1 BEFORE THE ADMINISTRATOR

UNITED STATES ENVIROMENTAL PROTECTION AGENCY

In re Approval and Promulgation of Air Quality Implementation Plans; Infrastructure SIP Requirements for 1997 8-Hour Ozone and PM2.5 National Ambient Air Quality Standards.

Comments of the Midwest Environmental Defense Center

These comments are provided by Midwest Envi ronmental Defense Center on behalf of its members. EPA’s proposed approval of the “inf rastructure SIP” for the states in Region 5 (Wisconsin, Michigan, Minnesota, Illinois, Indiana, and Ohio) is deficient for the reasons set forth below. Generally, EPA acknowledges certai n shared problems with the SIPs but proposes to address those problems through other rulemaki ngs. To the extent EPA does so, it must use section 110(k)(4) of the Act, 42 U.S.C. § 7410(k )(4), which requires that the state adopt the missing (or correct the deficient) provision by a da te certain (no later than one year), and which constitutes an automatic disapproval if the state fails to meet the deadline. EPA is not authorized to punt is current infrastructure determination to speculations about future rulemakings to satisfy the infrastructure requirements in section 110. Moreover, EPA provides no basis (and we are not aware of any) for its purported decision not to “act[] on any of the re quirements of” certain sections of 110(a)—such as the inter-state contribution provisi on in 110(a)(2)(D)(i). Similarly, we are not aware of any (and EPA has not o ffered any) basis for not “approv[ing] or disapprov[ing] any existing state provisions wi th regard to excess emissions during SSM of operations at facilities.” EPA has an obligati on (under the CAA and court order) to approve or disapprove the SIPs’ infrastructure requirement components. To the extent illegal SSM provisions (and other illegal provisions, such as “director discretion”) exist, EPA must disapprove. EPA-R05-OAR-2007-1179

FRL-9299-8

May 31, 20112 A. Wisconsin

1. Wisconsin DNR is Not Implemen ting Its SIP Sufficiently To Comply With 40 C.F.R. § 51.160 and CAA § 110(a).

Wisconsin DNR must have and implement a SIP that prevents sources from constructing or modifying and causing emissions that either vi olate or prevent the maintenance of NAAQS. However, Wisconsin DNR is failing to do so by effectively exempting sources from the requirements to demonstrate (through modeling) that its emissions will not cause NAAQS violations or prevent NAAQS maintenance. See e.g., 42 U.S.C. § 740(a)(2); 40 C.F.R. § 51.160(a), (f). For example, DNR’s “guidance” 1 on modeling notes that sources can avoid modeling in nonattainment areas if they obtain offsets or model below the SIL—despite no SIP provision for Wisconsin allowing such exceptions to Wis. Stat. § 285.63(1). Wisconsin DNR’s “guidance” also exempts all operating permits fo r sources in nonattainment areas from the clean requirement to demonstrate compliance with (a nd non-prevention of maintenance of) NAAQS as a condition of permit approval for all operating pe rmits for all sources (not merely those in attainment areas) in Wis. Stat. § 285.63(1).

Furthermore, Wisconsin DNR has not been modeling compliance with PM 2.5 for registration permits. For example, an Administrative Law Judge recently found that Wisconsin DNR had illegally exempted registration permit source s from modeling compliance with PM2.5—contrary to Wis. Stat. § 285.63 ( See In re Waukesha Iron and Metal )—and, yet, Wisconsin DNR continues to ignore the requireme nt in the Wisconsin SIP that every permit applicant must demonstrate compliance with NAAQS before any permit can be issued.

Moreover, Wisconsin DNR does not model ozone impacts ( i.e., ozone NAAQS compliance), despite the clear applicability of the SIP re quirement to demonstrate compliance with all NAAQS as a condition of permit issuance in Wi s. Stat. § 285.63(1). To our knowledge, DNR has never analyzed the impacts of facilities on ozone during pe rmitting—as it is required to do pursuant to 42 U.S.C. § 7410(a), 40 C.F.R. §§ 51.160, 51.166 and Wis. Stat. § 285.63(1). In fact, DNR’s guidance states exp licitly that it does not model fo r ozone impacts. See WDNR, Dispersion Modeling Guidelin es (2009), available at http://dnr.wi.gov/air/pdf /wdnrguidance_v71final.pdf

.

