyone listed on EDO-AQCC-A5 the Party Status List Denver CO 80246 Rulemaking Hearing Date October 20, 2011 at 9:00a.m. 4300 Cherry CreekDrive South BuildingA Sabin Conference Room 

## CERTIFICATEOFSERVICE Ido certifY that atrue and exact copyofthe Party Status List for the upcoming Rulemaking Hearing regarding proposed revisions to RegulationNumber 11 was emailedto the followmg on Au ust 22 2011 NAME REPRESENTED BY/ADDRESS TELEPHONE/FAX/EMAIL Noble Energy Inc. John R. Jacus, Esq. Ph: 303-892-9400

Air Quality Control Commission

Air Pollution Control Division

Office ofthe Attorney General Radcliffe Dann IV, Esq. Fax: 303-893-1379 Davis Graham & Stubbs LLP Email: john.jacus@dgslaw.com 1550 17th Street, Suite 500 Email: randy.dann@dgslaw.com Denver, CO 80202-1500

BarbaraRoberts

- Commission HearingOfficer
Mike Silverstein -Administrator 4300 Cherry Creek Drive South, EDO-AQCC-A5 Denver, CO 80246
TheresaMartin

- Program Assistant 4300 Cherry Creek Drive South, EDO-AQCC-A5 n,.n"Pr_C[)**R0?~4fi** Dena Wojtach- Unit Supervisor 4300 Cherry Creek Drive South, APCD B1 Denver CO 80246 AndreaGelfuso-Goetz

- Commission Attorney Casey Shpall

- Commission Attorney 1525 Sherman Street, 7th Floor Denver, CO 80202
Tom Roan

- Division Attorney Megan Lowe

- Division Attorney 1525 Sherman Street, 7th Floor Denver, CO 80202 Email: barbarawroberts@gmail.com
Ph: 303-692-3478 Fax: 303-691-7702 Email: Mike.Silverstein@state.co.us
Ph: 303-692-3476 Fax: 303-69I-7702 IFm"il·**ThPrP~"** ll"r' '**•tm~t<>tP** rn**~~~** Ph: 303-692-3147 Email: Dena.Wojtach@state.co.us

Ph: 303-866-3782 Email: Andrea.Goetz@state.co.us Ph: 303-866-5069 Email: Casey.Shpall@state.co.us
Ph: 303-866-5280 Email: Tom.Roan@state.co.us Ph: 303-866-4065 Email: Megan.Lowe@state.co.us
Fax: 303-866-3558

# AirPollution ControlDivision

### BEFORE THEAIRQUALITYCONTROL COMMISSION STATE OF COLORADO

PREHEARING STATEMENT OF COLORADODEPARTMENT OFPUBLICHEALTH AND ENVIRONMENT,AIRPOLLUTION CONTROL DIVISION 

### REGARDING PROPOSED REVISIONS TOREGULATIONNUMBER3

EXECUTIVE SUMMARY The ColoradoDepartment ofPublicHealthandEnvironment, AirPollutionControl Division("Division")proposedthis rulemakingto: address federal changesto theNew Source Review (NSR) ProgramrelatedtoPM2.5 National Ambient Air Quality Standards (NAAQS); address severalrecent Environmental ProtectionAgency (EPA) State ImplementationPlan(SIP) actions inwhichEPApartiallydisapprovedvarious SIP revisions; incorporate EPA'sDeferral of Biogenic Sources ofC02EmissionsintoColorado'sPSD andTitleV PermittingPrograms; and make other miscellaneousrevisions and to correcttypographical, grammatical and formatting errors. In response to the comments ofNobleEnergy, Inc. and arecentEPAfinal rule, the Division made the following changestoour originalproposal: I. Thenotice ofstartupproposedrule textwas clarified. See Regulation 3, PartB, Section III.G.l. 2. The Biogenic C02Deferralproposedruletext wasrevisedto include theJuly 21, 2014 deferral end date thatwas incorporatedintoEPA's final rulepublished in the Federal RegisteronJuly 20,2011. EPARegion 8 indicatesthatthese revisions are acceptable. SeeRegulation 3, PartA, SectionI.B.44.b.(i). Additionally, the Divisionpreviouslyreported thatwehaveproposed several revisions to address EPA'sproposed disapproval ofseveralAirPollutant EmissionNotice (APEN) and permitexemptions. As ofSeptember 16, 2011,EPA'sfinal rule disapprovingthese exemptions had not beenpublishedintheFederal Register. EPARegion 8 anticipates thatthisrulewill be publishedin theFederal Registerbythe AQCC hearingdate, October20, 2011. EPARegion 8 has indicatedthatthe final rule will mirrortheproposedrule. Therefore, we anticipate thatthe Division'sproposed APEN and permitexemption**re~sions** 

### will addressEPA'sconcerns. IfEPAdoes notpromulgate a final rule on this proposed SIP actionbythe October20, 2011 hearing, the Commission shouldconsidereitherdelaying ordisapprovingthe adoption ofthese revisions until EPAfinalizes thisrule.

STATEMENT OF FACTUALAND LEGAL ISSUES NobleEnergy, Inc. wasthe onlypartytothis proceeding. The DivisionmetwithNoble and agreed that we canworktogethertoexplore alternative measures to addressNoble'sconcerns. Based onthis understanding, Noblehas withdrawnitsparty statusrequest. There are nolonger any issues withthe Division'sproposal.

### WITNESSES 

### 1. DenaWojtach, Stationary Sources Program, ColoradoDepartmentofPublic HealthandEnvironment, AirPollution ControlDivision. Ms. Wojtachwill present the Division'sproposal. 2. 

### Stefanie Rucker, Stationary Sources Program, ColoradoDepartmentofPublic Healthand Environment, AirPollution ControlDivision. Ms. Ruckermay present supportinginformationassociated withtheDivision'sproposal.

