P.1 

OAR Box 1787 

Prepped by Ollie Stewart 

Document Number: 

8) ll-A-8 

Docket Number: 

A-90-37 

Printed 11/4/200810:22:18 AM Sheet 8 of 147 
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5.8 

'"ii! \h. 

iiiO; JAW 2 5 fc^ rfv:! 

i /..'.*•{ DOCKET 

FINAL DRAFT 

December 1986 
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The New Source Review Task Force 

Gary D. McCutchen, Chairman 

Rich Biondi 

Wayne Blackard 

John Crenshaw 

Jim DeMocker 

Greg Foote 

Judy Katz 

Tom Maslany 

Roger Pfaff 

Marcia Spink 

Ron Van Mersbergen 

Control Programs Development Division, OAQPS 

Stationary Source Compliance Division, OAQPS 

Region IX 

Emissions Standards and Engineering Division, OAQPS 

Office of Policy Analysis .and Review, OAR 

Office of General Counsel 

Office of Enforcement and Compliance Monitoring 

Region- III 

Region IV 

Region I 

Region V 

Task Force/OAR Liaison: Joseph E. Lees, OAR 

The NSR Task Force gratefully acknowledges the efforts of the following 

EPA staff in developing this report: 

Bernie Turlinski 

Matt Haber 

Gary Rust 

Region III 

Region IX 

Control Programs Development Division; OAQPS 

Finally, two particular contributions: 

Eric Noble, CPDD, OAQPS for his work on the BACT/LAER portion of this report, and 

David A. Solomon, CPDD, OAQPS whose ideas, energy, and enthusiasm make him the 

prtactparVarchiteclrof this report. — 
TABLE OF CONTENTS 

Chapter Title ' Page 

I. Introduction 1 

A. Statement of Purpose 1 

II. Executive Summary 2 

III. The NSR Program; Expectations and Concerns ..... . 3 

IV. Enhancing NSR Permit Processing: Certainty and 

Consistency 7 

A. NSR Assistance and Training Needs 7 

1. Existing Concerns. . . '. 8 

2. Options for Impro" ' "*. 9 

B. Communication and Information Exchange -. 13 

1. Background 13 

2. Causes of Inadequate Communications'/Information 

Exchange 15 

3. Impacts of Inadequate Communications/Information 

Exchange 16 

4. EPA and the Public Notice Period 18 

5. Options for Improving Communications/Information 

Exchange. . . ... . .. . . . . . 19 

a. From State and local agencies to EPA 19 

b. From EPA to the State and local agencies. . . 22 

C. The BACT Review 25 

1. Background 25 

2. An Alternate Approach to Determining BACT. .. . 26 

3. Options for Improving the Current BACT Process . 27 

3. The BACT/LAER Clearinghouse 28 

a. Purpose and Concerns 28 

b. Options for Improvement 29 
P.5 

* 

TABLE OF CONTENTS (CONTINUED) 

Chapter Title Page 

V. Public Participation in External Options 34 

VI. The Next Step 34 

Appendices 35 

A. NSR Program: A Background Summary 

B. Setting of BACT to Address Toxic Air pollutants 
P.6 

I. Introduction 

Major stationary sources of air pollution (and major modifications 

to major sources) are required to obtain a permit before commencing 

construction. The process "is called new source review (NSR) and is 

required whether the major source or modification is planned for an area 

where the national ambient air quality standards (NAAQS) are exceeded 

(nonattainment areas) or an area where air quality is acceptable (attainment 

areas). Attainment area permits are referred to as prevention of significant deterioration (PSD) permits; nonattainment area permits are 

referred to as NAA permits; the entire program, including both PSD and NAA 

permit reviews, is referred to as the NSR program. 

A. Statement of Purpose 

Ori June 27, 1986, Craig Potter, EPA Assistant Administrator for Air 

and Radiation, announced the formation of a Special Task Force on New 

Source Review. Mr. Potter's principal purpose in organizing this task 

force was to address growing concerns about the consistency and certainty 

of permits issued under the Clean Air Act NSR programs. The establishment 

of the Special Task Force on NSR has both (a) focused agency attention on 

the problems and issues associated with the NSR programs, and (b) provided 

a vehicle for identifying and proposing effective solutions to current 

problems. 

The basic goal of the overall Task Force effort is to improve the 

timeliness, certainty and effectiveness of the NSR permit process. The 

Task Force is to identify specific measure; t • -sure that delegated 

permitting agencies have the knowledge ano. *.*••"• -ecessary to correctly 

implement" ttre~"NSR""programs""aTTd_provtde" EPA wvr.:rr .-. 7Ax:zte~information toassure that the technology and other program requirements are implemented 

consistent with Clean Air Act requirements. To the maximum extent possible, 

the options developed by the Task Force are to attempt to improve the NSR 

process within existing resource constraints. 
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II. Executive Summary 

The NSR world consists of about 200 permits per year for major 

sources, which total from 70-90% of all new air pollution emissions. 

These permits are processed by one of the 90 or more State, territorial, 

local, or district agencies or one of the 10 EPA Regional Offices. 

Problems in both the processing and the technical review of these permits 

have been identified in recent audits, special reports, and specific 

incidents. 

A study of these problems has led to the main Task Force conclusion 

that, in almost all cases, they could be best resolved by improvements 

in: 

° additional general NSR program assistance and detailed technical 

training and assistance in the determination of Best Available Control 

Technology (BACT) and; 

0 enhanced communications and information flow between EPA and the 

State and local review agencies in a manner consistent with State 

and local permitting procedures and manpower concerns. 

Additional guidance and training is necessary due to the complex 

nature of the regulations and their technical review requirements. 

Adequate guidance and technical training will provide State and local 

agency personnel with the knowledge, tools, and skills to implement NSR 

consistent with Clean Air Act requirements. 

The exchange of "real time" information between EPA and the States 

when a key milestone is reached during the permitting process appears to 

be a critical element in ensuring correct and appropriate program 

TmpTementatiOn". Though the pathways for timely and appropriate information 

flow and exchange currently.exist at each of these milestones, they are 

often not utilized by EPA in a uniform manner to track, review, and, when 

appropriate, provide comment on a State's permit actions. This lack of a 

comprehensive,-uniform approach to EPA participation in ongoing "permit 

reviews is probably the single most important cause for inconsistency and 

uncertainty in the NSR programs. By tracking and reviewing permit 

actions during the application processing period, potential major issues 

and concerns can be flagged as (or before) they occur, thus decreasing 

the possibility of discovering areas of concern only after a permit has 

been issued. The identification of major issues as soon as possible in 

the processing of a permit allows EPA to provide input and comment in a 

manner consistent with the State permitting process. Timely and adequate 

policy and technical guidance coupled with the effective ongoing exchange 

of information on the processing of individual NSR permits will result in 

more certainty for the applicant and increased consistency in the 

implementation of the NSR program. 
P.8 

3 . . • 

III . The NSR Process: Expectations and Concerns 

The permit applicant, State and local review agency, and (to a lesser) 

degree) the public and EPA al l share an active role and interest in the 

ongoing everyday process of NSR permit review. The participants , each 

with a different perspective of NSR, expect the process to fulfil l individual 

expectations: 

° The applicant, with the submittal of a complete NSR application, 

expects a fair review within a reasonable period of time. 

0

 The State or local review agency expects to be able to implement 

NSR in a manner in keeping with it s mandate to protect the health 

and welfare of it s citizens within it s air qualit y and personnel 

resource needs and constraints. 

0

 The public expects to be able to participate in the NSR process by 

being notifie d of, commenting on ,and have the reviewing agency 

respond adequately to comments on proposed NSR permit actions. 

° EPA expects that the State or local review agency wil l implement 

NSR programs consistent with Clean Air Act requirements. 

On the other hand, each of these groups has concerns over certain aspects 

of the NSR program, as follows: 

For applicants 

0

 Delays in processing applications and granting permits—time is money. 

°-DecTSh)ns"whrch- do-not-appear-to-makfr much sense to the-applicant. 

"Decisions (e.g. , on BACT) which change or are questioned after the 

fact . "Late hits " are an extreme case of this . 

0

 Inexperienced reviewers who take longer, usually demand more 

information than is needed, and may foul up in processing 

applications. Educating such personnel by tria l and error costs the 

applicant (and the reviewing agency) additional resources and time. 

0

 Inconsistent decisions within an agency or from agency to agency, 

except for the applicant who obtains (or shops for) a competitive 

'- advantage from a more favorable decision, such as a less stringent 

BACT limit . 

For reviewing agencies 

° Lack of policy guidance and other information from EPA on specific 

issues or different guidance from, for example, the Regional Office 

and Headquarters. 
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° Monday morning quarter backing: EPA telling the agency what it 

should have done, but too late to do any good. 

° Lack of training opportunities and the funds to attend training courses. 

° Lack of equipment—most agencies, for example, cannot access BLIS, 

the computerized BACT/LAER clearinghouse. 

° Inadequate personnel—a State may have only a few ( 1 to 10) major 

source permits per year, but a determination as to whether a source is 

major or minor must be made on hundreds of applications and all 

these applications must be processed. 

0 Differences between EPA Regional Offices or the manner in which 

a Regional Office (or EPA Headquarters) resolves issues from State 

to State. 

° Lack of (or badly timed) feedback from EPA or the public when the 

State submits information on permits or requests guidance or assistance. 

0 Incomplete permit applicaitons (e.g., inadequate BACT analysis and 

proposal). 

For EPA 

0 Problems in obtaining the information required to carry out overview 

responsibilities. 

0 Inability to provide specific policy decisions or technical 

information as requested. 

"Jncorrect applicability determinations. 

,° Incorrect BACT and LAER determinations. 

0 Errors in applying or enforcing emission offsets. 

0 Allowing use of off-site data for preconstruction monitoring 

without a demonstration of the representativeness of the data. 

° Permit conditions that are so poorly written that they are 

unenforceable; also assumptions that were made during an analysis 

(e.g., operation 8 hours out of 24 hours) that were not made 

enforceable in the permit. 

° Incorrect ambient air modeling. 

° Inadequate response to comments. 

° Inadequate resources to respond to comments. 
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5 

For the public (including the FLM) 

0 Not hearing about an application that concerns or affects them 

until the public comment period (or later). 

° Receiving the public comment package too late to review it thoroughly. 

° Finding it difficult to obtain information about the proposed 

project. 

° Inadequate response to comments. 

