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OAR Box 1787 

Prepped by Ollie Stewart 

Document Number: 

28)JI-B-13 

Docket Number: 

A-90-37 

Printed 11/4/2008 10:22:19 AM Sheet 28 of 147 
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

WASHINGTON, D.C. 20460 

DEC I '•OS? 

'JE-'.;\. 2 0 E. 

OFFICE o r 

AIR AND RADIATION 

MEMORANDUM ----^-^LLt^:*~ * 

SUBJECT: Improving New source Review (NSR) Implementation 

FROM: J. Craig Potter 

Assistant Administrator 

for Air and Radiation (ANR-443) 

TO: Regional Administrator 

Regions I-X 

On June 27, 1986, I established a special task force to address 

growing concerns about the consistency and certainty of permits issued 

under the Clean Air Act's prevention of significant deterioration and . 

nonattainment area NSR programs. Based on the findings and recommendations 

of the task force, I am today establishing certain program initiatives 

designed to inprove the timeliness, certainty, and effectiveness of these 

programs. • % 

A great deal of effort will be required to overcome the problems 

which have developed, but it is my belief that these problems,- with your 

full cooperation and assistance, can be resolved so that these essential 

air management programs can fulfill their intended roles. Therefore, I 

urge each of you to provide the maximum priority and resource commitments 

available to the task. 

The outstanding concern we now face in these programs is inadequate 

implementation. The Office of Air and Radiation intends to apply its 

resource commitments so.as to enhance its ability to provide technical 

support and guidance, training, workshops, auditing, and enforcement 

support to th£ Regions and delegated programs. The Regional Offices must 

make a corresponding resource commitment for these efforts to succeed. 

Accordingly, I am requesting that you initiate a self-evaluation of current 

NSR ac.ivities and, to the extent necessary, refocus Regional attention on 

these programs in an effort to inprove and enhance NSR program implementation. 

To ensure that we maintain the flexibility' to make this effort a 

dynamic one, capable of sensing and adjusting to the needs of the program, 

I intend to establish an informal group of our colleagues to report to me 

on progress in implementing the initiatives discussed belcw. The mission 

of the group is to provide the feedback necessary to maximize the 

effectiveness of NSR implementation and to make NSR reflective of air 

program need.;. 

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The following is a list of the specific program initiatives I am 

hereby instituting to bring about improvements in NSR implementation: 

Tracking Permit Actions—Initially and until such time as permit 

quality can be assured, I am requiring that-each Regional Office establish 

("if not already in place) a program to ensure a timely and comprehensive 

review of all State and local agency-issued major source permits and 

certain minor source permits, implementation of the program will be nade 

part of the Regional Office Management System and will require the "real 

time" exchange and* review of infornation between the Regional Office and 

the State and local agencies when a key milestone is reached during the 

permitting process. 

Effective comnunication between the permitting agency and the Regional 

Office is essential to improving program implementation. Therefore, the 

Regional Offices will need to ensure that State and local permitting 

agencies follow certain notification procedures such as: 

- Notify the Regional Office and other affected parties (e.g., the 

Federal land manager if Class I areas are impacted), within a reasonable 

time, of the receipt of a new major source pennit application. This can .. 

take the form of a complete copy of the application itself or a brief 

description of the proposed project. Notification can be made as each 

application is received or the infornation may be submitted to the Regional 

Office in a periodic report. 

- Submit to the Regional Office a complete public notification 

package at the beginning of the public notice period. The package nust 

contain the public notice language, the proposed permit, and a technical 

analysis demonstrating how the proposed project complies with the technical 

review requirements of the regulations [e.g., best available control 

technology (BACT) or lowest achievable emission rate (LAER), air quality 

impacts or offsets]. 

- Submit to the Regional Office a copy of the final preconstruction 

permit when issued, including a response to any appropriate comments 

submitted during the public comment period. 

- Submit to the Regional Office a copy of the operating pennit when 

issued. 

V.kewise, when informed of a permit action, the Regional Office is 

responsible for the timely review of the infornation, specifically: 

- Screen incoming information on permit applications for potential 

issues or concerns and, if warranted, communicate them to the permitting 

agency. 

- Perform a timely and comprehensive review of the public notice 

package' and, if warranted/ provide comment during the public comment 

period. To aid in this task, I have directed the Office of Air Quality 
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Planning and Standards (OAQPS) to start work on the development of a 

pennit review checklist for use by the Regional Office during the public 

comment period. The checklist will also be useful to State and local 

agencies as a tool for self-audit and to understand what the Environmental 

Protection Aqency (EPA) enphasizes when reviewing a proposed pennit. 

- Review any response to comments and the final permit to ensure 

that any outstanding concerns have been resolved satisfactorily. 

- Review the pennit to operate to ensure that it is consistent with 

the preconstruction permit. 

- Take prompt and appropriate action to deter the issuance or use of 

permits which fail to meet minimal Federal requirements. I have directed 

OAQPS to work with the Office of General Counsel and the Office of Enforcement and Compliance Monitoring to develop guidance for the Regional 

Offices on the appropriate legal mechanisms and procedures for handling 

deficient permit actions. 

- To the extent practicable, prior to permit issuance, review 

potential minor permit actions which exenpt an otherwise major source or 

modification from a major review (e.g.,"synthetic" minor sources, major 

sources netting out of review, and 99.9 or 249.9 tons per year sources). 