EXHIBITS 1. Excerptsoftherevised, proposedrules
2. Final economic impactanalysis
ESTIMATE OF TIMEFORPRESENTATION The Divisionrequests 

### 10 minutes for its presentation.



### DATED this 19thdayofSeptember, 2011.

JOHNW. SUTHERS

) 

### A. 

### ROAN, 30867* FirstAssistantAttorney General AirQualityUnit Natural Resources andEnvironmentSection Attorneys for AIRPOLLUTION CONTROL

DIVISION
1525 ShermanStreet, 5thFloor Denver, Colorado 80203 Telephone: (303) 866-5280 *CounselofRecord

2

### CERTIFICATE OF SERVICE
Iherebycertifythat atrue andcorrectcopyofthe above and foregoing Department's

,Prehearing Statementwas servedviae-mailtothe following this__fl_!!:aay ofSeptember 2011: 

### AirQuality Control Commission Mike Silverstein, Administrator TheresaMartin, ProgramAssistant 4300 CherryCreekDrive South EDO-AQCC-A5 Denver, CO 80246 mike.silverstein@state.co.us 

### Theresa.martin@state.co.us AndreaGelfuso-Goetz Attorney forthe Commission Attorney General's Office 1525 Sherman Street, 7th

### Floor Denver, CO 80203 andrea.goetz@state.co.us

3

# I 9112;11 Exhibit I to APCDPrehearing Statement

available for examination atthe office ofthe Director ofthe Air Pollution Control Division, Department of Public Health and Environment, 4300 Cherry Creek Drive South, Denver, Colorado 80246-1530. forAffected Source see Section I.A.1. of Part C for Existing Source, see Section 1.8.20. of Part A for Indirect Source, see Section 1.8.24. of Part A for Major Source, see Section 1.8.25. of PartA for Major Stationary Source, see Section II.A.26. of Part D for Minor Source, see Section 1.8.26. of PartA for Mobile Source, see Section 1.8.27. of PartA for New Source, see Section 1.8.29. of Part A for Portable Source, see Section 1.8.36. of PartA for Temporary Source, see Section 1.8.45. of Part A 1.8.44. Subjectto Regulation For any air pollutant, that the pollutant is subject to either a provision in the Federal Act, or a nationally-applicable regulation codified by the Administrator in Subchapter C of40 CFR Chapter Iofthe Federal Act, that requires actual control ofthe quantity ofemissions ofthe pollutant, and that such a control requirement has taken effect and is operativeto control, limit or restrictthe quantity ofemissions ofthat pollutant released from the regulated activity, exceptthat: 1.8.44.a. GHG shall not be subject to regulation except as provided in Sections 1.8.44.d. through f. ofthis Part A. 1.8.44.b. For purposes ofSection 1.8.44.c. through e., the term C02e ofthis Part A, shall represent an amount ofGHG emitted, and shall be computed as follows: 1.8.44.b.{i) Multiplying the mass amount ofemissions (tpy), for each ofthe six GHGs in the pollutant GHG, bythe gas's associated GWP published at Table A-1 to Subpart A of Part 98 of40 CFR as in effect October30, 2009, which is hereby incorporated by reference, but not including later amendments. For purposes ofthis paragraph, priorto July21. 2014. the mass ofthe greenhouse gas carbon dioxide shall not include carbon dioxide emissions resulting from the combustion ordecomposition of non-fossilized and biodegradable organic material originating from plants. animals. or micro-organisms (including products. by-products. residues and waste from agriculture. forestry and related industries as well as the non-fossilized and biodegradable organic fractions of industrial and municipal wastes. including gases and liquids recovered from the decomposition of non-fossilized and biodegradable organic material). 1.8.44.b.(ii) Sum the resultant value from Section 1.8.44.b.{i) ofthis Part A, for each gas to compute a tpy C02e.
1.8.44.c. The term emissions increase as used in Sections 1.8.44.d. through e. of this PartA, shall mean that both a significant emissions increase (as calculated using the procedures in Section II.A.22 of Part D) and a significant net emissions increase (as defined in Sections II.A.26, and II.A.42 of Part D) occur. Forthe pollutant GHG, an emissions increase shall be based on tpy C02e, and shall be calculated assuming the pollutant GHG is a regulated NSR pollutant, and significant is defined as 75,000 tpy C02e instead ofapplying the value in Section II.A.42.b. of Part D. 

### Proposed Reg 3Revisions- PM2.5/SIP Fix/OtherRevisions Page 14...Q.[342 

## i 

# l f f 

# f 

# I
'revocation. The hearing shall be heard in accordance with the provisions ofSection 1.6.0. ofthe Commission's procedural rules, Colorado Revised Statute Sections 25-7- 114.5(8), and 25-7-119, (Colorado Air Pollution Prevention and Control Act) and Section 24-4-105, (State Administrative Procedure Act).
III.F.4. Initial Approval Expiration III.F.4.a. An initially approved permit shall expire ifthe owner or operatorofthe source for which the permitwas issued: (i) does not commence construction or operation ofthe source within eighteen months after eitherthe date of issuance ofthe permit orthe date on which such cQnstruction or activity was scheduled to commence as set forth in the permit, whichever is later; (ii) discontinues construction fora period ofeighteen months or more; or (iii) does not complete construction within a reasonable time ofthe estimated completion date. III.F.4.b. Upon a showing ofgood cause bythe permittee, the Division maygrant extensions ofthe permit notto exceed eighteen months per extension. Construction oroperation shall commence orbe resumed within a reasonable period oftime from the granting ofthe extension. In determining what constitutes good cause ora reasonable period oftime, the Division shall considerthe degree ofconstruction already completed, the amount invested or legally committed to the project, whether an extension would prevent (e.g., through reservation ofa Prevention Significant Deterioration increment) economic development in the affected area, general economic conditions, the health ofthe communityas it affects the ability ofthe permittee to proceed, and other relevant factors. The Division shall notifythe Commission ofany requested extensions and the reason given for each request. III.G. Final Permit Approval



