Bryan W. Shaw. Ph.D .• Chairman 

Toby Baker, Commissioner 

Zak Covar, Executive Director 

RECEiVED- 6POL 

AIR PLANNING SEC. 

13 OCT 23 PH 5: 0"/ 

TEXAS COMMISSION ON ENVIRONMENTAL QUALTIY 

Protecting Texas by Reducing and Preventing Pollution 

Mr. Ron Cuny 

Regional Administrator 

U.S. Environmental Protection Agency- Region 6 

1445 Ross Avenue, Suite 1200 

Dallas, Texas 75202-2733 

Dear Mr. Curry: 

October 21, 2013 

91 7108 2133 3935 1971 0~03 

Docket No. 2013-1598-SIP 

Project No. 2013-059-SIP-NR 

On September 24, 2013, the Texas Commission on Environmental Quality (Commission) 

considered the resubmittal and withdrawal of previously submitted rules implementing the 

Commission's Flexible Permit Program, as well as specific portions of rule amendments for the 

Flexible Permit Program adopted by the Commission on December 14, 2010, for consideration 

by the United States Environmental Protection Agency (EPA) as revisions to the State 

Implementation Plan (SIP). 

Specifically, the Commission took the following action "ith regard to the following sections in 

30 Texas Administrative Code (TAC), Chapter 116: 

1. Resubmittal for EPA consideration of: 

• § 116.13; 

• § u6.110(a)(3), adopted June 17, 1998; and 

• §§ 116.710-116.760, adopted or amended by the Commission on November 16, 1994; 

June 17, 1998; September 2, 1999; August 9, 2000; March 7, 2001; August 21, 2002; 

September 25, 2002; and August 20, 2003, except as modified by the list of sections 

listed below to be either withdrawn, or as amended by the Commission on December 14, 

2010. 

2. Withdrawal from EPA consideration of sections adopted by the Commission between 

1994 an.d 2003 to the SIP: 

• § 116.711(3) (last sentence only) and (11), as amended August 21, 2002, and all earlier 

versions; 

• § n6.715(a), only with regard to the text "or Subchapter C of this chapter (relating to 

Hazardous Air Pollutants: Regulations Governing Constructed or Reconstructed Major 

Sources (FCAA §112(g), 40 CFR Part 63))", as amended August 21, 2002, and all earlier 

. versions; 

•. § n6.715(c)(6) as amended August 20, 2003 and all earlier versions; 

• § n6.716(a) and (d), as adopted November 16, 1994; 

• § 116.730, adopted November 16, 1994, and repealed and readopted June 17, 1998; 

• § n6.740(b), adopted June 17, 1998 and amended September 2, 1999; 

P.O. Box 13087 • Austin, Texas 78711-3087 • 512-239-1000 • tceq.tcxas.gov 

How is our customer service? tceq.texas.govjcustomersurvey 
Mr. Ron Curry 

Page 2 

Re: Docket No. 2013-1598-SIP, Project No. 2013-059-SIP-NR 

; §§ 116.793- 116.802 and 116.804- 116.807, adopted May 22, 2002, except§§ 

116.794(11), 116.795(f) and 116.799(a), which were returned to the Commission by letter 

from EPA dated June 29, 2011; and 

• § 116.803, adopted August 21, 2002. 

3. Adoption and submittal as a revision to the SIP§ 116.765(b) and (c), and the submittal of 

the following sections adopted by the Commission on December 14, 2010, as revisions to 

the SIP: 

• § 116.13(3) and (5); 

• § 116.711(2)(M) [introductory text], and paragraphs (iv) and (vii); 

• § u6.715(c)(5)(A) and (B); 

• § 116.715(c)(6)(A)(i) and (ii); 

• § 116.715(d), [introductory text] except the text "The permit shall specify which ofthe 

monitoring options under paragraph (2)(A) - (E) of this subsection shall be used to 

determine compliance for facilities subject to monitoring under this subsection"; 

• § 116.715(d)(1); 

• § 116.715(0; 

• § 116.716(a), (c), (d) and (e); and 

• the repeal of§ 116.716(d). 

All of these rules are permanent and enforceable, including§ 116.765(b) and (c), which set a 

compliance schedule for the amended rules adopted December 14, 2010. 

The Commission requests that documents for the previously submitted rules, in EPA docket 

number EPA-Ro6-0AR-2005-TX-oo32, be included in the review of this current SIP submittal 

by the TCEQ. Enclosed are the proposed revisions to the SIP and the accompanying orders for 

the rulemaking adopted on December 14, 2010, and the current revised submittal. Although the 

Commission adopted other new and amended rules in 2010 which are necessarily part of the 

documents submitted, the Commission requests that you act only on the rules specifically listed 

in the SIP revision, which are repeated above and in the attached order. I look forward to your 

expeditious approval of these SIP revisions. 

Sincerely, 

~:~~ Chairman 

BWS/jbh 

Enclo~ures 

cc: The Honorable Rick Perry, Governor ofTexa~~ JCi (' 3 \.~1: j: 'S r 

Mr. Jonathan Stinson, Office of Budget, Planhfng anJ Policy, Office of the Governor 

Mr. Zak Covar, Executive Director, Texas Commission on En~ronmental Quality ... '" • ' .• 1- i i' i \. \ .•.. 
SEP. 2b ZU~) 

5{~J~tf~~~·~~:::\~::·:·~\·:',\~i.2 

ORDER ADOPTING REVISIONS TO THE STATE IMPLEMEl'ITATION PLANe-:>~ 

Docket No. 2013-1598-SIP 

Project No. 2013-059-SIP-NR 

·~·,·-- - .-_. ' "-~" • -·· -_, -<;,1 

On September 24, 2013, the Texas Commission on Environmental Quality 

(Commission), during a public meeting, considered the resubmittal and v."ithdrawal of 

previously submitted rules implementing the Commission's air quality Flexible Permit 

Program, and specific portions of rule amendments for the Flexible Permit Program 

rules adopted by the Commission on December 14, 2010, for submittal to the United 

States Environmental Protection Agency (EPA) for consideration as revisions to the 

state implementation plan (SIP). The Commission adopts the submittal, resubmittal 

and withdrawal of rules as revisions to the SIP. Under Tex. Health & Safety Code Ann. 

§§ 382.011, 382.012, and 382.023 C.:V ernon 2011), the Commission has the authority to 

control the quality of the state's air and to issue orders consistent with the policies and 

purposes of the Texas Clean Air Act, Chapter 382 of the Tex. Health & Safety Code. 

The Commission resubmits for EPA consideration the following sections in 30 

Texas Administrative Code (TAC): § 116.10(9)(E), as amended September 15, 2010, and 

all earlier versions of this portion of the definition; § 116.13 and§ n6.no(a)(3), adopted 

June 17, 1998; and§§ 116.710- 116.760, adopted or amended by the Commission on 

November 16, 1994; June 17, 1998; September 2, 1999; August 9, 2000; March 7, 2001; 

August 21, 2002; September 25, 2002; and August 20, 2003, except as modified by the 

list of sections listed below to be withdrawn, or submitted as amended by the 

Commission on December 14, 2010. 

The Commission withdraws from EPA consideration as revisions to the SIP the 

following sections adopted by the Commission between 1994 and 2003: § 116. 711(3) 

(last sentence only) and (11), as amended August 21, 2002, and all earlier versions; § 

116. 715(a), only with regard to the text "or Subchapter C of this chapter (relating to 

Hazardous Air Pollutants: Regulations Governing Constructed or Reconstructed Major 

Sources (FCAA §112(g), 40 CFR Part 63))", as amended August 21, 2002, and all earlier 

versions; § n6.715(c)(6), as amended August 20, 2003, and all earlier versions;§ 

n6.716(a) and (d), as adopted November 16, 1994; § 116.730, adopted November 16, 

1994, and repealed and readopted June 17, 1998; § n6.740(b), adopted June 17, 1998 

and amended September 2, 1999; §§ 116.793- 116.802 and 116.804- 116.807, adopted 

May 22, 2002, except§§ n6.794(11), 116.795(£) and n6.799(a), which were returned to 

the Commission by letter from EPA dated June 29, 2011; and§ 116.803, adopted August 

21,2002. 
·'">:;;' >\ ... :~0~~~.~~~~~~ •\ \ ·, J \ l·' '' ' . , . I !'! -~' : ·, : ', \. ·--- ._- _.,., ' . - . 

. '· ..... , .. ihe~d~imJssion adopts and submits as a revision to the SIP§ u6.765(b) and (c), 

'anil$brhi~:f4etbllowing additional sections adopted by the Commission on December ,. _' ',,' ,, ' ,,... \' 14; 20,l.~l'flS\~~Wlsions to the SIP: § 116.13(3) and (s); § u6.711(2)(M) [introductory text], 

and paragraphs (iv) and (vii);§ u6.715(c)(s)(A) and (B);§ u6.715(c)(6)(A)(i) and (ii); § 

116.715(d) [introductocytext], except the text "The permit shall specify which of the 

monitoring options under paragraph (2)(A) -(E) of this subsection shall be used to 

determine compliance for facilities subject to monitoring under this subsection"; § 

u6.715(d)(1) and (f);§ u6.716(a), (c), (d) and (e); and the repeal of§ 116.716(d). 

Pursuant to 40 Code of Federal Regulations § 51.102 and after proper notice, the 

Commission conducted public hearings to consider the adoption and amendment of 

these rules and revisions to the SIP with each of the rulemaking actions of the 

Commission, as documented in the hearing record books and orders of the Commission 

for each adopted SIP revision. Proper notice included prominent advertisement in the 

areas affected at least 30 days prior to the dates of the hearings, and public hearings 

were held in various locations in Texas prior to the adoption of and amendments to 

these rules. · 

The Commission circulated hearing notices of its intended action to the public, 

including interested persons, the Regional Administrator of the EPA, and all applicable 

local air pollution control agencies. The public was invited to submit data, views, and 

recommendations on the proposed rules and SIP revisions, either orally or in writing, at 

the hearings or during the comment period. Prior to the scheduled hearings, copies of 

the proposed rules and SIP revisions were available for public inspection at the 

Commission's central office, regional offices or on the Commission's Web site. 

Data, views, and recommendations of interested persons regarding the proposed 

rules and SIP revisions were submitted to the Commission during the comment period, 

and were considered by the Commission as reflected in the analysis of testimony 

incorporated by reference to this Order, and in the hearing record books submitted to 

EPA for each of the rulemakings. The Commission finds that the analysis of testimony 

includes the names of all interested groups or associations offering comment on the 

proposed rules and the SIP revisions and their position concerning the same. 

IT IS THEREFORE ORDERED BY THE COMMISSION that the rules in 30 TAC 

listed herein are submitted or resubmitted to, or withdrawn from, the EPA as revisions 

to the SIP. The rules and the revisions to the SIP are incorporated by reference in this 

Order as if set forth at length verbatim in this Order. 

IT IS FURTHER ORDERED BY THE COMMISSION that on behalf of the 

Commission, the Chairman should transmit a copy of this Order, together with the rules 

and revisions to the SIP, to the Regional Administrator of EPA as a proposed revision to 
Docket No. 2013-1598-SIP 

Project No. 2013-059-SIP-NR 

the Texas SIP pursuant to the Federal Clean Air Act, codified at 42 U.S. Code Ann. §§ 

7401-7671q, as amended. 

If any portion of this Order is for any reason held to be invalid by a court of 

competent jurisdiction, the invalidity of any portion shall not affect the validity of the 

remaining portions. 

Date issued: SEP 2 6 2013 

TEXAS COMMISSION ON 

ENVIRONMENTAL QUALITY 
Docket No. 2010-0359-RUL 

THE STATE OF TEXAS 

COUNTY OF TRAVIS 

······-------·----··-----··------------·---·--··-·-------------------··-··--------

This is to certify that the attached are true and correct copies of documents for revisions to the 

Texas State Implementation Plan, adopted on December 14, 2010, pursuant to 40 Code of Federal 

Regulations § 51.104. I am the records administrator for the Air Permits Division of the Texas 

Commission on Environmental Quality (Commission). 

Steve 

~~ ~agle, P.E. 

Director, Air Permits Division 

Texas Commission on Environmental Quality 
Texas Commission on 

Environmental Quality 

Public Hearing 

July 29, 2010 

30 TAC Chapter 116 

Control of Air Pollution by Permits 

for New Construction or Modification 

Rule Project No. 2010-007-116-PR 

Flexible Permit Program Revisions 
This hearing book is being provided as background material 

in relation to the 2010 Flexible Permits rulemaking which 

was adopted by TCEQ on December 14, 2010. This hearing 

book and the associated 2010 rules were not submitted to 

EPA as a SIP revision at that time. Please refer to the SIP 

request letter and order approved by the Commission on 

September 24,2013 (TCEQDocket No. 2013-1598-SIP) for 

current information about the rule sections which TCEQ is 

currently submitting, resubmitting, or withdrawing as 

revisions to the Texas SIP. 
INTRODUCfiON 

The Texas Commission on Environmental Quality (commission) held a public hearing in 

Austin on July 29, 2010, to receive testimony regarding revisions to 30 TAC Chapter 116, 

Control of Air Pollution by Permits for New Construction or Modification; and 

corresponding revisions to the Texas state implementation plan (SIP). 

The commission adopted new §116. 765 and adopted amendments to §§116.13, 116.710, 

116.711, 116.715-116.718, 116.720, 116.721, 116.730, 116.740, and 116.750. The amended 

sections are being submitted to the U.S. Environmental Protection Agency (EPA) as 

revisions to the SIP, with the exception of §§116.711(2)(C)(iii), 116.715(f)(2)(A), 116.730, 

116.740(b), and 116.765, which are not submitted as revisions to the SIP. These revisions 

to Chapter 116 address a number of alleged deficiencies with the flexible permits 

program as discussed in EPA's notice of proposed disapproval published on September 

23, 2009 (74 FR 48480) and EPA's notice of final disapproval published on July 15, 2010 

(75 FR 41311). 

The comment period closed on August 2, 2010. All testimony and comments have been 

reviewed and seriously considered. This hearing record contains a complete record of 

the public hearings and is divided into the following four sections: 

• Public Notification and Proposal 

• Written and Oral Testimony 

• Evaluation of Testimony 

• Staff Recommendations 
Additional copies of this hearing record are maintained in the TCEQ central office at 

12100 Park35 Circle, Austin, Texas 78753. For further information, contact Michael 

Wilhoit at (512) 239-1222. 

PUBLIC NOTIFICATION 

Notification to the public of the proposed revisions was conducted by the following 

procedures: 

1. Publication of the notice of public hearing in the following newspapers on the 

dates listed: 

Austin American-Statesman 

Fort Worth Star-Telegram 

Houston Chronicle 

June18,2010 

June 18, 2010 

June 18, 2010 

2. Publication of the public hearing notice in the Texas Register on July 2, 2010 (35 

TexReg 5736). 

