STATE OF NORTH CAROLINA 

DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES 

DIVISION OF AIR QUALITY 

REPORT OF PROCEEDINGS OF PUBLIC HEARINGS 

ON PROPOSED AMENDMENTS TO RULES 

15A NCAC 02D .0530, PREVENTION OF SIGNIFICANT DETERIORATION 

and 15A NCAC 002D .0531, SOURCES IN NONATTAINMENT AREAS 

 

 

APRIL 27, 2010 

CHARLOTTE, NC 

APRIL 29, 2010 

RALEIGH, NC 

ENVIRONMENTAL MANAGEMENT COMMISSION 

Attachment A A-1
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CONTENTS 

CHAPTER I Summaries and Recommendations I-1

 Background and Summary I-1

 Comments and Responses Thereto I-1

 Conclusion I-1

 Hearing Officers Recommendation I-1

CHAPTER II Regulations Proposed for Adoption II-1

CHAPTER III Report of Proceedings III-1

 Introduction III-1

 Designation of Hearing Officer III-2

 Public Notice III-3

 Transcript III-6

CHAPTER IV Exhibits IV- 1

 Proposed Regulations With Amendments as Presented at the 

Hearing IV-2

 Hearing Officer Comments at Hearing IV-9

CHAPTER V Written Comments During Comment Period V-1

CHAPTER VI Attachments VI-1

CHAPTER VII Documentation VII-1

 

 

 

 

 

 

 

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CHAPTER I 

Summaries and Recommendations 

Proposed amendments to Rules 15A NCAC 02D .0530 and .0531. 

BACKGROUND AND SUMMARY 

 

Rule 15A NCAC 02D .0530, Prevention of Significant Deterioration, is proposed for 

amendment, to clarify that installation of Best Available Control Technology (BACT) applies to 

all new natural gas-fired electrical utility generating units for which cost recovery is sought 

under the Clean Smokestacks Act. 

Rule 15A NCAC 02D .0531, Sources in Nonattainment Areas, is proposed for amendment to 

remove pollutant specific references that require sources to continue measures after an area’s 

redesignation to attainment and replace description of nonattainment areas with reference to 40 

CFR 81.334 that identifies nonattainment areas. The rule is also amended to clarify that new 

natural gas-fired electrical utility generating units in nonattainment areas for which cost recovery 

is sought pursuant to G.S. 62-133.6 shall install lowest achievable emission rate (LAER) 

technology for nitrogen oxides and sulfur dioxide. Finally, obsolete language is removed in 

Paragraph (n) of 02D .0531, and the subsequent paragraph lettering is revised accordingly.

PUBLIC COMMENTS AND RESPONSES THERETO

No comments received during the comment period. 

CONCLUSION

No one commented on the rules that were published in the North Carolina Register and taken to 

public hearing. Therefore, no rule changes will be made to the proposed rule amendments as a 

result of the hearings. 

HEARING OFFICER'S RECOMMENDATION

The Hearing Officer recommends that the proposed amendments as presented in Chapter II of 

this hearing report be adopted by the Environmental Management Commission. 

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1 15A NCAC 02D .0530 is proposed for amendment as follows: 

2 

3 15A NCAC 02D .0530 PREVENTION OF SIGNIFICANT DETERIORATION 

4 (a) The purpose of the Rule is to implement a program for the prevention of significant deterioration of air quality as 

5 required by 40 CFR 51.166. 

6 (b) For the purposes of this Rule the definitions contained in 40 CFR 51.166(b) and 40 CFR 51.301 shall apply except 

7 the definition of "baseline actual emissions." 

8 (1) "Baseline actual emissions" means the rate of emissions, in tons per year, of a regulated new source 

9 review (NSR) pollutant, as determined in accordance with Parts (A) through (C) of this Subparagraph: 

10 (A) For an existing emissions unit, baseline actual emissions means the average rate, in tons per 

11 year, at which the emissions unit actually emitted the pollutant during any consecutive 24-

12 month period selected by the owner or operator within the 5-year period immediately 

13 preceding the date that a complete permit application is received by the Division for a permit 

14 required under this Rule. The Director shall allow a different time period, not to exceed 10 

15 years immediately preceding the date that a complete permit application is received by the 

16 Division, if the owner or operator demonstrates that it is more representative of normal 

17 source operation. For the purpose of determining baseline actual emissions, the following 

18 shall apply: 

19 (i) The average rate shall include fugitive emissions to the extent quantifiable, and 

20 emissions associated with startups, shutdowns, and malfunctions. 

21 (ii) The average rate shall be adjusted downward to exclude any non-compliant 

22 emissions that occurred while the source was operating above any emission 

23 limitation that was legally enforceable during the consecutive 24-month period. 

24 (iii) For an existing emission unit (other than an electric utility steam generating unit), 

25 the average rate shall be adjusted downward to exclude any emissions that would 

26 have exceeded an emission limitation with which the major stationary source must 

27 currently comply. However, if the State has taken credit in an attainment 

28 demonstration or maintenance plan consistent with the requirements of 40 CFR 

29 51.165(a)(3)(ii)(G) for an emission limitation that is part of a maximum achievable 

30 control technology standard that the Administrator proposed or promulgated under 

31 part 63 of the Code of Federal Regulations, the baseline actual emissions shall be 

32 adjusted to account for such emission reductions. 

33 (iv) For an electric utility steam generating unit, the average rate shall be adjusted 

34 downward to reflect any emissions reductions under G. S. 143-215.107D and for 

35 which cost recovery is sought pursuant to G. S. 62-133.6. 

36 (v) For a regulated NSR pollutant, when a project involves multiple emissions units, 

37 only one consecutive 24-month period shall be used to determine the baseline actual 

38 emissions for all the emissions units being changed. A different consecutive 24-

39 month period for each regulated NSR pollutant can be used for each regulated NSR 

40 pollutant. 

41 (vi) The average rate shall not be based on any consecutive 24-month period for which 

42 there is inadequate information for determining annual emissions, in tons per year, 

43 and for adjusting this amount if required by Subparts (ii) and (iii) of this Part. 

44 (B) For a new emissions unit, the baseline actual emissions for purposes of determining the 

45 emissions increase that will result from the initial construction and operation of such unit 

46 shall equal zero; and thereafter, for all other purposes, shall equal the unit's potential to emit. 

47 (C) For a plantwide applicability limit (PAL) for a stationary source, the baseline actual 

48 emissions shall be calculated for existing emissions units in accordance with the procedures 

49 contained in Part (A) of this Subparagraph, and for a new emissions unit in accordance with 

50 the procedures contained in Part (B) of this Subparagraph. 

51 (2) In the definition of "net emissions increase," the reasonable period specified in 40 CFR 

52 51.166(b)(3)(ii) shall be seven years. 

53 (3) The limitation specified in 40 CFR 51.166(b)(15)(ii) shall not apply. 

54 (c) All areas of the State shall be classified as Class II except that the following areas are Class I: 

55 (1) Great Smoky Mountains National Park; 

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1 (2) Joyce Kilmer Slickrock National Wilderness Area; 

2 (3) Linville Gorge National Wilderness Area; 

3 (4) Shining Rock National Wilderness Area; 

4 (5) Swanquarter National Wilderness Area. 

5 (d) Redesignations of areas to Class I or II may be submitted as state proposals to the Administrator of the 

6 Environmental Protection Agency (EPA), if the requirements of 40 CFR 51.166(g)(2) are met. Areas may be proposed to 

7 be redesignated as Class III, if the requirements of 40 CFR 51.166(g)(3) are met. Redesignations may not, however, be 

8 proposed which would violate the restrictions of 40 CFR 51.166(e). Lands within the boundaries of Indian Reservations 

9 may be redesignated only by the appropriate Indian Governing Body. 

10 (e) In areas designated as Class I, II, or III, increases in pollutant concentration over the baseline concentration shall be 

11 limited to the values set forth in 40 CFR 51.166(c). However, concentration of the pollutant shall not exceed standards 

12 set forth in 40 CFR 51.166(d). 

13 (f) Concentrations attributable to the conditions described in 40 CFR 51.166(f)(1) shall be excluded in determining 

14 compliance with a maximum allowable increase. However, the exclusions referred to in 40 CFR 51.166(f)(1)(i) or (ii) 

15 shall be limited to five years as described in 40 CFR 51.166(f)(2). 

16 (g) Major stationary sources and major modifications shall comply with the requirements contained in 40 CFR 51.166(i) 

17 and (a)(7) and by extension in 40 CFR 51.166(j) through (o) and (w). The transition provisions allowed by 40 CFR 52.21 

18 (i)(11)(i) and (ii) and (m)(1)(vii) and (viii) are hereby adopted under this Rule. The minimum requirements described in 

19 the portions of 40 CFR 51.166 referenced in this Paragraph are hereby adopted as the requirements to be used under this 

20 Rule, except as otherwise provided in this Rule. Wherever the language of the portions of 40 CFR 51.166 referenced in 

21 this Paragraph speaks of the "plan," the requirements described therein shall apply to the source to which they pertain, 

22 except as otherwise provided in this Rule. Whenever the portions of 40 CFR 51.166 referenced in this Paragraph provide 

23 that the State plan may exempt or not apply certain requirements in certain circumstances, those exemptions and 

24 provisions of nonapplicability are also hereby adopted under this Rule. However, this provision shall not be interpreted 

25 so as to limit information that may be requested from the owner or operator by the Director as specified in 40 CFR 

26 51.166(n)(2). 

27 (h) New natural gas-fired electrical utility generating units for which cost recovery is sought pursuant to G. S. 62-133.6

28 shall install best available control technology for NOX and SO2. SO2, regardless of applicability of the rest of this rule.

29 (i) 40 CFR 51.166(w)(10)(iv)(a) is changed to read: "If the emissions level calculated in accordance with Paragraph 

30 (w)(6) of this Section is equal to or greater than 80 percent of the PAL [plant wide applicability limit] level, the Director 

31 shall renew the PAL at the same level." 40 CFR 51.166(w)(10)(iv)(b) is not incorporated by reference. 

32 (j) 15A NCAC 02Q .0102 and .0302 are not applicable to any source to which this Rule applies. The owner or operator 

33 of the sources to which this Rule applies shall apply for and receive a permit as required in 15A NCAC 02Q .0300 or 

34 .0500. 

35 (k) When a particular source or modification becomes a major stationary source or major modification solely by virtue of 

36 a relaxation in any enforceable limitation which was established after August 7, 1980, on the capacity of the source or 

37 modification to emit a pollutant, such as a restriction on hours of operation, then the provisions of this Rule shall apply to 

38 the source or modification as though construction had not yet begun on the source or modification. 

39 (l) The provisions of 40 CFR 52.21(r)(2) regarding the period of validity of approval to construct are incorporated by 

40 reference except that the term "Administrator" is replaced with "Director". 

41 (m) Volatile organic compounds exempted from coverage in 40 CFR 51.100(s) shall also be exempted when calculating 

42 source applicability and control requirements under this Rule. 

43 (n) The degree of emission limitation required for control of any air pollutant under this Rule shall not be affected in any 

44 manner by: 

45 (1) that amount of a stack height, not in existence before December 31, 1970, that exceeds good 

46 engineering practice; or 

47 (2) any other dispersion technique not implemented before then. 

