P.1 

OAR Box 1796 

Prepped by Keeia Richards 

Document Number: 

37) IV-H-63 

Docket Number: 

A-90-37 

Printed 10/31/2008 4:20:37 PM Sheet 37 of 107 
I 16:2 2 FAX 919 541 5509 

1B2 13:4 5 313-4840122 

NG'->-22-?002 03 : dO 

OPG IIG EPA 

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FromFAX TRANSMISSION 

OFFICE OP INFORMATTON AND (-IESULATORY AFFAIRS 

OFFICE OF MANAGEMENT AND BUD-SET 

NATURAL BESOUBCES. £NERS> AND AGRICULTURE BRANCH 

725 17th Street. NW. Room 10202 

Washington. foC 20503 

Office: 202-395-3084/FaJt: 202-395-7285 

) Art Fraas 

) Rich Theroux 

) Jim Laity 

) Amanda Lee 

Amy Farrell 

) Bryon Allen 

) Morgte Malanoski 

) David Rostker 

) Ruth Solomon 

) Edmand Toy 

v. J " 

Date: 

Pages 

hi Qvt 7 ) 

.. including fhi» i:ov«r sheet 

£3 

DOCKET 

Comments-. 

PirvpA n~\t-yf^^^L. A(* -

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.outcome, by requiring the reviewing authority to 

e.oasidisrevaluate-TgfiegBSr your -PAL cemLiuufets to LH=I -roQDbnabXy 

^tepiefa'tiiiLdLive-e^ baseline actual emissions at the time of 

PAL permit renewal. 

Although we believe that a periodic review of the level 

of the PAL may be necessary, and that this may result in an 

adjustment in your PAL to a level that is representative of 

your baseline actual emissions, we do not believe that we 

should mandate an adjustment to the PAL based on only one 

prescribed methodology. Such an approach could lead to 

inappropriate results, as discussed below. Instead, we 

believe that our concerns can be appropriately addressed by 

providing the States the authority to adjust the PAL based 

on what is representative of your baseline actual emissions. 

We believe that some discretion in determining what is 

representative of actual emissions is appropriate^ basedr in 

part-r on our experience with the pilot projects previously 

mentioned. In one instance, a participant voluntarily 

agreed to reduce its actual emissions by 54 percent in 

exchange for obtaining a source—-wide emissions cap. After 

agreeing to'this emissions reduction, the participant 

further reduced emissions by increasing capture efficiency 

and incorporating pollution prevention strategies into its 

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relevant terminology for calculating a post modification 

(changerpre-change emissions increase for most applications 

is now ^baseline actual emissions^ rather than factual 

emissions.^ You may use any consecutive 24-month period in 

the past 10 years to determine your baseline actual 

emissions. Second, we are supplementing the existing 

"actual-to •potential ^actual.-to-potent ial applicability test 

with an "actual -to projected •actual"actual-to-proiiectedactua.1 applicability test for determining if a non-routine 

physical or operational change at an existing emissions unit 

will result in an emissions increase. Notwithstanding the 

new test, you will still have the ability to conduct an • 

"aotual'-tu potential "actual -to-potent ial, type test within 

the new "actual-to-oronacted aetual^actual-to-DroJectedactual applicability test. In this case, you will not be i / • 1 

subject to certain recordkeeping requirements that -wouloO If/r/c,*, tfo**s pcfXofcfrgrw-ise appT^T *r V^Atvd 

For EUSGUs, we are making several changes to the 

existing procedures and are codifying our current policy for U "^X 

calculating the baseline actual emissions. That is, the 

baseline actual emissions for EUSGUs is the average rate, in 

tona per yeartpv, at which that the unit actually emitted 

the pollutant during a 2-year (consecutive 24-month) period 

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Today's action amends the existing NSR regulations to 

provide you with a common^applicability test for all 

existing emissions units -the "actual to prujectedaotual"actual-to-projected-actual applicability test. This 

test has changed in some ways from both the 1996 NPRM and 

the 1998 NOA. As described in greater detail in sections 

II.C and II.D below, the key features of the methodology are 

as follows: 

