Technical Support Document

for EPA's Notice of Propo s ed Rulemaking

for the California State Implementation Plan

Placer County Air Pollution Control District

Rule 502 New Source Review

Prepared by: Laura Yannayon

Reviewed by:

Gerardo Rios

Air Division, Permits Office United States Environmental Protection Agency, Region IX San Francisco, California

February 8 , 2013Table of Contents

Section Page

Introduction 1

NSR Program SIP Revision Submittal 1

Background 1

Rule Summary 2

Rule Evaluation 2

Section 110(l) of the Act 4

Section 193 of the Act 4

Recommendations 5

Attachment s 61 Introduction

Part D of title I of the Clean Air Act (CAA or Act) contains the requirements for areas designated “nonattainment” for any of the National Ambient Air Quality Standards (NAAQS). Among other things, Part D requires pre

- construction permit programs for certain new or modified stationary sources of nonattainment pollutants in nonattainment areas, referred to as “Nonattainment NS R” (NSR). The NSR program applies to “major” stationary sources and “major modifications” as those terms are defined in 40 CFR Part 51, Subpart I

.

NSR Program SIP Revision Submittal

Rule 502

– New Source Review (NSR) was adopted by the Placer County Air Pollution Control District (PCAPCD or District) on October 13, 2011 and submitted to EPA via the California Air Resources Board (ARB) by a letter dated November 18, 2011

. The District adopted Rule 502 to implement the federal nonattainmen t NSR program requirements in Placer County.

ARB is the governor’s designee for submitting official revisions of the California State Implementation Plan (SIP) to EPA, and PC A PC D is the local agency responsible for regulating

the construction and modific ation of stationary sources within Placer County.

Background

On July 2 7 , 2011, EPA finalized a limited approval and limited disapproval of PCAPCD Rule

502

– New Source Review (NSR )

. See 76 FR 4 4809

. The e ffect of this action was to incorporate

Rule 502 into the SIP , in place of existing SIP Rule 508

– New Source Review

, and to trigger sanctions clocks with respect to certain provisions of the rule that did not satisfy the requirements of section 110 and title I, part D of the CAA

. Sanctions will be impos ed under section 179 of the Act according to 40 CFR 52.31 unless EPA approves SIP revisions that

correct the identified rule defi ciencies by February 26 , 2013. PCAPCD ’s submitt ed Rule 502 is

intended to address the se previously identified rule deficiencies.

The CAA defines a “nonattainment” area as any area that does not meet (or that contribute s to ambient air quality in a nearby area that does not meet ) the national primary or se condary NAAQS for a pollutant. CAA 107(d)(1)(A)(i). The Sacrame nto Valley Air Basin and Mountain Counties Air Basin portions of Placer County are currently designated and classified as severe

nonattainment for the 1997 and 2008 8

- hour ozone NAAQS. The Sacramento Valley Air Basin portion of Placer County is currently d esignated nonattainment for the 2006 24

- hour PM 2.5 NAAQS. See 40 CFR 81.305

. Therefore, California is required to implement a SIP

- approved NSR program for the Placer area that applies, at minimum, to the following NAAQS pollutants and precursor pollutants: volatile organic compounds (VOCs), nitrogen oxides (NO

x ), particular matter of 2.5 microns or less (PM 2.5 ) and sulfur oxides (SO

x ). VOCs and NO

x are subject to NSR as precursors to ozone, and NO

x and SO

x are subject to NSR as precursors to PM 2.5

. See

40 CFR 51.165(a)(1)(xxxvii)(C). Rule 502 constitutes the District’s non

- attainment major source

program
, as well as its minor source program

, for all regulated NSR pollutants.2 Rule Summary

Rule 502 contains the substantial requirements of the NSR program and is comprised of six

sections: Section 100

– General, Section 200

– Definitions, Section 300

– Standards, Section 400

– Application Processing, Section 500

– Additional Provisions for Power Plants, and Section 600

– Monitoring and Records. Section 100 i ncludes provisions that outline the purpose and applicability of the rule , and public notice thresholds. Section 200 contains 5 9 definitions (five of which are new) , and clarifies which other rules may be used to define a term if it is no t defined

within this section. Section 300 contains the requirements that apply to projects undergoing new source review, including Best Available Control Technology (BACT ), emission offset requirements, as well as the calculation methodologies to be used to make various deter minations throughout the rule. Section 400 contains administrative requirements, including provisions for determining when an application is complete, which air quality models must be used, public notice requirements, requirements for a final action, and ot her administrative provisions. Section 500 contains specific requirements for power plant applications and Section 600 contains recordkeeping requirements for emergency engines, and portable and temporary equipment.

Rule Evaluatio n

T his Technical Support Document ( TSD ) provides EPA’s evaluation of the District’s revised

Rule 502 (including revisions made by the District to address the deficiencies identified in our July 2 7 , 2011 final action on PCAPCD ’s NSR program submittal )

. W e have reviewed Rule 502 for compliance with the requirements of section 110 and part D of title I of the Act and EPA’s current implementing regulations at 40 CFR 51.160 through 51.165.