48 (o) A substitution or modification of a model as provided for in 40 CFR 51.166(l) shall be subject to public comment 

49 procedures in accordance with the requirements of 40 CFR 51.102. 

50 (p) Permits may be issued on the basis of innovative control technology as set forth in 40 CFR 51.166(s)(1) if the 

51 requirements of 40 CFR 51.166(s)(2) have been met, subject to the condition of 40 CFR 51.166(s)(3), and with the 

52 allowance set forth in 40 CFR 51.166(s)(4). 

53 (q) If a source to which this Rule applies impacts an area designated Class I by requirements of 40 CFR 51.166(e), 

54 notice to EPA will be provided as set forth in 40 CFR 51.166(p)(1). If the Federal Land Manager presents a 

55 demonstration described in 40 CFR 51.166(p)(3) during the public comment period or public hearing to the Director and 

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1 if the Director concurs with this demonstration, the permit application shall be denied. Permits may be issued on the basis 

2 that the requirements for variances as set forth in 40 CFR 51.166(p)(4), (p)(5) and (p)(7), or (p)(6) and (p)(7) have been 

3 satisfied. 

4 (r) A permit application subject to this Rule shall be processed in accordance with the procedures and requirements of 40 

5 CFR 51.166(q). Within 30 days of receipt of the application, applicants shall be notified if the application is complete as 

6 to initial information submitted. Commencement of construction before full prevention of significant deterioration 

7 approval is obtained constitutes a violation of this Rule. 

8 (s) Approval of an application with regard to the requirements of this Rule shall not relieve the owner or operator of the 

9 responsibility to comply fully with applicable provisions of other rules of this Subchapter or Subchapter 02Q of this Title 

10 and any other requirements under local, state, or federal law. 

11 (t) When a source or modification subject to this Rule may affect the visibility of a Class I area named in Paragraph (c) 

12 of this Rule, the following procedures shall apply: 

13 (1) The Director shall provide written notification to all affected Federal Land Managers within 30 days of 

14 receiving the permit application or within 30 days of receiving advance notification of an application. 

15 The notification shall be at least 30 days prior to the publication of notice for public comment on the 

16 application. The notification shall include a copy of all information relevant to the permit application 

17 including an analysis provided by the source of the potential impact of the proposed source on 

18 visibility. 

19 (2) The Director shall consider any analysis concerning visibility impairment performed by the Federal 

20 Land Manager if the analysis is received within 30 days of notification. If the Director finds that the 

21 analysis of the Federal Land Manager fails to demonstrate to his satisfaction that an adverse impact on 

22 visibility will result in the Class I area, the Director shall provide in the notice of public hearing on the 

23 application, an explanation of his decision or notice as to where the explanation can be obtained. 

24 (3) The Director may require monitoring of visibility in or around any Class I area by the proposed new 

25 source or modification when the visibility impact analysis indicates possible visibility impairment. 

26 (u) If the owner or operator of a source is using projected actual emissions to avoid applicability of prevention of 

27 significant deterioration requirements, the owner or operator shall notify the Director of the modification before 

28 beginning actual construction. The notification shall include: 

29 (1) a description of the project, 

30 (2) identification of sources whose emissions could be affected by the project, 

31 (3) the calculated projected actual emissions and an explanation of how the projected actual emissions 

32 were calculated, including identification of emissions excluded by 40 CFR 51.166(b)(40)(ii)(c), 

33 (4) the calculated baseline actual emissions and an explanation of how the baseline actual emissions were 

34 calculated, and 

35 (5) any netting calculations if applicable. 

36 If upon reviewing the notification, the Director finds that the project will cause a prevention of significant deterioration 

37 evaluation, then the Director shall notify the owner or operator of his findings. The owner or operator shall not make the 

38 modification until it has received a permit issued pursuant to this Rule. If a permit revision is not required pursuant to this

39 rule, the owner or operator shall maintain records of annual emissions in tons per year, on a calendar year basis related to 

40 the modifications for 10 years following resumption of regular operations after the change if the project involves 

41 increasing the emissions unit's design capacity or its potential to emit the regulated NSR pollutant; otherwise these 

42 records shall be maintained for five years following resumption of regular operations after the change. The owner or 

43 operator shall submit a report to the director within 60 days after the end of each year during which these records must be 

44 generated. The report shall contain the items listed in 40 CFR 51.166(r)(6)(v)(a) through (c). The owner or operator shall 

45 make the information documented and maintained under this Paragraph available to the Director or the general public 

46 pursuant to the requirements in 40 CFR 70.4(b)(3)(viii). 

47 (v) The reference to the Code of Federal Regulations (CFR) in this Rule are incorporated by reference unless a specific 

48 reference states otherwise. The version of the Code of Federal Regulations incorporated in this Rule is that as of June 13, 

49 2007. 2007except those provisions noticed as stayed in 69 FR 40274, and does not include any subsequent amendments 

50 or editions to the referenced material. 

 51 

52 History Note: Authority G.S. 143-215.3(a)(1); 143-215.107(a)(3); 143-215.107(a)(5); 143-215.107(a)(7); 143-

53 215.108(b); 150B-21.6; 

54 Eff. June 1, 1981; 

55 Amended Eff. December 1, 1992; August 1, 1991; 

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1 Temporary Amendment Eff. March 8, 1994, for a period of 180 days or until the permanent rule is 

2 effective, whichever is sooner; 

3 Amended Eff. ______; May 1, 2008; July 28, 2006; July 1, 1997; February 1, 1995; July 1, 1994. 

4 

5 15A NCAC 02D .0531 is proposed for amendment with changes as follows: 

6 

7 15A NCAC 02D .0531 SOURCES IN NONATTAINMENT AREAS 

8 (a) For the purpose of this Rule the definitions contained in 40 CFR 51.165(a)(1) and 40 CFR 51.301 shall apply except 

9 the definition of "baseline actual emissions." 

10 (1) "Baseline actual emissions" means the rate of emissions, in tons per year, of a regulated new source 

11 review (NSR) pollutant, as determined in accordance with Parts (A) through (C) of this Subparagraph: 

12 (A) For an existing emissions unit, baseline actual emissions means the average rate, in tons per 

13 year, at which the emissions unit actually emitted the pollutant during any consecutive 24-

14 month period selected by the owner or operator within the 5-year period immediately 

15 preceding the date that a complete permit application is received by the Division for a permit 

16 required under this Rule. The Director shall allow a different time period, not to exceed 10 

17 years immediately preceding the date that a complete permit application is received by the 

18 Division, if the owner or operator demonstrates that it is more representative of normal 

19 source operation. For the purpose of determining baseline actual emissions, the following 

20 shall apply: 

21 (i) The average rate shall include fugitive emissions to the extent quantifiable, and 

22 emissions associated with startups, shutdowns, and malfunctions. 

23 (ii) The average rate shall be adjusted downward to exclude any non-compliant 

24 emissions that occurred while the source was operating above any emission 

25 limitation that was legally enforceable during the consecutive 24-month period. 

26 (iii) For an existing emission unit (other than an electric utility steam generating unit), 

27 the average rate shall be adjusted downward to exclude any emissions that would 

28 have exceeded an emission limitation with which the major stationary source must 

29 currently comply. However, if the State has taken credit in an attainment 

30 demonstration or maintenance plan consistent with the requirements of 40 CFR 

31 51.165(a)(3)(ii)(G) for an emission limitation that is part of a maximum achievable 

32 control technology standard that the Administrator proposed or promulgated under 

33 part 63 of the Code of Federal Regulations, the baseline actual emissions shall be 

34 adjusted to account for such emission reductions. 

35 (iv) For an electric utility steam generating unit, the average rate shall be adjusted 

36 downward to reflect any emissions reductions under G.S. 143-215.107D and for 

37 which cost recovery is sought pursuant to G.S. 62-133.6. 

38 (v) For a regulated NSR pollutant, when a project involves multiple emissions units, 

39 only one consecutive 24-month period shall be used to determine the baseline actual 

40 emissions for all the emissions units being changed. A different consecutive 24-

41 month period for each regulated NSR pollutant. 

42 (vi) The average rate shall not be based on any consecutive 24-month period for which 

43 there is inadequate information for determining annual emissions, in tons per year, 

44 and for adjusting this amount if required by Subparts (ii) and (iii) of this Part. 

45 (B) For a new emissions unit, the baseline actual emissions for purposes of determining the 

46 emissions increase that will result from the initial construction and operation of such unit 

47 shall equal zero; and thereafter, for all other purposes, shall equal the unit's potential to emit. 

48 (C) For a plantwide applicability limit (PAL) for a stationary source, the baseline actual 

49 emissions shall be calculated for existing emissions units in accordance with the procedures 

50 contained in Part (A) of this Subparagraph, and for a new emissions unit in accordance with 

51 the procedures contained in Part (B) of this Subparagraph. 

52 (2) In the definition of "net emissions increase," the reasonable period specified in 40 CFR 

53 51.165(a)(1)(vi)(C)(1) shall be seven years. 

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1 (b) Redesignation to Attainment. If any county or part of a county to which this Rule applies is later designated in 40 

2 CFR 81.334 as attainment for ozone or carbon monoxide, all sources in that county subject to this Rule before the 

3 redesignation date shall continue to comply with this Rule. 

4 (c) Applicability. 40 CFR 51.165(a)(2) is incorporated by reference. This Rule applies to areas designated as 

5 nonattainment in 40 CFR 81.334, including any subsequent amendments or editions. the following areas: 

6 (1) Ozone Nonattainment Areas, to major stationary sources and major modifications of sources of 

7 volatile organic compounds or nitrogen oxides for which construction commences after the area in 

8 which the source is located is designated according to Part (A) or (B) of this Subparagraph: 

9 (A) areas designated in 40 CFR 81.334 as nonattainment for ozone, or

10 (B) any of the following areas and in that area only when the Director notices in the North 

11 Carolina Register that the area is in violation of the ambient air quality standard for ozone:

12 (i) Charlotte/Gastonia, consisting of Mecklenburg and Gaston Counties; with the 

13 exception allowed under Paragraph (l) of this Rule;

14 (ii) Greensboro/Winston-Salem/High Point, consisting of Davidson, Forsyth, and 

15 Guilford Counties and that part of Davie County bounded by the Yadkin River, 

16 Dutchmans Creek, North Carolina Highway 801, Fulton Creek and back to Yadkin 

17 River; or

18 (iii) Raleigh/Durham, consisting of Durham and Wake Counties and Dutchville 

19 Township in Granville County.

20 Violations of the ambient air quality standard for ozone shall be determined according to 40 

21 CFR 50.9. 

22 (2) Carbon Monoxide Nonattainment Areas. This Rule applies to major stationary sources and major 

23 modifications of sources of carbon monoxide located in areas designated in 40 CFR 81.334 as 

24 nonattainment for carbon monoxide and for which construction commences after the area in which the 

25 source is located is listed in 40 CFR 81.334 as nonattainment for carbon monoxide. 

