UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

RESEARCH TRIANGLE PARK, NC 27711 

JAN 3 1 2014 OFFICE OF 

AIR QUALITY PLANNING 

AND STANDARDS 

MEMORANDUM 

SUBJECT: 

FROM: 

TO: 

Guidance on Extension ofPrevention of Significant Deterioration (PSD) Permits under 

40 CFR 52.21(r)(2) 

Stephen D. Page, Director M\W \(u ~~ Office of Air Quality Planning and Standards 

Regional Air Division Directors, Regions 1-10 

The purpose of this memorandum is to clarify the U.S. Environmental Protection Agency's views on 

what constitutes adequate justification for an extension of the 18-month timeframe for commencing 

construction of a source that has been granted a preconstruction permit under the prevention of 

significant deterioration (PSD) provisions of part C of title I of the Clean Air Act (CAA). Such 

extensions are authorized by 40 CFR 52.21 (r)(2). 1

•

2 

This guidance primarily applies to the EPA and delegated permitting authorities. In preparing the 

guidance, we sought input from regional offices and also informed state and local air agency staff about 

its main concepts. 

For questions on this guidance, please contact Raj Rao at (919) 541-5344, rao.raj@epa.gov or Jessica 

Montanez at (919)541-3407, montanezjessica@epa.gov. 

BACKGROUND 

The permit extension provision at 40 CFR 52.21(r)(2i establishes that "approval to construct [a new 

major stationary source or major modification] shall become invalid if construction is not commenced 

1 This document explains the requirements of the EPA regulations, describes the EPA policies, and recommends procedures 

for permitting authorities to use to ensure that permitting decisions are consistent with applicable regulations. This document 

is not a rule or regulation, and the guidance it contains may not apply to a particular situation based upon the individual facts 

and circumstances. This guidance does not change or substitute for any law, regulation or any other legally binding 

requirement and is not legally enforceable. The use of non-mandatory language such as "guidance," "recommend," "may," 

"should" and "can," is intended to describe the EPA policies and recommendations. Mandatory terminology such as "must" 

and "required" are intended to describe controlling requirements under the terms of the CAA and the EPA regulations, but 

this document does not establish legally binding requirements in and of itself. 2 In 1992, the EPA finalized permit extension provisions in 40 CFR 55.6(b)(4) for sources seeking permits in the Outer 

Continental Shelf(OCS). The permit extension provisions in 40 CFR 55.6(b)(4) only apply to OCS sources and as such they 

are not addressed by the clarifications in this memorandum. 

3 The CAA does not expressly include the 18-month deadline or any provision for extending that deadline. Thus, the EPA's 

analysis focuses on the regulatory text. 

lntemet Address (URL) • http://www.epa.gov 

Recycled/Recyclable • Printed wHh Vegetable Oil Based Inks on Recycled Paper (Minimum 25% Postconsumer) 
2 

within 18 months after receipt of such approval, if construction is discontinued for a period of 18 months 

or more, or if construction is not completed within a reasonable time."4 In addition, this provision states 

that "the [EPA] Administrator may extend the 18-month period upon a satisfactory showing that an 

extension is justified."5 This provision gives the EPA discretion to extend the 18-month commencement 

of construction deadline for PSD permits issued under federal authority where the EPA determines that a 

"satisfactory showing that an extension is justified" has been made. The PSD regulations indicate that 

the EPA should exercise this discretion on a case-by-case basis, evaluating whether the showing offered 

for a particular extension is satisfactory and, accordingly, whether an extension is justified for a 

particular permit. The text of 40 CFR 52.21(r)(2) does not provide any specific criteria or required 

process that must be satisfied before the EPA can exercise its discretion to determine that a permit 

extension is justified. 

The EPA has previously considered how it would exercise its discretion in determining whether granting 

a permit extension was justified under the provision in 40 CFR 52.21 (r)(2). In 1988, Wayne Blackard, 

then Chief of the EPA's Region 9 New Source Section, issued a policy memorandum 6 describing how 

Region 9 intended to exercise its discretion at that time in determining whether granting an extension of 

the 18-month commencement of construction deadline was justified per 40 CFR 52.21 (r)(2). However, 

the approach described in the 1988 Region 9 policy memorandum is not, and never has been, the 

exclusive means by which an applicant can show that an extension of the 18-month expiration period is 

justified. The 1988 Region 9 policy memorandum did not purport to interpret the terms of 40 CFR 

52.21 (r)(2) and did not state that the provision requires the approach outlined in the memorandum to 

show that an extension of the 18-month timeframe for commencing construction is justified. 