# I 9112;11III.G.1. Unless prior and mutually acceptable arrangements have been made, the applicant shall not oommenoe the operation ofa stationary**so~**roe forVo'hioh a**oonstr~otion** permit has been**iss~ed** or reinstated witho1:1t §i't'in§ 91Y!;Lnotice to the Division,**~fifteen** calendar days (fifteen oalondar days for portaele so1:1roes) priorafter-te-_the date on which commencement ofoperation will-take§ place. · III.G.2. Within 180 calendar days after commencement ofoperation, the source shall demonstrate to the Division compliance with the terms and conditions ofthe initial approval construction permit. The Division may inspectthe source to determinewhether or notthe operating terms and conditions ofthe initial approval construction permit have been satisfied. Atthe end of 180 days, the Division must revoke the construction permit; or, continue the construction permit if applicable; or, notifythe owneror operatorthatthe source has demonstrated compliance with the construction permit. III.G.3. Before final approval ofthe permit is granted, the Division may require the applicantto conduct and pay for performance tests in accordance with methods approved bythe Division. A test protocol shall be submitted to the Division for review and approval at leastthirty days prior to testing. The Division may monitor such tests and may, at its expense, conduct its own performance tests. III.G.4. For sources that submit an application for an operating permit pursuant to Part C ofthis Regulation Number3, including any application for a permit modification or permit renewal, prior to issuance ofa final approval construction permit, upon demonstration by the source ofcompliance with all terms and conditions ofthe construction permit or a satisfactoryfinal approval inspection, as required pursuant to this Section III.G., the Division may electto either issue afinal approval construction permit orallowthe initial 

### ProposedReg 3Revisions- PM2.5/SIPFix/OtherRevisions Page87 _Qf_342

### Exhibit 2to APCDPrehearing Statement



# Final Economic ImpactAnalysis

For Revisionsto 

## AQCC Regulation 3, Parts A, B, C and D CRS 25-7-110.5(2) and (4) September 12, 2011 

### ISSUES
The Colorado Department ofPublic Health and Environment, Air Pollution Control Division (Division) is petitioning the Colorado Air Quality Control Commission (AQCC) to adopt revisions to Regulation 3, Parts A, B, C, and D. The proposed revisions primarily address federal changes to the PM2.5 National Ambient Air Quality Standard (NAAQS) under the New Source Review (NSR) program, which are necessary for consistent state implementation ofthe federal NSRprogram. In addition to the PM2.5 related revisions, the Division proposes to address federal rulemaking activities related to State Implementation Plan (SIP) reviews and greenhouse gas (GHG) permitting implementation. Specifically, the Division is proposing revisions that address recent U.S. Environmental Protection Agency (EPA) SIP actions in which EPA disapproved or provided comments on rule text in previous SIP submittals. Additionally, the Division is proposing to adopt the federal rule allowing for a deferral of greenhouse gas permitting requirements for biogenic sources of carbon dioxide emissions under the Prevention of Significant Deterioration (PSD) and TitleV programs. Finally, the Division is proposing to make other miscellaneous clarifications and to correct typographical, grammatical and formatting errors.



### STATUTORYREQUIREMENTS
Section 25-7-110.5(4)(a), C.R.S. sets forth the requirements for the initial and final Economic ImpactAnalysis, as stated below:

911211 1 

### Before any permanent rule is proposed pursuant to this section, an initial economic impact analysis shall be conducted in compliance with this subsection (4) of the proposed rule or alternative proposed rules. Such economic impact analysis shall be in writing, developed by the proponent, or the Division in cooperation with the proponent and made available to the public at the time any request for hearing on a proposed rule is heard by the commission. A final economic impact analysis shall be in writing and delivered to the technical secretary and to all parties of record five working days prior to the prehearing conference. If no prehearing conference is scheduled, the economic impact

Initial Economic Impacts Analysis Page 1of9 Proposed Reg 3 Revisions- PM2.5/SIP Fix/Other Revisions

### analysis shall be submitted at least ten working days before the date ofthe rulemaking hearing. The proponent of an alternative proposal will provide, in conjunctionwiththe Division, a final economic impactanalysis five workingdays prior to the prehearing conference. The economic impact analyses shall be based upon reasonably available data. Except where data is not reasonably available, or as otherwise provided in this section, the failure to provide an economic impact analysis of any noticed proposed rule or any alternative proposed rule will preclude such proposed rule or alternative proposed rule from being considered by the Commission. Nothing in this section shall be construed to restrict the Commission's authority to consider alternative proposals and alternative economic impact analyses that have not been submitted prior to the prehearing conference for good cause and so long as parties have adequate time to review them.
Per Section 25-7-110.5(2), C.R.S., the requirements ofSection 25-7-110.5(4) shall not apply to rules which: (1) 

### adopt by reference applicable federal rules; (2) adopt rules to implement prescriptive state statutory requirements where the AQCC is allowed no significant policymaking options; or, (3) adopt rules that have no regulatory impact on any person, facility or activity.

