Technical Support Document

– Sections 110(a)(2)(C), 110(a)(2)(D)(i)(II) ( Prong 3 ) and

110(a)(2)(J) related to P revention of S ignificant D eterioration (PSD) for North Carolina
I. What is EPA’s Approach to the Review of Infrastructure State Implementation
Plan ( SIP ) Submissions? The requirement for states to make a SIP submission of this type arises out of section 110(a)(1). Pursuant to section 110(a)(1), states must make SIP submissions “within 3 years (or such shorter period as the Administrator may presc ribe) after the promulgation of a national primary ambient air quality standard (or any revision thereof),” and these SIP submissions are to provide for the “implementation, maintenance, and enforcement” of such national ambient air quality standards ( NAAQ S ) . The statute directly imposes on states the duty to make these SIP submissions, and the requirement to make the submissions is not conditioned upon EPA’s taking any action other than promulgating a new or revised NAAQS. Section 110(a)(2) includes a li st of specific elements that “each such plan” submission must address. EPA has historically referred to these SIP submissions made for the purpose of satisfying the requirements of section 110(a)(1) and (2) as “infrastructure SIP” submissions. Although t he term “infrastructure SIP” does not appear in the Clean Air Act ( CAA ) , EPA uses the term to distinguish this particular type of SIP submission from submissions that are intended to satisfy other SIP requirements under the CAA, such as “nonattainment SIP” or “attainment plan SIP” submissions to address the nonattainment planning requirements of part D of Title I of the CAA, “regional haze SIP” submissions required by EPA rule to address the visibility protection requirements of section 169A of the CAA, and nonattainment new source review permit program submissions to address the permit requirements of CAA, Title I, part D.Section 110(a)(1) addresses the timing and general requirements for infrastructure SIP

submissions and section 110(a)(2) provides more d etails concerning the required contents of these submissions. The list of required elements provided in section 110(a)(2) contains a wide variety of disparate provisions, some of which pertain to required legal authority, some of which pertain to required substantive program provisions, and some of which pertain to requirements for both authority and substantive program provisions. 1 EPA therefore believes that while the timing requirement in section 110(a)(1) is unambiguous, some of the other statutory pr ovisions are ambiguous. In particular, EPA believes that the list of required elements for infrastructure SIP submissions provided in section 110(a)(2) contains ambiguities concerning what is required for inclusion in an infrastructure SIP submission.
Th e following examples of ambiguities illustrate the need for EPA to interpret some section 110(a)(1) and section 110(a)(2) requirements with respect to infrastructure SIP submissions for a given new or revised NAAQS. One example of ambiguity is that sectio n 110(a)(2) requires that “each” SIP submission must meet the list of requirements therein, while EPA has long noted that this literal reading of the statute is internally inconsistent and would create a conflict with the nonattainment provisions in part D of Title I of the CAA, which specifically address nonattainment SIP requirements. 2 Section 110(a)(2)(I) pertains to nonattainment SIP requirements and part D addresses when attainment plan SIP submissions to address nonattainment area requirements are du e. For example, section 172(b) requires EPA to

1 For example: s ection 110(a)(2)(E)(i) provides that states must provide assurances that they have adequate legal authority under state and local law to carry out the SIP; Section 11 0(a)(2)(C) provides that states must have a SIP

approved program to address certain sources as required by part C of T itle I of the CAA ; and s ection 110(a)(2)(G) provides that states must have legal authority to address emergencies as well as contingency p lans that are triggered in the event of such emergencies.

2 See, e.g ., “Rule To Reduce Interstate Transport of Fine Particulate Matter and Ozone (Clean Air Interstate Rule); Revisions to Acid Rain Program; Revisions to the NO x SIP Call; Final Rule,” 70 FR 25162, at 25163

– 65 (May 12, 2005) (explaining relationship between timing requirement of s ection 110(a)(2)(D) versus s ection 110(a)(2)(I)).establish a schedule for submission of such plans for certain pollutants when the Administrator

promulgates the designation of an area as nonattainment, and section 107(d)(1)(B) allows up to two years or in s ome cases three years, for such designations to be promulgated. 3 This ambiguity illustrates that rather than apply all the stated requirements of section 110(a)(2) in a strict literal sense, EPA must determine which provisions of section 110(a)(2) are app licable for a particular infrastructure SIP submission. Another example of ambiguity within section 110(a)(1) and (2) with respect to infrastructure SIPs pertains to whether states must meet all of the infrastructure SIP requirements in a single SIP submi ssion, and whether EPA must act upon such SIP submission in a single action. Although section 110(a)(1) directs states to submit “a plan” to meet these requirements, EPA interprets the CAA to allow states to make multiple SIP submissions separately addres sing infrastructure SIP elements for the same NAAQS. If states elect to make such multiple SIP submissions to meet the infrastructure SIP requirements, EPA can elect to act on such submissions either individually or in a larger combined action. 4 Similarl y, EPA interprets the CAA to allow it to take action on the individual parts of one larger, comprehensive infrastructure SIP submission for a given NAAQS without concurrent action on the entire submission. For

