UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION III 1650 Arch Street Philadelphia, Pennsylvania 19103

DATE: August 6, 2010 SUBJECT: Technical Support Document

- West Virginia, Title 45, Legislative Rule,

Department of Environmental Protection, A ir Quality , Series 14, Permits for Construction and Major Modification of Major Stationary Sources of Air Pollution for the Prevention of Significant Deterioration /s/ FROM: Sharon McCauley , Environmental Protection Specialist

Office of Permits and Air Toxics (3AP10) TO: File THRU: Kathleen Anderson , Associate Director

Office of Permits and Air Toxics (3AP10)

I. BACKGROUND On July 20, 2009, the West Virginia Department of Environmental Protection submitted a SIP revision that replaces the cur rent version of 45CSR14 last approved by EPA on December 4, 2006 at 71 FR 64470. This revision governs permits for constructing and significantl y modifying major stationary sources of air pollutants. The r eferences to pollution control projects and clean units were deleted in accordance with a federal appellate court decision vacating those provisions. The United States Court of Appeals for the District of Columbia Circuit ruled in New York v. EPA, 413 F.3d 3 (D.C. Cir. June 24, 2005) that EPA lacked the authority to promulgate the Clean Unit provisions, and the Court requested that EPA vacate that portion of the 2002 Federal regulation, codified at 40 CFR 52.21(x), as contrary to the statute. Also, the Court determined EPA lacked the authority to create P CP exceptions from NSR and vacated those parts of the 1991 and 2002 rules, codified at 40 CFR 52.21(b)(32) and 52.21(z), as contrary to the Statute. Also, this revision will establish NO x as a precursor to ozone in the State of West Virginia and will and include the “reasonable possibility” federal provision equivalent

. This revision was made effective as a legislative rule in West Virginia on June 1, 2009. The Federal PSD program has undergone several relevant changes since the last State SIP approval o f its PSD permitting program. The following provides a summary of the final federal provision changes that occurred from December 4, 2006 through the present that will not be part of this revision request to the West Virginia's regulatory PSD SI P approved program . 1. Final Rule to Revise Nonattainment New source Review Regulations: Appendix S On February

28, 2007

- This final rule update d the regulations that appl y t o the process for2

permitting new or modified industrial facilities in areas that do not meet EPA's health based national air quality

standards for ground

- level ozone and fine particle pollution. These areas are known as nonattainment areas.
2. Final Changes for Certain Ethanol Production Facilities Under Three Clean Air Act Permitting Programs On April 12, 2007 EPA’s final action modifie d the definition of a "chemical process plant" as it applies to three Clean Air Act permitting programs.
3. Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NSR): Removal of Vacated Elements On June 5, 2007 EPA removed provisions for pollution control projects (PCP) and clean units (CU) from its New Source Review (NSR) regulations. These provisions were part of EPA’s NSR improvement rule issued on December 31, 2002. On June 24, 2005, the United States Court of Appeals for the District of Columbia Circuit vacated the portions of the 2002 and 1992 NSR rules that pertained to CU and PCP. 4. Rule Clarification Assures that New Source Review Program is Applied Appropriatel y On December 14, 2007 EPA issue d a final rule to clarify when facilities must keep records and report emissions when a “reasonable possibility ” test shows that projected emissions increases could equal or exceed 50 percent of the Clean Air Act’s NSR significant levels for an y pollutant. This rule does not change permitting requirements.
5. EPA I ssues Final Rules Governing the Implementation of NSR for Fine Particulate Matter On May 8, 2008, the Environmental Protection Agency (EPA) issued final rules governi ng the implementation of the New Source Review (NSR) program for particulate matter less then 2.5 micrometers in diameter (PM2.5). PM2.5 also is known as fine particles. This rule finalizes several NSR program requirements for sources that emit PM2.5 and o ther pollutants that contribute to PM2.5
6. EPA Finalizes Rule Reconsidering Inclusion of Fugitive Emissions On December 10, 2008, EPA finalized revisions to the December 31, 2002 New Source Review (NSR) Improvement rules to change the requirements of th e major NSR programs regarding the treatment of fugitive emissions.
7. EPA issues an interpretive memorandum entitled "EPA's Interpretation of Regulations That Determine Pollutants Covered b y Federal Prevention of Significant Deterioration (PSD) Permit P rogram." On December 18, 2008 the Administrator issued an interpretive memorandum entitled "EPA's Interpretation of Regulations That Determine Pollutants Covered b y Federal Prevention of Significant Deterioration (PSD) Permit Program."3