The most critical element of these initiatives is the Regional Office 

review of proposed permit actions during the public comment period. Ihe 

FY 1935 national air audit showed widespread serious permit deficiencies, 

many of which could have been corrected without interfering with State 

and local agency processing if dealt with by EPA during the public 

comment period. By uniformly reviewing all major source permit actions 

during the comment period, EPA is able to address deficient reviews or 

permits before the final permit is issued. This not only promotes more 

consistency in the permitting process among the States, but also provides 

the highest degree of certainty to the applicant that the permit will not 

be challenged by EPA at a later date. Moreover, if the pennit is not 

reviewed and commented on prior to issuance, the possibility of successfully 

challenging the action is greatly diminished, as is the opportunity to 

inprove the enforceability of the permit. 

BACT Determinations—Of all the NSR processes, BACT (and LAER) 

determinations are perhaps the most misunderstood and the least correctly 

appli'.i. The BACT alternatives, if presented by the applicant at all, 

are often poorly documented or biased to achieve the decision the applicant 

desires. • 

To bring consistency to the BACT process, I have authorized OAQPS to 

proceed with developing specific guidance on the use of the "top-down" 

approach to BACT. The first step in this approach is to determine, for 

the emission source in question, the most stringent control available 

for a similar or identical source or source category. If it can be shown 

that this level of control is technically or economically infeasible for 
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the source in question, then the next most stringent level of control is 

determined and similarly evaluated. This process continues until the 

BACT level under consideration cannot be eliminated by any substantial or 

unique technical, environmental, or economic objections. Thus, the 

"top-down" approach shifts.the burden of proof to the applicant to justify 

why the proposed source is unable to apply the best technology available. 

It also differs from other processes in that it requires the applicant to 

analyze a control technology only if the applicant opposes that level of 

control; .the other processes required a full analysis of all possible 

types and levels of control above the baseline case. 

The "top-down" approach is essentially already required for municipal 

waste combustors pursuant to the June 22, 1987, Administrator's remand to 

Region IX of the H-Power BACT decision and the OAQPS June 26, 1987, 

"Operational Guidance on Control Technology for New and Modified Municipal 

Waste Combustors (MWCs)." It is also currently being successfully 

implemented by many permitting agencies and some of the Regional Offices 

for all sources. I have therefore determined that it should be adopted 

across the board. 

In the interim, while OAQPS develops specific guidance on the *< 

"top-down" process, I am requesting the Regional Office to apply it to ? 

their BACT determinations and to strongly encourage State and local 

agencies to do likewise. Moreover, when a State agency proposes as BACT 

a level of control that appears to be inconsistent with the "top-dawn" 

concept, such as failure to adequately consider the more stringent"control 

options, the Regional Office is to provide comment to that agency. A 

final BACT determination which still fails to reflect adequate consideration 

of the factors that would have been relevant using a "top-down" type of 

analysis shall be considered deficient by EPA. 

Training^—No formal training workshops specific to NSR have been 

held since 1980. Many State and local agencies, as well as the Regional 

Offices, have experienced a high rate of NSR personnel turnover since 

then. Many of the basic problems that are occurring in NSR isplenentation 

can be traced to the lack of comprehensive, continuing training for new 

Regional Office and State agency personnel. 

To rectify this situation, in FY 1988, OAQPS will work on developing 

materials for a comprehensive training program in the form of Regional 

workshops to be conducted in FY 1989. 

Commencing in FY 1989, biannual Headquarters-sponsored NSR workshops 

will be conducted at each Regional Office with State and local agencies 

attendance encouraged. Workshop topics will cover the NSR rules and 

policy, BACT and LAER determinations, effective permit writing, how to 

review a proposed permit and audit a permit file, and other program areas 

as needed. Appropriate!/ - rained. Regional staff are to then hold these 

workshops at their resp^c w e State agencies. The NSR experts from 

Headquarters or NSR ex:>"-_3 from other Regions will be available to assist. 

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In addition, Regional Offices should reserve' the funds necessary to 

send at least one EPA staff representative to the NSR workshops (for EPA 

only) held semiannually at Denver, Colorado (February), and Southern Pines, 

North Carolina (July). Attendance at these workshops plays a vital role 

in keeping the Regions up'to date on program implementation and new and 

emerging policy. 

Policy and Guidance—Continuous litigation and regulatory changes 

have combined with the conplexity of NSR rules to create a log jam of the 

policy and guidance needed to help interpret and effectively apply these 

rules. Therefore, I am directing that in FY 1989 OAQPS dedicate at least 

one staff person to ensuring a timely response to policy and guidance 

requests. In the interim, I intend to continue OAQPS's efforts to 

compile and organize NSR reference and guidance materials, such as the 

NSR electronic bulletin board. 

I realize that the initiatives discussed above constitute only the 

first steps of a continuing process to address concerns and needs relating 

to NSR program implementation. In recognition of the possible need to 

.maintain flexibility in managing and improving the NSR process I will, as ^ 

indicated earlier, establish a group to monitor our progress under this o 

new policy. The group will be comprised of representatives from EPA 

Headquarters and Regional Offices and we will consult with State and 

local agency officials as part of our effort to obtain timely feedback as 

we implement these initiatives. 

Additional specific guidance on improvements in the program areas 

discussed above will be issued in the near future. In the meantime, each 

Regional Office is directed to work closely with its State and local 

agencies to ensure that all aspects of the NSR permit programs comply 

with all applicable State and Federal program requirements. 

Your comments and suggestions are welcome. Please direct them to 

Gary McCutchen, Chief, New Source Review Section, MD-15, Research Triangle 

Park, North Carolina 27711 (FTS 629-5592). 

cc: Air Division Directors, Regions I-X