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[Federal Register Volume 79, Number 238 (Thursday, December 11, 2014)]
[Proposed Rules]
[Pages 73508-73512]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-29128]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R03-OAR-2014-0186; FRL-9920-20-Region 3]

Approval and Promulgation of Air Quality Implementation Plans; 
District of Columbia; Preconstruction Requirements--Nonattainment New 
Source Review

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing to 
approve an April 5, 2013 State Implementation Plan (SIP) revision 
submitted by the District Department of the Environment (DDOE) for the 
District of Columbia (DC). This revision pertains to DC's nonattainment 
New Source Review (NSR) program, notably provisions for Plantwide 
Applicability Limits (PALs) and preconstruction permitting requirements 
for major sources of fine particulate matter (PM2.5). This 
action is being taken under the Clean Air Act (CAA).

DATES: Written comments must be received on or before January 12, 2015.

ADDRESSES: Submit your comments, identified by Docket ID Number EPA-
R03-OAR-2014-0186 by one of the following methods:
    A. www.regulations.gov. Follow the on-line instructions for 
submitting comments.
    B. Email: kreider.andrew@epa.gov.
    C. Mail: EPA-R03-OAR-2014-0186, Andrew Kreider, Acting Associate 
Director, Office of Permits and Air Toxics, Mailcode 3AP10, U.S. 
Environmental Protection Agency, Region III, 1650 Arch Street, 
Philadelphia, Pennsylvania 19103.
    D. Hand Delivery: At the previously-listed EPA Region III address. 
Such deliveries are only accepted during the Docket's normal hours of 
operation, and special arrangements should be made for deliveries of 
boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-R03-OAR-
2014-0186. EPA's policy is that all comments received will be included 
in the public docket without change, and may be made available online 
at www.regulations.gov, including any personal information provided, 
unless the comment includes information claimed to be Confidential 
Business Information (CBI) or other information whose disclosure is 
restricted by statute. Do not submit information that you consider to 
be CBI or otherwise protected through www.regulations.gov or email. The 
www.regulations.gov Web site is an ``anonymous access'' system, which 
means EPA will not know your identity or contact information unless you 
provide it in the body of your comment. If you send an email comment 
directly to EPA without going through www.regulations.gov, your email 
address will be automatically captured and included as part of the 
comment that is placed in the public docket and made available on the 
Internet. If you submit an electronic comment, EPA recommends that you 
include your name and other contact information in the body of your 
comment and with any disk or CD-ROM you submit. If EPA cannot read your 
comment due to technical difficulties and cannot contact you for 
clarification, EPA may not be able to consider your comment. Electronic 
files should avoid the use of special characters, any form of 
encryption, and be free of any defects or viruses.

[[Page 73509]]

    Docket: All documents in the electronic docket are listed in the 
www.regulations.gov index. Although listed in the index, some 
information is not publicly available, i.e., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, is not placed on the Internet and will be 
publicly available only in hard copy form. Publicly available docket 
materials are available either electronically in www.regulations.gov or 
in hard copy during normal business hours at the Air Protection 
Division, U.S. Environmental Protection Agency, Region III, 1650 Arch 
Street, Philadelphia, Pennsylvania 19103. Copies of the State submittal 
are available at District of Columbia Department of the Environment, 
Air Quality Division, 1200 1st Street NE., 5th floor, Washington, DC 
20002.

FOR FURTHER INFORMATION CONTACT: Mr. David Talley, (215) 814-2117, or 
by email at talley.david@epa.gov.

SUPPLEMENTARY INFORMATION:

I. Background

    On April 5, 2013, DDOE submitted a SIP revision request to EPA. 
This SIP revision request, if approved, would revise DC's currently 
approved nonattainment NSR program by amending Chapters 1 and 2 under 
Title 20 of DC Municipal Regulations (DCMR). Generally, the revisions 
incorporate provisions related to two Federal rulemaking actions: The 
2002 ``Prevention of Significant Deterioration (PSD) and Nonattainment 
NSR (NSR): Baseline Emissions Determination, Actual-to-Future-Actual 
Methodology, Plantwide Applicability Limitations, Clean Units, 
Pollution Control Projects'' (2002 NSR Rules; 67 FR 80186); and the 
2008 ``Implementation of the New Source Review (NSR) Program for 
Particulate Matter Less than 2.5 Micrometers (PM2.5)'' (2008 
NSR PM2.5 Rule; 73 FR 28321).
    The 2002 NSR Reform rules made changes to five areas of the NSR 
programs. In summary, the 2002 Rules: (1) Provided a new method for 
determining baseline actual emissions; (2) adopted an actual-to-
projected-actual methodology for determining whether a major 
modification has occurred; (3) allowed major stationary sources to 
comply with a Plantwide Applicability Limit (PAL) to avoid having a 
significant emissions increase that triggers the requirements of the 
major NSR program; (4) provided a new applicability provision for 
emissions units that are designated clean units; and (5) excluded 
pollution control projects (PCPs) from the definition of ``physical 
change or change in the method of operation.'' On November 7, 2003, EPA 
published a notice of final action on its reconsideration of the 2002 
NSR Reform Rules,\1\ which added a definition for ``replacement unit'' 
and clarified an issue regarding PALs. For additional information on 
the 2002 NSR Reform Rules, see EPA's December 31, 2002 final rulemaking 
action entitled: ``Prevention of Significant Deterioration (PSD) and 
Nonattainment NSR (NSR): Baseline Emissions Determination, Actual-to-
Future-Actual Methodology, Plantwide Applicability Limitations, Clean 
Units, Pollution Control Projects'' (67 FR 80186), the 2003 final 
reconsideration: ``Prevention of Significant Deterioration (PSD) and 
Non-Attainment New Source Review (NSR): Reconsideration'' (68 FR 
63021), and http://www.epa.gov/nsr.
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    \1\ See, ``Prevention of Significant Deterioration (PSD) and 
Non-Attainment New Source Review (NSR): Reconsideration;'' (68 FR 
63021).
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    After the 2002 NSR Reform Rules were finalized and effective (March 
3, 2003), industry, state, and environmental petitioners challenged 
numerous aspects of the 2002 NSR Reform Rules, along with portions of 
EPA's 1980 NSR Rules (45 FR 52676, August 7, 1980). On June 24, 2005, 
the United States Court of Appeals for the District of Columbia (D.C. 
Circuit) issued a decision on the challenges to the 2002 NSR Reform 
Rules. New York v. United States, 413 F.3d 3 (New York I).
    In summary, the D.C. Circuit vacated portions of the rules 
pertaining to clean units and PCPs, remanded a portion of the rules 
regarding recordkeeping and the term ``reasonable possibility'' found 
in 40 CFR 52.21(r)(6) and 40 CFR 51.166(r)(6), and either upheld or did 
not comment on the other provisions included as part of the 2002 NSR 
Reform Rules. On June 13, 2007 (72 FR 32526), EPA took final action to 
revise the 2002 NSR Reform Rules to remove from federal law all 
provisions pertaining to clean units and the PCP exemption that were 
vacated by the D.C. Circuit.
    The 2008 NSR PM2.5 Rule (as well as the 2007 ``Final 
Clean Air Fine Particle Implementation Rule'' (2007 PM2.5 
Implementation Rule)),\2\ was also the subject of litigation before the 
D.C. Circuit in Natural Resources Defense Council v. EPA.\3\ On January 
4, 2013, the court remanded to EPA both the 2007 PM2.5 
Implementation Rule and the 2008 NSR PM2.5 Rule. The court 
found that in both rules EPA erred in implementing the 1997 
PM2.5 NAAQS solely pursuant to the general implementation 
provisions of subpart 1 of part D of title I of the CAA (subpart 1), 
rather than pursuant to the additional implementation provisions 
specific to particulate matter in subpart 4 of part D of title I 
(subpart 4).\4\ As a result, the court remanded both rules and 
instructed EPA ``to re-promulgate these rules pursuant to subpart 4 
consistent with this opinion.'' Although the D.C. Circuit declined to 
establish a deadline for EPA's response, EPA intends to respond 
promptly to the court's remand and to promulgate new generally 
applicable implementation regulations for the PM2.5 NAAQS in 
accordance with the requirements of subpart 4. In the interim, however, 
states and EPA still need to proceed with implementation of the 1997 
PM2.5 NAAQS in a timely and effective fashion in order to 
meet statutory obligations under the CAA and to assure the protection 
of public health intended by those NAAQS. In a June 2, 2014 final 
rulemaking entitled ``Identification of Nonattainment Classification 
and Deadlines for Submission of State Implementation Plan (SIP) 
Provisions for the 1997 Fine Particle (PM2.5) National 
Ambient Air Quality Standard (NAAQS) and 2006 PM2.5 NAAQS; 
Final Rule,'' (79 FR 31566), EPA identified the classification under 
subpart 4 for areas currently designated nonattainment for the 1997 and 
2006 PM2.5 NAAQS. That rulemaking also established a 
December 31, 2014 deadline for the submission of any additional 
attainment related SIP elements that may be needed to meet the 
applicable requirements of subpart 4.
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    \2\ 72 FR 20586 (April 25, 2007).
    \3\ 706 F.3d 428 (D.C. Cir. 2013).
    \4\ The court's opinion did not specifically address the point 
that implementation under subpart 4 requirements would still require 
consideration of subpart 1 requirements, to the extent that subpart 
4 did not override subpart 1. EPA assumes that the court presumed 
that EPA would address this issue of potential overlap between 
subpart 1 and subpart 4 requirements in subsequent actions.
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    Additionally, the 2008 NSR PM2.5 final rule authorized 
states to adopt provisions in their nonattainment NSR rules that would 
allow major stationary sources and major modifications locating in 
areas designated nonattainment for PM2.5 to offset emissions 
increases of direct PM2.5 emissions or PM2.5 
precursors with reductions of either direct PM2.5 emissions 
or PM2.5 precursors in accordance with offset ratios 
contained in the approved SIP for the applicable nonattainment area. 
The inclusion, in whole or in part, of the interpollutant offset 
provisions for PM2.5 is

