B O BBY JINDAL GOVERN O R

Mr. Ron Curry

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# of JLoutstana DEPARTMENT OF ENVIRONMENTAL QUALI1Y**ENVTRO~NTALSERVICES** Regional Administrator (6RA) U.S. Environmental Protection Agency, Region 6 1445 Ross Avenue, Suite 1200 Dallas, Texas 75202-2733 RE: Authorized Emissions for Purposes ofLAC 33:III.504 and 509 Docket No
. EPA-R06-0AR-2006-0131 Dear Mr. Curry: PEGGY M

. HATCH SECRETARY

On December 31 , 2002, the Environmental Protection Agency (EPA) promulgated revisions to the federal Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NNSR) programs. 1 The final rule required states to "adopt and submit revisions to their part 51 permittin:P programs implementing these minimum program elements no later than January 2, 2006. " On December 20, 2005, the Louisiana Department ofEnvironmental Quality (LDEQ) submitted the necessary amendments to LAC 33:III.504**~SR)** and LAC 33:III.509 (PSD) as a revision to Louisiana's State Implementation Plan (SIP). LAC 33:III.504 and 509 essentially mirror their federal counterparts under 40 CFR 51.165 and 166; however, the state provisions utilize the term " authorized" in the context of emissions associated with start-ups, shutdowns, and malfunctions, a term not found in the federal rules. Affected citations include:
• LAC 33:III.504.J.3.b • LAC 33:III.504.K
.Baseline Actual Emissions.a.i • LAC 33:III.504.K.BaselineActual Emissions.b.i • LAC 33 :III.504.K
.ProjectedActual Emissions.b • LAC 33:III.509.B.Baseline Actual Emissions.a.i • LAC 33:III
.509
.B.BaselineActual Emissions. b.i • LAC 33 : III.509.B.ProjectedActual Emissions.b • LAC 33:III.509.AA.3.b LDEQ 's SIP submission included the requisite "demonstration of equivalency," which IS repeated in relevant part below. The department believes use of the term " authorized" is consistent with federal language requiring the average rate, when calculating baseline actual emissions, to be adjusted downward to exclude any non-compliant emissions that occurred while the source was operating above any emission limitation that was legally enforceable during the consecutive 24-month period. Also, when determining projected actual emissions, a source should not assume this figure will be greater than its potential to emit (i.e., include emissions not "authorized" by its permit). 4

I 67 FR 80186 2 67 FR 80240 3 EDMS Doc ID 6431380 4 /d. (p. 5 of403) Post Office Box 4313 • Baton Rouge, Louisiana 708 2 1-4313 • Phone 225-219

-3181 • Fax 225-219-3309 www.deq.louisia na.govMr. Ron Curry Page 2 During its review of Louisiana's SIP revision, Region 6 has requested that LDEQ clarify certain matters as they relate to the aforementioned citations. In response, LDEQ offers the following information: 

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• In the context of LAC 33:III.504 and 509, the term "authorized emissions" refers to emissions authorized through a valid air permit issued pursuant to LAC 33:III.Chapter 5. LDEQ's definitions of "baseline actual emissions" require such emissions to be based on "the average rate, in tons per year, at which the unit actually emitted the pollutant during any consecutive 24-month period." When assessing baseline actual emissions from a permitted emissions unit, the average rate must be "adjusted downward to exclude any non-compliant emissions that occurred while the source was operating above an emission limitation that was legally enforceable during the consecutive 24-month period." All non-compliant emissions, including those associated with malfunctions, must be subtracted from the "the average rate. " A variance is not a permit, but rather a finite "waiver issued under the authority of the Department of Environmental Quality upon application to allow emissions greater than those allowable under the regulations and/or a license to do some act contrary to [the] regulations
." 5 Variances are issued prospectively for periods of time no lon-#er than one year and cannot be used to authorize emissions which have already occurred. 6• Baseline actual emissions cannot exceed permitted limits, even ifadditional emissions have been approved by means of a variance or Declaration of Emergency and Administrative Order (hereafter Emergency Order)
. 8 Emissions from an unpermitted emissions unit temporarily authorized to operate in place of a permitted emissions unit by means of a variance or Emergency Order cannot be counted as baseline actual emissions. · Should LDEQ calculate baseline actual emissions using its definition in LAC 33:III.504.K or 509.B , the result would be no different than if the federal definition at 40 CFR 51.165(a)(l)(xxxv) or 51.166(b)(47) was utilized. If a physical change or change in the method of operation results in a significant emissions increase and a significant net emissions increase, the project is subject to applicable New Source Review (NSR) requirements. Construction of a project that causes a significant emissions increase and a significant net emissions increase without the appropriate NSR permit is a violation of the Act and subject to enforcement action, even if preconstruction projections did not indicate the project would trigger NSR or the emissions increase associated with the rroject would have been less than " significant" due to a variance or Emergency Order. 9•1

5 LAC 33 :III.III.A 6 R.S. 30 :2056(C) 7 Louisiana Guid ance for Air Permitting Actions, rev . 5 (Section 2
.2
.3) (http ://www.deq
.louisiana.gov/portal/DIVISIONS/AirPerrnitsEngineeringandPI anning
.aspx) 8 Declarations ofemergencies are addressed by R
.S. 30 :2033. 9 "Technical Support Document for the Prevention of Significant Deterioration and Nonattainment New Source

Review Regulations," U
.S
. EPA, November 2002 (p
. I-4-8) 10 LAC 33 :III.504.D ; LAC 33 :III.509
.A.3Mr. Ron Curry Page 3
In sum, a variance is not a permit, but rather a waiver issued prospectively by LDEQ to allow emissions from an emissions unit to temporarily exceed permitted limitations or to authorize the use ofa temporary emissions unit not addressed by an air permit. 11 A variance cannot function to increase baseline actual emissions over permitted limits, nor can emissions from a temporary emissions unit authorized via a variance count towards baseline actual emissions. In evaluating a prospective project for NSR applicability, ifa permittee chooses a 24-month period during which a variance was in place for one or more affected emissions units, the permittee must "adjust downward" (i.e., discount) any actual emissions not expressly authorized by its air permit, even if such emissions were approved through variance procedures. Alternatively, the permittee may select another 24-month period. LDEQ's use of the term "authorized" does not expand the meaning of "baseline actual emissions" or "projected actual emissions" in a manner to render the submitted revisions to LAC 33:III.504 and 509 less stringent than their corresponding federal provisions. Accordingly, a permittee cannot circumvent what would otherwise be applicable NSR requirements or improperly establish a plantwide applicability limit (PAL) by means ofan LDEQ-issued variance or Emergency Order. Finally, LDEQ notes that the term "authorized" is used differently in the context of LAC 33:III.919 (Emissions Inventory) and the reporting of actual emissions to LDEQ's Emissions Reporting and Inventory Center (ERIC). LDEQ will amend its "Louisiana Guidance for Air Permitting Actions" to clarify that, for purposes ofbaseline actual emissions and projected actual emissions, "authorized" emissions cannot exceed the limitations imposed by an air permit issued pursuant to LAC 33:III.Chapter 5. If you have any questions about this matter, please contact Bryan D. Johnston ofthe Air Permits Division at (225) 219-3450. Sincerely,

Date TBT:BDJ

I I Variances may also address other circumstances.