26 (d) This Rule is not applicable to: 

27 (1) complex sources of air pollution regulated only under Section .0800 of this Subchapter and not under 

28 any other rule in this Subchapter; 

29 (2) emission of pollutants at the new major stationary source or major modification located in the 

30 nonattainment area that are pollutants other than the pollutant or pollutants for which the area is 

31 nonattainment. (A major stationary source or major modification that is major for volatile organic 

32 compounds or nitrogen oxides is also major for ozone.); 

33 (3) emission of pollutants for which the source or modification is not major; 

34 (4) a new source or modification that qualifies for exemption under the provision of 40 CFR 51.165(a)(4); 

35 or 

36 (5) emission of compounds listed under 40 CFR 51.100(s) as having been determined to have negligible 

37 photochemical reactivity except carbon monoxide. 

38 (e) 15A NCAC 02Q .0102 and .0302 are not applicable to any source to which this Rule applies. The owner or operator 

39 of the source shall apply for and receive a permit as required in 15A NCAC 02Q .0300 or .0500. 

40 (f) To issue a permit to a source to which this Rule applies, the Director shall determine that the source meets the 

41 following requirements: 

42 (1) The new major stationary source or major modification will emit the nonattainment pollutant at a rate 

43 no more than the lowest achievable emission rate; 

44 (2) The owner or operator of the proposed new major stationary source or major modification has 

45 demonstrated that all major stationary sources in the State that are owned or operated by this person 

46 (or any entity controlling, controlled by, or under common control with this person) are subject to 

47 emission limitations and are in compliance, or on a schedule for compliance that is federally 

48 enforceable or contained in a court decree, with all applicable emission limitations and standards of 

49 this Subchapter that EPA has authority to approve as elements of the North Carolina State 

50 Implementation Plan for Air Quality; 

51 (3) The owner or operator of the proposed new major stationary source or major modification will obtain 

52 sufficient emission reductions of the nonattainment pollutant from other sources in the nonattainment 

53 area so that the emissions from the new major source and associated new minor sources will be less 

54 than the emissions reductions by a ratio of at least 1.00 to 1.15 for volatile organic compounds and 

55 nitrogen oxides and by a ratio of less than one to one for carbon monoxide. The baseline for this 

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1 emission offset shall be the actual emissions of the source from which offset credit is obtained. 

2 Emission reductions shall not include any reductions resulting from compliance (or scheduled 

3 compliance) with applicable rules in effect before the application. The difference between the 

4 emissions from the new major source and associated new minor sources of carbon monoxide and the 

5 emission reductions shall be sufficient to represent reasonable further progress toward attaining the 

6 National Ambient Air Quality Standards. The emissions reduction credits shall also conform to the 

7 provisions of 40 CFR 51.165(a)(3)(ii)(A) through (G) and (J); and 

8 (4) The North Carolina State Implementation Plan for Air Quality is being carried out for the 

9 nonattainment area in which the proposed source is located. 

10 (g) New natural gas-fired electrical utility generating units for which cost recovery is sought pursuant to G. S. 62-133.6 

11 shall install lowest achievable emission rate technology for NOX and SO2.SO2, regardless of the applicability of the rest 

12 of this Rule. 

13 (h) 40 CFR 51.165(f) is incorporated by reference except that 40 CFR 51.165(f)(10)(iv)(A) is changed to read: "If the 

14 emissions level calculated in accordance with Paragraph (f)(6) of this Section is equal to or greater than 80 percent of the 

15 PAL level, the Director shall renew the PAL at the same level." 40 CFR 51.165(f)(10)(iv)(B) is not incorporated by 

16 reference. 

17 (i) When a particular source or modification becomes a major stationary source or major modification solely by virtue of 

18 a relaxation in any enforceable limitation established after August 7, 1980, on the capacity of the source or modification 

19 to emit a pollutant, such as a restriction on hours of operation, then the provisions of this Rule shall apply to the source or

20 modification as though construction had not yet begun on the source or modification. 

21 (j) To issue a permit to a source of a nonattainment pollutant, the Director shall determine, in addition to the other 

22 requirements of this Rule, that an analysis (produced by the permit applicant) of alternative sites, sizes, production 

23 processes, and environmental control techniques for the source demonstrates that the benefits of the source significantly 

24 outweigh the environmental and social costs imposed as a result of its location, construction, or modification. 

25 (k) The provisions of 40 CFR 52.21(r)(2) regarding the period of validity of approval to construct are incorporated by 

26 reference except that the term "Administrator" is replaced with "Director". 

27 (l) Approval of an application regarding the requirements of this Rule shall not relieve the owner or operator of the 

28 responsibility to comply fully with applicable provisions of other rules of this Chapter and any other requirements under 

29 local, state, or federal law. 

30 (m) When a source or modification subject to this Rule may affect the visibility of a Class I area named in Paragraph (c) 

31 of Rule .0530 of this Section, the following procedures shall be followed: 

32 (1) The owner or operator of the source shall provide an analysis of the impairment to visibility that would 

33 occur because of the source or modification and general commercial, industrial and other growth 

34 associated with the source or modification; 

35 (2) The Director shall provide written notification to all affected Federal Land Managers within 30 days of 

36 receiving the permit application or within 30 days of receiving advance notification of an application. 

37 The notification shall be at least 30 days before the publication of the notice for public comment on the 

38 application. The notification shall include a copy of all information relevant to the permit application 

39 including an analysis provided by the source of the potential impact of the proposed source on 

40 visibility; 

41 (3) The Director shall consider any analysis concerning visibility impairment performed by the Federal 

42 Land Manager if the analysis is received within 30 days of notification. If the Director finds that the 

43 analysis of the Federal Land Manager fails to demonstrate to his satisfaction that an adverse impact on 

44 visibility will result in the Class I area, the Director shall provide in the notice of public hearing on the 

45 application, an explanation of his decision or notice where the explanation can be obtained; 

46 (4) The Director shall issue permits only to those sources whose emissions will be consistent with making 

47 reasonable progress toward the national goal of preventing any future, and remedying any existing, 

48 impairment of visibility in mandatory Class I areas when the impairment results from manmade air 

49 pollution. In making the decision to issue a permit, the Director shall consider the cost of compliance, 

50 the time necessary for compliance, the energy and nonair quality environmental impacts of 

51 compliance, and the useful life of the source; and 

52 (5) The Director may require monitoring of visibility in or around any Class I area by the proposed new 

53 source or modification when the visibility impact analysis indicates possible visibility impairment. 

54 The requirements of this Paragraph shall not apply to nonprofit health or nonprofit educational institutions. 

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1 (n) Paragraphs (f) and (j) of this Rule shall not apply to a new major stationary source or a major modification of a 

2 source of volatile organic compounds or nitrogen oxides for which construction commences after the area in which the 

3 source is located has been designated according to Part (c)(1)(B) of this Rule and before the area is designated in 40 CFR 

4 81.334 as nonattainment for ozone if the owner or operator of the source demonstrates, using the Urban Airshed Model 

5 (UAM), that the new source or modification will not contribute to or cause a violation. The model used shall be that 

6 maintained by the Division. The Division shall run the model only after the permit application has been submitted. The 

7 permit application shall be incomplete until the modeling analysis is completed. The owner or operator of the source shall 

8 apply such degree of control and obtain such offsets necessary to demonstrate the new source or modified source will not 

9 cause or contribute to a violation.

10 (o)(n) If the owner or operator of a source is using projected actual emissions to avoid applicability of nonattainment 

11 new source review, the owner or operator shall notify the director of the modification before beginning actual 

12 construction. The notification shall include: 

13 (1) a description of the project, 

14 (2) identification of sources whose emissions could be affected by the project, 

15 (3) the calculated projected actual emissions and an explanation of how the projected actual emissions 

16 were calculated, including identification of emissions excluded by 40 CFR 51.165(a)(1)(xxviii)(B)(3), 

17 (4) the calculated baseline actual emissions and an explanation of how the baseline actual emissions were 

18 calculated, and 

19 (5) any netting calculations if applicable. 

20 If upon reviewing the notification, the Director finds that the project will cause a nonattainment new source review 

21 evaluation, then the Director shall notify the owner or operator of his findings. The owner or operator shall not make the 

22 modification until it has received a permit issued pursuant to this Rule. If a permit revision is not required pursuant to this

23 Rule, the owner or operator shall maintain records of annual emissions in tons per year on a calendar year basis related to 

24 the modifications for 10 years following resumption of regular operations after the change if the project involves 

25 increasing the emissions unit's design capacity or its potential to emit the regulated NSR pollutant; otherwise these 

26 records shall be maintained for five years following resumption of regular operations after the change. The owner or 

27 operator shall submit a report to the director within 60 days after the end of each year during which these records must be 

28 generated. The report shall contain the items listed in 40 CFR 51.165(a)(6)(v)(A) through (C). The owner or operator 

29 shall make the information documented and maintained under this Paragraph available to the Director or the general 

30 public pursuant to the requirements in 40 CFR 70.4(b)(3)(viii). 

31 (p)(o) The reference to the Code of Federal Regulations (CFR) in this Rule are incorporated by reference unless a 

32 specific reference states otherwise. The Except for 40 CFR 81.334, the version of the Code of Federal Regulations 

33 incorporated in this Rule is that as of June 13, 2007 except those provisions noticed as stayed in 69 FR 40274, and does 

34 not include any subsequent amendments or editions to the referenced material. 2007.

 35 

36 History Note: Authority G.S. 143-215.3(a)(1); 143-215.107(a)(5); 143-215.108(b); 

37 Eff. June 1, 1981; 

38 Amended Eff. December 1, 1993; December 1, 1992; 

39 Temporary Amendment Eff. March 8, 1994 for a period of 180 days or until the permanent rule is 

40 effective, whichever is sooner; 

41 Amended Eff. _______; May 1, 2008; May 1, 2005; July 1, 1998; July 1, 1996; July 1, 1995; July 1, 

42 1994. 

 43 

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II-8 

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A-14
CHAPTER III 

REPORT OF PROCEEDINGS 

Introduction 

The Department of Environmental and Natural Resources, Division of Air Quality, held two 

public hearings on April 27, 2010, at 6:00 P.M. at Mecklenburg Government Center, Room CH14, 600 E. 4th Street, Charlotte, NC 28202 and on April 29, 2010, at 6:00 P.M., at DENR – 

Division of Air Quality Annex Training Room (AQ 526) 2728 Capital Blvd., Raleigh, NC 

27604. 

The hearing considered the proposed amendments to Rules 15A NCAC 02D .0530 and .0531. 

 The proposed effective date for these rules is projected to be September 1, 2010. 

A public notice announcing this hearing was mailed to each person on the official mailing list for 

rule-making hearings. The public notice was also published in the North Carolina Register at 

least 20 days before the public hearing and in the Charlotte Observer, the Wilmington Star News, 

the Asheville Citizen Times, the Winston Salem Journal, and the Raleigh News and Observer at 

least 30 days prior to the public hearing. 

III-1 A-15
ENVIRONMENTAL MANAGEMENT COMMISSION

NORTH CAROLINA

DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES

Stephen T. Smith

Chairman

Charles Peterson

Vice Chairman

Beverly Eaves Perdue, Governor

Dee Freeman, Secretary Yvonne C. Bailey

Donnie Brewer

Thomas F. Cecich

Stan L. Crowe

John S. Curry

Marion Deerhake

Tom Ellis

William L. Hall, Jr.