For a more comprehensive analysis of how Rule 502 satisfies the applicable requirements of the

Act and 40 CFR 51.160 through 51.165, please also see the TSD supporting our July 2 7 , 2011 limited approval and limited disapproval of Rule 502 at 76 FR 44809 . “Technical Support

Document for EPA’s Notice of P roposed Rulemaking for the California State Implementation Plan, Placer County Air Pollution Control District, Rule 502 New Source Review,” May 6, 2011. We also considered the following materials in our review: General Preamble for the Implementation of Ti tle I of the Clean Air Act Amendments of 1990 (see 57 FR 13498, April 16, 1992), EPA’s Emission Offset Interpretive Ruling (40 CFR part 51, Appendix S), and EPA’s policy document entitled, “Improving Air Quality with Economic Incentive Programs,” which

was published in January 2001. EPA has condensed the approval criteria contained in these various materials in this TSD, which describes reasons for our proposed action on the Rule 502

SIP submittal

. All references below to “Rule 502 ” are to the rule as amend ed October 13 , 201 1

, unless otherwise noted.

Rule 502

– New Source Review In our May 19, 2011 Notice of Proposed Rulemaking on Rule 502 (see 76 FR 2894 4 ), we identified the following deficiencies and suggested corrections:3 1. Add definitions for the terms “ begin actual construction, ” “federally enforceable” and “necessary preconstruction approvals or permits.”

2. Add a provision, pursuant to 40 CFR 51.165(a)(5)(ii), which requires new source review for a source or modification which becomes major due to a rel axation in a federally

enforceable limit. Such sources and modifications shall be subject to new source review “as though construction had not yet commenced.”

The District revised Rule 502 to address each of the se deficiencies

. The revisions made to Rule

502 , including those which address the deficiencies identified in EPA’s previous rulemaking , are discussed below.

Item 1 : Definitions have been added for each of the following terms : Begin Actual

Construction

, Class I Area

, Commence, Federally Enforceable and Necessary Preconstruction Approvals or Permits. These new definitions are either identical or equivalent to EPA’s definitions in 40 CFR 51.165(a)(1) and therefore correct the identified

deficiencies.

Item 2 : New language consistent with t he requirements of 40 CFR 51.165(a)(5)(ii) has been

added to Section 102

. This new language corrects the identified deficiency.

Other R evisions:

A. Within the definition of the term “significant” the defined emission rate for n itrogen

o xides and VOC has been revised to 25 tpy to reflect the District’s status as a s ev ere

o zone non

- attainment area. Twenty

- five tpy is the appropriate threshold for this

classification.

B. The requirement in Section 304.3 for source s with potential v isibility i mpacts has been revised to specify when a visibility analysis is required, based on emission rates and location of the facility.

C. In several places throughout the rule, text has been revised to clarify that “federal” enforceability of c ertain provisions i s required (e.g., Sections 2 20 , 2 27 )

. These provisions are at least as stringent as the corresponding EPA definitions in 40 CFR 51.165 (e.g., the

definition of “federally enforceable” in section 51.165(a)(1)(xiv)).

New Deficiencies :

A. The definition of “NS R Regulated Pollutant” do es not specify that gaseous emissions

which condense to form either PM 10 or PM 2.5 must be counted as PM 10 or PM 2.5 , respectively

. T his revision to the definition of NSR Regulated Pollutant was made as part of our Phase II rulemaking for Implementation of the New Source Review (NSR) Program for Particulate Matter Less Than 2.5 Micrometers (PM 2.5 ) . See 73 FR 28321. This omission creates a deficiency which must be corrected by providing this clarific ation4 regarding the treatment of condensable gaseous emissions within the definition NSR Regulated Pollutant or the definitions of PM 10 and PM 2.5

.

B. Since the District revised Rule 502 in O ctober 2011, EPA has revised it s policy regarding

PM 2.5 interpolluta nt offset ratios

. Under EPA’s “Revised Policy to Address Reconsideration of Interpollutant Trading Provisions for Fine Particles (PM 2.5 ),” dated July 21, 2011, any ratio involving PM 2.5 precursors must be submitted to EPA for approval for use in a district’s interpollutant offset program for PM 2.5 nonattainment

areas . The submittal must be accompanied by a technical demonstration that shows the net air quality benefits of such ratio for the relevant PM 2.5 nonattainment area

. Because

such ratios are not allowed in the absence of such a demonstration, and PCAPCD has not provided such a demonstration, Placer must either remove these provisions from Rule 502 ( section 303.6.4) or provide a submittal making the necessary demonstration

. The

inclusion of int erpollutant offset ratios for PM 2.5 without the necessary demonstration is a program deficiency.