2. Illegal Startup and Shutdown Provisions

Wisconsin’s SIP contains a startup and shutdow n exemption (albeit, one much narrower than Wisconsin DNR has sometimes applied). See In re We Energies Oak Creek Power Plant, Order

1 http://dnr.wi.gov/air/pdf/Modelin gReqsAllPollutants_0411memo.pdf3 Responding to Petition at 22 (June 12, 2009), available at http://www.epa.gov/region7/air/title5/pet itiondb/petitions/oa k_creek_decision2007.pdf

. However, EPA has since made clear that su ch startup and shutdown exemptions are not approvable and conflict with Clean Air Act se ction 110 (among others). Therefore, until the illegal startup and shutdown exemption is rem oved from the Wisconsin SIP, the Wisconsin SIP does not meet the requirements of section 110.

EPA has long found that the Clean Air Act provides that all excess emissions are violations of the applicable standards. In Michigan Dep’t of Env’tl Quality v. Browner , the Sixth Circuit related the history of this policy: “Since 1977, th e EPA has interpreted all excess emissions as ‘violations’ of the applicable standards for which ‘notices of viol ations’ could, but not necessarily would, issue.” 230 F.3d 181, 183 (6 th Cir. 2000) (citing 42 Fed. Reg. 21472 (April 27, 1977)). The Sixth Circuit continued:

The EPA elaborated on this approach in 1982 and 1983, when Kathleen Bennett, then EPA Assistant Administrator for Air, Noise and Ra diation, issued two memoranda explaining the agency's policy on excess emissions. Together, the memoranda explain that excess emissions must be deemed violations because “any emissi ons above the allowable [standard] may cause or contribute to violations of the na tional ambient air quality standards.

Id . at 183-84 (quoting 9/28/1982 Mem. from Kathl een M. Bennett to Regional Administrators). See also 9/28/1982 Mem. from Kathleen M. Bennett to Regional Administrators (“The rationale for establishing these emissions as violations, as opposed to granting automatic exemptions, is that SIPs are ambient-based standards and any emissions above the allo wable [limit] may cause or contribute to violations of the national ambien t air quality standards. Without clear definition and limitations, these automatic exemption provis ions could effectively shield excess emissions arising from poor operation and maintenance or design, thus precluding a ttainment.”); 2/15/1983 Mem. from Kathleen M. Bennett to Regional Ad ministrators (“Automatic exemptions might aggravate air quality so as not to provide for attainment of ambient air quality standards.”); 9/20/1999 Mem. from Steven A. Herman to Re gional Administrators. In other words, any emissions above allowable limits may cause or cont ribute to violations and the infrastructure SIP is not sufficient to protect maintenance of the NAAQS until the illega l startup and shutdown provisions are removed from the Wisconsin SIP.

3. The Wisconsin SIP Contains Illega l “Directors Discretion” Provisions

EPA has long interpreted secti on 110 as prohibiting “director’ s discretion provisions,” which allow a representative of the agency (here, Wisc onsin DNR) to approve alternatives to the basic provisions of the State implement ation plan’s otherwise-applicab le regulations outside of the SIP-approval process. Wisconsin has variations of such unlawful provisions at Wis. Admin. Code § NR 436.03(2), 436.04, 436.06. (Note that un like the other varian ce and director’s discretion provisions, Wisconsin regulations in clude a limited variance provision for RACT limits that appropriately requires EPA SIP-approv al for any variance. See Wis. Admin. Code § NR 436.05(5).) EPA has historically, and correctl y, determined that it cannot approval SIPs as being adequate when they contain such director’s discretion provisions that have the potential to4 change the stringency of the SIP requiremen ts, including variances, test methods, control requirements, exemptions, etc.

