RHODE ISLAND 

DEPARTMENT OF ENVIRONMENTAL MANAGEMENT 

235 Promenade Street, Providence, RI 02908-5767 

18 September 2013 

David B. Conroy, Chief 

Air Programs Branch 

EPA-New England, Region 1 

5 Post Office Square 

Boston, MA 02109-3912 

Dear Mr. Conroy: 

TDD 401-222-4462 

This letter is intended to address several questions EPA Region 1 has asked RI DEM about its 

current version of Air Pollution Control Regulation No. 9 that was submitted to EPA for 

approval into the State Implementation Plan (SIP) on January 18,2011. 

Attached to this letter is a demonstration that the Prevention of Significant Deterioration (PSD) 

program contained in Air Pollution Control Regulation No. 9 is more stringent than or at least as 

stringent in all respects as the federal progran1 for preconstruction permitting of greenhouse 

gases. The PSD program is implemented in Rhode Island through Air Pollution Control 

Regulation No.9. 

The attached demonstration supplements the SIP submittal in order to meet the requirements of 

40 CFR §5!.166 and to demonstrate that APC Regulation No.9, as amended on January 31, 

2011, achieves at least the same level of emissions reductions that would have been achieved had 

Rhode Island adopted plantwide applicability level requirements found at 40 CFR §51.166(w) 

and the other new source review reform provisions promulgated by EPA in 2002. 

Additionally, EPA Region 1 has asked a question regarding RI's current regulatory definition of 

the term "regulated NSR pollutant" as it is used in RI's major new source review preconstruction 

permitting program. Region 1 has asked whether RI requires that the condensable portion of the 

pollutants PM-10 and PM 2.5 be considered for purposes of major new source review permitting 

applicability detetminations and for establishing source-specific emissions limits in new source 

review preconstruction permits. The question arose because RI's current definition of "regulated 

NSR pollutant" does not contain the explicit references to condensable portions of PM-I 0 and 

PM2.5 that appear in EPA's definition of "regulated NSR pollutant" at 40 C.F.R. 

51.166(b )( 49)(i)(a). 

A t-4} 30% post-consumer fiber 
RI DEM offers the following in response to Region 1 's question. RI DEM does currently require 

consideration of the condensable portion of the pollutants PM-1 0 and PM 2.5 for the purposes of 

major new source review applicability determinations and establishing permit limits, despite the 

absence of an explicit reference to "condensables" in the definition of "regulated NSR pollutant." 

RI DEM interprets the definitions of the terms "PM-10" and "PM2.5" in APC Regulation No.9 

to include the condensable portion of the pollutants PM-10 and PM 2.5 even though the word 

"condensable" is not expressly used in that definition. RI DEM believes that this is the only 

reasonable interpretation of the two definitions given the defined term refers to measurements of 

PM-I 0 and PM2.5 in relation to ambient monitoring which, as a technical matter, necessarily 

would include the condensable portions ofPM-1 0 and PM 2.5. 

Lastly, on December 29, 2005, RI DEM submitted to EPA Region 1 a demonstration that the New 

Source Review (NSR) programs contained in Rhode Island's existing State Implementation Plan (SIP) are 

at least as stringent as the revised federal program (including NSR reform). EPA concluded, however, 

that the State's demonstration did not contain all of the elements needed and so could not be 

accepted for its intended purpose. We understand that EPA is now preparing to conditionally 

approve the incorporation of the current APC Regulation No.9 into the SIP provided RI DEM 

commits to submitting a revised demonstration no later than one year from the date on which 

EPA finalizes the conditional approval. As required by EPA, RI DEM commits to provide the 

revised demonstration in the timeframe specified. 

Feel free to contact me or Ruth Gold with any questions or to discuss this letter. 

Sincerely, 

i,~QfA';{iJ (7( !rL:t;-· I 

I 1 r- DougJ~S L. McVay, Ch 

Office of Air Resources 
Rhode Island Department of Environmental Management 

Office of Air Resources 

State Implementation Plan Equivalency Demonstration 

For Greenhouse Gas Emissions under the PSD Program 

September 18,2013 

Executive Summary 

In 2002, the United States Environmental Protection Agency (EPA) promulgated 

amendments to the federal prevention of significant deterioration (PSD) and major 

nonattainment new source review regulations (NSR Reform). 1 If a state's 

preconstruction permitting program for major stationary sources deviates from the federal 

provisions, it must perform an analysis, pursuant to 40 C.F.R. §51.166, demonstrating 

that its program is more stringent than or at least as stringent in all respects as the federal 

program

2 

In 2010, EPA issued a rule tailoring the applicability criteria that determine which 

stationary sources and modification projects become subject to permitting requirements 

for greenhouse gas emissions under the PSD program.

