## Georgia Department of Natural Resources

Environmental Protection Division  Air Protection Branch
4244 International Parkway  Suite 120  Atlan ta  Georgia 30354

404/363

- 7000  Fax: 404/363

- 7100

Mark Williams, Commissioner

F. Allen Barnes , Director

Shirley Rivera (AIR

- 3)

E

- mail: R9airpermits@epa.gov U.S. EPA Region 9

75 Hawthorne Street San Francisco, CA 94105

- 3901

RE: AVENAL ENERGY PROJECT

Dear Ms. Rivera :

The Air Protection Branch of Georgia Environmental Protection Division appreciates t he opportunity to provide the following comments on the proposed action and Supplemental Statement of Basis relating to the Prevention of Significant Deterioration (PSD) permit application for th e Avenal Energy Project (Avenal )

. We would normally

not comm ent on a proposed permit for a project far away from our state, however, EPA has clearly indicated that this situation is precedent setting for how it intends to treat other “similarly situated” sources and that may directly affect our state.

Background

Avenal submitted a permit application that EPA found to be complete on March 19,

2008

. Se ction 165(c) of the CAA requires EPA to render a final decision on Avenal's permit within one year of filing a completed permit application. More than three years

la ter, EPA has yet to render a final decision on Avenal’s permit.

In a court declaration of Assistant Administrator Gina McCarthy on January 31, 2011, in paragraph 5

, Ms. McCarthy stated:

“ In a prior declaration, I testified that applicants seeking PSD per mits to construct stationary source of air pollution have experienced unforeseen challenges with the preparation and review of information to predict the impact of proposed sources on hourly NO2 concentrations. This gave rise to an EPA policy review

that has now proceeded to the point that the agency can more specifically explain how it intends to move forward with action on the PSD permit application submitted by Avenal Power Center. ”

Paragraph 6 begins as follows:

“ As part of this policy review, EPA ha s determined that it is appropriate, under certain narrow circumstances, to grandfather certain PSD applications from the requirement to demonstrate that the proposed facility will not cause or contributePage 2 of 4

to a violation of the hourly NO2 standard. In addi tion, EPA believes the factors that justify such an approach for the hourly NO2 standard also provide a basis not to subject these same permit applications to additional permitting requirements that have taken effect during the period of time these permit applications have been pending...”

Later in p aragraph 6 , it states :

“EPA will propose to extend similar relief to other permit applicants that can show they are similarly situated.”

Then, in March 2011, EPA proposed the specific action that is the subject of these

comments. With regard to Avenal, the proposal was very similar to Ms. McCarthy’s declaration. Gone, however, was the mention of any further progress on the policy review or how other similarly situated sources would be identified and handled. Specifically, EPA stated:

EPA has found that applicants seeking PSD permits to construct stationary sources of air pollution have experienced unforeseen challenges with the preparation and review of information to predict the impact of proposed sources

on hourly NO2 concentrations. As a result of concerns about these challenges expressed by permit applicants, EPA began a policy review to determine whether additional action by EPA was necessary to facilitate the preparation of information to predict hourly NO2 concentrations and to enable EPA and other permitting authorities to complete action on pending PSD permit applications in a timely manner.

As part of this policy review, and in light of EPA’s statutory obligation under Clean Air Act section 165(c) to grant or deny a complete PSD permit application within one year, and other circumstances present in this case, EPA has determined that it is appropriate to grandfather the PSD permit application from APC from the requirement to demonstrate that the propos ed facility will not cause or contribute to a violation of the hourly NO2 standard. Accordingly, EPA proposes to approve APC’s PSD permit application for the Project without requiring a demonstration that the source will not cause or contribute to a

violat ion of the hourly NO2 standard. In addition, EPA believes the factors that justify such an approach for the hourly NO2 standard also provide a basis not to subject this permit application to additional permitting requirements that have

taken effect followi

ng the promulgation of the hourly NO2 NAAQS. Therefore, EPA also will not require the source to meet emissions limitations for greenhouse gases or to demonstrate that it will not cause or contribute to a violation of the NAAQS for hourly concentrations of sulfur dioxide.Page 3 of 4

Grandfathering

We s upport reasonable grandfathering provisions , as are being proposed in this case, to allow for smooth transitions to new requirements in the new source review permitting

program.