Ernest W. Larkin

Kevin Martin

David H. Moreau

Jeffrey V. Morse

Darryl D. Moss

David B. Peden

Dickson Phillips Ill

Forrest R. Westall, Sr.

MEMORANDUM

TO: Mr. Tom Ellis

FROM: Mr. Stephen Smith TyvtAIrr)

SUBJECT: Hearing Officer Appointment

DATE: March 4, 2010

Public hearings have been scheduled for Tuesday, April 27, 2010, in Charlotte at 6:00 p.m. and

Thursday, April 29, 2010, in Raleigh at 6:00 p.m. The attached public notice describes the purpose of these

hearings.

I am hereby appointing you to serve as hearing officer for these hearings. Please receive all relevant public

comment and report your findings and recommendations to the Environmental Management Commission.

Mr. Mike Abraczinskas will provide staff support for you.

If you have any questions, please feel free to contact Joelle Burleson at (919) 733-1474 or me.

BKO/jb

Attachment

cc: Keith Overcash

Lois Thomas

Hearing Record File

An Equal Opportunity Affirmative Action Employer

A-16 III-2
III-3 A-17
A-18 III-4
III-5 A-19
Transcript

Transcripts of the April 27 and April 29, 2010 hearings have not been prepared; however, 

an audio recording of each proceeding will be kept on file with the Division of Air 

Quality for one year from the date of the final actions by the Environmental Management 

Commission. 

A list of those attending the hearing as follows: 

Hearing Officer: Mr. Tom Ellis, member of the Environmental Management 

Commission 

Staff Members at both hearings: 

Mr. Glenn Sappie, DAQ, DENR 

Mr. Vladimir Zaytsev, DAQ, DENR 

Ms. Joelle Burleson, DAQ, DENR 

Staff Member at the April 27, Charlotte hearing: 

Mr. Chuck Greco, Mecklenburg County Air Quality 

Staff Member at the April 29, Raleigh hearing: 

Mr. Michael Abraczinskas, DAQ, DENR 

Members of the General Public at the April 27, Charlotte hearing: 

Mr. Jeff Stoudt, President, Printing Industry of the Carolinas 

Mr. Andy Munn, Public Policy Director, Real Estate and Building Industry Coalition 

Members of the General Public at the April 29, Raleigh hearing: 

Mr. James Sell, Senior Council, American Coatings Association 

A-20 III-6
IV-1 

CHAPTER IV 

EXHIBITS 

EXHIBIT PAGE

Proposed Regulations as Published in the Public Notice and Presented at the Hearing IV-2 

Hearing Officer Comments at the Public Hearing IV-9 

 

A-21
IV-2 

 North Carolina Register * Volume 24* Issue 04 * August 17, 2009 

Notice is hereby given in accordance with G.S. 150B-21.2 that 

the Environmental Management Commission intends to adopt 

the rules cited as 15A NCAC 02D .0961-.0968, amend the rules 

cited as 15A NCAC 02D .0530-.0531, .0902, .0909, .0922, 

.0923, .0935, .0951-.0952; 02Q .0306, and repeal the rules cited 

as 15A NCAC 02D .0917, .0920-.0921, .0934, .0936. 

Proposed Effective Date: July 1, 2010 

Public Hearing: 

Date: April 27, 2010 

Time: 6:00 p.m. 

Location: Mecklenburg Government Center, Room CH-14, 600 

E. 4th Street, Charlotte, NC 28202 

Date: April 29, 2010 

Time: 6:00 p.m. 

Location: DENR-Division of Air Quality, Central Office, Air 

Quality Annex Training Room (AQ-526), 2728 Capital Blvd, 

Raleigh, NC 27604 

Reason for Proposed Action: 

Hearing 1: 15A NCAC 02D .0530, Prevention of Significant 

Deterioration, is proposed for amendment, to clarify that 

installation of BACT applies to all new natural gas-fired 

electrical utility generating units for which cost recovery is 

sought under the Clean Smokestacks Act. Amendments to Rule 

15A NCAC 02D .0531, Sources in Nonattainment Areas, is 

proposed for amendment to remove pollutant specific references 

that require sources to continue measures after an area's 

redesignation to attainment and replace description of 

nonattainment areas with reference to 40 CFR 81.334 that 

identifies nonattainment areas. 

Hearing 2: 15A NCAC 02D .0900, Volatile Organic 

Compounds, is proposed for amendment to incorporate EPA 

Control Techniques Guidelines concerning what types of 

controls could constitute RACT for eleven source categories to 

comply with the requirements of Sections 172(c)(1) and 

182(b)(2). 

1. Amendments to 15A NCAC 02D Rules - 

.0909 Compliance Schedules for Sources in Nonattainment 

Areas; .0922, Metal Furniture Coatings; .0923, Surface Coating 

of Large Appliance Parts; .0935, Factory Surface Coating Of 

Flat Wood Paneling; .0902, Applicability; .0951, Miscellaneous 

Volatile Organic Compound Emissions, .0952 Petition for 

Alternative Controls for RACT. 

Also proposes amendments to 15A NCAC 02Q .0306, Permits 

Requiring Public Participation. 

2. Adoptions of the Rules to 15A NCAC 02D Rules - 

.0961, Offset Lithographic Printing and Letterpress Printing; 

.0962, Industrial Cleaning Solvents; .0963, Fiberglass Boat 

Manufacturing; .0964, Miscellaneous Industrial Adhesives; 

.0965, Flexible Package Printing; .0966, Paper, Film and Foil 

Coatings; .0967, Miscellaneous Metal and Plastic Parts 

Coatings; .0968, Automobile and Light-Duty Truck Assembly 

Coatings. 

3. Repeals of the current 15A NCAC 02D Rules - 

.0917, Automobile and Light-duty Truck Manufacturing; .0921, 

Fabric and Vinyl Coating; .0920, Paper Coating; .0934, 

Coating of Miscellaneous Metal Parts and Products; and .0936, 

Graphic Arts. 

Procedure by which a person can object to the agency on a 

proposed rule: Mail a letter including your specific reasons to: 

Mr. Michael Abraczinskas, Division of Air Quality, 1641 Mail 

Service Center, Raleigh, NC 27699-1641. 

Comments may be submitted to: Michael Abraczinskas, 

Division of Air Quality, 1641 Mail Service Center, Raleigh, NC 

27699-1641, phone (919)715-3473, fax (919)715-7476, email 

Michael.abraczinskas@ncdenr.gov 

Comment period ends: April 30, 2010 

Procedure for Subjecting a Proposed Rule to Legislative 

Review: If an objection is not resolved prior to the adoption of 

the rule, a person may also submit written objections to the 

Rules Review Commission after the adoption of the Rule. If the 

Rules Review Commission receives written and signed 

objections after the adoption of the Rule in accordance with G.S. 

150B-21.3(b2) from 10 or more persons clearly requesting 

review by the legislature and the Rules Review Commission 

approves the rule, the rule will become effective as provided in 

G.S. 150B-21.3(b1). The Commission will receive written 

objections until 5:00 p.m. on the day following the day the 

Commission approves the rule. The Commission will receive 

those objections by mail, delivery service, hand delivery, or 

facsimile transmission. If you have any further questions 

concerning the submission of objections to the Commission, 

please call a Commission staff attorney at 919-431-3000. 

Fiscal Impact: A copy of the fiscal note can be obtained from 

the agency.

 State 

 Local – 15A NCAC 02D .0530-.0531 

 Substantial Economic Impact (>$3,000,000) 

 None – 15A NCAC 02D, .0902, .0909, .0917, .0920-

.0921, .0922, .0923, .0935, .0934, .0936, .0951-.0952, .0961-

.0968; 02Q .0306 

Fiscal Note posted at 

http://www.osbm.state.nc.us/pdf_files/DENR110609.pdf 

TITLE 15A – DEPARTMENT OF ENVIRONMENT AND 

NATURAL RESOURCES 

CHAPTER 02 - ENVIRONMENTAL MANAGEMENT 

SUBCHAPTER 02D - AIR POLLUTION CONTROL 

REQUIREMENTS 

SECTION .0500 - EMISSION CONTROL STANDARDS 

15A NCAC 02D .0530 PREVENTION OF SIGNIFICANT 

DETERIORATION 

(a) The purpose of the Rule is to implement a program for the 

prevention of significant deterioration of air quality as required 

by 40 CFR 51.166. 

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 North Carolina Register * Volume 24* Issue 04 * August 17, 2009 

(b) For the purposes of this Rule the definitions contained in 40 

CFR 51.166(b) and 40 CFR 51.301 shall apply except the 

definition of "baseline actual emissions." 

(1) "Baseline actual emissions" means the rate of 

emissions, in tons per year, of a regulated new 

source review (NSR) pollutant, as determined 

in accordance with Parts (A) through (C) of 

this Subparagraph: 

(A) For an existing emissions unit, 

baseline actual emissions means the 

average rate, in tons per year, at 

which the emissions unit actually 

emitted the pollutant during any 

consecutive 24-month period selected 

by the owner or operator within the 5-

year period immediately preceding 

the date that a complete permit 

application is received by the 

Division for a permit required under 

this Rule. The Director shall allow a 

different time period, not to exceed 

10 years immediately preceding the 

date that a complete permit 

application is received by the 

Division, if the owner or operator 

demonstrates that it is more 

representative of normal source 

operation. For the purpose of 

determining baseline actual 

emissions, the following shall apply: 

(i) The average rate shall 

include fugitive emissions to 

the extent quantifiable, and 

emissions associated with 

startups, shutdowns, and 

malfunctions. 

(ii) The average rate shall be 

adjusted downward to 

exclude any non-compliant 

emissions that occurred 

while the source was 

operating above any 

emission limitation that was 

legally enforceable during 

the consecutive 24-month 

period. 

(iii) For an existing emission unit 

(other than an electric utility 

steam generating unit), the 

average rate shall be 

adjusted downward to 

exclude any emissions that 

would have exceeded an 

emission limitation with 

which the major stationary 

source must currently 

comply. However, if the 

State has taken credit in an 

attainment demonstration or 

maintenance plan consistent 

with the requirements of 40 

CFR 51.165(a)(3)(ii)(G) for 

an emission limitation that is 

part of a maximum 

achievable control 

technology standard that the 

Administrator proposed or 

promulgated under part 63 

of the Code of Federal 

Regulations, the baseline 

actual emissions shall be 

adjusted to account for such 

emission reductions. 

(iv) For an electric utility steam 

generating unit, the average 

rate shall be adjusted 

downward to reflect any 

emissions reductions under 

G. S. 143-215.107D and for 

which cost recovery is 

sought pursuant to G. S. 62-

133.6. 

(v) For a regulated NSR 

pollutant, when a project 

involves multiple emissions 

units, only one consecutive 

24-month period shall be 

used to determine the 

baseline actual emissions for 

all the emissions units being 

changed. A different 

consecutive 24-month period 

for each regulated NSR 

pollutant can be used for 

each regulated NSR 

pollutant. 

(vi) The average rate shall not be 

based on any consecutive 

24-month period for which 

there is inadequate 

information for determining 

annual emissions, in tons per 

year, and for adjusting this 

amount if required by 

Subparts (ii) and (iii) of this 

Part. 