3. Publication of the proposed rules in the Texas Register on July 2, 2010 (35 

TexReg 5729). 

4· Correspondence forwarding the notice of public hearing to the following officials 

and agencies: 

Speaker of the House 

Lieutenant Governor 

City of El Paso 

City of Victoria Planning Department 

Dallas Department of Health and Human Services 

El Paso City-County Health District 
Federal Highway Administration 

Fort Worth Public Health Department 

Galveston County Health District 

Houston Department of Health and Human Services 

Harris County Pollution Control Department 

North Central Texas Council ofGovernments 

Houston-Galveston Area Council 

South East Texas Regional Planning Commission 

Texas Department of Transportation 

Texas Transportation Institute 

Arkansas Department of Pollution Control and Ecology 

Louisiana Department of Environmental Quality 

New Mexico Air Quality Bureau 

Oklahoma Department of Environmental Quality 

U. S. Environmental Protection Agency 
EXAMPLE OF NEWSPAPER CLASSIFIED AD 

Fort Worth Star Telegram 

June 18, 2010 

READER SERViCES v OUR NETWORK OF StTES • Sunny ao·~ ! Forecasl 

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Search Results: 

PU5UC HEARING ON PROPOSED REVISIONS TO 

PUBUC HEARING ON PROPOSED REVISIONS TO 

30 TAC CHAPTER 116 AND REVISIONS TO THE 

STATE IMPLEMENTATION PLAN 

The: Texas CommiSS1on on Environmental 

Quality (commission) will conduct a publk 

he2ring to receive testimony regarding 

proposed revisiOns to 30 Texas Administrative 

Chapter (TAC) Chaptet" 116, Control of Air 

Pollution by Permits for New Constructioo or 

Modification, coll6.13, 116.710, 116.711, 

116.715 ~ 116.718, 116.720, 116.721, 

116.730, 116.740, 116,750 and 116.765; :and 

to the sti!te implementt~tiOn plan (51P}, und~r 

the requirements of Texas He-alth otnd Safety 

Code, 0382.017; Texas G~mment Code, 

Chapter 2001, Subchapter B; and 40 Code of 

Federal RegtJiations o51.1D2 of the United 

States Environmental Protection Agency {EPA) 

regulations concerning SIPs. The proposed 

rulemaking would revise the flexlb~ air pumlt 

rules to i!lddress the EPA's prol)osed disapproval 

of the flexible permit prognm as part of tl'le 

Texa• SIP by EPA. The propased rules would 

more clearlv identify that federal permitting 

requirements mu:st ~met Independently of the 

flexible permit program; eMure that the flexible 

permit rules cannot be used to drcumvent 

federal permitting requirements; address 

monitoring, recordkeeping, and reporting 

associated with flexible permits; and Implement 

other changes necessary to obtain SIP approval 

for the minor new source review flexible permit 

program. The commission wl!l hold a public 

hearing en this proposal in Austin on Juty 29, 

2010, at 2:00p.m., in Building E, Room 2015, 

at the commission's central office located at 

12100 Park 35 Circle. lhe hearing is structured 

for the receipt of oral or written comments by 

interested persons. Individuals may present oral 

statements when called upon in order of 

registration. Open discussion win not be 

permitted durlng the hearing; however, 

commission staff members wi!J be available to discuss the proposal 30 minutes prior to the 

hearing, Persons who have special 

communkation or other accommodation needs 

who are planning to attend ~he hearing should 

contact Charlotte Hom, Office of Legal Services 

at{512} 239·0779. Requests should be made 

as far ln advance as possible. Written comments 

may be 'ubmltted to Michael Parrish, MC 20S, 

Offic:e of Legal Sentlees, Tex;es Commission on 

Environmental Quality, P.O. Box 13087, Austin, 

Texas 7B711·3DS7, or faxed to (512} 239-4808. 

Electronic comments may be submitted at: 

http:lfwwwS. tc:eq.stata.tx. 

us/ruleS/~JCCJmments/ 

File size restrictions may apply to comment5 

being submitted via the eComments system. All 

comments :should reference Rule Project Number 2010.007-116-PR. The comment period 

doses August 2, 2010. Copies of the proposed 

rulemeldng ~:an be obtained from the 

commission's Web site at http:/lwww. 

tceq.state,tx .us/nav/ruleS/ 

propose_adopt.html. For further Information, 

~lease contact Mr. Mk:hael Wilhoit, Air Pl!!rmits 

Division, at {512) 239-12l2. 

31069747 

I·· 

http://www.legalnotice.org/pl/startelegram/ShowNotice.aspx 6/18/2010 
♦ ♦ ♦

♦ ♦ ♦

The TCEQ may grant a contested case hearing on the petition if a written hearing request is filed within 30 days after the newspaper publication of the notice. To request a contested case hearing, you must

submit the following: (1) your name (or for a group or association, an

official representative), mailing address, daytime phone number, and

fax number, if any; (2) the name of the Petitioner and the TCEQ Internal Control Number; (3) the statement "I/we request a contested case

hearing"; (4) a brief description of how you would be affected by the

petition in a way not common to the general public; and (5) the location of your property relative to the proposed District’s boundaries.

You may also submit your proposed adjustments to the petition. Requests for a contested case hearing must be submitted in writing to the

Office of the Chief Clerk at the address provided in the information section below. The Executive Director may approve the petition unless a

written request for a contested case hearing is filed within 30 days after

the newspaper publication of this notice. If a hearing request is filed,

the Executive Director will not approve the petition and will forward

the petition and hearing request to the TCEQ Commissioners for their

consideration at a scheduled Commission meeting. If a contested case

hearing is held, it will be a legal proceeding similar to a civil trial in

state district court. Written hearing requests should be submitted to the

Office of the Chief Clerk, MC 105, TCEQ, P.O. Box 13087, Austin, TX

78711-3087. For information concerning the hearing process, please

contact the Public Interest Counsel, MC 103, at the same address. For

additional information, individual members of the general public may

contact the Districts Review Team, at (512) 239-4691.

Si desea información en Español, puede llamar al (512) 239-0200.

General information regarding TCEQ can be found at our web site at

www.tceq.state.tx.us.

TRD-201003601

LaDonna Castañuela

Chief Clerk

Texas Commission on Environmental Quality

Filed: June 23, 2010

Notice of Public Hearings on Proposed Revisions to 30 TAC

Chapter 114 and Revisions to the State Implementation Plan

The Texas Commission on Environmental Quality (TCEQ or commission) will conduct public hearings to receive testimony regarding proposed amendments to 30 Texas Administrative Code (TAC) Chapter

114, Control of Air Pollution from Motor Vehicles, §§114.2, 114.51,

and 114.64; the repeal of §114.52; and revisions to the state implementation plan (SIP), under the requirements of Texas Health and Safety

Code, §382.017; Texas Government Code, Chapter 2001, Subchapter

B; and 40 Code of Federal Regulations §51.102 of the United States

Environmental Protection Agency (EPA) regulations concerning SIPs.

The proposed rulemaking would implement House Bill (HB) 715 and

HB 1796 from the 81st Texas Legislature, 2009, Regular Session, relating to requiring low-volume vehicle emissions inspection stations to

meet the criteria for a low-volume waiver established by the Texas Department of Public Safety and increasing the maximum time allowed

from five to ten days that counties will have to reimburse dealerships

participating in the Low Income Vehicle Repair Assistance, Retrofit,

and Accelerated Vehicle Retirement Assistance Program, respectively.

The proposed rulemaking would also streamline the process for implementing minor non-programmatic modifications to the vehicle emissions inspection analyzer specifications and repeal the Early Participation Incentive Program. (Rule Project Number 2009-027-114-EN)

The proposed SIP revision would implement HB 715 from the 81st

Texas Legislature, 2009, Regular Session, related to requiring low-volume vehicle emissionsinspection stationsto meet the criteria for a lowvolume waiver established by the Texas Department of Public Safety.

The proposed revision would also streamline the process for implementing minor non-programmatic modifications to the vehicle emissions inspection analyzer specifications and include various non-substantive changes to apply appropriate and consistent use of acronyms,

section references, structure, formatting, and certain terminology. (SIP

Project Number 2009-035-SIP-NR)

The commission will hold public hearings on these proposals in Fort

Worth on July 20, 2010, at 2:00 p.m. at the TCEQ, Region 4 Office, Dallas-Fort Worth Public Meeting Room, 2309 Gravel Road, Fort

Worth, TX 76118; in Austin on July 21, 2010, at 10:00 a.m. at the

TCEQ, Building E, Room 201S, 12100 Park 35 Circle, Austin, TX

78753; and in Houston on July 22, 2010, at 3:00 p.m. at the HoustonGalveston Area Council, Conference Room A, 3555 Timmons Lane,

Houston, TX 77027. The hearings are structured for the receipt of oral

or written comments by interested persons. Individuals may present

oral statements when called upon in order of registration. Open discussion will not be permitted during the hearings; however, commission staff members will be available to discuss the proposal 30 minutes

prior to the hearings.

Persons who have special communication or other accommodation

needs who are planning to attend the hearings should contact Charlotte

Horn, Office of Legal Services at (512) 239-0779. Requests should be

made as far in advance as possible.

Written comments may be submitted to Michael Parrish, MC 205,

Office of Legal Services, Texas Commission on Environmental

Quality, P.O. Box 13087, Austin, Texas 78711-3087, or faxed

to (512) 239-4808. Electronic comments may be submitted at

http://www5.tceq.state.tx.us/rules/ecomments/. File size restrictions

may apply to comments being submitted via the eComments system.

All comments pertaining to the rulemaking should reference Rule

Project Number 2009-027-114-EN. All comments relating to the

SIP revision should reference Project Number 2009-035-SIP-NR.

The comment period closes July 26, 2010. Copies of the proposed

rulemaking can be obtained from the commission’s Web site at

http://www.tceq.state.tx.us/nav/rules/propose_adopt.html. Copies

of the proposed SIP revision and all appendices can be obtained

from the TCEQ’s Web site at http://www.tceq.state.tx.us/implementation/air/sip/sipplans.html. For further information, please contact

Edgar J. Gilmore, Jr., Air Quality Planning Section, (512) 239-2069.

TRD-201003438

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Filed: June 18, 2010

Notice of Public Hearing on Proposed Revisions To 30 TAC

Chapter 116 and Revisions to the State Implementation Plan

The Texas Commission on Environmental Quality (commission) will

conduct a public hearing to receive testimony regarding proposed

revisions to 30 Texas Administrative Chapter (TAC) Chapter 116,

Control of Air Pollution by Permits for New Construction or Modification, §§116.13, 116.710, 116.711, 116.715 - 116.718, 116.720,

116.721, 116.730, 116.740, 116.750, and 116.765; and to the state

implementation plan (SIP), under the requirements of Texas Health

and Safety Code, §382.017; Texas Government Code, Chapter 2001,

Subchapter B; and 40 Code of Federal Regulations §51.102 of the

United States Environmental Protection Agency (EPA) regulations

concerning SIPs.

IN ADDITION July 2, 2010 35 TexReg 5967
♦ ♦ ♦

The proposed rulemaking would revise the flexible air permit rules

to address the EPA’s proposed disapproval of the flexible permit program as part of the Texas SIP by EPA. The proposed rules would more

clearly identify that federal permitting requirements must be met independently of the flexible permit program; ensure that the flexible permit rules cannot be used to circumvent federalpermitting requirements;

address monitoring, recordkeeping, and reporting associated with flexible permits; and implement other changes necessary to obtain SIPapprovalfor the minor new source review flexible permit program.

The commission will hold a public hearing on this proposal in Austin

on July 29, 2010, at 2:00 p.m., in Building E, Room 201S, at the commission’s central office located at 12100 Park 35 Circle. The hearing

is structured for the receipt of oral or written comments by interested

persons. Individuals may present oral statements when called upon in

order of registration. Open discussion will not be permitted during the

hearing; however, commission staff members will be available to discuss the proposal 30 minutes prior to the hearing.

Persons who have special communication or other accommodation

needs who are planning to attend the hearing should contact Charlotte

Horn, Office of Legal Services at (512) 239-0779. Requests should be

made as far in advance as possible.

Written comments may be submitted to Michael Parrish, MC 205,

Office of Legal Services, Texas Commission on Environmental

Quality, P.O. Box 13087, Austin, Texas 78711-3087, or faxed

to (512) 239-4808. Electronic comments may be submitted at:

http://www5.tceq.state.tx.us/rules/ecomments/. File size restrictions may apply to comments being submitted via the eComments

system. All comments should reference Rule Project Number

2010-007-116-PR. The comment period closes August 2, 2010. Copies

of the proposed rulemaking can be obtained from the commission’s

Web site at http://www.tceq.state.tx.us/nav/rules/propose_adopt.html.

For further information, please contact Mr. Michael Wilhoit, Air

Permits Division, at (512) 239-1222.

TRD-201003437

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Filed: June 18, 2010

Notice of Water Quality Applications

The following notice was issued on June 11, 2010 through June 18,

2010.

The following require the applicants to publish notice in a newspaper.

Public comments, requests for public meetings, or requests for a contested case hearing may be submitted to the Office of the Chief Clerk,

Mail Code 105, P.O. Box 13087, Austin, Texas 78711-3087, WITHIN

30 DAYS OF THE DATE OF NEWSPAPER PUBLICATION OF THE

NOTICE.

INFORMATION SECTION

Douglas Wayne Hall for a new State Permit No. WQ0004908000, for

a Concentrated Animal Feeding Operation (CAFO), to authorize the

applicant to operate an existing dairy cattle facility at a maximum capacity of 699 head, of which 699 head are milking cows. The facility

is located at 400 County Road 4410, Point, in Rains County, Texas.

CALPINE HIDALGO ENERGY CENTER LP BROWNSVILLE

PUBLIC UTILITIES BOARD AND CALPINE OPERATING SERVICES COMPANY INC which operates the Calpine Hidalgo Energy

Center, a combined cycle electric power generating facility has applied

for a major amendment to TPDES Permit No WQ0004138000 to

authorize continuous chlorination and associated changes to Item 8

of the Other Requirements section of the existing permit, revisions to

chlorine limits in the existing permit, and the addition of an internal

outfall to discharge off-line turbine wash water on an intermittent

and flow variable basis. The current permit authorizes the discharge

of cooling tower blowdown and previously monitored effluents (low

volume waste sources) at a daily average flow not to exceed 920,000

gallons per day via Outfall 001. The facility is located at 4005 North

Seminary Road, at the northwest corner of the intersection of Monte

Cristo Road (Farm-to-Market Road 1925) and Seminary Road in the

City of Edinburg, Hidalgo County, Texas 78541.

CITY PUBLIC SERVICE OF SAN ANTONIO which operates V. H.