8. Final Rule Defin es Approach for Grouping Projects under the New Source Review Permitting Program On January

12, 2009, EPA issued a final rule that revises the agency ’s policy on “aggregation.” For the purpose of determining whether NSR applies, this rule directs facilitie s and permitting authorities to combine, or aggregate, emissions from plant modifications when those projects are related. Thus, total emissions for the related projects must be considered when permitting authorities determine whether NSR applies.
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. Den ial of Petitions to Reconsider Aspects of the PM2.5 NSR Requirements and Reasonable Possiblity Rule January 15, 2009

- EPA has denied two petitions for reconsideration of two final rules under the New Source Review permitting program for PM2.5 Requirements and Reasonable Possibility Rule

. Note well ; West Virginia’s regulations do comply with the Reasonable Possibility rulemaking.
1 0. EPA Reconsiders New Source Review Final Rule February 9, 2009

- To allow further review of the January 15, 2009, final ru le modifying the NSR air permitting program’s “aggregation” policy, EPA is extending the effective date of the rule. This action is in response to the White House’s January 20, 2009, and the Office of Management and Budget’s January 21, 2009, memoranda reg arding regulatory review. EPA also will reconsider one or more of the aspects of this final rule raised by the Natural Resources Defense Council in a petition for reconsideration. To allow time for the review and the reconsideration, EPA will stay the effe ctive date of this rule for 90 day s, until May 18, 2009.
11. Granting of Petitions to Reconsider Aspects of the Reasonable Possibility , Fugitive Emissions and PM2.5 NSR Permitting Rules April 24, 2009

- EPA notified petitioners of its intent to reconsider portions of three rules under its New Source Review (NSR) permitting program.
12. EPA extends effective date of the aggregation rule for 1

- ye ar May 8, 2009

- This final rule extends until May 18, 2010, the effective date of the January 12, 2009 aggregati on rule. During this time, EPA will reconsider the final aggregation rule.
13. Stay s the "Grandfathering" Provision for the PM2.5 NSR Permitting Rule for Nine Months September 16, 2009

- EPA staying until June 22, 2010 the "grandfathering" provision for particulate mater less than 2.5 micrometers (PM2.5) requirements in the Federal Prevention of Significant Deterioration (PSD) program published in the Federal Register on May 16, 2008

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1 4. Final Rule Facilitates the use of Flexible Air Permits September 2 5, 2009

- Flexible air permits enable major air emissions sources to implement operational plans and make anticipated changes to these plans without further review and approval. These permits do not provide approval for operational changes outside the scop e authorized in the initial permit and sources must still meet all Clean Air Act requirements that apply to them. Pilot studies have shown that flexible permitting approaches can minimize the need for permit revisions, provide significant economic benefits , encourage innovation, and increase public awareness

-- all while ensuring equal or greater environmental protection.
1 5. Approval and Promulgation of Wisconsin NSR Reform Regulations: Denial of Petition for Reconsideration January 20, 2010

- EPA respond ed to a petition from the NRDC and Sierra Club. Their petition requested that EPA reconsider and stay of certain parts of the Wisconsin's SI P. After carefull y reviewing the petition for reconsideration, EPA has denied it. EPA also denied NRDC's request for a stay of the final rule approving the Wisconsin state plan

. 1 6. Stay of Fugitive Emissions Rule for 18 Months March 24, 2010

- EPA has stay ed for 18 additional months, the rule establishing how fugitive emissions should be treated for New Source Review permitting. A previous stay will expire on March 30, 2010.
17. Stay of Aggregation Rule May 6, 2010

- EPA extended the effective date of the January 15, 2009 final rule that modified the New Source Review air permitting program’s policy on “Aggregation .”
18. Final GHG Tailoring Rule May 13, 2010

- EPA sets greenhouse gas (GHG) emissions thresholds to define when permits under the New Source Review Prevention Significant Deterioration (PSD) and title V Operating Permit programs are required for new and existing industrial facilities. The State has the authority to regulate GHGs, however, the State will now need to adopt the equivalent federal threshold levels for GHGs based on the Tailoring Rule. In the previousl y approved NSR Reform SIP revision at 7 1 FR 64470 dated December 4, 2006, West Virginia had requested that EPA not act upon the provisions of 45 CSR 14.19.8 pertaining to the recordkeeping and reporting requirements for sources that elect to use the actual