[[Page 73510]]

discretionary on the part of the states. In the preamble to the 2008 
final rule, EPA included preferred or presumptive offset ratios, 
applicable to specific PM2.5 precursors that states may 
adopt in conjunction with the new interpollutant offset provisions for 
PM2.5, and for which the state could rely on the EPA's 
technical work to demonstrate the adequacy of the ratios for use in any 
PM2.5 nonattainment area. Alternatively, the preamble 
indicated that states may adopt their own ratios, subject to the EPA's 
approval, that would have to be substantiated by modeling or other 
technical demonstrations of the net air quality benefit for ambient 
PM2.5 concentrations. The preferred ratios were subsequently 
the subject of a petition for reconsideration, which the Administrator 
granted. EPA continues to support the basic policy that sources may 
offset increases in emissions of direct PM2.5 or of any 
PM2.5 precursor in a PM2.5 nonattainment area 
with actual emissions reductions in direct PM2.5 or 
PM2.5 precursors in accordance with offset ratios as 
approved in the SIP for the applicable nonattainment area. However, we 
no longer consider the preferred ratios set forth in the preamble to 
the 2008 final rule for PM2.5 NSR implementation to be 
presumptively approvable. Instead, any ratio involving PM2.5 
precursors adopted by the state for use in the interpollutant offset 
program for PM2.5 nonattainment areas must be accompanied by 
a technical demonstration that shows the net air quality benefits of 
such ratio for the PM2.5 nonattainment area in which it will 
be applied.
    A Technical Support Document (TSD) is included in the docket for 
this action, and contains additional detail regarding the history and 
background of the Federal counterparts to the regulations included in 
DDOE's submittal, which will not be restated here.

II. Summary of SIP Revision

    Generally, the revision submitted by DDOE involves amendments to 
sections 199.1 (Definitions and Abbreviations) and 200 (General Permit 
Requirements), repealing and replacing section 204 (Permit Requirements 
for Sources Affecting Non-attainment Areas), repealing section 206 
(Notice and Comment Prior to Permit Issuance), adding sections 208 
(General and Non-attainment Areas) and 210 (Notice and Comment Prior to 
Permit Issuance), and adding specific definitions to section 299 
(Definitions and Abbreviations). Additionally, several non-substantive, 
clarifying and organizational revisions were submitted. Following is 
EPA's rationale for the proposed approval.