Throughout the history of the NAA/PSD programs, litigation has played 

a major role in shaping the NSR programs. Litigation has resulted in 

numerous fundamental changes to most aspects of the NSR programs. Existing 

and evolving issues continue to remold these programs. Specificly: 

0 PMlO» which will affect PSD/NAA source applicability, air quality 

modeling and monitoring requirements, BACT/LAER decisions and 

permit conditions; 

° N0X increments, which will add additional air quality review 

requirements to the PSD program; 

0 Surface coal mine rulemaking, which may impact source applicability, 

air quality modeling and.monitoring, and BACT requirements; 

° Vessel emissions rulemaking, which may affect source applicability, 

air quality modeling and monitoring, offsets and BACT/LAER; 

BACT for toxic air pollutants, which affects BACT/LAER and permit 

conditions (see" appendix B), and; 

° Chemical Manufactures Association (CMA) suit, which impacts source 

applicability and offsets. 

Participants in the NSR process (especially the State and local 

agencies and the EPA Regional Offices) expect, and require, clear, timely 

and adequate assistance, training and guidance to implement the current 

and changing NSR regulations. Each regulatory change brings with it yet 

another level of complexity to the NSR permitting process. 

A study of these specific concerns led to the Task Force conclusion 

that, in almost all cases, they could be best resolved by improvements in: 

° NSR program guidance and training (i.e., front-loading the NSR 

system with the information and guidance needed to result in correct 

implementation of the rules); 

0 Improved Communications and information flow between EPA and the 

State and local review agencies in a manner consistent with State 

and local permitting procedures and manpower concerns, and; 
p.11 

0 BACT information, policy and data. 

The Task Force explored each of these areas with the goal of providing 

options to improve the NSR program by bringing greater certainty and 

consistency to the NSR process. 

Two types of improvements are possible: internal and external. 

Internal improvements consist of changes in the internal operations of 

EPA that can be made without rulemaking or rule.revisions. These changes 

(such as a commitment to review all major NSR permits received) can be 

implemented without fanfare or public input; the only thing the outside 

world would (hopefully) notice would be an improvement in EPA's processes. 

External changes, on the other hand, require the cooperation, input, or 

knowledge of outside groups; examples include an agreement with STAPPA to 

submit all public notice packages to EPA and any rulemaking activity. 

Since there are considerable differences in the process that would be used 

to implement these types of options, the options listed in this report 

are identified as internal or external. 

Options which require additional resources from a State or applicant 

should, to the greatest extent possible, be offset by a reduction in 

EPA-mandated resources elsewhere. For example, States agree to promptly 

submit complete public comment packages to EPA and the FLM; EPA could, in 

return, require only some basic information on each application submitted 

rather than the complete application. In addition, the application information could be submitted monthly rather than upon receipt. 
P.12 

7 

IV. Enhancing NSR Permit Processing: Certainty and Consistency 

A. Assistance and Training Needs 

Well trained staff are the key to a good State or local NSR program. 

A NSR permit reviewer (either new t o NSR and needing trainin g or 

familiar with NSR and seeking program guidance) has available for reference 

the following material: 

0

 The Clean Air Act 

The Clean Air Act, the statute from which the NSR regulations are 

derived, provide littl e guidance in the practical implementation 

of the NSR programs. 

0

 The NAA/PSD regulations or the applicable SIP (or SIP approved programs) 

These requirements define the program requirements and administrative 

procedures. However, they present very littl e guidance for the 

implementation of most of the program's technical requirements 

(i.e. , BACT/LAER, air quality modeling, visibilit y impacts). 

0

 EPA's 1980 Prevention of Significant Deterioration Workshop Manual 

The manual was intended for use in conjunction with EPA's 1980 PSD 

workshops. The workshops were held to familiarize the Regions and 

State and local agencies with the August 1980 amendments to the 

PSD regulations. However, attendance at a workshop was not 

essential to understanding or using the manual. 

The PSD workshop manual describes in simple terms the 1980 PSD 

regulations found at 40 CFR52.21 and provides suggested methods 

of meeting these requirements (including illustrativ e examples). 

EPA Air Pollution Training Courses (*APTI) 

Courses available specific to understanding the technical requirements 

of implementing the PSD programs are: 

Overview of PSD Regulations (APTI self-instructiona l course SI:453) 

This 15-hour course utilize s slide/tape and flipbook/tape presentations 

to provide a overview of al l major aspects of the PSD program. I t 

derives much of it s material from EPA 1980 PSD workshops. 

Effective Permit Writing Workshop (*APTI course 454) 

The course emphasis is on reviewing, analyzing and drafting construction 

and operating permits. The course trie s to provide a practical 

background for the permit review engineer. This is a new course 
P.13 

which was initiated in January 1986. Although it was very well 

received and provides useful information for the new and experienced 

permit reviewer, it is scheduled to be given.only once in 1987. 

With such a limited scheduled it is obvious that its usefulness to 

most State and local permitting agencies is minimal. 

Fundamentals of Effective Permit Drafting and Analysis APTI (selfinstructional course SI:45T) 

This course is designed to provide technical training in methods of 

effective permit and efficient review analysis and drafting of 

construction and operating permits. The course material is being 

finalized and will be ready for dissemination early in 1987. EPA 

has already received between 50 to 60 requests for the course 

material from permitting agencies. This is a valid indication 

of the want and need that State and local agencies have for practical 

training material. 

A.l. Existing concerns on the part of State and Local agencies 

regarding existing program assistance and training needs are: 

° The EPA will not (or cannot) provide specific information or guidance 

to the State or local agency on numerous major issues (e.g., dual 

source definition, vessel emissions, federal enforceability, 

applicability determinations, ambient air definition). This lack 

of input results in each agency implementing its own set of criteria, 

which causes even greater inconsistency in program implementation 

between permitting agencies. 

°_Th_e EPA, in responding to requests for guidance/technical assistance, 

"prWides inconsistent answers, both within Headquarters and between " 

Regions.. For. example,..the response from Headquarters to the 

permitting agency may not be consistent with that received from the 

Regional office or the applicant may not be given a response which 

is consistent with that given to the permitting agency. 

0 Permitting agencies have continual personnel turnover and therefore 

need constant access to training and current technical information 

and data to do the job right. Though EPA does provide some training 

and technical support, it is not as timely and up to date as may 

be needed by a State or local agency, and is definitely not given 

often enough and in enough different locations to maintain an 

acceptable level of training. 

° The lack of ongoing interaction with the States and local agencies 

prevents EPA from learning about the specific needs, concerns, and 

requirements of individual States and local agencies. As a result, 

EPA has to be constantly "brought up to speed" on local issues, the 

way an agency may do business, or an agency's rules and regulations 

[State implementation plan (SIP)] vs. delegated programs. 
P.14 

A.2. Options to Improve Program Assistance and Training 

State and local permit agencies need to be able to rely on EPA as a 

technical resource for gathering and exchanging up-to-date technical data 

and policy information. Options for ensuring that the information EPA 

provides to the State and local permit agencies is current and comprehensive 

are (see Figure 1.): 

0 Establish a comprehensive NSR Clearinghouse (separate from the BACT/LAER 

Clearinghouse) to track and compile information on NSR issues and policy 

(e.g., NSR applicability, creditable contemporaneous emissions reductions, 

enforceable permit conditions, new technology), (internal) 

Implementation: Headquarters to implement out of NSR section. 

Pro: Consolidates information into a single reference. Easy access 

single mechanism to disseminate new information on policy and issues, 

thereby promoting consistency. 

Con: Setting up and continual operation of a clearinghouse is a major 

task and would require both in-house personnel and contract funds. 

Note: Region IV has issued a "New Source Review: PSD/Nonattainment 

Policy Reference Guide". The guide is a compilation of EPA policy 

memorandums, letters, and information that have been developed to 

aid implementation of PSD and NAA air pollution control programs. 

It has has proven extremely useful to both the Regions and State and 

local agencies in understanding NSR policy. However, distribution of 

the document has been extremely limited. A national NSR clearinghouse would act on a larger scale to compile a national database on 

NSR policy joth existing and developing. 

0 Continue-and-improve. semi annual NSR Workshops to disseminate information 

on new developments in the world of NSR permits. Although now being held 

these Workshops are only sporadically attended, (internal) 

Implementation: Meetings would be supported by EPA upper management; RO 

representation would be mandatory with the meeting attended by NSR 

Regional contacts. Each Region and Headquarters would present and 

discuss information on what is new in all areas of NSR permitting. 

A prerequisite is that each Region have a dedicated NSR contact person. 

Pro: Bring all Regional NSR contacts up to speed thereby promoting 

national consistency and consensus on emerging policy issues. 

Con: Travel constraints may not allow all Regions to attend. Information 

still needs to be disseminated to State and local agencies. 

° Hold quarterly conference calls between all the Regions to exchange 

the latest NSR information (e.g., technology data, national policy), 

(internal) 
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10 

FIGURE 1. OPTIONS TO ENSURE ADEQUATE NSR PROGRAM TRAINING AND ASSISTANCE: 

ADEQUATE NSR PROGRAM 

ASSISTANCE 

AND 

TRAINING 

A. Ensure that EPA has the 

ability and expertise to respond 

to the State's need for timely 

guidance and assistance on 

NSR policy and issues. 

tiveness: 

low 

<<<<<<<< 

<<<<<<<< 

<r«<<<~ 

<<<<<<<< 

«<<<<< < 

<<<<<<<< 

B. Provide NSR training and 

reference materials adequate to 

foster proper NSR program 

implementation. 

OPTIONS 

1. Establish at HQ national 

NSR contacts for each 

major program area (e.g., 

BACT, applicability). 

Increasing 

Resource 

Needs 

v 

v 

v 

2. Require at each RO a 

regional NSR expert/ 

contact responsible for 

State's needs and overview. 

3. Hold quarterly conference calls-between all RO 

to exchange latest NSR 

information. 

4. Continue and improve 

annual NSR Workshop with 

mandatory RO attendance. 

5. Hold annua] workshops 

at each RO with State 

agencies attending. 

6. Establish a NSR 

Clearinghouse to track 

information on all NSR 

areas and issues. 

OPTIONS 

1. EPA publishes (with 

updates) a list of NSR 

contacts. 

Effectiveness 

high lov 

<<< 

2. Update existing PSD 

Workshop Manual and 

slide presentation to 

cover "current" issues. 