3 EPA notes that this ambiguity within s ection 110(a)(2) is heightened by the fact t hat various subparts of part D set specific dates for submission of certain types of SIP submissions in designated nonattainment areas for various pollutants. Note, e.g., that s ection 182(a)(1) provides specific dates for submission of emissions inventori es for the ozone NAAQS. Some of these specific dates are necessarily later than three years after promulgation of the new or revised NAAQS.

4 See, e.g., “ Approval and Promulgation of Implementation Plans; New Mexico; Revisions to the New Source Review (NSR) State Implementation Plan (SIP); Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NNSR) Permitting,” 78 FR 4339 (January 22, 2013) (EPA’s final action approving the structural PSD elements of the New Mexico SIP submi tted by the State separately to meet the requirements of EPA’s 2008 PM 2.5 NSR rule), and “Approval and Promulgation of Air Quality Implementation Plans; New Mexico; Infrastructure and Interstate Transport Requirements for the 2006 PM 2.5 NAAQS,” 78 FR 4337 (January 22, 2013) (EPA’s final action on the infrastructure SIP for the 2006 PM 2.5 NAAQS).example, EPA has sometimes elected to act at different times on various elements and sub

elements of the same infrastructure SIP submission. 5 Ambiguities within section 110(a)(1) and (2) may also arise with respect to infrastructure SIP submission requirements for different NAAQS. Thus, EPA notes th at not every element of section 110(a)(2) would be relevant, or as relevant, or relevant in the same way, for each new or revised NAAQS. The states’ attendant infrastructure SIP submissions for each NAAQS therefore could be different. For example, the mo nitoring requirements that a state might need to meet in its infrastructure SIP submission for purposes of section 110(a)(2)(B) could be very different for different pollutants, because the content and scope of a state’s infrastructure SIP
submission to me et this element might be very different for an entirely new NAAQS than for a minor revision to an existing NAAQS. 6 EPA notes that interpretation of section 110(a)(2) is also necessary when EPA reviews other types of SIP submissions required under the CAA. Therefore, as with infrastructure SIP submissions, EPA also has to identify and interpret the relevant elements of section 110(a)(2) that logically apply to these other types of SIP submissions. For example, section 172(c)(7) requires attainment plan SI P submissions required by part D to meet the “applicable requirements” of section 110(a)(2); thus, attainment plan SIP submissions must meet the requirements of section 110(a)(2)(A) regarding enforceable emission limits and control measures and section 110 (a)(2)(E)(i) regarding air agency resources and authority. By contrast, it is clear

5 On December 14, 2007, the State of Tennessee, through the Tennessee Department of Environment and Conservation , made a SIP revision to EPA demonstrating that the State meets the requirements of s ections 110(a)(1) and (2). EPA proposed action for infrastructure SIP elements (C) and (J) on January 23, 2012 (77 FR 3213) and took final action on March 14, 2012 (77 FR 14976). On April 16, 2012 (77 FR 22533) and July 2 3, 2012 (77 FR 42997), EPA took separate proposed and final actions on all other s ection 110(a)(2) infrastructure SIP elements of Tennessee’s December 14, 2007 submi ssion

.
6 For example, implementation of the 1997 PM 2.5 NAAQS required the deployment of a system of new monitors to measure ambient levels of that new indicator species for the new NAAQS.that attainment plan SIP submissions required by part D would not need to meet the portion of

section 110(a)(2)(C) that pertains to the PSD program required in part C of T itle I of the CAA, because PSD does not apply to a pollutant for which an area is designated nonattainment and thus subject to part D planning requirements. As this example illustrates, each type of SIP submission may implicate some elements of section 11 0(a)(2) but not others. Given the potential for ambiguity in some of the statutory language of section 110(a)(1) and section 110(a)(2), EPA believes that it is appropriate to interpret the ambiguous portions of section 110(a)(1) and section 110(a)(2) in t he context of acting on a particular SIP submission. In other words, EPA assumes that Congress could not have intended that each and every SIP submission, regardless of the NAAQS in question or the history of SIP development for the relevant pollutant, wo uld meet each of the requirements, or meet each of them in the same way. Therefore, EPA has adopted an approach under which it reviews infrastructure SIP submissions against the list of elements in section 110(a)(2), but only to the extent each element ap plies for that particular NAAQS. Historically, EPA has elected to use guidance documents to make recommendations to states for infrastructure SIPs, in some cases conveying needed interpretations on newly arising issues and in some cases conveying interpret ations that have already been developed and applied to individual SIP submissions for particular elements. 7 EPA most recently issued guidance for infrastructure SIPs on September 13, 2013 (2013 Guidance). 8 EPA developed this document to provide states wi th up

- to

- date guidance for infrastructure SIPs for any new or revised NAAQS.