DISCUSSION
The Division has proposed changes to Regulation 3 on three primary topics: PM2.5 Related Rules, EPA Partial Disapproval Actions, and the Biogenic GHG Deferral. The economic impacts ofeach are discussed in detail in this section.
PM 2.5 Related Rules
The Division is petitioningthe AQCC to adopt four federal rules:

• "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 (PM2.5)

- Increments, Significant Impact Levels (SILs) and Significant Monitoring Concentration (SMC)" (75 FR 64864, October20, 2010)

• "Requirements for Preparation, Adoption, and Submittal ofImplementation Plans" (76 FR 18870, April6, 2011)

• "Implementation ofthe New Source Review (NSR) Program for Particulate Matter Less Than 2.5 Micrometers (PM2.5); Final Rule to Repeal Grandfather Provision" (76 FR 28646, May 18, 2011)

9/12/11 Initial Economic Impacts Analysis Page 2of9 Proposed Reg 3 Revisions- PM2.5/SIP Fix/OtherRevisions

### While this proposed rulemaking does not technically conform to an adoption by reference procedure, the proposed PM2.5 revisions mirror EPA's regulatory language for the inclusion of PM2.5 as a regulated NSR pollutant in the NSR program under Colorado regulations. The proposed PM2.5 revisions have been prescribed in federal rules, and the AQCC has few policymaking options due to the requirement to maintain consistency with federal NSR permitting program requirements and the desire to maintain federal delegation of authority of the NSR program. (Sections 25-7-109(9)(a) and 25-7-301(1), C.R.S.) Accordingly, the Division maintains that a "No Analysis Justification" satisfies the EIA requirement under Section 25-7- 110.5(2), C.R.S. for the PM2.5 related revisions.
EPA's May 16, 2008 PM2.5 Implementation Rule provided some flexibility in designating PM2.5 precursor pollutants. While sulfur dioxide (S02) must be treated as a PM2.5 precursor in all areas ofthe state, more flexibility is afforded to nitrogen oxides (NOx), volatile organic compounds (VOCs) and ammonia (NH3). NOx is presumed to be a PM2.5 precursor state-wide unless the state demonstrates that NOx is not a "significant contributor" to PM2.5 concentrations within Colorado. (73 FR 28328.) 

### However, VOCs and NH3 are not required to be treated as PM2.5 precursors, except that high molecular weight VOCs (equal to or greater than 25 carbon atoms and low vaporpressure) will be addressed as a condensable particulate. (73 FR28329-283330.)


### Atthis time, the Divisionproposesto identify S02 and NOx as PM2.5 precursors state-wide. Based on the limited PM2.5 modeling and monitoring data available for Colorado, the Division determinedthatthere is insufficient evidenceto claim eitherwaythatNOxemissions do or do not contribute significantlyto the concentration ofPM2.5 in any area in Colorado. Without evidenceto narrowthe identification ofNOxas a precursorto specific areas, Colorado must identifyNOx as aPM2.5 precursor state-wide. Less is known about VOCs and NH3 and their contributionto PM2.5 in Colorado, and so Coloradohas chosen to not identifythem as PM2.5 precursors at thistime.
In designating NOx as a PM2.5 precursor state-wide rather than having made a demonstration to narrow the NOx precursor designation, the Division acknowledges that there will be an associated cost to sources with emissions ofNOx, including the possibility ofPSD applicability and Best Available Control Technology (BACT) determinations for the pollutant PM2.5 as a result ofa significant emissions increase (as defined in Regulation 3, Part D, Section II.A.42.) of NOx. The cost increase is limited to the:
I. Cost ofcompleting a BACT analysis for PM2.5 in the situations where the increase of direct PM2.5 emissions does notexceedthe significance level; 2. Cost ofthe Division engineerreview time for the BACTanalysis; and 3. Costofimplementing any control requirements arising ofthe BACTanalysis for PM2.5. However, these costs are allayed by the fact that a major stationary source with NOx emissions exceeding the significance level will already be required to undergo a PSD review and BACT analysis for their NOx emissions (including as a contributor to PM2.5). Therefore, the designation does not impose PSD review in itself, but instead requires the consideration of PM2.5 in an ongoing PSD review.

9/12/11 Initial Economic Impacts Analysis Page 3 of9 Proposed Reg 3Revisions- PM2.5/SIP Fix/Other Revisions

### EPA Panial Disapproval Actions
The Division is petitioning the AQCC to adopt revisions to multiple Air Pollution Emission Notice (APEN) and construction permit exemptions in Parts A and B in response to EPA disapproval and language suggestions arising out ofEPA's SIP review. The proposed revisions are required under Section 25-7-105(1)(a)(I), C.R.S., wherein the SIP shall meet all requirements ofthe Clean Air Act (CAA) and be revised whenever necessary or appropriate, and the AQCC has few policy-making options related to these adjustments. Further, most of the proposed changes should have no regulatory impact on any person, facility, or activity. Accordingly, the Division maintains that a "NoAnalysis Justification" satisfies the EIA requirement under Section 25-7-110.5(2), C.R.S. However, the Division recognizes that there are sources which may be impacted by the revision, and in some cases deletion, of APEN and permitting exemptions. To that end, based on reasonably available information, the Division prepared the following economic analysis which satisfiesthe statutoryrequirementsto prepare athree-partregulatory analysisthat: (A) Identifiesthe industrial and business sectorsthatwill be impactedbythe proposal; and (B) Quantifies the directcostto the primaryaffected business or industrial sector; and (C) 

### Incorporates an estimate of the economic impact of the proposal on the supporting business and industrial sectors associated with the primary affected business or industry sectors. Section 25-7-110.5(4)(c)(lll), C.R.S.
Industrialandbusinesssectors impacted


### There are no anticipated regulatory effects on any industrial or business sectors as a result of: correcting the open burning and surface water impoundment APEN exemptions; clarifying the mobile sources APEN exemption and non-road engine state-only permit exemption; or removing the deaerator/vacuum pump exhaustand air curtain destructorAPEN exemptions.
There are anticipated regulatory effects on industrial and business sectors as a result ofrepealing the APEN exemptions for stationary internal combustion engines (ICE) and emergency generators and reverting to the originally EPA SIP approved construction permit exemption for ICE. Therefore, the industrial and business sectors impacted by this proposal are any that utilize internal combustion engines, including but not limited to oil and gas, construction, sand and gravel, landfills, and anythatutilize emergencygenerators as a back-up powersource. Directcostto theprimaryaffectedbusiness orindustrialsector 

### The Division proposes to repeal the APEN exemptions for ICE and emergency generators, located in Regulation 3, PartA, Sections II.D.1.sss. and II.D.1.ttt. These exemptions allowed for ICE and generators of a certain design horsepower and annual hours of operation to be categorically exempt from APEN submittal requirements. The values in the exemptions were