(B) For a new emissions unit, the baseline 

actual emissions for purposes of 

determining the emissions increase 

that will result from the initial 

construction and operation of such 

unit shall equal zero; and thereafter, 

for all other purposes, shall equal the 

unit's potential to emit. 

(C) For a plantwide applicability limit 

(PAL) for a stationary source, the 

baseline actual emissions shall be 

calculated for existing emissions units 

in accordance with the procedures 

contained in Part (A) of this 

Subparagraph, and for a new 

emissions unit in accordance with the 

procedures contained in Part (B) of 

this Subparagraph. 

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 North Carolina Register * Volume 24* Issue 04 * August 17, 2009 

(2) In the definition of "net emissions increase," 

the reasonable period specified in 40 CFR 

51.166(b)(3)(ii) shall be seven years. 

(3) The limitation specified in 40 CFR 

51.166(b)(15)(ii) shall not apply. 

(c) All areas of the State shall be classified as Class II except 

that the following areas are Class I: 

(1) Great Smoky Mountains National Park; 

(2) Joyce Kilmer Slickrock National Wilderness 

Area; 

(3) Linville Gorge National Wilderness Area; 

(4) Shining Rock National Wilderness Area; 

(5) Swanquarter National Wilderness Area. 

(d) Redesignations of areas to Class I or II may be submitted as 

state proposals to the Administrator of the Environmental 

Protection Agency (EPA), if the requirements of 40 CFR 

51.166(g)(2) are met. Areas may be proposed to be redesignated 

as Class III, if the requirements of 40 CFR 51.166(g)(3) are met. 

Redesignations may not, however, be proposed which would 

violate the restrictions of 40 CFR 51.166(e). Lands within the 

boundaries of Indian Reservations may be redesignated only by 

the appropriate Indian Governing Body. 

(e) In areas designated as Class I, II, or III, increases in 

pollutant concentration over the baseline concentration shall be 

limited to the values set forth in 40 CFR 51.166(c). However, 

concentration of the pollutant shall not exceed standards set forth 

in 40 CFR 51.166(d). 

(f) Concentrations attributable to the conditions described in 40 

CFR 51.166(f)(1) shall be excluded in determining compliance 

with a maximum allowable increase. However, the exclusions 

referred to in 40 CFR 51.166(f)(1)(i) or (ii) shall be limited to 

five years as described in 40 CFR 51.166(f)(2). 

(g) Major stationary sources and major modifications shall 

comply with the requirements contained in 40 CFR 51.166(i) 

and (a)(7) and by extension in 40 CFR 51.166(j) through (o) and 

(w). The transition provisions allowed by 40 CFR 52.21 

(i)(11)(i) and (ii) and (m)(1)(vii) and (viii) are hereby adopted 

under this Rule. The minimum requirements described in the 

portions of 40 CFR 51.166 referenced in this Paragraph are 

hereby adopted as the requirements to be used under this Rule, 

except as otherwise provided in this Rule. Wherever the 

language of the portions of 40 CFR 51.166 referenced in this 

Paragraph speaks of the "plan," the requirements described 

therein shall apply to the source to which they pertain, except as 

otherwise provided in this Rule. Whenever the portions of 40 

CFR 51.166 referenced in this Paragraph provide that the State 

plan may exempt or not apply certain requirements in certain 

circumstances, those exemptions and provisions of 

nonapplicability are also hereby adopted under this Rule. 

However, this provision shall not be interpreted so as to limit 

information that may be requested from the owner or operator by 

the Director as specified in 40 CFR 51.166(n)(2). 

(h) New natural gas-fired electrical utility generating units for 

which cost recovery is sought pursuant to G.S. 62-133.6 shall 

install best available control technology for NOX and SO2. SO2, 

regardless of applicability of the rest of this Rule.

(i) 40 CFR 51.166(w)(10)(iv)(a) is changed to read: "If the 

emissions level calculated in accordance with Paragraph (w)(6) 

of this Section is equal to or greater than 80 percent of the PAL 

[plant wide applicability limit] level, the Director shall renew the 

PAL at the same level." 40 CFR 51.166(w)(10)(iv)(b) is not 

incorporated by reference. 

(j) 15A NCAC 02Q .0102 and .0302 are not applicable to any 

source to which this Rule applies. The owner or operator of the 

sources to which this Rule applies shall apply for and receive a 

permit as required in 15A NCAC 02Q .0300 or .0500. 

(k) When a particular source or modification becomes a major 

stationary source or major modification solely by virtue of a 

relaxation in any enforceable limitation which was established 

after August 7, 1980, on the capacity of the source or 

modification to emit a pollutant, such as a restriction on hours of 

operation, then the provisions of this Rule shall apply to the 

source or modification as though construction had not yet begun 

on the source or modification. 

(l) The provisions of 40 CFR 52.21(r)(2) regarding the period of 

validity of approval to construct are incorporated by reference 

except that the term "Administrator" is replaced with "Director". 

(m) Volatile organic compounds exempted from coverage in 40 

CFR 51.100(s) shall also be exempted when calculating source 

applicability and control requirements under this Rule. 

(n) The degree of emission limitation required for control of any 

air pollutant under this Rule shall not be affected in any manner 

by: 

(1) that amount of a stack height, not in existence 

before December 31, 1970, that exceeds good 

engineering practice; or 

(2) any other dispersion technique not 

implemented before then. 

(o) A substitution or modification of a model as provided for in 

40 CFR 51.166(l) shall be subject to public comment procedures 

in accordance with the requirements of 40 CFR 51.102. 

(p) Permits may be issued on the basis of innovative control 

technology as set forth in 40 CFR 51.166(s)(1) if the 

requirements of 40 CFR 51.166(s)(2) have been met, subject to 

the condition of 40 CFR 51.166(s)(3), and with the allowance set 

forth in 40 CFR 51.166(s)(4). 

(q) If a source to which this Rule applies impacts an area 

designated Class I by requirements of 40 CFR 51.166(e), notice 

to EPA will be provided as set forth in 40 CFR 51.166(p)(1). If 

the Federal Land Manager presents a demonstration described in 

40 CFR 51.166(p)(3) during the public comment period or 

public hearing to the Director and if the Director concurs with 

this demonstration, the permit application shall be denied. 

Permits may be issued on the basis that the requirements for 

variances as set forth in 40 CFR 51.166(p)(4), (p)(5) and (p)(7), 

or (p)(6) and (p)(7) have been satisfied. 

(r) A permit application subject to this Rule shall be processed 

in accordance with the procedures and requirements of 40 CFR 

51.166(q). Within 30 days of receipt of the application, 

applicants shall be notified if the application is complete as to 

initial information submitted. Commencement of construction 

before full prevention of significant deterioration approval is 

obtained constitutes a violation of this Rule. 

(s) Approval of an application with regard to the requirements 

of this Rule shall not relieve the owner or operator of the 

responsibility to comply fully with applicable provisions of other 

rules of this Subchapter or Subchapter 02Q of this Title and any 

other requirements under local, state, or federal law. 

(t) When a source or modification subject to this Rule may 

affect the visibility of a Class I area named in Paragraph (c) of 

this Rule, the following procedures shall apply: 

(1) The Director shall provide written notification 

to all affected Federal Land Managers within 

30 days of receiving the permit application or 

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IV-5 

 North Carolina Register * Volume 24* Issue 04 * August 17, 2009 

within 30 days of receiving advance 

notification of an application. The notification 

shall be at least 30 days prior to the 

publication of notice for public comment on 

the application. The notification shall include a 

copy of all information relevant to the permit 

application including an analysis provided by 

the source of the potential impact of the 

proposed source on visibility. 

(2) The Director shall consider any analysis 

concerning visibility impairment performed by 

the Federal Land Manager if the analysis is 

received within 30 days of notification. If the 

Director finds that the analysis of the Federal 

Land Manager fails to demonstrate to his 

satisfaction that an adverse impact on visibility 

will result in the Class I area, the Director shall 

provide in the notice of public hearing on the 

application, an explanation of his decision or 

notice as to where the explanation can be 

obtained. 

(3) The Director may require monitoring of 

visibility in or around any Class I area by the 

proposed new source or modification when the 

visibility impact analysis indicates possible 

visibility impairment. 

(u) If the owner or operator of a source is using projected actual 

emissions to avoid applicability of prevention of significant 

deterioration requirements, the owner or operator shall notify the 

Director of the modification before beginning actual 

construction. The notification shall include: 

(1) a description of the project, 

(2) identification of sources whose emissions 

could be affected by the project, 

(3) the calculated projected actual emissions and 

an explanation of how the projected actual 

emissions were calculated, including 

identification of emissions excluded by 40 

CFR 51.166(b)(40)(ii)(c), 

(4) the calculated baseline actual emissions and an 

explanation of how the baseline actual 

emissions were calculated, and 

(5) any netting calculations if applicable. 

If upon reviewing the notification, the Director finds that the 

project will cause a prevention of significant deterioration 

evaluation, then the Director shall notify the owner or operator 

of his findings. The owner or operator shall not make the 

modification until it has received a permit issued pursuant to this 

Rule. If a permit revision is not required pursuant to this rule, the 

owner or operator shall maintain records of annual emissions in 

tons per year, on a calendar year basis related to the 

modifications for 10 years following resumption of regular 

operations after the change if the project involves increasing the 

emissions unit's design capacity or its potential to emit the 

regulated NSR pollutant; otherwise these records shall be 

maintained for five years following resumption of regular 

operations after the change. The owner or operator shall submit a 

report to the director within 60 days after the end of each year 

during which these records must be generated. The report shall 

contain the items listed in 40 CFR 51.166(r)(6)(v)(a) through (c). 

The owner or operator shall make the information documented 

and maintained under this Paragraph available to the Director or 

the general public pursuant to the requirements in 40 CFR 

70.4(b)(3)(viii). 

(v) The reference to the Code of Federal Regulations (CFR) in 

this Rule are incorporated by reference unless a specific 

reference states otherwise. The version of the Code of Federal 

Regulations incorporated in this Rule is that as of June 13, 2007. 

2007 except those provisions noticed as stayed in 69 FR 40274, 

and does not include any subsequent amendments or editions to 

the referenced material. 

Authority G.S. 143-215.3(a)(1); 143-215.107(a)(3); 143-

215.107(a)(5); 143-215.107(a)(7); 143-215.108(b); 150B-21.6. 

15A NCAC 02D .0531 SOURCES IN 

NONATTAINMENT AREAS 

(a) For the purpose of this Rule the definitions contained in 40 

CFR 51.165(a)(1) and 40 CFR 51.301 shall apply except the 

definition of "baseline actual emissions." 

(1) "Baseline actual emissions" means the rate of 

emissions, in tons per year, of a regulated new 

source review (NSR) pollutant, as determined 

in accordance with Parts (A) through (C) of 

this Subparagraph: 

(A) For an existing emissions unit, 

baseline actual emissions means the 

average rate, in tons per year, at 

which the emissions unit actually 

emitted the pollutant during any 

consecutive 24-month period selected 

by the owner or operator within the 5-

year period immediately preceding 

the date that a complete permit 

application is received by the 

Division for a permit required under 

this Rule. The Director shall allow a 

different time period, not to exceed 

10 years immediately preceding the 

date that a complete permit 

application is received by the 

Division, if the owner or operator 

demonstrates that it is more 

representative of normal source 

operation. For the purpose of 

determining baseline actual 

emissions, the following shall apply: 

(i) The average rate shall 

include fugitive emissions to 

the extent quantifiable, and 

emissions associated with 

startups, shutdowns, and 

malfunctions. 