7 EPA notes, however, that nothing in the CAA requires EPA to provide guidance or to promulgate regulations for infrastructure SIP submissions. The CAA direc tly applies to states and requires the submission of infrastructure SIP submissions, regardless of whether or not EPA provides guidance or regulations pertaining to such submissions. EPA elects to issue such guidance in order to assist states, as appropri ate.

8 “Guidance on Infrastructure State Implementation Plan (SIP) Elements under Clean Air Act Sections 110(a)(1) and 110(a)(2),” Memorandum from Stephen D. Page, September 13, 2013.Within this guidance, EPA describes the duty of states to make infrastructure SIP submissions to

meet basic structural SIP requirements within three years of promulgation of a ne w or revised NAAQS. EPA also made recommendations about many specific subsections of section 110(a)(2) that are relevant in the context of infrastructure SIP submissions. 9 The guidance also discusses the substantively important issues that are germane to certain subsections of section 110(a)(2). EPA interprets section 110(a)(1) and (2) such that infrastructure SIP submissions need to address certain issues and need not address others. Accordingly, EPA reviews each infrastructure SIP submission for compl iance with the applicable statutory provisions of section 110(a)(2), as appropriate. As an example, section 110(a)(2)(E)(ii) is a required element of section 110(a)(2) for infrastructure SIP submissions. Under this element, a state must meet the substant ive requirements of section 128, which pertain to state boards that approve permits or enforcement orders and heads of executive agencies with similar powers. Thus, EPA reviews infrastructure SIP submissions to ensure that the state’s implementation plan appropriately addresses the requirements of section 110(a)(2)(E)(ii) and section 128. The 2013 Guidance explains EPA’s interpretation that there may be a variety of ways by which states can appropriately address these substantive statutory requirements, d epending on the structure of an individual state’s permitting or enforcement program ( e.g., whether permits and enforcement orders are approved by a multi

member board or by a head of an executive agency). However they are addressed by the state, the subs tantive requirements of Section 128 are necessarily included in EPA’s evaluation of

9 EPA’s September 13, 2013, guidance did not make recommendations with respect to infrastructure SIP submissions to address S ection 110(a)(2)(D)(i)(I). EPA issued the guidance shortly after the U.S. Supreme Court agreed to review the D.C. Circuit decision in EME Homer City , 696 F.3d 7 (D.C. Cir. 2012) which had interpreted the requirements of s ection 110(a)(2)(D)(i)(I). In light of the uncertainty created by ongoing litigation, EPA elected not to provide additional guidance on the requirements of s ection 1 10(a)(2)(D)(i)(I) at that time. As the guidance is neither binding nor required by statute, whether EPA elects to provide guidance on a particular s ection has no impact on a state’s CAA obligations.infrastructure SIP submissions because section 110(a)(2)(E)(ii) explicitly requires that the state

satisfy the provisions of section 128. As another example, EPA’s review of infrastructure SIP submissions with respect to the PSD program requirements in section 110(a)(2)(C), (D)(i)(II), and (J) focuses upon the structural PSD program requirements contained in part C and EPA’s PSD regulations. Structural PSD program requirem ents include provisions necessary for the PSD program to address all regulated sources and NSR pollutants, including Greenhouse Gases (GHGs). By contrast, structural PSD program requirements do not include provisions that are not required under EPA’s regu lations at 40 CFR 51.166 but are merely available as an option for the state, such as the option to provide grandfathering of complete permit applications with respect to the PM 2.5 NAAQS. Accordingly, the latter optional provisions are types of provisions EPA considers irrelevant in the context of an infrastructure SIP action. For other section 110(a)(2) elements, however, EPA’s review of a state’s infrastructure
SIP submission foc uses on assuring that the state’s SIP meets basic structural requirements. For example, section 110(a)(2)(C) includes, inter alia, the requirement that states have a program to regulate minor new sources. Thus, EPA evaluates whether the state has an EPA

- approved minor new source review program and whether the program addresses the pollutants relevant to that NAAQS. In the context of acting on an infrastructure SIP submission, however, EPA does not think it is necessary to conduct a review of each and eve ry provision of a state’s existing minor source program ( i.e., already in the existing SIP) for compliance with the requirements of the CAA and EPA’s regulations that pertain to such programs. With respect to certain other issues, EPA does not believe tha t an action on a state’s infrastructure SIP submission is necessarily the appropriate type of action in which to addresspossible deficiencies in a state’s existing SIP. These issues include: (i) existing provisions

related to excess emissions from sourc es during periods of startup, shutdown, or malfunction (SSM) that may be contrary to the CAA and EPA’s policies addressing such excess emissions; 10 (ii) existing provisions related to “director’s variance” or “director’s discretion” that may be contrary to the CAA because they purport to allow revisions to SIP