Accordingly, the 1988 Region 9 policy memorandum should not be viewed as a controlling EPA 

interpretation of 40 CFR 52.21(r)(2), but rather should be regarded as a prior Region 9 policy statement 

for PSD permit extensions. This 1988 Region 9 policy memorandum asked the permittee to submit a 

complete re-analysis ofPSD permit requirements and stated that the Region would conduct another 

comprehensive PSD review. This comprehensive PSD review was to include a re-analysis of the best 

available control technology (BACT), a re-analysis of air quality impacts and PSD increment 

consumption, and an analysis of any new PSD requirements. The 1988 Region 9 policy memorandum 

also called for a public participation process under 40 CFR 124 in order to determine that a PSD permit 

extension was justified under 40 CFR 52.21 (r)(2). 

In addition to the 1988 Region 9 policy memorandum described above, in 1985 an EPA headquarters 

office developed a draft policy addressing PSD permit extension requests that was distributed for review 

among the EPA staff. 7 This EPA headquarters office also developed a similar (but not identical) draft 

policy dated June 11 , 1991.8 However, these documents were never issued in final form. Because these 

4 This guidance is specifically intended to clarify our current views on processing requests to extend the 18-month timeframe 

for commencing construction under 40 CFR 52.21(r)(2). It does not address the two other aspects of 40 CFR 52.21(r)(2), i.e., 

the provisions pertaining to discontinuing construction and completion of construction within a reasonable time. Requests 

pertaining to these provisions occur less frequently, and may present different considerations, than requests for extension of 

the deadline for commencing construction. The EPA will exercise its discretion to address these requests on a case-by-case 

basis. 

5 For phased construction projects, the provision also states that "each phase must commence construction within 18 months 

of the projected and approved commencement date." 6 Memorandum from Wayne Blackard, Chief, New Source Section, EPA Region 9 Policy on PSD Permit Extensions 

(September 8, 1988). See http://www.epa.gov/ttn/naaqs/aqmguide/collection/nsr/extnsion.pdf 7 Memorandum from Darryl D. Tyler, Director, Control Program Development Division, Revised Draft Policy on Permit 

Modifications and Extensions (July 5, 1985). See http://www.epa.gov/ttn/naaqs/aqmguide/collection/nsr/permmod.pdf. 

8 See http://www.regulations.gov/#!documentDetail;D=EPA-R09-0AR-2013-0190-001 0. 
3 

documents were drafts that were never finalized, they did not establish a controlling interpretation of the 

text in 40 CFR 52.21 (r)(2). These draft EPA headquarters policies called for public notice and comment 

for PSD permit extensions and a substantive re-analysis of BACT and in some instances other PSD 

requirements. The draft policies discussed the role of the permit expiration requirement in ensuring that 

PSD analyses, in particular BACT, be current for PSD-permitted projects. These draft policies were 

based on the idea of allowing extensions readily but requiring substantive review to ensure that the 

BACT limi~s and other conditions in the original permit remained current. The EPA developed these 

draft approaches as alternatives to other approaches, such as requiring a showing of the inability of the 

source to construct due to various reasons including but not limited to economic or legal constraints. In 

the 1985 and 1991 draft policy memoranda, the EPA explained that the latter approaches presented 

varying degrees of subjectivity and certain difficulties in the factual analysis, which these draft policies 

sought to avoid. 

THE EPA'S POLICY ON PSD PERMIT EXTENSIONS 

After further consideration of the practical impact of these earlier policies, the EPA has determined that 

it is more appropriate and consistent with the terms of 40 CFR 52.21(r)(2) to evaluate on a case-by-case 

basis whether an applicant has shown that an extension of the deadline for commencing construction of 

a PSD permit is justified. This analysis would include a case-by-case consideration ofthe appropriate 

factors and process to be employed in determining whether to grant such request. As 40 CFR 52.21(r)(2) 

does not specify that any particular criteria must be satisfied or process followed, this case-by-case 

approach is consistent with the provision and the discretion that it provides to the EPA. 