4. NOx as an Ozone Precursor

Contrary to EPA’s Federal Re gister notice, 76 Fed. Reg. at 23760-61, Wisconsin’s SIP does not contain the requirement that Ni trogen Oxides (NOx) be regulated in the Non-attainment New Source Review and Prevention of Significant Deteri oration program as an ozone precursor. In Wisconsin’s SIP, like many that EPA has recently found deficient, 75 Fed. Reg. 78300, only Volatile Organic Compounds (VOC s) are regulated as ozone. This means that a significant net emissions increase of NOx is not considered an increase in oz one. See e.g., Wis. Admin. Code §§ NR 405.02(27)(a)6. (only a 40 ton increase on VOC is considered significant for Ozone), NR 408.02(32)(a)2. (same). However, under the Act an in crease in NOx must also be an increase in

ozone. See 40 C.F.R. § 51.166(b)(23)(i) (providing th at a 40 ton increase in VOC or NOx is significant for ozone). Additionally, a major source of NOx is a major ozone source. 40 C.F.R. § 51.165(a)(2); 51.166(b)(1)(ii), 52.21(b )(1)(ii). And, NOx emissions require ambient impact analysis for ozone. 40 C.F.R. §§ 51.166(i)(5)(i) n. 1, 52.21(i)(5)(i) n.1.

5. Fuel Changes As a Modification

NSR program requires that states adopt definitions identical to, or more stringent than, EPA’s definitions. 40 C.F.R. §§ 51.165(a)(1), 51.166(b). The federal regulations define “major modification” by providing only a limited exempti on from the definition (and therefore from NSR requirements) for certain fuel cha nges, but provides that fuel changes are “major modifications” and require compliance with th e NSR program when such changes “would be prohibited under any federally enforceable perm it condition which was established after January 6, 1975 pursuant to 40 CFR 52.21 or 40 CFR subpart I or 40 CFR 51.166.” 40 C.F.R. §§ 51.165(a)(1)(v)(C)(5); 51.166( b)(2)(iii)(e), 52.21 (b)(2)(iii)(d)(1). EPA adm its that the Wisconsin SIP omits this definition. See 73 Fed. Reg. at 76,566 (stating that the Wisconsin major modification definition “failed to incorporate language that would include sources with construction permits issued ... either directly by EPA or by WDNR under a delegated agreement in accordance with 40 CFR 52.21.”); see also Wis. Admin. Code §§ NR 405.02(21) (omitting this provision), NR 408.02( 20) (same for nonattainment NSR program). Indeed, EPA has specifically apprised WDNR via letter of the need for Wisconsin to correct this deficiency:

[W]e did agree with a portion of one of the comments raised by the Sierra Club concerning the differences in citations used with respect to the fuel use prohibition th at is part of the definition of “major modification.” ...

We, therefore, request that WDNR [change] NR 405.02(21)(b)5... We also request that WDNR revise the language under the definition of “major modificati on” at NR 408.02(20 )(e)(5) to be analogous to the [change reque sted of NR 405.02(21)(b)(5)].

Letter from Cheryl L. Ne wton, EPA Region 5, to John Me lby, Jr., WDNR (June 17,5 2009).

B. Indiana

1. Enforcement

According to many press accounts, Indiana is no longer taking enforcement of its air pollution regulations seriously. See http://www.journalgazette.ne t/article/20100328/LOCAL10/303289908 (Published March 28, 2010); http://www.journalgazette.net/apps/pbc s.dll/article?AID=/20081219/EDIT05/812190391 ; http://www.indems.org/index.php/news/entry /idem_comes_under_att ack_gary_post_tribune/ According to those reports, there are hundreds of documented violations which the state has shown no ability or no interest in addressing. Moreover, as USEPA indi cated in a letter to IDEM over two years ago, EPA already has concerns about IDEM’s elimination of the Office of Enforcement, revising the Compliance and Enfor cement Policy (CERP), and its elimination of funding for local air authorities. IDEM’s current enforcement policy requires that enforcement staff show that violations caused specific and actu al harm to human health or the environment to be considered important enough for enforcement. Th is heighted “harm” standard is contrary to the Clean Air Act because pollution that harms health and the environment is often caused by disparate emitters who, collectively, cause health threats—and proof th at one violation is the sole cause of health problems is extremely difficult. Moreover, all enfor cement decisions are now routed through the pol itically-appointed Commissioner, w ho decides whether to bring an enforcement action. See also http://www.in.gov/idem/files/OAQ_Complianc e_and_Enforcement_Lean_Rollout.ppt