3 This rule became known as the 

"Tailoring Rule." Rhode Island amended Air Pollution Control Regulation No. 9 (APCR 

No.9) on January 31, 2011 to adopt the applicability criteria. In light of those revisions, 

Rhode Island has prepared this analysis to verify for EPA that APCR No. 9 is more 

stringent than or at least as stringent in all respects as EPA's NSR Reform rules and the 

Tailoring Rule, as these rules apply to the preconstruction permitting of greenhouse 

gases. 

Background 

A. New Source Review Reform 

On December 31, 2002, the U.S. Environmental Protection Agency (EPA) revised its 

regulations governing the New Source Review (NSR) programs, including PSD 

requirements, under Parts C and D of Title I of the Clean Air Act.4 Two elements of the 

revisions, the Clean Units provision and the Pollution Control Projects exclusion were 

vacated by the U.S. Court of Appeals for the District ofColumbia. 5 The three remaining 

elements are as follow: 

1 40 CPR §52.21 et seq .. The 2002 rule changes affect nonattairunent New Source Review (NSR) as well 

as PSD. For this discussion the changes are limited to permitting greenhouse gas emissions under the PSD 

program. 

2 40 CFR §51.166 (a)(7)(iv). 

3 75 FR 31514 (June 3, 2010). 

4 67 Fed. Reg. 80185. 5 State of New York. eta/., v. U.S Environmental Protection Agency, eta/., 413 F.3d 3 (D.C. Cir 2005) 
1. Plantwide Applicability Limits (PALs): The rules were modified to allow 

sources to make changes to their operations without triggering PSD review, as 

long as a source accepts a permit limit requiring it to operate within a strict 

facility-wide emissions cap, called a Plantwide Applicability Limit or PAL. 

2. 10-year Look-back for Establishing Emissions Baseline: PSD requirements 

are triggered when emissions increases for a new project or modification exceed 

specified levels. The emissions increase is measured by comparing estimated 

post-construction emissions to a preconstruction baseline level of emissions. 

NSR Reform changed the way in which baseline emissions are calculated. NSR 

Reform allow a facility other than an electric utility to use any 24-month period in 

the I 0 years prior to the modification as long as all current control requirements 

are taken into account. (Electric utility units must use a consecutive 24-month 

period within the previous 5 years.) 

3. Calculating Emissions Increases: NSR Reform extended an optional method 

for calculating increases in emissions resulting from facility modifications at nonelectric utility steam generating units (non-EGUs). The federal rules allow a 

source to use either an actual-to-projected actual test or an actual-to-potential test. 

If a source chooses to use the actual-to-projected actual test and there is a 

reasonable possibility the change will result in a significant emission increase, it 

is required to maintain certain records demonstrating how it calculated its 

predicted future actual emissions; and the source must submit reports to the 

permitting authority if its post-modification actual emissions turn out to be 

different from the pre-modification prediction. 

B. EPA's Narrowing Rule 

In 20 I 0, EPA promulgated a rule entitled "Limitation of Approval of Prevention of 

Significant Deterioration Provisions Concerning Greenhouse Gas Emitting-Sources in 

State Implementation Plans" that changed the threshold for greenhouse gas permitting in 

several approved state implementations plans, including Rhode Island's. 6 This rule, 

referred to as the Narrowing Rule, aligned the Rhode Island SIP-approved PSD 

regulations with EPA's Tailoring Rule. 

C. New Source Review Reform Applies to Greenhouse Gases 

Neither the Narrowing Rule nor the Tailoring Rule adopted an exemption from EPA's 

NSR Reforms for stationary sources of greenhouse gases. In fact, in 2012 EPA extended 

PALs, part of the NSR Reforms promulgated in 2002, to stationary sources of GHGs.7 

6 75 FR 82536 (December 30, 2010) 7 77 FR 41051 (July 12, 2012) 

I 
Rhode Island's Equivalency Determination Analysis 

NSR Reform allows states to deviate from the NSR Reform regulations, but requires such 

states to show that their existing program is more stringent than or at least as stringent in 

all respects as the NSR Reform provisions. 8 The analysis contained in this document 

fulfills that requirement with regard only to the permitting of greenhouse gas emissions 

under the Clean Air Act's PSD preconstruction permit program. This analysis does not 

address whether Rhode Island's current APCR No. 9 is more stringent than or at least as 

stringent in all respects as EPA's NSR Reform provisions for all other regulated NSR 

pollutants. Rhode Island intends to submit such a demonstration for all other regulated 

NSR pollutants in the near future. 