9/12/11 Initial Economic Impacts Analysis Page4 of9 Proposed Reg 3 Revisions- PM2.5/SIP Fix/OtherRevisions

### based on calculations utilizing criteria pollutant emission factors from EPA's AP-42, Chapter 3.3, Gasoline and Diesel Industrial Engines, assumingthe combinations ofhorsepower and hours of operation listed would not result in emissions exceeding two (2) tons per year (tpy). Therefore, the repeal of these exemptions may affect sources currently designated as APEN Exempt, but which have criteria pollutant actual uncontrolled emissions greater than either one (1) tpy ortwo (2) tpy, depending on whetherthe engine is located in the ozone nonattainment or attainment area. According to the Division's inventory, as ofJune 29, 2011, there are 17 APEN Exempt ICE and generators in the nonattainment area and 36 APEN Exempt ICE and generators in the attainment area. It 

### is assumed that even more sources that have not actively obtained APEN exemptions will be affected because sources with APEN Exempt equipment are not required to provide emissions data, oreven notifythe Division oftheir equipment's existence. Thus, it is difficult to determinethe actual numberofsources maybecome subjectto APEN requirements due to repeal ofthe ICE exemption.
This analysis focuses on the information available to the Division. Assuming that all of the APEN Exempt engines in the Division's inventory will be required to submit APENs, using the currently approved APEN fee of$152.90, the associated cost ofcomplying with the Division's proposal is listed in Table 1, below. The initial cost per ICE or generator is up to $152.90, with no associated fees for hours spent by the Division on reviewing the APENs. The APEN would expire after five (5) years, and the source would berequired to submit an updated APEN with the APEN submittal cost at thattime.


### T bl 1 

### I "f 

### I 

### C t t 

### S

a e : 01 

### 1a OS 0 

### ourcesofR

### emovm th APENE e xem f ti 

## E p110ns or ngmes Nonattainment Attainment Total Area Area Statewide NumberofSources1 

### 17 36 53 

### APENFee $152.90

### persource TotalAPEN SubmittalCosf $2,599.30 $5,504.40 $8,103.70 I. Does not include sources which may become subjectto APEN reporting which have not submitted an APEN orrequested APEN exempt status from the Division. Because sources which are APEN exempt are not required to notify the Division oftheirexistence ortheir emissions, the Division does not have an accurate inventory ofall APEN Exempt sourcesthroughoutthe State. 2. Assuming that all APEN Exempt sources will become subject to APEN reporting.


### After submission of an APEN, there are annual fees charged for emissions of criteria and hazardous air pollutants (HAP). The currently approved annual emissions fees are $22.90 per ton ofcriteria pollutants and $152.90 per ton ofHAP. Engines, including ICE and generators, are likelyto emitthe following:

9/12111 Initial Economic Impacts Analysis Page 5 of9 Proposed Reg 3 Revisions- PM2.5/SIP Fix/OtherRevisions

### Criteria ollutants: • oxides ofnitrogen (NOx), 

# • • volatile organiccompounds 

# • (VOC), • acrolein, • carbon monoxide (CO), and • benzene, • particulate matter (PMl0). • toluene, • ethylbenzene, and • xylene. Assuming the emiSSion of criteria pollutants are all at the facility permitting thresholds in Regulation 3, Part B, Sections 11.0.2. and 11.0.3. and the emission ofHAP are the at the de minimus thresholds in Regulation 

### 3, Part A, Appendix A, Scenario 

### 1, the annual cost of complyingwiththe Division'sproposal is listed in Table 2, below.

a e : 

### T 

### bl 2 Annua

### I C t 

### S OS 

### to ourcesofRemovmgth APENE e xemp11ons or**~** 

## E f ngmes Nonattainment Attainment Total Area Area Statewide NumberofSources1 

### 17 36 53 13 tonsperyear 30 tons per



# -- Maximum Criteria persource yearper source PollutantEmissions2• 3 

### 221 tons per 1,080 tons per 1,301 tons year year peryear CRITERIA Annual Fee $22.90 perton POLLUTANT $297.70 per $687.00 per



# -- AnnualInvoice source source $5,061 $24,732 $29,793 1.6 tons per 1.6tonsper



# -- MinimumHAP _yearper source yearpersource Emissions2'4 

### 27.2tonsper 84.8 tons per 112 tons HAZARDOUS year year peryear AIR AnnualFee $152.90 perton POLLUTANT $36.64 per $36.64 per



# -- AnnualInvoice source source $623 $1,3.19 $1,942
TOTAL AnnualInvoice $334.34 per $723.64 per



## -- source source

9/12/11 Initial Economic Impacts Analysis Page 6 of9 Proposed Reg 3 Revisions- PM2.5/SIP Fix/OtherRevisions1 1 

### $5,684 1 

### $26,051 1 

### $31,735 1. Does not include sourceswhich may become subjectto APEN reporting which have not submitted an APEN orrequested APEN exempt status from the Division. Because sources which are APEN exempt are not required to notify theDivision oftheirexistence ortheir emissions, the Division does not have an accurate inventory ofall APEN Exempt sourcesthroughoutthe State. 2. Assumingthat all APEN Exempt sources will become subjectto APEN reporting. 3. CriteriaPollutant (tonsperyearpersource): Nonattainment: NOx = 5tpy; CO=5tpy; VOC = 2 tpy; PMIO = 1tpy Attainment: NOx = 10 tpy; CO= 10tpy; VOC = 5tpy; PMIO = 5tpy 4. HAP (tonsperyearper source): Formaldehyde=50lb/yr; Acetaldehyde = 50 lb/yr; Acrolein = 50 lb/yr; Benzene= 50 lb/yr Toluene= 1,000 lb/yr; Ethylbenzene= 1,000lb/yr; Xylene= 1,000 lb/yr 

