```

[Federal Register Volume 76, Number 4 (Thursday, January 6, 2011)]
[Proposed Rules]
[Pages 752-758]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-17]

[[Page 752]]

=======================================================================
-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R01-OAR-2010-0996, FRL-9248-8]

Approval and Promulgation of Implementation Plans; Connecticut: 
Prevention of Significant Deterioration; Greenhouse Gas Permitting 
Authority and Tailoring Rule Revision

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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

SUMMARY: EPA is proposing to approve a draft revision to the State 
Implementation Plan (SIP), submitted by Connecticut on December 9, 
2010, for parallel processing. The proposed SIP revision makes two 
changes impacting Connecticut's New Source Review (NSR) Prevention of 
Significant Deterioration (PSD) program. First, the proposed revision 
provides the State of Connecticut with authority to regulate greenhouse 
gases (GHGs) under its PSD program. Second, the proposed SIP revision 
establishes appropriate emission thresholds for determining which 
stationary sources and modification projects become subject to 
Connecticut's PSD permitting requirements for their GHG emissions. The 
first component of the proposed revision is necessary because the State 
of Connecticut is required to apply its PSD program to GHG-emitting 
sources, and unless it does so (or unless EPA promulgates a federal 
implementation plan (FIP) to do so), such sources will be unable to 
receive preconstruction permits and therefore may not be able to 
construct or modify. The second component is necessary because without 
it, on January 2, 2011, PSD requirements would apply at the 100 or 250 
tons per year (tpy) levels provided under the Clean Air Act (CAA or 
Act), which would overwhelm Connecticut's permitting resources.

DATES: Comments must be received on or before February 7, 2011.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R01-
OAR-2010-0996, by one of the following methods:
    1. http://www.regulations.gov: Follow the on-line instructions for 
submitting comments.
    2. E-mail: dahl.donald@epa.
    3. Fax: (617) 918-0657.
    4. Mail: ``Docket Identification Number EPA-R01-OAR-2010-0996'', 
Donald Dahl, U.S. Environmental Protection Agency, EPA New England 
Regional Office, Office of Ecosystem Protection, 5 Post Office Square--
Suite 100 (Mail code OEP05-2), Boston, MA 02109-3912.
    5. Hand Delivery or Courier: Deliver your comments to: Donald Dahl, 
U.S. Environmental Protection Agency, EPA New England Regional Office, 
Office of Ecosystem Protection, Air Permits, Toxics, and Indoor Air 
Programs Unit, 5 Post Office Square--Suite 100, (mail code OEP05-2), 
Boston, MA 02109-3912. Such deliveries are only accepted during the 
Regional Office's normal hours of operation. The Regional Office's 
official hours of business are Monday through Friday, 8:30 to 4:30, 
excluding legal holidays.
    Instructions: Direct your comments to Docket ID No. ``EPA-R01-OAR-
2010-0996.'' EPA's policy is that all comments received will be 
included in the public docket without change and may be made available 
online at http://www.regulations.gov, including any personal 
information provided, unless the comment includes information claimed 
to be Confidential Business Information (CBI) or other information 
whose disclosure is restricted by statute. Do not submit through http://www.regulations.gov or e-mail, information that you consider to be CBI 
or otherwise protected. The http://www.regulations.gov Web site is an 
``anonymous access'' system, which means EPA will not know your 
identity or contact information unless you provide it in the body of 
your comment. If you send an e-mail comment directly to EPA without 
going through http://www.regulations.gov, your e-mail address will be 
automatically captured and included as part of the comment that is 
placed in the public docket and made available on the Internet. If you 
submit an electronic comment, EPA recommends that you include your name 
and other contact information in the body of your comment and with any 
disk or CD-ROM you submit. If EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, EPA 
may not be able to consider your comment. Electronic files should avoid 
the use of special characters, any form of encryption, and be free of 
any defects or viruses. For additional information about EPA's public 
docket visit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm.
    Docket: All documents in the electronic docket are listed in the 
http://www.regulations.gov index. Although listed in the index, some 
information is not publicly available, i.e., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, is not placed on the Internet and will be 
publicly available only in hard copy form. Publicly available docket 
materials are available either electronically in http://www.regulations.gov or in hard copy at the Office of Ecosystem 
Protection, U.S. Environmental Protection Agency, EPA New England 
Regional Office, Office of Ecosystem Protection, Air Permits, Toxics, 
and Indoor Air Programs Unit, 5 Post Office Square--Suite 100, Boston, 
MA.. EPA requests that if at all possible, you contact the person 
listed in the FOR FURTHER INFORMATION CONTACT section to schedule your 
inspection. The Regional Office's official hours of business are Monday 
through Friday, 8:30 to 4:30, excluding federal holidays.
    In addition, copies of the state submittal are also available for 
public inspection during normal business hours, by appointment at the 
State Air Agency; The Bureau of Air Management, Department of 
Environmental Protection, State Office Building, 79 Elm Street, 
Hartford, CT 06106-1630.

FOR FURTHER INFORMATION CONTACT: For information regarding the 
Connecticut SIP, contact Donald Dahl, U.S. Environmental Protection 
Agency, EPA New England Regional Office, Office of Ecosystem 
Protection, Air Permits, Toxics, and Indoor Air Programs Unit, 5 Post 
Office Square--Suite 100, (mail code OEP05-2), Boston, MA 02109-3912. 
Mr. Dahl's telephone number is (617) 918-1657; e-mail address: 
dahl.donald@epa.gov.

SUPPLEMENTARY INFORMATION: Throughout this document whenever ``we,'' 
``us,'' or ``our'' is used, we mean EPA. The following outline is 
provided to aid in locating information in this preamble.

