DATE: May2, 2012

SUBJECT: Technical Support Document

Approval ofRevision to Allegheny County’s Portion ofthe Pennsylvania State

Implementation Plan (SIP) Revising Allegheny County Health Department

(ACHD) Prevention of Significant Deterioration (PSD) ofAir Quality

Regulations

FROM: Paul T. Wentworth, P.E.

Office of Permits and Air Toxics (3AP1O)

TO: Kathleen Cox, Associate Director

Office of Permits and Air Toxics (3AP1O)

TECHNICAL SUPPORT DOCUMENT

EPA-R03-OAR--2012-0378

APPROVAL OF REVISIONS TO ALLEGHENY COUNTY RULES AND

REGULATIONS FOR PREVENTION OF SIGNIFICANT DETERIORATION (PSD)

I. BACKGROUND

On December 14, 1983, the U.S. Environmental Protection Agency (EPA) delegated

authority to the ACHD to implement and enforce the provisions of 40 CFR 52.2 Ion behalf of

EPA, (see 48 FR 55625, December 14,1983) , based on CAA § 301 in conjunction with CAA §

101 and 110 ofthe CAA Amendments of 1977 authorizing the Administrator to delegate EPA

authority to implement and enforce the federal PSD regulations to any State which has submitted

adequate implementation and enforcement procedures.

On February 13, 2003, the ACHD requested that EPA update and affirm the existing

delegation of authority agreement between Allegheny County and the EPA based on the

representations included in Allegheny County’s February 13, 2003 letter to EPA (see 68 FR

14617). On March 18, 2003, EPA formally notified ACHD that as ofthe publication of date of

the information notice in the Federal register (March 26, 2003), pursuant to 40 CFR 52.2 1(u),ACHD was delegated full PSD authority to implement all portions ofthe Federal PSD program

in 40 CFR 52.21. Future additions, revisions, or deletions to 40 CFR 52.2lwhich are adopted by
The Pennsylvania Department of Environmental Protection (PADEP) on behalf ofthe

Allegheny County Health Department (ACHD) submitted a revision to the Allegheny County

portion ofthe Pennsylvania State Implementation Plan (SIP) on July 1, 2008. This SIP

submission adds Allegheny County’s Prevention of Significant Deterioration (PSD) regulations

at Article XXI Section 2102.07, entitled, “Prevention of Significant Deterioration,” by

incorporating by reference, the federal PSD program at 40 CFR 52.21 in its entirety. The

purpose ofthis SIP revision is to replace the delegated PSD program with a SIP approved

program. In addition, ACHD requests that as their regulation automatically incorporates by

reference all future changes to 40 CFR 52.21, that such future changes be automatically

incorporated into the SIP.

EPA is also proposing to make a determination that the proposed SIP revision will satisfy

the Clean Air Act (CAA) requirements of § § 11 0(a)(2)(C), (D)(i), and (J) for the 1997 ozone and

particulate matter less than 2.5 micrometers (PM2.5)National Ambient Air Quality Standards

(NAAQS) and the 2006 PM2.5 NAAQS by including the following SIP elements: the PSD

portion ofNew Source Review (NSR) Reform, nitrogen oxides (NOx) as a precursor to ozone,

PM2.5 and its precursors and greenhouse gases (GHGs) as a regulated PSD pollutant.

EPA is proposing to approve ACHD’s SIP revision for the PSD permitting program.

EPA proposes approval of ACHD’s submission because it substantively satisfies CAA

requirements. Additionally, EPA is proposing, as a separate action, to determine that the ACHD

has met its obligations pursuant to the PSD portion ofthe infrastructure requirements ofthe

Clean Air Act (CAA) to implement, maintain, and enforce the 1997 8-hour ozone and PM2.5

National Ambient Air Quality Standards (NAAQS) and the 2006 PM2.5NAAQS and Greenhouse

gases. This action is being taken under the CAA.

The SIP revision submitted by ACHD on July 1, 2008 contained a provision in

§2102.07(d) that would relieve a person ofthe duty to comply with the PSD requirements as

promulgated by EPA and incorporated in § 2102.07 ifsuch person was “legally temporarily

relieved of the duty to comply”. On May 1, 2012 the PADEP submitted a letter notifying EPA

that they were withdrawing that portion ofthe SIP revision.

III. EVALUATION

NSR Reform

On December 31, 2002 (67 FR 80186), EPA published final rule changes to 40 CFR parts

51 and 52, regarding the CAA’s PSD and Nonattainment NSR programs. On November 7, 2003

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to determine whether the area meets the NAAQS (

unclassifiable

areas). Part D oftitle I ofthe

CAA is the nonattainment NSR program, which applies in areas that are not in attainment ofthe

NAAQS (“nonattainment” areas). Collectively, the PSD and nonattainment NSR programs are

referred to as the “New Source Review” or NSR programs. EPA regulations implementing these

programs are contained in 40 CFR 51.165, 51.166, 52.21, 52.24, and part 51, appendix S.

The 2002 NSR Reform Rules made changes to five areas of the NSR programs. In

summary, the 2002 Rules: (1) provided a new method for determining baseline actual emissions;

(2) adopted an actual-to-projected-actual methodology for determining whether a major

modification has occurred; (3) allowed major stationary sources to comply with a PlantwideApplicability Limit (PAL) to avoid having a significant emissions increase that triggers therequirements ofthe major NSR program; (4) provided a new applicability provision for

emissions units that are designated clean units; and (5) excluded pollution control projects(PCPs) from the definition of “physical change or change in the method of operation.” On

November 7, 2003 (68 FR 63021), EPA published a notice offinal action on its reconsideration

ofthe 2002 NSR Reform Rules, which added a definition for “replacement unit” and clarified anissue regarding PALs.