Braunig Steam Electric Station, has applied for a renewal of TPDES

Permit No. WQ0001515000, which authorizes the discharge of oncethrough cooling water, previously monitored effluents, and storm water

runoff at a daily average flow not to exceed 1,320,000,000 gallons per

day via Outfall 001; the discharge of storm water runoff at an intermittent and flow variable basis via Outfalls 003, 006, 007, 008, 011, 013,

and 015; and the discharge of storm water runoff and car wash water

at an intermittent and flow variable basis via Outfall 012. The facility

is located at 15290 Streich Road, approximately two miles east of Interstate Highway 37 South, adjacent to Braunig Lake, approximately

2.75 miles northwest of the City of Elmendorf and 17 miles southeast

of the City of San Antonio, Bexar County, Texas TX 78112.

WRB REFINING LLC which operates Borger Railway Maintenance

Center, a railcar cleaning, maintenance, and testing center, has applied

for a renewal of TCEQ Permit No. WQ0002326000, which authorizes

disposal of boiler blowdown/zeolite regeneration water and steam condensate (not used in cleaning) at a volume not to exceed an annual average flow of 1100 gallons per day via evaporation. This permit will not

authorize a discharge of pollutants into water in the State. The facility

and land application site are located 919 Florida Street, west of Spur

Road 246 and south of the Atchison, Topeka, and Santa Fe Railway in

the City of Borger, Hutchinson County, Texas 79007.

UNITED STATES DEPARTMENT OF THE AIR FORCE which

operates the former Kelly Air Force Base groundwater treatment

facilities, has applied for a major amendment to TPDES Permit No.

WQ0003955000 to authorize the removal of unconstructed Outfall

002, the removal of total PCBs sampling requirements at Outfall 003,

and a modification of the irrigation acres from 195 acres to 198 acres.

The current permit authorizes the discharge of treated groundwater and

rinsate at a daily average flow not to exceed 1,000,000 gallons per day

via Outfalls 001, 002, and 003; the discharge of treated groundwater

and rinsate at a daily average flow not to exceed 150,000 gallons per

day via Outfall 004; and the irrigation of 195 acres of the Lackland Air

Force Base with treated groundwater at a hydraulic application rate

not to exceed 4.0 acre-feet per acre per year. The facility is located

adjacent to the Lackland Air Force Base, south of U.S. Highway 90

and east of the intersection of Leon Creek and Military Drive, in the

southwest portion of the City of San Antonio, Bexar County, Texas

78226.

SAN ANTONIO WATER SYSTEM has applied for a renewal of

TPDES Permit No. WQ0010137003, which authorizes the discharge

of treated domestic wastewater at an annual average flow not to exceed

46,000,000 gallons per day. The existing permit also authorizes composting of sewage sludge, the marketing and distribution of sewage

sludge and the land application of Class A sludge on property-owned,

leased or under the direct control of the permittee. The facility is

located approximately one mile west of the intersection of Mauermann

Road and Pleasanton Road in Bexar County, Texas 78221. The sludge

35 TexReg 5968 July 2, 2010 Texas Register
♦ ♦ ♦

(f) Reimbursements for replacements. A participating county

shall ensure that funds are transferred to a participating automobile

dealership no later than 10 [five] business days after the county receives

proof of the sale, proof of transfer to a dismantler, and any administrative documents that meet the requirements of the county or designated

entity. A list of all administrative documents must be included in the

agreements that are entered into by the county or designated entity and

the participating automobile dealerships.

(1) A participating county shall provide an electronic

means for distributing replacement funds to a participating automobile

dealership once all program criteria have been met. The replacement

funds may be used as a down payment toward the purchase of a

replacement vehicle. Participating automobile dealers shall be located

in the State of Texas. Participation in the LIRAP by an automobile

dealer is voluntary.

(2) Participating counties shall develop a document for

confirming a person’s eligibility for purchasing a replacement vehicle

and for tracking such purchase.

(A) The document must include at a minimum, the full

name of applicant, the vehicle identification number of the retired vehicle, expiration date of the document, the program administrator’s contact information, and the amount of money available to the participating

vehicle owner.

(B) The document must be presented to a participating

dealer by the person seeking to purchase a replacement vehicle before

entering into negotiations for a replacement vehicle.

(C) A participating dealer who relies on the document

issued by the participating county has no duty to confirm the eligibility

of the person purchasing a replacement vehicle in the manner provided

by this section.

This agency hereby certifies that the proposal has been reviewed

by legal counsel and found to be within the agency’s legal authority to adopt.

Filed with the Office of the Secretary of State on June 18, 2010.

TRD-201003434

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Earliest possible date of adoption: August 1, 2010

For further information, please call: (512) 239-2548

CHAPTER 116. CONTROL OF AIR

POLLUTION BY PERMITS FOR NEW

CONSTRUCTION OR MODIFICATION

The Texas Commission on Environmental Quality (TCEQ or

commission) proposes amendments to §§116.13, 116.710,

116.711, 116.715 - 116.718, 116.720, 116.721, 116.730,

116.740, and 116.750; and new §116.765.

The amended sections would be submitted to the United

States Environmental Protection Agency (EPA) as revisions

to the State Implementation Plan (SIP) with the exception

of §§116.711(a)(2)(C)(iii), 116.715(f)(2)(A), 116.730, and

116.740(b).

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS

FOR THE PROPOSED RULES

On September 23, 2009, the EPA published notice in the Federal

Register (74 FR 48480) (hereafter "Notice") of its intent to disapprove the TCEQ flexible permit program rules that were submitted to the EPA as a proposed SIP revision in 1994. Although

the Federal Clean Air Act (FCAA) requires that proposed revisions to the SIP be reviewed within 18 months after submittal

(See 42 United States Code (U.S.C.) §7410(k)(1)(B) and (k)(2)),

EPA took 15 years to take any formal action and did so only

in response to litigation brought by holders of flexible permits

(see BCCA Appeal Group, et al v. United States EPA et al, No.

3-08CV1491-G (N.D. Texas)). In the Notice, the EPA cited the

following assertions as the basis for disapproval of the flexible

permit program as a minor New Source Review (NSR) revision:

1) The program is not clearly limited to use in minor NSR and

does not clearly prevent circumvention of major NSR requirements; 2) The program does not require that an applicability determination for major NSR be made first for construction or modification that could potentially be subject to major NSR; 3) The

program fails to meet the statutory and regulatory requirements

for a SIP revision and is not consistent with guidance on SIP

revisions; 4) The program lacks replicable, specific, established

implementation procedures for establishing the emission cap in

a minor NSR flexible permit; 5) The program is not an enforceable minor NSR permitting program; 6) The program allows the

issuance of flexible permits that do not incorporate emission limitations and other requirements of the Texas SIP; and 7) The program lacks the necessary more specialized monitoring, recordkeeping, and reporting (MRR) requirements required for this type

of minor NSR program, to ensure accountability and provide a

means to determine compliance. The EPA also identified a number of related concerns with the Texas flexible permit program in

correspondence to the commission dated March 12, 2008.

The Texas flexible permit program rules (Chapter 116, Subchapter G, Flexible Permits) became effective on December 8, 1994.

The flexible permit program was developed in response to direction from the commission at the January 21, 1994, policy

agenda meeting. The flexible permit rules were developed after considering the positional papers presented by industry, environmental groups, and local programs under the supervision of

Task Force 21. The rules created a new type of permit called a

flexible permit, which functions as an optional alternative to the

traditional preconstruction permits that are authorized in Subchapter B, New Source Review Permits. Flexible permits were

designed to exchange flexibility for emission reductions with the

final goal being a well-controlled facility. At the time the flexible

permit program was developed, the commission lacked the authority to require an air quality permit for grandfathered facilities.

The flexible permit program was intended to provide grandfathered facilities with a voluntary authorization mechanism that

would reduce emissions. Only one flexible permit can be issued

for a particular plant site or active account. However, multiple

emission caps, multiple individual emission limits, or any combination thereof can be included in a flexible permit. The applicant

for a flexible permit can combine existing facilities and new facilities into the flexible permit. The flexible permit would then

become the controlling authorization for all facilities included in

the permit, succeeding any existing minor NSR permits that may

have been applicable to all or part of the facilities. The flexible

permit is not a substitute for or in lieu of major NSR permitting

if federal NSR review is triggered. The flexible permitting program is intended to eliminate the need for owners or operators of

participating facilities to submit an amendment application each

time certain operational or physical changes are made at the

permitted facility. The environmental benefits of the flexible perPROPOSED RULES July 2, 2010 35 TexReg 5729
mit program have included the permitting of grandfathered units,

substantial emission reductions from the installation of controls,

and a comprehensive evaluation of emission impacts.

The commission maintains that its flexible permit program rules,

as adopted and implemented, are fully approvable as revisions

to the SIP. In fact, the Texas flexible permit program is a minor

NSR permit program which requires the application of best available control technology (BACT) to minor sources even though

not required to do so under the FCAA. The commission’s executive director provided detailed comments in response to the

Notice addressing each of the EPA assertions discussed earlier

and demonstrating that, as written and administered by the commission, the flexible permit program rules are in full conformity

with all applicable federal requirements (see Letter from M. Vickery, Executive Director, TCEQ to S. Spruiell, Air Permits Section

(EPA Region 6), November 23, 2009). Additionally, permits issued under the flexible permit rules are consistent with the FCAA

and EPA rules implementing NSR.

As originally developed and subsequently implemented by

TCEQ in 1994, the Texas flexible permit program is a minor

NSR program. No provision of the Texas flexible permit program

rules may be read to circumvent federal requirements. The

rules expressly require compliance with all applicable requirements relating to nonattainment and Prevention of Significant

Deterioration (PSD) review.

That limitation, adopted in 1994 as §116.711(8) and (9), continues as proposed §116.711(a)(2)(H) and (I); see also, e.g.,

proposed §§116.710(a)(5), 116.711(a)(2)(C)(ii), and 116.718(b)

and (c). The program does not supersede or negate federal requirements. The flexible permit program may not be used as a

shield for protection or exemption from federal programs. Persons making changes under a flexible permit must maintain sufficient documentation to demonstrate that the project will comply

with Subchapter B, Division 5, Nonattainment Review Permits;

Division 6, Prevention of Significant Deterioration Review; and

Subchapter E, Hazardous Air Pollutants: Regulations Governing

Constructed or Reconstructed Major Sources (FCAA, §112(g),

40 CFR Part 63). A major modification, as defined in §116.12,

may not occur without first being subject to a Nonattainment

and/or PSD review. Likewise, an owner or operator may not use

flexible permit rules to avoid maximum achievable control technology (MACT) requirements for the construction or reconstruction of major sources of hazardous air pollutants (HAP) as they

are described and addressed in the 40 Code of Federal Regulations (CFR) Part 63, National Emission Standards for Hazardous

Air Pollutants (NESHAP) rules. If a proposed project is determined to be a major modification under Nonattainment and/or

PSD rules, or meets the definition of construction or reconstruction under 40 CFR Part 63, the owner or operator must obtain a

federal NSR permit or major modification under the appropriate

federal NSR program, as well as a HAP permit to meet requirements of FCAA §112(g) if case-by-case MACT applies; and a

minor NSR permit amendment. Further, the flexible permit program does not impair the commission’s authority to control the

quality of the state’s air and to take action to control a condition

of air pollution if the commission finds that such a condition exists.

As the EPA recognizes, under the applicable federal regulations,

states have broad discretion to determine the scope of their minor NSR programs as needed to attain and maintain the national ambient air quality standards (NAAQS). The development

of NSR requirements and procedures tailored for the air quality needs of each state is not only consistent with the FCAA, it

is encouraged under the law and EPA’s implementing regulations (see 42 U.S.C. §7407(a) and 40 CFR §51.101(e) and (g);

see also Safe Air for Everyone v. United States EPA, 488 F.3d

1088, 1092 (9th Cir. 2007)). States have significant discretion

to tailor minor NSR requirements that are consistent with the requirements of 40 CFR Part 51 (Requirements for Preparation,

Adoption, and Submittal of Implementation Plans), and may also

provide a rationale for why the rules are at least as stringent as

the Part 51 requirements where the revisions are different from

Part 51. These amendments are intended to remove any doubt

that EPA might have, and to reaffirm the commission’s position

that the rules for the flexible permit program are at least as stringent as the commission’s SIP-approved minor NSR permitting

program.

SECTION BY SECTION DISCUSSION

§116.13, Flexible Permit Definitions

The commission is proposing detailed MRR requirements

in proposed §116.715(c)(5), (6) and (12) and (d); see also

§116.711(a)(2)(G). To support the proposed MRR requirements,

the commission is proposing definitions of continuous emission

monitoring system (CEMS), continuous parameter monitoring

system (CPMS), and predictive emissions monitoring system

(PEMS). The proposed definitions for these terms are derived

from similar definitions established in 40 CFR §52.21, with minor

changes to account for their use in the flexible permit program.

The proposed changes relating to MRR are intended to address

the EPA’s comment that the Texas flexible permit program lacks

the specialized MRR requirements necessary to enforce flexible

permits.

The commission proposes to revise the definition of "emission

cap" and the definition of "individual emission limitation" under

§116.13 to delete references to the "insignificant emissions

factor." The commission also proposes to remove the insignificant emission factor from other sections of Subchapter G as

discussed in following sections of this preamble. The EPA

identified the insignificant emissions factor as a concern in

the March 12, 2008, correspondence to the commission. The

proposed changes to eliminate the insignificant emissions factor

would improve the accounting of emissions authorized under

the flexible permit, and would address the EPA’s comments

that the Texas flexible permit program lacks replicable, specific,

established implementation procedures for establishing the

emission cap, and does not sufficiently address major NSR

requirements.

§116.710, Applicability

The EPA has commented that the Texas flexible permit program

is not clearly limited to minor NSR thereby allowing new major

stationary sources to construct without a major NSR permit, and

has no regulatory provisions clearly prohibiting the use of the

program from circumventing the major NSR SIP requirements

thereby allowing sources to use a flexible permit to avoid the

requirement to obtain preconstruction permit authorizations for

projects that would otherwise require a major NSR preconstruction permit. As previously discussed in the BACKGROUND

AND SUMMARY section, the commission does not concur

with the EPA’s comment that the flexible permit program allows sources to circumvent or avoid major NSR requirements.

However, the commission is proposing §116.710(a)(5) to clarify

and emphasize that any project that constitutes a new major

stationary source or major modification that would trigger major

35 TexReg 5730 July 2, 2010 Texas Register
NSR requirements must comply with Subchapter B, Division 5

or 6, as applicable. Proposed §116.710(a)(5) also contains a

statement to emphasize that Subchapter G, cannot be used to

circumvent applicable federal major NSR permit requirements.

Proposed §116.710 also contains minor editorial changes to

correct outdated cross-references and obsolete terminology

throughout the section.

§116.711, Flexible Permit Application

The commission proposes to restructure and renumber the contents of this section to provide improved readability and greater

consistency with similar requirements in §116.111. The commission also proposes minor changes throughout this section to update terminology and correct cross-references.

