UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

REGION 1

5 POST OFFICE SQUARE, SUITE 100

BOSTON, MA 02109-3912

Memorandum

Date: September 20, 2013

Subject: Technical Support Document; Review of Rhode Island’s Equivalency 

Demonstration for Preconstruction Permitting Requirements Applicable to 

Sources of Greenhouse Gas Emissions 

From: Donald Dahl

Environmental Engineer

To: Files

Background

During 2010, EPA promulgated several regulatory amendments to 40 C.F.R. § 51.166

relating to the Prevention of Significant Deterioration (PSD) preconstruction permitting 

requirements that state implementation plans (SIP) must contain for major stationary 

sources of greenhouse gas (GHG) emissions. On January 18, 2011, Rhode Island 

submitted to EPA Region 1 a request for a SIP revision that consisted of regulatory 

changes to its preconstruction permitting regulations, including changes addressing the 

GHG PSD preconstruction permitting requirements at 40 CFR § 51.166. (EPA is 

deferring action on the portions of Rhode Island’s SIP submittal that are not necessary for 

permitting GHG emissions from major new or modified stationary sources.)

In 2002, EPA amended 40 C.F.R. §§ 51.165 and 51.166, nonattainment new source 

review and PSD preconstruction permitting requirements, respectively. The 2002 

amendments are collectively known as “NSR Reform.”

1

 States were required to: 1) adopt 

the NSR Reforms, or 2) submit a technical demonstration showing that the state’s 

regulations are more stringent than or at least as stringent in all respects as the NSR 

Reforms. See 40 C.F.R. § 51.166(a)(7)(iv). In 2005, Rhode Island submitted an 

equivalency demonstration, but the demonstration did not contain all of the elements 

necessary to make the showing required by EPA’s regulations. Hence, EPA did not 

approve that 2005 demonstration. Subsequently, however, Rhode Island submitted a 

revised equivalency demonstration on September 18, 2013. That revised demonstration

is limited to an analysis of the State’s preconstruction permitting requirements as they 

 

1 A number of the NSR Reform provisions, not relevant to this technical support document, were later 

vacated by federal courts.
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apply to sources of GHGs. EPA Region 1 has determined that Rhode Island’s September 

18, 2013 demonstration for sources of GHGs meets federal requirements, and EPA will 

be approving that demonstration along with the relevant SIP provisions that are part of 

the State’s submittal. A brief analysis of the State’s technical demonstration and the 

basis of EPA’s determination is described below. 

Analysis

As stated above, EPA Region 1 has reviewed Rhode Island’s September 18, 2013

equivalency demonstration, and has concluded that Rhode Island’s regulations addressing 

preconstruction permitting requirements for GHGs are more stringent than or at least as 

stringent as EPA’s NSR Reforms. Thus, EPA has concluded that Rhode Island’s PSD 

program for GHGs will achieve at least the same level of emission reductions as would 

be achieved had Rhode Island adopted EPA’s NSR Reforms. EPA’s conclusion is based 

on the following:

1. Rhode Island provided an analysis of specific sources of GHGs in Rhode Island that

typically would trigger PSD permitting requirements under 40 CFR § 51.166 at some 

point during their operation. The State’s analysis clearly shows that the regulatory 

language contained in the State’s proposed SIP revision will achieve at least an

equivalent level of emissions reductions as compared to EPA’s NSR Reforms. 

2. Rhode Island’s demonstration provided an analysis for each of the three main

components of NSR Reform. These components are known as: 1) Plant-wide 

Applicability Limits (PALs), 2) the Actual-to-Projected Actual Test, and 3) the Ten 

Year Look-back. Rhode Island’s demonstration showed that for each of the three 

components, the State’s preconstruction permitting regulations as to GHG sources 

would be more stringent than or at least as stringent in all respects as NSR Reform. 

