BOARD: 

Paul C. Aughrry, I11 

Chairman 

Edwin H. Cooper, 111 

Vice Chairman 

BOARD: 

Henry C. Scorr 

M. David Mitchell, MD 

Steven G. lsner 

Secretary C. Earl Hunter, Commissioner 

Promoting andprotecting the health of the public and the environment 

April 12,201 1 

Glenn A. McCall 

Coleman F. Buckhouse, MD 

Ms. Shirley Rivera (AIR-3) 

U.S. EPA Region 9 

75 Hawthorne Street 

San Francisco, CA 94 105-390 1 

Attention: Docket ID No. EPA-R09-OAR-2009-0438 

Re: Announcement of Public Hearing and Request for Public Comment on Proposed 

Action and Supplemental Statement of Basis Related to a Clean Air Act Prevention of 

Significant Deterioration Permit for the Emission of Air Pollutants Permit Application No. 

SJ 08-01, and Supplemental Statement of Basis: PSD Permit Application for Avenal Energy 

Project, March 2011. 

Ms. Rivera: 

Thank you for the opportunity to provide comments on the notice entitled Announcement of 

Public Hearing and Request for Public Comment on Proposed Action and Supplemental 

Statement of Basis Related to a Clean Air Act Prevention of Signzjkant Deterioration Permit for 

the Emission of Air Pollutants Permit Application No. SJ 08-01' ("Public Notice") and the 

Supplemental Statement of Basis: PSD Permit Application for Avenal Energy Project, March 

201 1 ("Supplemental Statement of as is").^ The South Carolina Department of Health and 

Environmental Control ("DHEC") is the public health agency for the State of South Carolina, and 

we are committed to promoting and protecting the health of the public and the environment for 

the State of South Carolina. Further, DHEC is the air quality permitting authority for the State of 

South Carolina, and DHEC has a State Implementation Plan ("SIP) approved Prevention of 

Significant Deterioration ("PSD) air quality permitting program. U.S. Environmental Protection 

Agency ("EPA") permitting decisions affect our permitting decisions, and we appreciate the 

opportunity to comment on this nationally significant permitting decision. 

DHEC is not objecting to the issuance of the PSD permit to Avenal Power Center, LLC ("APC"). 

DHEC is concerned that the EPA's policy reversal will have national implications, and this 

matter should be fully addressed through general rulemaking. We are also requesting clarification 

on the EPA's justification in the Supplemental Statement of Basis. 

I Document No. EPA-R09-OAR-2009-0438-0093, in Docket No. EPA-R09-OAR-2009-0438, Available at 

http://www.regulations.gov/#!documentDetaiI;D=EPA-R09-OAR-2009-0438-0093 (last visited April 1, 

201 1). 

Document No. EPA-R09-OAR-2009-0438-0088, in Docket No. EPA-R09-OAR-2009-0438, Available at 

http://www.regulations.gov/#!documentDetail;D=EPA-R09-OAR-2009-0438-0088 (last visited April 1, 

201 1). 

SOUTH CAROLINA DEPARTMENT OF HEALTH AND ENVIRONMENTAL CONTROL 

2600 Bull Street Columbia, SC 29201 Phone: (803) 898-3432 www.scdhec.gov 
Ms. Rivera 

April 12,201 1 

Page 2 of 5 

BACKGROUND 

The EPA is the permitting authority for PSD air quality permits in the San Joaquin Valley Air 

Pollution Control District of California ("District"). Under this authority, the EPA Region 9 

office in San Francisco issued a draft permit to APC on June 16,2009, for the construction of two 

natural-gas fired 180 MW combustion turbine generators, a heat recovery steam generator, and a 

300 MW steam turbine generator, and associated equipment, in Avenal, California. The EPA 

draft PSD permit addresses nitrogen dioxide ("NO2"), particulate matter with a diameter of less 

than 10 micrometers ("PM,o"), sulfur dioxide ("SO2"), lead, and carbon monoxide. 