Table of Contents

I. What action is EPA proposing in today's notice?
II. What is the background for the action proposed by EPA in today's 
notice regarding PSD permitting requirements for GHG-emitting 
sources?
III. What is the relationship between today's proposed action and 
EPA's proposed GHG SIP call and GHG FIP?
IV. What is EPA's analysis of Connecticut's proposed SIP revision?
V. Proposed Action
VI. Statutory and Executive Order Reviews

I. What action is EPA proposing in today's notice?

    On December 9, 2010, the Connecticut Department of Environmental 
Protection (DEP) submitted a draft revision to EPA for approval into 
Connecticut's SIP to: (1) Provide the State with the authority

[[Page 753]]

to regulate GHGs under its PSD program; and (2) establish appropriate 
emission thresholds for determining which new or modified stationary 
sources become subject to Connecticut's PSD permitting requirements for 
GHG emissions. Final approval of Connecticut's December 9, 2010 SIP 
revision will make Connecticut's SIP adequate with respect to PSD 
requirements for GHG-emitting sources, thereby negating the need for a 
GHG FIP. Furthermore, final approval of Connecticut's December 9, 2010, 
SIP revision will put in place the GHG emission thresholds for PSD 
applicability set forth in EPA's Tailoring Rule, ensuring that smaller 
GHG sources emitting less than these thresholds will not be subject to 
the permitting requirements that will begin applying to GHGs on January 
2, 2011. Pursuant to section 110 of the CAA, EPA is proposing to 
approve this revision into the Connecticut SIP.
    Because this draft SIP revision is not yet state-effective, 
Connecticut requested that EPA ``parallel process'' the SIP revision in 
a letter dated December 9, 2010. Under this procedure, the EPA Regional 
Office works closely with the state while developing new or revised 
regulations, and may propose approval of the SIP revision before it has 
become fully effective as state law.
    Connecticut conducted a public comment period on its proposed 
regulations from September 1, 2010 to October 18, 2010.\1\ On October 
14, 2010, EPA submitted comments to Connecticut on the state's proposed 
regulations. On December 9, 2010, Connecticut submitted a letter to EPA 
explaining that Connecticut had considered all the submitted comments 
and made revisions to the proposed regulation, and that a revised 
``final draft'' regulation was now available that responded to all of 
EPA's comments. Connecticut requested that EPA propose to approve this 
final draft regulation, rather than the original proposed regulation, 
as the SIP revision.
---------------------------------------------------------------------------

    \1\ As part of the same state comment process, Connecticut also 
proposed revisions to its operating permit program under Title V of 
the Clean Air Act. Connecticut has not requested that EPA approve 
these revisions under Title V and EPA is not proposing to approve 
them in today's action.
---------------------------------------------------------------------------

    As Connecticut explained, however, pursuant to Connecticut's 
regulatory adoption laws, this final draft regulation must be reviewed 
by Connecticut's Office of Attorney General and then the Legislative 
Regulations Review Committee before it can be finalized and made 
effective under state law. Therefore, as of today, Connecticut has not 
yet issued final regulations. However, pursuant to the ``parallel 
processing'' mechanism, EPA is proposing approval of the SIP revision, 
based on the proposed state action.
    After Connecticut submits the formal state-effective SIP revision 
request (including a response to all public comments raised during the 
State's public participation process), EPA will prepare a final 
rulemaking notice for the SIP revision, provided Connecticut's final 
promulgated regulation adequately addresses EPA's comments. If changes 
are made to the SIP revision after EPA's notice of proposed rulemaking, 
such changes must be acknowledged in EPA's final rulemaking action. If 
the changes are significant, then EPA may be obliged to re-propose 
action. In addition, if the changes render the SIP revision not 
approvable, EPA's re-proposal of the action would be a disapproval of 
the revision.

II. What is the background for the action proposed by EPA in today's 
notice regarding PSD permitting requirements for GHG-emitting sources?

    Today's proposed action on the Connecticut SIP relates to three 
federal rulemaking actions. The first rulemaking is EPA's ``Prevention 
of Significant Deterioration and Title V Greenhouse Gas Tailoring 
Rule,'' Final Rule (the Tailoring Rule). 75 FR 31514 (June 3, 2010). 
The second rulemaking is EPA's ``Action to Ensure Authority to Issue 
Permits Under the Prevention of Significant Deterioration Program to 
Sources of Greenhouse Gas Emissions: Finding of Substantial Inadequacy 
and SIP Call,'' Proposed Rule, (GHG SIP Call). 75 FR 53892 (September 
2, 2010). The third rulemaking is EPA's ``Action to Ensure Authority to 
Issue Permits Under the Prevention of Significant Deterioration Program 
to Sources of Greenhouse Gas Emissions: Federal Implementation Plan,'' 
Proposed Rule, 75 FR 53883 (September 2, 2010) (GHG FIP), which serves 
as a companion rulemaking to EPA's proposed GHG SIP Call. A summary of 
each of these rulemakings is described below.