For this analysis, Rhode Island separately analyzed below each of the three elements 

currently contained in EPA's NSR Reform regulations. 

PALs 

NSR Reform's environmental impact analysis relies on benefits that result from 

encouraging facilities to voluntarily implement emission controls. However, ifNSR 

Reform had been adopted by Rhode Island, there are several factors specifically relevant 

to Rhode Island's GHG sources indicating that such benefits would not occur. 

EPA's Supplemental Analysis 9 relied heavily on emissions reductions that would arise 

from the application of PALs to six source categories. These results were then 

extrapolated to assess impacts on volatile organic compounds (VOC) emissions in three 

other industrial categories: pharmaceutical manufacturing, semi-conductor 

manufacturing, and automobile manufacturing. In addition, EPA provided a separate 

analysis which assessed the impact of PALs for the pulp and paper industry within the 

context of approving NSR reform in Wisconsin. 10 Again, EPA's analysis contrasted 

emissions reductions benefits anticipated to be obtained at sources in the pulp and paper 

industry if PALs were applied in lieu of obtaining a traditional NSR permit. 

EPA has stated that the types of facilities in the four source categories referenced above 

may need significant operational flexibility to make quick changes in response to 

changing market conditions. The ability to make such changes without having to wait for 

the issuance of a PSD construction permit is considered, on balance, to be preferable 

even if additional emissions reductions are required and maintenance of additional 

records are needed to verif'y compliance with the plant-wide emissions limits. EPA states 

that by keeping emissions below the PAL the source will have agreed to lower its 

emissions beyond what would have been required under a PSD preconstruction permit 

program without PALs. However, given the type and number of sources in Rhode Island 

emitting greenhouse gas emissions at a level that would be subject to EPA's PSD 

8 40 CFR 51.166(a)(7)(iv) 

9 U.S. Environmental Protection Agency, New Source Review (NSR) Improvements: Supplemental 

Analysis of the Environmental Impact of the 2002 Final NSR Improvement Rules, November 21, 2002. 

10 73 FR 76564, December 17,2008 

2 
requirements, we do not believe there would have been any reduction in emissions from 

current emissions levels if Rhode Island had adopted PALs as part of its regulatory 

approach. 

Attachment I to this document contains a list of 11 stationary sources of GHGs in Rhode 

Island, on a C02e basis, that have reported to EPA's Greenhouse Gas Reporting Program. 

Sources with greenhouse gas emissions that in general are over 25,000 metric tons per 

year, must report their greenhouse gas emissions to EPA. It is important to note that the 

reporting threshold is just slightly over 25% of the major source threshold in EPA's PSD 

permit rules on a COze basis. 

In analyzing the types of sources listed in Attachment I, we first note that none of the 

sources is in any of four source categories which formed the basis of EPA's analysis 

supporting the conclusion that the inclusion of PALs in the major stationary source 

preconstruction permitting program results in emissions reductions as compared to a 

program without PALs. The greenhouse gases emitted from 10 of the sources in 

Attachment I result from the combustion of fossil fuels. The other source, a landfill, 

primarily emits the greenhouse gas methane. These 11 sources typically do not make 

quick changes to their facilities in response to changing market conditions, either in their 

raw materials or final product, which would require a PSD pennit. For example, 5 of the 

sources generate electricity for wholesale. These five facilities are also subject to other 

federal and state permitting programs implemented by federal and state agencies other 

than EPA and RI DEM. Consequently, a PAL typically would not provide these sources 

with the operational and timing flexibility afforded sources not subject to those other 

permitting programs, because the electric generating facilities would, even with a PAL, 

need to undergo the various permitting processes implemented by other state and federal 

regulators before the physical or operational changes in question could legally occur. 

These sources are large, stable operations, limited to com busting one or two fuels, and so 

are unlikely to benefit from a PAL. 

Five of the other six sources, whose greenhouse gas emissions derive from combustion of 

fossil fuels, only consist of one to four main combustion units, per source. These 5 

sources and the size of their emission units are listed in Attachment II (which contains 

more information for these sources beyond what is contained in Attachment I). These 

sources have not made frequent changes to their combustion units in the past which 

required preconstruction permits, let alone PSD permits. 

Finally, for the remaining source (of the 11 sources), landfills generate methane (a GHG) 

and other volatile organic compounds as a result of biodegradation of the waste deposited 

in the landfill. Landfills typically would only trigger PSD for GHGs when they construct 

a large new section or "phase" of the landfill. The nature of that kind of land-based 

footprint construction suggests that it is not something that actually does, or even could, 

happen frequently over relatively short periods of time in response to rapidly changing 

conditions, either in the market or at the source. Consequently, it is difficult to see how a 

PAL might be of use to a large landfill. 

