11SR Aggregation ReconsiderationBriefing for OMB and InteragencyTeamFebruary 23, 20102Meeting ObjectivesProvide Background on the Aggregation FinalRuleBriefly summarize issues raised in petition forreconsiderationDescribe the contents of the draftReconsideration NoticeDiscuss timing issues3Background-What is “Aggregation”?“Aggregation” refers to the grouping of multiple, relatedphysical or operational changes into a single ‘change’ (i.e.,a “project” or “modification”) under New Source Review.“How to Aggregate” has never been defined in our rulesnor in a single policy statement.Current policy are derived via guidance memoranda,applicabilitydeterminations, and enforcement cases.3M Maplewood Memo (1993) is best-known policy memo.Multiple factors should be assessed to determine ifseparate smallchanges should be grouped together.Relationship to “plant’s overall basic purpose” is afactor.Context was a circumvention analysis (post change review), raisingthe question of a source’s intent.4Background-History of RuleSeptember 2006 – Proposed rule issued; proposedaggregation only for projects that are “technicallyandeconomically dependent.”Based on 2002 Energy Policy Recommendations.Adopted new rule text but billed as clarification of existing policy.Environmental groups and some States opposed concept.Other States and industry supported concept, but raised numeroustechnical and implementation issues with proposal.Coupled with proposal on two other NSR concepts –debottlenecking and project netting.5Background-History of Rule (cont.)January 2009 – Issued final “interpretive rule” (no CFRamendment) stating, prospectively:Aggregate emissions only when plant changes are “SubstantiallyRelated”:•Relationship based on technical or economic interconnectivity.•Possible indicators of this relationship could include changes that are jointlyplanned, occur close-in-time, and located at functionally interconnectedcomponents.“Plant’s overall basic purpose” (3M) is not a basisto aggregate; andTiming of construction should not be the sole basisfor aggregating, butchanges that are 3 or more years apart are (rebuttably) presumed notsubstantially related.Final Action withdrew Debottlenecking Proposal, andtook noaction on Project Netting.Final Rule determined non-significant, so OMB did not review.6Background-Petitions for Reconsideration and ReviewJanuary 30, 2009 – NRDC petitions for reconsideration and astay of the Aggregation Rule.February 13, 2009 – EPA stays effective date for 90days(until May 18, 2009), and grant reconsideration withforthcoming notice describing issues.March 16, 2009 – NRDC petitions for review on finalrule.March 18, 2009 – EPA proposes to further extend effectivedate to complete reconsideration process.May 14, 2009 – EPA finalizes rule to extend effective date for12 months (until May 18, 2010).Rule is pending legal suit, so court may decide tohear case ifEPA is not making steady progress on reconsideration.7Summary of Objections from Petition



# NRDC argued:Rule is inconsistent with a D.C. Court ruling on NSR RoutineMaintenance Rule (aka, “



# New York II”), by creating an illegalexclusion to the broad “any physical change” provision inCAA.Proposal stated a need for clarification, but failed to identifyany actual problems or inconsistencies with “longstanding3M-Maplewood policy.”While the Proposal presented new rule text to implement a“clarification” to EPA’s aggregation rules, the finalAggregation Rule retains the old rule text and offers areinterpretation of it in the guise of a “clarification.”8Summary of Objections from Petition (cont.)



# More NRDC arguments:“Substantially related” is vague and undefined, didnotappear in the Proposal, retreats from the factors of the 3MMemo, and eliminates consideration of 3M’s analysisbyfailure to consider intent.Final Rule implementation is confusing with respectto“interpretive” aspect of rule.EPA’s consultation with States during the development ofthe NSR Aggregation Rule was inadequate and violatedrelevant EO’s.9Overview of Reconsideration ProposalBroadly reconsiders the entire Final RuleKey Issues for Comment:Whether EPA provide adequate opportunity forNotice and Comment on Final RuleWhether Final Rule was inconsistent with aprevious Court Decision on an NSR ruleWhether EPA had justified the need for a PolicyChange10Overview of Reconsideration Proposal (cont.)How the Final Rule would apply to States withapproved plansWhether EPA should revoke Final Rule andreturn to status quo.•Proposes revocation•Takes comment on how EPA views the “status quo.”Whether to further extend Effective Date ofRule•Proposes a delay the effective date of rule until11/18/10 (additional 6 months)•Solicits comment on longer delays.11Timing IssueCurrent Stay expires on May 18, 2010 - to propose andfinalize our reconsideration by that date will be impossible.Finalizing the Effective Date Extension aspect of the Reconsideration ispossible by May 18, 2010.Knowing timetable for OMB review would help plan how toproceed.