S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 1

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Proposed effective date: February 25, 2011 SOUTH CAROLINA

DEPARTMENT OF HEALTH AND ENVIRONMENTAL CONTROL

AIR POLLUTION CONTROL REGULATIONS AND STANDARDS

REGULATION 61-62.5

AIR POLLUTION CONTROL STANDARDS

STANDARD NO. 7.1 NONATTAINMENT NEW SOURCE REVIEW (NSR)

(a) Applicability

(1) This rule applies to all major stationary sour ces constructed or modified in any nonattainment area as designated in 40 CFR 81.341 ("nonattainment area") if the emissions from such facility will cause or contribute to concentrations of a regulated NSR pollu tant (as defined in paragraph (c)(13)) for which the nonattainment area was designated as nonattainment. Appli cability to this regulation shall be based on the pollutant emission rate set out in paragraph (c)( 14) for only those pollutants for which the area’s designation is based.

(A) The requirements of paragraph (d) apply to the construction of any new major stationary source or the major modification of any existing major stati onary source, except as prov ided in paragraph (b).

(B) No new major stationary source or major m odification to which the requirements of paragraph (d) apply shall begin actual construc tion without a permit that states that the major stationary source or major modification will meet those requirements. The De partment has authority to issue any such permit.

(2) Redesignation to attainment . If any nonattainment area to which this regulation applies is later designated in 40 CFR 81.341 as attainment, all sour ces in that nonattainment area subject to this regulation before the redesignation date shall continue to comply with this regulation.

(3) For any area designated as nonattainment a major stationary source or major modification that is major for volatile organic compounds or oxid es of nitrogen is also major for ozone.

(b) Applicability procedures.

(1) Except as otherwise provided in paragraphs (b)(7) and (8), and consistent with the definition of major modification contained in paragraph (c)(6)(A), a project is a major modification for a regulated NSR pollutant if it causes two types of emissions in creases – a significant emissions increase (as defined in paragraph (c)(15), and a significant net emissions increase (as defined in paragraphs (c)(8) and (15). The project is not a major modification if it does not cause a significant emissions increase. If the project causes a significant emissions increase, then the project is a major modification only if it also results in a significant net emissions increase.

(2) The procedure for calculating (before beginning actual construction) whether a significant emissions increase ( i.e. , the first step of the process) will occur depends upon the type of emissions units being modified, according to paragraphs (b)(1) thr ough (6). The procedure for calculating (before beginning actual construction) whether a significan t net emissions increase will occur at the major stationary source ( i.e. , the second step of the process) is contai ned in the definition in paragraph (c)(8). Regardless of any such preconstruc tion projections, a major modification results if the project causes a significant emissions increase and a significant net emissions increase.S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 2

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Proposed effective date: February 25, 2011 (3) Actual-to-projected-actual applicability test for pr ojects that only involve existing emissions

units

. A significant emissions increase of a regulated NSR po llutant is projected to occur if the sum of the difference between the projected actual emissions (as defined in paragraph (c)(11)) and the baseline actual emissions (as defined in pa ragraphs (c)(2)(A) and (B), as applicab le), for each existing emissions unit, equals or exceeds the significant amount for that pollutant (as defined in paragraph (c)(14)).

(4) Actual-to-potential test for projects that only involve construction of a new emissions unit(s)

. A significant emissions increase of a regulated NSR pollutant is projected to occur if the sum of the difference between the potential to emit (as defined in paragraph (b)(37) of Re gulation 61-62.5 Standard

7, “ Prevention of Significant Deterioration ” (“Standard 7”)) from each new emissions unit following completion of the project and the baseline actual emissions (as defined in paragraph (c)(2)(C)) of these units before the project equals or exceeds the sign ificant amount for that pollutant (as defined in paragraph (c)(14)).

(5) [Reserved]

(6) Hybrid test for projects that involve multiple types of emissions units

. A significant emissions increase of a regulated NSR pollutant is projected to occur if the sum of the emissions increases for each emissions unit, using the method specified in paragra phs (b)(3) and (4) as applicable with respect to each emissions unit, for each type of emissions unit equals or exceeds the significant amount for that pollutant (as defined in paragraph (c)(14)).

(7) For any major stationary source for a Plantw ide Applicability Limitation (PAL) for a regulated NSR pollutant, the major stationary source shall comply with requirements under paragraph (i).

(c) Definitions. The following definitions apply to this Standa rd only. Any other term contained within

this Standard is as defined where indicate d in Regulation 61-62.5, Standard 7, “ Prevention of Significant

Deterioration. ”

(1)(A) “Actual emissions” means the actual rate of emissions of a regulated NSR pollutant from an emissions unit, as determined in accordance with paragraphs (c)(1)(B) through (D), except that this definition shall not apply for calculating whether a significant emissions increase has occurred, or for establishing a PAL under paragraph (i). Instead, paragraphs (c)(2) and (c)(11) shall apply for those

purposes.

(B) In general, actual emissions as of a particular date shall equal the average rate, in tons per year, at which the unit actually emitted the pollutant durin g a consecutive 24-month period which precedes the particular date and which is repr esentative of normal source operation. The Department shall allow the use of a different time period upon a determination that it is more representative of normal source operation. Actual emissions shall be calculated using the unit's actual operating hours, production rates, and types of materials processed, stored, or combusted during the selected time period.

(C) The Department may presume that source-specific allowable emissions for the unit are equivalent to the actual emissions of the unit.

(D) For any emissions unit that has not begun normal operations on the particular date, actual emissions shall equal the potential to emit of the unit on that date.

(2) “Baseline actual emissions” means the rate of emissions, in tons per year, of a regulated NSR pollutant, as determined in accordance w ith paragraphs (c)(2)(A) through (D).S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 3

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Proposed effective date: February 25, 2011 (A) For any existing electric utility steam ge nerating unit, baseline actual emissions means the average rate, in tons per year, at which the unit actually emitted the pollutant during any consecutive 24- month period selected by the owner or operator within the 5-year period immediately preceding when the owner or operator begins actual c onstruction of the project. The Department shall allow the use of a different time period upon a determination that it is more representative of normal source operation.

(i) The average rate shall include fugitive em issions to the extent quantifiable, and emissions associated with startups, and shutdowns.

(ii) The average rate shall be adjusted dow nward to exclude any non-compliant emissions that occurred while the source was operating above any emission limitation that was legally enforceable during the consecutive 24-month period.

(iii) For a regulated NSR pollutant, when a project involves multiple emissions units, only one consecutive 24-month period must be used to determ ine the baseline actual emissions for the emissions units being changed. A different consecutive 24-month period can be used for each regulated NSR pollutant.

(iv) The average rate shall not be based on any consecutive 24-month peri od for which there is inadequate information for determin ing annual emissions, in tons per y ear, and for adjusting this amount if required by paragraph (c)(2)(A)(ii).

(B) For an existing emissions unit (other than an electric utility steam generating unit), baseline actual emissions means the average rate, in tons per year, at which the emissions unit actually emitted the pollutant during any consecutive 24-month period selected by the owner or operator within the 10-year period immediately preceding either the date the ow ner or operator begins act ual construction of the project, or the date a complete permit application is received by the Department for a permit required either under this section or under a plan approved by th e Administrator whichever is earlier, except that the 10-year period shall not include any period earlier than November 15, 1990. The Department reserves the right to determine if the 24-m onth period selected is appropriate.

(i) The average rate shall include fugitive em issions to the extent quantifiable, and emissions associated with startups and shutdowns.

(ii) The average rate shall be adjusted dow nward to exclude any non-compliant emissions that occurred while the source was operating above an emi ssion limitation that was legally enforceable during the consecutive 24-month period.

(iii) The average rate shall be adjusted dow nward to exclude any emissions that would have exceeded an emission limitation with which the major stationary source must currently comply, had such major stationary source been required to comply w ith such limitations during the consecutive 24-month period. However, if an emission limitation is part of a maximum achievable control technology standard that the Administrator proposed or promulgated under 40 CFR 63, the baseline actual emissions need only be adjusted if the State has taken credit for such emissions reductions in an attainment demonstration or maintenance plan consistent with th e requirements of paragraph (d)(1)(c)(viii).

(iv) For a regulated NSR pollutant, when a project involves multiple emissions units, only one consecutive 24-month period must be used to determ ine the baseline actual emissions for the emissions units being changed. A different consecutive 24-month period can be used for each regulated NSR pollutant.S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 4

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Proposed effective date: February 25, 2011 (v) The average rate shall not be based on any consecutive 24-month period for which there is inadequate information for determin ing annual emissions, in tons per y ear, and for adjusting this amount if required by paragraphs (c)(2)(B)(ii) and (iii).

(C) For a new emissions unit, the baseline ac tual emissions for purposes of determining the

emissions increase that will result from the initial cons truction and operation of such unit shall equal zero; and thereafter, for all other purposes, sh all equal the unit's potential to emit.

(D) For a PAL for a major stationary source, th e baseline actual emissions shall be calculated for existing electric utility steam generating units in acco rdance with the procedures contained in paragraph (c)(2)(A), for other existing emissions units in acco rdance with the procedures contained in paragraph (c)(2)(B), and for a new emissions unit in accordan ce with the procedures contained in paragraph (c)(2)(C).

(3) “Best available control technology (BACT)” means an emissions limitation (including a visible emissions standard) based on the maximum degree of reduction for each regulated NSR pollutant which would be emitted from any proposed major stati onary source or major modification which the Department, on a case-by-case basis, taking into account energy, environmental, and economic impacts and other costs, determines is achievable for su ch source or modification through application of production processes or available methods, systems, and techniques, including fuel cleaning or treatment or innovative fuel combustion techniques for control of such pollutant. In no event shall application of best available control technology result in emissions of any pollutant which would exceed the emissions allowed by any applicable standard under 40 CFR 60 or 61. If the Department determines that technological or economic limitations on the applica tion of measurement methodology to a particular emissions unit would make the imposition of an emissions standard infeasible, a design, equipment, work practice, operational standard, or combination ther eof, may be prescribed instead to satisfy the requirement for the application of BACT. Such sta ndard shall, to the degree possible, set forth the emissions reduction achievable by implementation of such design, equipment, work practice or operation, and shall provide for compliance by m eans which achieve equivalent results.

(4) [Reserved]

(5) “Lowest achievable emission rate (LAER)” means, for any source, the more stringent rate of emissions based on the following:

(A) The most stringent emissions limitation which is contained in the implementation plan of any State for such class or category of stationary so urce, unless the owner or operator of the proposed stationary source demonstrates that such limitations are not achievable; or

(B) The most stringent emissions limitation which is achieved in practice by such class or category of stationary sources. This limitation, when app lied to a modification, means the lowest achievable

emissions rate for the new or modified emissions units within a stationary sour ce. In no event shall the application of the term permit a pr oposed new or modified stationary source to emit any pollutant in excess of the amount allowable under an appli cable new source standard of performance.

(6)(A) “Major modification” means any physical change in or change in the method of operation of a major stationary source that would result in:

(i) A significant emissions increase of a regulated NSR pollutant (as defined in paragraph (c)(13));

andS.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 5

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Proposed effective date: February 25, 2011 (ii) A significant net emissions increase of that pollutant from the major stationary source.

(B) Any significant emissions increase (as defined in paragraph (c)(15)) from any emissions units or net emissions increase (as defined in paragraph (c)(8)) at a major stationary source that is significant for volatile organic compounds or oxides of nitroge n shall be considered significant for ozone.

(C) A physical change or change in the method of operation shall not include:

(i) Routine maintenance, repair and replacement;

(ii) Use of an alternative fuel or raw material by reason of an order under sections 2(a) and (b) of the Energy Supply and Environmental Coordination Act of 1974 (or any superseding legislation) or by reason of a natural gas curtailment plan pursuant to the Federal Power Act;

(iii) Use of an alternative fuel by reason of an order or rule section 125 of the Clean Air Act;

(iv) Use of an alternative fuel at a steam gene rating unit to the extent that the fuel is generated from municipal solid waste;

(v) Use of an alternative fuel or raw material by a stationary source which;

(a) The source was capable of accommodating before December 21, 1976, unless such change would be prohibited under any federally enfor ceable permit condition which was established after

December 12, 1976, or

(b) The source is approved to use under an y permit issued under regulations approved pursuant

to this section;

(vi) An increase in the hours of operation or in the production rate, unless such change is prohibited under any federally enforceable permit condition which was established after December 21,

1976.

(vii) Any change in ownership at a stationary source.

(viii) [Reserved]

(ix) The installation, operation, cessation, or removal of a temporary clean coal technology demonstration project, provided that the project complies with:

(a) The South Carolina State Implementation Plan, and

(b) Other requirements necessary to attain and maintain the national ambient air quality standard during the project and after it is terminated.

(D) This definition shall not apply with respect to a particular regulated NSR pollutant when the major stationary source is complying with the re quirements under paragraph (i) for a PAL for that pollutant. Instead, the definition at paragraph (i)(2)(viii) shall apply.

(7)(A) “Major stationary source” means:S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 6

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Proposed effective date: February 25, 2011 (i) Any stationary source of air pollutants which emits, or has the potential to emit 100 tons per year or more of any regulated NSR pollutant, or

(ii) Any physical change that would occur at a stationary source not qualifying under paragraph (c)(7)(A)(i) as a major stationary source, if the ch ange would constitute a major stationary source by

itself.

(B) A major stationary source that is major for volatile organic compounds or oxides of nitrogen shall be considered major for ozone.

(C) The fugitive emissions of a stationary source shall not be included in determining for any of the purposes of this paragraph whether it is a major stati onary source, unless the source belongs to one of the following categories of stationary sources:

(i) Coal cleaning plants (with thermal dryers);

(ii) Kraft pulp mills;

(iii) Portland cement plants;

(iv) Primary zinc smelters;

(v) Iron and steel mills;

(vi) Primary aluminum ore reduction plants;

(vii) Primary copper smelters;

(viii) Municipal incinerators capable of char ging more than 250 tons of refuse per day;

(ix) Hydrofluoric, sulfuric, or nitric acid plants;

(x) Petroleum refineries;

(xi) Lime plants;

(xii) Phosphate rock processing plants;

(xiii) Coke oven batteries;

(xiv) Sulfur recovery plants;

(xv) Carbon black plants (furnace process);

(xvi) Primary lead smelters;

(xvii) Fuel conversion plants;

(xviii) Sintering plants;

(xix) Secondary metal production plants;S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 7

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Proposed effective date: February 25, 2011 (xx) Chemical process plants – The term ch emical processing plant shall not include ethanol production facilities that produce ethanol by natura l fermentation included in NAICS codes 325193 or

312140;

(xxi) Fossil-fuel boilers (or combination ther eof) totaling more than 250 million British thermal units per hour heat input;

(xxii) Petroleum storage and transfer units w ith a total storage capacity exceeding 300,000 barrels;

(xxiii) Taconite ore processing plants;

(xxiv) Glass fiber processing plants;

(xxv) Charcoal production plants;

(xxvi) Fossil fuel-fired steam electric plants of more than 250 million British thermal units per hour heat input; and

(xxvii) Any other stationary source category which, as of August 7, 1980, is being regulated under

section 111 or 112 of the Clean Air Act.

(8)(A) “Net emissions increase” means, with respect to any regulated NSR pollutant emitted by a major stationary source, the amount by which the sum of the following exceeds zero:

(i) The increase in emissions from a particular physical change or change in the method of operation at a stationary source as calcul ated pursuant to paragraph (b); and

(ii) Any other increases and decreases in actual emissions at the major stationary source that are contemporaneous with the particular change and are otherwise creditable. Baseline actual emissions for calculating increases and decreases under this paragraph (c)(8)(A)(ii) sha ll be determined as provided in paragraph (c)(2), except that paragraphs (c )(2)(A)(iii) and (c)(2)(B)(iv) shall not apply.

(B) An increase or decrease in actual emissions is contemporaneous with the increase from the particular change only if it occurs before the date that the increase from the particular change occurs;

(C) An increase or decrease in actual emissions is creditable only if:

(i) It occurs within five years before constr uction on the particular change commences; and

(ii) The Department has not relied on it in issuing a permit for the source, which permit is in effect when the increase in actual emissions from the particular change occurs.

(D) An increase in actual emissions is creditable onl y to the extent that the new level of actual

emissions exceeds the old level.

(E) A decrease in actual emissions is creditable only to the extent that:

(i) The old level of actual emission or the old le vel of allowable emissions whichever is lower,

exceeds the new level of actual emissions;S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 8

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Proposed effective date: February 25, 2011 (ii) It is enforceable as a practical matter at and after the time that actual construction on the particular change begins; and

(iii) The Department has not relied on it in issui ng any permit or the Department has not relied on it in demonstrating attainment or reasonable further progress;

(iv) It has approximately the same qualitative signi ficance for public health and welfare as that attributed to the increase from the particular change.

(F) An increase that results from a physical change at a source occurs when the emissions unit on which construction occurred becomes operational and begins to emit a particular pollutant. Any replacement unit that requires shakedown becomes ope rational only after a reasonable shakedown period, not to exceed 180 days.