It is extremely unlikely that this type of transition would result in any environmental degradation over instant enforcement of a newly promulgate d NAAQS. The reason is that a project already has to demonstrate that it will 1) comply with all existing NAAQS

and PSD increments; 2) protect air qu ality related values in Class I area s; 3 ) include the Best Available Control Technology (BACT) for all NSR regulated pollutants emitted in significant amounts; and 4) comply with other new source review requirements including impacts to soils and vegetatio n.

In addition, the Clean Air Act provides for compliance with all NAAQS by other mechanisms in addition to the new source review permitting program . Just because a particular new source may be grandfathered from an element in the new source review permi tting program during a transition period, does not mean that a violation of the
NAAQS will result. In fact, Section 107(a) of t he Clean Air Act requires states to demonstrate compliance with all NAAQS within the entire geographic area comprising

such Stat e by submitting an implementation plan which will specify the manner in which national primary and secondary ambient air quality standards will be achieved and

maintained

.

Rules vs. Guidance

Upon the promulgation of a new , or revised, NAAQS, EPA and the states need a reasonable amount of time to update the ir rules so everyone knows what the requirements are and can plan for them

. EPA routinely issues guidance in these circumstances however, as is the case here for NO2, g uidance is not a substitute for

ru les. Guidance should only be used to further explain or clarify what the rules already

requ ire. EPA’s use of guidance denies states, and other affected entities, from the

opp ortunity to provide input on the effective implementation of Clean Air Act requi rements.

States have repeatedly requested that EPA coordinate the NAAQS implementation rules with the setting of the final NAAQS 1

. And, even EPA has begun to recognize the importance of timely rulemaking coordinated with the promulgation of a new or revi sed
NAAQS. In a memo to the “SIP Zero Team” dated March 25, 2010, Assistant Administrator Gina McCarthy states, “EPA Headquarters plans to issue implementation

1 Georgia EPD made the following comment in our comments dated March 22, 2010 to the reconsidered 2008 ozone NAAQS: “Delays in promulgation of the implementation rule results in uncertainty on the part of the states, re gulated sources, and the public. This uncertainty leads to wasted effort on the part of states that are forced to implement the NAAQS without knowing what regulatory path to follow. It also leads to delays in emission reductions, which is the key element n eeded for protection of public health and the environment .”Page 4 of 4

rules and related guidance with NAAQS promulgation or as promptly thereafter as possible.”

How ever, since EPA finalized a revised ozone NAAQS in March 2008, a revised nitrogen dioxide NAAQS in January 2010, and a revised sulfur dioxide NAAQS in June 2010, as of April 2011 EPA has yet to even propose a single implementation rule for any of these NAA QS in the federal register. As such, states have had no opportuni ty to provide input on the imple me ntation of any of these new NAAQS.

Equal Treatment to States

This proposal seeks to grandfather one source where EPA is the permitting authority.

Howeve r, EPA has failed to notify states of how it intends to treat other similarly situated sources. In the meantime, the states, and those sources, are struggling with the implementation of these newly revised NAAQS, with no proposed or final implementation r ules in sight . As it currently stands, EPA is exempting itself from the very requirements that it is forcing everyone else to follow. EPA m ust give states the opportunity, if necessary, to grandfather similarly situated sources.

We thank you for the opp ortunity to comment on this matter. If there are any questions about these comments, please contact me at 404

- 363

- 7016 or james.capp@gaepd.org

.

Sincerely,

James A. Capp Chief, Air Protection Branch Georgia Environmental Protection Division