The commission proposes §116.711(a)(2)(C)(i) to more clearly

describe the application of BACT to new and existing facilities.

All new facilities are required to use BACT. Existing facilities

may be considered on a grouped basis, such that some facilities within the group may be controlled at a higher level than

BACT in order to provide the emission reductions necessary so

that other facilities within the group may be controlled to a lesser

degree. The existing level of control may not be reduced for any

facility.

The commission proposes §116.711(a)(2)(C)(ii), which contains

language to clarify that projects which constitute a new major

source or major modification that would be subject to federal

PSD or nonattainment permitting must comply with applicable

requirements of §§116.150, 116.151, or 116.160 to determine

the necessary emission controls. This proposed change is intended to ensure that all applicable federal major NSR control requirements are applied. This proposed change addresses EPA’s

comments that allege that the flexible permit rules could be used

to bypass the federal BACT or Lowest Achievable Emission Rate

(LAER) control technology determination that is required for major PSD or nonattainment NSR projects.

The commission proposes amended §116.711(a)(2)(G), which

would specify that flexible permits shall specify requirements for

initial compliance testing and methods of determining ongoing

compliance. The EPA expressed a concern that the existing rule

language, which contains the term "may" instead of "shall," is

not sufficiently specific. Although flexible permits already specify appropriate compliance testing and compliance determination

methods within the conditions of the permit, the commission has

proposed to revise the rule language for greater clarity. The proposed change, in combination with others in this proposal, addresses the EPA’s comments that the flexible permit program is

lacking in supporting MRR requirements, and is not sufficiently

enforceable.

The commission proposes amended §116.711(a)(2)(H) and (I),

which would specify that prior to applying the requirements of

Subchapter G, the applicant must first perform an analysis to

determine the applicability or nonapplicability of federal nonattainment NSR requirements or PSD requirements. These proposed changes address EPA’s comment that the flexible permit

program could be used to exempt or shield changes from federal

permitting requirements because the program does not require

that first an applicability determination be made whether the construction or modification is subject to major NSR.

The commission proposes amended §116.711(a)(2)(J), which

would add a requirement that any permit application for a new

flexible permit, or permit amendment, shall include an air quality

analysis to demonstrate that the proposed action will not interfere

with attainment and maintenance of the NAAQS. This proposed

change addresses EPA’s comment that the flexible permit program does not sufficiently protect the NAAQS.

The commission proposes to amend §116.711(a)(2)(M)(iv) by

adding language to ensure that permit applicants provide a complete description of the emission point numbers (EPNs) and facilities that will be included in an emissions cap. This proposed

change addresses the EPA’s comment that flexible permits must

be structured in such a way that they sufficiently identify which

units are subject to emission caps and individual emission limits.

The commission proposes §116.711(a)(2)(M)(vi) to specify that

calculations to determine the controlled emission rates from

each facility shall be performed in accordance with TCEQ Air

Permits Division guidance.

The commission proposes §116.711(a)(2)(M)(vii) to specify that

the flexible permit application must identify any terms, conditions, and representations in any Subchapter B permit or permits which will be superseded or incorporated under a flexible

permit. The applicant shall include an analysis of how the conditions and control requirements of Subchapter B permits will be

carried forward in the proposed flexible permit. This proposed

change is intended to address the EPA’s comment that existing

SIP permits’ major and minor NSR terms, limits and conditions,

must be tracked and accounted for.

§116.715, General and Special Conditions

The commission proposes to restructure and renumber portions

of §116.715, and proposes other minor changes to improve readability and update terminology and cross references throughout

the section.

The commission proposes to amend §116.715(a) by deleting existing language concerning the executive director’s ability to limit

the use of standard permits or permits by rule in cases where the

increase of a particular air contaminant could result in a significant impact on the air environment, or could cause the facility,

group of facilities, or account to become subject to federal PSD

or nonattainment permitting. This requirement has been reorganized and relocated to §116.715(f).

The commission proposes an amendment to §116.715(b) to clarify that a flexible permit may contain more than one emission

cap for a specific air contaminant. The commission also proposes to add language to specify that a permit holder shall comply with any emission caps and individual emission limitations in

the permit, and that an exceedance of a flexible permit emission

cap(s) or individual emission limitations is a violation of the permit. These proposed changes are in response to comments in

the EPA’s correspondence to the commission dated March 12,

2008.

The commission proposes amendments to §116.715(c)(5). Proposed §116.715(c)(5)(A) would require that each flexible permit specify requirements for monitoring or demonstrating compliance with emission caps and individual emission limits in the

flexible permit. Proposed §116.715(c)(5)(B) would require that

each flexible permit specify emission calculation methods for calculating annual and short term emissions for each pollutant when

continuous emission monitoring or continuous operating parameter monitoring is not required. These proposed changes address the EPA’s concerns that the flexible permit rules are not

sufficiently specific concerning the monitoring and enforcement

of flexible permit emission caps and individual emission limits.

PROPOSED RULES July 2, 2010 35 TexReg 5731
The commission proposes to amend §116.715(c)(6). The

proposed amendment would reorganize the recordkeeping

requirements applicable to flexible permits, and add specific

new recordkeeping requirements to address certain EPA comments in the Notice and in the March 12, 2008, correspondence

from the EPA to the commission. The proposed recordkeeping requirements would require flexible permit applicants to

maintain records of any other permit applications associated

with the flexible permit; would require specific recordkeeping

to document compliance with annual and short term emission

caps and individual emission limitations; and would require that

flexible permit holders maintain records for five years instead

of two years, as suggested by the EPA’s March 12, 2008,

correspondence.

The commission proposes §116.715(c)(8), concerning compliance with representations in a flexible permit application. This

requirement parallels existing requirements relating to representations under §116.116.

In the Notice, the EPA commented that the flexible permit program lacked sufficient MRR to ensure accountability and determine compliance with flexible permits. The commission does

not concur with the EPA’s comment, as each individual permit

establishes appropriate MRR requirements on a case-by-case

basis. However, more specific rule language relating to MRR

may be appropriate to clearly establish MRR requirements in

the rule, especially relating to emission caps. The commission

proposes §116.715(c)(12) and (d), which would specify MRR

procedures associated with emission caps in a flexible permit.

The proposed rules would require semiannual reporting relating

to compliance with long and short term emission caps, similar

to the semiannual reporting suggested by the EPA’s March 12,

2008, correspondence to the commission. The proposed rules

include requirements to address absence of monitoring data, require revalidation of site-generated data, and define minimum

characteristics of the monitoring system. The proposed rules

are intentionally structured in a manner similar to federal regulations for recordkeeping, reporting, and monitoring associated

with Plant-wide Applicability Limits, for which the commission

has adopted rules in Subchapter C, Plant-wide Applicability Limits, with minor changes as necessary for compatibility with the

flexible permit program.

§116.716, Emission Caps and Individual Emission Limitations

The commission is proposing minor changes throughout this

section to improve readability and update terminology. Other

proposed changes throughout §116.716 are intended to address

EPA’s comment that the flexible permit program lacks replicable,

specific, established implementation procedures for determining

an emissions cap, and address several of the EPA’s comments

in the March 12, 2008, correspondence to the commission.

The commission is proposing §116.716(a)(1), which would specify that only like-kind facilities could be included in an emissions

cap. As an alternative to this requirement, a site-wide emission

cap could be established to cover all facilities at a site. Like-kind

facilities means those facilities which are similar in operational

nature and in emissions, such that all the facilities within an emission cap would share certain basic characteristics. Examples of

like-kind facilities could include, but are not limited to: engines;

turbines; boilers and process heaters; storage vessels; or similar

chemical or refining process units. The executive director would

reserve the right to exclude a proposed facility from an emissions cap if the executive director determines that the inclusion

of the facility in the cap could interfere with the ability to monitor

compliance with the permit, or determines that the inclusion of

the facility in the cap could interfere with the protection of human

health and the environment. The EPA expressed concern in the

Notice that under the existing rules, hundreds of unrelated emission sources could be subject to one emission cap and/or individual emission limitations. The proposed change would address

this concern by narrowing the scope of the types of sources that

could be included together in an emission cap, referred to as a

like-kind facilities cap. The commission has also included the

option to have a site-wide cap.

The commission is proposing §116.716(a)(2)(B), which would

add language to clarify and reinforce the application of federally-required control technology for any project that constitutes a

federal major source or major modification. This provision is intended to further address EPA’s stated concerns that the flexible

permit program could allow a facility to avoid federally-required

control technology.

The commission is proposing §116.716(a)(3), which would require that facilities subject to LAER in accordance with Subchapter B, Division 5, must be included in a separate emissions cap

or provided with individual emission limitations. This provision is

intended to ensure that sources subject to LAER are fully controlled as required by federal NSR regulations and Subchapter

B.

The commission is proposing §116.716(a)(5) to specify that a

permit applicant may propose an emission cap that is lower than

the emission cap determined by subsection (a)(4), if the permit

applicant provides technical information to demonstrate that it

is feasible to operate in compliance with the proposed emission

cap.

The commission is proposing §116.716(c), which would require

that each flexible permit clearly identify, by a table or other appropriate means, the facilities that are subject to an emission

cap, and the facilities that are subject to individual emission limitations. This proposed change addresses EPA’s comment that

each flexible permit must be structured in such a manner that it

will be clear which facilities are included under the permit and

emission cap, and which facilities are subject to individual emission limitations.

The commission proposes to delete existing §116.716(d), which

currently allows an emission cap or individual limitation to include

an insignificant emissions factor of up to 9%.

The commission proposes §116.716(d) which would clarify how

an emission cap is to be adjusted or determined for several situations. Proposed §116.716(d)(1) would require that an emission cap be adjusted downward to account for the shutdown of

a facility for a period longer than six months. The current rule

does not require the emission cap to be adjusted until a facility

is shut down for longer than 12 months. The time period has

been proposed to be reduced from 12 months to ensure that

the emissions cap corresponds to the actual operation of the facilities under the cap and to ensure that appropriate emission

control is maintained even when some sources within the cap

are not operating. Proposed §116.716(d)(1) also includes language to clarify how the emission cap is to be adjusted when a

previously shut down facility is restored to operation. The commission proposes §116.716(d)(2) to clarify that a permit amendment is required to add a facility to a flexible permit emission cap.

Proposed §116.716(d)(3) further explains how the emission cap

shall be determined when the permit is amended.

35 TexReg 5732 July 2, 2010 Texas Register
Proposed §116.716(e) would require that each emission cap

or individual emission limitation have an annual emission limit,

based on a 12-month rolling period. The proposed rule would

also require that each emission cap or individual emission

limitation include an appropriate short term (such as hourly)

emission limit.

§116.717, Implementation Schedule for Additional Controls

The commission proposes an amendment to §116.717 to clarify

that any control implementation schedule contained in a flexible

permit is a requirement of the permit, such that if the schedule

cannot be met, the permit holder must obtain a permit amendment or alteration to revise the control schedule in order to maintain compliance with the permit. The permit amendment or alteration would have to be approved by the executive director before

the control schedule deadline specified in the permit passes. In

addition, the commission has added language to this section to

acknowledge and emphasize that certain federally-required controls, such as BACT or LAER required by PSD or nonattainment

NSR, must be in place and operational before the permitted facility can begin operation. The proposed amendment addresses

the EPA’s comments relating to implementation schedules in the

March 12, 2008, correspondence from the EPA to the commission, and would further ensure that the flexible permit program

cannot be used to forestall or avoid major NSR control requirements.

§116.718, Significant Emission Increase

The commission proposes §116.718(b) to clarify that this section

may not be used to authorize an emission increase under a flexible permit for any project that constitutes a federal major modification. Proposed §116.718(b) further requires that the permit

holder must document that any increases under this section are

not major modifications. The proposed changes further address

the EPA’s comments that the flexible permit program could be

used to avoid applicable major NSR requirements.

The commission proposes §116.718(c) which would require a

permit holder to perform an air quality analysis to demonstrate

that any increases under this section would not interfere with

attainment and maintenance of the NAAQS. This proposed

change addresses the EPA’s comment in the Notice that the

flexible permit program does not contain sufficient assurances

that the NAAQS will not be violated.

§116.720, Limitation on Physical and Operational Changes

The commission proposes minor editorial changes to §116.720

to improve readability.

§116.721, Amendments and Alterations

The commission proposes amendments to §116.721 to clarify

under what circumstances a flexible permit amendment is required. The proposed rule under §116.721(a) includes new language to state that any action that would relax emission controls,

add a new facility or facilities, or would constitute a major modification would require the permit holder to obtain a permit amendment. Similar language is proposed to be added to §116.721(c)

for the same purpose. The proposed change is intended to prevent "backsliding" of emission controls, and ensure that projects

that constitute a major modification are subject to an appropriate review for applicable federal requirements. The commission

also proposes minor editorial changes to this section to update

terminology and improve readability.

The Notice stated that the proposed disapproval was based, in

part, on the EPA’s understanding that the flexible permit program

allows holders of a flexible permit to make de facto amendments

of existing SIP permits, including changes in the terms and conditions (such as throughput, fuel type, hours of operation) of minor and major NSR permits, without a preconstruction review.

The Notice further stated that while the EPA has recognized that

under certain circumstances changes to PSD permits may be

appropriate, such changes are generally not allowed without a

review of the new circumstances by the permitting authority. The

EPA stated that any time a change to a permit limit founded in

BACT is being considered, a corresponding reevaluation (or reopening) of the original BACT determination may be necessary,

and cited a memo from 1987.

The EPA’s understanding of the Texas flexible permit rule is incorrect, and the case cited by EPA does not match the point EPA

is attempting to support. Authorizing facilities in a flexible permit

emission cap (regardless of their previous status) is a modification and requires a complete preconstruction review. Once

established in a flexible permit, changes in the terms and conditions (such as any restrictions on throughput, fuel type, or hours

of operation) of minor and major NSR permits without a preconstruction review are not allowed. Section 116.721(b)(2) provides

that any change to permit conditions requires executive director

approval. In general, flexible permits will not have conditions that

restrict throughput or hours of operation unless they are necessary for BACT or to ensure acceptable off-site impacts. Changing any condition related to BACT requires a permit amendment,

pursuant to §116.721(a). Any change in permit conditions that

could result in a major modification as well as any fuel switch

must undergo a preconstruction review, §116.721(a).

§116.730, Compliance History

The commission proposes minor editorial changes to §116.730

to improve readability and update terminology.

§116.740, Public Notice and Comment

The commission proposes minor editorial changes to §116.740

to improve readability and correct outdated cross-references. In

a concurrent rulemaking, the commission has proposed new and

amended rules regarding public participation in Chapter 39, Public Notice, Subchapters H and K, and in Chapter 55, Requests

for Reconsideration and Contested Case Hearings; Public Comment, Subchapter E. Some of these changes apply to flexible

permit applications.