(G) Paragraph (c)(1)(B) shall not apply for determining creditable increases and decreases or after a change.

(9) “Nonattainment major new source review (NSR) program” means a major source preconstruction permit program that has been approved by the Administrator and incorporated into the plan to implement the requirements of this regulati on, or a program that impl ements 40 CFR 51, appendix S, Sections I through VI. Any permit issued under such a program is a major NSR permit.

(10) [Reserved]

(11)(A) “Projected actual emissions” means, the maximum annual rate, in tons per year, at which an existing emissions unit is projected to emit a regulated NSR pollutant in any one of the 5 years (12-month period) following the date the unit resumes regular ope ration after the project, or in any one of the 10 years following that date, if the project involves increasing the emissions unit's design capacity or its potential to emit of that regulated NSR pollutant and full utilization of the unit would result in a significant emissions increase or a significant net emissions increase at the major stationary source.

(B) In determining the projected actual emissi ons under paragraph (c)(11) (A) before beginning actual construction, the owner or opera tor of the major stationary source: (i) Shall consider all relevant information, incl uding but not limited to, historical operational data, the company's own representations, the company's e xpected business activity and the company's highest projections of business activity, the company's filings with the State or Federal regulatory authorities, and compliance plans under the approved plan; and

(ii) Shall include fugitive emissions to the extent quantifiable, and emissions associated with startups, and shutdowns; and

(iii) Shall exclude, in calculating any increase in em issions that results from the particular project, that portion of the unit's emissions following the pr oject that an existing unit could have accommodated during the consecutive 24-month period used to estab lish the baseline actual emissions under paragraph (c)(2) and that are also unrelated to the particul ar project, including any increased utilization due to product demand growth; or,

(iv) In lieu of using the method set out in paragraphs (c)(11)(B)(i) through (iii) may elect to use the emissions unit's potential to emit, in tons per y ear, as defined under paragra ph (b)(37) of Standard 7.

(12) “Prevention of Significant Deterioration (PSD) permit” means any permit that is issued underS.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 9

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Proposed effective date: February 25, 2011 a major source preconstruction permit program that has been approved by the Administrator and incorporated into the plan to implement the requirements of 40 CFR 51.166, or under the program in 40

CFR 52.21.

(13) “Regulated NSR pollutant,” for purposes of this regulation of this regulation, means the following:

(A) Oxides of nitrogen or any volatile organic compounds;

(B) Any pollutant for which a national ambient air quality standard has been promulgated; or

(C) Any pollutant that is a constituent or precurs or of a general pollutant listed under paragraphs (c)(13)(A) or (B), provided that a constituent or precursor pollutant may only be regulated under NSR as part of regulation of the general pollutant. Precursor s identified by the Administrator for purposes of NSR are the following:

(a) Volatile organic compounds and nitrogen oxides are precurs ors to ozone in all ozone

nonattainment areas;

(b) Sulfur dioxide is a precursor to PM 2.5 in all PM 2.5 nonattainment areas;

(c) Nitrogen oxides are presumed to be precursors to PM 2.5 in all PM 2.5 nonattainment areas,

unless the State demonstrates to the Administrator’s satisfaction or EPA demonstrates that emissions of nitrogen oxides from sources in a specific area are not a significant contributor to that area’s ambient PM

2.5 concentrations;

(d) Volatile organic compounds and ammonia ar e presumed not to be precursors to PM 2.5 in

any PM 2.5 nonattainment area, unless the State demonstrat es to the Administrator’s satisfaction or EPA demonstrates that emissions of volatile organic co mpounds or ammonia from sources in a specific area are a significant contributor to that area’s ambient PM 2.5 concentrations; or

(D) PM 2.5 emissions and PM 10 emissions shall include gaseous emissions from a source or activity which condense to form particulate matter at ambient temperatures. On or after January 1, 2011 (or any earlier date established in the upcoming rulemaking codifying test methods), such condensable particulate matter shall be accounted for in appli cability determinations and in establishing emissions

limitations for PM 2.5 and PM 10 in permits issued under this ruling. Compliance with emissions limitations

for PM 2.5 and PM 10 issued prior to this date shall not be based on condensable particulate matter unless required by the terms and conditions of the permit or the applicable implementation plan. Applicability determinations made prior to this date without accounting for condensable partic ulate matter shall not be

considered in violation of this section unless the a pplicable implementation plan required condensable particulate matter to be included.

(14) “Significant” means, in reference to a net emissions increase or the potential of a source to emit any of the following pollutants, as rate of emissions th at would equal or exceed any of the following rates:

Pollutant Emission Rate

Carbon monoxide: 100 tons per year (tpy)

Nitrogen oxides: 40 tpyS.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 10

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Proposed effective date: February 25, 2011 Particulate matter:

15 tpy of PM 10 emissions 10 tpy of direct PM 2.5 ; 40 tpy of sulfur dioxide emissions; 40 tpy of nitrogen oxide emissions unless demonstrated not to be a PM 2.5 precursor under paragraph

13 of this section

Sulfur dioxide: 40 tpy

Ozone: 40 tpy of volatile organic compounds or oxides of nitrogen

Lead: 0.6 tpy

(15) “Significant emissions increase” means, for a regulated NSR pollutant, an increase in emissions that is significant (as defined in paragraph (c)(14)) for that pollutant.

(16) “Volatile organic compounds (VOC)” is as defined in Regulation 61-62.1, Section I, Definitions

.

(d) Permitting requirements

(1) Conditions for approval . If the Department finds that the major stationary source or major modification would be constructed in an area designated in 40 CFR 81.341 as nonattainment for a pollutant for which the stationary source or modifi cation is major, approval may be granted only if the following conditions are met:

(A) The major stationary source or major modi fication is required to meet an emission limitation which specifies the lowest achievable em ission rate (LAER) for such source.

(B) The applicant must certify that all existing ma jor sources owned or operated by the applicant (or any entity controlling, controlled by, or under common control with the applicant) in the same State as the proposed source are in compliance wi th all applicable emission limitati ons and standards under the Clean Air Act (or are in compliance with an expeditious sche dule which is Federally enforceable or contained in a court decree).

(C) The owner or operator of the proposed new major stationary source or major modification will obtain sufficient emission reductions of the nonattainment pollutant from other sources. Emission reductions shall be in effect and enforceable prior to the date the new source or modification commences operation. The emission reductions shall be obtained in accordance with the following provisions:

(i) Where the permitted emissions limit allows great er emissions than the potential to emit of the

source, emissions offset credit will be allo wed only for control below this potential;

(ii) For an existing fuel combustion source, credit shall be based on the allowable emissions for the type of fuel being burned at the time the appli cation to construct is filed. If the existing source

commits to switch to a cleaner fuel at some future date, emissions offset credit based on the allowable (or actual) emissions for the fuels involved is not acceptable, unless the permit is conditioned to require the use of a specified alternative control measure which would achieve the same degree of emissions

reduction should the source switch back to a dirtier fuel at some later date.S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 11

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Proposed effective date: February 25, 2011 (iii)(a) Emissions reductions achieved by shutting down an existing source or curtailing production or operating hours below b aseline levels may be generally credited if such reductions are permanent, quantifiable, federally enforceable, occurred on or after the date of the most recent emissions inventory, and if the area has an EPA-approved attainment plan.

(b) Such reductions may be credited if the s hutdown or curtailment occurred on or after the date the new source permit application is filed, or, if the applicant can establish that the proposed new source is a replacement for the shutdown or curtailed s ource, and the cutoff date provision of paragraph (d)(C)(iii)(a) are observed.

(iv) No emissions credit may be allowed for re placing one hydrocarbon compound with another of lesser reactivity, except for those compounds listed in Table 1 of EPA's "Recommended Policy on Control of Volatile Organic Compounds" (42 FR 35314, July 8, 1977);

(v) All emission reductions claimed as offset cred it shall be federally enforceable and surplus;

(a) Eligibility as Emission Offsets . Any facility that has the potential to emit any NAAQS pollutant in an amount greater than 5 tons per y ear and that is located in a federally-designated nonattainment area shall be eligible to create emission offsets.

(1) To be eligible to be an emission offset:

(A) A reduction in emissions shall be real, permanent, quantifiable, enforceable, and surplus and must have occurred after December 31 of th e base year inventory for t hose pollutants that are designated nonattainment by the EPA. The base year inve ntory date is two years preceding the date of nonattainment designation. Howeve r, the Department may choose to consider a prior shutdown or curtailment to have occurred after the last day of th e base year if the projected emissions inventory used to develop the attainment demonstr ation explicitly includes the emissi ons from such previously shutdown

or curtailed emission units.

(B) Emission reductions shall have been created by a facility that has obtained an enforceable air quality permit or letter of permit cancellation resulting from the surrender of the source’s permit(s).

(2) Emission reductions may be created by any or a combination of the following methods:

(A) Installation of control equipment beyond what is necessary to comply with existing requirements;

(B) A change in process inputs, form ulations, products or produc t mix, fuels, or raw

materials;

(C) A reduction in actual emission rates;

(D) A reduction in hours of operation;

(E) Production curtailment or reduction in throughput;

(F) Shutdown of emitting sources; or

(G) Any other enforceable method that the Department determines to result in real,S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 12

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Proposed effective date: February 25, 2011 permanent, quantifiable, enforceable, and surplus reduction of emissions.

(3) A completed emissions offset submittal must be received by the Department within one year of the date of the creation of the reductions. Emission offsets not requested within one year of the

date of the creation of the reducti ons will be permanently retired. Prior to commencing operation of a permitted emissions unit, Department approval for the required emission offsets must be granted.

(4) The following are ineligible for emission offsets:

(A) Emission reductions that are not considered surplus, such as:

(i) Emission reductions that have pr eviously been used to avoid Regulation 61-62.5

Standard No. 7, Prevention of Significant Deterioration, or Regulation 61-62.5 Standard No. 7.1, Nonattainment New Source Review (NSR), through a netting demonstration;

(ii) Emission reductions of hazardous ai r pollutants, listed in Section 112(b) of the Clean Air Act, to the extent needed to comply with Regulation 61-62.61, National Emission Standards for Hazardous Air Pollutants (NESHAP) , and Regulation 61-62.63, National Emission Standards for Hazardous Air Pollutants (NESHAP) for Source Categories , (however, emission reductions of hazardous volatile organic compound (VOC) and/or hazardous par ticulate matter (PM) air pollutants beyond the amount of reductions necessary to comply with Regulation 61-62.61, NESHAP, and Regulation 61-62.63, NESHAP for Source Categories, are considered surplus);

(iii) Emission reductions of nitrogen oxides (NOx), sulfur dioxide (SO 2 ), particulate matter (PM) and VOCs to the extent needed to comply with Section 111 of the CAA and Regulation 61-

62.60, South Carolina Designated Facility Plan and New Source Performance Standards (NSPS)

, (however, emission reductions of VOCs, NOx, SO 2 , PM and VOCs beyond the amount of reductions necessary to comply with Regulation 61-62.60, South Carolina Designated Facility Plan and NSPS, are considered surplus);

(iv) Emission units covered under an agreement, order or variance for exceeding an emission standard until compliance is demonstrated with the emission standard that is the subject of the agreement, order or variance;

(v) Sources that have operated less than 12 months;

(vi) Emission reductions required in order to comply with any State or Federal regulation not listed above, unless these reductions are in excess of the amount required by the State or Federal regulation; or

(vii) Facilities that have received a Department transmittal letter notifying of permit cancellation due to the facility’s decision to close out its operating permit without a request to qualify facility emission reductions as offsets.

(b) Calculation of Emission Offsets

(1) The following procedure shall be followed to calculate emission offsets:

(A) The source shall calculate average annual actual emissions, in tons per year (tpy), before the emission reduction using data from the 24-month period immediately preceding the reduction in emissions. With the Department’s approval, the u se of a different time period, not to exceed 10 yearsS.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 13

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Proposed effective date: February 25, 2011 immediately preceding the reduction in emissions, may be allowed if the owner or operator of the source documents that such period is more representative of normal source operation, but not prior to the base year inventory date, which is the last day of the two years preceding the date of nonattainment designation; and

(B) The emission offsets created shall be calculated by subtracting the allowable emissions following the reduction from the average annual actual emissions prior to the reduction.

(2) For any emissions unit that has been operating for a consecutive period of at least 12 months but less than 24 months on the base year i nventory date, based on the unit’s potential to emit, emissions shall be calculated equal to the amount needed to complete a 24 month period on the base year inventory date.

(vi) Location of offsetting emissions. Emission offsets shall be obtained from sources currently operating within the same designated nonattainment ar ea as the new or modified stationary source. Emission offsets may be obtained from another nonatta inment area with the Department’s approval only if (a) the other area has an equal or higher nonatta inment classification than the area in which the proposed source is located and (b) emissions from the other area contribute to a violation of the NAAQS

in the nonattainment area in which the source is located.

(vii) Emission offsetting ratios . Emission offsets shall be required in nonattainment areas in accordance with the following provisions:

(a) Emissions for carbon monoxide (CO), nitrogen dioxide (NO 2 ), sulfur dioxide (SO 2 ), lead (Pb), and particulate matter (PM 10 and PM 2.5 ) nonattainment areas shall be offset at a ratio greater than

one to one.

(b) Emissions for ozone nonattainment are as shall be offset for volatile organic compounds (VOCs) and nitrogen oxides (NO

x ) in accordance with the following table:

Designation Offset ratios Subpart I >1 to 1 Marginal 1.1 to 1

Moderate 1.15 to 1

Serious 1.2 to 1

Severe 1.3 to 1

Extreme 1.5 to 1

(viii) Credit for an emissions reduction can be claimed to the extent that the Department has not relied on it in issuing any permit unde r regulations approved pursuant to 40 CFR part 51 subpart I or the Department has not relied on it in demonstrati ng attainment or reasonable further progress.

(ix) [Reserved]

(x) [Reserved]

(xi) The total tonnage of increas ed emissions, in tons per year, resulting from a major modification

that must be offset in accordance with section 173 of the Clean Air Act shall be determined by summing

the difference between the allowable emissions after the modification (as defined by paragraph (b)(3) of Standard 7) and the actual emissions before the mo dification (as defined in paragraph (c)(1)) for each

emissions unit.S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 14

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Proposed effective date: February 25, 2011 (D) The emission offsets must provide a positive net air quality benefit in the affected area as determined by 40 CFR 51, Appendix S, Emission Offset Interpretative Ruling

.

(E) Alternative Sites Analysis. An analysis of alternative sites, sizes, production processes, and environmental control techniques for such proposed source demonstrates that benefits of the proposed source significantly outweigh the environmental and so cial costs imposed as a result of its location,

construction, or modificati on shall be required.

(2) (A) Any owner or operator who c onstructs or operates a source or modification not in accordance with the application submitted pursuant to this section or with the terms of any approval to construct, or any owner or operator of a source or modification s ubject to this section who commences construction after the effective date of these regulations withou t applying for and receiving approval hereunder, shall be subject to appropriate enforcement action.

(B) Approval to construct shall become invalid if construction is not commenced within 18 months after receipt of such approval, if construction is di scontinued for a period of 18 months or more, or if construction is not completed within a reasonable tim e. The Department may extend the 18-month period upon a satisfactory showing that an extension is justif ied. This provision does not apply to the time period between construction of the approved phases of a phased construction project; each phase must

commence construction within 18 months of the projected and appr oved commencement date.

(C) Approval to construct shall not relieve an y owner or operator of the responsibility to comply fully with applicable provisions of the plan and an y other requirements under local, State or Federal law.

(D) At such time that a particular source or modification becomes a major stationary source or major modification solely by virtue of a relaxation in any enforcement limitation which was established after August 7, 1980, on the capacity of the source or m odification otherwise to emit a pollutant, such as a restriction on hours of operation, then the requirement s of regulations approved pursuant to this section shall apply to the source or modification as though construction had not yet commenced on the source or modification;

(3) The following provisions apply to projects at existing emissions units at a major stationary source (other than projects at a source with a PAL) in circ umstances where there is a reasonable possibility that a project that is not a part of a major modificati on may result in a significant emissions increase and the owner or operator elects to use the method specif ied in paragraphs (c)(11)(B)(i) through (iii) for calculating projected actual emissions.

(A) If the project requires construction permitting under Regulation 61-62.1, Section II “ Permit Requirements, ” the owner or operator shall provide a copy of the information set out in paragraph (d)(3)(B) as part of the permit application to the Department. If constructi on permitting under Regulation 61-62.1, Section II “ Permit Requirements ” is not required, the owner or operator shall maintain the information set out in paragraph (d)(3).

(B) Before beginning actual construction of the project, the owner or operator shall document and maintain a record of the following information:

(i) A description of the project;

(ii) Identification of the emissions unit(s) whose emissions of a regulated NSR pollutant could beS.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 15

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Proposed effective date: February 25, 2011 affected by the project; and

(iii) A description of the applicability test used to determine that the project is not a major modification for any regulated NSR pollutant, incl uding the baseline actual emissions, the projected

actual emissions, the amount of emissions excluded unde r paragraph (c)(11)(B)(iii) and an explanation for why such amount was excluded, and a ny netting calculations, if applicable.