- approved emissions limits while limiting public process or not requiring further approval by EPA; and (iii) existing provisions for PSD programs that may be inconsistent with current requirements of E PA’s “Final NSR Improvement Rule,” 67 FR 80186 (December 31, 2002), as amended by 72 FR 32526 (June 13, 2007) (NSR Reform). Thus, EPA believes that it may approve an infrastructure SIP submission without scrutinizing the totality of the existing SIP for s uch potentially deficient provisions and may approve the submission even if it is aware of such existing provisions. 11 It is important to note that EPA’s approval of a state’s infrastructure SIP submission should not be construed as explicit or implicit re

- approval of any existing potentially deficient provisions that relate to the three specific issues just described. EPA’s approach to review of infrastructure SIP submissions is to identify the CAA requirements that are logically applicable to that submi ssion. EPA believes that this approach to the review of a particular infrastructure SIP submission is appropriate, because it would not be

10 Subsequent to issuing the 2013 Guidance, EPA’s interp retation of the CAA with respect to the approvability of affirmative defense provisions in SIPs has changed. See “State Implementation Plans: Response to Petition for Rulemaking; Restatement and Update of EPA’s SSM Policy Applicable to SIPs; Findings of S ubstantial Inadequacy; and SIP Calls To Amend Provisions Applying to Excess Emissions During Periods of Startup, Shutdown and Malfunction,” 80 FR 33839 (June 12, 2015). As a result, EPA’s 2013 Guidance (p. 21 & n.30) no longer represents the EPA’s view con cerning the validity of affirmative defense provisions, in light of the requirements of section 113 and section 304.

11 By contrast, EPA notes that if a state were to include a new provision in an infrastructure SIP submission that contained a legal defici ency, such as a new exemption or affirmative defense for excess emissions during SSM events, then EPA would need to evaluate that provision for compliance against the rubric of applicable CAA requirements in the context of the action on the infrastructure SIP.reasonable to read the general requirements of section 110(a)(1) and the list of elements in

section 110(a)(2) as re quiring review of each and every provision of a state’s existing SIP against all requirements in the CAA and EPA regulations merely for purposes of assuring that the state in question has the basic structural elements for a functioning SIP for a new or rev ised NAAQS. Because SIPs have grown by accretion over the decades as statutory and regulatory requirements under the CAA have evolved, they may include some outmoded provisions and historical artifacts. These provisions, while not fully up to date, never theless may not pose a significant problem for the purposes of “implementation, maintenance, and enforcement” of a new or revised NAAQS when EPA evaluates adequacy of the infrastructure SIP submission. EPA believes that a better approach is for states and EPA to focus attention on those elements of section 110(a)(2) of the CAA most likely to warrant a specific SIP revision due to the promulgation of a new or revised NAAQS or other factors. For example, EPA’s 2013 Guidance gives simpler recommendations wi th respect to carbon monoxide than other NAAQS pollutants to meet the visibility requirements of section 110(a)(2)(D)(i)(II), because carbon monoxide does not affect visibility. As a result, an infrastructure SIP submission for any future new or revised N AAQS for carbon monoxide need only state this fact in order to address the visibility prong of section 110(a)(2)(D)(i)(II). Finally, EPA believes that its approach with respect to infrastructure SIP requirements is based on a reasonable reading of section 110(a)(1) and (2) because the CAA provides other avenues and mechanisms to address specific substantive deficiencies in existing SIPs. These other statutory tools allow EPA to take appropriately tailored action, depending upon the nature and severity of t he alleged SIP deficiency. Section 110(k)(5) authorizes EPA to issue a “SIP call” whenever the Agency determines that a state’s SIP is substantially inadequate to attain ormaintain the NAAQS, to mitigate interstate transport, or to otherwise comply with the CAA. 12

Section 110(k)(6) authorizes EPA to correct errors in past actions, such as past approvals of SIP submissions. 13 Significantly, EPA’s determination that an action on a state’s infrastructure SIP submission is not the appropriate time and place t o address all potential existing SIP deficiencies does not preclude EPA’s subsequent reliance on provisions in section 110(a)(2) as part of the basis for action to correct those deficiencies at a later time. For example, although it may not be appropriate to require a state to eliminate all existing inappropriate director’s discretion provisions in the course of acting on an infrastructure SIP submission, EPA believes that section 110(a)(2)(A) may be among the statutory bases that EPA relies upon in the co urse of addressing such deficiency in a subsequent action. 14

II. W hat are t he PSD Program Requirements for Infrastructure SIPs ? Section 110(a)(2)(C) has three components that must be addressed in infrastructure SIP submissions : enforcement, state

- wide regulation of new and modified minor sources and minor modifications of major sources; and PSD permitting of major sources and major modifications in

12 For example, EPA issued a SIP call to Utah to address specific existing SIP deficiencies related to the treatment of excess emissions during SSM events. See “Finding of Substantial Inadequacy of Implementation Plan; Call for Utah State Implementat ion Plan Revisions,” 74 FR 21639 (April 18, 2011).