This permit is the subject of litigation between the EPA and APC over failure to issue the PSD 

permit one year after receiving a complete permit application; the EPA deemed the APC 

application complete on March 19,2008. The Public Notice and the Supplemental Statement of 

Basis are related to the litigation. In the Supplemental Statement of Basis, the EPA proposed to 

"grandfather," or exempt, the APC permit from three regulations that the EPA promulgated after 

it determined that the APC permit application was complete, the new one-hour NO2 National 

Ambient Air Quality Standard ("NAAQs"),~ the Tailoring ~ule,~ and the revised so2 NAAQS.~ 

This grandfathering is counter to prior EPA policy statement^.^ 

In the case of APC, the statutory requirements for sources not to cause an exceedance of the 

NAAQS and to employ the Best Available Control Technology ("BACT") are in conflict with the 

statutory requirement to make a decision on a PSD permit application within one year of 

receiving a complete application. DHEC is in no way attempting to weigh these requirements in 

this case. We cite the requirements for sources to meet the NAAQS and use BACT to highlight 

the extent to which the Supplemental Statement of Basis marks a departure from existing policy, 

and thus warrants a more complete explanation from the EPA. A Supplemental Statement of 

Basis for a single permit is not the appropriate vehicle to reverse prior policy. 

DHEC COMMENTS 

DHEC is commenting on the EPA's justification for its decision to grandfather the APC permits 

from the NO2 and SO2 NAAQS and the Tailoring Rule. Again, DHEC is not commenting on 

whether or not the EPA should issue a PSD permit to APC. As the air quality permitting authority 

for the State of South Carolina, DHEC looks to EPA decisions for precedents in issuing PSD 

permits. Our permit applicants and stakeholders also look to EPA decisions in evaluating 

DHEC's draft PSD permits, and the proposed APC decision could make a confusing precedent. 

1. APC PERMIT ISSUES HAVE NOT BEEN SHOWN TO BE UNIQUE 

Primary National Ambient Air Quality Standards for Nitrogen Dioxide, 75 Fed. Reg. 6474 (February 9, 

20 10). 

Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule, 75 Fed. Reg. 3 15 14 

(June 3,20 10). 

Primary National Ambient Air Quality Standards for Sulfur Dioxide, 75 Fed. Reg. 35520 (June 22, 2010). 6 See Clean Air Act § 165(a); 40 CFR 52,2l(k)(l)(i) (2010); Stephen Page, Office of Air Quality Planning 

and Standards. Memorandum. Applicability of the Federal Prevention of Significant Deterioration Permit 

Requirements to New and Revised National Ambient Air Quality Standards (April 1, 20 10); 

Reconsideration of Interpretation of Regulations That Determine Pollutants Covered by Clean Air Act 

Permitting Programs, 75 Fed. Reg. 17004, 170 18 (April 2,20 10). 
Ms. Rivera 

April 12,201 1 

Page 3 of 5 

DHEC's primary comment is that the issues with the APC permit are not unique. State and local 

permitting agencies often experience the sorts of delays in issuing PSD permits that the EPA 

experienced with APC, yet the EPA has required permits from these agencies to meet the 

NAAQS at the time of permit issuance. The case-specific grandfathering decision explained in 

the Supplemental Statement of Basis may add confusion to the already complex PSD permitting 

process. 

In the Supplemental Statement of Basis, the EPA makes five arguments for why this case is 

fundamentally unique and thus why it should change its previous, long-standing position. DHEC 

notes that the EPA's reasons for why APC is unique do not establish a clear bright line. 

a. PROCESS TYPE SHOULD HAVE NO BEARING ON THE PROPOSAL TO 

GRANDFATHER NAAQS COMPLIANCE AND THE TAILORING RULE 

The first reason given is that the draft permit is for well-controlled natural-gas fired combustion 

turbines with the BACT for NO2. The well-controlled nature of the project is a given, or the 

project would not have been eligible for a PSD permit. Therefore, the nature of the project should 

have no bearing on EPA's action on this permit, and citing the nature of the project in partial 

justification of the proposed case-specific grandfathering action sets a bad precedent. EPA's 

comments that APC's status as a natural-gas fired electric generating facility warrants its 

grandfathering may undercut its past statements that it is not attempting to define natural gas as 