If you are an existing emissions unit (other than an 

EUSGU), you will determine the pre-change (baseline) 

actual emissions by calculating an average annual 

emissions rate, in tons per yeartpy, using any 

consecutive 24-months24 months during the 10-year 

period immediately preceding the change. This rate 

must be adjusted downward to reflect any legally 

enforceable emission limitations imposed after the 

selected baseline period.' 

We are codifying the "2-yeava •irr-5"2-in-5-years" 

presumption for calculating the baseline actual 

emissions for EUSGUs. 

If you are an existing emissions unit (including 

EUSGUs), you will estimate post-change emissions 

(projected actual emissions), in tuns- par—yeartpy, to 

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WlW6? ^yfe^rack) or report your post-change emissions.

 tlfPs<^ ^ 

As discussed earlier, the cu-gjferrt regulations provide^ 

that when your emissions unit, other than an electric 

uti-lity sLfcram generating unit—f-EUSGU^, "has not begun normal 

operations," actual emissions equal the PTE of the unit. 

There hayve been considerable issues raised with this 

approach. For example, using potential—bo emitPTE as a 

measure of post-change emissions automatically attributes 

all possible emissions increases to the change. There are 

many cases, however, where this simply is not true. 

Moreover, when the actual-to-potential test is applied^ it 

is automatically assumed that the emissions unit has not 

begun normal operations after the change period. In many 

such cases, however, the changed unit as a practical matter 

will function essentially as it did before the change. We 

are, therefore, allowing all existing emissions units to use 

an actual-to-projected-actual- emiAsionsar>plicab.ility test. 

Accordingly^ we are eliminating the term "begun normal 

operations" from the determination of whether a change 

results in a significant emissions increase.11 

r/ We do make use of the term "resumes regular operations" 

(as opposed to "normal operations") in the final rule- B^ 

but that term has a very different meaning and we are using 

it for an entirely different purpose. Specifically, we are 

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the selected 24-month baseline period and is not. related to 

the change. Accordingly, you will calculate the unit'sprojected actual emissions as the product of: (1) the hourly 

emissions rate, which is based on the emissions unit's 

operational capabilities following the change(s), taking 

into account legally enforceable restrictions that could 

affect the hourly emissions rate following the change(s); 

and (2) the projected level of utilization, which is based 

on both the emissions unit's historical annual utilization 

rate and available information regarding the emissions 

unit's likely post-change capacity utilization. In 

calculating the projected actual emissions, you should 

consider both the expected and the highest projections of 

the business activity that you expect could be achieved and 

that are consistent with information your company publishes 

for business-related purposes such as a stockholder 

prospectus, or applications for business lc .oans.] nWhen 

determining^ projected actual emissions before bequHTTna 

construction^ vou must proie^fe-'-FTTe highest ^annua.] 

ate that the emissi^ftg^units (including EUSGUs) that are 

en >d wij.,1 achieve once thev resume /lormal 

;e rat ion 7^) From the initial calculation, you may then make 

the appropriate adjustment to subtract out any portion of 

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•unit-by-unit basis, the —monitoring must be sufficient to 

provide data that demonstrate that emissions do.not exceed 

the applicable limit for a particular unit. Under the 

tiaditionalthis approach, if an emissions unit has to meet 

an NSPS VOC limit of 9 ppm, the— monitoring need only 

demonstrate that VOC emissions are no higher than 9 ppm but 

notn measure VOC^ emissions at any precise level below 9 ppm 

(for example, 7 ppm, 8 ppm). 