Requiring substantive review of a prior PSD permitting decision and conducting an additional public 

participation process in the context ofPSD extension requests has resulted in little or no practical 

distinction between the extension of an existing PSD permit and an applicant having to apply for a new 

permit. The 1985 and 1991 draft policies did not consider how this approach could obscure the 

distinction between extension of an existing permit and requiring the applicant to apply for a new 

permit. The intensive substantive review and associated public participation process called for in the 

1988 Region 9 policy memorandum further illustrates this tension between a permit extension and a new 

permit. The EPA believes it is important to give meaning to the extension provision in the PSD 

regulations. 

The 1985 and 1991 draft policy memoranda did not recognize other potential downsides of the approach 

they described, such as the potential for substantial further delay or the significant resource burden that 

may result from substantive re-analysis of the permit in the context of even a relatively brief extension 

request. The EPA's recent experience is that improvements in pollution control technology for criteria 

pollutants have not been occurring as rapidly as was anticipated at the time of the earlier draft EPA 

policies on permit extensions. Thus, the time and resource burdens involved in reviewing an earlier 

permitting decision after the initial 18 months do not produce as much value in this context. The earlier 

draft documents also did not demonstrate that re-evaluation of permit conditions was necessary when 

other factors may otherwise provide a reasonable justification for an extension, such as litigation over 

the PSD permit or a lack of other approvals that precludes a source from commencing construction. In 

recent years, the EPA has noticed an increase in the number of PSD permits subject to judicial review 

and the time required to complete this process, particularly in the U.S. Courts of Appeals. The earlier 

draft policies expressed concern with subjectivity and difficulties in verifying facts showing the inability 

of the source to construct due to various reasons such as economic or legal constraints. However, the 

EPA has not encountered such difficulties in its more recent reviews of permit extension requests or 
4 

received information indicating that other PSD permitting authorities are frequently experiencing such 

di ffi culti es. 

With regard to soliciting public comment on an extension request, the earlier Region 9 and draft 

headquarters policies deemed this process advisable in the context of other elements of the policies that 

called for substantive review of PSD requirements such as BACT before granting the extension. When 

this kind of substantive review is not conducted, the EPA does not see the same basis for providing an 

opportunity for public comment on an extension of the deadline for commencing construction. A later 

section of this memorandum discusses the issue of the appropriate process for granting a permit 

extension in more detail. 

As a policy matter, the EPA generally intends to exercise its discretion, in accordance with 40 CFR 

52.21(r)(2), to make a case-by-case evaluation of whether a source's showing is satisfactory and, 

therefore, whether an extension is justified for a particular permit.9 The text of 40 CFR 52.2l(r)(2) does 

not provide any specific criteria or required process that must be satisfied before the EPA can exercise 

its discretion to determine that a permit extension is justified. Therefore, the elements outlined below 

represent various aspects of permit extension situations that the EPA Regions, and state, tribal or local 

programs that issue permits on behalf of the EPA in accordance with 40 CFR 52.21 (u) ("delegated 

permitting authorities"), should generally consider in determining whether a particular permit extension 

is justified. However, these aspects do not represent the only factors that may be relevant when 

considering whether a particular permit extension is justified. Consistent with 40 CFR 52.21 (r)(2), the 

EPA may in a particular case exercise its discretion to determine that another type of showing is 

sufficient or necessary to justify a permit extension. If a delegated permitting authority is considering 

issuing a permit extension, the delegated permitting authority should coordinate with the EPA to ensure 

that the approach being considered is consistent with 40 CFR 52.21(r)(2). 

WHEN AN EXTENSION REQUEST SHOULD BE MADE 

While 40 CFR 52.21(r)(2) does not specify a deadline for requesting a PSD permit extension, sources 

are strongly encouraged to request a permit extension in advance of the end of the 18-month period for 

commencing construction. The EPA and delegated permitting authorities should strive to make PSD 

permit extension decisions as expeditiously as possible. 