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projected actual emission test and where there is a ``reasonable possibility '' that a project may result in a significant net emissions increase. EPA is now proposing to approve 45 CSR 14.19.8 into the West Virginia SIP revision with this proposed action as regulatory corrections have been made to the State’s regulations dated June 1, 2009.5

EPA determined that the proposed amendments to West Virginia's prevention of significant deterioration (PSD) permit program at 45 CSR 14, as submitted on July 20, 2009, meet the minimum requirements of 40 CFR 51.166 and the Clean Air Act. This amendment is being proposed for approval as a revision to the West Virginia SIP. II. SUMMARY OF ACTION This rule establishes a state construction permit program consistent with the federal Clean Air Act’s Title I program and implementing regulations at 40 CFR §51.166, “Prevention of Significant Deterioration of Air Qualit y.” 45CSR14 is part of the State Implementation Plan and sets forth the criteria and procedures for major stationary sources to obtain a permit to construct, operate and/or modify

a major stationary

source. As required b y 40 CFR Part 51, Subpart I

- “Review of New Sources and Modifications,” this rule adopts criteria and procedures for the prevention of significant deterioration of air quality th at are consistent with the governing federal regulation at 40 CFR §51.166. Promulgation of this rule by the Legislature is necessary for the State to fulfill its responsibilities under 40 CFR Part 51 and the CAA, as amended. Revisions to the WV rule have r emoved provisions for pollution control projects (PCPs) and clean units (CUs) per a 2005 US Court of Appeals for the District of Columbia Circuit court decision which vacated these provisions in the federal counterpart. These references for PCPs and CUs n ow being deleted from the WV regulations, were never part of the currently

approved WV SIP. This revision simply is adding new references to include NO x as a precursor to ozone to comport with federal counterpart language. The West Virginia Department of Air Quality (DAQ) has now submitted a final rule 45CSR14 as a proposed revision to the State Implementation Plan. In the previousl y approved NSR Reform SIP revision at 71 FR 64470 dated December 4, 2006, West Virginia had requested that EPA not act upon the provisions of 45 CSR 14.19.8 pertaining to the recordkeeping and reporting requirements for sources that elect to use the actual

- to

projected actual emission test and where there is a ``reasonable possibility '' that a project may result in a significant net emissions increase. EPA is now proposing to approve 45 CSR 14.19.8 into the West Virginia SIP revision with this proposed action as regulatory corrections have been made to the State’s regulations dated June 1, 2009.

III. PROGRAM REVIEW A. West Vir ginia Submittal The West Virginia submittal includes revisions to the State rule to remove provisions for pollution control projects and clean units per a 2005 U.S. Court of Appeals decision which vacated these provisions in the federal counterpart. Thes e regulations were not part of the previously

approved PSD program approved at 71 FR 64470. New references were added to the State rule which include NO x as a precursor to ozone in the proposed SIP revision package to comport with federal counterpart language.6

B. Public Comment on the revised State rules contained in this SI P approval

– Comments were received from the Sierra Club , West Virginia Chapter and the Environmental Protection Agency , Region III

. Changes as described below, based on these comments , were included in this submittal. 1. The Sierra Club requested several deletions of language, specifically : 2.40. d regarding use of fuel derived from municipal solid waste 2.50 "plant

- wide applicability limit" These deletions were not made in or der for the rule to be consistent with federal counterpart language. 2. EPA sought clarification regarding West Virginia's intention to revise their existing legislative language on the prevention of significant deterioration (PSD) State Implementation P lan (SIP) regarding NSR reform provisions that were not included in the regulatory

package received b y EPA on August 11, 2008. EPA commented on the following: a) . Regarding New Source Review, §51.166, Reasonable Possibility in Recordkeeping

, EPA provided revised language for the amendments

. DAQ revised the rule to be consistent with EPA's comment and the current federal counterpart language. b) . Regarding Major Emitting Facility Definition §51.166 Treatment of Certain Ethanol Production Facilities Under Major Emitting Facility , EPA provided revised language. DAQ revised the rule to be consistent with EPA's comment and the current federal counterpart language. c) . EPA provided revised language for §51.166 Prevention of Significant Deterioration for Nitrogen Oxides Increment. DAQ responded that the rule contains this language, which is consistent with EPA's comment and current federal counterpart language. The language provided in EPA's comments simply

provides flexibility

to states, and is not a nece ssary component of the state rule. d) . EPA provided revised language for §51.165 Permit Requirements Clarification to add 'Replacement Unit' and PALBaseline. DAQ revised the rule b y including the valid definition of "Replacement Unit". However, DAQ has not included the following language in parenthesis from that definition which reads ( as discussed in paragraph (y)(2) of this section), as section (y) has been stay ed7

indefinitely

by court order. If the stay

is lifted, DAQ will reinsert the phrase in sub sequent rulemaking.