    In the first rulemaking, the Tailoring Rule, EPA establishes 
appropriate GHG emission thresholds for determining the applicability 
of PSD requirements to GHG-emitting sources. In the second rulemaking, 
the GHG SIP Call, EPA is proposing to find that the EPA-approved PSD 
programs in 13 States (including Connecticut) are substantially 
inadequate to meet CAA requirements because they do not appear to apply 
PSD requirements to GHG-emitting sources. For each of these States, EPA 
proposes to require the State (through a ``SIP Call'') to revise its 
SIP as necessary to correct such inadequacies. EPA is proposing an 
expedited schedule for these States to submit their SIP revision, in 
light of the fact that as of January 2, 2011, certain GHG-emitting 
sources will become subject to the PSD requirements and may not be able 
to obtain a PSD permit in order to construct or modify. In the third 
rulemaking, the GHG FIP (which is not yet final), EPA is proposing a 
FIP to apply in any state that is unable to submit, by its deadline, a 
SIP revision to ensure that the state has authority to issue PSD 
permits for GHG-emitting sources. Connecticut is now seeking to revise 
its SIP to make it adequate with respect to PSD requirements for GHG-
emitting sources, thereby negating the need for a GHG FIP. Furthermore, 
Connecticut is seeking to revise its SIP to put in place the GHG 
emission thresholds for PSD applicability set forth in EPA's Tailoring 
Rule, thereby ensuring that smaller GHG sources emitting less than 
these thresholds will not be subject to permitting requirements.
    Below is a brief overview of GHGs and GHG-emitting sources, the CAA 
PSD program, minimum SIP elements for a PSD program, and EPA's recent 
actions regarding GHG permitting. Following this section, EPA 
discusses, in sections III and IV, the relationship between the 
proposed Connecticut SIP revision and EPA's other national rulemakings 
as well as EPA's analysis of Connecticut's SIP revision.

A. What are GHGs and their sources?

    A detailed explanation of GHGs, climate change and the impact on 
health, society, and the environment is included in EPA's technical 
support document for EPA's GHG endangerment finding final rule 
(Document ID No. EPA-HQ-OAR-2009-0472-11292 at http://www.regulations.gov). The endangerment finding rulemaking is discussed 
later in this rulemaking. A summary of the nature and sources of GHGs 
is provided below.
    GHGs trap the Earth's heat that would otherwise escape from the 
atmosphere into space and form the greenhouse effect that helps keep 
the Earth warm enough for life. GHGs are naturally present in the 
atmosphere and are also emitted by human activities. Human activities 
are intensifying the naturally occurring greenhouse effect by 
increasing the amount of GHGs in the atmosphere, which is changing the 
climate in a way that endangers human health, society, and the natural 
environment.

[[Page 754]]

    Some GHGs, such as carbon dioxide (CO2), are emitted to 
the atmosphere through natural processes as well as human activities. 
Other gases, such as fluorinated gases, are created and emitted solely 
through human activities. The well-mixed GHGs of concern directly 
emitted by human activities include CO2, methane 
(CH4), nitrous oxide (N2O), hydrofluorocarbons 
(HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride 
(SF6), hereafter referred to collectively as ``the six well-
mixed GHGs,'' or, simply, GHGs. Together these six well-mixed GHGs 
constitute the ``air pollutant'' upon which the GHG thresholds in EPA's 
Tailoring Rule are based. These six gases remain in the atmosphere for 
decades to centuries where they become well-mixed globally in the 
atmosphere. When they are emitted more quickly than natural processes 
can remove them from the atmosphere, their concentrations increase, 
thus increasing the greenhouse effect.
    In the U.S., the combustion of fossil fuels (e.g., coal, oil, gas) 
is the largest source of CO2 emissions and accounts for 80 
percent of the total GHG emissions by mass. Anthropogenic 
CO2 emissions released from a variety of sources, including 
through the use of fossil fuel combustion and cement production from 
geologically stored carbon (e.g., coal, oil, and natural gas) that is 
hundreds of millions of years old, as well as anthropogenic 
CO2 emissions from land-use changes such as deforestation, 
perturb the atmospheric concentration of CO2, and the 
distribution of carbon within different reservoirs readjusts. More than 
half of the energy-related emissions come from large stationary sources 
such as power plants, while about a third come from transportation. Of 
the six well-mixed GHGs, four (CO2, CH4, 
N2O, and HFCs) are emitted by motor vehicles. In the U.S., 
industrial processes (such as the production of cement, steel, and 
aluminum), agriculture, forestry, other land use, and waste management 
are also important sources of GHGs.
    Different GHGs have different heat-trapping capacities. The concept 
of Global Warming Potential (GWP) was developed to compare the heat-
trapping capacity and atmospheric lifetime of one GHG to another. The 
definition of a GWP for a particular GHG is the ratio of heat trapped 
by one unit mass of the GHG to that of one unit mass of CO2 
over a specified time period. When quantities of the different GHGs are 
multiplied by their GWPs, the different GHGs can be summed and compared 
on a carbon dioxide equivalent (CO2e) basis. For example, 
CH4 has a GWP of 21, meaning each ton of CH4 
emissions would have 21 times as much impact on global warming over a 
100-year time horizon as 1 ton of CO2 emissions. Thus, on 
the basis of heat-trapping capability, 1 ton of CH4 would 
equal 21 tons of CO2e. The GWPs of the non-CO2 
GHGs range from 21 (for CH4) up to 23,900 (for 
SF6). Aggregating all GHGs on a CO2e basis at the 
source level allows a facility to evaluate its total GHG emissions 
contribution based on a single metric.

B. What are the general requirements of the PSD program?

1. Overview of the PSD Program
    The PSD program is a preconstruction review and permitting program 
applicable to new major stationary sources and major modifications at 
existing stationary sources. The PSD program applies in areas that are 
designated ``attainment'' or ``unclassifiable'' for a national ambient 
air quality standard (NAAQS). The PSD program is contained in part C of 
title I of the CAA. The ``nonattainment NSR'' program applies in areas 
not in attainment of a NAAQS or in the Ozone Transport Region, and it 
is implemented under the requirements of part D of title I of the CAA. 