LENGTH OF EXTENSION 

The EPA's regulations do not state the time period for a permit extension granted under 40 CFR 

52.2l(r)(2). However, we believe that PSD permit extensions generally should be available for an 

additional 18-month period following the initial 18-month timeframe for commencing construction set 

forth in 40 CFR 52.21(r)(2), and should be based on adequate justification for the length of the permit 

extension. Permit extensions for shorter or longer time periods may be granted depending on the 

particular demonstration that an extension of the commencement of construction deadline is justified. 

9 We note that the EPA Region 9 has previously applied the reasoning reflected in this guidance in making a case-specific 

determination, in the context of a particular request to extend the deadline for commencement of construction in a PSD 

permit. Information concerning this determination can be found at 78 FR 40968 (2013). See 

http://www.gpo.gov/fdsxs/pkg/FR-2013-07-09/pdf/2013-16334.pdf 
5 

PSD PROGRAMS UNDER APPROVED STATE IMPLEMENTATION PLANS (SIPs) 

We note that while the 18-month timeframe for commencing construction appears in the EPA's rules in 

40 CFR 52.21, neither the CAA nor the EPA's rules in 40 CFR 51.166, which govern SIP-approved 

PSD programs, contain this 18-month deadline. Accordingly, SIP-approved programs are not required to 

include the 18-month construction deadline, and nothing in this guidance should be read to indicate that 

SIP-approved PSD programs need to be revised consistent with this guidance. Nonetheless, we 

encourage permitting authorities with SIP-approved PSD programs that incorporate the 40 CFR 

52.21(r)(2) provision by reference or that implement a provision similar to 40 CFR 52.21(r)(2) to apply 

this policy or a policy that is similar to that included in this memorandum. Owners or operators of 

facilities seeking extensions of PSD permits issued by state, tribal or local authorities with SIP-approved 

programs should contact their PSD permitting authority for information on the applicable requirements. 

EXTENSION OF MINOR SOURCE PERMITS 

This permit extension guidance does not address minor New Source Review (NSR) permit extension 

requests (other than requests for certain sources in Indian country10

) because the provision in 40 CFR 

52.21(r)(2) does not apply to minor NSR sources. Owners or operators of facilities with questions on 

minor source permit extensions should contact their minor NSR permitting authority. 

FIRST PERMIT EXTENSION REQUEST 

In accordance with 40 CFR 52.21(r)(2), a permittee's first PSD permit extension request should include 

a detailed justification of why the source cannot commence construction within the initial 18-month 

deadline. For example, relevant factors for this justification could include ongoing litigation over the 

PSD permit, natural disasters that directly affect the facility, significant or unusual economic 

impediments (including inability to secure financial resources necessary to commence construction) 

and/or delays in obtaining other required permits. 

Furthermore, the EPA believes that in order to give meaning to the extension provision in 40 CFR 

52.21(r)(2), review or redo of substantive permit analyses such as BACT, air quality impacts analysis 

(AQIA) or PSD increment consumption analyses should generally not be necessary for a first permit 

extension request. 

SECOND PERMIT EXTENSION REQUEST 

The EPA believes that in most cases a request for a second extension of the commencement of 

construction deadline should include a substantive re-analysis and update ofPSD requirements. Only in 

rare circumstances would a detailed justification of why a source cannot commence construction by the 

current deadline (as is recommended above for the purpose of requesting the first extension) be 

sufficient to support a second extension. Generally, the benefits of conducting an updated substantive 

review of the PSD requirements after 36 months from the initial issuance of the PSD permit would 

10 Since PSD sources in Indian country are currently permitted under 40 CFR 52.21 and the permit extension provisions for 

minor sources in Indian country (40 CFR 49.155(b)) are identical to those in 40 CFR 52.2l(r)(2), this guidance also extends 

to the EPA's consideration of sources seeking extensions of the deadline for commencing construction in PSD and minor 

NSR permits in Indian country until such time as a tribe develops and the EPA approves a tribe's PSD or minor NSR Tribal 

Implementation Plan (TIP). 
6 

outweigh the considerations discussed above that favor an initial extension without such analysis. While 

the EPA's experience is that pollution control technology for criteria pollutants has not been advancing 

at the same rate that it once was, the EPA believes that it is more likely that technology and air quality 

considerations will become outdated when construction does not begin until36 months or longer after 

the EPA has taken final action to issue a PSD permit. Therefore, when a second extension ofthe 

deadline for commencing construction is requested, the EPA will evaluate on a case by-case basis 

whether a second permit extension is justified. In some cases, the EPA may ask the permittee to apply 

for a new PSD permit rather than conduct its review through a permit extension proceeding. 