13 EPA has used this authority to correct errors in past actions on SIP submissions related to PSD programs. See “Limitation of Approval of Prevention of Significant Deterioration Provisions Concerning G reenhouse Gas Emitting

- Sources in State Implementation Plans; Final Rule,” 75 FR 82536 (December 30, 2010). EPA has previously used its authority under s ection 110(k)(6) of the CAA to remove numerous other SIP provisions that the Agency determined it had approved in error. See, e.g., 61 FR 38664 (July 25, 1996) and 62 FR 34641 (June 27, 1997) (corrections to American Samoa, Arizona, California, Hawaii, and Nevada SIPs); 69 FR 67062, November 16, 2004 (corrections to California SIP); and 74 FR 57051 (Novem ber 3, 2009) (corrections to Arizona and Nevada SIPs).

14 See, e.g ., EPA’s disapproval of a SIP submission from Colorado on the grounds that it would have included a director’s discretion provision inconsistent with CAA requirements, including s ection 110( a)(2)(A). See, e.g ., 75 FR 42342 at 42344 (July 21, 2010) (proposed disapproval of director’s discretion provisions); 76 FR 4540 (January 26, 2011) (final disapproval of such provisions).areas designated attainment or unclassifiable for the subject NAAQS as required b y the CAA

title I part C ( i.e ., the major source PSD program). Section 110(a)(2)(D)(i) has two components : 110(a)(2)(D)(i)(I) and 110(a)(2)(D) (i) (II)

. Each of these components have two subparts resulting in four distinct components, commonly referred to as “prongs,” that must be addressed in infrastructure SIP submissions. The first two prongs, which are codified in section 110(a)(2)(D)(i)(I), are provisions that prohibit any source or other type of emissions activity in one state from contributing si gnificantly to nonattainment of the NAAQS in another state (“prong 1”), and interfering with maintenance of the NAAQS in another state (“prong 2”). The third and fourth prongs, which are codified in section 110(a)(2)(D)(i)(II), are provisions that prohibi t emissions activity in one state interfering with measures required to prevent significant deterioration of air quality in anothe r state (“prong 3”), or to protect visibility in another state (“prong 4”). Section 110(a)(2) (J) has four components that must be addressed in infrastructure SIP submissions: 1) c onsultation with government officials , 2) p ublic notification , 3) PSD , and 4)

v isibility protection

. With respect to the PSD e lements of 110(C) and (J) , EPA interprets the CAA to require each state to make , for each new or revised NAAQS, an infrastructure SIP submission that demonstrates that the air agency has a complete PSD permitting program meeting the current requirements for all regulated new source rev iew ( NSR ) pollutants. The requirements of e lement 110(D)(i)(II) may also be satisfied by demonstrating the air agency has a complete PSD permitting program correctly addressing all regulated NSR pollutants.
I n order for the PSD elements of infrastructure SIP submissions to be approvable , a
state ’s submission must demonstrate that all structural PSD program elements that are currentlydue under the CAA and EPA regulations are either approved into the SIP or are submitted for

approval, in which case EPA must take final action to approve these elements before or simultaneously with its action on the infrastructure SIP. T here are four more recent structural PSD program requirements that are relevant to EPA’s r eview of the PSD e lements of the infrastructure SIP submissions

. The EPA regulations that require these SIP revisions are: 1) the Phase II Rule 15 ; 2) the GHG Tailoring Rule 16 as consistent with the holding in Utility Air Regulatory Group v. Environmental Protection Agency ; 17 3) the NSR Fine Particulate Matter ( PM 2.5 ) Rule 18 ; and 4) the PM 2.5 PSD Increment

- Significant Impact Levels ( SILs )

- Significant Monitoring Concentrations ( SMC ) Rule (only as it relates to PM 2.5 Increments)

. 19 Specific details on these PSD requirements can be found in the respective fin al rules cited above, however, a brief summary of each rule is provided below. The Phase II rule established f ederal NSR permitting requirements for the implementation of the ozone NAAQS including recognizing nitrogen oxide as an ozone
precursor. See 70 FR 71612

. The GHG Tailoring Rule established emission thresholds for determining which new stationary sources and modification projects become subject to PSD permitting requ irements for

15 “ Final Rule To Implement the 8

- Hour Ozone National Ambient Air Quality Standard

— Phase 2; Final Rule” (November 29, 2005, 70 FR 71612) (hereafter referred to as the “Phase II Rule”)

.
16 “ Prevention of Significant Deterioration and Title V Greenhouse Gas (GHG ) Tailoring Rule; Final Rule” (June 3, 2010, 75 FR 31514) (hereafter referred to as the “GHG Tailoring Rule ”).