After the 2002 NSR Reform Rules were finalized and effective (March 3, 2003),

industry, state, and environmental petitioners challenged numerous aspects ofthe 2002 NSRReform Rules, along with portions of EPA’s 1980 NSR Rules (45 FR 52676, August 7, 1980).

On June 24, 2005, the United States Court of Appeals for the District of Columbia (D.C. CircuitCourt) issued a decision on the challenges to the 2002 NSR Reform Rules. New York v. United

States, 413 F.3d 3 (New York I). In summary, the D.C. Circuit Court vacated portions ofthe

rules pertaining to clean units and PCPs, remanded a portion ofthe rules regardingrecordkeeping and the term “reasonable possibility” found in 40 CFR 52.21 (r)(6) and 40 CFR

51.1 66(r)(6), and either upheld or did not comment on the other provisions included as part of

the 2002 NSR Reform Rules. On June 13, 2007 (72 FR 32526), EPA took final action to revise

the 2002 NSR Reform Rules to remove from federal law all provisions pertaining to clean units

and the PCP exemption that were vacated by the D.C. Circuit Court.

With regard to the remanded portions ofthe 2002 NSR Reform Rules related to

recordkeeping, on December 21, 2007, EPA took final action to establish that a “reasonablepossibility” applies where source emissions equal or exceed 50 percent ofthe CAA NSR

significance levels for any pollutant (72 FR 72607). The “reasonable possibility” provision

identifies for sources and reviewing authorities the circumstances under which a major stationary

source undergoing a modification that does not trigger major NSR must keep records.

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EPA had done to support the 2002 rule supported NSR Reform in Wisconsin, and (3) Petitioners

had not provided any information or arguments demonstrating that the general analysis did not

apply in Wisconsin, and that information in the record countered Petitioners’ specific arguments

that the revisions would be backsliding. Additionally, in response to comments, EPA performed

an analysis specific to Wisconsin to examine the impacts of applying reform in that State. Our

findings were consistent with those ofthe supplementary environmental analysis (SEA) for the

2002 Reform Rule (neutral).

NRDC v. Jackson: On June 16, 2011, the U.S. Court of Appeals for the Seventh Circuit

(Seventh Circuit) denied the petitions for review filed by NRDC and Sierra Club challenging

EPA’s approval ofthe 2002 NSR Reform provisions into the Wisconsin SIP. The primary issueaddressed in the opinion was whether EPA’s approval of Wisconsin’s NSR SIP was backsliding

prohibited by CAA sections 110(1) and 193. The Court held that EPA’s decision was not

contrary to these provisions. First, the Court found that Petitioners’ arguments were

a repeat of

the arguments that they had made and lost in New York I. Second, the Court held that the

general analysis that supported the NSR Reform provisions when they were challenged after

promulgation “supply substantial evidence for the EPA’s decision [with respect to the Wisconsin

SIP] and show that it is neither arbitrary nor capricious.” But, the Court did note that some states

have implemented the NSR Reform provisions and that the experience in those states might

support or refute EPA’s conclusions and that “[alt some point, preferring predictions over facts is

no longer rational.”

The proposed revision to the ACHD portion ofthe Pennsylvania SIP, which incorporates

by reference the federal PSD program in 40 CFR 52.21, includes only those provisions whichwere upheld by the D.C. Circuit in 2005, and reaffirmed in the Seventh Circuit’s denial ofthepetition to reconsider EPA’s approval ofNSR Reform into Wisconsin’s SIP (NRDC v. Jackson).

Furthermore, ACHD has been implementing the NSR Reform regulations since their adoption

through their delegation of the federal PSD Program with no known link between reform and adecrease in air quality or an interference with reasonable further progress. This is not unexpected

given the limited universe of affected sources. NSR Reform only affects permitting of

modifications to existing sources, and more specifically, modifications to existing emissionsunits. Any growth occurring from new, greenfield sites would be controlled and permitted the

same both pre- and post-reform. Therefore, any concerns about NSR Reform would be related to

unregulated growth from existing major sources. In the specific case of Allegheny County, the

County maintains a robust minor NSR program that specifically regulates minor changes to

major stationary sources. So while a facility may escape the requirements ofmajor NSR, they donot escape the requirement to obtain a pre-construction permit that includes the requirement to

monitor emissions after a change and may also include an air quality impact analysis. Finally,the demonstration ofreasonable further progress for nonattainment areas does not rely on this

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Federal Implementation Plan (FIP), the requirements of CAA § § 11 0(a)(2)(C), (D)(i), and (J),

have already been addressed. The FIP is implemented through regulations at 40 CFR 52.21.

These are the same rules that the County has incorporated by reference into their rules and thatthey are proposing as a SIP revision. Since the SIP revision incorporates by reference the federal

PSD program in its entirety, the CAA requirements of § § 11 0(a)(2)(C), (D)(i), and (J) for the

1997 8-hour ozone and PM2.5 NAAQS and the 2006 PM2.5 NAAQS will be satisfied by this

SIP revision.

V. RECOMMENDED AGENCY ACTION

I recommend that the July 1, 2008 proposed revisions to the Pennsylvania SIP that adds

Allegheny County’s Prevention of Significant Deterioration (PSD) regulations at Article XXI

Section 2102.07 by incorporating by reference, the federal PSD program at 40 CFR 52.21 in its

entirety be approved as a revision.

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