A. NSR Reform

    DDOE has not adopted the full suite of NSR reform regulations, 
opting instead for a ``hybrid'' approach, tailored to the particular 
air quality challenges and source universe in DC. The vast majority of 
sources in DC are institutional (e.g. hospitals, universities). Because 
it focused on large industrial source categories, much of the analysis 
performed by EPA in support of the 2002 Reform Rules may not be 
applicable in DC. However, as EPA stated in the preamble of the 2002 
NSR Rules: ``. . . state and local jurisdictions have significant 
freedom to customize their NSR programs. Ever since the current NSR 
regulations were adopted in 1980, we have taken the position that 
States may meet the requirements of part 51 `with different but 
equivalent regulations. 45 FR 52676.' Several States have, indeed, 
implemented programs that work every bit as well as our own base 
programs, yet depart substantially from the basic framework established 
in our rules . . .'' (See 67 FR 80241). Therefore, EPA is able to 
approve state SIP revisions that are at least as stringent as the 
Federal rules even if they contain provisions that differ. EPA's 
proposed approval in this case, therefore, hinges upon the 
determination that the proposed revisions are at least equivalent to 
the Federal program and do not constitute an impermissible backslide 
under the CAA.
1. Calculating Emissions Increases
    In order for a physical change or change in the method of operation 
at a major stationary source to be considered a major modification and 
trigger NSR requirements, the net emissions increase resulting from the 
project at hand must exceed the significance threshold(s) for one or 
more pollutant. One of the primary components of the 2002 NSR Reform 
Rules was a change in the regulations governing how to quantify the 
emissions increase relative to the pre-project baseline. Federal 
regulations allow the use of ``baseline actual emissions'' (BAE) to 
determine a facility's emissions prior to the change. For a facility 
that is not an electric generating unit (EGU), BAE is calculated by 
selecting any 24-month period during the preceding ten years and 
computing the average emission rate. The ``look-back'' period for EGUs 
is five years. DDOE has not adopted the Federal regulations relating to 
the calculation of BAE; rather, DDOE has retained the pre-NSR reform 
definition of ``actual emissions.'' Actual emissions are calculated by 
averaging the emissions in the 24-month period immediately preceding 
the project at hand. The revisions to the definition of ``actual 
emissions'' submitted by DDOE do not substantively change the look-back 
period for calculating actual emissions. Rather, they clarify that DDOE 
may allow the use of a different time period within the last five years 
if a demonstration can be made that it is more representative of the 
facility's operations. Additionally, the revisions require that the 
same 24-month period be used for all pollutants. These proposed 
revisions differ from the Federal regulations which allow different 24-
month periods to be used for different pollutants.
    Once the baseline has been established, it is necessary to 
calculate the increase resulting from the project relative to that 
baseline. Federal regulations allow a source to use ``projected actual 
emissions'' (PAE) which predict future emissions, based on several 
factors including business projections. PAE also allows a source to 
exclude from consideration those emissions which could legally and 
physically have been emitted prior to the modification. DDOE's 
regulations (and indeed EPA's pre-reform regulations) require sources 
to use the full potential to emit (PTE) to calculate the increase, and 
do not allow for the exclusion of emissions that the facility could 
have accommodated prior to the change. This is codified in the 
definition of ``net emissions increase,'' previously at 20 DCMR section 
199.1. In the proposed revisions, that definition is re-codified under 
section 299.1, however the substantive requirements are not changed. It 
is also important to note that, because DDOE's regulations do not allow 
for the use of PAE, and because every source wishing to construct or 
modify in DC must receive authorization from DDOE prior to doing so, 
the ``reasonable possibility'' provisions of NSR Reform do not apply.
2. Plantwide Applicability Limits (PALs)
    The most notable component of the 2002 NSR Reform rules being 
adopted by DC are provisions for DDOE to issue Plantwide Applicability 
Limits, or PALs. A PAL is a facility-wide, pollutant specific limit 
that allows sources to make modifications without triggering major NSR 
requirements, as long as the plantwide emissions of that pollutant do 
not exceed the PAL. EPA's rationale for adopting PALs in 2002 was that 
they would encourage the installation of newer, more efficient, and 
lower emitting equipment by providing sources the flexibility to do so

[[Page 73511]]

without triggering NSR requirements. For sources, the trade-off for 
this flexibility is a number of enhanced monitoring requirements.
    Under Federal regulations, a PAL is set by calculating the 
facility's BAE of the PAL pollutant (as described above), and adding 
the significance level for that pollutant, as defined by 40 CFR 
51.165(a)(1)(x)(A). Federal PALs have a term of ten years. The PAL 
provisions being proposed by DC for approval into the SIP differ from 
the Federal PAL regulations in two ways. First, PALs issued by DDOE 
have a five year term, rather than a ten year term. Second, as 
previously discussed, DDOE has not adopted BAE provisions for 
calculating the pre-project emissions baseline. Therefore, in order to 
establish the PAL, the significance level for the PAL pollutant is 
added to the pre-NSR Reform definition of ``actual emissions.''