Collectively, EPA commonly refers to these two programs as the major 
NSR program. The governing EPA rules are contained in 40 CFR 51.165, 
51.166, 52.21, 52.24, and part 51, Appendices S and W. There is no 
NAAQS for CO2 or any of the other well-mixed GHGs, nor has 
EPA proposed any such NAAQS; therefore, unless and until EPA takes 
further such action, the nonattainment NSR program does not apply to 
GHGs.
    The applicability of PSD to a particular source must be determined 
in advance of construction or modification and is pollutant-specific. 
The primary criterion in determining PSD applicability for a proposed 
new or modified source is whether the source is a ``major emitting 
facility,'' based on its predicted potential emissions of regulated 
pollutants, within the meaning of CAA section 169(1) that either 
constructs or undertakes a modification. EPA has implemented these 
requirements in its regulations, which use somewhat different 
terminology than the CAA does, for determining PSD applicability.
a. Major Stationary Source
    Under PSD, a ``major stationary source'' is any source belonging to 
a specified list of 28 source categories that emits or has the 
potential to emit 100 tpy or more of any air pollutant subject to 
regulation under the CAA, or any other source type that emits or has 
the potential to emit such pollutants in amounts equal to or greater 
than 250 tpy. We refer to these levels as the 100/250-tpy thresholds. A 
new source with a potential to emit (PTE) at or above the applicable 
``major stationary source threshold'' is subject to major NSR. These 
limits originate from section 169 of the CAA, which applies PSD to any 
``major emitting facility'' and defines the term to include any source 
that emits or has a PTE of 100 or 250 tpy, depending on the source 
category. Note that the major source definition incorporates the phrase 
``subject to regulation,'' which, as described later, will begin to 
include GHGs on January 2, 2011, under our interpretation of that 
phrase as discussed in the recent memorandum entitled, ``EPA's 
Interpretation of Regulations that Determine Pollutants Covered by 
Federal Prevention of Significant Deterioration (PSD) Permit Program.'' 
75 FR 17004 (April 2, 2010).
b. Major Modifications
    PSD also applies to existing sources that undertake a ``major 
modification,'' which occurs when: (1) There is a physical change in, 
or change in the method of operation of, a ``major stationary source;'' 
(2) the change results in a ``significant'' emissions increase of a 
pollutant subject to regulation (equal to or above the significance 
level that EPA has set for the pollutant in 40 CFR 52.21(b)(23)); and 
(3) there is a ``significant net emissions increase'' of a pollutant 
subject to regulation that is equal to or above the significance level 
(defined in 40 CFR 52.21(b)(23)). Significance levels, which EPA has 
promulgated for criteria pollutants and certain other pollutants, 
represent a de minimis contribution to air quality problems. When EPA 
has not set a significance level for a regulated NSR pollutant, PSD 
applies to an increase of the pollutant in any amount (that is, in 
effect, the significance level is treated as zero).
2. General Requirements for PSD
    This section provides a very brief summary of the main requirements 
of the PSD program. One principal requirement is that a new major 
source or major modification must apply best available control 
technology (BACT), which is determined on a case-by-case basis taking 
into account, among other factors, the cost effectiveness of the 
control and energy and environmental impacts. EPA has developed a 
``top-down'' approach for BACT review, which involves a decision 
process that includes identification of all available control 
technologies, elimination of

[[Page 755]]

technically infeasible options, ranking of remaining options by control 
and cost effectiveness, and then selection of BACT. Under PSD, once a 
source is determined to be major for any regulated NSR pollutant, a 
BACT review is performed for each attainment pollutant that exceeds its 
PSD significance level as part of new construction or for modification 
projects at the source, where there is a significant increase and a 
significant net emissions increase of such pollutant.\2\
---------------------------------------------------------------------------

    \2\ EPA notes that the PSD program has historically operated in 
this fashion for all pollutants--when new sources or modifications 
are ``major,'' PSD applies to all pollutants that are emitted in 
significant quantities from the source or project. This rule does 
not alter that for sources or modifications that are major due to 
their GHG emissions.
---------------------------------------------------------------------------

    In addition to performing BACT, the source must analyze impacts on 
ambient air quality to assure that sources do not cause or contribute 
to violation of any NAAQS or PSD increments and must analyze impacts on 
soil, vegetation, and visibility. In addition, sources or modifications 
that would impact Class I areas (e.g., national parks) may be subject 
to additional requirements to protect air quality related values 
(AQRVs) that have been identified for such areas. Under PSD, if a 
source's proposed project may impact a Class I area, the Federal Land 
Manager is notified and is responsible for evaluating a source's 
projected impact on the AQRVs and recommending either approval or 
disapproval of the source's permit application based on anticipated 
impacts. There are currently no NAAQS or PSD increments established for 
GHGs, and therefore these PSD requirements would not apply for GHGs, 
even when PSD is triggered for GHGs. However, if PSD is triggered for a 
GHG-emitting source, all regulated NSR pollutants that the new source 
emits in significant amounts would be subject to PSD requirements. 
Therefore, if a facility triggers NSR for non-GHG pollutants for which 
there are established NAAQS or increments, the air quality, additional 
impacts, and Class I requirements would apply to those pollutants.
    Pursuant to existing PSD requirements, the permitting authority 
must provide notice of its preliminary decision on a source's 
application for a PSD permit and must provide an opportunity for 
comment by the public, industry, and other interested persons. After 
considering and responding to comments, the permitting authority must 
issue a final determination on the construction permit. Usually NSR 
permits are issued by a state or local air pollution control agency 
that has its own authority to issue PSD permits under a permit program 
that has been approved by EPA for inclusion in its SIP. In some areas, 
EPA has delegated its authority to issue PSD permits under federal 
regulations to the state or local agency. In other areas, EPA issues 
the permits under its own authority.