BACT. In ostensibly favoring natural gas, the EPA is providing support for natural gas as BACT. 

b. THE EPA HAS NOT ESTABLISHED HOW THE TIMING OF THE 

COMPLETENESS DETERMINATION AND THE NO2 NAAQS PROPOSAL IS RELEVANT 

The second reason given is that the EPA issued the NO2 NAAQS proposal more than a year after 

the completeness determination. DHEC notes that this is not an unusual circumstance. Proposed 

regulations come out regularly. Further, the EPA often publishes a final rule shortly after 

proposal; for example, the EPA will sign the final Utility MACT eight months after signing the 

proposal, pursuant to a consent decree. It is not uncommon for the EPA to publish a proposal and 

a final rule during the time it takes for a permitting authority to resolve issues with a PSD permit. 

The relevance of the one-year timeframe is unclear. If a proposal came out less than a year after 

the completeness determination would this grandfathering exemption apply? 

c. UNFORSEEN MODELING ISSUES ARE NOT UNIQUE TO THE APC 

PERMITTING PROCESS 

The third reason the EPA used to propose grandfathering is that unforeseen modeling issues arose 

after EPA had decided not to grandfather permits. Permitting authorities experience unforeseen 

modeling issues with every revised NAAQS. DHEC notes that more analysis on why these 

modeling issues were unique may clarify this reason. Most permitting authorities experience 

modeling issues with PSD applications. 

DHEC appreciates the March 1, 20 1 1, guidance memorandum for NO2 modeling and the April 7, 

20 1 1, AERMOD update, but we note that the EPA published these essential tools more than a 

year after the publication of the one-hour NO2 NAAQS. Before the publication of the March 1, 

201 1, memorandum, DHEC notes that compliance with this NAAQS may have been technically 

impossible because of the absence of implementation guidance. A possible cause of this problem 
Ms. Rivera 

April 12,201 1 

Page 4 of 5 

is lack of communication amongst the EPA program areas. Standard setting and implementation 

guidance, including modeling, must be synchronized. 

d. THE EPA DOES NOT EXPLAIN HOW APC MINIMIZES CARBON DIOXIDE 

EQUIVALENT (COze) EMISSIONS 

The fourth reason given is that the NO2 modeling issues delayed permit issuance past the 

effective dates of the SO2 NAAQS and the Tailoring Rule. DHEC notes that this is not a reason; 

it's a description of the chronology. Previous EPA guidance that forbids grandfathering does not 

make exceptions for the cause of a permit delay. This is only a valid reason if the NO2 

grandfathering is valid. The EPA dismisses possible concern over the SO2 NAAQS by stating that 

APC will emit a de minimis amount of S02. The EPA, however, does not elaborate on the 

Tailoring Rule issues in the same way. Rather, the EPA simply notes that in considering the 

transition period for the Tailoring Rule, the EPA did not consider possible delays caused by NO2 

implementation. It would be helpful if EPA would comment on features of the APC project that 

are consistent with the greenhouse gas BACT requirements that would apply if the EPA had not 

exempted the permit from the Tailoring Rule. 

e. THE SPECIFIC CAUSE(S) OF THE PERMIT DELAY IS NOT CLEAR 

The fifth reason given was that judicial precedents allow for exceptions to laws and regulations in 

the case of an agency delay. The EPA notes that "where there has been a significant and 

prejudicial delay by the government agency reviewing an application," the government agency 

can make an exemption to the principle that "a decision on an application for a government 

license, permit, or other type of authorization must be based on the law in effect at the time of the 

decision of the reviewing agency." Again, the EPA has failed to articulate why this delay is 

unique. Many PSD permit applications experience a processing delay. The EPA should clarify 

what exactly caused the delays in this permit process. As discussed above, the administrative 

record is unclear on the causes of the delays, particularly in the period before the EPA issued the 

final NO2 NAAQS. Providing additional information would help prevent the EPA's proposed 

action from becoming a binding precedent that runs counter to current established policy. 