B. PM2.5

    The PM2.5 provisions submitted by DDOE for approval into 
the DC SIP largely mirror the 2008 NSR PM2.5 Rule, which: 
(1) Required NSR permits to address directly emitted PM2.5 
and precursor pollutants; (2) established significant emission rates 
for direct PM2.5 and precursor pollutants (including sulfur 
dioxide (SO2) and oxides of nitrogen (NOX)); (3) 
established PM2.5 emission offsets; and (4) required states 
to account for gases that condense to form particles (condensables) in 
PM2.5 emission limits.
    Additionally, DDOE's submittal includes provisions allowing sources 
to offset emissions increases of direct PM2.5 emissions or 
PM2.5 precursors with reductions of either direct 
PM2.5 emissions or PM2.5 precursors in accordance 
with offset ratios contained in the approved SIP for the applicable 
nonattainment area. DDOE's submittal does not, however, contain the 
presumptive offset trading ratios from the 2008 NSR PM2.5 
Rule that were subject to the petition for reconsideration. As 
previously discussed, while the presumptively approvable interpollutant 
trading ratios from the 2008 NSR PM2.5 Rule are no longer 
supported, EPA does continue to support the policy allowing an 
interpollutant offset program. However, in order for sources in DC to 
utilize such a program, DDOE must develop and submit to EPA for 
approval, a technical demonstration justifying the ratios to be used, 
and showing the net air quality benefits of such ratio for the 
PM2.5 nonattainment area in which it will be applied.
    EPA is in the process of evaluating the requirements of subpart 4 
as they pertain to nonattainment NSR. In particular, subpart 4 includes 
section 189(e) of the CAA, which requires the control of major 
stationary sources of PM10 precursors (and hence under the 
court decision, PM2.5 precursors) ``except where the 
Administrator determines that such sources do not contribute 
significantly to PM10 levels which exceed the standard in 
the area.'' The evaluation of which precursors need to be controlled to 
achieve the standard in a particular area is typically conducted in the 
context of the state's preparing and the EPA's reviewing of an area's 
attainment plan SIP. In this case, there was previously only one 
designated PM2.5 nonattainment area, the DC portion of the 
Washington, DC-MD-VA nonattainment area for the 1997 annual 
PM2.5 NAAQS.
    With respect to this nonattainment area, DDOE submitted an 
attainment plan on April 2, 2008. On January 12, 2009, EPA finalized a 
clean data determination for the area, (74 FR 1146), which suspended 
the requirement for DDOE to submit, among other things, an attainment 
plan SIP for the area. Accordingly, on February 6, 2012, DDOE withdrew 
the attainment plan SIP, and it is no longer before EPA. Moreover, on 
October 6, 2014, (FR 60081), EPA took final action to redesignate the 
Metro-Washington area to attainment. This redesignation absolves the 
District of any further obligation to comply with the subpart 4 
requirements for nonattainment NSR as to this area unless and until 
there is a future designation of nonattainment for a PM2.5 
NAAQS. Therefore, EPA is not evaluating the April 5, 2013 submittal for 
the purposes of determining compliance with the subpart 4 requirements.

III. Proposed Action

    EPA's review of this material indicates that with the proposed 
amendments to the DC Municipal Regulations, DDOE's nonattainment NSR 
program is equivalent to, and at least as stringent as Federal 
regulations. Therefore, EPA is proposing to approve the DC SIP revision 
which was submitted on April 5, 2013. EPA is not acting on DDOE's 
submittal for purposes of determining compliance with the subpart 4 
requirements relating to PM2.5. EPA is soliciting public 
comments on the issues discussed in this document. These comments will 
be considered before taking final action.

IV. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP 
submission that complies with the provisions of the CAA and applicable 
Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in 
reviewing SIP submissions, EPA's role is to approve state choices, 
provided that they meet the criteria of the CAA. Accordingly, this 
action merely approves state law as meeting Federal requirements and 
does not impose additional requirements beyond those imposed by state 
law. For that reason, this proposed action:
     Is not a ``significant regulatory action'' subject to 
review by the Office of Management and Budget under Executive Order 
12866 (58 FR 51735, October 4, 1993);
     does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     is certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
     does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
     does not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
     is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
     is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
     is not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the CAA; and
     does not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human health or environmental 
effects, using practicable and legally permissible methods, under 
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, this proposed rule, relating to the District of 
Columbia's nonattainment NSR program, does not have tribal implications 
as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), 
because the SIP is not approved to apply in Indian country located in 
the state, and EPA notes that it will not impose substantial direct 
costs on tribal governments or preempt tribal law.

[[Page 73512]]

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide, 
Incorporation by reference, Intergovernmental relations, Lead, Nitrogen 
dioxide, Ozone, Particulate matter, Reporting and recordkeeping 
requirements, Sulfur oxides, Volatile organic compounds.

    Authority: 42 U.S.C. 7401 et seq.

    Dated: November 28, 2014.
William C. Early,
Acting Regional Administrator, Region III.
[FR Doc. 2014-29128 Filed 12-10-14; 8:45 am]
BILLING CODE 6560-50-P
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