(C) The owner or operator shall monitor the emissi ons of any regulated NSR pollutant that could increase as a result of the project and that is emitte d by any emissions units identified in paragraph (d)(3)(B)(ii); and calculate and maintain a record of the annual emissions, in tons per year on a calendar year basis, for a period of 5 years following resumption of regular operations after the change, or for a period of 10 years following resumption of regular oper ations after the change if the project increases the design capacity or potential to emit of that re gulated NSR pollutant at such emissions unit.

(D) If the unit is an existing electric utility steam generating unit, the owner or operator shall submit a report to the Department within 60 days after the end of each year during which records must be generated under paragraph (d)(3)(B) setting out the unit's annual emissions during the year that preceded submission of the report.

(E) If the unit is an existing unit other than an electric utility steam generating unit, the owner or operator shall submit a report to the Department if th e annual emissions, in tons per year, from the project identified in paragraph (d)(3)(B), exceed the baselin e actual emissions (as doc umented and maintained pursuant to paragraph (d)(3)(B)(iii)), by a significant amount (as defined in paragraph (c)(14)) for that regulated NSR pollutant, and if such emissions di ffer from the preconstruction projection as documented and maintained pursuant to paragraph (d)(3)(B)(iii). Such report shall be submitted to the Department within 60 days after the end of such year. The report shall contain the following:

(i) The name, address and telephone numb er of the major stationary source;

(ii) The annual emissions as calculated pursuant to paragraph (d)(3)(C); and

(iii) Any other information needed for to make a compliance determination ( e.g. , an explanation as to why the emissions differ from the preconstruction projection).

(4) If a project at a source with a PAL requi res construction permitting under Regulation 61-62.1,

Section II, “ Permit Requirements, ” the owner or operator shall provide notification of source status as part of the permit application to the Department.

(5) The owner or operator of the source shall make the information required to be documented and maintained pursuant to paragraph (d)(3) for review up on a request for inspection by the Department or the general public pursuant to the requirements contained in 40 CFR 70.4(b)(3)(viii).

(6) Public Participation. Within 30 days after receip t of an application to cons truct, or any addition to such application, the Department shall advise the appli cant of any deficiency in the application or in the information submitted and transmit a copy of such appli cation to EPA. In the even t of such a deficiency, the date of receipt of the application shall be, for the purpose of this regulation, the date on which the Department received all required information.

(7) In accordance with Regulation 61-30, Environmental Protection Fees , the Department shall make a final determination on the application. This involves performing the following actions in a timely manner:S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 16

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Proposed effective date: February 25, 2011 (i) For the purposes of this paragraph (d)(7), th e time frame for making a final determination shall be

consistent with R. 61-30, Environmental Protection Fees , paragraph (H)(2)(c)(iii).

(ii) Make a preliminary determination whethe r construction should be approved, approved with conditions, or disapproved.

(iii) Make available in at least one locati on in each region in which the proposed plant or

modification would be constructed a copy of all materials the applicant submitted, a copy of the preliminary determination and a copy or summary of other materials, if any, considered in making the preliminary determination.

(iv) Notify the public, by advertisement in a news paper of general circulation in each region in which the proposed plant or modification would be cons tructed, of the application, the preliminary determination, the degree of increment consumption th at is expected from the plant or modification, and the opportunity for comment at a public hearing as well as written public comment.

(v) Send a copy of the notice of public comment to the applicant, the Administrator of EPA, and to officials and agencies having cognizance over the loca tion where the proposed construction would occur as follows: The chief executives of the city and county where the plant or modification would be located, any comprehensive regional land use planning agency and any State, Federal Land Manager, or Indian Governing Body whose lands may be affected by emissions from the plant or modification.

(vi) Provide opportunity for a public hearing for interested persons to appear and submit written or oral comments on the air quality impact of the plant or modification, alternatives to the plant or modification, the control technology requir ed, and other appropriate considerations.

(vii) Consider all written comments submitted wi thin a time specified in the notice of public comment and all comments received at any public hearing(s) in making a final decision on the approvability of the application. No later than 10 da ys after the close of the public comment period, the applicant may submit a written res ponse to any comments submitted by the public. The Department shall consider the applicant’s response in making a final decision. The Department shall make all comments available for public inspection in the same lo cations where the Department made available preconstruction information relating to the proposed plant or modification.

(viii) Make a final determination whether construction should be a pproved, approved with

conditions, or disa pproved pursuant to this section.

(ix) Notify the applicant in writing of the final determination and make su ch notification available for public inspection at the same location where the Department made available preconstruction information and public comments rela ting to the plant or modification.

(x) Notify EPA of every action related to the consideration of the permit.

(e) Exemptions . The provisions of paragraph (d) shall not appl y to a particular major stationary source or major modification if the source or modification would be a major stationary source or major modification only if fugitive emissions, to the extent quantifiable, are considered in calculating the potential to emit of the stationary source or modification and the source does not belong to any of the following categories:

(A) Coal cleaning plants (with thermal dryers);S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 17

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Proposed effective date: February 25, 2011 (B) Kraft pulp mills;

(C) Portland cement plants;

(D) Primary zinc smelters;

(E) Iron and steel mills;

(F) Primary aluminum ore reduction plants;

(G) Primary copper smelters;

(H) Municipal incinerators capable of chargi ng more than 250 tons of refuse per day;

(I) Hydrofluoric, sulfuric, or nitric acid plants;

(J) Petroleum refineries;

(K) Lime plants;

(L) Phosphate rock processing plants;

(M) Coke oven batteries;

(N) Sulfur recovery plants;

(O) Carbon black plants (furnace process);

(P) Primary lead smelters;

(Q) Fuel conversion plants;

(R) Sintering plants;

(S) Secondary metal production plants;

(T) Chemical process plants - The term chemical process plant shall not include ethanol production facilities that produce ethanol by natural fermen tation included in NAICS codes 325193 or 312140;

(U) Fossil-fuel boilers (or combination thereof) totaling more than 250 million British thermal units per hour heat input;

(V) Petroleum storage and transfer units with a total storage capacity exceeding 300,000 barrels;

(W) Taconite ore processing plants;

(X) Glass fiber processing plants;

(Y) Charcoal production plants;

(Z) Fossil fuel-fired steam electric plants of more than 250 million British thermal units per hourS.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 18

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Proposed effective date: February 25, 2011 heat input; and

(AA) Any other stationary source category which, as of August 7, 1980, is being regulated under

section 111 or 112 of the Clean Air Act.

(f) [Reserved]

(g) [Reserved]

(h) [Reserved]

(i) Actuals PALs

. The provisions in paragraphs (i)(1 ) through (15) govern actuals PALs.

(1) Applicability

.

(i) The Department may approve the use of an actua ls PAL for any existing major stationary source (except as provided in paragraph (i)(1)(ii)) if the PAL meets the requirements in paragraphs (i)(1) through (15). The term "PAL" shall mean "actuals PAL" throughout paragraph (i).

(ii) The Department shall not allow an actuals PAL for VOC or NO

x for any major stationary source

located in an extreme ozone nonattainment area.

(iii) Any physical change in or change in the me thod of operation of a major stationary source that

maintains its total source-wide emissions below the PAL level, meets the requi rements in paragraphs (i)(1) through (15), and complies with the PAL permit:

(A) Is not a major modification for the PAL pollutant;

(B) Does not have to be approved throu gh Regulation 61-62.5, Standard 7.1, “ Nonattainment New

Source Review ”; however, will be reviewed through Regulation 61-62.1, Section II A. “ Permit Requirements, ” and

(C) Is not subject to the provisions in paragraph (d)(2)(D) (restrictions on relaxing enforceable emission limitations that the major stationary source used to avoid applicability of the nonattainment major NSR program).

(iv) Except as provided under paragraph (i)(1)(iii)(C), a major stationary source shall continue to comply with all applicable Federal or State re quirements, emission limitations, and work practice requirements that were established prior to the effective date of the PAL.

(2) Definitions. The definitions in paragraphs (i)(2)(i) th rough (xi) shall apply to actuals PALs consistent with paragraphs (i)(1) through (15). When a term is not defined in these paragraphs, it shall have the meaning given in paragraph (c) of this regulation; paragraph (b) of Regulation 61-62.5, Standard

7, “ Prevention of Significant Deterioration”(“Standard 7”); or in the Clean Air Act.

(i) Actuals PAL for a major stationary source means a PAL based on the baseline actual emissions (as defined in paragraph (c)(1)) of all emissions units (as defined in paragraph (b )(20) of Standard 7) at the source, that emit or have the potential to emit the PAL pollutant.

(ii) Allowable emissions means "allowable emissions" as defined in paragraph (b)(3) of Standard 7, except as this definition is modified accordin g to paragraphs (i)(2)(ii)(A) through (B).S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 19

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Proposed effective date: February 25, 2011 (A) The allowable emissions for any emissions un it shall be calculated considering any emission limitations that are enforceable as a practical matter on the emissions unit's potential to emit.

(B) An emissions unit's potential to emit shall be determined using the definition in paragraph (b)(37) of Standard 7, except that the words "or en forceable as a practical matter" should be added after "federally enforceable."

(iii) Small emissions unit means an emissions unit that emits or has the potential to emit the PAL pollutant in an amount less than the significant leve l for that PAL pollutant, as defined in paragraph (c)(14) or in the Clean Air Act, whichever is lower.

(iv) Major emissions unit means:

(A) Any emissions unit that emits or has the poten tial to emit 100 tons per year or more of the PAL pollutant in an attainment area; or

(B) Any emissions unit that emits or has the poten tial to emit the PAL pollutant in an amount that is equal to or greater than the major source threshold for the PAL pollutant as defined by the Clean Air Act for nonattainment areas. For example, in accordance with the definitio n of major stationary source in section 182(c) of the Clean Air Act, an emissions unit would be a major emissions unit for VOC if the

emissions unit is located in a serious ozone nonattainme nt area and it emits or has the potential to emit 50 or more tons of VOC per year.

(v) Plantwide applicability limitation (PAL) means an emission limitation expressed in tons per year, for a pollutant at a major stationary source, th at is enforceable as a practical matter and established source-wide in accordance with pa ragraphs (i)(1) through (i)(15).

(vi) PAL effective date generally means the date of issuance of the PAL permit. However, the PAL

effective date for an increased PAL is the date an y emissions unit which is part of the PAL major modification becomes operational and begins to emit the PAL pollutant.

(vii) PAL effective period means the period beginning with th e PAL effective date and ending 10 years later.

(viii) PAL major modification means, notwithstanding paragraphs (c)(6) and (8) (the definitions for major modification and net emissions increase), any ph ysical change in or change in the method of operation of the PAL source that causes it to emit the PAL pollutant at a level equal to or greater than the

PAL.

(ix) PAL permit means the major NSR permit, the minor NS R permit, or the State operating permit under Regulation 61-62.1 Section II G, or the title V pe rmit issued by the Depa rtment that establishes a PAL for a major stationary source.

(x) PAL pollutant means the pollutant for which a PAL is established at a major stationary source.

(xi) Significant emissions unit means an emissions unit that emits or has the potential to emit a PAL pollutant in an amount that is equal to or greater th an the significant level (as defined in paragraph (c)(13) or in the Clean Air Act, whichever is lower) for th at PAL pollutant, but less than the amount that would qualify the unit as a major emissions unit as defined in paragraph (i)(2)(iv).S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 20

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Proposed effective date: February 25, 2011 (3) Permit application requirements

. As part of a permit applicati on requesting a PAL, the owner or operator of a major stationary source shall submit the following information to the Department for approval:

(i) A list of all emissions units at the source desi gnated as small, significant or major based on their potential to emit. In addition, the owner or operator of the source shall indicate which, if any, Federal or State applicable requirements, emission limitations or work practices apply to each unit.

(ii) Calculations of the baseline actual emissi ons (with supporting documentation). Baseline actual

emissions are to include emissions associated not only with operation of the unit, but also emissions associated with startup, shutdown and malfunction.

(iii) The calculation procedures that the major sta tionary source owner or operator proposes to use to convert the monitoring system data to monthly emissions and annual emissions based on a 12-month rolling total for each month as required by paragraph (i)(13)(i).

(4) General requirements for establishing PALs

.

(i) The Department is allowed to establish a PAL at a major stationary source, provided that at a minimum, the requirements in paragraphs (i)(4)(i)(A) through (G) are met.

(A) The PAL shall impose an annual emission limitation in tons per year, that is enforceable as a practical matter, for the entire major stationary sour ce. For each month during the PAL effective period after the first 12 months of establishing a PAL, the major stationary source owner or operator shall show that the sum of the monthly em issions from each emissions unit under the PAL for the previous 12 consecutive months is less than the PAL (a 12-mo nth average, rolled monthly). For each month during the first 11 months from the PAL effective date, the major stationary source owner or operator shall show that the sum of the preceding monthly emissions fro m the PAL effective date for each emissions unit

under the PAL is less than the PAL.

(B) The PAL shall be established in a PAL permit that meets the public participation requirements in paragraph (i)(5).

(C) The PAL permit shall contain all th e requirements of paragraph (i)(7).

(D) The PAL shall include fugitive emissions, to th e extent quantifiable, from all emissions units that emit or have the potential to emit the PAL pollutant at the major stationary source.

(E) Each PAL shall regulate emissions of only one pollutant.

(F) Each PAL shall have a PAL effective period of 10 years.

(G) The owner or operator of the major stationa ry source with a PAL shall comply with the monitoring, recordkeeping, and reporting requirements provided in paragraphs (i )(12) through (14) for each emissions unit under the PAL through the PAL effective period.

(ii) At no time (during or after the PAL eff ective period) are emissi ons reductions of a PAL pollutant, which occur during the PAL effective peri od, creditable as decreases for purposes of offsets under paragraph (d)(1)(c) unless the level of the PAL is reduced by the amount of such emissions

reductions and such reductions would be creditable in the absence of the PAL.S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 21

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Proposed effective date: February 25, 2011 (5) Public participation requirement for PALs

. PALs for existing major stationary sources shall be established, renewed, or increased through a procedure that is consistent paragraph (d)(6) and (d)(7). The Department must address all material comment s before taking final action on the permit.

(6) Setting the 10-year actuals PAL level

. (i) Except as provided in paragraph (i)(6)(ii), the actuals PAL level for a major stationary source shall be established as the sum of the baseline actual emissions (as defined in paragraph (c)(2)) of the PAL pollutant for each emissions unit at the source; plus an amount equal to the applicable significant level for the PAL pollutant under paragraph (c)(14) or under the Clean Air Act, whichever is lower. When establishing th e actuals PAL level, for a PAL pollutant, only one consecutive 24-month period must be used to determ ine the baseline actual emissions for all existing

emissions units. However, a different consecutive 24- month period may be used for each different PAL pollutant. Emissions associated with units that were permanently shut down af ter this 24-month period must be subtracted from the PAL level. The Department shall specify a reduced PAL level(s) (in tons/yr) in the PAL permit to become effective on the future co mpliance date(s) of any applicable Federal or State regulatory requirement(s) that the Department is aw are of prior to issuance of the PAL permit. For instance, if the source owner or operator will be re quired to reduce emissions from industrial boilers in half from baseline emissions of 60 ppm NO X to a new rule limit of 30 ppm, then the permit shall contain

a future effective PAL level that is equal to the current PAL level reduced by half of the original baseline emissions of such unit(s).

(ii) For newly constructed units (which do not in clude modifications to existing units) on which operation began less than 24-months prior to the date of the PAL permit application, the emissions must

be added to the PAL level in an amount e qual to the potential to emit of the units.

(7) Contents of the PAL permit

. The PAL permit must contain, at a minimum, the information in paragraphs (i)(7)(i) through (x).

(i) The PAL pollutant and the applicable sour ce-wide emission limitation in tons per year.

(ii) The PAL permit effective da te and the expiration date of the PAL (PAL effective period).

(iii) Specification in the PAL permit that if a majo r stationary source owner or operator applies to renew a PAL in accordance with para graph (i)(10) before the end of th e PAL effective period, then the PAL shall not expire at the end of the PAL effective period. It shall remain in effect until a revised PAL permit is issued by the Department.

(iv) A requirement that emission calculations for compliance purposes include emissions from startups, shutdowns and malfunctions.

(v) A requirement that, once the PAL expires, th e major stationary source is subject to the requirements of paragraph (i)(9).

(vi) The calculation procedures that the major stat ionary source owner or operator shall use to convert the monitoring system data to monthly emissions and annual emissions based on a 12-month rolling total for each month as required by paragraph (i)(13)(i).

(vii) A requirement that the major stationary sour ce owner or operator monitor all emissions units in accordance with the provisions under paragraph (i)(12).S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 22

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Proposed effective date: February 25, 2011 (viii) A requirement to retain th e records required under paragraph (i)(13) on site. Such records may

be retained in an electronic format.

(ix) A requirement to submit the reports required under paragraph (i)(14) by the required deadlines.

(x) Any other requirements that the Department de ems necessary to implement and enforce the PAL.