§116.750, Flexible Permit Fee

The commission proposes an amendment to §116.750 that

would revise how fees for flexible permits are determined.

Since the inception of the flexible permit program in 1994,

fees for flexible permits have been determined based on the

quantity of emissions authorized, at a rate of $32 per ton (with

a minimum fee of $900, and a maximum fee of $75,000). The

proposed changes would require that flexible permit fees be

based on a percentage of project capital cost, rather than based

on emission rate. The proposed changes would make flexible

permits subject to the existing fee system used for Subchapter

B air permits, as specified in §116.141. The minimum fee of

$900 and the maximum fee of $75,000 would be retained. The

commission is proposing this change because the relatively

small volume of flexible permit actions in relation to the number

of Subchapter B permit actions does not justify maintaining a

separate fee system.

PROPOSED RULES July 2, 2010 35 TexReg 5733
§116.765, Delayed Effective Date

The commission proposes new §116.765 to specify that the rule

changes proposed in this action would not become effective until the earlier of 60 days after the EPA publishes final approval

of these sections as revisions to the Texas SIP, or December 1,

2012. Until such time, the existing Subchapter G rules concerning flexible permitting would remain in effect.

FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERNMENT

Nina Chamness, Analyst, Strategic Planning and Assessment,

has determined that, for the first five-year period the proposed

rules are in effect, no significant fiscal implications are anticipated for the agency as a result of administration or enforcement

of the proposed rules. The proposed rules will base the calculation of the flexible permit fee on the capital cost of a project

instead of annual emissions. The impact on agency revenue will

vary depending on the complexity of each project, but the overall

impact to agency revenue is not expected to be significant. Most

local governments are not expected to experience fiscal impacts

as a result of the proposed rules, but some governmental entities that have flexible permits could experience fiscal impacts if

they choose to apply for a new flexible permit or modify facilities

in a way that would require them to request an amendment to a

flexible permit.

The EPA has proposed to disapprove existing rules in Subchapter G that relate to the flexible air permits program. The existing

flexible permits program allows different sources to be grouped

together under an emissions cap instead of having an individual

emission limit for every emission point in a permit. The proposed

rules are intended to address the EPA’s concerns so that it will

approve the flexible permits program.

For the most part, the proposed rules are clarifications of already

existing agency practices and policies concerning the review and

issuance of flexible permits. The proposed rules provide more

detail, reorganize existing requirements, clarify and reference

applicable federal requirements if a project triggers federal NSR

permitting, clearly state that the flexible permits program cannot

be used to circumvent federal NSR permitting, clearly state that

exceedance of flexible permit caps or individual emission limitations is subject to enforcement action, and detail other requirements that are not expected to have a fiscal impact on regulated

entities.

The proposed rules also incorporate provisions that are expected to have fiscal impacts, although these impacts are not

expected to be significant. The proposed rules will only have

fiscal impacts on regulated entities if they apply for a new

flexible permit or are required to amend an existing flexible

permit. Provisions of the proposed rules that may have a fiscal

impact on regulated entities include changes to require that

new permit or amendment applications include an air quality

analysis to demonstrate that proposed actions will not interfere

with attainment and maintenance of NAAQS, and specify a

five-year record retention period.

The proposed rules may have a fiscal impact on agency revenue, but the impact is not expected to be significant. The basis for calculating the flexible permit fee will change from being

based on tons of emissions per year to a percentage of project

capital cost, which is the same basis used to assess a fee for a

construction permit. Based on historical data, the average fee

for an initial flexible permit has been $19,000, but a new flexible

permit could range from $900 to $75,000. The number of initial

flexible permits has been five to seven per year, and the number

of flexible and construction amendments have averaged 30 per

year. The average fee for a flexible permit amendment has been

about $5,700. The average fee for an initial construction permit has been $11,000 and the fee for an amendment has been

$5,700. If an average of six initial flexible permits and 30 flexible amendments are issued in a year, the estimated decrease

in agency revenue could be as much as $48,000 per year in Account 151 - Clean Air Account. However, since projects requiring

flexible permits are often complex, the effect on agency revenue

due to the change in the basis for assessment could vary considerably. If a large number of complex projects are submitted,

fees assessed could actually increase agency revenue.

Agency records indicate that there may be as many as one local

government, one state agency, and one federal installation that

could experience fiscal implications as a result of the proposed

rules if they need a new flexible permit or are required to amend

an existing flexible permit. Fiscal implications will vary depending on the complexity of each project. Permit fees will vary depending on the complexity of the project, but based on the difference in average fees charged for flexible and construction permits under current rules, the fee for an initial flexible permit could

decrease by $8,000 per permit. New or amended flexible permits will require a local government or other governmental entity

to conduct an air quality analysis. An air quality analysis would

be a one-time cost that could range from $5,000 to $20,000 per

analysis. A governmental entity would also be required to keep

records for five years instead of two, which could increase record

storage costs. The increase in storage costs is expected to be

minimal and will depend on storage costs in different locations

around the state.

The proposed rules modify the types of emission units allowed

in a group to determine emission caps. Instead of allowing any

kind of unit in an emission cap, the proposed rules allow that an

emission cap have similar units. As an alternative to this requirement, permit applicants would also have the option to establish

a site-wide emission cap that would cover all facilities at the site.

Local governments with flexible permits could experience cost

increases if facilities are placed in different emission caps. However, as permit applicants can elect to use a site-wide cap, instead of a like-kind cap for similar units, no fiscal impacts are

expected as a result of the proposed rules for those situations.

PUBLIC BENEFITS AND COSTS

Nina Chamness also determined that for each year of the first

five years the proposed rules are in effect, the public benefit anticipated from the changes seen in the proposed rules will be

consistency with federal requirements and additional clarity regarding the flexible permit program.

Individuals are not expected to experience fiscal impacts as a

result of the proposed rules. Individuals do not typically operate

facilities that would elect to use the flexible permit program for

operational flexibility.

Large businesses will be affected by the proposed rules if they

elect to apply for a new flexible permit or elect to modify facilities

in a way that requires an amendment of a flexible permit. Trends

suggest that there may be as many as 37 plants per year that

could be affected by the proposed rules, and examples of businesses that might be affected include chemical plants, refineries,

pipeline companies, oil and gas companies, power plants, and

others. Fiscal implications will vary depending on the complexity

of each project. Permit fees paid will vary depending on the com35 TexReg 5734 July 2, 2010 Texas Register
plexity of the project, but based on the difference in average fees

charged for flexible and construction permits under current rules,

the fee for an initial flexible permit could decrease by $8,000 per

permit. If the project is more complex, a flexible permit fee could

increase. New or amended flexible permits will require a local

government or other governmental entity to conduct an air quality analysis. An air quality analysis would be a one-time cost

that could range from $5,000 to $20,000 per analysis. A large

business would also be required to keep records for five years

instead of two, which could increase record storage costs. The

increase in storage costs is expected to be minimal and will depend on storage costs in different locations around the state.

Businesses could also experience higher costs for monitoring or

control devices if they choose to place facilities in different emission cap groupings. However, as permit applicants can elect to

use a site-wide cap, instead of a like-kind cap for similar units,

no fiscal impacts are expected as a result of the proposed rules

for those situations.

SMALL BUSINESS AND MICRO-BUSINESS ASSESSMENT

No adverse fiscal implications are anticipated for small or micro-businesses that operate facilities under flexible permits unless they apply for a new flexible permit or modify facilities in

a way that would require them to amend their flexible permits.

Agency records indicate that most flexible permits are held by

large businesses, but there may be as many as ten small businesses that have flexible permits. If these small businesses elect

to apply for a new flexible permit or modify facilities in a way that

requires an amendment of a flexible permit, they will experience

the same fiscal impacts as those experienced by a large business.

SMALL BUSINESS REGULATORY FLEXIBILITY ANALYSIS

The commission has reviewed this proposed rulemaking and determined that a small business regulatory flexibility analysis is not

required because the proposed amendments to the rules are required for approval as part of the Texas SIP. The approval will

be based on whether the commission’s flexible permit program

rules meet federal requirements. For purposes of the fiscal analysis, the requirements of the flexible permit program apply to

both large and small businesses alike.

LOCAL EMPLOYMENT IMPACT STATEMENT

The commission has reviewed this proposed rulemaking and determined that a local employment impact statement is not required because the proposed rules do not adversely affect a local economy in a material way for the first five years that the

proposed rules are in effect.

DRAFT REGULATORY IMPACT ANALYSIS DETERMINATION

The commission reviewed the rulemaking in light of the regulatory impact analysis requirements of Texas Government Code,

§2001.0225, and determined that the rulemaking does not meet

the definition of a major environmental rule as defined in that

statute, and in addition, if it did meet the definition, would not be

subject to the requirement to prepare a regulatory impact analysis.

A major environmental rule means a rule, the specific intent of

which is to protect the environment or reduce risks to human

health from environmental exposure, and that may adversely affect in a material way the economy, a sector of the economy,

productivity, competition, jobs, the environment, or the public

health and safety of the state or a sector of the state. The specific intent of the proposed rules is to amend various sections

of Subchapter G to address concerns expressed by the EPA regarding the agency’s flexible permit program submitted by the

commission as a revision to the SIP. The proposed changes to

established rules for the flexible permit program are necessary

to ensure that the rules can be a federally approved part of the

Texas SIP. Specifically, these amendments: 1) include detailed

MRR requirements; 2) propose replicable, specific, established

implementation procedures for establishing the emission cap; 3)

clearly limit the rules to minor NSR; 4) include regulatory provisions clearly prohibiting the use of the program from circumventing the major NSR permitting; 5) ensure that the rules cannot be

used to bypass the federal BACT or LAER control technology determination that is required for major PSD or Nonattainment NSR

projects; 6) specify requirements for initial compliance testing

and methods of determining ongoing compliance; 7) ensure that

the NAAQS are sufficiently protected; 8) include requirements

for clarity of which facilities are included under the permit and

any emission cap, and that there are sufficient monitoring and

enforcement requirements for the emission caps and individual

emission limits; and 9) provide for a delayed effective date.

As defined in the Texas Government Code, §2001.0225 only applies to a major environmental rule, the result of which is to: 1)

exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement of

state law, unless the rule is specifically required by federal law;

3) exceed a requirement of a delegation agreement or contract

between the state and an agency or representative of the federal government to implement a state and federal program; or

4) adopt a rule solely under the general powers of the agency

instead of under a specific state law. This rulemaking action

does not meet any of these four applicability requirements of a

"major environmental rule." Specifically, the proposed amendments were developed to correct EPA-identified deficiencies in

the commission’s flexible permit program to ensure SIP approval

by the EPA and thus meet a requirement of federal law. This

rulemaking action does not exceed an express requirement of

state law or a requirement of a delegation agreement, and was

not developed solely under the general powers of the agency,

but was specifically developed to meet the requirements of the

Texas SIP, and the requirements of the FCAA and its associated regulations, and is authorized by specific sections of Texas

Health and Safety Code, Chapter 382 (also known as the Texas

Clean Air Act), and the Texas Water Code, which are cited in the

STATUTORY AUTHORITY section of this preamble.

Therefore, this proposed rulemaking action is not subject to

the regulatory analysis provisions of Texas Government Code,

§2001.0225(b). Comments on the Draft Regulatory Impact

Analysis Determination may be submitted to the contact person

at the address listed under the SUBMITTAL OF COMMENTS

portion of this preamble.

TAKINGS IMPACT ASSESSMENT

Under Texas Government Code, §2007.002(5), taking means a

governmental action that affects private real property, in whole or

in part or temporarily or permanently, in a manner that requires

the governmental entity to compensate the private real property

owner as provided by the Fifth and Fourteenth Amendments to

the United States Constitution or §17 or §19, Article I, Texas Constitution; or a governmental action that affects an owner’s private

real property that is the subject of the governmental action, in

whole or in part or temporarily or permanently, in a manner that

restricts or limits the owner’s right to the property that would otherwise exist in the absence of the governmental action; and is

PROPOSED RULES July 2, 2010 35 TexReg 5735
the producing cause of a reduction of at least 25 percent in the

market value of the affected private real property, determined by

comparing the market value of the property as if the governmental action is not in effect and the market value of the property

determined as if the governmental action is in effect.

The commission completed a takings impact analysis for the proposed rulemaking action under the Texas Government Code,

§2007.043. The primary purpose of this proposed rulemaking

action, as discussed elsewhere in this preamble, is to amend

the rules related to flexible permits in order to obtain federal approval of the rules into the Texas SIP. The proposed rules will

not create any additional burden on private real property. The

proposed rules will not affect private real property in a manner

that would require compensation to private real property owners

under the United States Constitution or the Texas Constitution.

The proposal also will not affect private real property in a manner that restricts or limits an owner’s right to the property that

would otherwise exist in the absence of the governmental action. Therefore, the proposed rulemaking will not cause a taking

under Texas Government Code, Chapter 2007.

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM

The commission determined that this rulemaking action relates

to an action or actions subject to the Texas Coastal Management Program (CMP) in accordance with the Coastal Coordination Act of 1991, as amended (Texas Natural Resources Code,

§§33.201 et seq.), and commission rules in Chapter 281, Applications Processing, Subchapter B. As required by §281.45(a)(3)

and 31 TAC §505.11(b)(2), relating to Actions and Rules Subject

to the Coastal Management Program, commission rules governing air pollutant emissions must be consistent with the applicable

goals and policies of the CMP. The commission reviewed this

action for consistency with the CMP goals and policies in accordance with the rules of the Coastal Coordination Council and

determined that the action is consistent with the applicable CMP

goals and policies.

The CMP goal applicable to this proposed rulemaking action is

the goal to protect, preserve, and enhance the diversity, quality,

quantity, functions, and values of coastal natural resource areas

(31 TAC §501.12(l)). The proposed amendments will benefit the

environment by ensuring that the flexible permit program meets

applicable federal requirements, and is adequately enforceable

so that air quality is protected. The CMP policy applicable to

this rulemaking action is the policy that commission rules comply with federal regulations in 40 CFR, to protect and enhance air

quality in the coastal areas (31 TAC §501.32). Therefore, in accordance with 31 TAC §505.22(e), the commission affirms that

this rulemaking action is consistent with CMP goals and policies.

Written comments on the consistency of the proposed rulemaking may be submitted to the contact person at the address listed

under the SUBMITTAL OF COMMENTS section of this preamble.

EFFECT ON SITES SUBJECT TO THE FEDERAL OPERATING

PERMITS PROGRAM

Chapter 116 is an applicable requirement under Chapter 122,

Federal Operating Permits Program. If the proposed rules are

adopted, owners or operators subject to the federal operating

permit program must, consistent with the revision process in

Chapter 122, upon the effective date of the adopted rulemaking, revise their operating permit to include the new Chapter 116

requirements.