<<<<<< 

3. 

book 

Publish a 

oriented 

PSD worktoressing specific 

gram areas of 

addproconcern. 

<<<<<< 

4. Establish new train 

ing courses providing 

in-depth coverage of 

individual program areas 

<<<<<<<<< 

5. Extend training 

course locations to 

each State as needed/ 

requested. 

<<<<<<<<<<< 

ote: Options under each task are not mutually exclusive; combinations of options 

should be considered for most effective results. 
11 

Implementation: Each Region and Headquarters would present and discuss 

information on what is new in all areas of NSR permitting. 

Pro: Would bring all Regional NSR contacts up to speed thereby promoting 

national consistency and consensus on emerging policy issues. Can be 

used as follow up to augment workshops. 

Con: Information still needs to be disseminated to State and local 

agencies. A prerequisite is that each Region have a dedicated NSR 

contact person. Conference calls are difficult to arrange; total 

participation during discussion less likely than at meeting. 

P.16 

Hold meetings with State and local agencies and RO personnel annually, 

either in conjunction with STAPPA or APCA or on a Region by Region basis. 

Pro: Brings together many regulatory agencies thereby promoting 

consistency between the States. Regional meetings can target 

assistance where needed. 

Con: Large meetings make it difficult to address the needs of individual 

permit review agencies. State and local agencies may not want to 

discuss sensitive issues (or acknowledge failing in a program area) 

before other agencies. 

0 Establish a Regional Contact/Expert responsible for Regional overview 

and assistance to State and local agencies, (internal) 

Implementation: A minimum of one full time staff assigned to NSR 

program at each Regional Office. Regional contact's performance can 

be linked to facilitating consistency and certainty in the State NSR 

program. . 

— Pro: State and local agencies are more likely to ask for assistance 

if a knowledgeable single NSR contact is available and able to 

respond to requests. Regional contact will be directly responsible 

to ensure proper NSR program implementation. 

Con: Regional contact must be kept up to speed on all NSR issues and 

policy. Regions may not feel the need for full time staff on NSR. 

Regional contact must still coordinate policy decisions with 

Headquarters.. 

"^Establish a National Contact, (internal) 

Implementation: National contact(s) to be established at Headquarters for 

BACT technical and/or policy and other program areas of concern, as 

appropriate. 

Pro: Single contact person promotes consistency and direct access to 

information. 

Con: Policy decisions must still be coordinated with numerous offices. 
P.17 

12 

Publish a list of EPA Contacts, (internal) 

Implementation: Headquarters to publish a list of national/regional 

contacts for all areas of NSR permitting. 

Pro: Easy to implement; helps promote one stop information access. 

Con: List must be always kept current to be useful. One on one is a 

very resource intensive way for EPA to communicate. 

Ensure appropriate training for review engineers (internal to decide 

to establish course; external to require attendance). 

Implementation (A) : Promote the use and wider distribution of 

existing *APTI NSR training courses (or self study material). Could 

give the course in each state that requests it, up to a limited 

number per year, and then retrain an agency as needed. 

Implementation (B): Establish additional indepth *APTI mini-training 

course(s) (or self study material) for specific program area(s) 

(e.i., BACT) of concern. 

Pro: Two or three day course (or self study material) can cover a 

major NSR area, enabling new permit engineers (including new Regional 

Office NSR personnel) to be quickly brought up to speed. 

Con: Costly to reach a large audience. Difficult to reach all 

permit reviewers (except self study). Training material must be 

keep current to be effective. 

Delegate authority to make interpretation policy decisions on 

promulgated rulesjtp CPDD or OAQPS Directors, (internal) 

Pro: Greatly reduce turn around time on interpretative (not new) 

policy issues. 

Con: Some policy decisions will still need to be coordinated with 

other offices. 

Reactivate SSCD's role (even if NSRS carries it out) in issuing NAA/PSD 

applicability determinations, including updates to the summary, (internal) 

Implementation: SSCD issued these determinations in the past 

(1976 - 1982); therefore, the system by which to issue the determinations 

and summaries could be reactivated with relative ease. 

Pro: Summaries can be easily distributed to Regional Offices, to State 

and local agencies, and to the public by request, thereby increasing 

information flow and consistency in applicability determinations. 

Con: Implementation may not be possible within current workload constraints 

or priorities. 
P.18 

13 

B. Communications and Information Flow 

B.l. Background 

Each step a permitting agency follows as i t proceeds with theprocessing 

of a permit application carries with i t the potential need to communicate 

with parties outside the permitting agency regarding permitting information 

and actions. Typically, a State or local agency wil l communicate at some 

time during the permitting process with: 

0

 the regulated community; 

°' the public; 

0 EPA Regional Office/Headquarters; and 

° other State or local agencies. 

Effective communications between the permitting agency and the other 

involved parties is key to proper program implementation. It is our 

opinion that most of the issues assigned to the Task Force can be addressed 

by concentration on the nature and type of information flow occurring 

between EPA and the State agencies. Therefore, for the most part, the 

following discussions focus on the type and flow of information between 

the two. 

Communication and the exchange of information takes place on formal 

and informal levels. There are specific statutory and regulatory requirements which define the process for the formal exchange of specific information between State agencies and EPA during the permit process. The 

statutory requirements are: 

° Section 165(d)(1) of the Clean Air Act (CAA) which requires each 

State to transmit to the Administrator a copy of each permit 

application and provide notice of every action related to the 

consideration of such permit; and 

° 40 CFR 51.18(h) "now Section 51.161", which requires the State 

agency to provide the opportunity for public comment on the application 

and on the agency's analysis of such construction, including the 

agency's proposed approval or disapproval. 

Congress clearly intended that EPA maintain an interactive (or 

overview) role in the permitting process, even when the actual permitting 

is performed by the State Agencies. 

In fulfilling the notification requirements, EPA envisions a State 

or local agency: 

° Notifying EPA and other affected parties (e.g., the FLM if Class I 

are impacted), within a reasonable time, of the receipt of a new 

permit application. This can take the form of a complete copy of 
P.19 

14 

the application itself or a brief description of the proposed 

project. Notification can be made as each application is received 

or the information may be submitted to EPA in a periodic (e.g., 

monthly) report. • 

0 Submitting to EPA a complete public notification package at the 

beginning of the public notice period. The package must contain: ! 

the public notice, the proposed permit, and a technical analysis 

demonstrating how the proposed project complies with the technical

 : 

review requirements of the regulations ( i.e., control technology, 

air quality impact review, and additional impacts). 

0 Submitting to EPA a copy of the final preconstruction permit when 

issued, including a response to any appropriate comments submitted 

during the public comment period. 

° Submitting to EPA a copy of the operating permit when issued. 

When informed of a permit action, EPA has the responsibility to evaluate 

the information received and, if warranted, provide comment to the State 

or local agency in a manner consistent with their permitting process and 

responsive to their needs. This type of formal interaction on EPA's part 

is best suited to the public comment period and will be discussed in 

detail later in the report. 

Aside from the major points of formal interaction between State and 

local agencies and EPA, another, just as important, area of communication 

occurs. This takes place at the level of the permit review engineer. 

While processing the application, a reviewer usually finds it necessary 

to consult various sources for additional information and expertise. 

-Information-exchange can occur within an agency, between agencies, and — •'•-

between agencies and the public/regulated community. Such exchanges are ! 

most likely to occur prior to the public notice period and, for the most ' 

part, are directed at the technical aspects of the permit review. Such \ 

information may be communicated between EPA and a permitting agency 

through a formalized transfer system such as: 

° Policy/guidance memos (e.g., EPA guidelines for determining BACT); 

° The PSD Workshop Manual 

° The BACT/LAER Clearinghouse, 

° The EPA technical documents (e.g., AP-42, NSPS background documents, 

EPA modeling guidelines), and; 

0 Attendance at EPA sponsored NSR workshops and training courses. 

Additionally, program and technical information may be gathered by a 

permitting engineer through informal means such as: 
P.20 

15 

o two State and/or local permitting agencies conferring 

on emissions test data; 

0 discussions with equipment vendors regarding control efficiencies, and; 

° a State or local agency permitting engineer discussing policy or 

technical questions with a Regional Office/Headquarters expert. 

Often the information the permit engineer uses has been transmitted 

through numerous channels before being received. For example, a request 

to the Regional Office for technical information may go through Headquarters 

before being relayed back to the originator. Within Headquarters, the 

question may have been discussed between numerous staff prior to responding 

to the Region. Consequently, the same question originating from another 

permitting engineer might not necessarily result in exactly the same 

response; consistency can often be improved by conferring with more 

people, but this increases the time required to respond to the question. 

Regardless of the source of the information, or the method of transfer, 

consistency and certainty is bred into the permitting process when the 

permit reviewer has access to and receives accurate and current technical/ 

policy information specific to his needs in a timely manner. 

B.2. Causes of Inadequate Communications and Information Flow 

During the permitting process, the State or local agency is responsible 

for notifying EPA pf permit actions. Currently, many of these agencies 

either fail to provide this notification or supply inadequate documentation. 

The impact of these failures can include the following: 

^NcTniotTffcatidn is given to~EPA~~and other affected parties of the ~ 

receipt of an major source permit application (e.g., FLM for 

projects impacting a Class I area). 

- With notice of a new application, EPA can flag applications that 

are, or may become, controversial in nature. The permitting agency 

can then be given advanced notification of issues or concerns (or 

even the availability of specific information/expertise that may 

be beneficial to the review). For example, EPA may want to key 

in on specific source categories (e.g., municipal incinerators) or 

locations (e.g., Class I areas) where there may be a cause for 

concern and increased EPA involvement. 

A notice of receipt of an application is sent to EPA but it does 

not contain a copy of the application or a description of the 

project. 

- To do any prescreening, the notification must carry with it some 

information regarding the proposed project. 

No public notice package is sent to EPA (or other affected parties). 

o 
P.21 

16 

- Without proper notification of the beginning of the public comment 

period, EPA is unable to participate in the permitting process 

during the most critical and appropriate phase of the permit 

review. This is true also for the FLM and other affected parties. 

- If there are significant concerns regarding the permit or review, 

they may go undetected or surface during or after source 

construction or operation. 

0 The public notice package is sent, but is incomplete (e.g., it does 

not contain the proposed permit and/or technical analysis). 

- The State or local agency must be contacted and the missing 

information received before EPA can evaluate the proposed action. 