17 Utility Air Regulatory Group v. Environmental Protection Agency , 134 S. Ct. 2427 (2014).

18 Implementation of the New Source Review Program for Particulate Matter Less Than 2.5 Micrometers; Final Rule” (May 16, 2008, 73 FR 28321) (hereafter referred to as the “NSR PM 2.5 Rule” ).

19 “Final Rule on the Prevention of Significant Deterioration (PSD) for Particulate Matter Less Than 2.5 Micrometers (PM 2.5 )

– Increments, Significant Impact Levels (SILs) and Significant monitoring Concentration (SMC); Final Rule” (October 20, 2010, 75 FR 64864) (hereafter referred to as the“PM 2.5 PSD Increment

- SILs

- SMC Rule (only as it relates to PM 2.5 Increments)”).their GHG emissions. See 75 FR 31514

. EPA notes that o n June 23, 20 14, the U.S. Supreme

Court issued a decision addressing the application of PSD permitting requirements to GHG emissions. See Utility Air Regulatory Group v. Environmental Protection Agency , 134 S. Ct.
2427. In that decision, t he Supreme Court said that the EPA may not treat GHGs as an air pollutant for purposes of determining whether a source is a major source required to obtain a PSD permit. The Court also said that EPA could continue to require that PSD permits, otherwise required based on emissi ons of pollutants other than GHGs, contain limitations on GHG emissions based on the application of Best Available Control Technology (BACT). In accordance with the Supreme Court decision, o n April 10, 2015, the U.S. Court of Appeals for the District of C olumbia Circuit ( D.C. Circuit ) issued an A mended J udgment ( Coalition for Responsible Regulation, Inc. v. EPA, Nos. 09

- 1322, 10

- 073, 10

- 1092 and 10

- 1167), vacating the regulations that implemented Step 2 of EPA’s GHG Tailoring Rule, but not the regulations that implement Step 1 of that rule. Step 1 of the GHG Tailoring Rule covers

s ources that are required to obtain a PSD permit based on emissions of pollutants other than
GHGs

. Step 2 applied to sources that emitted only GHGs above the thresholds triggering the requirement to obtain a PSD permit. The A mended J udgment preserves, without the need for additional rulemaking by EPA, the application of the BACT requirement to GHG emissions from Step 1 or “anyway” sources. With respect to Step 2 sources, the D.C. Circuit’s A mended
J udgment vacated the regulations at issue in the litigation, including 40 CFR 51.166(b)(48)(v) and 40 CFR 52.21(b)(49)(v), “to the extent they require a stationary source to obtain a PSD permit if greenhouse gases are the only pollutant : (i) that the source emits or has the potential to emit above the applicable major source thresholds, or (ii) for which there is a significantemission increase from a modification.” The D.C. Circuit simultaneousl y issued its mandate,

which means that the Coalition Amended Judgment became final and effective upon issuance. On August 12, 2015, EPA signed a final rule that removes from the PSD regulations certain regulatory provisions that require a stationary source to obtain a PSD permit solely on the basis of the source’s GHG emissions (Step 2) and the regulations that requ ire the EPA to consider further phasing

- in GHG permitting requirements into the PSD. The EPA intends to further revise the PSD regulations to fully implement the Coalition Amended Judgment in a separate rulemaking. States may submit revisions to their PS D SIP program consistent with EPA’s amended regulations whenever feasible. At this juncture, EPA is not expecting states to have revised their PSD programs for purposes of infrastructure SIP submissions and is only evaluating such submissions to assure th at the state’s program correctly addresses GHGs
consistent with the court decisions discussed above and EPA’s revised regulations

. At present, EPA has determined that the North Carolina infrastructure SIP s are sufficient to satisfy the PSD e lements of 110(a)(2) (C), (D)(i)(II), and (J) with respect to GHGs

. This is because the PSD permitting program s previously approved by the EPA into the se SIP s continue to require that PSD permits issued to “anyway sources” contain limitations on GHG emissions
based o n the application of BACT. The approved North Carolina PSD permitting program still contain s some provisions regarding Step 2 sources that are no longer necessary in light of the Supreme Court decision and D.C. Circuit A mended J udgment. Nevertheless, the presence of these provisions in the previously