ANNOUNCEMENT OF HEARING

The commission will hold a public hearing on this proposal in

Austin on July 29, 2010, at 2:00 p.m., in Building E, Room 201S,

at the commission’s central office located at 12100 Park 35 Circle. The hearing is structured for the receipt of oral or written

comments by interested persons. Individuals may present oral

statements when called upon in order of registration. Open discussion will not be permitted during the hearing; however, commission staff members will be available to discuss the proposal

30 minutes prior to the hearing.

Persons who have special communication or other accommodation needs who are planning to attend the hearing should contact

Charlotte Horn, Office of Legal Services at (512) 239-0779. Requests should be made as far in advance as possible.

SUBMITTAL OF COMMENTS

Written comments may be submitted to Michael Parrish, MC

205, Office of Legal Services, Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas 78711-3087,

or faxed to (512) 239-4808. Electronic comments may be

submitted at: http://www5.tceq.state.tx.us/rules/ecomments/.

File size restrictions may apply to comments being submitted

via the eComments system. All comments should reference Rule Project Number 2010-007-116-PR. The comment

period closes August 2, 2010. Copies of the proposed rulemaking can be obtained from the commission’s Web site at

http://www.tceq.state.tx.us/nav/rules/propose_adopt.html. For

further information, please contact Mr. Michael Wilhoit, Air

Permits Division, at (512) 239-1222.

SUBCHAPTER A. DEFINITIONS

30 TAC §116.13

STATUTORY AUTHORITY

The amendment is proposed under Texas Water Code, §5.102,

concerning General Powers, that provides the commission with

the general powers to carry out its duties under the Texas Water Code; §5.103, concerning Rules, and §5.105, concerning

General Policy, which authorize the commission to adopt rules

necessary to carry out its powers and duties under the Texas

Water Code; and under Texas Health and Safety Code (THSC),

§382.017, concerning Rules, which authorizes the commission

to adopt rules consistent with the policy and purposes of the

Texas Clean Air Act. The amendment is also proposed under

THSC, §382.002, concerning Policy and Purpose, which establishes the commission purpose to safeguard the state’s air resources, consistent with the protection of public health, general welfare, and physical property; §382.003, concerning Definitions; §382.011, concerning General Powers and Duties, which

authorizes the commission to control the quality of the state’s air;

§382.012, concerning State Air Control Plan, which authorizes

the commission to prepare and develop a general, comprehensive plan for the control of the state’s air; §382.051, concerning

Permitting Authority of Commission; Rules, which authorizes the

commission to issue a permit by rule for types of facilities that

will not significantly contribute air contaminants to the atmosphere; §382.0513, concerning Permit Conditions, which authorizes the commission to establish and enforce permit conditions;

and §382.0514, concerning Sampling, Monitoring, and Certification.

This rulemaking implements THSC, §§382.002, 382.003,

382.011, 382.012, 382.051, 382.0513, and 382.0514.

35 TexReg 5736 July 2, 2010 Texas Register
♦ ♦ ♦

§116.13. Flexible Permit Definitions.

The following words and terms, when used in this chapter, shall have

the following meanings, unless the context clearly indicates otherwise.

(1) Continuous emission monitoring system (CEMS)--All

of the equipment that may be required to meet the data acquisition and

availability requirements of Subchapter G of this chapter, to sample,

condition (if applicable), analyze, and provide a record of emissions

on a continuous basis.

(2) Continuous parameter monitoring system (CPMS)--All

of the equipment necessary to meet the data acquisition and availability requirements of Subchapter G of this chapter, to monitor process

and control device operational parameters (for example, control device

secondary voltages and electric currents) and other information (for ex

ample, gas flow rate, O or CO concentrations), and to record average

operational parameter v2 2

 alue(s) on a continuous basis.

(3) [(1)] Emission cap--Emission limit for a specific air

contaminant based on total emissions of that pollutant [adjusted by an

insignificant emissions factor] from all facilities [sources] that are included in a flexible permit.

(4) [(2)] Expected maximum capacity--The maximum capacity of a facility according to its physical and operational design and

planned operation.

(5) [(3)] Individual emission limitation--Emission limit for

a specific air contaminant [not covered by an emission cap] for an individual facility [adjusted by an insignificant emissions factor].

(6) Predictive emissions monitoring system (PEMS)--All

of the equipment necessary to monitor process and control device op

erational parameters (for example, control device secondary voltages

and electric currents) and other information (for example, gas flow rate,

O2 or CO concentrations), and calculate and record the mass emissions

rate 2

(for example, pounds per hour) on a continuous basis.

This agency hereby certifies that the proposal has been reviewed

by legal counsel and found to be within the agency’s legal authority to adopt.

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Filed with the Office of the Secretary of State on June 18, 2010.

TRD-201003435

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Earliest possible date of adoption: August 1, 2010

For further information, please call: (512) 239-2548

SUBCHAPTER G. FLEXIBLE PERMITS

30 TAC §§116.710, 116.711, 116.715 - 116.718, 116.720,

116.721, 116.730, 116.740, 116.750, 116.765

STATUTORY AUTHORITY

The amendments and new rule are proposed under Texas Water Code, §5.102, concerning General Powers, that provides the

commission with the general powers to carry out its duties under

the Texas Water Code; §5.103, concerning Rules, and §5.105,

concerning General Policy, which authorize the commission to

adopt rules necessary to carry out its powers and duties under

the Texas Water Code; and under Texas Health and Safety Code

(THSC), §382.017, concerning Rules, which authorizes the commission to adopt rules consistent with the policy and purposes

of the Texas Clean Air Act. The amendments are also proposed

under THSC, §382.002, concerning Policy and Purpose, which

establishes the commission purpose to safeguard the state’s air

resources, consistent with the protection of public health, general welfare, and physical property; §382.003, concerning Definitions; §382.011, concerning General Powers and Duties, which

authorizes the commission to control the quality of the state’s air;

§382.012, concerning State Air Control Plan, which authorizes

the commission to prepare and develop a general, comprehensive plan for the control of the state’s air; §382.051, concerning

Permitting Authority of Commission; Rules, which authorizes the

commission to issue a permit by rule for types of facilities that

will not significantly contribute air contaminants to the atmosphere; §381.0511, concerning Permit Consolidation and Amendment; §382.0512, concerning Modification of Existing Facility,

which restricts what the commission may consider in determining a facility modification; §382.0513, concerning Permit Conditions, which authorizes the commission to establish and enforce

permit conditions; §382.0514, concerning Sampling, Monitoring,

and Certification; §382.0515, concerning Application for Permit,

§382.0517, concerning Determination of Administrative Completion of Application, §382.0518, concerning Preconstruction Permit, which authorizes the commission to require a permit before

a facility is constructed or modified; §382.056, concerning Notice of Intent to Obtain Permit or Permit Review; Hearing; and

§382.062, concerning Application, Permit, and Inspection Fees.

This rulemaking implements THSC, §§382.002, 382.003,

382.011, 382.012, 382.051, 381.0511, 382.0512; 382.0513,

382.0514, 382.0515, 382.0517, 382.0518, 382.056 and

382.062.

§116.710. Applicability.

(a) Flexible permit. A person may obtain a flexible permit

which allows for physical or operational changes as provided by this

subchapter as an alternative to obtaining a new source review permit

under §116.110 of this title (relating to Applicability), or in lieu of

amending an existing permit under §116.116 of this title (relating to

Amendments and Alterations). A person may obtain a flexible permit

under §116.711 of this title (relating to Flexible Permit Application)

for a facility, group of facilities, or account before any actual work is

begun, provided however:

(1) only one flexible permit may be issued for [at] an account [site];

(2) modifications to existing facilities included in [covered

by] a flexible permit may be authorized by [handled through] the

amendment of an existing flexible permit;

(3) [permitting of] a new facility may be authorized by

[handled through] the amendment of a flexible permit; [and]

(4) a flexible permit may not cover facilities [sources] at

more than one account; and [site.]

(5) a flexible permit application, review, and issued permit

used to authorize any facility, group of facilities, account, or any change

to existing facilities that constitutes a new major stationary source or

major modification as defined by §116.12 of thistitle (relating to Nonat

tainment and Prevention of Significant Deterioration Review Defini

tions), shall be completed in accordance with Subchapter B, Division

5 or 6 of this chapter (relating to Nonattainment Review Permits; and

Prevention of Significant Deterioration Review, respectively), as ap

plicable. No person shall use this subchapter to circumvent applicable

requirements of Subchapter B, Division 5 or 6 of this chapter.

(b) Change in ownership. The new owner of a facility, group

of facilities, or account shall comply with §116.110(e) [§116.110(d)] of

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PROPOSED RULES July 2, 2010 35 TexReg 5737
this title, provided however, that all facilities authorized [covered] by a

flexible permit must change ownership at the same time and to the same

person, or both the new owner and existing permit holder must obtain

a permit alteration allocating the emission caps or individual emission

limitation prior to the transfer of the permit by the commission. After

the sale of a facility, or facilities, but prior to the transfer of a permit

requiring a permit alteration, the original permit holder remainsresponsible for ensuring compliance with the existing flexible permit and all

rules and regulations of the commission.

(c) Submittal under seal of Texas licensed professional engineer. All applications for a flexible permit or flexible permit amendment shall comply with §116.110(f) [§116.110(e)] of this title.

(d) Responsibility for flexible permit application. The owner

of the facility, group of facilities, or account or the operator of the facility, group of facilities, or account who is authorized to act for the owner

is responsible for complying with this section, except as provided by

subsection (b) of this section.

§116.711. Flexible Permit Application.

[Any application for a new flexible permit or flexible permit amend

ment must include a completed Form PI-1 General Application. The

Form PI-1 must be signed by an authorized representative of the ap

plicant. The Form PI-1 specifies additional support information which

­

­

must be provided before the application is deemed complete.] In order to be granted a flexible permit or flexible permit amendment, the

owner or operator of the proposed facility shall submit a permit application which must include: [information to the commission which

demonstrates that all of the following are met.]

(1) a completed Form PI-1 General Application signed by

an authorized representative of the applicant. All additional support

information specified on the form must be provided before the application is complete;

(2) information which demonstrates that emissions from

the facility, including any associated dockside vessel emissions, meet

all of the following:

(A) [(1)] Protection of public health and welfare.

(i) The emissions from the proposed facility, group

of facilities, or account as determined under §116.716 of thistitle (relating to Emission Caps and Individual Emission Limitations), will comply with all applicable rules [and regulations] of the commission and

with the intent of the TCAA, including protection of the health and

physical property of the people.

(ii) In considering the issuance of a flexible permit

for construction or modification of any facility, group of facilities, or

account within 3,000 feet or less of an elementary, junior high/middle, or senior high school, the commission shall consider any possible

adverse short-term or long-term side effects that an air contaminant or

nuisance odor from the facility, group of facilities, or account may have

on the individuals attending these school facilities.

(B) [(2)] Measurement of emissions. The proposed facility, group of facilities, or account will have provisions for measuring the emission of air contaminants as determined by the executive

director. This may include the installation of sampling ports on exhauststacks and construction ofsampling platformsin accordance with

guidelines in the "Texas Natural Resource Conservation Commission

Sampling Procedures Manual."

(C) [(3)] Best available control technology (BACT).

(i) All new facilities must [The proposed facility,

group of facilities, or account will] utilize BACT[, with consideration

given to the technical practicability and economic reasonableness of

reducing or eliminating the emissions from the facility on a proposed

facility, group of facilities, or account basis]. Existing facilities shall

utilize BACT with consideration given to the technical practicability

and economic reasonableness of reducing or eliminating the emissions

from the facility on a proposed facility or group of existing facilities

basis. Control technology beyond BACT may be used on certain existing facilities to provide the emission reductions necessary to comply

with this requirement on a group of existing facilities [or account]

basis, provided however, that the existing level of control may not be

lessened for any facility. [For new facilities and proposed affected

sources (as defined in §116.15(1) of this title (relating to Section

112(g) Definitions)) subject to Subchapter C of this chapter (relating

to Hazardous Air Pollutants: Regulations Governing Constructed or

Reconstructed Major Sources (FCAA, §112(g), 40 CFR Part 63)),

the use of BACT shall be demonstrated for the individual facility or

affected source.]

(ii) For pollutants from new or modified facilities

that constitute a new major stationary source or major modification

as defined by §116.12 of this title (relating to Nonattainment and Prevention of Significant Deterioration Review Definitions), control technology shall be demonstrated as required by §§116.150, 116.151, or

116.160 of this title (relating to New Major Source or Major Modification in Ozone Nonattainment Areas; New Major Source or Major

Modification in Nonattainment Area Other Than Ozone; and Prevention of Significant Deterioration Requirements, respectively), as applicable, for each new or modified facility.

(iii) For new facilities and proposed affected sources

(as defined in §116.15(1) of this title (relating to Section 112(g) Definitions)) subject to Subchapter E of this chapter (relating to Hazardous

Air Pollutants: Regulations Governing Constructed or Reconstructed

Major Sources (FCAA, §112(g), 40 CFR Part 63)), the use of BACT

shall be demonstrated for the individual facility or affected source.

(D) [(4)] New Source Performance Standards (NSPS).

The emissions from each affected facility as defined in 40 Code of Federal Regulations (CFR), Part 60 will meet at least the requirements of

any applicable NSPS as listed under Title 40 CFR Part 60, promulgated by the EPA under authority granted under the FCAA, §111, as

amended.

(E) [(5)] National Emission Standards for Hazardous

Air Pollutants (NESHAPS). The emissions from each facility as defined in 40 CFR Part 61 will meet at least the requirements of any applicable NESHAPS, as listed under 40 CFR Part 61, promulgated by

EPA under authority granted under the FCAA, §112, as amended.

(F) [(6)] NESHAPS for source categories. The emissions from each affected facility shall meet at least the requirements

of any applicable maximum achievable control technology (MACT)

standard as listed under 40 CFR Part 63, promulgated by the EPA under FCAA, §112 or as listed under Chapter 113, Subchapter C of this

title (relating to National Emissions Standards for Hazardous Air Pollutants for Source Categories (FCAA, §112, 40 CFR 63)).

(G) [(7)] Performance demonstration. The proposed

facility, group of facilities, or account will achieve the performance

specified in the flexible permit application. The applicant may be required to submit additional engineering data after a flexible permit has

been issued in order to demonstrate further that the proposed facility,

group of facilities, or account will achieve the performance specified in

the flexible permit. In addition, initial compliance testing with ongoing compliance determined through engineering calculations based on

measured process variables, parametric or predictive monitoring, stack

monitoring, or stack testing shall [may] be required as specified in each

flexible permit.