(ii) The average rate shall be 

adjusted downward to 

exclude any non-compliant 

emissions that occurred 

while the source was 

operating above any 

emission limitation that was 

legally enforceable during 

the consecutive 24-month 

period. 

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 North Carolina Register * Volume 24* Issue 04 * August 17, 2009 

(iii) For an existing emission unit 

(other than an electric utility 

steam generating unit), the 

average rate shall be 

adjusted downward to 

exclude any emissions that 

would have exceeded an 

emission limitation with 

which the major stationary 

source must currently 

comply. However, if the 

State has taken credit in an 

attainment demonstration or 

maintenance plan consistent 

with the requirements of 40 

CFR 51.165(a)(3)(ii)(G) for 

an emission limitation that is 

part of a maximum 

achievable control 

technology standard that the 

Administrator proposed or 

promulgated under part 63 

of the Code of Federal 

Regulations, the baseline 

actual emissions shall be 

adjusted to account for such 

emission reductions. 

(iv) For an electric utility steam 

generating unit, the average 

rate shall be adjusted 

downward to reflect any 

emissions reductions under 

G.S. 143-215.107D and for 

which cost recovery is 

sought pursuant to G.S. 62-

133.6. 

(v) For a regulated NSR 

pollutant, when a project 

involves multiple emissions 

units, only one consecutive 

24-month period shall be 

used to determine the 

baseline actual emissions for 

all the emissions units being 

changed. A different 

consecutive 24-month period 

for each regulated NSR 

pollutant. 

(vi) The average rate shall not be 

based on any consecutive 

24-month period for which 

there is inadequate 

information for determining 

annual emissions, in tons per 

year, and for adjusting this 

amount if required by 

Subparts (ii) and (iii) of this 

Part. 

(B) For a new emissions unit, the baseline 

actual emissions for purposes of 

determining the emissions increase 

that will result from the initial 

construction and operation of such 

unit shall equal zero; and thereafter, 

for all other purposes, shall equal the 

unit's potential to emit. 

(C) For a plantwide applicability limit 

(PAL) for a stationary source, the 

baseline actual emissions shall be 

calculated for existing emissions units 

in accordance with the procedures 

contained in Part (A) of this 

Subparagraph, and for a new 

emissions unit in accordance with the 

procedures contained in Part (B) of 

this Subparagraph. 

(2) In the definition of "net emissions increase," 

the reasonable period specified in 40 CFR 

51.165(a)(1)(vi)(C)(1) shall be seven years. 

(b) Redesignation to Attainment. If any county or part of a 

county to which this Rule applies is later designated in 40 CFR 

81.334 as attainment for ozone or carbon monoxide, all sources 

in that county subject to this Rule before the redesignation date 

shall continue to comply with this Rule. 

(c) Applicability. 40 CFR 51.165(a)(2) is incorporated by 

reference. This Rule applies to areas designated as 

nonattainment in 40 CFR 81.334, including any subsequent 

amendments or editions. the following areas: 

(1) Ozone Nonattainment Areas, to major 

stationary sources and major modifications of 

sources of volatile organic compounds or 

nitrogen oxides for which construction 

commences after the area in which the source 

is located is designated according to Part (A) 

or (B) of this Subparagraph: 

(A) areas designated in 40 CFR 81.334 as 

nonattainment for ozone, or

(B) any of the following areas and in that 

area only when the Director notices in 

the North Carolina Register that the 

area is in violation of the ambient air 

quality standard for ozone:

(i) Charlotte/Gastonia, 

consisting of Mecklenburg 

and Gaston Counties; with 

the exception allowed under 

Paragraph (l) of this Rule;

(ii) Greensboro/WinstonSalem/High Point, consisting 

of Davidson, Forsyth, and 

Guilford Counties and that 

part of Davie County 

bounded by the Yadkin 

River, Dutchmans Creek, 

North Carolina Highway 

801, Fulton Creek and back 

to Yadkin River; or

(iii) Raleigh/Durham, consisting 

of Durham and Wake 

Counties and Dutchville 

Township in Granville 

County.

Violations of the ambient air quality 

standard for ozone shall be 

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IV-7 

 North Carolina Register * Volume 24* Issue 04 * August 17, 2009 

determined according to 40 

CFR 50.9. 

(2) Carbon Monoxide Nonattainment Areas. This 

Rule applies to major stationary sources and 

major modifications of sources of carbon 

monoxide located in areas designated in 40 

CFR 81.334 as nonattainment for carbon 

monoxide and for which construction 

commences after the area in which the source 

is located is listed in 40 CFR 81.334 as 

nonattainment for carbon monoxide. 

(d) This Rule is not applicable to: 

(1) complex sources of air pollution regulated 

only under Section .0800 of this Subchapter 

and not under any other rule in this 

Subchapter; 

(2) emission of pollutants at the new major 

stationary source or major modification 

located in the nonattainment area that are 

pollutants other than the pollutant or pollutants 

for which the area is nonattainment. (A major 

stationary source or major modification that is 

major for volatile organic compounds or 

nitrogen oxides is also major for ozone.); 

(3) emission of pollutants for which the source or 

modification is not major; 

(4) a new source or modification that qualifies for 

exemption under the provision of 40 CFR 

51.165(a)(4); or 

(5) emission of compounds listed under 40 CFR 

51.100(s) as having been determined to have 

negligible photochemical reactivity except 

carbon monoxide. 

(e) 15A NCAC 02Q .0102 and .0302 are not applicable to any 

source to which this Rule applies. The owner or operator of the 

source shall apply for and receive a permit as required in 15A 

NCAC 02Q .0300 or .0500. 

(f) To issue a permit to a source to which this Rule applies, the 

Director shall determine that the source meets the following 

requirements: 

(1) The new major stationary source or major 

modification will emit the nonattainment 

pollutant at a rate no more than the lowest 

achievable emission rate; 

(2) The owner or operator of the proposed new 

major stationary source or major modification 

has demonstrated that all major stationary 

sources in the State that are owned or operated 

by this person (or any entity controlling, 

controlled by, or under common control with 

this person) are subject to emission limitations 

and are in compliance, or on a schedule for 

compliance that is federally enforceable or 

contained in a court decree, with all applicable 

emission limitations and standards of this 

Subchapter that EPA has authority to approve 

as elements of the North Carolina State 

Implementation Plan for Air Quality; 

(3) The owner or operator of the proposed new 

major stationary source or major modification 

will obtain sufficient emission reductions of 

the nonattainment pollutant from other sources 

in the nonattainment area so that the emissions 

from the new major source and associated new 

minor sources will be less than the emissions 

reductions by a ratio of at least 1.00 to 1.15 for 

volatile organic compounds and nitrogen 

oxides and by a ratio of less than one to one 

for carbon monoxide. The baseline for this 

emission offset shall be the actual emissions of 

the source from which offset credit is obtained. 

Emission reductions shall not include any 

reductions resulting from compliance (or 

scheduled compliance) with applicable rules in 

effect before the application. The difference 

between the emissions from the new major 

source and associated new minor sources of 

carbon monoxide and the emission reductions 

shall be sufficient to represent reasonable 

further progress toward attaining the National 

Ambient Air Quality Standards. The 

emissions reduction credits shall also conform 

to the provisions of 40 CFR 

51.165(a)(3)(ii)(A) through (G) and (J); and 

(4) The North Carolina State Implementation Plan 

for Air Quality is being carried out for the 

nonattainment area in which the proposed 

source is located. 

(g) New natural gas-fired electrical utility generating units for 

which cost recovery is sought pursuant to G.S. 62-133.6 shall 

install lowest achievable emission rate technology for NOX and 

SO2. SO2, regardless of the applicability of the rest of this Rule.

(h) 40 CFR 51.165(f) is incorporated by reference except that 

40 CFR 51.165(f)(10)(iv)(A) is changed to read: "If the 

emissions level calculated in accordance with Paragraph (f)(6) of 

this Section is equal to or greater than 80 percent of the PAL 

level, the Director shall renew the PAL at the same level." 40 

CFR 51.165(f)(10)(iv)(B) is not incorporated by reference. 

(i) When a particular source or modification becomes a major 

stationary source or major modification solely by virtue of a 

relaxation in any enforceable limitation established after 

August 7, 1980, on the capacity of the source or modification to 

emit a pollutant, such as a restriction on hours of operation, then 

the provisions of this Rule shall apply to the source or 

modification as though construction had not yet begun on the 

source or modification. 

(j) To issue a permit to a source of a nonattainment pollutant, 

the Director shall determine, in addition to the other 

requirements of this Rule, that an analysis (produced by the 

permit applicant) of alternative sites, sizes, production processes, 

and environmental control techniques for the source 

demonstrates that the benefits of the source significantly 

outweigh the environmental and social costs imposed as a result 

of its location, construction, or modification. 

(k) The provisions of 40 CFR 52.21(r)(2) regarding the period 

of validity of approval to construct are incorporated by reference 

except that the term "Administrator" is replaced with "Director". 

(l) Approval of an application regarding the requirements of this 

Rule shall not relieve the owner or operator of the responsibility 

to comply fully with applicable provisions of other rules of this 

Chapter and any other requirements under local, state, or federal 

law. 

(m) When a source or modification subject to this Rule may 

affect the visibility of a Class I area named in Paragraph (c) of 

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IV-8 

 North Carolina Register * Volume 24* Issue 04 * August 17, 2009 

Rule .0530 of this Section, the following procedures shall be 

followed: 

(1) The owner or operator of the source shall 

provide an analysis of the impairment to 

visibility that would occur because of the 

source or modification and general 

commercial, industrial and other growth 

associated with the source or modification; 

(2) The Director shall provide written notification 

to all affected Federal Land Managers within 

30 days of receiving the permit application or 

within 30 days of receiving advance 

notification of an application. The notification 

shall be at least 30 days before the publication 

of the notice for public comment on the 

application. The notification shall include a 

copy of all information relevant to the permit 

application including an analysis provided by 

the source of the potential impact of the 

proposed source on visibility; 

(3) The Director shall consider any analysis 

concerning visibility impairment performed by 

the Federal Land Manager if the analysis is 

received within 30 days of notification. If the 

Director finds that the analysis of the Federal 

Land Manager fails to demonstrate to his 

satisfaction that an adverse impact on visibility 

will result in the Class I area, the Director shall 

provide in the notice of public hearing on the 

application, an explanation of his decision or 

notice where the explanation can be obtained; 

(4) The Director shall issue permits only to those 

sources whose emissions will be consistent 

with making reasonable progress toward the 

national goal of preventing any future, and 

remedying any existing, impairment of 

visibility in mandatory Class I areas when the 

impairment results from manmade air 

pollution. In making the decision to issue a 

permit, the Director shall consider the cost of 

compliance, the time necessary for 

compliance, the energy and nonair quality 

environmental impacts of compliance, and the 

useful life of the source; and 

(5) The Director may require monitoring of 

visibility in or around any Class I area by the 

proposed new source or modification when the 

visibility impact analysis indicates possible 

visibility impairment. 