- approved plan does not render the infrastructure SIP submission s inadequate to satisfy the PSD e lements of 110(a)(2) (C), (D)(i)(II), and (J). The SIP contains the PSD requirements for applying the BACT requi rement to GHG emissions from “anyway sources” that are necessary at this time. The application of those requirements is notimpeded by the presence of other previously

- approved provisions regarding the permitting of

Step 2 sources. Accordingly, the Supre me Court decision and subsequent D.C. Circuit judgment do not prevent EPA’s approval of the infrastructure SIP s of North Carolina as to the requirements of the PSD e lements. The 2008 NSR PM 2.5 Rule 20 and 2010 PM 2.5 PSD Increment

- SILs

- SMC Rule (only as it relates to PM 2.5 Increments) established NSR permitting requirements for the implementation of the PM 2.5 NAAQS including increments pursuant to section 166(a) of the CAA to prevent significant deterioration of air quality in areas meeting the NAAQS

. See 73 FR 28321 and 75 FR
64864 . O n January 22, 2013, the D.C. Circuit , in Sierra Club v. EPA, 70 5 F.3d 458 (D.C. Cir. 2013), issued a judgment that, among other things , vacated the provisions adding the PM 2.5 SMC to the Federal regulations, at 40 CFR 51.166( i)(5)(i)( c ) and 52.21(i)(5)(i)( c ), that were

20 On January 4, 2013, the U.S. Court of Appeals, in Natural Resources Defense Council v. EPA , No. 08

- 1250, 2013 WL 45653 (D.C. Cir., filed Ju ly 15, 2008) (consolidated with 09

- 1102, 11

- 1430), issued a judgment that remanded EPA’s 2007 and 2008 rules impleme nting the PM 2.5 NAAQS. The court concluded that since subpart 4 of the CAA generally applies to coarse particulate matter ( PM 10 ) , EPA should have also followed the more prescriptive subpart 4 structure for the PM 2.5 implementation rules. The court ordere d EPA to repromulgate the implementation rules pursuant to subpart 4. Subpart 4 of part D, t itle 1 of the CAA establishes additional provisions for particulate matter nonattainment areas. The 2008 implementation rule addressed by the court decision, “Implementation of New Source Review (NSR) Program for Particulate Matter Less Than 2.5 Micrometers (PM 2.5 ),” 73 FR 28321 (May 16, 2008), promulgated NSR requirements for implementation of PM 2.5 in both nonattainment areas ( N NSR) and attainment/unclassifia ble areas (PSD). As the requirements of s ubpart 4 only pertain to nonattainment areas, EPA does not consider the portions of the 2008 rule that address requirements for PM 2.5 attainment and unclassifiable areas to be affected by the court’s opinion. More over, EPA does not anticipate the need to revise any PSD requirements promulgated in the 2008 rule in order to comply with the court’s decision. Accordingly, EPA’s approval of a state’s infrastructure SIP related to elements (C), (D)(i) (prong 3) , or (J) with respect to the PSD requirements promulgated in t he 2008 NSR PM 2.5 Rule does not conflict with the court’s opinion. The court’s decision with respect to the N NSR requirements promulgated by the 2008 implementation rule also does not affect EPA’s action on the present infrastructure action. EPA interprets the Act to exclude nonattainment area requirements, including requirements associated with a N NSR program, from infrastructure SIP submissions due three years after adoption or revision of a NAAQ S . Instead, these elements are typically referred to as nonattainment SIP or attainment plan elements, which would be due by the dates statutorily prescribed under subpart 2 through 5 under part D, extending as far as 10 years following designations for s ome elements

.promulgated as part of the 2010 PM 2.5 PSD Increment

- SILs

- SMC Rule. 21 See 75 FR 64864 ; s ee

also , Sierra Club v. EPA , 70 5 F.3d 458 (D.C. Cir. 2013). In its decision, the court held that EPA did not have the authority to use SMCs to exempt permit applicants from the statutory requirement in section 165(e)(2) of the CAA that ambient monitoring data for PM 2.5 be included in all PSD permit a pplications. Thus, although the PM 2.5 SMC was not a required element of a

s tate's PSD program and thus not a structural requirement for purposes of infrastructure SIPs,
were a SIP

- approved PSD program that contains such a provision to use that provision to issue new permits without requiring ambient PM 2.5 monitoring data, such application of the SIP would be inconsistent with the court ’ s opinion and the requirements of section 165(e)(2) of the CAA. Because of the vacatur of the EPA regulations, the SMC provisions included in s tates’ SIP

approved PSD progr ams on the basis of EPA ’ s regulations are unlawful and no longer federally enforceable by law. Permits issued on the basis of these provisions as they appear in approved SIPs would be inconsistent with the CAA and difficult to defend in administrative and judicial challenges. Thus, the SIP provisions may not be applied even prior to their removal from the
SIPs. States should instead require applicants requesting a PSD permit, including those having already been applied for but for which the permit has no t yet been received, to submit ambient
PM 2.5 monitoring data in accordance with the CAA requirements whenever either direct PM 2.5 or any PM 2.5 precursor is emitted in a significant amount. 22