3. The information provided by Rhode Island that EPA Region 1 relied on includes:

a. Plantwide Applicability Limits: The State’s demonstration contained a list 

of 11 specific stationary sources that report GHG emissions to EPA 

pursuant to 40 C.F.R. Part 98. The State’s analysis showed that these 11 

sources would not be expected to apply for, or benefit from, a PAL, due to

the specific nature of their operations and a corresponding lack of a need 

for the kind of operational flexibility provided by a PAL. See pages 3-4 of 

the State’s demonstration.

b. Actual to Projected Actual Test: When the EPA adopted the revisions to 

the NSR program referred to as NSR Reform, an additional applicability 

test, the Actual-to-Projected Actual test (ATPA), was added to the existing 

test, the Actual-to-Potential test. The State’s program retains the Actualto Potential test without adding the ATPA test.
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The EPA analyzed the effects of adding the ATPA test in the 

Supplemental Environmental Analysis (SEA), prepared for the NSR 

Reform Rule. In the SEA, the EPA determined that in cases where 

hypothetical emissions calculated under the Actual-to-Potential test but 

not under the ATPA test, sources almost always took permit limits to 

avoid NSR. This is what is likely to occur in Rhode Island for greenhouse 

gases, based on the assertions made in their equivalency determination. 

In the SEA, the EPA determined that in these cases, the addition of the 

ATPA test is environmentally neutral.

According to the SEA, only “a very small subset” of stationary sources 

subject to NSR would benefit from the ATPA test (SEA at App. G-1).

The scenario highlighted in the SEA would be a case where a source is 

operating substantially below its potential emissions that could undertake 

a physical or operational change that would lower actual emissions but not 

meaningfully impact potential emissions. Such a source would be 

discouraged from undertaking such a change because it would need to 

reduce its potential emissions substantially through a minor source permit 

in order to avoid needing an NSR permit. The SEA notes that, nationally, 

“current actual emissions are generally well below maximum potential 

emissions” at sources subject to NSR (SEA at App. G-2). We were not 

able to quantify the national benefit of ATPA as part of the SEA, but 

viewed it as “very small.” (SEA at App. G-6).

The stationary sources in Rhode Island that would be subject to NSR for 

greenhouse gases were they to have modifications generally do not operate 

as substantially below their potential emissions as in other parts of the 

country. Therefore, the disincentive of “giving up” potential emissions in 

a minor source permitting action is less than what is the national case 

discussed in the SEA.

As noted in the SEA, the benefit of ATPA nationally is unquantifiable but 

very small and limited to the very small subset of stationary sources. The 

conditions necessary to benefit from ATPA do not apply to Rhode Island 

greenhouse gas sources. The EPA has, therefore, determined that Rhode 

Island’s program for permitting GHG is at least as stringent as the EPA 

program.

c. Ten Year Look-back: The State’s demonstration showed that of the 11 

stationary sources analyzed, one is an electric generating facility that, 

under the State’s permitting requirements applicable to electric generating 

facilities, actually would be subject to the same 5-year look-back period

for purposes of new source review permitting requirements. As to the 

other 10 stationary sources, the nature of their specific operations and 

business cycles indicates that the distinction between a five year and a tenyear look-back period would not have any practical difference in terms of 
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new source review permitting applicability. See Pages 6-7 of the State’s 

demonstration.

Note: Rhode Island stated in its demonstration that their current definition of major 

modification is broader in scope and therefore their rule is more stringent than EPA’s 

reform rule because more changes would be subject to PSD permitting. EPA’s approval 

of Rhode Island’s rules being equivalent with regards to GHG permitting does not rely on 

this statement. In the 2002 reform rule EPA stated that in all cases more PSD permitting 

does not always result in less emissions. In fact, it is EPA’s position that Reform rules 

taken as a whole will under most state preconstruction permitting program result in lower 

emissions than if that particular state did not adopt NSR reform.

Conclusion

Based on the data and analyses provided by Rhode Island in its letter dated September 20, 

2013, EPA Region 1 has determined that Rhode Island’s preconstruction permitting 

regulations, as they apply to major stationary sources of GHGs, is more stringent than, or 

is at least as stringent in all respects as, EPA’s NSR reform provisions contained in 40 

CFR § 51.166.