This may significantly reduce the amount of time EPA has to conduct 

an adequate review and, if necessary, prepare comments. 

0 EPA does not receive a copy of the preconstruction permit (and, if 

applicable, response to comments). 

- If no comments are received, the preconstruction permit should 

read exactly the same as the proposed permit. This is not always 

the case. Sometimes, either during or after the public notice, 

a State or local agency may negotiate changes to-the permit with 

the applicant. EPA's review of the final permit is to determine 

whether the finished product conforms to the program requirements. 

- A State or local agency is obligated by regulation to consider 

all comments prior to issuing a preconstruction permit. To 

ensure proper program implementation and the validity of the 

_ preconstruction permit, EPA needs t^> know^whetherand how an 

agency responds to issues raised. If the response to comments 

is unacceptable to EPA, the permitting agency and the source 

need to be informed as soon as possible to ensure that issues 

are resolved in a timely manner. 

0 EPA does not receive a copy of the operating permit. 

- State and local permit agencies issue a permit to operate to 

sources after the source has started up and met compliance tests. 

The agencies feel that these permits supersede the preconstruction 

permit. However, the OGC does not consider this permit to be 

federally enforceable because the operating permit conditions, 

including emission limits, could change from those in the 

preconstruction permit without (in EPA's view) adequate review. 

To ensure that the source complies with the NSR preconstruction 

permit, which is federally enforceable, EPA must verify that the 

operating permit conditions are not less stringent. 

B.3. Impacts of Inadequate Communications 

When breakdowns in communication and information flow occur, their 
P.22 

17 

impacts can be far reaching and have significant adverse impacts. The most 

direct and significant impact resulting from a failure to communicate 

timely information on a major permit action is on the applicant in the form 

of n.iulatory uncertainty. Unless a major concern or issue arises during 

the permitting process and remains unresolved despite the issuance of the 

final permit, it is generally assumed the applicant, permitting agency, 

the prulic, and (usually) EPA that with -.he issuance of the final permit 

the source may begin construction. 

For many major sources, the receipt of a final NSR permit is a 

necessary prerequisite to securing financial backing and signals the 

go-ahead for initiation of actual onsite construction activities. In 

all cases, the receipt of a final NSR permit is a major milestone in the 

timeline of any major project subject to review. The discovery of a 

major issue which may impact the content, or even the validity, of the 

final permit can result in severe economic hardship to the applicant. 

Changes in control technology requirements after the final permit is 

issued, for example, may cost the applicant considerable time and money 

to implement design changes. If a final NSR permit is invalidated by EPA 

after it is issued, construction may not commence or, if already underway, 

may have to be postponed or rescheduled. 

Poor or nonexistent communications between EPA and a permitting 

agency has resulted in the increased expenditure of resources in program 

implementation. When a major problem t issue surfaces after a permit is 

issued, both EPA and the permitting agency have a responsibility to the 

source to resolve that problem as soon as possible. This puts all parties 

involved into a "fire fighting" mode, diverting previously allocated time 

and resources to addressing the problem; the applicant's plans and schedule, 

to some extent, are disrupted. 

When" the formal communication mechanisms" do notr function- correctly,-•- -

permitting engineers and agencies may turn towards the less structured, 

more informal types of communications exchange. While these avenues of 

communication do provide many advantages to the user (e.g., quicker turn 

around, less bureaucratic) they also carry with them disadvantages and 

the potential for abuse. For example: 

° if the correct source is not used, then the information provided 

may not represent current or comprehensive EPA policy; 

o inconsistent information may be transferred to the various involved 

parties; 

the transfer and dissemination of information to all concerned 

parties may not occur; or 

the permitting agency/appncant may try to solicit only the type 

of responses it wishes to hear by avoiding proper channels. 
P.23 

18 

It is the responsibility of the permitting agency to implement the 

NSR permit program consistent with the approved or promulgated regulations. 

Failure to adequately inform all affected parties of major permit actions 

may be indicative of other areas of deficiency in the program. Noncompliance 

with specific program elements required by the Act or implementing regulations 

may cause the loss of § 105 grant funds to the permitting agency. If the 

deficiencies are severe enough, EPA may have no recourse but to take back 

the program. However, if EPA receives and reviews information on an 

ongoing basis (and provides constructive feedback when appropriate), 

deficiencies may be detected before they become a chronic problem requiring 

major corrective action. 

B.4. EPA and the Public Notice Period 

As necessary, EPA may communicate with a State or local agency at 

any step in the permitting process. However, in general, the most appropriate place for EPA's formal interaction to occur is during the public 

comment period. The regulated community, the public, and EPA are all 

equally invited to comment on the proposed action at that time. Also, at 

that time, the permitting agency has available, and EPA should have 

received, all the information necessary to perform a comprehensive evaluation of the proposed permit, the reviewer's associated technical review, 

and the action the reviewing agency anticipates taking with regard to the 

proposed source. 

During the public comment period, comments and concerns can be voiced 

to the State or local permitting agency in a manner totally consistent 

with their normal permit processing procedures. Comments submitted at 

this time automatically becomes part of the official record and are 

available not only by the State or local agency, but also to the regulated 

community and the general public whoare interested in the permit. This 

allows EPA to participate in the permit^process in a public forum at a 

time when-all interested parties are communicating-with the permitting 

agency. All issues and concerns can be put on the table at one time and 

be viewed together by all interested parties. 

By commenting during the public comment period, EPA encourages (not only 

from the the perspective of the permitting agency but also the. applicant) 

resolution of outstanding issues at a time least disruptive to the permitting 

process and project planning (assuming the applicant understands that 

public comments may impact the schedule for issuing a preconstruction permit). 

Knowing that EPA has reviewed their proposed permit and has either raised all 

potential concerns, or finds the review acceptable, the applicant should 

expect no surprises regarding the validity of the permit once it is issued. 

Additionally, by uniformly reviewing all State and local permit reviews 

during the comment period, EPA can address incorrect or inadequate reviews 

or procedures before permits are issued. This promotes more consistency 

in the permitting process among the States and provides the highest 

degree of certainty to the applicant that the permit will not be challenged 

at a later date. 
P.24 

19 

« 

EPA should, however, not be precluded from relaying concerns to a 

State or local agency regarding a pending permit application at a time 

other than during the public comment period. For example, after reviewing 

a copy of a recently submitted application, EPA may want to alert a 

permitting agency to a potential area of concern. Such communications 

may be formalized in a letter from EPA to the agency, or take the form 

of a simple call from EPA staff to the State or local agency permit 

engineer. Here, as during the comment period, EPA should function to 

alert the permitting agency (and the applicant through the agency) to 

issues and available information that may influence the permitting process. 

However, should a State or local agency isssue a permit that EPA has 

determined to be inadequate, the Agency should investigate the following 

options to address the issue: 

1. For PSD permits in States with.delegated programs, review of the 

permit conditions by the Administrator under 40 CFR 124.19(b) within 30 

days of the service date of notice of the Regional Administrator's action. 

2. Direct enforcement against the source under sections 167 or 113 

for State-approved PSD permits and NSR permits for failure to get a valid 

PSD permit prior to commencing construction. The EPA's position here 

would be that a PSD permit issued not consistent with the requirements in 

40 CFR 52.21 or 51.18 would not be a valid PSD permit. 

The EPA may need to issue guidance to claifiry the proper Agency 

procedures for handling inadequate permits. This may include drafting 

some new regulations at 40 CFR section 124. 

B.5. Options for Improving Communications and Information Flow 

B.5.a. Improving"th¥ AcquiTitTdnby EPA of"Ong"ofhg"Permitting Information 

from State and Local Agencies - '_ 

Permitting agencies need to understand and carry out their responsibility 

to inform EPA of major permit actions as those actions occur. Of the permit 

actions reportable to EPA, the single most important is the timely submittal 

of a complete public notice package. 

Options available to EPA to require or promote the timely flow of 

information in regard to permit actions from State agencies (see Figure 2) 

include: 

0 Stress the importance of the statutory and regulatory reporting requirements 

and assume permitting agencies will comply, (external) 

Implementation: EPA, through the Regional Offices, would inform the 

State agencies of the need for, and importance to the program of, timely 

and appropriate information on all major NSR permit actions. A letter 

(possibly from the AA) to the head of the State agency would stress the 

importance and positive aspects of informing EPA of major NSR permit 

actions as they occur. Unless currently, required by an existing agreement, 
P.25 

20 

FIGURE 2. OPTIONS TO ENSURE PROPER COMMUNICATIONS AND INFORMATION FLOW 

PROPER COMMUNICATIONS 

AND 

INFORMATION FLOW 

A. Ensure that EPA receives from 

State and local agencies: 

° Notification of receipt of 

a NSR application; 

° a complete public notice 

package; 

0 the final NSR preconstruction 

permit, and; 

° the permit to operate. 

:ti veness: 

low 

I I 

:<<<<<<<< 

<<<<<< 

:<<<<<<<<< 

B. Ensure the timely and 

comprehensive review by EPA 

of State and local major NSR 

permit actions. 

OPTIONS 

1. Request in writing 

that State agencies submit the needed information to EPA. 

Increasing 

Resource 

Needs 

v 

v 

v 

v 

2. Include in the §105 

grants a requirement to 

submit the necessary 

information. 

3. Negotiate a formal 

agreement with STAPPA/ 

ALAPCO for the necessary 

information. 

4. Take appropriate action 

where the State fails to | 

(after due notice) submit| 

requested information. | 

OPTIONS 

1. AA requests that all 

Regional Offices implement a program to review 

all State NSR permit 

actions. 

Effectiveness, 

high li 

I I 

<<<<<< 

2. Implement an SPMS (or | 

equivalent) requiring || | I 

ongoing review of State | <<<<<<<<<<<< 

NSR permit actions. | 

3. HQ develops a 

standardized procedure 

for Regional review of 

NSR permit actions. 

<<<<<<<<< 

4. Headquarters reviews 

all public notice 

packages issued by the 

States. 

i 

<<<<<<• 

Note: Options under each task are not mutually exclusive; combinations of options 

should be considered for most effective results. 
P.26 

21 

* 

it would ask for voluntary compliance while citing the regulatory background for the request. If the permitting agency is currently committed 

by some agreement with EPA to send the information, its commitment 

would be reemphasized. The request could be tailored to past performance 

and any current concerns EPA may have regarding an individual permitting 

agency. 