C. What are the CAA requirements for a PSD program?

    The CAA contemplates that the PSD program be implemented in the 
first instance by the states and requires that states include PSD 
requirements in their SIPs. CAA section 110(a)(2)(C) requires that--

    Each implementation plan * * * shall * * * include a program to 
provide for * * * regulation of the modification and construction of 
any stationary source within the areas covered by the plan as 
necessary to assure that national ambient air quality standards are 
achieved, including a permit program as required in part[] C * * * 
of this subchapter.

CAA section 110(a)(2)(J) requires that--

    Each implementation plan * * * shall * * * meet the applicable 
requirements of * * * part C of this subchapter (relating to 
significant deterioration of air quality and visibility protection).

CAA section 161 provides that--

    Each applicable implementation plan shall contain emission 
limitations and such other measures as may be necessary, as 
determined under regulations promulgated under this part [C], to 
prevent significant deterioration of air quality for such region * * 
* designated * * * as attainment or unclassifiable.

    These provisions, read in conjunction with the PSD applicability 
provisions--which, as noted above, applies, by its terms, to ``any air 
pollutant,'' and which EPA has, through regulation, interpreted more 
narrowly as any ``NSR regulated pollutant''--and read in conjunction 
with other provisions, such as the BACT provision under CAA section 
165(a)(4), mandate that SIPs include PSD programs that are applicable 
to, among other things, any air pollutant that is subject to 
regulation, including, as discussed below, GHGs on and after January 2, 
2011.\3\
---------------------------------------------------------------------------

    \3\ In the Tailoring Rule, EPA noted that commenters argued, 
with some variations, that the PSD provisions applied only to NAAQS 
pollutants, and not GHG, and EPA responded that the PSD provisions 
apply to all pollutants subject to regulation, including GHG. See 75 
FR 31560-62 (June 3, 2010). EPA maintains its position that the PSD 
provisions apply to all pollutants subject to regulation, and the 
Agency incorporates by reference the discussion of this issue in the 
Tailoring Rule.
---------------------------------------------------------------------------

    A number of states do not have PSD programs approved into their 
SIPs. In those states, EPA's regulations at 40 CFR 52.21 govern, and 
either EPA or the state as EPA's delegatee acts as the permitting 
authority. On the other hand, most states have PSD programs that have 
been approved into their SIPs, and these states implement their PSD 
programs and act as the permitting authority. Connecticut has a SIP-
approved PSD program.

D. What actions has EPA taken concerning PSD requirements for GHG-
emitting sources?

1. What are the Endangerment Finding, the Light Duty Vehicle Rule, and 
the Johnson Memo Reconsideration?
    By notice dated December 15, 2009, pursuant to CAA section 202(a), 
EPA issued, in a single final action, two findings regarding GHGs that 
are commonly referred to as the ``Endangerment Finding'' and the 
``Cause or Contribute Finding.'' ``Endangerment and Cause or Contribute 
Findings for Greenhouse Gases Under Section 202(a) of the Clean Air 
Act,'' 74 FR 66496. In the Endangerment Finding, the Administrator 
found that six long-lived and directly emitted GHGs--CO2, 
CH4, N2O, HFCs, PFCs, and SF6--may 
reasonably be anticipated to endanger public health and welfare. In the 
Cause or Contribute Finding, the Administrator ``define[d] the air 
pollutant as the aggregate group of the same six * * * greenhouse 
gases,'' 74 FR 66536, and found that the combined emissions of this air 
pollutant from new motor vehicles and new motor vehicle engines 
contribute to the GHG air pollution that endangers public health and 
welfare.
    By notice dated May 7, 2010, EPA published what is commonly 
referred to as the ``Light-Duty Vehicle Rule'' (LDVR), which for the 
first time established federal controls on GHGs emitted from light-duty 
vehicles. ``Light-Duty Vehicle Greenhouse Gas Emission Standards and 
Corporate Average Fuel Economy Standards; Final Rule.'' 75 FR 25324. In 
its applicability provisions, the LDVR specifies that it ``contains 
standards and other regulations applicable to the emissions of six 
greenhouse gases,'' including CO2, CH4, 
N2O, HFCs, PFCs, and SF6. 75 FR 25686 (40 CFR 
86.1818-12(a)). Shortly before finalizing the LDVR, by notice dated 
April 2, 2010, EPA published a notice commonly referred to as the 
Johnson Memo Reconsideration. On December 18, 2008, EPA issued a 
memorandum, ``EPA's Interpretation of Regulations that Determine 
Pollutants Covered by

[[Page 756]]

Federal Prevention of Significant Deterioration (PSD) Permit Program'' 
(known as the ``Johnson Memo'' or the ``PSD Interpretive Memo,'' and 
referred to in this preamble as the ``Interpretive Memo''), that set 
forth EPA's interpretation regarding which EPA and state actions, with 
respect to a previously unregulated pollutant, cause that pollutant to 
become ``subject to regulation'' under the Act. Whether a pollutant is 
``subject to regulation'' is important for the purposes of determining 
whether it is covered under the federal PSD permitting program. The 
Interpretive Memo established that a pollutant is ``subject to 
regulation'' only if it is subject to either a provision in the CAA or 
regulation adopted by EPA under the CAA that requires actual control of 
emissions of that pollutant (referred to as the ``actual control 
interpretation''). On February 17, 2009, EPA granted a petition for 
reconsideration on the Interpretive Memo and announced its intent to 
conduct a rulemaking to allow for public comment on the issues raised 
in the memorandum and on related issues. EPA also clarified that the 
Interpretive Memo would remain in effect pending reconsideration.