3 
Actual-To-Projected Actual Test 

The emission increase calculation used at non-utility sources for determining whether a 

physical or operational change at a source triggers the major modification preconstruction 

permitting requirements was changed by EPA's NSR Reforms from an actual-to-potential 

test to an actual-to-projected actual test (with an option to use the former test, however, if 

a source so chooses). In the context of EPA's recent approval of certain revisions to the 

Wisconsin NSR SIP, EPA stated "it is more difficult to assess the environmental impacts 

of the actual-to- projected-actual test and the '"two-in-ten' baseline provisions." 

However, we present the following facts to demonstrate that Rhode Island's rules will 

provide for at least the same emission reductions in greenhouse gases as EPA's rules in 

relation to the difference between the two tests. 

Although Rhode Island's preconstruction permitting program regulations contain the 

actual-to-potential test, rather than the NSR Reform's actual-to-projected actual test, 

there are other aspects of Rhode Island's regulations that operate to achieve a result that 

is equivalent, as a practical matter, to the federal rules. EPA's NSR Reform requires a 

source to project its post-modification actual emissions to determine if the project meets 

the definition of a "major modification" triggering PSD permitting requirements. If the 

source projects that there is a significant possibility its post-modification emissions will 

result in either a "significant emissions increase" or a "significant net emissions 

increase," the source must maintain records of its actual emissions for either 5 or 10 years 

after a modification occurs in order to confinn that its pre-modification emissions 

projections were correct. 

While Rhode Island's preconstruction permitting rules include a different test, the actualto-potential test, a source would have an option that would result in the same operational 

flexibility to avoid PSD review (as described below). In other words, if the concern over 

the use of a different test in Rhode Island arises because the actual-to-potential test does 

not provide sources with sufficient operational flexibility, Rhode Island's permitting rules 

as a whole actually do provide an equivalent level of flexibility through a different 

mechanism. In Rhode Island, any source that would have, under NSR Refonn, been 

required to maintain records of its greenhouse gas emissions for 5 or I 0 years to confirm 

that its projection of post-modification emissions was sufficiently accurate, would in any 

event be required to obtain a minor source preconstruction permit . Although GHGs are 

not regulated directly under Rhode Island's minor source permit program, the sources 

located in Rhode Island as identified in Attachment I, which potentially could be subject 

to PSD permitting for GHGs, typically emit other regulated NSR pollutants. A minor 

source permit would contain an emission cap that would limit emissions of all pollutants, 

including GHG, to less than the PSD applicability thresholds. In addition, the minor 

NSR permit would contain similar record keeping requirements as EPA's NSR Reform 

rule to ensure that the source did not violate the emissions cap that kept the source out of 

major PSD review. Consequently, a source in Rhode Island that would have projected 

that its post-modification actual emissions would not trigger PSD review (had NSR 

Reform been adopted by the State), under Rhode Island's current rules would simply 

need an additional permit requirement (an emissions cap) to reflect such a projection. 

4 
Another way oflooking at this equivalency between the State and federal programs is to 

note that in Rhode Island, whether the major source PSD rules were to rely on either an 

actual-to-potential test or an actual-to-projected actual test, that source would still need to 

obtain a minor NSR permit prior to construction. As a practical matter, if a source were 

willing to project that its actual post-modification emissions would stay below major 

modification thresholds in relation to a particular project, then it should readily be able to 

comply with a minor NSR emissions cap at an equivalent level of emissions to those 

projected to occur in the future. 

In addition to the above reasoning, Rhode Island maintains that its current definition of 

major modification that relies on the actual-to-potential test is broader in scope than the 

federal definition (i.e. more sources would be subject to review as major modifications) 

and therefore APCR No. 9 is more stringent than or at least as stringent as the federal 

program with respect to the actual to projected actual test. 

10 Year Look Back 

This provision ofNSR Reform changed the allowable time frame used to determine 

baseline actual emissions as part of the calculation of emissions increases that might 

trigger PSD review for modifications. The NSR Reform rules revised the allowable time 

frame to be any consecutive 24 month period during the 10 year period immediately 

preceding the permit application date for a modification at non-utility sources. Rhode 

Island's current rules, however, limit the look-back period to 5 years. Under either the 

NSR reform rules or Rhode Island's current rules, utility sources are limited to a 

consecutive 24 month period in the previous 5 years. In EPA's Supplemental Analysis 11 

to the Reform Rule EPA stated: 

"As described in Appendix F, the rule change will not alter the baseline at all for 

most sources, including (I) new sources, (2) modifications in the largest-emitting 

category, coal fired power plants, (3) modifications at any source where emissions 

have been highest in recent years, and ( 4) modifications at any source where 

emissions have been relatively stable. Together these categories comprise an 

estimated 90 percent of emissions benefits from the NSR program." 