(8) PAL effective period and reopening of the PAL permit

. The requirements in paragraphs (i)(8)(i) and (ii) apply to actuals PALs.

(i) PAL effective period

. The Department shall specify a PAL effective period of 10 years.

(ii) Reopening of the PAL permit

.

(A) During the PAL effective period, the De partment must reopen the PAL permit to:

(1) Correct typographical/calculation errors made in setting the PAL or reflect a more accurate

determination of emissions used to establish the PAL.

(2) Reduce the PAL if the owner or operator of the major stationary source creates creditable emissions reductions for use as offsets under paragraph (d)(2).

(3) Revise the PAL to reflect an increase in the PAL as provided under paragraph (i)(11).

(B) The Department shall have discretion to reopen the PAL permit for the following:

(1) Reduce the PAL to reflect newly applicable Federal requirements (for example, NSPS) with compliance dates after the PAL effective date.

(2) Reduce the PAL consistent with any other re quirement, that is enforceable as a practical matter, and that the Department may impose on the major stationary source under the State Implementation Plan.

(3) Reduce the PAL if the Department determines that a reduction is necessary to avoid causing or contributing to a NAAQS or PSD increment violation, or to an adverse impact on an air quality related

value that has been identified for a Federal Clas s I area by a Federal Land Manager and for which information is available to the general public.

(C) Except for the permit reopening in paragraph (i)(8)(ii)(A)(1) for the correction of typographical/calculation errors that do not increase the PAL level, all other reopenings shall be carried out in accordance with the public particip ation requirements of paragraph (i)(5).

(9) Expiration of a PAL

. Any PAL which is not renewed in accordance with the procedures in paragraph (i)(10) shall expire at the end of the PAL effective period, and the requirements in paragraphs (i)(9)(i) through (v) shall apply.

(i) Each emissions unit (or each group of emissions units) that existed under the PAL shall comply

with an allowable emission limitation under a revised permit established according to the procedures in paragraphs (i)(9)(i)(A) through (B).

(A) Within the time frame specified for PAL renewa ls in paragraph (i)(10)(ii), the major stationaryS.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 23

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Proposed effective date: February 25, 2011 source shall submit a proposed allowable emission limitation for each emissions unit (or each group of emissions units, if such a distribution is more appr opriate as decided by the Department) by distributing

the PAL allowable emissions for th e major stationary source among each of the emissions units that existed under the PAL. If the PAL had not yet been adju sted for an applicable requirement that became effective during the PAL effective period, as required under paragraph (i)(10)(v), such distribution shall be made as if the PAL had been adjusted.

(B) The Department shall decide whether a nd how the PAL allowable emissions will be distributed and issue a revised permit incorporating allowable limits for each emissions unit, or each group of emissions units, as the Department determines is appropriate.

(ii) Each emissions unit(s) shall comply with the allowable emission limitation on a 12-month rolling basis. The Department may approve the use of monito ring systems (source testing, emission factors, etc.) other than CEMS, CERMS, PEMS or CPMS to demonstrate compliance with the allowable emission

limitation.

(iii) Until the Department issues the revised permit incorporating allowable limits for each emissions unit, or each group of emissions units, as required unde r paragraph (i)(9)(i)(A), the source shall continue to comply with a source-wide, multi-unit emissions cap equivalent to the level of the PAL emission

limitation.

(iv) Any physical change or change in the method of operation at the major stationary source will be subject to the nonattainment major NSR requirements if such change meets the definition of major modification in paragraph (c)(6).

(v) The major stationary source owner or operator shall continue to comply with any State or Federal applicable requirements (BACT, RACT, NSPS, etc. ) that may have applied either during the PAL effective period or prior to the PAL effective period except for those emission limitations that had been established pursuant to paragraph (d)(2)(D), but were eliminated by the PA L in accordance with the provisions in paragraph (i)(1)(iii)(C).

(10) Renewal of a PAL

.

(i) The Department shall follow the procedures speci fied in paragraph (i)(5) in approving any request to renew a PAL for a major stationary source, a nd shall provide both the proposed PAL level and a written rationale for the proposed PAL level to the public for review and comment. During such public review, any person may propose a PAL level for th e source for consideration by the Department.

(ii) Application deadline

. A major stationary source owner or operator shall submit a timely application to the Department to request renewal of a PAL. A timely application is one that is submitted at least 6 months prior to, but not earlier than 18 mont hs from, the date of perm it expiration. This deadline for application submittal is to ensure that the permit will not expire before th e permit is renewed. If the owner or operator of a major stationary source submits a complete application to renew the PAL within this time period, then the PAL sha ll continue to be effective until th e revised permit with the renewed

PAL is issued.

(iii) Application requirements

. The application to renew a PAL permit shall contain the information required in paragra phs (i)(10)(iii)(A) through (D).

(A) The information required in pa ragraphs (i)(3)(i) through (iii).S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 24

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Proposed effective date: February 25, 2011 (B) A proposed PAL level.

(C) The sum of the potential to emit of all emissions units under th e PAL (with supporting documentation).

(D) Any other information the owner or opera tor wishes the Department to consider in determining the appropriate level for renewing the PAL.

(iv) PAL adjustment

. In determining whether and how to ad just the PAL, the Department shall consider the options outlined in paragraphs (i)(10)(iv)(A) and (B). However, in no case may any such adjustment fail to comply with paragraph (i)(10)(iv)(C).

(A) If the emissions level calculated in accordance wi th paragraph (i)(6) is equal to or greater than 80 percent of the PAL level, the Department may re new the PAL at the same level without considering the factors set forth in paragraph (i)(10)(iv)(B); or

(B) The Department may set the PAL at a level that it determines to be more representative of the

source's baseline actual emissions, or that it determin es to be appropriate considering air quality needs, advances in control technology, anticipated economic gr owth in the area, desire to reward or encourage the source's voluntary emissions reductions, or other f actors as specifically identified by the Department

in its written rationale.

(C) Notwithstanding paragraphs (i)(10)(iv)(A) and (B),

(1) If the potential to emit of the major stationary source is less than the PAL, the Department shall adjust the PAL to a level no greater th an the potential to emit of the source; and

(2) The Department shall not approve a renewed PAL level higher than the current PAL, unless the major stationary source has complied with the provisions of paragraph (i)(11) (increasing a PAL).

(v) If the compliance date for a State or Federal re quirement that applies to the PAL source occurs during the PAL effective period, and if the Department has not already adjusted for such requirement, the PAL shall be adjusted at the time of PAL permit rene wal or title V permit renewal, whichever occurs first.

(11) Increasing a PAL during the PAL effective period.

(i) The Department may increase a PAL emission limitation only if the major stationary source complies with the provisions in paragraphs (i)(11)(i)(A) through (D).

(A) The owner or operator of the major stationary source shall submit a complete application to request an increase in the PAL limit for a PAL major modification. Such application shall identify the emissions unit(s) contributing to th e increase in emissions so as to cause the major stationary source's emissions to equal or exceed its PAL.

(B) As part of this application, the major sta tionary source owner or operator shall demonstrate

that the sum of the baseline actual emissions of the small emissions units, plus the sum of the baseline actual emissions of the significant and major emissi ons units assuming application of BACT equivalent controls, plus the sum of the allowable emissions of the new or modified emissions unit(s) exceeds the

PAL. The level of control that would result from BACT equivalent controls on each significant or major emissions unit shall be determined by conducting a ne w BACT analysis at the time the application is submitted, unless the emissions unit is currently requir ed to comply with a BACT or LAER requirementS.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 25

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Proposed effective date: February 25, 2011 that was established within the preceding 10 years. In such a case, the assumed control level for that emissions unit shall be equal to the level of BACT or LAER with which that emissions unit must currently comply.

(C) The owner or operator obtains a major NSR permit for all emissions unit(s) identified in paragraph (i)(11)(i)(A), regardless of the magnitude of the emissions increase resulting from them (that is, no significant levels apply). These emissions unit(s) shall comply with any emissions requirements resulting from the nonattainment major NSR program pr ocess (for example, LAER), even though they have also become subject to the PAL or continue to be subject to the PAL.

(D) The PAL permit shall require that the increased PAL level shall be effective on the day any emissions unit that is part of the PAL major modification becomes operational and begins to emit the PAL pollutant.

(ii) The Department shall calculate the new PAL as the sum of the allowable emissions for each modified or new emissions unit, plus the sum of the baseline actual emissions of the significant and major emissions units (assuming application of BACT equi valent controls as determined in accordance with paragraph (i)(11)(i)(B)), plus the sum of the base line actual emissions of the small emissions units.

(iii) The PAL permit shall be revised to reflect the increased PAL level pursuant to the public notice requirements of paragraph (i)(5).

(12) Monitoring requirements for PALs

.

(i) General Requirements.

(A) Each PAL permit must contain enforceable requirements for the monitoring system that accurately determines plantwide emissions of the PAL pollutant in terms of mass per unit of time. Any monitoring system authorized for use in the PA L permit must be based on sound science and meet generally acceptable scientific procedures for da ta quality and manipulation. Additionally, the information generated by such system must meet minimum legal requirements for admissibility in a judicial proceeding to enforce the PAL permit.

(B) The PAL monitoring system must employ one or more of the four general monitoring approaches meeting the minimum requirements set fo rth in paragraphs (i)(12)(ii)(A) through (D) and must be approved by the Department.

(C) Notwithstanding paragraph (i)(12)(i)(B), you may also employ an alternative monitoring approach that meets paragraph (i)(12)(i )(A) if approved by the Department.

(D) Failure to use a monitoring system that meets the requirements of this regulation renders the

PAL invalid.

(ii) Minimum Performance Requirements for Appr oved Monitoring Approaches. The following are acceptable general monitoring approaches when conducte d in accordance with the minimum requirements in paragraphs (i)(12)(iii) through (ix):

(A) Mass balance calculations for activities using coatings or solvents;

(B) Continuous emissions monitoring system (CEMS);S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 26

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Proposed effective date: February 25, 2011 (C) Continuous parameter monitoring system (CPM S) or Predictive emissions monitoring system (PEMS); and

(D) Emission Factors.

(iii) Mass Balance Calculations. An owner or opera tor using mass balance calculations to monitor PAL pollutant emissions from activities using coating or solvents shall meet the following requirements:

(A) Provide a demonstrated means of validating the published content of the PAL pollutant that is contained in or created by all materials used in or at the emissions unit;

(B) Assume that the emissions unit emits all of the PAL pollutant that is contained in or created by any raw material or fuel used in or at the emissions unit, if it cannot otherwise be accounted for in the process; and

(C) Where the vendor of a material or fuel, which is used in or at the emissions unit, publishes a range of pollutant content from such material, the ow ner or operator must use the highest value of the range to calculate the PAL pollutant emissions unless the Department determines there is site-specific data or a site-specific monitoring program to support another content within the range.

(iv) CEMS. An owner or operator using CEMS to monitor PAL pollutant emissions shall meet the following requirements:

(A) CEMS must comply with applicable Perform ance Specifications found in 40 CFR part 60, appendix B; and

(B) CEMS must sample, analyze and record data at least every 15 minutes while the emissions unit is operating.

(v) CPMS or PEMS. An owner or operator using CPMS or PEMS to monitor PAL pollutant emissions shall meet the following requirements:

(A) The CPMS or the PEMS must be based on current site-specific data demonstrating a correlation between the monitored parameter(s) and the PAL pollutant emissions across the range of operation of the emissions unit; and

(B) Each CPMS or PEMS must sample, analyze, and record data at least every 15 minutes, or at another less frequent interval approved by the Department, while the emissions unit is operating.

(vi) Emission factors. An owner or operator us ing emission factors to monitor PAL pollutant emissions shall meet the following requirements:

(A) All emission factors shall be adjusted, if a ppropriate, to account for the degree of uncertainty or limitations in the factors' development;

(B) The emissions unit shall operate within the desi gnated range of use for the emission factor, if applicable; and

(C) If technically practicable, the owner or operato r of a significant emissions unit that relies on an emission factor to calculate PAL pollutant emissions shall conduct validation tes ting to determine a sitespecific emission factor within 6 months of PAL pe rmit issuance, unless the Department determines thatS.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 27

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Proposed effective date: February 25, 2011 testing is not required.

(vii) A source owner or operator must record and report maximum potential emissions without considering enforceable emission limitations or opera tional restrictions for an emissions unit during any period of time that there is no monitoring data, un less another method for determining emissions during such periods is specified in the PAL permit.

(viii) Notwithstanding the requirements in paragraphs (i)(12)(iii) through (vii), where an owner or operator of an emissions unit cannot demonstrate a correlation between the monitored parameter(s) and the PAL pollutant emissions rate at all operating points of the emissions unit, the Department shall, at the time of permit issuance:

(A) Establish default value(s) for determining compliance with the PAL based on the highest potential emissions reasonably estimated at such operating point(s); or

(B) Determine that operation of the emissions unit during operating conditions when there is no correlation between monitored paramete r(s) and the PAL pollutant emissions is a violation of the PAL.

(ix) Re-validation. All data used to establish the PAL pollutant must be re-validated through performance testing or other scientifically valid mean s approved by the Department. Such testing must occur at least once every 5 year s after issuance of the PAL.

(13) Recordkeeping requirements

.

(i) The PAL permit shall require an owner or operator to retain a copy of all records necessary to determine compliance with any requirement of paragra ph (i) and of the PAL, including a determination of each emissions unit's 12-month rolling total emission s, for 5 years from the date of such record.

(ii) The PAL permit shall require an owner or opera tor to retain a copy of the following records for the duration of the PAL effective period plus 5 years:

(A) A copy of the PAL permit application and an y applications for revisions to the PAL; and

(B) Each annual certification of compliance pursuan t to title V and the data relied on in certifying the compliance.

(14) Reporting and notification requirements

. The owner or operator shall submit semi-annual monitoring reports and prompt deviation reports to th e Department in accordance with the applicable title V operating permit program. The reports shall meet the requirements in paragraphs (i)(14)(i) through (iii).

(i) Semi-Annual Report. The semi-annual report shall be submitted to the Department within 30 days of the end of each reporting period. This report sha ll contain the information required in paragraphs (i)(14)(i)(A) through (G).

(A) The identification of owner a nd operator and the permit number.

(B) Total annual emissions (tons/year) based on a 12-month rolling total for each month in the reporting period recorded pursuant to paragraph (i)(13)(i).

(C) All data relied upon, including, but not limited to, any Quality Assurance or Quality Control data, in calculating the monthly and annual PAL pollutant emissions.S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 28

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Proposed effective date: February 25, 2011 (D) A list of any emissions units modified or added to the major stationary source during the preceding 6-month period.

(E) The number, duration, and cause of any devia tions or monitoring malfunctions (other than the time associated with zero and span calibrati on checks), and any corrective action taken.

(F) A notification of a shutdown of any monitoring system, whether the shutdown was permanent or temporary, the reason for the shutdown, the anticip ated date that the monitoring system will be fully operational or replaced with another monitoring syst em, and whether the emissions unit monitored by the monitoring system continued to operate, and the cal culation of the emissions of the pollutant or the number determined by method included in the permit, as provided by paragraph (i)(12)(vii).

(G) A signed statement by the responsible official (as defined by Regulation 61-62.70, Title V Operating Permit Program ) certifying the truth, accuracy, and completeness of the information provided in the report.

(ii) Deviation report. The major stationary source ow ner or operator shall promptly submit reports of any deviations or exceedance of the PAL require ments, including periods where no monitoring is available. A report submitted pursuant to 40 CFR 70.6(a)(3)(iii)(B) shall satisfy this reporting requirement. The deviation reports shall be submitted w ithin the time limits prescribed by the applicable program implementing 40 CFR 70.6(a)(3)(iii)(B). The reports shall contain the following information:

(A) The identification of owner a nd operator and the permit number;

(B) The PAL requirement that experienced the deviation or that was exceeded;

(C) Emissions resulting from the deviation or the exceedance; and

(D) A signed statement by the responsible official (as defined by the applicable title V operating permit program) certifying the truth, accuracy, and co mpleteness of the information provided in the

report.

(iii) Re-validation results. The owner or operator shall submit to the Department the results of any revalidation test or method within 3 months after completion of such test or method.

(15) Transition requirements

.

(i) The Department may not issue a PAL that does not comply with the requirements in paragraphs (aa)(1) through (15) after the date these provisions become effective.

(ii) The Department may supersede any PAL which was establis hed prior to the date of approval of the plan by the Administrator with a PAL that co mplies with the requirements of paragraphs (i)(1) through (15).