Pro: This,type of action is least confrontational and is the easiest 

to implement. It allows each Regional Office to communicate its 

informational needs on a case-by-case basis to the permitting agencies 

in a manner consistent with business as usual. 

Con: It would only be a formal request and its implementation could 

not be enforced. There would be little or no incentive for the State 

agency to comply with the request and it would be difficult to monitor 

compliance with such a request. Implementation may still be viewed 

by the State agency as just another recordkeeping chore. 

Negotiate an agreement with STAPPA/ALAPCO which directs permitting agencies 

to submit the needed information on permit actions, (external) 

Implementation: EPA would meet with STAPPA/ALAPCO and discuss 'the benefits 

to the permitting agencies of strong and ongoing information flow from 

and to EPA. EPA would reach a formal agreement with STAPPA/ALAPCO which 

requires that State agencies submit the needed information. In return, 

EPA would commit to improving its function as a program resource. 

Pro: It involves directly those parties affected the most by its 

implementation. 

Con: Can be a lengthy and resource intensive process with an unpredictable 

outcome. "Again, there Ts TTttTe incentive to accommodate EPA. ^ 

STAPPA's.strengths are forming consensus opinions and exchanging information, 

not enforcing agreements " individual agencies. 

Require the submittal of the necessary information through the section 105 

grant process, (external) 

Implementation: § 105 Grant money would be conditioned to require the 

submittal of the necessary information. EPA can either develop 

a minimal set of criteria applicable to all permitting agencies or 

allow each Regional Office the flexibility to negotiate grant conditions 

with their individual State agencies. Failure to transmit the required 

information could result in the withdrawal of funding. , This method is 

currently being employed by some Regional Offices with good results (see 

attachment). 

Pro: It makes the State agency directly accountable for the submittal 

of necessary information and its use is consistent with existing 

regulatory requirements. Verification of performance could be accomp i'i shed 

during the annual audit. 
P.27 

22 

Con: State agencies may argue that additional funds are required to 

accomplish the required task. 

° For agencies that fail to comply with the statutory and regulatory 

requirements for notification of major permit actions, take action to 

rescind the authority of the permitting agency to review/ issue major 

source NSR permits, (internal policy decision; external if rescission 

required). 

Implementation: Take formal action to take back the NSR program from 

State and local agencies that fail to notify EPA of permit actions 

(i.e., public notice). 

Pro: Insures proper implementation of NSR program. 

Con: Lengthy and manpower consumptive process. Most drastic of all 

measures, with adverse impacts not only for the permitting agency (e.g.; 

loss of funds) , but also EPA (e.g., increased workload) and the permit 

applicant (e.g., new players, transition period, must now deal with two! 

permitting agencies). It is also in direct conflict with EPA's longstanding goals of "one stop permitting" and having the States in control 

of their own air quality resources. 

B.5.b. Options to make EPA's ongoing interaction in NSR permitting responsive 

to a State agency's and applicant's concerns that involvement occur in 

a timely and appropriate manner. 

EPA has no established system or formalized procedure for the ongoing 

review of State or local agency NSR permitting. Regional Offices are 

left to their own discretion regarding the extent to which, and how, an 

ongoing evaluation is implemented. Some Regions have implemented a 

system"for comprehensively reviewing all State and"local agency permit 

actions. These Regions usually are able to detect and inform the permit 

agencies of potential problems prior to the issuance of a preconstruction 

permit. Other Regions, either through choice or lack of program personnel, 

have not become involved in reviewing ongoing permitting actions. 

Consequently, from State to State, EPA's ability to detect and address 

major issues during the permit process ranges from very good to nonexistent. 

This lack of a comprehensive, uniform approach to EPA participation in 

ongoing permit reviews is probably the single most important cause for 

inconsistency and uncertainty in the NSR permitting. 

EPA should consider implementing a systematic approach at each 

Regional Office to the monitoring and evaluating of ongoing permit actions. 

The approach should address the need to track and, when necessary, the 

ability to comprehensively evaluate individual permit actions as they 

occur. It should direct itself to flagging potential issues while a 

permit is still in processing and promote the feedback of timely constructive 

comments. Options for the implementation of such a system include: 

° Stress the need and importance of ongoing overview with the Regional 

Offices and request that they track and review State agency permit 

actions as necessary, (internal) 
P.28 

23 

Implementation: The AA for OAR would transmit a memo to the Regional 

Division Directors recommending that the Regions review for correctness 

and consistency all NSR permits submitted to the Region during the 

public comment period. The memo would stress the importance of such 

ongoing review to the program. If necessary, the memo could recommend 

specific procedures to be followed for the review of each action. 

However, there would be no accountability on the part of the Region in 

carrying through the reviews. 

Pro: Administratively quick and easy to implement. 

Con: There is no accountability and therefore little incentive for a 

Region to invest time and resources in such an undertaking. Therefore, 

there is little assurance that Regions would comply and that there 

would be a change in the status quo. 

Require that each Regional Office be directly responsible for developing 

and implementing a system which provides for the ongoing overview of 

State permitting agencies, (internal) 

Implementation A: Develop and implement a%Regional Strategic Planning and 

Management System (SPMS) or other specific commitment requiring ongoing 

review of State and local permits. 

Pro: Defines a specific commitment to ongoing review which can be easily 

tracked and audited by Headquarters. 

Con: Regions will be concerned about workload impacts. 

Implementation B: Review the Region Offices' performance of NSR overview 

as part of the Annual Air Enforcement Audit. The enforcement audit 

team could include a NSR specialist who would evaluate the Region's 

•overview program and its effectiveness. _.. 

Pro: Allows each Region to develop and implement their own system for 

State NSR permit overview. Regional performance in the area of State 

NSR permit overview would be evaluated for effectiveness and national 

consistency annually. Regional Offices are more likejy to undertake a 

conscientious effort to undertake State NSR permit review with the 

knowledge that their program is to be audited. 

Con: Regions will be concerned about workload impacts. 

Develop a standardized process for the tracking and review of permit 

actions by the Regional Offices, (internal) 

Implementation: Memo from the AA for OAR establishes the system and 

includes the forms needed for tracking. 

Pro: Standardizes the Regional review process.' Ensures correct and 

comprehensive review by Region. Consistency from Region to Region in 

type and depth of review. 
P.29 

24 

Con: Regions will complain about workload impacts. Still requires a 

mechanism to ensure the Regions are accountable to task. Standardized 

forms tend to lead to shallow reviews because of the complexity of the 

NSR process. This is one of the drawbacks of the NSR 

National Audit forms. States may come to believe that anything not 

covered on the form is not open for review. 

EPA Headquarters responsible to review all NSR public notice packages 

during the public notice period. 

Implementation: At the commencement of the public notice period HQ 

would receive direct from the State and local agencies a copy of the 

public notice package. HQ staff would be responsible to review each 

package for consistency and compliance with NSR requirements. 

Pro: With the same staff responsible for the review of all proposed ' 

NSR permit actions nationwide, a very high degree of consistency and 

certainty will result. 

Con: HQ staffing needs would increase accordingly (1-2 workyears). HQ 

is one step further removed fron the Regional Offices in understanding 

the State's position and concerns regarding local issues, industry growth, 

and, (perhaps most important) politics. State and local agencies 

would consider such an undertaking by HQ as an additional level of 

federal involvement in "their" programs. State and local agencies 

would tend to bypass the Regional Offices in seeking program assistance, 

thereby further taxing HQ resources and causing confusion as to who 

has the lead (HQ or the RO) in providing program assistance to the 

State and local agencies. 
P.30 

25 

C. The BACT Process 

C.l. Background 

A BACT analysis determines the lowest emissions that can be met by a 

source or modification, considering economic, environmental, and energy 

impacts. The BACT analysis and the results it produces provide the majority 

of the input data for the other two required PSD analyses: the air quality 

analysis and the additional impact analysis. Consequently, an accurate 

BACT analysis can be considered the focal point of a successful PSD review. 

BACT analyses for the same types of emissions unit and the same 

pollutants in different locations or situations may determine that different 

control strategies should be applied to the different sites, depending on 

site-specific factors. Therefore, BACT analyses must be conducted on a 

case-by-case basis. 

An applicant is required to propose BACT emissions limitations for 

each pollutant subject to PSD review and provide supporting evidence and 

documentation derived from a thorough analysis. To fully assess an applicant's 

BACT analysis, the reviewer must not only possess a broad knowledge of the 

information and situations referred to in the analysis, but also must be 

aware of the PSD requirements for the BACT analysis and the methods suggested 

for meeting these requirements. 

The applicant is expected to provide the appropriate data to support 

his or her BACT proposal. In those areas where the reviewer lacks 

extensive knowledge or seeks additional information , he or she is encouraged 

to use the information contained in other sources. These sources include 

the BACT/LAER Clearinghouse reports, literature references, national 

emissions standards, control technology vendors' data, actual source test 

data, and any other source of information on-emissions control technology. — -

States often feel that they receive insufficient guidance from EPA on 

what sources are present in each type of plant, the pollutants they generate, 

or what control techniques are available. The ESED can (and does) provide 

this type of support on occasion but; since they have never had any budget 

to do so, have never advertised the fact. 

States have also indicated the need for additional guidance in defining 

the BACT process itself. The only guidance on performing a BACT analysis 

that EPA has dates back to 1980 PSD Workshop Manual and a draft 1978 guidance 

on determining BACT. This information may have been adequate at the time 

it was issued; however as the program matures, complex permitting issues 

and circumstances indicate the need for additional definition and guidance 

regarding BACT protocol. 

In assessing the BACT analysis, the reviewer may require a more stringent 

emission rate than that proposed by the applicant. To do this, the reviewer 

must have access to information on alternative emission control technology 

for the source under review, so that the decision can be based on fact. 

Many State and local agencies are concerned that they have timely access to 
P.31 

26 

information on the latest/newest/best control options available. On the 

other hand, without adequate information on viable control options, many 

agencies default to the New Source Performance Standards (NSPS) as BACT. 

Inconsistency and uncertainty in BACT determinations can for the most 

part be traced back to either a lack of a true understanding of the BACT 

determination process, or insufficient or inappropriate data on viable 

control options. 

C.2. An Alternate Approach to Determining BACT 

Two similar, yet slightly different approaches are available for 

determining BACT: the "bottom-up" (current) and the "top-down" (alternate) 

approach. 

The bottom-up approach for determining BACT is discussed in detail in 

the EPA's PSD Workshop Manual issued in October 1980, and is currently 

considered EPA's standard methodology for performing a BACT analysis. 