Section 110( l ) of the Act

Section 110(l) states: “Each revision to an implementation plan submitted by a State under this chapter shall be adopted by such State after reasonable notice and public hearing. The Administrator shall not approve a revision of a plan if the revision would interfere with any applicable requirement concerning attainment and reasonable further progress (as defined in

section 7501 of this title), or any other applicable requirement of this chapter.”

With respect to the procedural requirements of CAA section 110(l), based on our review of the public process documentation included in PCAPC D’s November 18, 2011 rule submittal, we

find th at the State has provided sufficient evidence of public notice and opportunity for comment and public hearings prior to adoption and submittal of these rules to EPA.

With respect to the substantive requirements of section 110(l), our approval of revised Rule 502 (to replace current SIP Rule 502 ) would strengthen the SIP

- approved nonattainment NSR and minor NSR p rogram s in Placer County compared to the existing SIP program as approved July

2 7 , 2011. As discussed above, the District has added several required definitions to Rule 502 and

corrected a provision that was inconsistent with the applicable NSR regulations in 40 CFR

51.165

. The rule revisions strengthen the nonattainment NSR program in Placer County by clarifying its applicability and compliance provisions and addressing NSR requirements that the current SIP program fails to adequately address

. None of the revisions to Rule 502 relax any control requirement or related compliance provision.

In addition, we are unaware of any reliance by PCAPC D on the continuation of any aspect of the permit

- related rules in Placer County for the purpose of continued attainmen t or maintenan ce of the NAAQS. Given all these considerations, we propose to conclude that our approval of Rule

502 into the California SIP would not interfere with any applicable requirement concerning attainment and reasonable further progress (RFP) or any other appli cable requirement of the Act.5 Section 193 of the Act

Section 193 of the Act, which was added by the Clean Air Act Amendments of 1990, includes a savings clause which provides, in pertinent part: “No control requirement in effect, or required to be adop ted by an order, settlement agreement, or plan in effect before November 15, 1990, in any area which is a nonattainment area for any air pollutant may be modified after November 15, 1990, in any manner unless the modification insures equivalent or greater emission reductions of such air pollutant.”

EPA does not believe that NSR programs are control requirements for the purposes of section 193. See 70 FR 39413, at 39417 (July 8, 2005). However, we recognize that, on December 22, 2006, the D.C. Circuit is sued a decision on South Coast Air Quality Management District v.

EPA , No. 14

- 1200, that may lead EPA to modify its interpretation of “control requirement” for the purposes of CAA section 193. Nonetheless, we evaluated Rule 502 against the existing pre

199 0 SIP requirements of Rule 508 (which Rule 502 was to replace) in our May 2011 analysis and determined we could approve submitted Rule 502 under section 193 of the Act . See the TSD supporting our July 27, 2011 limited approval and limited disapproval of Rule 502 at 76 FR 44809. “Technical Support Document for EPA’s Notice of Proposed Rulemaking for the California State Implementation Plan, Placer County Air Pollution Control District, Rule 502 New Source Review,” May 6, 2011. As discussed in the 110(l) analysis above, the current revisions to Rule 502 do not relax any requirements of the rule. There fore our previous section

193 evaluation is still valid and no furthe r analysis is required as part of our current evaluation of

Rule 502

.

Recommendations

Pursuant to section 110(k)(3) of the Act, we recommend a limited approval / limited disapproval

of the submitted NSR rule. W e recommend limited approval based on our d etermination that the rule compl ies with applicable statutory and regulatory provisions requiring regulation of stationary sources in general and requiring permit programs for major stationary sources in particular, including section 110(a)(2)(C) and part D of title I of the Act. In support of this recommendation, we have concluded that our approval of Rule 502 complies with section 110(l)

and 193 of the Act because the new rule do es not relax control technology and offset requirements and therefore would not interfere with the strategy for attainment of the Ozone or
PM 2.5 NAAQS in PCAPCD or the continued attainment of the other NAAQS in PCAPCD

. We recommend limited disapproval to correct the deficiencies listed below. If we finalize this action

as p roposed, our action would be codified through revisions to 40 CFR 52. 220 (identification of plan)

.

Deficiencies as listed in this TSD under sub section entitled “ New Deficiencies.”

1. Revise the definition of “NSR Regulated Pollutant” or the definitions of “PM 10 ” and

“PM 2.5 ” to specify that gaseous emissions which condense to form either PM 10 or PM 2.5 must be counted as PM 10 or PM 2.5 , respectively.6 2. Delete section 303.6.4 or submit a technical demonstration that shows the net air quality

benefits of such ra tio for the relevant PM 2.5 nonattainment area

.

Attachments

1. Submitted PCAPCD Rule 502

, New Source Review

, amended October 13 , 201 1

. 2. PCAPCD Staff Report for Proposed Amendment of Rule 502

, New Source Review ; undated

. 3. “Technical Support Document for EPA’s Notice of Proposed Rulemaking for the California State Implementation Plan, Placer County Air Pollution Control District, Rule

502 New Source Review,” May 6, 2011.