The requirements of this Paragraph shall not apply to nonprofit 

health or nonprofit educational institutions. 

(n) Paragraphs (f) and (j) of this Rule shall not apply to a new 

major stationary source or a major modification of a source of 

volatile organic compounds or nitrogen oxides for which 

construction commences after the area in which the source is 

located has been designated according to Part (c)(1)(B) of this 

Rule and before the area is designated in 40 CFR 81.334 as 

nonattainment for ozone if the owner or operator of the source 

demonstrates, using the Urban Airshed Model (UAM), that the 

new source or modification will not contribute to or cause a 

violation. The model used shall be that maintained by the 

Division. The Division shall run the model only after the permit 

application has been submitted. The permit application shall be 

incomplete until the modeling analysis is completed. The owner 

or operator of the source shall apply such degree of control and 

obtain such offsets necessary to demonstrate the new source or 

modified source will not cause or contribute to a violation.

(o)(n) If the owner or operator of a source is using projected 

actual emissions to avoid applicability of nonattainment new 

source review, the owner or operator shall notify the director of 

the modification before beginning actual construction. The 

notification shall include: 

(1) a description of the project, 

(2) identification of sources whose emissions 

could be affected by the project, 

(3) the calculated projected actual emissions and 

an explanation of how the projected actual 

emissions were calculated, including 

identification of emissions excluded by 40 

CFR 51.165(a)(1)(xxviii)(B)(3), 

(4) the calculated baseline actual emissions and an 

explanation of how the baseline actual 

emissions were calculated, and 

(5) any netting calculations if applicable. 

If upon reviewing the notification, the Director finds that the 

project will cause a nonattainment new source review 

evaluation, then the Director shall notify the owner or operator 

of his findings. The owner or operator shall not make the 

modification until it has received a permit issued pursuant to this 

Rule. If a permit revision is not required pursuant to this Rule, 

the owner or operator shall maintain records of annual emissions 

in tons per year on a calendar year basis related to the 

modifications for 10 years following resumption of regular 

operations after the change if the project involves increasing the 

emissions unit's design capacity or its potential to emit the 

regulated NSR pollutant; otherwise these records shall be 

maintained for five years following resumption of regular 

operations after the change. The owner or operator shall submit a 

report to the director within 60 days after the end of each year 

during which these records must be generated. The report shall 

contain the items listed in 40 CFR 51.165(a)(6)(v)(A) through 

(C). The owner or operator shall make the information 

documented and maintained under this Paragraph available to 

the Director or the general public pursuant to the requirements in 

40 CFR 70.4(b)(3)(viii). 

(p)(o) The references to the Code of Federal Regulations (CFR) 

in this Rule are incorporated by reference unless a specific 

reference states otherwise. Except for 40 CFR 81.334, the 

version of the Code of Federal Regulations incorporated in this 

Rule is that as of June 13, 2007 2007. those provisions noticed 

as stayed in 69 FR 40274, and does not include any subsequent 

amendments or editions to the referenced material.

Authority G.S. 143-215.3(a)(1); 143-215.107(a)(5); 143-

215.108(b). 

A-28
IV-9 

Hearing Officer's Suggested Hearing Comments 

INTRODUCTION

[hearing officer]: 

 Good evening ladies and gentlemen. My name is Tom Ellis. I am a member of the Environmental 

Management Commission. My role as hearing officer is to listen to all relevant comment on these 

proceedings and report them to the full commission. Sitting with me is Ms. Joelle Burleson. She is 

with the North Carolina Division of Air Quality (DAQ), Planning Section. 

 Some of the staff from the Division of Air Quality are here to assist. Ms. Burleson, please introduce 

the staff present. 

Ms. Burleson. (Introduce staff) 

[hearing officer]: 

 This evening we are conducting two hearings. During the first hearing we will take comments 

concerning amendments to the Prevention of Significant (PSD) and New Source Review (NSR) rules. 

The second hearing concerns adoptions, repeals and amendments to rules in Subchapter 02D, Section 

.0900 that regulate volatile organic compound (VOC) emissions. These hearings will be held according 

to the North Carolina Administrative Procedures Act. The public notice for these hearings has been 

advertised in the North Carolina Register and five newspapers in the state. Copies of the notice have 

been sent to those on the official DAQ mailing list. I will enter the public notice and the proposed 

amendments, repeals and adoptions into the hearing record without reading them at this time. 

 Any person desiring to comment is requested to submit a written statement for inclusion into the 

hearing record. Once called to speak, please come to the podium and state your name clearly, identify 

the rule or rules you are commenting on, and whom you represent. 

[first hearing]: 

A-29
IV-10 

 I will now open the first hearing and take relevant comments on rule amendments to the PSD and 

NSR requirements. The PSD requirements can be found in Rule 15 A NCAC 02D .0530, Prevention 

of Significant Deterioration and the NSR requirements can be found in Rule 15A NCAC 02D .0531, 

Sources in Nonattainment Areas. Being considered are rule amendments to clarify that installation of 

best available control technology (BACT) applies to all new natural gas-fired electrical utility 

generating units for which cost recovery is sought under the Clean Smokestacks Act and to remove 

pollutant specific references that require sources to continue measures after an area’s redesignation to 

attainment and replace the description of nonattainment areas with reference to 40 CFR 81.334 that 

identifies nonattainment areas. 

----------------------------------------------------------------------------------------------------------------------- 

[hearing officer]: Optional Time Limit 

 Many people have requested to speak at this hearing. Due to time constraints, speakers’ 

presentations will be limited to ___ minutes. Speakers are requested to submit a written statement by 

the close of the comment period for inclusion into the hearing record. 

----------------------------------------------------------------------------------------------------------------------- 

[hearing officer]: 

 I will now take any comments that you may have. 

[SPEAKERS] 

[hearing officer]: 

 Is there anyone else who would like to comment? If there are no more comments, then the first 

hearing is closed. The first hearing record will remain open until April 30, 2010, for additional written 

comments. 

------------------------------------------------------------------------------------------------------------------------

 [second hearing]: 

 I will now open the second hearing and take relevant comments to the modification of 15A NCAC 

2D Section .0900, Volatile Organic Compounds. Being considered are rule changes to incorporate 

United States Environmental Protection Agency (USEPA) Control Techniques Guidelines (CTG) level 

A-30
IV-11 

of Reasonably Available Control Technology (RACT) to comply with Sections 172(c)(1) and 182(b) of 

the Clean Air Act (CAA). 

 DAQ is required, under provisions of CAA Section 172(c)(1), to revise its State Implementation 

Plan (SIP) in order to include an ozone attainment demonstration that will lead to attainment of the 

national ambient air quality standards (NAAQS) for ozone. Section 182(b)(2) of CAA provides that 

States must revise their ozone SIP to include RACT for each category of VOC sources covered by any 

CTG document issued after November 15, 1990, and prior to the date of attainment. After the 

USEPA revised VOC regulations several times through issuance of New Sources Performance 

Standards (NSPS) and National Emissions Standards for Hazardous Air Pollutants (NESHAP) 

regulations to related industries, it finally provided States with guidance concerning what types of 

controls could constitute RACT for a given source category through the issuance of CTGs to comply 

with the requirements of Section 182(b)(2). EPA has issued 11 CTGs since 2006. The changes in 

Section .0900-Volatile Organic Compounds presented at this hearing address recommendations made 

in these 11 CTGs. 

----------------------------------------------------------------------------------------------------------------------- 

[hearing officer]: 

I will now take any comments that you may have. 

[SPEAKERS] 

 

[hearing officer]: 

Is there anyone else who would like to comment? If there are no more comments, then this hearing is 

closed. The hearing record will remain open until April 30, 2010, for additional written comments. 

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IV-12 

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V-1 

CHAPTER V 

COMMENTS DURING THE COMMENT PERIOD 

No comments were received for the rules in this hearing report during the comment period. 

A-33
V-2 

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A-34
VI-1 

CHAPTER VI 

INDEX OF ATTACHMENTS 

ATTACHMENTS PAGE

1. PSD and Sources in Nonattainment Areas Economic Analysis VI-2 

A-35
VI-2 

ECONOMIC ANALYSIS: PSD & SOURCES IN NONATTAINMENT AREAS (490)

Contact Information 

1. Division of Air Quality File Number (490) 

2. Analyst: Glenn Sappie 

glenn.sappie@ncdenr.gov

3. Office DENR, Air Quality Planning, Rule Branch 

4. Phone 919/715-3743 or 919/ 715-4398 

5. Comments to Agency Contact Mike Abraczinskas 

Michael.Abraczinskas@ncdenr.gov

6. Title of the Amended Rule PSD & Sources in Nonattainment Areas 

7. Rule Citation 15A NCAC 02D .0530 & 02D .0531 

8. Brief Description of the Proposed Rule Use CFR reference to specify nonattainment areas 

where BACT or LAER controls apply 

9. Rule Category Division 1 – Regulatory Behavior 

Screening Analysis 

Rule Actions General Statute Yes 

or 

No 

10. Federal Law Certification Required - Does the proposed rule 

purport to implement a federal law requiring a certification 

statement by the rule-making coordinator under? 

NCGS 150B-21(f)(1) No 

11. Temporary Rules - Does this rule meet the criteria listed 

relating to temporary rules? 

NCGS 150B-21.1 No 

12. Emergency Rules - Does this rule meet the criteria relating to 

emergency rules? 

NCGS 150B-21.1(a) No 

13. Establishes or Increases Fees - Is the agency required to 

complied with the requirements of G.S. 12-3.1? 

NCGS 150B-12-3.1 

NCGS 150B-21.3(c1) 

No 

14. State Funds - Does the proposed rule require the expenditure or 

distribution of funds subject to the Executive Budget Act, 

Article 1 of Chapter 143? 

NCGS 150B-21.4(a) No 

15. NC DOT Analysis - Does the proposed rule affect NC DOT 

environmental permitting that will result in an increased cost? 

NCGS 150B-21.4(a1) No 

16. Local Government Unit Funds - Does the proposed rule affect 

the expenditures or revenues of a unit of local government? 

NCGS 150B-21.4(b) No 

17. Substantial Economic Impact Analysis - Federal Rule 

Exemption - Does this rule meet the criterion of Federal 

Exemption found in? 

NCGS 150B-21.4(b1) No 

18. Technical Change - Are only technical changes being 

incorporated such that public notice and rule-making hearings 

are not required?

NCGS 150B-21.5 No 

19. Repeal of Regulatory Deadwood - Is the Rule Obsolete? NCGS 150B-21.5(b) No 

A-36
VI-3 

ECONOMIC ANALYSIS: PSD & SOURCES IN NONATTAINMENT AREAS

I. Executive Summary 

The purpose of this analysis is to conduct an evaluation of the costs and benefits that will be 

incurred by owners or operators of the affected facilities to comply with the proposed 

amendments. Included is a review of the potential fiscal impacts on state funds that could result 

due to permit conditions of any state-owned facility, or regulatory responsibilities the Division of 

Air Quality (DAQ) as the primary implementing agency. Potential impacts to units of local 

government are examined from the perspective as facility owners or through local air quality 

program expenditures due to administration responsibilities of re-adopted DAQ rules. 