    On March 29, 2010, EPA signed a notice conveying its decision to 
continue applying (with one limited refinement) the Interpretive Memo's 
interpretation of ``subject to regulation'' (``Interpretation of 
Regulations that Determine Pollutants Covered by Clean Air Act 
Permitting Programs''). 75 FR 17004. EPA concluded that the ``actual 
control interpretation'' is the most appropriate interpretation to 
apply given the policy implications. However, EPA refined the Agency's 
interpretation in one respect: EPA established that PSD permitting 
requirements apply to a newly regulated pollutant at the time a 
regulatory requirement to control emissions of that pollutant ``takes 
effect'' (rather than upon promulgation or the legal effective date of 
the regulation containing such a requirement). In addition, based on 
the anticipated promulgation of the LDVR, EPA stated that the GHG 
requirements of the vehicle rule would take effect on January 2, 2011, 
because that is the earliest date that a 2012 model year vehicle may be 
introduced into commerce. In other words, the compliance obligation 
under the LDVR does not occur until a manufacturer may introduce into 
commerce vehicles that are required to comply with GHG standards, which 
will begin with model year 2012 and will not occur before January 2, 
2011.
2. What is EPA's Tailoring Rule?
    On June 3, 2010 (effective August 2, 2010), EPA promulgated a final 
rulemaking for the purpose of relieving overwhelming permitting burdens 
that would, in the absence of the rule, fall on permitting authorities 
and sources, the Tailoring Rule, 75 FR 31514. EPA accomplished this by 
tailoring the applicability criteria that determine which GHG emission 
sources become subject to the PSD program \4\ of the CAA. In 
particular, EPA established in the Tailoring Rule a phase-in approach 
for PSD applicability and established the first two steps of the phase-
in for the largest GHG-emitters. Additionally, EPA committed to certain 
follow-up actions regarding future steps beyond the first two, 
discussed in more detail later.
---------------------------------------------------------------------------

    \4\ The Tailoring Rule also applies to the title V program, 
which requires operating permits for existing sources. However, 
today's action does not affect Connecticut's title V program.
---------------------------------------------------------------------------

    For the first step of the Tailoring Rule, which will begin on 
January 2, 2011, PSD requirements will apply to major stationary source 
GHG emissions only if the sources are subject to PSD anyway due to 
their emissions of non-GHG pollutants. Therefore, in the first step, 
EPA will not require sources or modifications to evaluate whether they 
are subject to PSD requirements solely on account of their GHG 
emissions. Specifically, for PSD, Step 1 requires that as of January 2, 
2011, the applicable requirements of PSD, most notably, the BACT 
requirement, will apply to projects that increase net GHG emissions by 
at least 75,000 tpy CO2e, but only if the project also 
significantly increases emissions of at least one non-GHG pollutant.
    The second step of the Tailoring Rule, beginning on July 1, 2011, 
will phase in additional large sources of GHG emissions. New sources 
that emit, or have the potential to emit, at least 100,000 tpy 
CO2e will become subject to the PSD requirements. In 
addition, sources that emit or have the potential to emit at least 
100,000 tpy CO2e and that undertake a modification that 
increases net GHG emissions by at least 75,000 tpy CO2e will 
also be subject to PSD requirements. For both steps, EPA notes that if 
sources or modifications exceed these CO2e-adjusted GHG 
triggers, they are not covered by permitting requirements unless their 
GHG emissions also exceed the corresponding mass-based triggers in tpy.
    EPA believes that the costs to the sources and the administrative 
burdens to the permitting authorities of PSD permitting will be 
manageable at the levels in these initial two steps and that it would 
be administratively infeasible to subject additional sources to PSD 
requirements at those times. However, EPA also intends to issue a 
supplemental notice of proposed rulemaking in 2011, in which the Agency 
will propose or solicit comment on a third step of the phase-in that 
would include more sources, beginning on July 1, 2013. In the Tailoring 
Rule, EPA established an enforceable commitment that the Agency will 
complete this rulemaking by July 1, 2012, which will allow for 1 year's 
notice before Step 3 would take effect.
    In addition, EPA committed to explore streamlining techniques that 
may well make the permitting programs much more efficient to administer 
for GHG, and that therefore may allow their expansion to smaller 
sources. EPA expects that the initial streamlining techniques will take 
several years to develop and implement.
    In the Tailoring Rule, EPA also included a provision, that no 
source with emissions below 50,000 tpy CO2e, and no 
modification resulting in net GHG increases of less than 50,000 tpy 
CO2e, will be subject to PSD permitting before at least 6 
years (i.e., April 30, 2016). This is because EPA has concluded that at 
the present time the administrative burdens that would accompany 
permitting sources below this level would be so great that even with 
the streamlining actions that EPA may be able to develop and implement 
in the next several years, and even with the increases in permitting 
resources that EPA can reasonably expect the permitting authorities to 
acquire, it would be impossible to administer the permit programs for 
these sources until at least 2016.
    As EPA explained in the Tailoring Rule, the threshold limitations 
are necessary because without it, PSD would apply to all stationary 
sources that emit or have the potential to emit more than 100 or 250 
tons of GHG per year beginning on January 2, 2011. This is the date 
when EPA's recently promulgated LDVR takes effect, imposing control 
requirements for the first time on CO2 and other GHGs. If 
this January 2, 2011, date were to pass without the Tailoring Rule 
being in effect, PSD requirements would apply to GHG emissions at the 
100/250 tpy applicability levels provided under a literal reading of 
the CAA as of that date. From that point forward, a source owner 
proposing to construct any new major source that emits at or higher 
than the applicability levels (and which therefore may be referred to 
as a ``major'' source) or modify any existing major

[[Page 757]]

source in a way that would increase GHG emissions would need to obtain 
a permit under the PSD program that addresses these emissions before 
construction or modification could begin.