DHEC finds the administrative record inadequate to explain why the EPA did not issue the final 

permit before its statutory deadline of March 19, 2009, or at least before the effective date of the 

one-hour NO2 NAAQS on April 12,2010. The multiple public comment periods do not seem to 

have yielded insurmountable issues. Also, the role of consultation with the U.S. Fish and Wildlife 

Service ("FWS") for compliance with the Endangered Species Act in the delay is unclear. Given 

that the FWS review started on July 10,2008, and did not end until August 2010, perhaps the 

FWS review could in part explain the delay. DHEC would find an elaboration of the causes of the 

delay helpful in understanding the EPA's many assertions of the singularity of this case. 

2. IT IS UNCLEAR IF ALL FIVE CRITERIA NEED TO BE MET TO GRANDFATHER THE 

PROJECT 

DHEC is also unclear how the reasons taken as a group would apply to other permits. Does a 

proposed permit need to meet all five of these reasons, or will meeting just three suffice? The 

EPA could lessen confusion in future permits if it addressed this issue clearly and create a 

coherent bright-line test. The EPA could also lessen confusion surrounding this action by 

explicitly stating that this is a case-specific grandfathering action and should not be used as a 

precedent for future permitting. 
Ms. Rivera 

April 12, 201 1 

Page 5 of 5 

3. THE EPA SHOULD ADDRESS GRANDFATHERING THROUGH GENERAL 

RULEMAKING 

The EPA should address its grandfathering policy through general rulemaking or a guidance 

document with a public comment period. The APC action contradicts long-standing PSD policy, 

and the Supplemental Public Notice does not adequately explain how the APC permit is distinct 

enough to warrant the grandfathering from three major rules. 

4. THE EPA SHOULD COMMIT TO RESOLVING MODELING ISSUES WHEN IT ISSUES 

A NEW OR REVISED NAAQS 

DHEC also requests that the EPA commit to issuing all guidance for a new or revised NAAQS 

when that NAAQS is published. The lack of this clear guidance led in part to the APC delays. 

The EPA had issued the one-hour NO2 NAAQS and required sources to comply with it, yet it did 

not provide guidance on how sources could do that. This was a problem with the 1997 PM2 

NAAQS. The EPA did not issue final guidance on implementing this NAAQS until late 2010, 

creating unnecessary confusion for permitting authorities. With recently issued NAAQS, such as 

SO2, and forthcoming revisions, including PM2.S and the N02/S02 secondary NAAQS, the 

grandfathering issue is of central importance to the permitting process. DHEC requests that the 

EPA involve state and local permitting authorities as co-regulators rather than just stakeholders in 

setting NAAQS and in other rulemaking. The EPA needs to involve state and local agencies in 

the rulemaking pre-proposal stage, when agenda-setting decisions are being made. State and local 

agencies implement EPA regulations and have expertise that would improve the outcome of 

rulemaking to address NAAQS implementation. 

We hope the lessons learned from this permitting experience will help the EPA better understand 

and appreciate the struggles and complexities state and local permitting authorities endure on a 

daily basis with PSD permitting and NAAQS implementation. It should also affirm the strong 

benefits of having timely and clear guidance for future rulemakings. DHEC appreciates the 

opportunity to comment on this significant permitting action. If you have questions, please 

contact Elizabeth Basil of my staff at (803) 898-4126, or by email at basilej@dhec.sc.gov. 

Sincerely, 

Bureau of Air Quality 

ec: Beverly Banister, Director, Air, Pesticides, and Toxics Management Division, 

EPA Region 4 

Gregg Worley, Chief, Air Permits Section, EPA Region 4 

Gerardo Rios, Chief, Air Permits Section, EPA Region 9 

Richard Corey, Division Chief, Stationary Source Division, California Air 

Resources Board 

David Warner, Director, Permit Services, San Joaquin Valley Air Pollution 

Control District 

Rhonda Banks Thompson, Assistant Bureau Chief, Bureau of Air Quality, 

S.C. DHEC