PSD PERMIT EXTENSIONS INVOLVING GRANDFATHERED REQUIREMENTS OR 

REQUIREMENTS THAT TAKE EFFECT DURING THE INITIAL 18-MONTH PERMIT 

TERM 

In certain circumstances, the EPA has not imposed PSD requirements resulting from a newly regulated 

pollutant or a new or revised national ambient air quality standard (NAAQS) or PSD increment on 

permit ·applicants that have already submitted complete PSD permit applications or on projects for which 

draft PSD permits have already been issued at the time when a new requirement would otherwise go into 

effect. These sources and modifications have been "grandfathered" from having to demonstrate 

compliance with the new or revised PSD regulatory requirements. Thus, the EPA has used 

grandfathering as a means of transition to new PSD requirements. 

Current PSD regulations do not speak specifically to whether an extension of the initial18-month 

commencement of construction deadline may be justified where a project has been grandfathered in the 

initial PSD permit decision from PSD requirements that would otherwise have applied. Therefore, the 

EPA believes it is appropriate and consistent with the terms of 40 CFR 52.21 (r)(2) and the discretion 

provided by those terms to evaluate on a case-by-case basis whether and under what circumstances a 

PSD permit extension is justified in the context of such a source. Therefore, a source that was 

grandfathered from PSD requirements that seeks a permit extension is encouraged to address in its 

permit extension request and justification the significance ofthe grandfathering and whether the EPA's 

_ ____,basis_for gr_andfathering_the pe111liLstillJWiili~tD_i@_S_Q_Uice . 

Similarly, the PSD regulations do not specifically address situations where a new pollutant is regulated 

or a NAAQS is promulgated or revised after a permit is issued but before the expiration of the 18-month 

deadline for commencing construction. In its 1988 policy memorandum, Region 9 called for a PSD 

permit extension application to address the new PSD permitting requirements that became applicable in 

this 18-month period. However, considering the extension language of 40 CFR 52.21 (r)(2) and the value 

of giving an extension meaning independent of a new permit application, the EPA believes that a 

permitting authority has the discretion to evaluate on a case-by-case basis whether and under what 

circumstances it would be justified to issue a PSD permit extension without requiring the source to meet 

a new requirement that took effect during the term of the initial permit. 11 Thus, applications for permit 

extensions should address this issue, if applicable. 

11 The EPA has explained elsewhere that a PSD permit issued before a new requirement takes effect does not need to be 

reopened. 75 FR 31514,31593 (June 3, 2010). 
7 

PSD PERMIT EXTENSIONS FOR AREAS THAT HAVE BEEN REDESIGNATED FROM 

ATTAINMENT TO NONATTAINMENT 

Part D of the CAA contains the general and pollutant-specific requirements applicable to all areas that 

are designated nonattainment of the NAAQS. However, neither the CAA nor the regulatory text at 40 

CFR 52.21 (r)(2) provides any specific criteria or required process for PSD permit extensions in areas 

that have been redesignated from attainment to nonattainment for a particular pollutant following PSD 

permit issuance. 

On March 11, 1991, JohnS. Seitz, then Director of the Office of Air Quality Planning and Standards, 

issued a policy memorandum concerning certain transitional issues related to changes to the NSR 

requirements of the PSD and nonattainment area programs resulting from the CAA Amendments of 

1990. Among other things, this memorandum stated, without detailed discussion, that it would be 

inappropriate to extend the PSD permit expiration deadline for permits issued to sources in areas that 

have been designated as nonattainment following permit issuance. 

As with the other older policy memoranda discussed in this document, this 1991 Seitz memorandum 

does not purport to interpret the terms of 40 CFR 52.21(r)(2) and does not state that the regulation 

requires the approach outlined therein in all circumstances to determine whether an extension of a PSD 

permit's commencement of construction deadline is justified in areas that have been redesignated as 

nonattainment following PSD permit issuance. In addition, the memorandum does not discuss how PSD 

continues to apply to pollutants for which the area remains designated attainment while nonattainment 

NSR becomes applicable only to the pollutants for which the area is designated as nonattainment. 