### Finally, the Division proposes to revert to the previously approved construction permitting exemption for ICE, located in Regulation 3, Part B, Section II.D.1.c.(iii)(B). The current exemption allows for ICE in the attainment area to be categorically exempt from obtaining a construction permit when the criteria pollutant actual uncontrolled emissions from the engine alone were less thanten (10) tpy and/or iftheenginehad a design horsepower lessthan 100. The proposed exemption will apply statewide and exempt from permitting those ICE with actual uncontrolled emissions ofany criteriapollutant less than five (5) tpy and/or a design horsepower less than 50. Therefore, the revision ofthis exemption may affect sources currently designated as Permit Exempt, but which have actual uncontrolled emissions greater than either five (5) tpy or have a design horsepower greaterthan 50, as is currently approved in the SIP. According to the Division's inventory, as ofJune 29, 2011, there are 201 Permit Exempt ICE statewide with emissions greater than five (5) tpy ofany criteria pollutant. Assuming that all of these engines will be required to obtain a construction permit, the associated cost ofcomplying with the Division's proposal is listed in Table 3, below.
The initial cost per ICE is $152.90, with additional associated fees for hours spent by the Division on reviewing the permit application and issuing the permit. The number ofhours that the Division must spend reviewing a permit application and APEN vary dependant on many factors, including, but not limited to, the completeness ofthe permit application, the complexity ofthepermitted activity, and the regulatory requirements on the source. The Division is required under Regulation 3, Part A, Section VI.B.4. to provide notice to the applicant with an estimate of projected processing time iftotal processing time is anticipated to exceed 30 hours. Therefore, for the purposes ofthis analysis, the Division assumes that each ICE permit application will take 30 hours to process. T bl 3 P

a e : 

### "tf 

# c t 

### t 

# s erm1 mg OS 0 

### ourcesofChangmgth p 

### e "tE erm1 

### f f< E 

### xemp110n or ngmes TotalStatewide NumberofSources1 

### 201 APENFee $152.90 persource APENCOST TotalAPENCost $30,732.90

9/12/11 Initial Economic Impacts Analysis Page 7 of9 Proposed Reg 3Revisions- PM2.5/SIP Fix/Other Revisions

### PERMIT Permitting Time2 

### 30 hours persource PROCESSING TIME TotalPermittingTime 

### 6,030 hours

PERMIT PermitProcessingFee 

### $76.45 perhour PROCESSING PermitProcessing Cost $2,293.50 persource COST Total PermitProcessing Cost 

### $460,993.50

1. Assuming that all PermitExempt sources with any criteriapollutantemissions greaterthan 5 tpy will be requiredto obtain a construction permit. 2. Only for the purposes ofthisanalysis, assumedthe permittinghours requiredequalthe maximum allowed to the Division priorto notifyingthe applicant. (Regulation 3, PartA, Section VI.B.4.)



### Economic impactonsupportingbusinessandindustrialsectors 

### There is no anticipated economic impact on businesses and industrial sectors supporting the primary industrial sectors. Biogenic GHG Deferral
On October 21, 2010, the AQCC adopted revisions to Regulation 3, Parts A, B, C and D in accordance with the "Prevention of Significant Deterioration and Title V Greenhouse Gas (GHG) Tailoring Rule," commonly called the GHG Tailoring Rule. (75FR31514, 

### June 3, 2010.) EPA's GHG Tailoring Rule was·designed to tailor the applicability criteriathat determine which stationary sources and modification projects become subject to permitting requirements for GHGs underthe PSD andTitle VPrograms ofthe CleanAirAct (CAA).
The Division is petitioning the AQCC to adopt the applicable federal rule: "Deferral for C02 Emissions from Bioenergy and Other Biogenic Sources Under the Prevention of Significant Deterioration (PSD) and Title V Programs," commonly called the Biogenic Deferral. (76FR15249, 

### March 21, 2011.) While this proposed rulemaking does nottechnically conform to an adoption by reference procedure, the changes which have been proposed mirror EPA's regulatory language. The proposed revisions have been prescribed in the Biogenic Deferral, and the AQCC has few policy-making options due to the framework within which EPA promulgated this rulemaking. Accordingly, the Division maintains that a "No Analysis Justification" satisfies the ElA requirement under Section 25-7-110.5(2), C.R.S.
EPA promulgated the GHG Tailoring Rule in an effort to avoid an untenable workload on states and sources. EPA promulgated the Biogenic Deferral to allow sources of biogenic C02 emissions a three year deferral from the permitting requirements of the PSD and Title V programs while EPA completes a study on the effect ofbiogenic C02 on the atmosphere and climate. The proposed rulemaking may significantly reduce the number ofpermitting actions, and therefore costs, within the State of Colorado during the deferral. For this reason, the adoption of this proposed rulemaking will reduce the regulatory impact on GHG emission sources in Colorado duringthethree-yeardeferral.

9/12/11 Initial Economic Impacts Analysis Page 8 of9 Proposed Reg 3 Revisions- PM2.5/SIP Fix/OtherRevisions

### SUMMARYAND CONCLUSION
As discussed in detail in the previous section, the Division is petitioning the AQCC to adopt revisions to Regulation 3 on three primary topics: PM2.5 Related Rules, EPA Partial Disapproval Actions, and the Biogenic GHG Deferral. The proposed revisions are required under Section 25-7-105(1)(a)(l), C.R.S., wherein the SIP shall meet all requirements oftheClean Air Act (CAA) and be revised whenever necessary or appropriate, and the AQCC has few policy-making options related to these revisions. Further, many ofthe proposed changes should have no or abeneficial regulatory impact on sources.