(j) If any provision of this regulation, or the appli cation of such provision to any person or circumstance, is held invalid, the remainder of this regulation, or the application of such provision to persons or

circumstances other than those as to which it is held invalid, shall not be affected thereby.S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 29

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Proposed effective date: February 25, 2011 R. 61-62.5, Standard No. 7 History - South Carolina State Register : Vol. 29, Issue No. 6. (Doc. No. 2943), June 24, 2005; Vol. 33, Issue No. 4, (Doc. No. 4056), April 24, 2009.S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 1

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Proposed effective date: February 25, 2011 SOUTH CAROLINA

DEPARTMENT OF HEALTH AND ENVIRONMENTAL CONTROL

AIR POLLUTION CONTROL REGULATIONS AND STANDARDS

REGULATION 61-62.5

AIR POLLUTION CONTROL STANDARDS

STANDARD NO. 7.1 NONATTAINMENT NEW SOURCE REVIEW (NSR)

(a) Applicability

(1) This rule applies to all major stationary sour ces constructed or modified in any nonattainment area as designated in 40 CFR 81.341 ("nonattainment area") if the emissions from such facility will cause or contribute to concentrations of a regulated NSR pollu tant (as defined in paragraph (c)(13)) for which the nonattainment area was designated as nonattainment. Appli cability to this regulation shall be based on the pollutant emission rate set out in paragraph (c)( 14) for only those pollutants for which the area’s designation is based.

(A) The requirements of paragraph (d) apply to the construction of any new major stationary source or the major modification of any existing major stati onary source, except as prov ided in paragraph (b).

(B) No new major stationary source or major m odification to which the requirements of paragraph (d) apply shall begin actual construc tion without a permit that states that the major stationary source or major modification will meet those requirements. The De partment has authority to issue any such permit.

(2) Redesignation to attainment . If any nonattainment area to which this regulation applies is later designated in 40 CFR 81.341 as attainment, all sour ces in that nonattainment area subject to this regulation before the redesignation date shall continue to comply with this regulation.

(3) For any area designated as nonattainment a major stationary source or major modification that is major for volatile organic compounds or oxid es of nitrogen is also major for ozone.

(b) Applicability procedures.

(1) Except as otherwise provided in paragraphs (b)(7) and (8), and consistent with the definition of major modification contained in paragraph (c)(6)(A), a project is a major modification for a regulated NSR pollutant if it causes two types of emissions in creases – a significant emissions increase (as defined in paragraph (c)(15), and a significant net emissions increase (as defined in paragraphs (c)(8) and (15). The project is not a major modification if it does not cause a significant emissions increase. If the project causes a significant emissions increase, then the project is a major modification only if it also results in a significant net emissions increase.

(2) The procedure for calculating (before beginning actual construction) whether a significant emissions increase ( i.e. , the first step of the process) will occur depends upon the type of emissions units being modified, according to paragraphs (b)(1) thr ough (6). The procedure for calculating (before beginning actual construction) whether a significan t net emissions increase will occur at the major stationary source ( i.e. , the second step of the process) is contai ned in the definition in paragraph (c)(8). Regardless of any such preconstruc tion projections, a major modification results if the project causes a significant emissions increase and a significant net emissions increase.S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 2

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Proposed effective date: February 25, 2011 (3) Actual-to-projected-actual applicability test for pr ojects that only involve existing emissions

units

. A significant emissions increase of a regulated NSR po llutant is projected to occur if the sum of the difference between the projected actual emissions (as defined in paragraph (c)(11)) and the baseline actual emissions (as defined in pa ragraphs (c)(2)(A) and (B), as applicab le), for each existing emissions unit, equals or exceeds the significant amount for that pollutant (as defined in paragraph (c)(14)).

(4) Actual-to-potential test for projects that only involve construction of a new emissions unit(s)

. A significant emissions increase of a regulated NSR pollutant is projected to occur if the sum of the difference between the potential to emit (as defined in paragraph (b)(37) of Re gulation 61-62.5 Standard

7, “ Prevention of Significant Deterioration ” (“Standard 7”)) from each new emissions unit following completion of the project and the baseline actual emissions (as defined in paragraph (c)(2)(C)) of these units before the project equals or exceeds the sign ificant amount for that pollutant (as defined in paragraph (c)(14)).

(5) [Reserved]

(6) Hybrid test for projects that involve multiple types of emissions units

. A significant emissions increase of a regulated NSR pollutant is projected to occur if the sum of the emissions increases for each emissions unit, using the method specified in paragra phs (b)(3) and (4) as applicable with respect to each emissions unit, for each type of emissions unit equals or exceeds the significant amount for that pollutant (as defined in paragraph (c)(14)).

(7) For any major stationary source for a Plantw ide Applicability Limitation (PAL) for a regulated NSR pollutant, the major stationary source shall comply with requirements under paragraph (i).

(c) Definitions. The following definitions apply to this Standa rd only. Any other term contained within

this Standard is as defined where indicate d in Regulation 61-62.5, Standard 7, “ Prevention of Significant

Deterioration. ”

(1)(A) “Actual emissions” means the actual rate of emissions of a regulated NSR pollutant from an emissions unit, as determined in accordance with paragraphs (c)(1)(B) through (D), except that this definition shall not apply for calculating whether a significant emissions increase has occurred, or for establishing a PAL under paragraph (i). Instead, paragraphs (c)(2) and (c)(11) shall apply for those

purposes.

(B) In general, actual emissions as of a particular date shall equal the average rate, in tons per year, at which the unit actually emitted the pollutant durin g a consecutive 24-month period which precedes the particular date and which is repr esentative of normal source operation. The Department shall allow the use of a different time period upon a determination that it is more representative of normal source operation. Actual emissions shall be calculated using the unit's actual operating hours, production rates, and types of materials processed, stored, or combusted during the selected time period.

(C) The Department may presume that source-specific allowable emissions for the unit are equivalent to the actual emissions of the unit.

(D) For any emissions unit that has not begun normal operations on the particular date, actual emissions shall equal the potential to emit of the unit on that date.

(2) “Baseline actual emissions” means the rate of emissions, in tons per year, of a regulated NSR pollutant, as determined in accordance w ith paragraphs (c)(2)(A) through (D).S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 3

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Proposed effective date: February 25, 2011 (A) For any existing electric utility steam ge nerating unit, baseline actual emissions means the average rate, in tons per year, at which the unit actually emitted the pollutant during any consecutive 24- month period selected by the owner or operator within the 5-year period immediately preceding when the owner or operator begins actual c onstruction of the project. The Department shall allow the use of a different time period upon a determination that it is more representative of normal source operation.

(i) The average rate shall include fugitive em issions to the extent quantifiable, and emissions associated with startups, and shutdowns.

(ii) The average rate shall be adjusted dow nward to exclude any non-compliant emissions that occurred while the source was operating above any emission limitation that was legally enforceable during the consecutive 24-month period.

(iii) For a regulated NSR pollutant, when a project involves multiple emissions units, only one consecutive 24-month period must be used to determ ine the baseline actual emissions for the emissions units being changed. A different consecutive 24-month period can be used for each regulated NSR pollutant.

(iv) The average rate shall not be based on any consecutive 24-month peri od for which there is inadequate information for determin ing annual emissions, in tons per y ear, and for adjusting this amount if required by paragraph (c)(2)(A)(ii).

(B) For an existing emissions unit (other than an electric utility steam generating unit), baseline actual emissions means the average rate, in tons per year, at which the emissions unit actually emitted the pollutant during any consecutive 24-month period selected by the owner or operator within the 10-year period immediately preceding either the date the ow ner or operator begins act ual construction of the project, or the date a complete permit application is received by the Department for a permit required either under this section or under a plan approved by th e Administrator whichever is earlier, except that the 10-year period shall not include any period earlier than November 15, 1990. The Department reserves the right to determine if the 24-m onth period selected is appropriate.

(i) The average rate shall include fugitive em issions to the extent quantifiable, and emissions associated with startups and shutdowns.

(ii) The average rate shall be adjusted dow nward to exclude any non-compliant emissions that occurred while the source was operating above an emi ssion limitation that was legally enforceable during the consecutive 24-month period.

(iii) The average rate shall be adjusted dow nward to exclude any emissions that would have exceeded an emission limitation with which the major stationary source must currently comply, had such major stationary source been required to comply w ith such limitations during the consecutive 24-month period. However, if an emission limitation is part of a maximum achievable control technology standard that the Administrator proposed or promulgated under 40 CFR 63, the baseline actual emissions need only be adjusted if the State has taken credit for such emissions reductions in an attainment demonstration or maintenance plan consistent with th e requirements of paragraph (d)(1)(c)(viii).

(iv) For a regulated NSR pollutant, when a project involves multiple emissions units, only one consecutive 24-month period must be used to determ ine the baseline actual emissions for the emissions units being changed. A different consecutive 24-month period can be used for each regulated NSR pollutant.S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 4

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Proposed effective date: February 25, 2011 (v) The average rate shall not be based on any consecutive 24-month period for which there is inadequate information for determin ing annual emissions, in tons per y ear, and for adjusting this amount if required by paragraphs (c)(2)(B)(ii) and (iii).

(C) For a new emissions unit, the baseline ac tual emissions for purposes of determining the

emissions increase that will result from the initial cons truction and operation of such unit shall equal zero; and thereafter, for all other purposes, sh all equal the unit's potential to emit.

(D) For a PAL for a major stationary source, th e baseline actual emissions shall be calculated for existing electric utility steam generating units in acco rdance with the procedures contained in paragraph (c)(2)(A), for other existing emissions units in acco rdance with the procedures contained in paragraph (c)(2)(B), and for a new emissions unit in accordan ce with the procedures contained in paragraph (c)(2)(C).

(3) “Best available control technology (BACT)” means an emissions limitation (including a visible emissions standard) based on the maximum degree of reduction for each regulated NSR pollutant which would be emitted from any proposed major stati onary source or major modification which the Department, on a case-by-case basis, taking into account energy, environmental, and economic impacts and other costs, determines is achievable for su ch source or modification through application of production processes or available methods, systems, and techniques, including fuel cleaning or treatment or innovative fuel combustion techniques for control of such pollutant. In no event shall application of best available control technology result in emissions of any pollutant which would exceed the emissions allowed by any applicable standard under 40 CFR 60 or 61. If the Department determines that technological or economic limitations on the applica tion of measurement methodology to a particular emissions unit would make the imposition of an emissions standard infeasible, a design, equipment, work practice, operational standard, or combination ther eof, may be prescribed instead to satisfy the requirement for the application of BACT. Such sta ndard shall, to the degree possible, set forth the emissions reduction achievable by implementation of such design, equipment, work practice or operation, and shall provide for compliance by m eans which achieve equivalent results.

(4) [Reserved]

(5) “Lowest achievable emission rate (LAER)” means, for any source, the more stringent rate of emissions based on the following:

(A) The most stringent emissions limitation which is contained in the implementation plan of any State for such class or category of stationary so urce, unless the owner or operator of the proposed stationary source demonstrates that such limitations are not achievable; or

(B) The most stringent emissions limitation which is achieved in practice by such class or category of stationary sources. This limitation, when app lied to a modification, means the lowest achievable

emissions rate for the new or modified emissions units within a stationary sour ce. In no event shall the application of the term permit a pr oposed new or modified stationary source to emit any pollutant in excess of the amount allowable under an appli cable new source standard of performance.

(6)(A) “Major modification” means any physical change in or change in the method of operation of a major stationary source that would result in:

(i) A significant emissions increase of a regulated NSR pollutant (as defined in paragraph (c)(13));

andS.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 5

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Proposed effective date: February 25, 2011 (ii) A significant net emissions increase of that pollutant from the major stationary source.

(B) Any significant emissions increase (as defined in paragraph (c)(15)) from any emissions units or net emissions increase (as defined in paragraph (c)(8)) at a major stationary source that is significant for volatile organic compounds or oxides of nitroge n shall be considered significant for ozone.

(C) A physical change or change in the method of operation shall not include:

(i) Routine maintenance, repair and replacement;

(ii) Use of an alternative fuel or raw material by reason of an order under sections 2(a) and (b) of the Energy Supply and Environmental Coordination Act of 1974 (or any superseding legislation) or by reason of a natural gas curtailment plan pursuant to the Federal Power Act;

(iii) Use of an alternative fuel by reason of an order or rule section 125 of the Clean Air Act;

(iv) Use of an alternative fuel at a steam gene rating unit to the extent that the fuel is generated from municipal solid waste;

(v) Use of an alternative fuel or raw material by a stationary source which;

(a) The source was capable of accommodating before December 21, 1976, unless such change would be prohibited under any federally enfor ceable permit condition which was established after

December 12, 1976, or

(b) The source is approved to use under an y permit issued under regulations approved pursuant

to this section;

(vi) An increase in the hours of operation or in the production rate, unless such change is prohibited under any federally enforceable permit condition which was established after December 21,

1976.

(vii) Any change in ownership at a stationary source.

(viii) [Reserved]

(ix) The installation, operation, cessation, or removal of a temporary clean coal technology demonstration project, provided that the project complies with:

(a) The South Carolina State Implementation Plan, and

(b) Other requirements necessary to attain and maintain the national ambient air quality standard during the project and after it is terminated.

(D) This definition shall not apply with respect to a particular regulated NSR pollutant when the major stationary source is complying with the re quirements under paragraph (i) for a PAL for that pollutant. Instead, the definition at paragraph (i)(2)(viii) shall apply.

(7)(A) “Major stationary source” means:S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 6

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Proposed effective date: February 25, 2011 (i) Any stationary source of air pollutants which emits, or has the potential to emit 100 tons per year or more of any regulated NSR pollutant, or

(ii) Any physical change that would occur at a stationary source not qualifying under paragraph (c)(7)(A)(i) as a major stationary source, if the ch ange would constitute a major stationary source by

itself.

(B) A major stationary source that is major for volatile organic compounds or oxides of nitrogen shall be considered major for ozone.

(C) The fugitive emissions of a stationary source shall not be included in determining for any of the purposes of this paragraph whether it is a major stati onary source, unless the source belongs to one of the following categories of stationary sources:

(i) Coal cleaning plants (with thermal dryers);

(ii) Kraft pulp mills;

(iii) Portland cement plants;

(iv) Primary zinc smelters;

(v) Iron and steel mills;

(vi) Primary aluminum ore reduction plants;

(vii) Primary copper smelters;

(viii) Municipal incinerators capable of char ging more than 250 tons of refuse per day;

(ix) Hydrofluoric, sulfuric, or nitric acid plants;

(x) Petroleum refineries;

(xi) Lime plants;

(xii) Phosphate rock processing plants;

(xiii) Coke oven batteries;

(xiv) Sulfur recovery plants;

(xv) Carbon black plants (furnace process);

(xvi) Primary lead smelters;

(xvii) Fuel conversion plants;

(xviii) Sintering plants;

(xix) Secondary metal production plants;S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 7

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Proposed effective date: February 25, 2011 (xx) Chemical process plants – The term ch emical processing plant shall not include ethanol production facilities that produce ethanol by natura l fermentation included in NAICS codes 325193 or

312140;

(xxi) Fossil-fuel boilers (or combination ther eof) totaling more than 250 million British thermal units per hour heat input;

(xxii) Petroleum storage and transfer units w ith a total storage capacity exceeding 300,000 barrels;

(xxiii) Taconite ore processing plants;

(xxiv) Glass fiber processing plants;

(xxv) Charcoal production plants;

(xxvi) Fossil fuel-fired steam electric plants of more than 250 million British thermal units per hour heat input; and

(xxvii) Any other stationary source category which, as of August 7, 1980, is being regulated under

section 111 or 112 of the Clean Air Act.

(8)(A) “Net emissions increase” means, with respect to any regulated NSR pollutant emitted by a major stationary source, the amount by which the sum of the following exceeds zero:

(i) The increase in emissions from a particular physical change or change in the method of operation at a stationary source as calcul ated pursuant to paragraph (b); and

(ii) Any other increases and decreases in actual emissions at the major stationary source that are contemporaneous with the particular change and are otherwise creditable. Baseline actual emissions for calculating increases and decreases under this paragraph (c)(8)(A)(ii) sha ll be determined as provided in paragraph (c)(2), except that paragraphs (c )(2)(A)(iii) and (c)(2)(B)(iv) shall not apply.

(B) An increase or decrease in actual emissions is contemporaneous with the increase from the particular change only if it occurs before the date that the increase from the particular change occurs;

(C) An increase or decrease in actual emissions is creditable only if:

(i) It occurs within five years before constr uction on the particular change commences; and

(ii) The Department has not relied on it in issuing a permit for the source, which permit is in effect when the increase in actual emissions from the particular change occurs.

(D) An increase in actual emissions is creditable onl y to the extent that the new level of actual

emissions exceeds the old level.

(E) A decrease in actual emissions is creditable only to the extent that:

(i) The old level of actual emission or the old le vel of allowable emissions whichever is lower,

exceeds the new level of actual emissions;S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 8

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Proposed effective date: February 25, 2011 (ii) It is enforceable as a practical matter at and after the time that actual construction on the particular change begins; and

(iii) The Department has not relied on it in issui ng any permit or the Department has not relied on it in demonstrating attainment or reasonable further progress;

(iv) It has approximately the same qualitative signi ficance for public health and welfare as that attributed to the increase from the particular change.

(F) An increase that results from a physical change at a source occurs when the emissions unit on which construction occurred becomes operational and begins to emit a particular pollutant. Any replacement unit that requires shakedown becomes ope rational only after a reasonable shakedown period, not to exceed 180 days.

