The Honorable Robert M. Summers, Ph.D.

Acting Secretary

Maryland Department of the Environment

Montgomery Park Business Center

1800 Washington Boulevard

Baltimore, Maryland 21230

Dear Secretary Summers:

The U.S. Environmental Protection Agency Region III (EPA) has been working with the

Maryland Department of the Environment (MDE) and the Maryland Public Service Commision

(PSC) to include the Maryland permitting process for electric generating units(EGUs) in the

Maryland State Implementation Plan (SIP) pursuant to Section 110 ofthe Clean Air Act (CAA).

EPA is seeking a resolution to the outstanding issues affecting the permitting of EGUs.

Representatives from EPA will participate in a meeting with the PSC and MDE in

Baltimore, Maryland on January 7, 2011 to discuss the PSC regulatory provisions to resolve

issues related to permitting of EGUs in Maryland, which must be included in the SIP. Details

regarding these regulatory provisions are enclosed.

On April 9, 2010, MDE submitted statutory and regulatory provisions related to the

Maryland EGU permitting program for EPA’s evaluation for inclusion into the SIP. During our

review of the SIP revision, EPA identified two regulatory provisions, COMAR 20.79.02 and

20.79.03, which were not submitted for approval into the SIP. These provisions relate to

Certificates of Public Convenience and Necessity (CPCNs) application requirements including

environmental requirements and timeframes for taking action on such applications. These

provisions should be included in the SIP to ensure CPCNs comply with CAA New Source

Review requirements.

Since these regulatory provisions were not included in the April 9, 2010 SIP submittal,

EPA does not believe that the submission can be approved. EPA suggests MDE withdraw its

April 9, 2010 submission and resubmit

a SIP revision for approval that includes those provisions

previously submitted on April 9, 2010, and the additional PSC regulations at COMAR 20.79.02

and 20.79.03.
In a letter dated January 3, 2011, EPA advised the PSC ofthe above SIP deficiency and

other implementation issues related to CPCNs. EPA urged the PSC not to issue CPCNs for theconstruction or modification of any emissions units located at facilities regulated by the PSC

sources until MDE resubmits the SIP provisions for permitting EGUs and EPA formally

approves the submittal.

If you have any questions, please do not hesitate to contact me or have your staff contact

Mrs. Linda Miller, EPA’s Maryland Liaison, at (215) 814-2068.

Sincerely,

Shawn M. Garvin

Regional Administrator

Enclosure

cc: Honorable Douglas R. M. Nazarian, Chairman

Maryland Public Service Commission
EPA received a draft CPCN for Energy Answers to construct a 120-megawatt generating

facility in Baltimore City, Maryland. The draft Energy Answers’ CPCN was submitted to

EPA for review in accordance with CAA New Source Review requirements. The PSC’s

CPCNs are proposed to be the PSC’s equivalent of

a New Source Review permit required

by the CAA prior to modification or construction ofmajor sources such as Electric

Generating Units (EGUs).

On June 28, 2010, EPA submitted substantive cOmments during the public comment

period outlining concerns that Energy Answers’ CPCN did not meet CAA requirements.

On July 8, 2010, the PSC entered a proposed order granting a CPCN to Energy Aaswers

before comments from MDE, EPA and other interested parties had been addressed.

As noted in a letter to EPA from the PSC on October 28, 2010, the Maryland Public

Utility Code does contain requirements for the PSC to include applicable federal and

state environmental laws and standards in a CPCN and for the PSC to consider applicableair pollution requirements prior to issuance of a CPCN.

çMaryland Public Utility

Code at

§ 7-207(e)(2) and 7-208(f). In addition, the Maryland Public Utility Code § 7-

207 requires public notice and comment prior to issuance of a CPCN.

It is EPA’s position that adequate public participation and comment requires air

permitting agencies to address and respond to public comment. çç In the Matter of

Onyx Environmental Services, Petition

V -2005-1 at 7 (February 1, 2006) (citing Home

Box Office v. FCC, 567 F.2d 9, 35 (D.C. Cir. 1977) (stating “the opportunity to commentis meaningless unless the agency responds to significant points raised by the public”).

See also In the Matter ofCitgo Refining and chemicals co. L.P., Petition VI-2007-01 at7 (May 28, 2009) (stating permitting authorities have a responsibility to respond to

significant comments); In the Matter ofKerr-McGee Gathering, LLC, Petition VIII-2007

at 4; In the Matter of Wheelabrator, Baltimore L.P., Permit 24-510-01- 886 at 7

(April 14, 2010).Issue: The State Implementation Plan (SIP) revision submitted to EPA for approval

on April 9, 2010 is missing.CAA regulatory requirements.

While reviewing the provisions MDE submitted for approval into the SIP, EPA identified

two regulatory provisions, COMAR 20.79.02 and 20.79.03, which were not submitted for

approval. COMAR 20.79.02 and 20.79.03 relate to CPCN application requirements

including environmental requirements for applications and timeframes for action on

applications. These provisions in COMAR 20.79.02 and 20.79.03 are necessary

requirements to ensure CPCNs comply with CAA New Source Review requirements.

Including these COMAR provisions into the SIP will ensure future CPCNs meet all

requirements of the New Source Review program.