In analyzing the greenhouse gas emissions in 2011 from the sources listed in Attachment 

I, five of the 11 sources (Entergy Rhode Island State Energy, LP, Manchester Street, 

Ocean State Power, Pawtucket Power and Tiverton Power) are all utility sources. 

Baseline emissions therefore would not be expected to be altered at these five sources by 

the NSR Reform rule because in each case they would be limited to a baseline within the 

previous 5 years. 

GHG emissions from three of the II sources, Brown University, Algonquin Gas 

Compressor Station, and Rhode Island Hospital, are expected to be stable over time. The 

11 New Source Review (NSR) Improvements "Supplemental Analysis of the Enviromnental Impact of the 

2002 Final NSR Improvement Rules," November 21, 2002 

5 
10 year look back period was provided to allow sources to account for variations in their 

business cycles. None of these three sources would be expected to be subject to 

significant variations in demand for their services from year to year, and thus the 

difference between a 5 and a 10 year look-back period should make no difference to the 

calculation. 

GHG from one of the 11 sources, Rhode Island Resource Recovery Corporation, will 

either remain stable or increase in the future. This facility receives all municipal trash 

generated in Rhode Island. If methane emissions from landfills are measured on a graph 

over a period of years the data would form a bell curve due to the nature of decomposing 

waste that generates gas (including methane). However, the landfill continues to expand 

and make improvements in collecting and destroying methane gas. These facts support 

the conclusion that baseline emissions for this particular source would not be expected to 

be impacted by the difference between a five year and a ten year look back period, 

because greenhouse gas emissions are expected to remain stable over time for the entire 

landfill, i.e., landfill gas emissions decrease over time in a particular segment of the 

landfill but new phases or sections are constructed. In addition, landfill gas collection 

systems are designed under applicable state and federal law to ensure that the methane is 

collected and controlled- in fact, methane typically is used to fuel power electric 

generating units. 

Finally, actual GHG emissions from the two remaining sources, U.S. Navy Naval Station 

and Toray Plastics, are 50% or less than the major source threshold for GHGs on a C02e 

basis and therefore could easily comply with a minor source permit emissions cap to 

avoid having to determine "actual baseline emissions" as the term is used in the PSD 

permit program. 

In addition to the above reasoning, Rhode Island maintains that its current definition of 

major modification that limits the look-back period to five years is broader in scope than 

the federal definition (i.e. more sources would be subject to review as major 

modifications) and therefore APCR No. 9 is more stringent than or at least as stringent as 

the federal program with respect to the look back period. 

Conclusion 

In Rhode Island, because of the characteristics of the specific sources subject to the PSD 

rules for GHGs as demonstrated by the analysis of those sources' emissions set forth 

above, RI DEM believes that APCR No. 9 is more stringent than or at least as stringent in 

all respects as the federal NSR Reform rules at reducing GHG emissions in Rhode Island. 

6 
Attachment I 

Sources Which Submitted Greenhouse Gas Emissions Data 

Pursuant to 40 CPR Part 98 

City/Town GHG Emissions 

on a C02e basis 

(metric tons in 

Facility Name 2011) 

Brown University Providence 28,810 

Algonquin Gas Compressor Station Bunillville 30,049 

Entergy Rhode Island State Energy, LP Johnston 1,172,779 

Manchester Street Providence 1,085,960 

Ocean State Power Hanisville 686,125 

Pawtucket Power Associates, LP Pawtucket 11,445 

Rhode Island Hospital Providence 49,267 

Rhode Island Resource Recovery 

Corporation Johnston 109,135 

Toray Plastics of America North Kingstown 57,460 

Tiverton Power Tiverton 627,406 

U.S. Navy Naval Station Newport 22,088 

7 
Attachment II 

Combustion Sources Other than Electric Generating Utilities 

Source Unit Size based on heat input 

Algonquin Gas Compressor Station 2 gas turbines each rated at 58 MMBtu/hr 

Brown University 1- 93 MMBtu/hr boiler 

2- 122 MMBtulhr boilers 

Rhode Island Hospital 1 - 80 MMBtu/hr boiler 

3 - 66 MMBtulhr boilers 

Toray Plastics 2 - 40 MMBtu/hr boilers 

1 - 98 MMBtulhr boilers 

U.S. Naval Station 2 - 93 MMBtulhr boiler 

1 - 95 MMBtulhr boiler 

I - 96 MMBtulhr boiler 

8