In the the bottom-up approach, a base case is chosen that reflects the 

control option that would have been either required or chosen in the absence 

of BACT decisionmaking. For most sources, the base case is the'applicable 

NSPS or SIP limitation. Alternative control strategies more stringent than 

the base case are then chosen that have been demonstrated to operate efficiently 

on identical or similar processes. The chosen alternatives should afford 

greater levels of control than the base case. Each control option is then 

evaluated for it s (1) economic, (2) energy, and (3) environmental impacts. 

The control strategy with the lowest level of overall impacts for the cost 

is then generally considered BACT. Significant inconsistencies in BACT levels 

between permitting agencies (for the same source type under similar 

circumstances) indicate a need to either improve the existing procedures, or 

implement an alternative approach. Options for improving the current BACT 

decisionmaking process are-discussedin a separate section of the report.-• -

An alternative procedure for determining BACT, the "top-down" approach, 

is being successfully implemented by some State and local agencies. The 

firs t step in this approach is to determine, for the emissions source in 

question, the most stringent BACT for a similar or identical source or 

source category. If i t can be proven that this BACT level of control is 

technically or economically infeasible for the source in question, then the 

next most stringent BACT level is determined and evaluated. The process 

continues until the BACT level under consideration cannot be eliminated by 

any serious technical, environmental, or economic objections. 

The bottom-up versus top-down approaches may not necessarily result in 

the same emissions control level. However, there is reason to believe that 

top-down BACT determinations would gravitate to a more consistent level of 

BACT nationwide than does the bottom-up approach. Other advantages associated 

with the top-down approach are: 

° Top-down starts all BACT reviews at the same level of control. This 

is an important factor for non-NSPS sources, where bottom-up base 

case emission limits may vary from agency to agency. 
27 

° Top-down is fundamentally a less resource intensive review (for both 

the applicant and the reviewing agency) since all available control 

options may not necessarily need to be evaluated. 

0 Under top-down, the closer an applicant's BACT is to the top-level 

BACT, the greater certainty of having that level accepted without 

challenge and processing time reduced. 

0 Top-down would require that the BACT/LAER Clearinghouse report only 

BACT determinations more stringent than the NSPS. This would allow 

the clearinghouse to provide more information on control alternatives 

and options. 

Implementation: The following options exist for implementing top-down BACT: 

0 EPA promulgates regulations describing the procedure and its 

requirement for use in determining BACT. 

0 EPA HQ issues guidance describing the procedure and the requirement 

(or preference) for its use in determining BACT. 

° EPA HQ issues a memo indicating that top down more closely follows 

. the Act definition and is to be used from that date on. 

C.3. Options for improving the Current BACT Process 

Within the framework of the existing "bottom-up" approach to BACT, 

there are certain options available to EPA to improve the consistency of 

BACT determinations nationwide. Some PSD permit applications simply do not 

completely fulfill all current BACT analysis requirements. This is apparent 

when no control alternatives are considered and the proposed BACT control 

is generally not considered to represent the "best""option available or 

defaults to the NSPS or SIP limits. This may occur when an applicant's 

application is incomplete ano . .: ^viewer fails to request additional 

information or is unaware of alternative options. When this occurs, it is 

not the BACT process, but the incomplete nature of the application and lack 

of corrective action on the reviewing agency's part that results in an 

inappropriate BACT determination. There are, however, cases in which no 

control alternatives may be evaluated simply because the applicant preselected 

the "best" control option. 

The number of alternative control options evaluated by the applicant 

and presented to the reviewing agency appears to have an impact on the 

outcome of the BACT process. A common instance of "one alternative" BACT 

analyses appears to be when the BACT control level has been pre-determined 

by the applicant. In these cases, the chosen BACT control is usually less 

stringent than that which may have been chosen had a full range of control 

options been presented. In such circumstances, the applicant may include 

one alternative in an effort to justify the preselected BACT option. 

For sources where at least two alternative control options were available, 

a study of PSD permits issued between 1981 and 1984 shows that the 
P.33 

28 

percent of BACT decisions more stringent than the NSPS is higher where the 

permitting agency considers two or more alternatives than when one alternative 

was considered. These results suggest that EPA should require (as specified 

in existing BACT protocol) State and local agencies to require the applicant 

to analyze all potentially applicable control options (unless, of course 

the "best" is preselected). This requirement will not only result in more 

meaningful data and more options upon which to make a sound BACT decision, 

but also defines a more consistent approach to the BACT decision making 

process. Also, by evaluating BACT proposals against the same set of criteria 

(i.e., all available control options) determinations by two different 

reviewing agencies for similar sources with similar energy, environmental, 

and economic impacts should result in similar BACT determinations thereby 

promoting greater consistency in BACT determinations nationwide, applicants 

who evaluate all available control options will find that one advantage 

of doing so is that their permits are processed quicker because all the 

information is there. 

Options for requiring the analysis of all potentially applicable 

control options when determining BACT are: 

o Have the Regional Offices send a letter indicating the requirement 

to do so to those State and local agencies where it is not common 

practice to evaluate all available control options in a typical BACT 

analysis. 

0 Have EPA HQ publish formal guidance on the BACT decisionmaking 

process stressing the need to evaluate all available control 

options. 

° Have EPA HQ develop a detailed BACT worksheet that would assist the 

reviewer in determining BACT. The worksheet would be required to be 

"kept with the permit file and could be submitted to the BACT/LAER 

Clearinghouse as a detailed record of the determination. 

° Use the BACT/LAER newsletter to inform State and local agencies 

of the need to require an applicant to present all available 

control options in the BACT portion of the permit application. 

° Obtain a STAPPA/ALAPCO agreement to assess BACT in a manner 

consistent with the requirements. 

C.3. The BACT/LAER Clearinghouse 

C.3.a. Purpose and Concerns 

The basic purposes of the BACT/LAER Clearinghouse are to: 1) provide 

State and local air pollution control agencies with current information on 

case-by-case control technology determinations that are made nationwide and 

2) promote communication, cooperation, and sharing of control technology 

information among permitting agencies. I t is intended as a reference for 

State and local agencies in making BACT/LAER decisions. 
P.34 

are: 

29 

Concerns with the current operation of the BACT/LAER Clearinghouse 

Many users feel that information on BACT/LAER decisions is not being 

disseminated in a timely fashion. The BACT/LAER Clearinghouse Report 

is published annually, and provides few details on either the plant 

or the controls. The Clearinghouse computer network (electronic 

bulletin board) provides more up-to-date information. However, it is 

no more extensive than the report and is not easily accessible to 

many agencies. 

Inputs to the BACT/LAER Clearinghouse are voluntary, so many 

determinations (probably about half) are not reported. 

The BACT/LAER Clearinghouse Report contains all reports submitted, 

regardless of stringency, so: 

1) it is much larger than necessary and useful data can be 

buried in a mass of determinations. 

2) encourages use of the lowest common denominator in making 

determinations; many entries equate BACT to the NSPS, the applicable 

SIP, or common practice. 

4) space limitations mean that little information can be provided on 

an individual facility, and; 

5) few of the completed BACT/LAER Clearinghouse forms on a 

major facility (which provide the data base for the BACT/LAER 

Clearinghouse report) list all the emission sources, all the 

pollutants generated by those sources, and all the emission 

controls and control efficiencies selected for them." 

o 

C.3.b. Options for Improvement 

0 Increase use of, and participation in,the BACT/LAER Clearinghouse 

by making submittal of questionnaires by the State mandatory for 

all major facilities, by tying receipt of section 105'grant money to 

their submittal, and by providing incentives for the States to utilize 

the Clearinghouse data base, (external) 

Implementation: One possible -'•-ive is to provide a modem, 

plus some free access time u: .... :• clearinghouse computer network for 

each submittal. A variation on this option might be to give STAPPA/ 

ALAPCO a month or two to poll their members and either come up with 

an acceptable alternative to mandatory submittal or solicit support 

for this proposal. 

Pro: An increase in the number of submittals to the Clearinghouse 

should increase the potential for receiving good BACT determinations. 

Use of section 105 grant money may encourage holdouts to participate. 
P.35 

o 

30 

Even a greatly expanded submittal form should not require over a half 

hour to complete (permits, of course, vary greatly, so extracting the 

needed information from a permit package is the most time-consuming 

task). 

The potential for permitting plants which don't even meet NSPS 

requirements might be reduced if agencies knew their actions would 

routinely become known to EPA and other agencies. Enforcement should 

catch such problems, as could the periodic audits, but an appearance 

in the Clearinghouse would make them more obvious. 

Usage of the computer network should increase if State/local agencies 

are not charged for access to the net while learning how to use it 

(or even determining whether they can use it). 

Con: STAPPA/ALAPCO might not concur with making Clearinghouse submittals 

mandatory. 

The use of grant money to force participation will be unpopular and • 

could be counter-productive. Agencies which now participate to a 

limited degree may elect to forgo grant money and refuse to send in 

any questionnaires, thereby reducing overall participation rather 

than increasing it. 

Increase the Clearinghouse data base by having the Regions submit the 

Clearinghouse questionnaires, (internal) 

Pro: Transferring this responsibility to the Regions might give 

States time to identify minor sources with good controls and submit 

forms on these sources to the Clearinghouse. Often the best new 

.technology Js first_trjed_oiij5malj[er sources. 

The added workload at the Regional level should be minimal, since 

only an average 200 (120 PSD, 80 NAA) major permit applications are 

expected each year. 

Con: Regions probably do not get copies of all 'major' permit 

applications at present, and may not do so unless the reporting 

requirements are enforced. 

Regions may not be willing to accept any additional workload. 

This approach has been tried before, unsuccessfully. 

Improve the usefulness of the Clearinghouse to 'permit reviewers' by 

reporting only the 'best* BACT determinations (best 5-10, top 3, all 

better than NSPS, etc.) for each industry and by including (if available) 

the lowest emission rates actually achieved in practice. One representative 

NSPS could be included for each source type, (internal) 

Implementation: The EPA would reorganize the Clearinghouse to reflect ; 

these changes. 
P.36 

o 

31 

Pro: The Clearinghouse annual report and computer network would be much 

smaller and easier to use, which could encourage their increased use. 

The depth of information provided in the Clearinghouse on each of the 

remaining determinations could be expanded without the size becoming 

unmanageable. 