    Under these circumstances, many small sources would be burdened by 
the costs of the individualized PSD control technology requirements and 
permit applications that the PSD provisions, absent streamlining, 
require. Additionally, state and local permitting authorities would be 
burdened by the extraordinary number of these permit applications, 
which are orders of magnitude greater than the current inventory of 
permits and would vastly exceed the current administrative resources of 
the permitting authorities. Permit gridlock would result since the 
permitting authorities would likely be able to issue only a tiny 
fraction of the permits requested.
    In the Tailoring Rule, EPA adopted regulatory language codifying 
the phase-in approach. As explained in that rulemaking, many state, 
local and tribal area programs will likely be able to immediately 
implement the approach without rule or statutory changes by, for 
example, interpreting the term ``subject to regulation'' that is part 
of the applicability provisions for PSD permitting. EPA has requested 
permitting authorities to confirm that they will follow this 
implementation approach for their programs, and if they cannot, then 
EPA has requested that they notify the Agency so that we can take 
appropriate follow-up action to narrow federal approval of their 
programs before GHGs become subject to PSD permitting on January 2, 
2011.\5\ On July 20, 2010, Connecticut provided a letter to EPA with 
the requested notification. See the docket for this proposed rulemaking 
for a copy of Connecticut's letter.
---------------------------------------------------------------------------

    \5\ Narrowing EPA's approval will ensure that for federal 
purposes, sources with GHG emissions that are less than the 
Tailoring Rule's emission thresholds will not be obligated under 
federal law to obtain PSD permits during the gap between when GHG 
PSD requirements go into effect on January 2, 2011 and when either 
(1) EPA approves a SIP revision adopting EPA's tailoring approach, 
or (2) if a state opts to regulate smaller GHG-emitting sources, the 
state demonstrates to EPA that it has adequate resources to handle 
permitting for such sources. EPA expects to finalize the narrowing 
action prior to the January 2, 2011 deadline with respect to those 
States for which EPA will not have approved the Tailoring Rule 
thresholds in their SIPs by that time.
---------------------------------------------------------------------------

    The thresholds that EPA established are based on CO2e 
for the aggregate sum of six GHGs that constitute the pollutant that 
will be subject to regulation, which we refer to as GHG.\6\ These gases 
are: CO2, CH4, N2O, HFCs, PFCs, and 
SF6. Thus, in EPA's Tailoring Rule, EPA provided that PSD 
applicability is based on the quantity that results when the mass 
emissions of each of these gases is multiplied by the GWP of that gas, 
and then summed for all six gases. However, EPA further provided that 
in order for a source's GHG emissions to trigger PSD requirements, the 
quantity of the GHG emissions must equal or exceed both the 
applicability thresholds established in the Tailoring Rule on a 
CO2e basis and the statutory thresholds of 100 or 250 tpy on 
a mass basis.\7\ Similarly, in order for a source to be subject to the 
PSD modification requirements, the source's net GHG emissions increase 
must exceed the applicable significance level on a CO2e 
basis and must also result in a net mass increase of the constituent 
gases combined.
---------------------------------------------------------------------------

    \6\ The term ``greenhouse gases'' is commonly used to refer 
generally to gases that have heat-trapping properties. However, in 
this notice, unless noted otherwise, we use it to refer specifically 
to the pollutant regulated in the LDVR.
    \7\ The relevant thresholds are 100 tpy for title V, and 250 tpy 
for PSD, except for 28 categories listed in EPA regulations for 
which the PSD threshold is 100 tpy.
---------------------------------------------------------------------------

    EPA adopted the Tailoring Rule after careful consideration of 
numerous public comments. On October 27, 2009 (74 FR 55292), EPA 
proposed the Tailoring Rule. EPA held two public hearings on the 
proposed rule, and received over 400,000 written public comments. The 
public comment period ended on December 28, 2009. The comments provided 
detailed information that helped EPA understand better the issues and 
potential impacts of the Tailoring Rule. The preamble of EPA's 
Tailoring Rule describes in detail the comments received and how some 
of these comments were incorporated in EPA's final rule. See 75 FR 
31514 for more detail.
3. What is the GHG SIP Call?
    By notice dated September 2, 2010, EPA proposed the GHG SIP Call. 
In that action, along with the companion GHG FIP rulemaking published 
at the same time, EPA took steps to ensure that in the 13 States that 
do not appear to have authority to issue PSD permits to GHG-emitting 
sources at present, either the State or EPA will have the authority to 
issue such permits by January 2, 2011. EPA explained that although for 
most States, either the State or EPA is already authorized to issue PSD 
permits for GHG-emitting sources as of that date, our preliminary 
information shows that these 13 States have EPA-approved PSD programs 
that do not appear to include GHG-emitting sources and therefore do not 
appear to authorize these States to issue PSD permits to such sources. 
Therefore, EPA proposed to find that these 13 States' SIPs are 
substantially inadequate to comply with CAA requirements and, 
accordingly, proposed to issue a SIP Call to require a SIP revision 
that applies their SIP PSD programs to GHG-emitting sources. In the 
companion GHG FIP rulemaking, EPA proposed a FIP that would give EPA 
authority to apply EPA's PSD program to GHG-emitting sources in any 
State that is unable to submit a corrective SIP revision by its 
deadline. Connecticut was one of the States for which EPA proposed a 
SIP Call.

III. What is the relationship between today's proposed action and EPA's 
proposed GHG SIP Call and GHG FIP?