(G) Paragraph (c)(1)(B) shall not apply for determining creditable increases and decreases or after a change.

(9) “Nonattainment major new source review (NSR) program” means a major source preconstruction permit program that has been approved by the Administrator and incorporated into the plan to implement the requirements of this regulati on, or a program that impl ements 40 CFR 51, appendix S, Sections I through VI. Any permit issued under such a program is a major NSR permit.

(10) [Reserved]

(11)(A) “Projected actual emissions” means, the maximum annual rate, in tons per year, at which an existing emissions unit is projected to emit a regulated NSR pollutant in any one of the 5 years (12-month period) following the date the unit resumes regular ope ration after the project, or in any one of the 10 years following that date, if the project involves increasing the emissions unit's design capacity or its potential to emit of that regulated NSR pollutant and full utilization of the unit would result in a significant emissions increase or a significant net emissions increase at the major stationary source.

(B) In determining the projected actual emissi ons under paragraph (c)(11) (A) before beginning actual construction, the owner or opera tor of the major stationary source: (i) Shall consider all relevant information, incl uding but not limited to, historical operational data, the company's own representations, the company's e xpected business activity and the company's highest projections of business activity, the company's filings with the State or Federal regulatory authorities, and compliance plans under the approved plan; and

(ii) Shall include fugitive emissions to the extent quantifiable, and emissions associated with startups, and shutdowns; and

(iii) Shall exclude, in calculating any increase in em issions that results from the particular project, that portion of the unit's emissions following the pr oject that an existing unit could have accommodated during the consecutive 24-month period used to estab lish the baseline actual emissions under paragraph (c)(2) and that are also unrelated to the particul ar project, including any increased utilization due to product demand growth; or,

(iv) In lieu of using the method set out in paragraphs (c)(11)(B)(i) through (iii) may elect to use the emissions unit's potential to emit, in tons per y ear, as defined under paragra ph (b)(37) of Standard 7.

(12) “Prevention of Significant Deterioration (PSD) permit” means any permit that is issued underS.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 9

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Proposed effective date: February 25, 2011 a major source preconstruction permit program that has been approved by the Administrator and incorporated into the plan to implement the requirements of 40 CFR 51.166, or under the program in 40

CFR 52.21.

(13) “Regulated NSR pollutant,” for purposes of this regulation, means the following:

(A) Oxides of nitrogen or any volatile organic compounds;

(B) Any pollutant for which a national ambient air quality standard has been promulgated; or

(C) Any pollutant that is a constituent or precurs or of a general pollutant listed under paragraphs (c)(13)(A) or (B), provided that a constituent or precursor pollutant may only be regulated under NSR as part of regulation of the general pollutant. Precursor s identified by the Administrator for purposes of NSR are the following:

(a) Volatile organic compounds and nitrogen oxides are precurs ors to ozone in all ozone

nonattainment areas;

(b) Sulfur dioxide is a precursor to PM 2.5 in all PM 2.5 nonattainment areas;

(c) Nitrogen oxides are presumed to be precursors to PM 2.5 in all PM 2.5 nonattainment areas,

unless the State demonstrates to the Administrator’s satisfaction or EPA demonstrates that emissions of nitrogen oxides from sources in a specific area are not a significant contributor to that area’s ambient PM

2.5 concentrations;

(d) Volatile organic compounds and ammonia ar e presumed not to be precursors to PM 2.5 in

any PM 2.5 nonattainment area, unless the State demonstrat es to the Administrator’s satisfaction or EPA demonstrates that emissions of volatile organic co mpounds or ammonia from sources in a specific area are a significant contributor to that area’s ambient PM 2.5 concentrations; or

(D) PM 2.5 emissions and PM 10 emissions shall include gaseous emissions from a source or activity which condense to form particulate matter at ambient temperatures. On or after January 1, 2011 (or any earlier date established in the upcoming rulemaking codifying test methods), such condensable particulate matter shall be accounted for in appli cability determinations and in establishing emissions

limitations for PM 2.5 and PM 10 in permits issued under this ruling. Compliance with emissions limitations

for PM 2.5 and PM 10 issued prior to this date shall not be based on condensable particulate matter unless required by the terms and conditions of the permit or the applicable implementation plan. Applicability determinations made prior to this date without accounting for condensable partic ulate matter shall not be

considered in violation of this section unless the a pplicable implementation plan required condensable particulate matter to be included.

(14) “Significant” means, in reference to a net emissions increase or the potential of a source to emit any of the following pollutants, as rate of emissions that would equal or exceed any of the following rates:

Pollutant Emission Rate

Carbon monoxide: 100 tons per year (tpy)

Nitrogen oxides: 40 tpy

Particulate matter:S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 10

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Proposed effective date: February 25, 2011 15 tpy of PM 10 emissions 10 tpy of direct PM 2.5 ; 40 tpy of sulfur dioxide emissions; 40 tpy of nitrogen oxide emissions unless demonstrated not to be a PM 2.5 precursor under paragraph

13 of this section

Sulfur dioxide: 40 tpy

Ozone: 40 tpy of volatile organic compounds or oxides of nitrogen

Lead: 0.6 tpy

(15) “Significant emissions increase” means, for a regulated NSR pollutant, an increase in emissions that is significant (as defined in paragraph (c)(14)) for that pollutant.

(16) “Volatile organic compounds (VOC)” is as defined in Regulation 61-62.1, Section I, Definitions

.

(d) Permitting requirements

(1) Conditions for approval . If the Department finds that the major stationary source or major modification would be constructed in an area designated in 40 CFR 81.341 as nonattainment for a pollutant for which the stationary source or modifi cation is major, approval may be granted only if the following conditions are met:

(A) The major stationary source or major modi fication is required to meet an emission limitation which specifies the lowest achievable em ission rate (LAER) for such source.

(B) The applicant must certify that all existing ma jor sources owned or operated by the applicant (or any entity controlling, controlled by, or under common control with the applicant) in the same State as the proposed source are in compliance wi th all applicable emission limitati ons and standards under the Clean Air Act (or are in compliance with an expeditious sche dule which is Federally enforceable or contained in a court decree).

(C) The owner or operator of the proposed new major stationary source or major modification will obtain sufficient emission reductions of the nonattainment pollutant from other sources. Emission reductions shall be in effect and enforceable prior to the date the new source or modification commences operation. The emission reductions shall be obtained in accordance with the following provisions:

(i) Where the permitted emissions limit allows great er emissions than the potential to emit of the source, emissions offset credit will be allo wed only for control below this potential;

(ii) For an existing fuel combustion source, credit shall be based on the allowable emissions for the type of fuel being burned at the time the appli cation to construct is filed. If the existing source

commits to switch to a cleaner fuel at some future date, emissions offset credit based on the allowable (or actual) emissions for the fuels involved is not acceptable, unless the permit is conditioned to require the use of a specified alternative control measure which would achieve the same degree of emissions

reduction should the source switch back to a dirtier fuel at some later date.

(iii)(a) Emissions reductions achieved by shutting down an existing source or curtailingS.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 11

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Proposed effective date: February 25, 2011 production or operating hours below b aseline levels may be generally credited if such reductions are permanent, quantifiable, federally enforceable, occurred on or after the date of the most recent emissions inventory, and if the area has an EPA-approved attainment plan.

(b) Such reductions may be credited if the s hutdown or curtailment occurred on or after the date the new source permit application is filed, or, if the applicant can establish that the proposed new source is a replacement for the shutdown or curtailed s ource, and the cutoff date provision of paragraph (d)(C)(iii)(a) are observed.

(iv) No emissions credit may be allowed for re placing one hydrocarbon compound with another of lesser reactivity, except for those compounds listed in Table 1 of EPA's "Recommended Policy on Control of Volatile Organic Compounds" (42 FR 35314, July 8, 1977);

(v) All emission reductions claimed as offset cred it shall be federally enforceable and surplus;

(a) Eligibility as Emission Offsets . Any facility that has the potential to emit any NAAQS pollutant in an amount greater than 5 tons per y ear and that is located in a federally-designated nonattainment area shall be eligible to create emission offsets.

(1) To be eligible to be an emission offset:

(A) A reduction in emissions shall be real, permanent, quantifiable, enforceable, and surplus and must have occurred after December 31 of th e base year inventory for t hose pollutants that are designated nonattainment by the EPA. The base year inve ntory date is two years preceding the date of nonattainment designation. Howeve r, the Department may choose to consider a prior shutdown or curtailment to have occurred after the last day of th e base year if the projected emissions inventory used to develop the attainment demonstr ation explicitly includes the emissi ons from such previously shutdown

or curtailed emission units.

(B) Emission reductions shall have been created by a facility that has obtained an enforceable air quality permit or letter of permit cancellation resulting from the surrender of the source’s permit(s).

(2) Emission reductions may be created by any or a combination of the following methods:

(A) Installation of control equipment beyond what is necessary to comply with existing requirements;

(B) A change in process inputs, form ulations, products or produc t mix, fuels, or raw

materials;

(C) A reduction in actual emission rates;

(D) A reduction in hours of operation;

(E) Production curtailment or reduction in throughput;

(F) Shutdown of emitting sources; or

(G) Any other enforceable method that the Department determines to result in real, permanent, quantifiable, enforceable, and surplus reduction of emissions.S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 12

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Proposed effective date: February 25, 2011 (3) A completed emissions offset submittal must be received by the Department within one year of the date of the creation of the reductions. Emission offsets not requested within one year of the

date of the creation of the reducti ons will be permanently retired. Prior to commencing operation of a permitted emissions unit, Department approval for the required emission offsets must be granted.

(4) The following are ineligible for emission offsets:

(A) Emission reductions that are not considered surplus, such as:

(i) Emission reductions that have pr eviously been used to avoid Regulation 61-62.5

Standard No. 7, Prevention of Significant Deterioration, or Regulation 61-62.5 Standard No. 7.1, Nonattainment New Source Review (NSR), through a netting demonstration;

(ii) Emission reductions of hazardous ai r pollutants, listed in Section 112(b) of the Clean Air Act, to the extent needed to comply with Regulation 61-62.61, National Emission Standards for Hazardous Air Pollutants (NESHAP) , and Regulation 61-62.63, National Emission Standards for Hazardous Air Pollutants (NESHAP) for Source Categories , (however, emission reductions of hazardous volatile organic compound (VOC) and/or hazardous par ticulate matter (PM) air pollutants beyond the amount of reductions necessary to comply with Regulation 61-62.61, NESHAP, and Regulation 61-62.63, NESHAP for Source Categories, are considered surplus);

(iii) Emission reductions of nitrogen oxides (NOx), sulfur dioxide (SO 2 ), particulate matter (PM) and VOCs to the extent needed to comply with Section 111 of the CAA and Regulation 61-

62.60, South Carolina Designated Facility Plan and New Source Performance Standards (NSPS)

, (however, emission reductions of VOCs, NOx, SO 2 , PM and VOCs beyond the amount of reductions necessary to comply with Regulation 61-62.60, South Carolina Designated Facility Plan and NSPS, are considered surplus);

(iv) Emission units covered under an agreement, order or variance for exceeding an emission standard until compliance is demonstrated with the emission standard that is the subject of the agreement, order or variance;

(v) Sources that have operated less than 12 months;

(vi) Emission reductions required in order to comply with any State or Federal regulation not listed above, unless these reductions are in excess of the amount required by the State or Federal regulation; or

(vii) Facilities that have received a Department transmittal letter notifying of permit cancellation due to the facility’s decision to close out its operating permit without a request to qualify facility emission reductions as offsets.

(b) Calculation of Emission Offsets

(1) The following procedure shall be followed to calculate emission offsets:

(A) The source shall calculate average annual actual emissions, in tons per year (tpy), before the emission reduction using data from the 24-month period immediately preceding the reduction in emissions. With the Department’s approval, the u se of a different time period, not to exceed 10 years immediately preceding the reduction in emissions, may be allowed if the owner or operator of the sourceS.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 13

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Proposed effective date: February 25, 2011 documents that such period is more representative of normal source operation, but not prior to the base year inventory date, which is the last day of the two years preceding the date of nonattainment designation; and

(B) The emission offsets created shall be calculated by subtracting the allowable emissions following the reduction from the average annual actual emissions prior to the reduction.

(2) For any emissions unit that has been operating for a consecutive period of at least 12 months but less than 24 months on the base year i nventory date, based on the unit’s potential to emit, emissions shall be calculated equal to the amount needed to complete a 24 month period on the base year inventory date.

(vi) Location of offsetting emissions. Emission offsets shall be obtained from sources currently operating within the same designated nonattainment ar ea as the new or modified stationary source. Emission offsets may be obtained from another nonatta inment area with the Department’s approval only if (a) the other area has an equal or higher nonatta inment classification than the area in which the proposed source is located and (b) emissions from the other area contribute to a violation of the NAAQS

in the nonattainment area in which the source is located.

(vii) Emission offsetting ratios . Emission offsets shall be required in nonattainment areas in accordance with the following provisions:

(a) Emissions for carbon monoxide (CO), nitrogen dioxide (NO 2 ), sulfur dioxide (SO 2 ), lead (Pb), and particulate matter (PM 10 and PM 2.5 ) nonattainment areas shall be offset at a ratio greater than

one to one.

(b) Emissions for ozone nonattainment are as shall be offset for volatile organic compounds (VOCs) and nitrogen oxides (NO

x ) in accordance with the following table:

Designation Offset ratios Subpart I >1 to 1 Marginal 1.1 to 1

Moderate 1.15 to 1

Serious 1.2 to 1

Severe 1.3 to 1

Extreme 1.5 to 1

(viii) Credit for an emissions reduction can be claimed to the extent that the Department has not relied on it in issuing any permit unde r regulations approved pursuant to 40 CFR part 51 subpart I or the Department has not relied on it in demonstrati ng attainment or reasonable further progress.

(ix) [Reserved]

(x) [Reserved]

(xi) The total tonnage of increas ed emissions, in tons per year, resulting from a major modification

that must be offset in accordance with section 173 of the Clean Air Act shall be determined by summing

the difference between the allowable emissions after the modification (as defined by paragraph (b)(3) of Standard 7) and the actual emissions before the mo dification (as defined in paragraph (c)(1)) for each

emissions unit.S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 14

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Proposed effective date: February 25, 2011 (D) The emission offsets must provide a positive net air quality benefit in the affected area as determined by 40 CFR 51, Appendix S, Emission Offset Interpretative Ruling

.

(E) Alternative Sites Analysis. An analysis of alternative sites, sizes, production processes, and environmental control techniques for such proposed source demonstrates that benefits of the proposed source significantly outweigh the environmental and so cial costs imposed as a result of its location,

construction, or modificati on shall be required.

(2) (A) Any owner or operator who c onstructs or operates a source or modification not in accordance with the application submitted pursuant to this section or with the terms of any approval to construct, or any owner or operator of a source or modification s ubject to this section who commences construction after the effective date of these regulations withou t applying for and receiving approval hereunder, shall be subject to appropriate enforcement action.

(B) Approval to construct shall become invalid if construction is not commenced within 18 months after receipt of such approval, if construction is di scontinued for a period of 18 months or more, or if construction is not completed within a reasonable tim e. The Department may extend the 18-month period upon a satisfactory showing that an extension is justif ied. This provision does not apply to the time period between construction of the approved phases of a phased construction project; each phase must

commence construction within 18 months of the projected and appr oved commencement date.

(C) Approval to construct shall not relieve an y owner or operator of the responsibility to comply fully with applicable provisions of the plan and an y other requirements under local, State or Federal law.

(D) At such time that a particular source or modification becomes a major stationary source or major modification solely by virtue of a relaxation in any enforcement limitation which was established after August 7, 1980, on the capacity of the source or m odification otherwise to emit a pollutant, such as a restriction on hours of operation, then the requirement s of regulations approved pursuant to this section shall apply to the source or modification as though construction had not yet commenced on the source or

modification;

(3) The following provisions apply to projects at existing emissions units at a major stationary source (other than projects at a source with a PAL) in circ umstances where there is a reasonable possibility that a project that is not a part of a major modificati on may result in a significant emissions increase and the owner or operator elects to use the method specif ied in paragraphs (c)(11)(B)(i) through (iii) for calculating projected actual emissions.

(A) If the project requires construction permitting under Regulation 61-62.1, Section II “ Permit Requirements, ” the owner or operator shall provide a copy of the information set out in paragraph (d)(3)(B) as part of the permit application to the Department. If constructi on permitting under Regulation

61-62.1, Section II “ Permit Requirements ” is not required, the owner or operator shall maintain the information set out in paragraph (d)(3).

(B) Before beginning actual construction of the project, the owner or operator shall document and maintain a record of the following information:

(i) A description of the project;

(ii) Identification of the emissions unit(s) whose emissions of a regulated NSR pollutant could be affected by the project; andS.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 15

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Proposed effective date: February 25, 2011 (iii) A description of the applicability test used to determine that the project is not a major modification for any regulated NSR pollutant, incl uding the baseline actual emissions, the projected actual emissions, the amount of emissions excluded unde r paragraph (c)(11)(B)(iii) and an explanation for why such amount was excluded, and a ny netting calculations, if applicable.