The tendency to rationalize accepting minimal controls as BACT would be 

lessened by eliminating all such mediocre determinations (less opportunity 

to play the numbers game). 

Con: Participation in the Clearinghouse could drop off, especially 

from States which tend to require minimal control, if their inputs are 

not published. 

Data on mediocre BACT determinations will be lost from the report. 

Selecting the best BACT determinations will be difficult, since information 

submitted to the Clearinghouse may not be adequate to makethis judgement. 

It will also be resource intensive if performed on a regular basis. 

Same as above, except that the remaining BACT analyses would be published 

as a supplemental report, or as an appendix, (internal) 

Pro: Data on less stringent BACT analyses would not be lost. 

Participation in the Clearinghouse by States exerting minimal control 

should not be impacted, since their determinations would still be 

published. 

Con: The presence of the less "stringent BACT analyses" in the"Clearingh"6use 

report, even as a separate document, may help to perpetuate the permitting 

of plants with mediocre controls. Require additional effort to publish 

a second volume. 

Improve the Clearinghouse questionnaire to make the information submitted 

more useful, (internal) 

Implementation: One possible approach would be to add two columns to 

the current data table, one noting what regulation would apply (NSPS 

or local regulation) in the absence of BACT, and the other listing 

this limit. Another is to require that all new process equipment at 

a major facility be listed, that all pollutants emitted by those 

processes be identified and that the control techniques proposed, if 

any, be reported. Also, process codes could be added to each line 

item so that data can be sorted by the type of process used. 

Pro: Little extra effort would be required to complete the amended 

questionnaire once users became familiar with the format. 
P.37 

32 

Con: Any revision to the format of the questionnaire, however minor, 

could increase the potential for receiving incorrectly completed forms. 

Expand the content of the Clearinghouse reports (hardcopy and/or computer) 

to include information on process and control equipment operating parameters 

for all determinations. The determinations may, or may not, all be published, 

(internal) 

Pro: The search time for comparable BACT could be reduced, as could the 

need to call for information on BACT determinations which turn out to 

be inappropriate. 

Permit reviewers would have more information on comparable plants 

with the best BACT at their fingertips. 

States taking the lead on BACT control could reduce the number 

and duration of the queries about their determinations. 

Permit review could be simplified and made more consistent, thereby 

reducing the potential for charges of capriciousness or favoritism. 

Con: The workload on State and local agencies will increase, which may 

reduce their participation in the Clearinghouse below current levels 

(about 125 major permits a year). 

The supplemental information entering the Clearinghouse will serve no 

valid function unless it is included in the report. 

The greater availability of data in the Clearinghouse will serve 

no real purpose unless it is accessed more frequently than at 

present-(hardcopy reports are only-publ ishedannual-ly-and the . _ — 

computer network is underutilized). 

Some agencies either have no computers or have equipment which 

is incompatible with the Clearinghouse network. 

The information in the annual (hardcopy) report is as much as 1 1/2 

years old assuming it takes 6 months to prepare and is published 

annually. 

Supplement the information in the Clearinghouse annual reports and 

computer network with technical support, plus periodic newsletters 

or bulletins containing information on one or more of the following 

subjects, (internal) 

Note: The information in the Clearinghouse form can be added to the 

computer data base in 2-4 weeks. The supplemental data, which might 

include the following, can take much longer to input: 

° data sorts on best BACT decisions 
P.38 

32 

0 data sorts on test results from the compliance data system (CDS), 

NSPS background documents, etc. 

0 comparisons of 'permitted' and 'measured' emissions from selected 

installations 

° articles on new control technologies from trade magazines, overseas 

installations, vendors, etc. 

° summaries of available control techniques (process and add-on) for 

selected industries and processes, with information on emissions, 

controlNAAficiencies, and costs 

0 analyses of 'target' BACT and LAER for use as the most stringent 

control in top-down analyses 

0 a list of technical experts within ESED who are available for 

consultation on each industry, process and control system 

Pro: Provides a single resource to the permit reviewer on available 

control options. 

These reports can provide the reviewer with much more specialized 

information than is now readily available. 

These reports will provide information on the control techniques 

which should be included in a bottom-up analysis and which should be 

analyzed first when using the top-down approach. 

Preparation and distribution of these documents need not impact 

existing BACT/LAER Clearinghouse operations. 

Con: Considerable additional manpower will be required by EPA/OAQPS 

to develop and-disseminate this new data and to provide,an 

appropriate level of technical support. 

° Incorporate compliance test results into the Clearinghouse data 

base as they become available on 'permitted' plants, (internal) 

Pro: Actual test results will either validate the BACT determinations 

or indicate that they are too lenient (BACT assessments which are 

not achievable should already be subject to intense scrutiny). 

Con: Some technical support will be needed by the States to review 

the test data and insert the test results into the Clearinghouse 

(however, they should already be evaluating the test data and 

reporting the results internally). 

See Figure 3 for a summary of the available option for improving BACT 

determinations and the BACT/LAER Clearinghouse. 
33 

FIGURE 3. OPTIONS TO ENSURE CONSISTENT AND CERTAINTY IN BACT DETERMINATIONS 

P.39 

IN 

CONSISTENCY 

AND CERTAINTY 

BACT DETERMINATIONS 

A. Ensure that the current BACT 

protocol is correctly understood 

and is implemented in a 

consistent manner by State and 

local agencies. 

• »or alternate 

BACT _ 

approach 

:tiveness: 

low 

<<<<<<<< 

<«<< 

<<<<<<<<< 

B. Ensure that the BACT/LAER 

Clearinghouse provides useful 

control technology data in a 

manner which enhances a State 

agency's ability to properly 

determine BACT. 

OPTIONS 

1. Inform State agencies | 

of the need to evaluate j 

all available control j 

options in the BACT review. 

Increasing 

Resource 

Needs 

v 

v 

v 

2. Issue policy guidance 

memos on considering 

economic impacts in the 

BACT review process. 

3. Develop a-Work-sheetfor the purpose of 

evaluating BACT (Worksheet 

would be part of permit file 

and could be submitted to 

the Clearinghouse). 

<«<<<<<< 

ALTERNATE APPROACH TO BACT 

EPA to promote the use of 

the "top down" approach in 

determining BACT. 

•lote: Options under each task are not mutually 

exclusive; combinations of options should 

be considered for most effective results. 

OPTIONS Effectivenes; 

high lov 

1. Have the Clearingdelete multiple NSPS 

as BACT determinations. 

<<<<<<<< 

2. List BACT submittals 

according to level of 

control. 

<«<<<<< 

-3-.- Expand- contents- of 

Clearinghouse to include 

actual source test data. 

I 

I I - -I 

<<<<< 

4. Supplement Clearinghouse with technical 

newsletters/reports. 

<<<<<<<< 

5. Improve Clearinghouse 

questionnaire (e.g., 

list base case for 

BACT decision). 

<«< 

6. Increase the number 

of State submittals to 

the Clearinghouse. 

<<<<<<' 
P.40 

34 

V. Public Participation In External Options 

There are three levels of external options. Each level should involve 

increased public participation. Most options suggested in Section IV can 

be implemented using Level 1 or Level 2. 

Level 1—Agreements. Agreements such as a commitment with STAPPA to 

submit BACT determination, would require only interaction with STAPPA, not 

with applicants or the public. 

Level 2—Requirements. Policy decisions that must be followed and 

requirements other than formal rulemaking should be publicized by Federal 

Register notice or other measures. A decision, for example, to begin 

rescinding programs if States do not meet all the statutory requirements 

should be well publicized and opinions should be sought before a decision 

is made. 

Level 3—Formal rulemaking. This would require full scale public 

participation, as all rules do. This is a resource-intensive option and 

should be avoided if at all possible. The options in Section IV can all be 

implemented without formal rulemaking, although some would be more readily 

complied with if they were made rules. 

VI. The Next Steps 

Once the option or options are selected, the Task Force will reconvene 

and, as specified in the authorizing memorandum, develop a detailed plan 

for implementing the options, including the necessary memoranda, forms, and 

information. 
P.41 

APPENDIX A. 

The NSR Program: A Backgroung Summary 

The NSR/PSD world consists of an average 200 permits per year, 

encompassing 60 to 90 percent of all new stationary source emissions, 

depending on the pollutant. The permits are processed by: (1) State or 

local agencies with approved State implementation plan (SIP) NSR/PSD programs, 

(2) State oc local agencies with delegated PSD programs, or (3) EPA Regional 

Offices. Every NSR permit program is SIP approved; the PSD programs are 

about evenly divided between SIP approved and delegated, with permits for 

ten States handled or signed by the Regional Office. In a delegated 

program, the State is acting as EPA's agent, applying EPA's rules. In a 

SIP-approved program, the State is carrying out its own EPA-approved 

NSR/PSD program. There are pros and cons to each type of delegation of 

authority, but the main administrative difficulty with a SIP-approved 

program is that the State rules do not change automatically when an EPA 

rule does. Some of the approvals are conditional: EPA accepts only part 

of the SIP or accepts the entire SIP contingent on the State revising a 

portion of it. Additionally, when EPA does not agree with a SIP-approved 

State's rule interpretation, the State can contend that it can best 

interpret its own rule; delegated programs, on the other hand, are more 

bound by EPA's interpretation, since they are applying EPA's rules. 

Regardless of who has the program, NSR/PSD permitting follows these 

general steps (see Flow Chart): 

° The review agency is notified of a proposed new source or a proposed 

modification to a source. 

° The review agency decides whether the source/modification is major 

or minor. This is not an easy determination. Decisions are made as 

to what constitutes the "source;" whether the source is "listed" (in 

attainment areas, a source is major at 100 tons per year (tpy) if it 

is listed, 250 tpy if it is not); whether fugitive emissions are to 

be "c67^i"de^d^n"deterinin"urg_the_thrreshoTd~"(another source category 

list);, and,, for. each pollut ant ^whether the source is major. If the 

source is major for any pollutant, the other pollutant emissions are 

then reexamined to determine which (if any) are "significant." For 

modifications, emissions increases and decreases must be "netted" 

for each pollutant separately before the threshold and significance 

determinations can be made. Tentative applicability determinations 

are usually made prior to submittal of a permit application. More 

than 20,000 new sources and modifications per year are considered 

"minor," i.e., they do not exceed the 100/250 tpy new source or the 

major modification levels. Many of these are "synthetic minors;" 

the source accepts limits on hours of operation, production capacity, 

or type of fuel to stay below the major source/modification threshold. 