Considering this distinction, the EPA believes that it is appropriate and consistent with the terms in 40 

CFR 52.21(r)(2) to evaluate on a case-by-case basis whether an extension of the PSD permit is justified 

in situations where one or more pollutants have been redesignated nonattainment following PSD permit 

issuance and the PSD permit contains other pollutants for which the area remains in attainment. 

However, for the pollutant(s) for which the area changed to nonattainment, these pollutant(s) should be 

evaluated by the appropriate permitting authority under the applicable nonattainment NSR permit 

re-quirements prio.r to commencing construction if construction will be delayed beyond the 18-month - - -

deadline. 12 We do not believ~ it is consistent with the purposes of the nonattainment NSR program to 

use an extension of the deadline for commencing construction in a PSD permit for the pollutants that 

remain in attainment as a shield against the requirements to obtain a major nonattainment NSR permit, if 

applicable, for the pollutant(s) for which the area has become nonattainment. 

PUBLIC NOTICE AND COMMENT ON PSD PERMIT EXTENSION ACTIONS 

Public notice and comment is not necessary for permit extension actions that would simply extend the 

deadline for commencing construction without reconsideration or amendment of the substantive 

conditions of the permit. 

The EPA has considered the question of whether PSD permit extension actions pursuant to 40 CFR 

52.21(r)(2) are subject to the procedures in the EPA's permitting regulations at 40 CFR Part 124. The 

provisions in 40 CFR Part 124 do not reference extensions ofPSD permits. The EPA notes that section 

12 40 CFR 51 .165 and 40 CFR 49.166 include the regulatory text for state/local and tribal nonattainment permitting programs, 

respectively. 40 CFR Appendix S contains the nonattainment NSR requirements for areas newly designated nonattainment 

for which a revised SIP or TIP is not in place yet. 
8 

124.15 does state that a "final permit decision" includes a decision to "modify" a permit, but the EPA 

has not yet promulgated more specific provisions regarding modifications ofPSD permits. See 40 CFR 

124.5(g). Thus, the precise scope and meaning of the term "modify" as applied to a PSD permit is not 

clear from the Part 124 regulations. 

In the absence of controlling regulations, the EPA views the modification of a PSD permit to include 

material changes to substantive terms and conditions that govern the construction and operation of the 

source. We do not interpret the term "modify" in this context to include the decision to issue an 

administrative amendment to extend the deadline for commencing construction under the PSD permit 

without reconsideration or amendment of the substantive conditions of the permit. Therefore, the EPA 

has determined that permit extension actions that would simply extend the deadline for commencing 

construction without reconsideration or amendment of the substantive conditions of the permit are not 

subject to the procedures in Part 124. We also believe that a public notice-and-comment period for a 

permit extension request would generally be unnecessary where no re-analysis of substantive PSD 

permit conditions and terms (such as BACT, air quality impact analysis, or PSD increment analysis) 

would be conducted, as would likely be the case for a first permit extension request. However, the EPA 

(or the delegated permitting authority) retains the discretion to provide for public notice and comment 

on a case-by-case basis if it determines that doing so would be appropriate. 

As stated above, the EPA views the modification of a PSD permit, as that term is used in the Part 124 

regulations, to include material changes to substantive terms and conditions that govern the construction 

and operation of the source. Therefore, when these types of changes to a permit are being analyzed, it 

would be appropriate to follow the public notice and comment procedures in 40 CFR Part 124. 

Once an EPA regional office or delegated permitting authority has issued a permit extension pursuant to 

40 CFR 52.21, we encourage the permitting authority to notify the public of the final permit extension 

decision, particularly when the public expressed significant interest in the underlying PSD permit 

proceeding that preceded the extension request. The means of notification could include but are not 

limited to: (1) posting the decision on the permitting authority's website; (2) sending notification letters 

about the decision to the permit extension ap licant and interested parties g. parties who commented 

on the underlying PSD permit, or litigants if the underlying PSD permit remains under litigation); or (3) 

publishing a notice of the final decision on the permit extension request in the Federal Register. 13 

13 Footnote 9 above cites an example of a Federal Register notice for a permit extension. In the case of an extension issued 

by a delegated permitting authority, the corresponding EPA regional office would initiate a Federal Register notice.