35 TexReg 5738 July 2, 2010 Texas Register
(H) [(8)] Nonattainment review. If the proposed facility, group of facilities, or account is located in a nonattainment area,

each facility shall comply with all applicable requirements concerning

nonattainment review in this chapter. Prior to the application of this

subchapter to a proposed facility, group of facilities, or account; or any

change at an existing facility, group of facilities, or account; a separate

analysis shall be made for the project to determine the applicability

or nonapplicability of federal Nonattainment New Source Review re

quirements.

(I) [(9)] Prevention of Significant Deterioration (PSD)

review. If the proposed facility, group of facilities, or account is located in an attainment area, each facility shall comply with all applicable requirements in this chapter concerning PSD review. Prior to the

application of this subchapter to a proposed facility, group of facilities,

or account; or any change at an existing facility, group of facilities, or

account; a separate analysis shall be made for the project to determine

the applicability or nonapplicability of federal PSD review.

(J) [(10)] Air dispersion modeling or ambient monitoring. Any permit application for a new flexible permit, or permit amend

ment to increase a flexible permit emission cap or individual emission

limitation, shall include an air quality analysis to demonstrate that the

proposed action will not interfere with attainment and maintenance of

the National Ambient Air Quality Standards. Computerized air dispersion modeling and/or ambient monitoring may be required by the commission’s Air [New Source Review] Permits Division to determine the

air quality impacts from the facility, group of facilities, or account. In

conducting a review of a permit application for a shipbuilding or ship

repair operation, the commission will not require and may not consider air dispersion modeling results predicting ambient concentrations

of non-criteria air contaminants over coastal waters of the state. The

commission shall determine compliance with non-criteria ambient air

contaminant standards and guidelines at land-based off-property locations.

(K) [(11)] Federal standards of review for constructed

or reconstructed major sources of hazardous air pollutants. If the proposed source is an affected source (as defined in §116.15(1) of this title), it shall comply with all applicable requirements under Subchapter

E [C] of this chapter.

(L) [(12)] Mass cap and trade allocations. If subject to

Chapter 101, Subchapter H, Division 3 of this title (relating to Mass

Emissions Cap and Trade Program) the proposed facility, group of facilities, or account must obtain allocations to operate.

(M) [(13)] Application content. In addition to [any]

other requirements of this chapter, the applicant shall:

(i) [(A)] identify each air contaminant for which an

emission cap is desired;

(ii) [(B)] identify each facility to be included in the

flexible permit;

(iii) [(C)] identify each source of emissions to be

included in the flexible permit and for each source of emissionsidentify

the Emission Point Number (EPN) and the air contaminants emitted;

(iv) [(D)] for each emission cap, identify all associated EPNs and facilities (including description, common name, and

facility identification number) and provide emission rate calculations

based on the expected maximum capacity and the proposed control

technology;

(v) [(E)] for each individual emission limitation,

identify the EPN and provide emission rate calculations based on the

expected maximum capacity and the proposed control technology;[.]

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(vi) include calculations used to determine the con

trolled emission rates from each facility performed in accordance with

TCEQ Air Permits Division guidance; and

(vii) if the flexible permit application includes facil

ities currently authorized by a permit issued under Subchapter B of this

chapter (relating to New Source Review Permits), the applicant shall

identify any terms, conditions, and representations in the Subchapter

B permit or permits which will be superseded by or incorporated into

the flexible permit. The applicant shall include an analysis of how the

conditions and control requirements of Subchapter B permits will be

carried forward in the proposed flexible permit.

(N) [(14)] Proposed control technology and compliance demonstration. The applicant shall specify the control technology proposed for each unit [to meet the emission cap] and demonstrate

compliance with all emission caps at expected maximum production

capacity.

§116.715. General and Special Conditions.

(a) Flexible permits may contain general and special conditions. The holders of flexible permits shall comply with any and all

such conditions. [Upon a specific finding by the executive director

that an increase of a particular air contaminant could result in a signif

icant impact on the air environment, or could cause the facility, group

of facilities, or account to become subject to review under §116.150

and §116.151 and §§116.160 - 116.163 of this title (relating to Nonat

tainment Review or Prevention of Significant Deterioration Review)

or Subchapter C of this chapter (relating to Hazardous Air Pollutants:

Regulations Governing Constructed or Reconstructed Major Sources

(FCAA, §112(g), 40 CFR Part 63)), the permit may include a special

condition which requires the permittee to obtain written approval from

the executive director before constructing a facility under a standard

permit or a permit by rule under Chapter 106 of this title (relating to

Permits by Rule).]

(b) A pollutant specific emission cap or [multiple emission

caps and/or] individual emission limitations shall be established for

each air contaminant for all facilities authorized by the flexible permit.

A flexible permit may contain more than one emission cap for a specific

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air contaminant. The holder of a flexible permit shall comply with all

flexible permit emission cap(s) and individual emission limitations. An

exceedance of the flexible permit emission cap(s) or individual emission limitations is a violation of the permit.

(c) The following general conditions shall be applicable to every flexible permit.

(1) Applicability. This section does not apply to physical

or operational changes allowed without an amendment under §116.721

of this title (relating to Amendments and Alterations).

(2) Construction progress. The permit holder shall report

the start of construction, construction interruptions exceeding 45 days,

and completion of construction [shall be reported] to the appropriate

regional office of the commission not later than 15 working days after

occurrence of the event.

(3) Start-up notification.

(A) The permit holder shall notify the appropriate regional office of the commission and any local program having jurisdiction [shall be notified] prior to the commencement of operations of the

facilities authorized by the permit in such a manner that a representative of the commission may be present.

(B) The permit holder shall provide a separate notifi

cation for the commencement of operations for each unit of phased

construction, which may involve a series of facilities commencing op-

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PROPOSED RULES July 2, 2010 35 TexReg 5739
erations at different times. [Phased construction, which may involve a

series of facilities commencing operations at different times, shall pro

vide separate notification for the commencement of operations for each

facility.]

(C) Prior to beginning operations of the facilities authorized by the permit, the permit holder shall identify to the Air Per

mits Division [Office of Permitting, Remediation, and Registration]

the source or sources of allowances to be utilized for compliance with

Chapter 101, Subchapter H, Division 3 of this title (relating to Mass

Emissions Cap and Trade Program).

(4) Sampling requirements.

(A) If sampling [of stacks or process vents] is required,

the flexible permit holder shall contact the commission’s Office of

Compliance and Enforcement prior to sampling to obtain the proper

data forms and procedures.

(B) All sampling and testing procedures must be approved by the executive director and coordinated with the appropriate

regional office of the commission.

(C) The flexible permit holder is also responsible for

providing sampling facilities and conducting the sampling operations

or contracting with an independent sampling consultant.

(5) Monitoring, Calculations, and Equivalency of Methods.

(A) Each flexible permit shall specify requirements for

monitoring or demonstrating compliance with emission caps and indi

vidual emission limits in the flexible permit.

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(B) Each flexible permit shall specify methods for calculating annual and short term emissions for each pollutant for a given

type of facility when continuous emission monitoring or continuous

operating parameter monitoring is not required to be used to monitor

emissions for that type of facility.

(C) [It shall be the responsibility of the] The flexible

permit holder must [to] demonstrate or otherwise justify the equivalency of emission control methods, sampling or other emission testing methods, and monitoring or calculation methods proposed as alternatives to methods indicated in the conditions of the flexible permit. Requests for alternative [Alternative] emission control, sampling,

monitoring, or calculation methods [shall be applied for] must be sub

mitted in writing for review and approval [and must be reviewed and

approved] by the executive director prior to their use in fulfilling any

requirements of the permit.

(6) Recordkeeping. The permit holder shall:

(A) maintain a [A] copy of the flexible permit (and any

permit applications associated with the flexible permit) along with information and data sufficient to demonstrate continuous compliance

with the emission caps and individual emission limitations contained

in the flexible permit [shall be maintained in a file at the plant site and

made available at the request of personnel from the commission or any

air pollution control program having jurisdiction. For facilities that

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normally operate unattended, this information shall be maintained at

the nearest staffed location within Texas specified by the permit holder

in the permit application. This information may include, but is not limited to, emission cap and individual emission limitation calculations

based on a 12-month rolling basis and production records and operating hours. Additional recordkeeping requirements may be specified in

special conditions attached to the flexible permit. Information in the

file shall be retained for at least two years following the date that the

information or data is obtained]. This information and data shall in

clude, but is not limited to:

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(i) emission cap and individual emission limitation

calculations based on a 12-month rolling basis;

(ii) emission cap and individual emission limitation

calculations corresponding to any short term emission limitation; and

(iii) Production records and operating hours.

(B) keep all required recordsin a file at the plantsite. If,

however, the facility site normally operates unattended, records must

be maintained at an office within Texas having day-to-day operational

control of the facility site;

(C) make the records available at the request of person

nel from the commission or any local air pollution control agency hav

ing jurisdiction over the site, which, upon request, the commission shall

make any such records of compliance available to the public in a timely

manner;

(D) comply with any additional recordkeeping require

ments specified in special conditions in the permit; and

(E) retain information in the file for at least five years

following the date the information or data is obtained.

(7) Maximum allowable emission rates. A flexible permit covers only those sources of emissions and those air contaminants

listed in the table entitled "Emission Sources, Emissions Caps and Individual Emission Limitations" in [attached to] the flexible permit. Flexible permitted facilities [sources] are limited to the emission limits and

other conditions specified in the table in [attached to] the flexible permit.

(8) Representations and conditions. The following are the

conditions upon which a flexible permit or a flexible permit amendment

is issued:

(A) representations with regard to construction plans

and operation procedures in an application for a permit or permit

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amendment; and

(B) any general and special conditions included in the

permit.

(9) [(8)] Emission cap readjustment. If a schedule to install additional controls is included in the flexible permit and a facility

subject to such a schedule is taken out of service, the emission cap contained in the flexible permit will be readjusted for the period the unit is

out of service to a level as if no schedule had been established. Unless

a special condition [provision] specifies the method of readjustment of

the emission cap, a permit alteration shall be obtained.

(10) [(9)] Maintenance of emission control. The facilities

authorized [covered] by the flexible permit shall not be operated unless

all air pollution emission capture and abatement equipment is maintained in good working order and operating properly during normal

facility operations. Notification for emissions events and scheduled

maintenance shall be made in accordance with §101.201 and §101.211

of this title (relating to Emissions Event Reporting and Recordkeeping Requirements; and Scheduled Maintenance, Startup, and Shutdown

Reporting and Recordkeeping Requirements).

(11) [(10)] Compliance with rules. Acceptance of a flexible permit by a permit applicant constitutes an acknowledgment and

agreement that the holder will comply with all applicable Rules[, Reg

ulations,] and Orders of the commission issued in conformity with the

Texas Clean Air Act [TCAA] and the conditions precedent to the granting of the permit. If more than one state or federal rule or regulation or

flexible permit condition are applicable, then the most stringent limit

or condition shall govern and be the standard by which compliance

shall be demonstrated. Acceptance of the permit includes consent to

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35 TexReg 5740 July 2, 2010 Texas Register
the entrance of commission employees and agents into the permitted

premises at reasonable times to investigate conditions relating to the

emission or concentration of air contaminants, including compliance

with the flexible permit.

(12) Emissions Caps. The following requirements apply to

facilities with emissions subject to emission caps.

(A) Recordkeeping and reporting.

(i) A semiannual report shall be submitted to the executive director within 30 days of the end of each reporting period that

contains:

(I) the identification of the owner and operator

and the permit number;

(II) total annual emissions (in tons per year)

based on a 12-month rolling total for each month in the reporting

period;

(III) the identification of any exceedances of a

short-term emission cap during the reporting period;

(IV) all data relied upon, including, but not limited to, any quality assurance or quality control data, in calculating the

monthly and annual emission cap pollutant emissions, and short-term

emission cap pollutant emissions;

(V) a list of any facility modified as defined in

§116.12 of this title (relating to Nonattainment and Prevention of Significant Deterioration Review Definitions) during the preceding sixmonth period and the documentation required by §116.718(b) of this

title (relating to Significant Emission Increase);

(VI) the number, duration, and cause of any deviations or monitoring malfunctions (other than the time associated with

zero and span calibration checks), and any corrective action taken. For

facilities that are subject to the federal operating permits program in

Chapter 122 of this title (relating to Federal Operating Permits Program) this may be satisfied by referencing the flexible permit number

in the semiannual report for the site submitted under §122.145 of this

title (relating to Reporting Terms and Conditions);

(VII) a notification of a shutdown of any monitoring system, whether the shutdown was permanent or temporary, the

reason for the shutdown, the anticipated date that the monitoring system will be fully operational or replaced with another monitoring system, whether the facility monitored by the monitoring system continued to operate, and the calculation of the emissions of the pollutant or

the emissions determined by method included in the permit;

(VIII) the readjusted emission cap for each pollutant if a facility subject to an emission cap is shut down for a period

longer than one week as required by §116.716(e)(1) of this title (relating to Emission Caps and Individual Emission Limitations); and

(IX) a signed statement by the owner or operator

certifying the truth, accuracy, and completeness of the information provided in the report.

(ii) The reporting period for the semiannual report

required under this section shall begin on the earliest date any facilities

in an emission cap commence operation under the cap.

(iii) The owner or operatorshallsubmit the results of

any revalidation test or method to the executive director within three

months after completion of such test or method.

(B) Absence of monitoring data. A facility owner or

operator shall record and report maximum potential emissions without

considering enforceable emission limitations or operational restrictions

for a facility during any period of time that there is no monitoring data,

unless another method for determining emissions during such periods

is specified in the flexible permit special conditions.

(C) Revalidation. Any site generated test data used to

determine the emission rates for facilities under the cap must be revalidated through performance testing or other scientifically valid means

approved by the executive director. Such testing must occur at least

once every five years after the facility has been added to an emission

cap.

(d) Each permit with emission caps must include special conditions that satisfy the following requirements for facilities subject to

those caps. These requirements do not apply to facilities that are not

subject to an emission cap.

(1) The monitoring system must accurately determine all

emissions of the pollutants in terms of mass per unit of time. Any

monitoring system authorized for use in the permit must be based on

sound science and meet generally acceptable scientific procedures for

data quality and manipulation.

(2) The monitoring system must employ one or more of the

general monitoring approaches meeting the minimum requirements as

described in subparagraphs (A) - (D) of this paragraph.

(A) An owner or operator using mass balance calculations to monitor pollutant emissions from activities using coating or

solvents shall meet the following requirements:

(i) provide a demonstrated means of validating the

published content of the pollutant that is contained in, or created by, all

materials used in or at the facility;

(ii) assume that the facility emits all of the pollutant

that is contained in, or created by, any raw material or fuel used in or at

the facility, if it cannot otherwise be accounted for in the process; and

(iii) where the vendor of a material or fuel that is

used in or at the facility publishes a range of pollutant content from

such material, the owner or operator shall use the highest value of the

range to calculate the pollutant emissions unless the executive director

determines that there is site-specific data or a site-specific monitoring

program to support another content within the range.