In contrast, under a VOC emissions actual PAL, the VOC 

emissions from each emissions unit must be quantified (in 

tpy) , generally each month as the sum of the previous 12 

months of VOC emissions. thus, it becomes necessary to 

require monitoring that quantifies the emissions from each 

emissions unit to ensure that the annual limit is 

enforceable as a practical matter. As a result, the 

monitoring requirements for emissions unlets under a PAL may 

be more stringent than for those emissions units not under a 

PAL. • In many instances, your emissions units may have 

monitoring suitable for determining compliance with a unit^ 

specific emission limitation on a periodic basi.s, in 

accordance with title V requirements, but ev&n that 

monitoring frequency of data collection may not be 

appropriate for rrtt-gM&Jruu mai,d's~luii.3- e^rareti f-icat. i nn. -£G>J: a 12-

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•monitoring systems accurately determine emissions from each 

unit subject to a PAL. You will need to collect such data 

from all units subject to the PAL, including those that are 

unregulated at the present time. If you do not have current 

emissions data^ or^if your emissions unit's operation and 

equipment have changed since collection of that data, you 

will need to obtain current, accurate data, typically by 

conducting performance tests or other direct measurements 

before.submission of your complete permit application to 

obtain a PAL. 

In addition,•you will need to re-validate the data and 

any correlation to demonstrate that your monitoring systems 

continue to accurately determine emissions from each unit 

subject to a PAL. This re-validation must occur at least 

once every fiveji years for the life of the PAL. Data must 

be re-validated through a performance evaluation test or 

other scientifically valid means that is approved by the 

reviewing authority. 

You must conduct all testing in accordance with test 

<. ^ methods appropriate to your emissions unit and applicable 

rp "~^ requirement^ For example, among the test methods for 

^•<-j measuring organic emissions are Methods 18, 25, 25A, and 

25B, which can be found in 40 CFR part 60, appendix A. 

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•solvent with 25. percent VOCs (as demonstrated using Method 

311). You would be required to report and include 2 tons of 

VOC emissions (since 8 * 0.25 '- 2) for that month to compare 

with the PAL, even though some of the VOCs may not 

ultimately be emitted. (For example, they could be retained 

in your emissions unit's product or in a process waste.) 

A CEMS, coupled with a CERMS as well as an ADHS 

(collectively known as a CEMS), may be used to measure and 

verify the PAL pollutant concentration, volumetric gas flow 

(if applicable), and PAL pollutant mass emissions discharged 

to the atmosphere from each emissions unit emitting the PAL 

pollutant. If a-vour source utilizes- a CEMS approach, tire 

auumeyou must ensure that the CEMS meets the applicable 

Performance Specifications in 40 CFR part 60, appendix B. 

The CEMS must be capable of data sampling at least once 

every 15 minutes. In addition, the ^ouiL.ey_gu must be able 

to convert the data obtained from the CEMS system to a mass 

emissions rate. IJ a significant ^^emissd. on s umt wishes/ to 

use/cEMSri •allir>stailIation, cart if icat ion, afld testing/must 

be ^conducted^within 6 month.^ of t the PAL permit issua/ce. 

These types of monitoring systems are appropriate for 

emissions sources subject- to respective sulfur dicxideSO-., 

nitrogen oyiidesNO,., carbon monoxide, particulate matter 

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operational times when an emissions correlation is not 

available. If ^ significant emissions unit wishes' to use 

parameter m^itopanq,, perjcormancy testing Reeded tcy provide 

£he corpelatig/T between/the monitored parameter an/j the 

emiss/ons myst be con/ucted within 6 mont/hs of th4 PAL 

permit issuance. u 

i n N II 

Alternatively/ the reviewing authority may decide that 

operation of the emissions unit during periods where there 

is no emissions correlation is a violation of the PAL. The 

PAL permit .must include enforceable requirements if either 

of these alternatives to the required correlation for 

•Pgarameter Mgjonitoring are used. 