9112111 Initial Economic Impacts Analysis Page 9 of9 Proposed Reg 3 Revisions- PM2.5/SIP Fix/Other Revisions

# Noble EnergyInc.

### AIRQUALITYCONTROLCOMMISSION,STATEOFCOLORADO

IntheMatterofProposedRevisionsto ColoradoAirQualityRegulationNumber3, PartsA, B, C, andD



### PETITIONFORPARTYSTATUS OFNOBLEENERGY,INC.

NobleEnergy, Inc. ("Noble"), submits this petition for party status ("Petition")and requeststherighttoparticipate as aparty, as providedby the Air Quality Control Commission's ("AQCC"orthe "Commission")proceduralrules, 5CCR 1001-1, Sect. 1.5.5(3), in all hearings, conferences and otherproceedingsheldinconnectionwiththe Commission'sconsiderationof proposedrevisionsto RegulationNumber3, PartsA, B, C, andD ("ProposedRevisions"). 

### I. TheApplicant
The Commissionisconsideringthe adoptionoftheAirPollutionControl Division's ("Division")proposedrevisionsto ColoradoAir Quality Control RegulationNumber3, Parts A, B, C, andD. AccordingtotheDivision,the ProposedRevisionsprimarily addressfederal changesto theNewSourceReview (''NSR")ProgramrelatedtoPM2.5 National AmbientAir Quality Standards (''NAAQS"). TheProposedRevisionsencompass a suite ofrulesregarding Colorado'sregulationofPM2.5 undertheNSRProgram.
The Commissionwill also considera numberofadditionalproposedrevisions to RegulationNumber3, includingrevisionsto address severalrecentEPAStateImplementation Plan ("SIP") actions inwhichEPApartiallydisapproved various SIP revisions; incorporationof EPA'sDeferral ofBiogenic SourcesofC02Emissions into Colorado'sPreventionofSignificant Deterioration ("PSD") andTitle V PermittingPrograms; and othermiscellaneousrevisions and correction oftypographical, grammatical, and formatting errors. The sources affectedbythe proposedrevisions includePM2.5 and C02emission sources, as well as openburning sources, mobile sources, stationary internal combustion engines, emergency generators, oil and gas surface impoundments, deaerator/vacuum pumpexhaust, and air curtain destructors. Nobleis significantly anduniquely interestedin, andpotentiallyaffectedby, certain aspects ofthe ProposedRevisions.
Nobleis one ofthe nation'sleadingindependentenergycompanies andis engaged inthe exploration, development, production, andmarketingofcrude oil andnatural gas. Noble operates over5,000 activenatural gas wells in theDJBasinWattenberg field. Noble also operates over 150 natural gas wells inthe PiceanceBasinlocatedin Garfield andMesaCounties onthe Western Slope ofColorado, andover 500wellsonthe easternplains ofYumaCounty. Noble's

### operationsencompass a numberofsmall stationaryinternalcombustionenginesthatmaybe directly affectedbythe ProposedRevisions.


### II. Applicant's Representatives
John R. 

### Jacus, Esq. RadcliffeDannIV, Esq. Davis Graham& Stubbs LLP 1550 17th St., Ste. 500 Denver, CO 80202-1500 Tel. 303.892.9400 Fax 303.893.1379 john.jacus@dgslaw.com randy.dann@dgslaw.com
II. 

### Applicant's 

### Issueswith the Proposed Rulemaking
The ProposedRevisions propose, amongotherthings, to makethe following changes and rev1s10ns:
1. Identify S02andNOxas PM2.5 precursors, state-wide. Accordingto the Division, insufficientevidence existsto claimthatNOxemissionsdo ordo not contribute significantlyto the concentrationofPM2.5 inany areainColorado, and, without suchevidenceto narrowNOxas aprecursorto specificareas, ColoradomustidentifyNOx asPM2.5 precursor state-wide;
2. Repeal stationaryinternal combustionengineAPENexemption (PartA, Section II.D.l.sss.) andrevise associatedpermittingexemption (PartB, Sections II.D.2.c. and II.D.2.c.(i)-(ii)) and insignificant activitieslist (PartC, SectionII.E.3.nnn.);
3. Repeal ofthe stationaryinternalcombustionengine 10tpypermittingexemption inattainment areas (PartB, Sections II.D.l.c. andII.D.l.c.(iii));
4. Revise oil and gas surface waterimpoundmentexemption and associated permittingexemptions and insignificantactivities list; and
5. Change theNoticeofStartupreporting timeframe from 30 days priorto commencingoperationto 15 days afterward.
Iftheserevisions are adopted as proposed,Noble maybedirectly affected and significantlyimpacted, botheconomicallyand operationally,bythe newrequirements applicable totheirexisting andfuture operations. Specifically,Nobleis concernedabouttheproposed repeal ofAPEN andpermitexemptionsfor small engines,whichareusedextensivelyinNoble's operationsfor artificial lift, wellheadcompression, andelectric generation. Additionally, eliminationofthese exemptions will causeanincreaseinthe Division'sworkload,which already

-2-

### strugglestomeetthe permittingdemand. These engines haveminoremissions and minimal environmentalimpactandthus meetthecriteriafor exemptions as defined inRegulationNumber 3, PartA, SectionII.D.4 andPartB, SectionII.D.8.
Noblealsohasconcernsregardingtheproposed changesto theNotice ofStartuprequired byPart

## B, SectionIII.

## G.I. The proposed language is contradictoryinnature andneeds to be clarified inorderto be consistentwiththeunderlying statutes. Furthermore,it appearstheDivisionhas, inmany instances, optedfor wholesale repeal of aparticularexemption,ratherthanrevisingitto address EPA's specificbasis forpartial disapproval. Forexample, inregardsto itemnumber

### 3 above, theEPA'spartial disapproval of the stationaryinternal combustionengine 

### 10tpypermittingexemptioninattainment areas was basedonColorado'sfailure to makethe necessary anti-backslidingdemonstrationto increasethe exemptionthreshold. 