2. Illegal Startup/Shutdown/Malfunction Exemptions

Indiana, like Wisconsin discussed above, provide s certain exemptions that are unlawful under EPA’s controlling interpretations. See e.g., 326 IAC §§ 1-6-4, 5-1-3.

C. Illinois

1. “Automatic Stay” Provision s and Multi-year Appeals Undermine Enforcement of SIP Requirements.

Illinois’ ability to enforce SIP requirements is undermined by a convoluted interpretation of state law and a history of lengthy (e.g. fi ve years) appeal process. In interpretations of state law by the Illinois Pollution Control Board, Illinois has determined that a permittee who appeals its permit can effectively stay any provisions it appeals. See e.g., Dynegy Midwest Generation Inc. v. IEPA , PCB 2009-009, Slip Op. (Aug. 21, 2008) (staying contested permit terms beginning in 2008 and continuing through present); Midwest Generation LLC, W aukegan Generating Station v. IEPA , PCB 2008-20 (Sept. 20, 2007) (staying pe rmit provisions beginning in 2007 and continuing to present); United States Steel Corp. v. IEPA , PCB 10-23, Slip. Op. (Nov. 19, 2009) (staying effectiveness of permit th at contains requirements to, in ter alia, ensure compliance with6 limits necessary to meet NAAQS) 2 ; Midwest Generation LLC, Fisk Generating Station v. IEPA

, PCB 2008-18 (Sept. 20, 2007) (same); Midwest Generation, LLC, Craw ford Generating Station v. IEPA , PCB 06-56, slip op. at 7 (Feb. 16, 2006); Midwest Generation, LLC, Fisk Generating Station v. IEPA , PCB 06-57, slip op. at 7 (Feb. 16, 2006); Midwest Generation, LLC, Joliet Generating Station v. IEPA , PCB 06-58, slip op. at 7 (Feb. 16, 2006); Midwest Generation, LLC, Powerton Generating Station v. IEPA , PCB 06-59, slip op. at 7 (Feb. 16, 2006); Midwest Generation, LLC, Will County Generating Station v. IEPA , PCB 06-60, slip op. at 7 (Feb. 16, 2006). Not only is this inconsistent with EPA re gulations, which provide for no such “stay,” see e.g., 40 C.F.R. pt. 70 (requiring enforceable limits and providing no automatic or discretionary “stay”), §§ 51.160(a) (requiring enforceable re quirements), 51.165 (same and further providing no automatic stays), but the extremely long time that permit challenges have been pending before the Pollution Control Board creates a de facto automatic “variance” from challenged SIP (and federally-enforceable SIP preconstruction permit requi rements) that, in turn, can interfere with maintenance of the NAAQS.

2. Illegal Startup and Shutdown Exemptions

Like Wisconsin, addressed above, Illinois has illegal exemptions contrary to established EPA interpretations of the Clean Air Act. Specifically, 35 Ill. Admin. Code §§ 212.123 and 212.124 contain illegal exemptions for periods of st artup, shutdown, malfunction, and breakdown. These must be removed, or EPA must set a deadline fo r them to be removed (triggering an automatic SIP disapproval if Illinois does not co mply) pursuant to section 110(k)(4).

3. Illegal “Director’s Discretion” Provisions

Like Wisconsin, addressed above, Il linois has illegal provisions a llowing the IEPA director to
allow violations of limits under certain circumstances. See 35 Ill. Admin. Code § 201.262- .265.

2 See http://www.epa.gov/region7/air/title5/pe titiondb/petitions/uss_response2009.pdf