Emission factors may be used for demonstrating 

compliance with PALs, so long as the factors are adjusted 

for the degree of uncertainty or limitations in the factors' 

development. In ascertaining whether an emission factor is 

appropriate, you and your reviewing authority should 

consider the contribution of emissions from the emissions 

unit in relation to the PAL, the size of the emissions unit, 

and the margin of compliance of the emissions unit. In 

addition, if the emission factor approach is taken, the 

emissions unit shall operate within the designated range of 

use for the emission factor. 

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•high load conditions as demonstrated through multiple 

performance tests) for each emissions unit. You must, 

however, use one of the accepted monitoring approaches, 

including alternative monitoring approved by the reviewing 

authority, for these periods or calculate the emissions 

during these periods by assuming the highest paten ti-al—to 

bjjfiitPTK without considering enforceable emission limitations 

or operational restrictions. 

In addition, the rule permits the reviewing authority 

to use the reasonably estimated highest potential emissions 

without considering—enforceable emission limitations for 

periods when your emissions unit operates outside its 

parameter range(s) established in the performance test— / 

unless another method is speeifred in—the- permit, and 

include those emissions in the 12-month rolling total during 

those- pa-riaiis in order to demonstrate compliance with the 

PAL. Alternatively, the reviewing authority may decide that 

operation outside the range(s) established in the 

performance test is considered a violation of the PAL. The 

reviewing authority must decide how to handle emissions when 

the unit is operating outside the ranges established in the 

performance tests prior to the issuance of the PAL permit 

and must include appropriate enforceable conditions in the 

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and intent underlying NSR. We believe the PAL regulations 

constitute a reasonable interpretation of the Act's 

definition of "modification" and are permissible under 

current law. 

The definition of "modification" set forth in section 

111(a)(4) of the Act is fundamental to determining major NSR 

applicability. Pursuant to the Act, the term modification 

means "any physical change in or change in the method of 

operation of a stationary source which increases the amount 

of any air pollutant emitted by such source or which results, 

in the emission of any air pollutant not previously 

emitted." The statute, however, does not prescribe the 

methodology for establishing a stationary source's emissions 

baseline from which emissions increases are measured. When 

a statute is silent or ambiguous with respect to specific 

issues, the relevant inquiry is whether the agency's 

interpretation of the statutory provisions is permissible. 

Chevron, USA U.S.A.,,, Inc. v. NRDC, Inc.. 467 U.S. '837, 865 

(1984) . 

Accordingly, EPA is . exercising its discretion/"^empererJ 

with i^s~~-e^p^riencejL£o develop reasonable alternatives to 

determine NSR applicability that are consistent .with the 

statutory provisions and Congressional intent underlying the 

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•units that have • installed good emissions controls, many 

commenters indicate that it would be inappropriate for EPA 

to "confiscate" such emissions reductions. Such an approach 

would encourage sources to pollute to maintain a higher 

baseline emissions, and would penalize those sources who 

would voluntarily reduce emissions. At least one commenter 

maintains that both you and the environment should benefit 

from these reductions, and thus, you should be allowed to 

retain a portion of your voluntary emissions reductions. 

We agree with some commenters that mandating an 

adjustment at renewal, based solely on current operations 

and emissions levels, would discourage the voluntary 

emissions reductions the PAL is specifically designed to 

encourage.—Today,—we aire finalizing our propo&al to retain 

a 20 per cent operating cushion when renewing the PAL. This 

provisions will be .supplemented as discussed further 'below. 

We agree with commenters that both you and the environment 

should benefit from your commitment to comply with a PAL. 

Should you engage in voluntary emissions reductions, we 

believe you should be able to retain far^&r^zTon of these 

-emissions -reductiong-aTTti-lthe accompanying flexibility that 

encouraged you to make these reductions. At the time of 

renewal, it may be very difficult for a reviewing authority 

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units, the resulting emissions level will exceed your • 

current PAL when combined with the emissions from both your 

small emissions units and your new emissions unit's 

allowable emissions. 