(C) The owner or operator shall monitor the emissi ons of any regulated NSR pollutant that could increase as a result of the project and that is emitte d by any emissions units identified in paragraph (d)(3)(B)(ii); and calculate and maintain a record of the annual emissions, in tons per year on a calendar year basis, for a period of 5 years following resumption of regular operations after the change, or for a period of 10 years following resumption of regular oper ations after the change if the project increases the design capacity or potential to emit of that re gulated NSR pollutant at such emissions unit.

(D) If the unit is an existing electric utility steam generating unit, the owner or operator shall submit a report to the Department within 60 days after the end of each year during which records must be generated under paragraph (d)(3)(B) setting out the unit's annual emissions during the year that preceded submission of the report.

(E) If the unit is an existing unit other than an electric utility steam generating unit, the owner or operator shall submit a report to the Department if th e annual emissions, in tons per year, from the project identified in paragraph (d)(3)(B), exceed the baselin e actual emissions (as doc umented and maintained pursuant to paragraph (d)(3)(B)(iii)), by a significant amount (as defined in paragraph (c)(14)) for that regulated NSR pollutant, and if such emissions di ffer from the preconstruction projection as documented and maintained pursuant to paragraph (d)(3)(B)(iii). Such report shall be submitted to the Department within 60 days after the end of such year. The report shall contain the following:

(i) The name, address and telephone numb er of the major stationary source;

(ii) The annual emissions as calculated pursuant to paragraph (d)(3)(C); and

(iii) Any other information needed for to make a compliance determination ( e.g. , an explanation as to why the emissions differ from the preconstruction projection).

(4) If a project at a source with a PAL requi res construction permitting under Regulation 61-62.1,

Section II, “ Permit Requirements, ” the owner or operator shall provide notification of source status as part of the permit application to the Department.

(5) The owner or operator of the source shall make the information required to be documented and maintained pursuant to paragraph (d)(3) for review up on a request for inspection by the Department or the general public pursuant to the requirements contained in 40 CFR 70.4(b)(3)(viii).

(6) Public Participation. Within 30 days after receip t of an application to cons truct, or any addition to such application, the Department shall advise the appli cant of any deficiency in the application or in the information submitted and transmit a copy of such appli cation to EPA. In the even t of such a deficiency, the date of receipt of the application shall be, for the purpose of this regulation, the date on which the Department received all required information.

(7) In accordance with Regulation 61-30, Environmental Protection Fees , the Department shall make a final determination on the application. This involves performing the following actions in a timely manner:

(i) For the purposes of this paragraph (d)(7), th e time frame for making a final determination shall beS.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 16

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Proposed effective date: February 25, 2011 consistent with R. 61-30, Environmental Protection Fees , paragraph (H)(2)(c)(iii).

(ii) Make a preliminary determination whethe r construction should be approved, approved with conditions, or disapproved.

(iii) Make available in at least one locati on in each region in which the proposed plant or

modification would be constructed a copy of all materials the applicant submitted, a copy of the preliminary determination and a copy or summary of other materials, if any, considered in making the preliminary determination.

(iv) Notify the public, by advertisement in a news paper of general circulation in each region in which the proposed plant or modification would be cons tructed, of the application, the preliminary determination, the degree of increment consumption th at is expected from the plant or modification, and the opportunity for comment at a public hearing as well as written public comment.

(v) Send a copy of the notice of public comment to the applicant, the Administrator of EPA, and to officials and agencies having cognizance over the loca tion where the proposed construction would occur as follows: The chief executives of the city and county where the plant or modification would be located, any comprehensive regional land use planning agency and any State, Federal Land Manager, or Indian Governing Body whose lands may be affected by emissions from the plant or modification.

(vi) Provide opportunity for a public hearing for interested persons to appear and submit written or oral comments on the air quality impact of the plant or modification, alternatives to the plant or modification, the control technology requir ed, and other appropriate considerations.

(vii) Consider all written comments submitted wi thin a time specified in the notice of public comment and all comments received at any public hearing(s) in making a final decision on the approvability of the application. No later than 10 da ys after the close of the public comment period, the applicant may submit a written res ponse to any comments submitted by the public. The Department shall consider the applicant’s response in making a final decision. The Department shall make all comments available for public inspection in the same lo cations where the Department made available preconstruction information relating to the proposed plant or modification.

(viii) Make a final determination whether construction should be a pproved, approved with

conditions, or disa pproved pursuant to this section.

(ix) Notify the applicant in writing of the final determination and make su ch notification available for public inspection at the same location where the Department made available preconstruction information and public comments rela ting to the plant or modification.

(x) Notify EPA of every action related to the consideration of the permit.

(e) Exemptions . The provisions of paragraph (d) shall not appl y to a particular major stationary source or major modification if the source or modification would be a major stationary source or major modification only if fugitive emissions, to the extent quantifiable, are considered in calculating the potential to emit of the stationary source or modification and the source does not belong to any of the following categories:

(A) Coal cleaning plants (with thermal dryers);

(B) Kraft pulp mills;S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 17

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Proposed effective date: February 25, 2011 (C) Portland cement plants;

(D) Primary zinc smelters;

(E) Iron and steel mills;

(F) Primary aluminum ore reduction plants;

(G) Primary copper smelters;

(H) Municipal incinerators capable of chargi ng more than 250 tons of refuse per day;

(I) Hydrofluoric, sulfuric, or nitric acid plants;

(J) Petroleum refineries;

(K) Lime plants;

(L) Phosphate rock processing plants;

(M) Coke oven batteries;

(N) Sulfur recovery plants;

(O) Carbon black plants (furnace process);

(P) Primary lead smelters;

(Q) Fuel conversion plants;

(R) Sintering plants;

(S) Secondary metal production plants;

(T) Chemical process plants - The term chemical process plant shall not include ethanol production facilities that produce ethanol by natural fermen tation included in NAICS codes 325193 or 312140;

(U) Fossil-fuel boilers (or combination thereof) totaling more than 250 million British thermal units per hour heat input;

(V) Petroleum storage and transfer units with a total storage capacity exceeding 300,000 barrels;

(W) Taconite ore processing plants;

(X) Glass fiber processing plants;

(Y) Charcoal production plants;

(Z) Fossil fuel-fired steam electric plants of more than 250 million British thermal units per hour heat input; andS.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 18

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Proposed effective date: February 25, 2011 (AA) Any other stationary source category which, as of August 7, 1980, is being regulated under

section 111 or 112 of the Clean Air Act.

(f) [Reserved]

(g) [Reserved]

(h) [Reserved]

(i) Actuals PALs

. The provisions in paragraphs (i)(1 ) through (15) govern actuals PALs.

(1) Applicability

.

(i) The Department may approve the use of an actua ls PAL for any existing major stationary source (except as provided in paragraph (i)(1)(ii)) if the PAL meets the requirements in paragraphs (i)(1) through (15). The term "PAL" shall mean "actuals PAL" throughout paragraph (i).

(ii) The Department shall not allow an actuals PAL for VOC or NO

x for any major stationary source

located in an extreme ozone nonattainment area.

(iii) Any physical change in or change in the me thod of operation of a major stationary source that

maintains its total source-wide emissions below the PAL level, meets the requi rements in paragraphs (i)(1) through (15), and complies with the PAL permit:

(A) Is not a major modification for the PAL pollutant;

(B) Does not have to be approved throu gh Regulation 61-62.5, Standard 7.1, “ Nonattainment New

Source Review ”; however, will be reviewed through Regulation 61-62.1, Section II A. “ Permit Requirements, ” and

(C) Is not subject to the provisions in paragraph (d)(2)(D) (restrictions on relaxing enforceable emission limitations that the major stationary source used to avoid applicability of the nonattainment major NSR program).

(iv) Except as provided under paragraph (i)(1)(iii)(C), a major stationary source shall continue to comply with all applicable Federal or State re quirements, emission limitations, and work practice requirements that were established prior to the effective date of the PAL.

(2) Definitions. The definitions in paragraphs (i)(2)(i) th rough (xi) shall apply to actuals PALs consistent with paragraphs (i)(1) through (15). When a term is not defined in these paragraphs, it shall have the meaning given in paragraph (c) of this regulation; paragraph (b) of Regulation 61-62.5, Standard

7, “ Prevention of Significant Deterioration”(“Standard 7”); or in the Clean Air Act.

(i) Actuals PAL for a major stationary source means a PAL based on the baseline actual emissions (as defined in paragraph (c)(1)) of all emissions units (as defined in paragraph (b )(20) of Standard 7) at the source, that emit or have the potential to emit the PAL pollutant.

(ii) Allowable emissions means "allowable emissions" as defined in paragraph (b)(3) of Standard 7, except as this definition is modified accordin g to paragraphs (i)(2)(ii)(A) through (B).S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 19

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Proposed effective date: February 25, 2011 (A) The allowable emissions for any emissions un it shall be calculated considering any emission limitations that are enforceable as a practical matter on the emissions unit's potential to emit.

(B) An emissions unit's potential to emit shall be determined using the definition in paragraph (b)(37) of Standard 7, except that the words "or en forceable as a practical matter" should be added after "federally enforceable."

(iii) Small emissions unit means an emissions unit that emits or has the potential to emit the PAL pollutant in an amount less than the significant leve l for that PAL pollutant, as defined in paragraph (c)(14) or in the Clean Air Act, whichever is lower.

(iv) Major emissions unit means:

(A) Any emissions unit that emits or has the poten tial to emit 100 tons per year or more of the PAL pollutant in an attainment area; or

(B) Any emissions unit that emits or has the poten tial to emit the PAL pollutant in an amount that is equal to or greater than the major source threshold for the PAL pollutant as defined by the Clean Air Act for nonattainment areas. For example, in accordance with the definitio n of major stationary source in section 182(c) of the Clean Air Act, an emissions unit would be a major emissions unit for VOC if the

emissions unit is located in a serious ozone nonattainme nt area and it emits or has the potential to emit 50 or more tons of VOC per year.

(v) Plantwide applicability limitation (PAL) means an emission limitation expressed in tons per year, for a pollutant at a major stationary source, th at is enforceable as a practical matter and established source-wide in accordance with pa ragraphs (i)(1) through (i)(15).

(vi) PAL effective date generally means the date of issuance of the PAL permit. However, the PAL

effective date for an increased PAL is the date an y emissions unit which is part of the PAL major modification becomes operational and begins to emit the PAL pollutant.

(vii) PAL effective period means the period beginning with th e PAL effective date and ending 10 years later.

(viii) PAL major modification means, notwithstanding paragraphs (c)(6) and (8) (the definitions for major modification and net emissions increase), any ph ysical change in or change in the method of operation of the PAL source that causes it to emit the PAL pollutant at a level equal to or greater than the

PAL.

(ix) PAL permit means the major NSR permit, the minor NS R permit, or the State operating permit under Regulation 61-62.1 Section II G, or the title V pe rmit issued by the Depa rtment that establishes a PAL for a major stationary source.

(x) PAL pollutant means the pollutant for which a PAL is established at a major stationary source.

(xi) Significant emissions unit means an emissions unit that emits or has the potential to emit a PAL pollutant in an amount that is equal to or greater th an the significant level (as defined in paragraph (c)(13) or in the Clean Air Act, whichever is lower) for th at PAL pollutant, but less than the amount that would qualify the unit as a major emissions unit as defined in paragraph (i)(2)(iv).

(3) Permit application requirements

. As part of a permit applicati on requesting a PAL, the owner orS.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 20

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Proposed effective date: February 25, 2011 operator of a major stationary source shall submit the following information to the Department for approval:

(i) A list of all emissions units at the source desi gnated as small, significant or major based on their potential to emit. In addition, the owner or operator of the source shall indicate which, if any, Federal or State applicable requirements, emission limitations or work practices apply to each unit.

(ii) Calculations of the baseline actual emissi ons (with supporting documentation). Baseline actual

emissions are to include emissions associated not only with operation of the unit, but also emissions associated with startup, shutdown and malfunction.

(iii) The calculation procedures that the major sta tionary source owner or operator proposes to use to convert the monitoring system data to monthly emissions and annual emissions based on a 12-month rolling total for each month as required by paragraph (i)(13)(i).

(4) General requirements for establishing PALs

.

(i) The Department is allowed to establish a PAL at a major stationary source, provided that at a minimum, the requirements in paragraphs (i)(4)(i)(A) through (G) are met.

(A) The PAL shall impose an annual emission limitation in tons per year, that is enforceable as a practical matter, for the entire major stationary sour ce. For each month during the PAL effective period after the first 12 months of establishing a PAL, the major stationary source owner or operator shall show that the sum of the monthly em issions from each emissions unit under the PAL for the previous 12 consecutive months is less than the PAL (a 12-mo nth average, rolled monthly). For each month during the first 11 months from the PAL effective date, the major stationary source owner or operator shall show that the sum of the preceding monthly emissions fro m the PAL effective date for each emissions unit

under the PAL is less than the PAL.

(B) The PAL shall be established in a PAL permit that meets the public participation requirements in paragraph (i)(5).

(C) The PAL permit shall contain all th e requirements of paragraph (i)(7).

(D) The PAL shall include fugitive emissions, to th e extent quantifiable, from all emissions units that emit or have the potential to emit the PAL pollutant at the major stationary source.

(E) Each PAL shall regulate emissions of only one pollutant.

(F) Each PAL shall have a PAL effective period of 10 years.

(G) The owner or operator of the major stationa ry source with a PAL shall comply with the monitoring, recordkeeping, and reporting requirements provided in paragraphs (i )(12) through (14) for each emissions unit under the PAL through the PAL effective period.

(ii) At no time (during or after the PAL eff ective period) are emissi ons reductions of a PAL pollutant, which occur during the PAL effective peri od, creditable as decreases for purposes of offsets under paragraph (d)(1)(c) unless the level of the PAL is reduced by the amount of such emissions

reductions and such reductions would be creditable in the absence of the PAL.S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 21

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Proposed effective date: February 25, 2011 (5) Public participation requirement for PALs

. PALs for existing major stationary sources shall be established, renewed, or increased through a procedure that is consistent paragraph (d)(6) and (d)(7). The Department must address all material comment s before taking final action on the permit.

(6) Setting the 10-year actuals PAL level

. (i) Except as provided in paragraph (i)(6)(ii), the actuals PAL level for a major stationary source shall be established as the sum of the baseline actual emissions (as defined in paragraph (c)(2)) of the PAL pollutant for each emissions unit at the source; plus an amount equal to the applicable significant level for the PAL pollutant under paragraph (c)(14) or under the Clean Air Act, whichever is lower. When establishing th e actuals PAL level, for a PAL pollutant, only one consecutive 24-month period must be used to determ ine the baseline actual emissions for all existing

emissions units. However, a different consecutive 24- month period may be used for each different PAL pollutant. Emissions associated with units that were permanently shut down af ter this 24-month period must be subtracted from the PAL level. The Department shall specify a reduced PAL level(s) (in tons/yr) in the PAL permit to become effective on the future co mpliance date(s) of any applicable Federal or State regulatory requirement(s) that the Department is aw are of prior to issuance of the PAL permit. For instance, if the source owner or operator will be re quired to reduce emissions from industrial boilers in half from baseline emissions of 60 ppm NO X to a new rule limit of 30 ppm, then the permit shall contain

a future effective PAL level that is equal to the current PAL level reduced by half of the original baseline emissions of such unit(s).

(ii) For newly constructed units (which do not in clude modifications to existing units) on which operation began less than 24-months prior to the date of the PAL permit application, the emissions must

be added to the PAL level in an amount e qual to the potential to emit of the units.

(7) Contents of the PAL permit

. The PAL permit must contain, at a minimum, the information in paragraphs (i)(7)(i) through (x).

(i) The PAL pollutant and the applicable sour ce-wide emission limitation in tons per year.

(ii) The PAL permit effective da te and the expiration date of the PAL (PAL effective period).

(iii) Specification in the PAL permit that if a majo r stationary source owner or operator applies to renew a PAL in accordance with para graph (i)(10) before the end of th e PAL effective period, then the PAL shall not expire at the end of the PAL effective period. It shall remain in effect until a revised PAL permit is issued by the Department.

(iv) A requirement that emission calculations for compliance purposes include emissions from startups, shutdowns and malfunctions.

(v) A requirement that, once the PAL expires, th e major stationary source is subject to the requirements of paragraph (i)(9).

(vi) The calculation procedures that the major stat ionary source owner or operator shall use to convert the monitoring system data to monthly emissions and annual emissions based on a 12-month rolling total for each month as required by paragraph (i)(13)(i).

(vii) A requirement that the major stationary sour ce owner or operator monitor all emissions units in accordance with the provisions under paragraph (i)(12).

(viii) A requirement to retain th e records required under paragraph (i)(13) on site. Such records mayS.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 22

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Proposed effective date: February 25, 2011 be retained in an electronic format.

(ix) A requirement to submit the reports required under paragraph (i)(14) by the required deadlines.

(x) Any other requirements that the Department de ems necessary to implement and enforce the PAL.