DAQ has found that the rule alread y contains the following language suggested by the commenter: Emissions from units on which actual construction began after the 24

- month period must be added to the PALlevel in an amount equal to th e potential to emit of the units." DAQ has revised the rule with a new subdivision 25.6.b, which contains the language in (w)(6)(ii) above. C. Regulatory

Review of Proposed SIP WV DAQ Series 14
- 2 Definitions The following is a brief summary of the chan ges. Section Status Description Regulation 2.17 Deletion Deleted definition of Clean Units (CUs) Regulation 2. 40.i. Deletion Deleted reference to Pollution Control Projects (PCPs) in the definition of major modification. Regulation 2. 46.d.2 and g.4 Dele tion Deleted reference to CUs in the definition of net emissions increase. Regulation 256 Deletion Deleted definition of PCPs. Regulation 2.74a Modified Modified to include NOx as a precursor to Ozone Regulation 2.77 Clarification Provided chart form at for definition of significant impact. No text Change. WV DAQ Series 14
- 3 Applicability The following is a brief summary of the changes. Section Status Description Regulation 3.4.e and f Deletion Deleted reference of CUs

. Regulation 3.6 Deletion De leted reference to PCPs.
WV DAQ Series 14
- 4 Am bient Air Quality and Ceilings The following is a brief summary of the changes. Section Status Description Regulation 4.1 Clarification Provided chart format. No text change.8

Section Status Description Regulation 3.6 Deletion Delet ed reference to PCPs.

WV DAQ Series 14
- 13 Additional Requirements and Variances for Sources Impacting Federal Class I Areas The following is a brief summary of the changes. Section Status Description Regulation 13.6 Clarification Provided chart for mat. No text change.
WV DAQ Series 14
- 16 Specific Exemptions The following is a brief summary of the changes. Section Status Description Regulation 16.6.d Modified Modified to include NOx as a precursor to ozone. Regulation 16.7 Modified text Table 2 De Minimus Air Quality I mpacts was moved to chart in 16.6.d

... WV DAQ Series 14
- 19 Permit Transfer, Cancellation and Responsibility The following is a brief summary of the changes. Section Status Description Regulation 19.8 Modified Modified to exclu de CUs and added text regarding reasonable possibility

. WV DAQ Series 14
- 22 Clean Unit Test for Emission Units that are subject to BACT or LAER The following is a brief summary of the changes. Section Status Description Regulation 22. Deleted Deleted entire section.
WV DAQ Series 14
- 23 Clean Unit Provisions for Emission Units that Achieve an Emission Limitation Comparable to BACT The following is a brief summary of the changes. Section Status Description Regulation 23. Deleted Deleted entire secti on.9

WV DAQ Series 14
- 24 PCP Exclusion Procedural Requirements The following is a brief summary of the changes. Section Status Description Regulation 24. Deleted Deleted entire section.

IV. Infrastructure This SIP revision is also necessary t o ensure that the SI P provides for the attainment and maintenance of the NAAQS. Section 110(a)(2)(C) of the Act, 42 U.S.C. § 7410(a)(2)(C), requires the state SIP to have a program for regulation of construction and modification of sources including a per

mit program as required by Parts C of Title I of the Act to assure NAAQS are achieved. This action, upon approval will establish NOx as a precursor to ozone and will accomplish programmatic needs found in the Federal Register notice regarding infrastructure for West Virginia dated March 27, 2008 73 FR 16205, page 16208. NOx as a precursor to ozone became regulated under 40 CFR Part 51.166 and 40 CFR 52.21 on November 29, 2005 in Federal Register 70 FR 71612. As such, this action would approve NOx as a precursor to ozone. V. RECOMMENDED AGENCY ACTION EPA recommends approving the revision to West Virginia's SIP, 45CSR14

- Permits for Construction and Major Modification of Major Stationary Sources of Air Pollution for the Prevention of Significant Deteri oration. This revision will establish NO x as a precursor to ozone and will also include “reasonable possibility ” federal provision equivalent

.