21 “ Prevention of Significant Deterioration (PSD) for Particulate Matter Less Than 2.5 Micrometers (PM 2.5 )

— Increments, Significant Impact Levels (SILs) and Significant Monitoring Concentration (SMC) ” ; Final Rule, 75 FR 64864 (October 20, 2 01 0), (hereafter referred to as the “2010 PM 2.5 PSD Increment

- SILs

- SMC Rule”). 22 In lieu of the applicants’ need to set out PM 2.5 monitors to collect ambient data, applicants may submit PM 2.5 ambient data collected from existing monitoring networks when the permitting authority deems such data to be representative of the air quality in the area of concern for the year preceding receipt of the application. EPA believes that applicants will gene rally be able to rely on existing representative monitoring data to satisfy the monitoring data requirement.On December 9, 2013, EPA issued a final rulemaking to remove the vacated and

remanded PM 2.5 SILs 23 and the vacated PM 2.5 SMC provisions from 40 CFR 51.166 and 52.21. 24
See 79 FR 73698. Because the Court vacated the PM 2.5 SMC provisions in 40 CFR 51.166(i)(5)(i)( c ) and 52.21(i)(5)(i)( c ) , EPA revised the existing concentr ation for the PM 2.5 SMC listed in sections 51.166(i)(5)(i)( c ) and 52.21(i)(5)(i)( c ) to zero micrograms per cubic meter (mg/m 3 ). Were EPA to completely remove PM 2.5 from the list of pollutants in sections 51.166(i)(5)(i)( c ) and 52.21(i)(5)(i)( c ) of the PSD regulations, PM 2.5 would no longer be a listed pollutant

. EPA did not entirely remove PM 2.5 as a listed pollutant in the SMC provisions so as to avoid any potential that sections 51.166(i)(5)(iii) and 52.21(i)(5)(iii) could be interpreted as giving review ing authorities the discretion to exempt permit applicants from the requirement to conduct monitoring for PM 2.5 . Such a conclusion would contravene the Court’s decision and the
CAA. By continuing to include PM 2.5 as a pollutant in the list contained in se ctions 51.166(i)(5)(i) and 52 .21(i)(5)(i), with the numerical value replaced with zero mg/m 3 , EPA is avoid ing any concern that paragraph (iii) of the two affected sections could be applied to excuse permit applicants from adequately addressing the monitoring requirement for PM 2.5 . EPA also advises s tates to begin preparations to remove the PM 2.5 provisions from t heir state PSD regulations and SIPs. As the previously

- approved PM 2.5 SMC SIP provisions are no

23 The court’s January 22, 2013, decision also vacated and remanded back to EPA the PM 2.5 SILs. EPA’s December 9, 2013 final rule also removed the PM 2.5 SILs from the CFR. The PM 2.5, SILs are not a required element of a State’ s PSD program and thus not a structural requirement for purposes of infrastructure SIPs . The PM 2.5 SILs are not approved into the SIP revision s that are the subject of this p roposed rulemaking.

24 Final Rule entitled “ Prevention of Significant Deterioration for Particulate Matter Less Than 2.5 Micrometers

— Significant Impact Levels and Significant Monitoring Concentration: Removal of Vacated Elements;” 79 FR 73698 (December 9, 2013)longer enforceable, EPA does not believe the existence of the se provisions in SIPs preclude

approv al of the infrastructure SIP submissions

.

III. W hat is EPA’s Analysis of How North Carolina Addressed Sections 110(a)(2)(C), 110(a)(2)(D)(i)(II) (prong 3) and 110(a)(2)(J) related to PSD ? As noted in section II. above, four recent structural PSD program requirements that are relevant to EPA’s r eview of the PSD elements of the infrastructure SIP submissions are the Phase II Rule , GHG Tailoring Rule , NSR PM 2.5 Rule , and PM 2.5 PSD Increment

- SILs

- SMC Rule (only as it relates to PM 2.5 Increments)

. EPA approved North Carolina’s SIP revisions addressing the Phase II Rule on August 10, 2011 (76 FR 49313), and the GHG Tailoring Rule on October 18, 2011 (76 FR 64240)

. EPA’s latest action proposes approv al of North Carolina’s SIP revision addressing the NSR PM 2.5 Rule and partially approv es and partially disapproves N orth Carolina’s SIP revision addressing the PM 2.5 PSD Increment

- SILs

- SMC Rule . S ee the proposed rulemaking associated with docket number “EPA

- R04

- OAR

- 2015

- 0501” for detailed discussion of those actions.