0 The source owner/operator submits an application, which the agency 

reviews for completeness. If complete, the date of submittal of the 

application usually determines a source's place in line for PSD 

increments, which define the amount of deterioration of air quality 

allowed in an attainment area. Unless exempted, a source must 

include in its application 4 to 12 months of on-site ambient air 

monitoring data. 
FLOW CHART of PERMITTING^ SEQUENCE for NEW and MODIFIED SOURCES 

5. 

! 

1 

' 

Completeness 

Determination 

4 1 

i o ! 3 l 1 

New 

Source — 

Existing Source 

with 

Permit/Source 

Modification 

10. 

* • Review Agency 

Notified by 

Source and/or 

Pre-Appl ication 

Meeting 

(EPA Audits)-> 

Compliance 

Determination 

11. \ 

Continuous 

Compliance 

Monitoring 

9. 

« - • i 

Applicability 

Determination 

i * 

- i 

Minor 

Source 

or 

Modification 

1 

Startup 

<-(EPA Audits) 

<-(EPA 

12. 

Operating * 

Permit Issued 

Audits) : 

8J 

" • i i 

Major Source 

Application 

Received 

1 

EPA 

Notified 

* 

(EPA Audi 

! i • 

Construction 

| Begins 

T i 

i ' \ 

i ! 

i i 

•\ i 

1 

i • 

' ! !. i 

! 1 

i 

|<— . 

1 

1 

1 

ts)-> 

1 

— (EPA Audits) 

A 

EPA* and 

Public 

Notified 

Application 

Reviewed 

; * 

"BACT/LAER 

"Modelling 

"NAAQS/Increment 

Analysis 

"Monitoring 

"Class I 

impacts 

"Visibility 

"Add'l Impacts 

"Offset Verif. 

EPA 

Notified 

* 

7. 

Permit 

Granted 

-> 

-V-

"^ 

Preliminary 

Determination 

Package 

"Public Notice 

"Technical Review 

"Proposed Permit 

Public 

Comment Period * 

(Public Hearing) 

6. \ ' 

Review Agency 

Responds to 

Comments 

<-(EPA Audits) 

Permit 

Denied 

'* Current EPA input points to the permitting system 
P.43 

° The complete application is then reviewed in detail by the agency, 

which assesses both the quality and correctness of the application 

(e.g., were all appropriate control technology systems examined in 

determining BACT, were the appropriate air quality models used correctly) 

and the conclusions reached (e.g., whether the Class I area impacts 

are acceptable). 

° The review agency makes a preliminary decision on whether it will 

grant or deny the permit. If the permit will be denied, the agency 

contacts the source, which usually negotiates changes to the application until the result is acceptable to the reviewing agency (as a 

result of this informal negotiation process, few permit applications 

are ever denied outright). Acceptable applications are prepared forpublic comment, including a public hearing, if requested. The public, 

including EPA, the Federal Land Manager (FLM), and the applicant, is 

informed of the agency's preliminary determination and invited to 

comment. 

° The review agency considers and responds to comments received. If 

a source is controversial, many "we don't want it here" comments are . 

received; these carry little weight since the review process decisions 

are based on technical considerations. 

° Unless new information is generated or deficiencies in either the 

application or the review are pointed out by comments, the review 

agency issues a preconstruction permit. 

° The permitted source is then constructed, started up, and checked 

for compliance with permit conditions and emission limitations. 

0 Most agencies then issue an "operating" permit (which EPA may or 

nfty-not-recognize)-t-o-the-source. - —- — 

If the program has been transferred (whether by SIP approval or 

delegation) to a State or local agency, the agency should notify EPA 

when: 

0 an application is received; 

0 the public comment package is released; 

° the preconstruction permit is issued; and 

° the operating permit is issued. 

In addition, EPA audits both major and minor source permit files at 

least once every 2 years. Among the items audited for correctness and 

adequate documentation are: 

° the applicability determination; 
° the completeness determination; 

0 the technical review (modeling, BACT/LAER determinations, etc.); 

0 public notification and response to comments; 

° the preconstruction permit; 

° the compliance determination; 

° continuous monitoring and reporting requirements; and 

° the operating permit. 

Note that the review agency, rather than the source, is being audited by 

EPA. Although there can be an effect on the source if particularly 

serious concerns arise, the audit generally concentrates on finding out 

whether the review agency is handling the review process adequately. 

The NSR/PSD program, particularly PSD, is a complex one, requiring 

considerable expertise and a number of judgmental calls (e.g., BACT, 

acceptability of impacts on soils, vegetation, and visibility). It is 

also one of the few such programs to be delegated; EPA has so far retained 

the TSCA and hazardous waste permit programs. Other delegated programs, 

such as the one for water pollution permits, report difficulties similar 

to those being experience by the NSR/PSD program. 

The last major revisions to NSR/PSD came on August 7, 1980, as a 

direct result of a court decision; there are still a number of unresolved 

policy and litigation issues that EPA has not yet settled, yet transfer 

of the program continued through all of this. In addition, EPA offered 

no specific-training on NSR/PSD since the 1980 PSD workshops- were held.- •—-

Resources to review and audit performance on these new, complex, changing 

programs has actually decreased;eYery~year"f it'shdwsT The" EPA"7ias backed 

away too soon; NSR/PSD has not yet been fully established as a routine, 

well-understood process in the State agencies. It is surprising that the 

system works as well as it does. 
P.45 

; \ • .. . APPENDIX B 

Setting of BACT to Address Toxic Air Pollutants 

The increasing emphasis upon the regulation of air toxics has 

underscored the importance of this aspect of PSD permitting. The PSD 

program is being looked to as a key component in the overall toxics 

strategy. The BACT determination addresses the control of toxics through 

two pathways. First, BACT applies to each pollutant "regulated under the 

Act" and emitted in "significant" amounts. Many of the toxics of concern 

are subspecies of PM or VOC and are thereby regulated under the Act. 

Second, the Administrator's June 3, 1986, remand of the North County 

Resource Recovery project PSD permit indicates a duty to consider even 

toxics riot^ regulated under the Act in determining BACT for directly 

regulated pollutants. The term "pollutant regulated under the Act" is 

currently defined to include those pollutants subject to a NAAQS, an 

NSPS, or a NESHAP. 

The PSD review has always been distinguished by a broad approach to 

air quality mangement issues. This is stressed by section 160 of the 

Act, which states that a purpose of PSD is "to protect .public health and 

welfare from any actual or potential adverse effect which in the Administrator's judgment may reasonably be anticipated to occur from air pollution or from exposure to pollutants in other media, which pollutants 

originate as emissions to the ambient air, notwithstanding attainment 

and maintenance of all national ambient air quality standards. ..." 

One should also note the extremely broad definition of. "air pollution" 

contained in section 302(g) of the Act, which encompasses any "substance 

or matter which is emitted into or otherwise enters the ambient air." 

It has been EPA policy that subspecies of PM and VOC be considered 

in making BACT determinations. In considering these substances, the review 

authority should require controls that constitute BACT for these toxic 

subspecies. This is an important means of addressing many pollutants but 

jdqes npt^ cover alVtoxics. In addition, this approach is diminished by _ 

the EPA list of VOCs considered to be "negligibly photochemical ly reac- " 

-tive.-—Examples—include methylene chloride-and methyl~cMoPof-ornu.--.This. -

highlights one reason that the Administrator's North County remand is 

especially important. That decision concluded that the review authority 

has the obligation to take into account the toxic effects of pollutants, 

including those not regulated under the Act, in making the BACT decisions 

for those that are. :, 

Two aspects of review are fundamental to implementing this requirement. 

First, the applicant is required to report on all pollutants to be emitted, 

not just the "regulated" pollutants or those emitted in "significant" 

amounts. The applicant has the obligation of performing the customary 

BACT analysis for each pollutant regulated under the Act, and emitted in 

significant amounts, including subspecies of particulate matter and SO2. 

Finally, the review takes into consideration the optimal control of all 

pollutants emitted regardless of whether "regulated." This determination 

would normally include an ambient impact assessment that addresses not 

only compliance with PSD increments and NAAQS but also the environmental 

impacts of these other pollutants. Such an evaluation of rrfaximum impacts 

and of population and resources affected is important in determining 

whether it would be reasonable to require special control measures for 
P.46 

the toxic pollutants in question. 

The second key aspect of this review is public notification. It is 

important that the review authority reference these toxics issues in its 

public notice, identify the way in which they have been considered in any 

proposed BACT decision, and indicate the public's right to comment on this 

aspect of the determination. 

Note, also, that the review authority has the independent obligation 

of evaluating the impacts of toxics from a proposed project, regardless 

of whether those are raised by the public. If the environmental effects 

of the unregulated pollutant are projected to be significant, the review 

authority has the responsibility of addressing these effects in it s 

review of BACT. This may well involve an enhancement of BACT beyond what 

would otherwise have been chosen. 

Given the potentially unlimited scope of pollutant coverage and the 

varying situations presented by each application, no specific guidance can 

be provided with respect to the degree that these considerations wil l 

affect a particular determination. EPA wil l undoubtedly receive requests 

for specific guidance on such matters as threshold levels of impact, depth 

of analysis, and role of control costs. As a record is developed, EPA wil l 

be in a better position to give more detailed suggestions. In many cases, 

however, this process wil l be less difficul t than i t appears in the abstract. 

This is because the toxics component of review wil l often be in the role of 

providing further motivation for the selection of a technology—generally a 

scrubber--that is already the preferred form of control from an environmental 

standpoint. An important example is the use of the scrubber/baghouse 

combination, rather than a precipitator, on resource recovery facilities . 

In these cases, the concern with dioxins and furans provides an additional 

reason for using what is already the preferred technology for controlling 

particulate matter and SO2. 

The PSD provisions of the" Act address~toxi"«""isl^uey"more"directly-

..than..the.nonattainment..NSR. provisions-in Part. D. Many of these_same. _ 

considerations should also be applied to nonattainment permitting, however. 

Section 172(b)(11) requires that nonattainment NSR programs provide "an 

analysis of alternative sites, sizes., production processes, and environmental control techniques for such proposed source which demonstrates that 

benefits of the proposed source significantly outweigh the environmental 

and social costs imposed as a result of it s location, construction, or 

modification. . . ." This provides a mandate for a similar analysis of 

toxics issues within the nonattainment NSR permitting process.