(8) PAL effective period and reopening of the PAL permit

. The requirements in paragraphs (i)(8)(i) and (ii) apply to actuals PALs.

(i) PAL effective period

. The Department shall specify a PAL effective period of 10 years.

(ii) Reopening of the PAL permit

.

(A) During the PAL effective period, the De partment must reopen the PAL permit to:

(1) Correct typographical/calculation errors made in setting the PAL or reflect a more accurate

determination of emissions used to establish the PAL.

(2) Reduce the PAL if the owner or operator of the major stationary source creates creditable emissions reductions for use as offsets under paragraph (d)(2).

(3) Revise the PAL to reflect an increase in the PAL as provided under paragraph (i)(11).

(B) The Department shall have discretion to reopen the PAL permit for the following:

(1) Reduce the PAL to reflect newly applicable Federal requirements (for example, NSPS) with compliance dates after the PAL effective date.

(2) Reduce the PAL consistent with any other re quirement, that is enforceable as a practical matter, and that the Department may impose on the major stationary source under the State Implementation Plan.

(3) Reduce the PAL if the Department determines that a reduction is necessary to avoid causing or contributing to a NAAQS or PSD increment violation, or to an adverse impact on an air quality related

value that has been identified for a Federal Clas s I area by a Federal Land Manager and for which information is available to the general public.

(C) Except for the permit reopening in paragraph (i)(8)(ii)(A)(1) for the correction of typographical/calculation errors that do not increase the PAL level, all other reopenings shall be carried out in accordance with the public particip ation requirements of paragraph (i)(5).

(9) Expiration of a PAL

. Any PAL which is not renewed in accordance with the procedures in paragraph (i)(10) shall expire at the end of the PAL effective period, and the requirements in paragraphs (i)(9)(i) through (v) shall apply.

(i) Each emissions unit (or each group of emissions units) that existed under the PAL shall comply

with an allowable emission limitation under a revised permit established according to the procedures in paragraphs (i)(9)(i)(A) through (B).

(A) Within the time frame specified for PAL renewa ls in paragraph (i)(10)(ii), the major stationary source shall submit a proposed allowable emission limitation for each emissions unit (or each group ofS.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 23

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Proposed effective date: February 25, 2011 emissions units, if such a distribution is more appr opriate as decided by the Department) by distributing

the PAL allowable emissions for th e major stationary source among each of the emissions units that existed under the PAL. If the PAL had not yet been adju sted for an applicable requirement that became effective during the PAL effective period, as required under paragraph (i)(10)(v), such distribution shall be made as if the PAL had been adjusted.

(B) The Department shall decide whether a nd how the PAL allowable emissions will be distributed and issue a revised permit incorporating allowable limits for each emissions unit, or each group of emissions units, as the Department determines is appropriate.

(ii) Each emissions unit(s) shall comply with the allowable emission limitation on a 12-month rolling basis. The Department may approve the use of monito ring systems (source testing, emission factors, etc.) other than CEMS, CERMS, PEMS or CPMS to demonstrate compliance with the allowable emission

limitation.

(iii) Until the Department issues the revised permit incorporating allowable limits for each emissions unit, or each group of emissions units, as required unde r paragraph (i)(9)(i)(A), the source shall continue to comply with a source-wide, multi-unit emissions cap equivalent to the level of the PAL emission

limitation.

(iv) Any physical change or change in the method of operation at the major stationary source will be subject to the nonattainment major NSR requirements if such change meets the definition of major modification in paragraph (c)(6).

(v) The major stationary source owner or operator shall continue to comply with any State or Federal applicable requirements (BACT, RACT, NSPS, etc. ) that may have applied either during the PAL effective period or prior to the PAL effective period except for those emission limitations that had been established pursuant to paragraph (d)(2)(D), but were eliminated by the PA L in accordance with the provisions in paragraph (i)(1)(iii)(C).

(10) Renewal of a PAL

.

(i) The Department shall follow the procedures speci fied in paragraph (i)(5) in approving any request to renew a PAL for a major stationary source, a nd shall provide both the proposed PAL level and a written rationale for the proposed PAL level to the public for review and comment. During such public review, any person may propose a PAL level for th e source for consideration by the Department.

(ii) Application deadline

. A major stationary source owner or operator shall submit a timely application to the Department to request renewal of a PAL. A timely application is one that is submitted at least 6 months prior to, but not earlier than 18 mont hs from, the date of perm it expiration. This deadline for application submittal is to ensure that the permit will not expire before th e permit is renewed. If the owner or operator of a major stationary source submits a complete application to renew the PAL within this time period, then the PAL sha ll continue to be effective until th e revised permit with the renewed

PAL is issued.

(iii) Application requirements

. The application to renew a PAL permit shall contain the information required in paragra phs (i)(10)(iii)(A) through (D).

(A) The information required in pa ragraphs (i)(3)(i) through (iii).

(B) A proposed PAL level.S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 24

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Proposed effective date: February 25, 2011 (C) The sum of the potential to emit of all emissions units under th e PAL (with supporting documentation).

(D) Any other information the owner or opera tor wishes the Department to consider in determining the appropriate level for renewing the PAL.

(iv) PAL adjustment

. In determining whether and how to ad just the PAL, the Department shall consider the options outlined in paragraphs (i)(10)(iv)(A) and (B). However, in no case may any such adjustment fail to comply with paragraph (i)(10)(iv)(C).

(A) If the emissions level calculated in accordance wi th paragraph (i)(6) is equal to or greater than 80 percent of the PAL level, the Department may re new the PAL at the same level without considering the factors set forth in paragraph (i)(10)(iv)(B); or

(B) The Department may set the PAL at a level that it determines to be more representative of the

source's baseline actual emissions, or that it determin es to be appropriate considering air quality needs, advances in control technology, anticipated economic gr owth in the area, desire to reward or encourage the source's voluntary emissions reductions, or other f actors as specifically identified by the Department

in its written rationale.

(C) Notwithstanding paragraphs (i)(10)(iv)(A) and (B),

(1) If the potential to emit of the major stationary source is less than the PAL, the Department shall adjust the PAL to a level no greater th an the potential to emit of the source; and

(2) The Department shall not approve a renewed PAL level higher than the current PAL, unless the major stationary source has complied with the provisions of paragraph (i)(11) (increasing a PAL).

(v) If the compliance date for a State or Federal re quirement that applies to the PAL source occurs during the PAL effective period, and if the Department has not already adjusted for such requirement, the PAL shall be adjusted at the time of PAL permit rene wal or title V permit renewal, whichever occurs first.

(11) Increasing a PAL during the PAL effective period.

(i) The Department may increase a PAL emission limitation only if the major stationary source complies with the provisions in paragraphs (i)(11)(i)(A) through (D).

(A) The owner or operator of the major stationary source shall submit a complete application to request an increase in the PAL limit for a PAL major modification. Such application shall identify the emissions unit(s) contributing to th e increase in emissions so as to cause the major stationary source's emissions to equal or exceed its PAL.

(B) As part of this application, the major sta tionary source owner or operator shall demonstrate

that the sum of the baseline actual emissions of the small emissions units, plus the sum of the baseline actual emissions of the significant and major emissi ons units assuming application of BACT equivalent controls, plus the sum of the allowable emissions of the new or modified emissions unit(s) exceeds the

PAL. The level of control that would result from BACT equivalent controls on each significant or major emissions unit shall be determined by conducting a ne w BACT analysis at the time the application is submitted, unless the emissions unit is currently requir ed to comply with a BACT or LAER requirement that was established within the preceding 10 years. In such a case, the assumed control level for thatS.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 25

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Proposed effective date: February 25, 2011 emissions unit shall be equal to the level of BACT or LAER with which that emissions unit must currently comply.

(C) The owner or operator obtains a major NSR permit for all emissions unit(s) identified in paragraph (i)(11)(i)(A), regardless of the magnitude of the emissions increase resulting from them (that is, no significant levels apply). These emissions unit(s) shall comply with any emissions requirements resulting from the nonattainment major NSR program pr ocess (for example, LAER), even though they have also become subject to the PAL or continue to be subject to the PAL.

(D) The PAL permit shall require that the increased PAL level shall be effective on the day any emissions unit that is part of the PAL major modification becomes operational and begins to emit the PAL pollutant.

(ii) The Department shall calculate the new PAL as the sum of the allowable emissions for each modified or new emissions unit, plus the sum of the baseline actual emissions of the significant and major emissions units (assuming application of BACT equi valent controls as determined in accordance with paragraph (i)(11)(i)(B)), plus the sum of the base line actual emissions of the small emissions units.

(iii) The PAL permit shall be revised to reflect the increased PAL level pursuant to the public notice requirements of paragraph (i)(5).

(12) Monitoring requirements for PALs

.

(i) General Requirements.

(A) Each PAL permit must contain enforceable requirements for the monitoring system that accurately determines plantwide emissions of the PAL pollutant in terms of mass per unit of time. Any monitoring system authorized for use in the PA L permit must be based on sound science and meet generally acceptable scientific procedures for da ta quality and manipulation. Additionally, the information generated by such system must meet minimum legal requirements for admissibility in a judicial proceeding to enforce the PAL permit.

(B) The PAL monitoring system must employ one or more of the four general monitoring approaches meeting the minimum requirements set fo rth in paragraphs (i)(12)(ii)(A) through (D) and must be approved by the Department.

(C) Notwithstanding paragraph (i)(12)(i)(B), you may also employ an alternative monitoring approach that meets paragraph (i)(12)(i )(A) if approved by the Department.

(D) Failure to use a monitoring system that meets the requirements of this regulation renders the

PAL invalid.

(ii) Minimum Performance Requirements for Appr oved Monitoring Approaches. The following are acceptable general monitoring approaches when conducte d in accordance with the minimum requirements in paragraphs (i)(12)(iii) through (ix):

(A) Mass balance calculations for activities using coatings or solvents;

(B) Continuous emissions monitoring system (CEMS);

(C) Continuous parameter monitoring system (CPM S) or Predictive emissions monitoring systemS.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 26

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Proposed effective date: February 25, 2011 (PEMS); and

(D) Emission Factors.

(iii) Mass Balance Calculations. An owner or opera tor using mass balance calculations to monitor PAL pollutant emissions from activities using coating or solvents shall meet the following requirements:

(A) Provide a demonstrated means of validating the published content of the PAL pollutant that is contained in or created by all materials used in or at the emissions unit;

(B) Assume that the emissions unit emits all of the PAL pollutant that is contained in or created by any raw material or fuel used in or at the emissions unit, if it cannot otherwise be accounted for in the process; and

(C) Where the vendor of a material or fuel, which is used in or at the emissions unit, publishes a range of pollutant content from such material, the ow ner or operator must use the highest value of the range to calculate the PAL pollutant emissions unless the Department determines there is site-specific data or a site-specific monitoring program to support another content within the range.

(iv) CEMS. An owner or operator using CEMS to monitor PAL pollutant emissions shall meet the following requirements:

(A) CEMS must comply with applicable Perform ance Specifications found in 40 CFR part 60, appendix B; and

(B) CEMS must sample, analyze and record data at least every 15 minutes while the emissions unit is operating.

(v) CPMS or PEMS. An owner or operator using CPMS or PEMS to monitor PAL pollutant emissions shall meet the following requirements:

(A) The CPMS or the PEMS must be based on current site-specific data demonstrating a correlation between the monitored parameter(s) and the PAL pollutant emissions across the range of operation of the emissions unit; and

(B) Each CPMS or PEMS must sample, analyze, and record data at least every 15 minutes, or at another less frequent interval approved by the Department, while the emissions unit is operating.

(vi) Emission factors. An owner or operator us ing emission factors to monitor PAL pollutant emissions shall meet the following requirements:

(A) All emission factors shall be adjusted, if a ppropriate, to account for the degree of uncertainty or limitations in the factors' development;

(B) The emissions unit shall operate within the desi gnated range of use for the emission factor, if applicable; and

(C) If technically practicable, the owner or operato r of a significant emissions unit that relies on an emission factor to calculate PAL pollutant emissions shall conduct validation tes ting to determine a sitespecific emission factor within 6 months of PAL pe rmit issuance, unless the Department determines that testing is not required.S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 27

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Proposed effective date: February 25, 2011 (vii) A source owner or operator must record and report maximum potential emissions without considering enforceable emission limitations or opera tional restrictions for an emissions unit during any period of time that there is no monitoring data, un less another method for determining emissions during such periods is specified in the PAL permit.

(viii) Notwithstanding the requirements in paragraphs (i)(12)(iii) through (vii), where an owner or operator of an emissions unit cannot demonstrate a correlation between the monitored parameter(s) and the PAL pollutant emissions rate at all operating points of the emissions unit, the Department shall, at the time of permit issuance:

(A) Establish default value(s) for determining compliance with the PAL based on the highest potential emissions reasonably estimated at such operating point(s); or

(B) Determine that operation of the emissions unit during operating conditions when there is no correlation between monitored paramete r(s) and the PAL pollutant emissions is a violation of the PAL.

(ix) Re-validation. All data used to establish the PAL pollutant must be re-validated through performance testing or other scientifically valid mean s approved by the Department. Such testing must occur at least once every 5 year s after issuance of the PAL.

(13) Recordkeeping requirements

.

(i) The PAL permit shall require an owner or operator to retain a copy of all records necessary to determine compliance with any requirement of paragra ph (i) and of the PAL, including a determination of each emissions unit's 12-month rolling total emission s, for 5 years from the date of such record.

(ii) The PAL permit shall require an owner or opera tor to retain a copy of the following records for the duration of the PAL effective period plus 5 years:

(A) A copy of the PAL permit application and an y applications for revisions to the PAL; and

(B) Each annual certification of compliance pursuan t to title V and the data relied on in certifying the compliance.

(14) Reporting and notification requirements

. The owner or operator shall submit semi-annual monitoring reports and prompt deviation reports to th e Department in accordance with the applicable title V operating permit program. The reports shall meet the requirements in paragraphs (i)(14)(i) through (iii).

(i) Semi-Annual Report. The semi-annual report shall be submitted to the Department within 30 days of the end of each reporting period. This report sha ll contain the information required in paragraphs (i)(14)(i)(A) through (G).

(A) The identification of owner a nd operator and the permit number.

(B) Total annual emissions (tons/year) based on a 12-month rolling total for each month in the reporting period recorded pursuant to paragraph (i)(13)(i).

(C) All data relied upon, including, but not limited to, any Quality Assurance or Quality Control data, in calculating the monthly and annual PAL pollutant emissions.S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 28

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Proposed effective date: February 25, 2011 (D) A list of any emissions units modified or added to the major stationary source during the preceding 6-month period.

(E) The number, duration, and cause of any devia tions or monitoring malfunctions (other than the time associated with zero and span calibrati on checks), and any corrective action taken.

(F) A notification of a shutdown of any monitoring system, whether the shutdown was permanent or temporary, the reason for the shutdown, the anticip ated date that the monitoring system will be fully operational or replaced with another monitoring syst em, and whether the emissions unit monitored by the monitoring system continued to operate, and the cal culation of the emissions of the pollutant or the number determined by method included in the permit, as provided by paragraph (i)(12)(vii).

(G) A signed statement by the responsible official (as defined by Regulation 61-62.70, Title V Operating Permit Program ) certifying the truth, accuracy, and completeness of the information provided in the report.

(ii) Deviation report. The major stationary source ow ner or operator shall promptly submit reports of any deviations or exceedance of the PAL require ments, including periods where no monitoring is available. A report submitted pursuant to 40 CFR 70.6(a)(3)(iii)(B) shall satisfy this reporting requirement. The deviation reports shall be submitted w ithin the time limits prescribed by the applicable program implementing 40 CFR 70.6(a)(3)(iii)(B). The reports shall contain the following information:

(A) The identification of owner a nd operator and the permit number;

(B) The PAL requirement that experienced the deviation or that was exceeded;

(C) Emissions resulting from the deviation or the exceedance; and

(D) A signed statement by the responsible official (as defined by the applicable title V operating permit program) certifying the truth, accuracy, and co mpleteness of the information provided in the

report.

(iii) Re-validation results. The owner or operator shall submit to the Department the results of any revalidation test or method within 3 months after completion of such test or method.

(15) Transition requirements

.

(i) The Department may not issue a PAL that does not comply with the requirements in paragraphs (aa)(1) through (15) after the date these provisions become effective.

(ii) The Department may supersede any PAL which was establis hed prior to the date of approval of the plan by the Administrator with a PAL that co mplies with the requirements of paragraphs (i)(1) through (15).

(j) If any provision of this regulation, or the appli cation of such provision to any person or circumstance, is held invalid, the remainder of this regulation, or the application of such provision to persons or

circumstances other than those as to which it is held invalid, shall not be affected thereby.S.C. DHEC NSR Revisions Parallel Processing Request, December 2, 2010 Page 29

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Proposed effective date: February 25, 2011 R. 61-62.5, Standard No. 7 History - South Carolina State Register : Vol. 29, Issue No. 6. (Doc. No. 2943), June 24, 2005; Vol. 33, Issue No. 4, (Doc. No. 4056), April 24, 2009.