    As noted above, by notice dated September 2, 2010, EPA proposed the 
GHG SIP Call. At the same time, EPA proposed a FIP to apply in any 
state that is unable to submit, by its deadline, a SIP revision to 
ensure that the state has authority to issue PSD permits to GHG-
emitting sources.\8\ As discussed in section IV of this rulemaking, 
Connecticut does not interpret its current PSD regulations as providing 
it with the authority to regulate GHG, and as such, Connecticut is 
included on the list of areas for the proposed SIP call. Connecticut's 
December 9, 2010, proposed SIP revision (the subject of this 
rulemaking) addresses this authority.
---------------------------------------------------------------------------

    \8\ As explained in the proposed GHG SIP Call (75 FR 53892, 
53896), EPA intends to finalize its finding of substantial 
inadequacy and the SIP call for the 13 listed states by December 1, 
2010. EPA requested that the states for which EPA is proposing a SIP 
call identify the deadline--between 3 weeks and 12 months from the 
date of signature of the final SIP Call--that they would accept for 
submitting their corrective SIP revision.
---------------------------------------------------------------------------

IV. What is EPA's analysis of Connecticut's proposed SIP revision?

    On December 9, 2010, DEP provided a revision to Connecticut's SIP 
to EPA for parallel processing and eventual approval. This revision to 
Connecticut's SIP is necessary because without it, (1) the State would 
not have authority to issue PSD permits to GHG-emitting sources, and as 
a result, absent further action, those sources may not be able to 
construct or undertake modifications beginning January 2, 2011; and (2) 
assuming that the State attains authority to issue PSD permits to GHG-
emitting sources, PSD requirements would apply, as of January 2, 2011, 
at the 100- or 250-tpy levels provided under the CAA. This would 
greatly increase the number

[[Page 758]]

of required permits, imposing undue costs on small sources; which would 
overwhelm Connecticut's permitting resources and severely impair the 
function of the program.
    The State's December 9, 2010, proposed SIP revision: (1) Provides 
the State with the authority to regulate GHG under the PSD program of 
the CAA, and (2) establishes thresholds for determining which 
stationary sources and modification projects become subject to 
permitting requirements for GHG emissions under the PSD program. 
Specifically, Connecticut's December 9, 2010, proposed SIP revision 
includes proposed changes to Regulations of Connecticut State Agencies, 
section 22a-174-1, by adding definitions for ``carbon dioxide 
equivalent emissions'' and ``greenhouse gases.'' The proposed SIP 
revision also addresses the thresholds for GHG permitting applicability 
and implementation through changes proposed to Connecticut's PSD 
regulations at section 22a-174-3a.
    The State of Connecticut is currently a SIP-approved state for the 
PSD program. However, Connecticut does not interpret its current rules, 
which are generally consistent with the federal rules, to be 
automatically updating to include newly designated regulated air 
pollutants such as GHG. In a letter provided to EPA on July 20, 2010, 
Connecticut notified EPA that the State does not currently have the 
authority to regulate GHG and thus is in the process of revising its 
regulation (the subject of this proposed action) to provide this 
authority. To provide this authority, Connecticut is adding definitions 
of ``carbon dioxide equivalent emissions'' and ``greenhouse gases'' to 
section 22a-174-1, and revising PSD applicability and BACT requirements 
in section 22a-174-3a, to explicitly regulate GHG under the CAA. EPA 
has preliminarily determined that this change to Connecticut's 
regulation is consistent with the CAA and its implementing regulations 
regarding GHG.
    The changes included in Connecticut's PSD program are substantively 
the same as EPA's Tailoring Rule. The Connecticut rules have been 
developed to conform to the structure of Connecticut's rule in section 
22a-174-3a, but in substantive content the rules that address the 
Tailoring Rule provisions are the same as the federal rules. As part of 
its review of the Connecticut submittal, EPA performed a line-by-line 
review of Connecticut's proposed changes to its regulations and 
concluded the state's proposed regulations are consistent with the 
Tailoring Rule.

V. Proposed Action

    Pursuant to section 110 of the CAA, EPA is proposing to approve the 
State of Connecticut's December 9, 2010, proposed SIP revision, 
relating to PSD requirements for GHG-emitting sources. Specifically, 
Connecticut's December 9, 2010, proposed SIP revision: (1) Provides the 
State with the authority to regulate GHGs under its PSD program, and 
(2) establishes appropriate emissions thresholds for determining PSD 
applicability to new and modified GHG-emitting sources in accordance 
with EPA's Tailoring Rule. EPA has made the preliminary determination 
that this SIP revision is approvable because it is in accordance with 
the CAA and EPA regulations regarding PSD permitting for GHGs.

VI. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP 
submission that complies with the provisions of the Act and applicable 
federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in 
reviewing SIP submissions, EPA's role is to approve state choices, 
provided that they meet the criteria of the CAA. Accordingly, this 
proposed action merely approves the State's law as meeting federal 
requirements and does not impose additional requirements beyond those 
imposed by the State's law. For that reason, this proposed action:
     Is not a ``significant regulatory action'' subject to 
review by the Office of Management and Budget under Executive Order 
12866 (58 FR 51735, October 4, 1993);
     Does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
     Is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the CAA; and
     Does not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human health or environmental 
effects, using practicable and legally permissible methods, under 
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, this rule does not have tribal implications as 
specified by Executive Order 13175 (65 FR 67249, November 9, 2000), 
because the SIP is not approved to apply in Indian country located in 
the State, and EPA notes that it will not impose substantial direct 
costs on tribal governments or preempt tribal law.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by 
reference, Intergovernmental relations, and Reporting and recordkeeping 
requirements.

    Authority: 42 U.S.C. 7401 et seq.

    Dated: December 22, 2010.
H. Curtis Spalding,
Regional Administrator, EPA New England.
[FR Doc. 2011-17 Filed 1-5-11; 8:45 am]
BILLING CODE 6560-50-P
```