## Inresponse, theDivision,ratherthan attemptingtomaketherequisite demonstration, is instead simplyproposingtorevertbackto the 

### 5tpythresholdEPApreviously approved. TheDivision, however, doesnotofferanybasisorjustificationfor itsdecisionnotto act.
Inlightofthesenoted issues andconcerns,Noblebelievesthe ProposedRevisions, if adopted as proposed, mayunnecessarilyburdenits operations whilenotmateriallycontributing to improvedairquality in Colorado. Noblereservesthe rightto raise additional issues and concerns in itsprehearingfilings and at status conferenceswith the Hearing Officerfor this proceeding, anddoes not intendbythis submissionto waive its rightsto address any other aspects oftheProposedRevisions.
Datedthis 18thday ofAugust, 

### 2011.

Respectfully submitted,
DAVIS GRAHAM 

### & STUBBS LLP

AITORNEYSFORNOBLE ENERGY, INC.



### -3-

### CERTIFICATE OFSERVICE
Iherebycertifythat atrue andcorrectcopyoftheattachedPetitionfor Party Status of NobleEnergy, Inc. was servedbyelectronic mail onthe 18th day ofAugust, 2011,uponthe following:
Air Quality Control Commission TheresaL. Martin EDO-AQCC-A5 4300 CherryCreekDrive South Denver, Colorado 80246 Theresa.Martin@state.co.us WilliamAllison Attorney for the Commission Attorney General's Office 1525 ShermanStreet, 7th Floor Denver, Colorado 80203 William.Allison@state.co.us AirPollution ControlDivision DenaWojtach APCD-Bl 4300 CherryCreekDrive South Denver, Colorado 80246 Dena.Wojtach@state.co.us Thomas Roan Attorney fortheDivision Attorney General's Office 1525 Sherman Street, 71h

### Floor Denver, Colorado. 80203 Tom.Roan@state.co.us

### AIRQUALITYCONTROLCOMMISSION,STATEOFCOLORADO

IntheMatterofProposedRevisionsto Colorado Air QualityRegulationNumber3, Parts A, B, C, andD



### NOTICE OFWITHDRAWAL OFPARTYSTATUSOFNOBLEENERGY,INC.

NobleEnergy, Inc. ("Noble"),by andthroughundersignedcounsel,hereby submitsthis noticeofitswithdrawal frompartystatuspreviouslyrequested and grantedpursuantto theAir QualityControl Commission's (the "Commission")proceduralrules, inconnectionwiththe Commission'sconsiderationofproposedrevisions to RegulationNumber3, PartsA, B, C, andD ("ProposedRevisions"). 

### I. PriorPetitionforPartyStatus
OnAugust 18,2011,Noblepetitionedthe Commissionfor partystatuspursuanttothe Commission'sproceduralrules, 5CCR 1001-1, Section 1.5.5(3). Noble'spetitionwasbasedon its concernthattheProposedRevisions, particularlytheproposedeliminationofcertainAPEN andpermitexemptions for some small stationaryinternal combustionengines, may impact Noble'soperationsinColorado. 

### II. ReasonsforWithdrawal
On September 1, 2011,representativesfromNobleandthe AirPollutionControl Division (the "Division")metanddiscussedNoble'sconcernsrelatedto the ProposedRevisions. Basedonthosediscussions, NoblebelievesthattheDivisionandNoblecan, inthefuture, work togetherin exploring alternative measuresto addressNoble'sprimaryconcerns. Accordingly, Noble'scontinuedparticipationas apartyinthisrulemakingwouldlikelyno longerbe productive andwouldunnecessarilyburdenthe CommissionandtheDivision. Noble appreciatesthe Commission's andtheDivision'stime and efforts indiscussingthese matters. OnSeptember 14,2011,undersigned counsel notifiedtheDivision'scounselthatNoble intendsto withdrawfrom party status. TheDivision'scounsel didnotobjecttoNoble's withdrawal. 

### III. Reservation ofRights
Noblereservesthe right, pursuantto 5CCR 1001-1, Section 1.5.5(2)(b),toparticipatein therulemakingprocess bymonitoringtheproceedings and commenting orally and inwritingon therulemaking as providedthereby, as aninterestedmemberofthepublic.

### IV. Applicant'sRepresentatives 

### JohnR. 

### Jacus, Esq. Radcliffe DannIV, 

### Esq. DAVISGRAHAM & 

### STUBBSLLP 

### 1550 17th Street, Suite 500 Denver, Colorado 80202 Telephone: (303) 892-9400 Facsimile: (303) 893-1379 john.jacus@dgslaw.com randy.dann@dgslaw.com Datedthis 16thday ofSeptember, 2011.

Respectfully submitted, DAVIS GRAHAM & 

### STUBBS LLP

ATTORNEYSFORNOBLEENERGY, INC.



### -2-

### CERTIFICATE OFSERVICE
Ihereby certifythata true andcorrectcopyofthe attachedNoticeofWithdrawal ofParty Status ofNobleEnergy, Inc. was servedbyelectronicmail onthe 16thdayofSeptember,2011, uponthefollowing:
AirQualityControl Commission Theresa 

### L. Martin EDO-AQCC-A5 4300CherryCreekDrive South Denver, Colorado 80246 Theresa.Martin@state.co.us WilliamAllison Attorneyforthe Commission Attorney General'sOffice 1525 Sherman Street, 7th Floor Denver, Colorado 80203 William.Allison@state.co.us AirPollution Control Division DenaWojtach APCD-B1 4300 Cherry CreekDrive South Denver, Colorado 80246 Dena.Wojtach@state.co.us ThomasRoan Attorneyfor the Division Attorney General'sOffice 1525 Sherman Street, 7th Floor Denver, Colorado 80203 Tom.Roan@state.co.us·1.;.



# EPA Comments
40 CFRPart51 Appendix V2.1(h)

- None Submitted

# Public Comments
40 CFRPart51 Appendix V2.1(h)

- None Submitted