Under the federal Clean Air Act, a program known as “Prevention of Significant Deterioration” 

(PSD) which requires an analysis of new sources at facilities or significant modifications of 

existing sources further protects areas that attain the National Ambient Air Quality Standard 

(NAAQS). The PSD program is one element of the “new source review” (NSR) program. 

The amendments in paragraph (h) to Rule 15A NCAC 02D .0530, Prevention of Significant 

Deterioration, clarify that Best Available Control Technology (BACT) is required for all new 

gas fired electrical generating units by adding the phrase “for which cost recovery is sought 

pursuant to G.S. 62-133.6”. This North Carolina statute is referred to as the Clean Smokestacks 

Act (CSA). This change clarifies that this paragraph of the rule applies only to certain CSA 

units. The Environmental Management Commission (EMC) inserted this paragraph during its 

December 2004 meeting. It’s clear from the meeting records that their intend was to prevent 

units that claimed cost recovery due to the CSA from using those emission reductions to avoid 

BACT under the PSD program and LAER under the nonattainment program. Given the intent of 

the paragraph as currently being implemented, the rule changes do not represent a change from 

baseline. 

Under the federal Clean Air Act the program generally known as “nonattainment new source 

review” (NNSR) requires new major or significant modifications of existing major sources in 

nonattainment areas for all NAAQS pollutants. This nonattainment NSR program requires; (1) 

lowest achievable emission rates (LAER), (2) emission offsets, and (3) public involvement. 

The amendments to paragraph (b) in Rule 15A NCAC 02D .0531, Sources in Nonattainment 

Areas, remove pollutant specific references that require sources to continue measures after an 

area’s redesignation to attainment. With this amendment, violations of any National Ambient Air 

Quality Standard (NAAQS) pollutant trigger provisions that require facilities to maintain control 

measures after an area regains attainment status. 

North Carolina nonattainment areas for two NAAQS pollutants (ozone and carbon monoxide) 

are currently identified in paragraph (c). The amendment replaces the geographic description of 

these nonattainment areas for ozone or carbon monoxide with a reference to the Code of Federal 

Regulation (CFR) that includes subsequent revisions. There is no discretion for DAQ to deviate 

from the referenced 40 CFR 81.334 that identifies North Carolina nonattainment areas by 

NAAQS pollutant. This amendment removes the pollutant specific nonattainment areas and 

A-37
VI-4 

relies on the 40 CFR 81.334 reference to update the identification of nonattainment areas for all 

NAAQS pollutants without the need for catch-up rulemaking that is out of sync with that federal 

code now. 

The amendments to paragraph (g) in Rule 15A NCAC 02D .0531, Sources in Nonattainment 

Areas, clarify that Lowest Achievable Emission Rate (LAER) is required on all new gas fired 

electrical generating units by adding the phrase “for which cost recovery is sought pursuant to 

G.S. 62-133.6” (CSA). This amendment clarifies that this rule only applies to certain CSA units. 

The EMC inserted this paragraph during its December 2004 meeting. It’s clear from the meeting 

records that their intend was to prevent units that claimed cost recovery due to the CSA from 

using those emission reductions to avoid BACT under the PSD program and LAER under the 

nonattainment program. Given the intent of the paragraph as currently being implemented, the 

rule changes do not represent a change from baseline. 

 

Deleting of Paragraph (n) in .0531 and re-lettering remaining paragraphs removes obsolete 

language that is no longer needed because there will be no time periods between the designation 

of nonattainment areas in the 40 CFR 81.334 and North Carolina’s Administrative Code when 

urban airshed modeling must be preformed to determine whether an increase in emissions is 

associated with any new or modified source. 

These amendments are not expected to impact air quality or result in any changes relative to a 

baseline of requirements already in effect on any affected facility. It also does not alter the 

permitting process and inspections routine from baseline responsibilities. There can be cost 

consequences when an area’s status is designated as nonattainment, but these are not directly 

related to the proposed rule amendments. For this reason the Office of State Budget and 

Management (OSBM) recommends their review of this economic analysis due to “significant” 

potential future impacts, while recognizing that current impacts estimates are not considered 

substantial. Therefore, the cost or cost-savings due to these rule amendments are negligible for 

the regulated community and the implementing agency. 

II. Background and Rationale for Action 

The reason for action is to amend Rule 15A NCAC 2D .0530, Prevention of Significant 

Deterioration, paragraph (h) to clarify that installation of BACT applies to all new natural gasfired electrical utility generating units for which cost recovery is sought under CSA. Also, 

obsolete language is removed related to provisions earlier stayed by the court challenge to PSD 

rules. 

Amendments to paragraph (b) of Rule 15A NCAC 02D .0531, Sources in Nonattainment Areas, 

remove the pollutant specific references that require sources to continue measures after an area is 

re-designated as attainment. The amendment replaces the description of pollutant specific 

nonattainment areas in paragraph (c) with a reference to the CFR, including subsequent 

revisions. The amendment to paragraph (g) proposes to clarify that all new natural gas-fired 

electrical utility generating units in nonattainment areas for which cost recovery is sought under 

CSA shall install lowest achievable emission rates (LAER) regardless of whether or not the 

A-38
VI-5 

source is major. Also, an obsolete requirement to do interim urban airshed modeling in 

Paragraph (n) is removed, and the remaining paragraph lettering is revised. 

Currently, 15A NCAC 02D .0531 applies only to ozone and carbon monoxide nonattainment 

areas. No part of North Carolina is nonattainment for carbon monoxide. However, the areas in 

North Carolina in nonattainment for ozone are not up to date. The amendment would extend this 

rule to cover all nonattainment areas, and provide automatic updates to 40 CFR 81.334 when 

revised. Davidson, Guilford, and Catawba Counties are currently classified as nonattainment for 

PM2.5 in the 40 CFR 81.334, but are not identified as such in the NCAC. Until this Rule is 

amended to cover new major sources and major modifications in all nonattainment areas, the 

procedures in 40 CFR Part 51, Appendix S are used to require offsets and lowest achievable 

control technology (LAER). These rule changes are being proposed at the suggestion of DAQ 

staff to satisfy EPA requirements. 

These amendments remove the description of the nonattainment areas from the North Carolina 

Administrative Code and instead rely upon the CFR to keep those pollutant specific 

nonattainment designations updated. For more information on the NSR program, go to 

http://www.epa.gov/nsr. 

III. Implementation 

These rule changes are not expected to require any changes to procedures for State and local 

agency programs implementing part C of the PSD permit program in 40 CFR 51.166 or part D of 

the nonattainment NSR permit program in 40 CFR 51.165 currently approved under North 

Carolina’s approved State Implementation Plan (SIP). 

IV. Identification of the Affected Parties 

The amendments have the potential to create two categories of interested parties: the regulated 

community and the implementing agency. The regulated community consists of the owners or 

operators of the facilities that fall under the category of NSR permitting. The implementing 

agency is DAQ, which has the responsibility for implementing the adopted and amended rules. 

To determine whether a facility would be affected by this action, they should carefully examine 

the applicability criteria in parts 51 and 52 of title 40 of the Code of Federal Regulations. It is 

impossible to predict and estimate the aggregate economic impacts associated with an area’s 

attainment status due to these BACT or LAER determinations. The is a lot of variability in the 

cost of control for different source categories and uncertainty associated with the future status of 

NAAQS attainment areas, and ability to know in advance which facilities may someday submit a 

PSD/NSR permit application. Potential impacts might occur to units of local government from 

their perspective as facility owners or through local air quality program expenditures due to 

administration responsibilities of re-adopted DAQ rules. 

A-39
VI-6 

V. Establishment of the Baseline 

The baseline for this analysis in based on the current PSD and NSR rules found in Rule 15A 

NCAC 02D .0530, Prevention of Significant Deterioration, and .0531, Sources in 

Nonattainment Areas, respectively. 

 

VI. Changes from the Baseline 

These amendments are not expected to directly alter the status of certain existing North Carolina 

sources that are requesting modification a permit for a project relative to the baseline. Our 

current rule description of ozone nonattainment areas is out of date when compared to the Code 

of Federal Regulation reference that will be adopted. The State of North Carolina is ultimately 

held to 40 CFR 81.334 for NSR pollutant nonattainment designations regardless of what our 

rules contain. Therefore, it is of no marginal cost consequence to rely solely on that reference. In 

fact it is highly beneficial to do so because it eliminates the need to continually update the rule 

when nonattainment area change. 

VII. Estimating the cost to Affected Parties 

 

Both rules are proposed for amendment to clarify that all new natural gas electrical generation 

units that sought cost recovery under the CSA are subject to NSR. The DAQ has been 

interpreting these rule sections in a manner consistent with the proposed changes. These rule 

amendments do not alter the permitting process or inspection routine for affected facilities. These 

amendments also do not directly cause changes to operations of affected facilities relative to the 

baseline. Therefore, negligible costs (or savings) are associated with these rule amendments on 

the regulated community or implementing agency. There can be cost consequences when an 

area’s status is designated as nonattainment, but these are not directly related to the proposed rule 

amendments. 

VIII. Benefits 

By using a reference to 40 CFR 81.334, the description of nonattainment areas remains 

consistent with federal designations, which avoids confusion and eliminates frequent rule 

updates. Most of the remaining amendments are ministerial in nature, which are necessary 

actions on the part of DAQ to clarify these rules. Unnecessary language was removed related to 

“stayed” court action that was resolved by the EPA in a June 13, 2007 rulemaking entitled 

“Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NSR): 

Removal of Vacated Elements”. 

IX. Conclusion 

The rule amendments allow the nonattainment areas that are identified in the Code of Federal 

Regulation section to be automatically adopted by reference. The other proposed changes are 

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primarily for the purpose of clarification of existing practice, or deletion of obsolete language 

and paragraph re-numbering. The marginal effect of these amendments on the regulated 

community, and units of local government or State implementing agencies will not result in 

substantial economic impacts as defined in North Carolina’s Administrative Procedures Act in 

NC § 150B-21.4 Fiscal notes on rules. The term "substantial economic impact" means an 

aggregate financial impact on all persons affected of at least three million dollars ($3,000,000) in 

a 12-month period. The Office of State Budget and Management (OSBM) recommends their 

review of this economic analysis due to “significant” potential future impacts, while recognizing 

that current impacts estimates are not considered substantial. Therefore, the cost or cost-savings 

due to these rule amendments are negligible for the regulated community, and the State or local 

government agencies implementing these rules. 

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VII-1 

Chapter VII 

The following documentation of filing and notification is incorporated as part of this hearing record and is 

maintained on file: 

1. ENR 101 Internal Approval Form. 

2. Submission for Notice Form and material submitted to the Office of Administrative 

Hearings. 

3. The public notice as it appears in The North Carolina Register Volume 24, Issue 17, 

pages 1508-1515. 

4. Letters to newspapers requesting that the public notice be published. 

5. Affidavits of Publication from newspaper. 

6. Memorandum transmitting hearing notice and proposal to regional offices for public 

inspection. 

7. Memorandum transmitting hearing notice and proposal to local programs. 

8. Letter notifying EPA of hearing. 

9. Submission of Filing Forms and material filed with Office of Administrative Hearings. 

 10. Letter transmitting hearing record to EPA. 

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