12. What compliance monitoring, reporting, recordkeeping, 

and testing (MRRT) t requirements are necessary to ensure the 

enforceability of PALs as a practical matter? 

The MRRT requirements for PALs are addressed below. 

Numerous commenters, generally State agencies-and 

environmental groups, state that adequate monitoring, 

reporting, and recordkeeping requirements would be necessary 

to ensure that the PAL limits were federally enforceable. 

Some commenters hold that the monitoring, recordkeeping, and 

reporting provisions would be too burdensome and 

restrictive. Some believe that PALs would not be viable 

because of these requirements. \ 

Several commenters request(Jytha~we clarify the 

monitoring that is necessary to show compliance with a PAL, 

especially in relation to the CAM and title V programs. 

Several- commenters prefer that the monitoring requirements 

be flexible and simple. These commenters urge us not to use 

CAM, require CEMS, or establish stringent protocols. A few 

commenters prefer that we not define what would be federally 

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November 1.9, 2002 

."substantially as effective" as BACT if it achieves an 

emission limitation that is equal to or better than—the 

average of. the emission-limitations achieved by a 1-1—the 

sources for which a DACT or LAER determination -has been made 

within the preceding 0 years and entered, into the RDLC,—arrd 

for which-it is—technically feasible tu apply the DACT or 

LAEn control technology to the emissions—unit. In a 

nonattainment area, your emissions unit w¥f.l achieve a level 

of control that is "substantially as effective" as LAER,[tf^ 

it achieves an emission limitation that is at_—Le-a-&t-"as 

s-txXn^errt—a-s-^rry^-Qfte^ pcrf orm4xig^-s-ifflilar 

sourtJeSNEor which a LAEB-.-d^t-e-r^JLax^-efT'lTas been made~~~wtrt'hin 

thve~-^£^gedJjQjg--4-^ea^r§^_J The reviewing authority will make a 

decision on whether a particular air pollution control 

technology (which includes pollution prevention or work 

practices) is "substantially as effective" as the BACT/LAER 

technology for a specific source on a case-by-case basis. 

WK^JSi we are not promulgating specific requirements or 

performance criteria for satisfying the "substantially as 

effective" test, we believe reviewing authorities are in 

the best position to determine whether in fact a particular 

air pollution control technology (which includes pollution 

prevention or work practices) is "substantially as 

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.operations. Unexpectedly, the participant also suffered an 

unusual economic downturn that caused a decrease in the rate 

V (A JA° ^ production and a correspondiLni g decrease in actual 

y i ('pTtiissinns . At thft tim e o f rsns i /* L, }' emissions. At the time of renewal of the source-^wide 

/«v (V V emissions cap, the participant's actual emissions were 10 

V T P C, 

( iA(v percent of its actual emissions before committing to the 

^ /\2 / emissions cap. The participant chose not to renew its 

\ \ emissions caps, because renewal required an automatic 

^ ^ adjustment to its current actual emissions level. Clearly, 

\ C J5.\ under a PAL provides, and discourages you from undertaking 

\ voluntary reductions. Accordingly, altj^ugh today's final 

..N ^ ^ysuch a result contravenes the mutual benefits operating 

* ' 

rules require the reviewing authority to. consider^^tfovmwATii, 

^d-jUTTLmuiiL ul thu« PAL*wnen you-ir current baseline actual 

emissions plus the significant level are less than 80 

percent of your PAL level, 44—arirSc^provides the reviewing 

authority the ability to reject such1 an outcome when it 

leads—to an "inappropriate result—such as—the one that 

occurred—rn—the ••example—abovediscretion .to consider a 

~-^g^"i ffit*t-frf--Partorg- in e.34iab.l.i.6h.j.-ru3-"-t?fae appropriate level,. 

We are also providing your reviewing authority 

discretion to take into account measures necessary to 

prevent a violation of a NAAQS or PSD increment, and to 

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