(B) An owner or operator using a continuous emission

monitoring system (CEMS) to monitor pollutant emissions shall meet

the following requirements.

(i) The CEMS must comply with applicable performance specifications found in 40 Code of Federal Regulations Part 60,

Appendix B.

(ii) The CEMS must sample, analyze, and record

data at least every 15 minutes while the emissions unit is operating.

(C) An owner or operator using a continuous parameter

monitoring system (CPMS) or a predictive emission monitoring system (PEMS) to monitor pollutant emissions shall meet the following

requirements:

(i) The CPMS or the PEMS must be based on current

site-specific data demonstrating a correlation between the monitored

parameter(s) and the pollutant emissions across the range of operation

of the facility; and

(ii) Each CPMS or PEMS mustsample, analyze, and

record data at least every 15 minutes or at another less frequent interval

approved by the executive director, while the facility is operating.

(D) An owner or operator using emission factors to

monitor pollutant emissions shall meet the following requirements:

PROPOSED RULES July 2, 2010 35 TexReg 5741
(i) All emission factors must be adjusted asspecified

by the permit, if appropriate, to account for the degree of uncertainty

or limitations in the factors’ development;

(ii) The facility must operate within the designated

range of use for the emission factor, if applicable; and

(iii) The owner or operator of a significant facility as

defined in §116.12 of this title that relies on an emission factor to calculate pollutant emissions shall conduct validation testing to determine

a site-specific emission factor within six months of permit issuance or

start of operation of the facility, whichever is later, unless the executive

director determines that testing is not required.

(E) An alternative monitoring system must meet the requirements in paragraph (1) of this subsection and be approved by the

executive director.

(3) Where an owner or operator of a facility cannot demonstrate a correlation between monitored parameter(s) and the pollutant

emissions rate at all operating points of the facility, the executive director shall:

(A) establish default value(s) for determining compliance with the emission cap based on the highest potential emissions

reasonably estimated at such operating point(s); or

(B) determine that operation of the facility during operating conditions when there is no correlation between monitored parameter(s) and the pollutant emissions is a violation of the emission

cap.

(e) [(d)] There may be additional special conditions included

in [attached to] a flexible permit upon issuance or amendment of the

permit. Such conditions in a flexible permit may be more restrictive

than the requirements of this title.

(f) The executive director may require as a special condition

that the permit holder obtain written approval before constructing a

source under a standard permit under Subchapter F of this chapter (relating to Standard Permits) or a permit by rule under Chapter 106 of

this title. Such written approval may be required if the executive director specifically finds that an increase of a particular pollutant could

either:

(1) result in a significant impact on the air environment, or

(2) cause the facility, group of facilities, or account to become subject to review under:

(A) Subchapter E of this chapter (relating to Hazardous

Air Pollutants: Regulations Governing Constructed or Reconstructed

Major Sources (FCAA, §112(g), 40 CFR Part 63)); or

(B) the provisionsin Subchapter B, Divisions 5 and 6 of

this chapter (relating to Nonattainment Review Permits; and Prevention

of Significant Deterioration Review, respectively).

§116.716. Emission Caps and Individual Emission Limitations.

(a) Emission caps. Each emission cap for a specific pollutant

will be established as follows:

(1) either as a site-wide cap or a like-kind facilities cap.

The executive director reserves the right to reject or exclude any facility from an emissions cap if necessary to ensure compliance with the

permit or to ensure the protection of human health and the environment.

(2) [(1)] emissions will be calculated for each facility

within an emission cap as follows: [based on application of current

Best Available Control Technology at expected maximum capacity;]

(A) based on application of best available control technology at expected maximum capacity; or

(B) if the permit is used to authorize any facility, group

of facilities, or account, or any change to existing facilities, that constitutes a new major stationary source or major modification for the

pollutant as defined by §116.12 of this title (relating to Nonattainment

and Prevention of Significant Deterioration Review Definitions), emissions shall be based on control technology determined in accordance

with Subchapter B, Division 5 or 6 of this chapter (relating to Nonattainment Review Permits; and Prevention of Significant Deterioration

Review, respectively) as applicable, at expected maximum capacity.

(3) pollutants emitted from facilities subject to lowest

achievable emission rate review in accordance with Subchapter B,

Division 5 of this chapter must be included in a separate emissions

cap or listed as individual emission limitations.

(4) [(2)] the calculated emissions for all facilities within

an emission cap will be summed.

(5) a lower emission cap than that determined by paragraph

(4) of thissubsection may be proposed by the permit applicant if technical information is provided to demonstrate that it is feasible to operate

in compliance with the proposed emission cap.

(b) Individual emission limitations. An individual emission

limitation will be established in the same permit for each pollutant

not included in [covered by] an emission cap for facilities authorized[covered] by the flexible permit. In addition, an individual

emission limitation may be established for a pollutant included in

[covered by] an emission cap when the expected capacity of a facility

is less than the expected maximum capacity to prevent a facility from

exceeding emission levels appropriate for the proposed controls.

(c) The permit shall clearly identify, by a table or other appropriate means, the facilities that are subject to an emission cap, and the

facilities that are subject to individual emission limitations. A facility

may be subject to both an emission cap and an individual emission limitation.

(d) [(c)] Adjustment [Readjustment] of emission cap.

(1) If a facility subject to an emission cap is shut down for

a period longer than six [12] months, the emission cap shall be adjusted [readjusted] by lowering the emission cap by an amount that the

shut down facility contributed to the original calculation of the emission cap. If a shut down facility is returned to operation, the emission

cap shall be adjusted by increasing the emission cap by the amount

that the facility contributed to the original calculation of the emission

cap; however, the emission cap cannot be increased beyond the original emission cap amount.

(2) If a [new] facility is to be added to [brought into] the

flexible permit, a permit amendment is required to establish a revised

emission cap[, an emission cap shall be adjusted by modifying the

emissions cap accordingly].

(3) If an existing emission cap is to be increased through a

permit amendment as a result of adding a new facility or the modification of a facility within the emission cap, the emission cap shall be

increased by the sum of the emissions from each of the new or modified facilities determined in accordance with subsection (a) of this section and decreased by the sum of the previous emission cap contributions from the facilities to be modified. For the purpose of determining

whether an increase in the emission cap constitutes a major modification for the pollutant as defined by §116.12 of this title, all facilities under that cap shall be considered modified unless there has been

35 TexReg 5742 July 2, 2010 Texas Register
no physical modification of that facility and a separate permit limit or

physical constraint limits its potential to emit.

[(d) Insignificant emission factor. The emission caps and in

dividual emissions limitation calculated pursuant to this section may

include an Insignificant Emissions Factor which does not exceed 9.0%

of the total emission cap or individual emission limitation.]

(4) [(e)] An emission cap will be adjusted [readjusted]

downward for any facility authorized [covered] by a flexible permit

if that facility becomes subject to any new state or federal rule or regulation which would lower emissions or require an emission reduction.

The adjustment will be made [at] the next time the flexible permit is

amended or altered. If an amendment to a flexible permit is not required to meet the new requirement [regulation], then within 60 days

of making the change, the permittee must submit a request to alter the

permit and include information describing how compliance with the

new requirement will be demonstrated.

(e) Each emission cap or individual emission limitation shall

specify an annual emission limitation in tons per year, based on a rolling

12-month period. Each emission cap or individual emission limitation

shall also specify a practically enforceable short term emission limita

tion.

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§116.717. Implementation Schedule for Additional Controls.

If a facility requires the installation of additional control or controls to

meet an emission cap for a pollutant, the flexible permit shall specify

an implementation schedule for such additional controls. The permit

may also specify how the emission cap will be adjusted if such a facility is taken out of service [or fails to install the additional control

equipment as provided by the implementation schedule]. In the event

that the controls and implementation schedule specified by a flexible

permit cannot be met, a permit amendment or alteration to modify the

controls and implementation schedule must be approved by the executive director before the applicable control schedule deadline. Control

technology that isrequired by federal major new source review requirements must be operational at start of operation and is not eligible for

an implementation schedule under this section.

§116.718. Significant Emission Increase.

(a) An increase in emissions from operational or physical

changes at an existing facility authorized [covered] by a flexible

permit is insignificant, for the purposes of minor [state] new source

review under this subchapter, if the increase does not exceed either

the emission cap or individual emission limitation. This section does

not apply to an increase in emissions from a new facility nor to the

emission of an air contaminant not previously emitted by an existing

facility.

(b) This section does not apply to any change or series of re

lated changes that would constitute a major modification as defined by

§116.12 of this title (relating to Nonattainment and Prevention of Sig

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nificant Deterioration Review Definitions). Unless a plant-wide applicability limit has been established for the pollutant under Subchapter C

of this chapter (relating to Plant-wide Applicability Limits), the permit

holdershall document that the change is not a major modification as defined in §116.12 of this title, and maintain the documentation required

by §116.121 of this title (Actual to Projected Actual and Emissions

Exclusion Test for Emissions Increases). When determining whether a

change is a major modification as defined in §116.12 of this title, the

project emissions increase and the project net shall be determined as

specified as defined in §116.12 of this title, regardless of how the existing facilities are authorized. For new facilities or modified facilities

under an emission cap for the pollutant where the permit holder electsto

use potential to emit rather than projected actual emissions from the facility to determine the project emissions increase, the potential to emit

shall be considered as the proposed emissions cap unless a separate

permit limit or physical constraint limits the facility’s potential to emit.

If the project emission increase is such that a de minimis threshold test

(netting) is required for a pollutant, the analysis shall be submitted to

the commission for review and approval prior to making the change.

If netting is not required, the information shall be submitted with the

next permit amendment or renewal application.

(c) The permit holder shall complete an air quality analysis

to demonstrate that the proposed action will not interfere with attainment and maintenance of the National Ambient Air Quality Standards

if there may be an increase in emissions from operational or physical

changes at an existing facility authorized by a flexible permit and the

area is not designated as nonattainment for the pollutant. If the emission increase may result in off-site ambient concentrations greater than

de minimis for that pollutant, the air quality analysis shall be submitted

to the commission for review and approval prior to making the change.

§116.720. Limitation on Physical and Operational Changes.

Operational or [Neither operational nor] physical changes authorized

under this subchapter may not result in an increase in actual emissions

at facilities not authorized [covered] by the flexible permit unless those

affected facilities are authorized pursuant to §116.110 of this title (relating to Applicability).

§116.721. Amendments and Alterations.

(a) Flexible permit amendments. All representations with regard to construction plans and operation procedures in an application

for a flexible permit or flexible permit amendment, as well as any general and special conditions [provisions attached], become conditions

upon which the subsequent flexible permit is issued. It shall be unlawful for any person to vary from such representation or flexible permit

provision if the change will cause a change in the method of control

of emissions or[,] the character of the emissions, will relax emission

controls, will add a new facility or facilities, [or] will result in a significant increase in emissions, or will constitute a major modification as

defined by §116.12 of this title (relating to Nonattainment and Preven

tion of Significant Deterioration Review Definitions) unless application

is made to the executive director to amend the flexible permit in that

regard and such amendment is approved by the executive director or

commission. Applications to amend a flexible permit shall be submit­

­

ted with a completed Form PI-1 and are subject to the requirements of

§116.711 of this title (relating to Flexible Permit Application).

(b) Flexible permit alterations.

(1) A flexible permit alteration is for any variation from a

representation in a flexible permit application or a general or special

provision of a flexible permit that does not require a flexible permit

amendment.

(2) All flexible permit alterations which may involve a

change in a general or special condition contained in the flexible

permit, or affect control equipment performance must receive prior

approval by the executive director. The executive director shall be

notified in writing of all other flexible permit alterations within ten

days of implementing the change, unless the permit provides for a

different method of notification. Any flexible permit alteration request

or notification shall include information sufficient to demonstrate that

the change does not interfere with the owner or operator’s previous

demonstrations of compliance with the requirements of §116.711 of

this title, including the protection of public health and welfare. The

appropriate commission regional office and any local air pollution

program having jurisdiction shall be provided copies of all flexible

permit alteration documents.

PROPOSED RULES July 2, 2010 35 TexReg 5743
♦ ♦ ♦

(3) Flexible permit alterations shall not be subject to

the requirements of Best Available Control Technology identified in

§116.711(3) of this title.

(c) Changes not requiring an amendment or alteration. The

following changes do not require an amendment or alteration, except

that an amendment is required if the change will cause a change in the

method of control of emissions or[,] the character of the emissions,

will relax emission controls, will add a new facility, [or] will result

in a significant increase in emissions as determined under §116.718 of

this title (relating to Significant Emission Increase), constitutes a major

modification as defined by §116.12 of this title, or conflicts with an

existing permit condition:

(1) a change in throughput; or

(2) a change in feedstock.

(d) Permit by rule under Chapter 106 of this title (relating to

Permits by Rule) in lieu of permit amendment or alteration.

(1) Notwithstanding subsections (a) or (b) of this section,

no permit amendment or alteration is required if the changes to the

permitted facility qualify for a permit by rule under Chapter 106 of this

title unless prohibited by permit provision as provided in §116.715 of

thistitle (relating to General and Special Conditions). Allsuch changes

permitted by rule to a permitted facility shall be incorporated into that

facility’s permit at such time as the permit is amended or renewed.

(2) Emission increases authorized by Chapter 106 of thistitle at an existing facility authorized [covered] by a flexible permit shall

not cause an exceedance of the emissions cap or individual emission

limitation.

§116.730. Compliance History.

As part of a flexible permit review, or the review of an amendment

of a flexible permit, or renewal of an existing flexible permit, the re

quirements of [provisions found in] Chapter 60 of this title (relating to

Compliance History) shall be applicable to the facility, group of facilities, or account being permitted, amended, or renewed.

§116.740. Public Notice and Comment.

(a) Any person who applies for a flexible permit or an amendment to a flexible permit shall comply with the requirements [provi

sions] in Chapter 39 of this title (relating to Public Notice).

(b) Any person who applies for an amendment to a flexible

permit regarding an affected source (as defined in §116.15(1) of this

title (relating to Section 112(g) Definitions)) subject to Subchapter E

[C] of thistitle (relating to Hazardous Air Pollutants: Regulations Governing Constructed or Reconstructed Major Sources (FCAA, §112(g),

40 CFR Part 63)) shall comply with the requirements [provisions] in

Chapter 39 of this title [(relating to Public Notice)].

§116.750. Flexible Permit Fee.

(a) Feesrequired. Any person who appliesfor a flexible permit

or for an amendment to an existing flexible permit shall remit, at the

time of application for such permit, a fee as set forth in subsection (b)

of this section. Fees will not be charged for flexible permit alterations,

changes of ownership, or changes of location of permitted facilities.

(b) Fee amounts. The fee to be remitted with a flexible permit

application shall be determined as set forth in §116.141 of this title

(relating to Determination of Fees) [based on the total annual allowable

emissions from the permitted facility, group of facilities, or account for

which the flexible permit is being sought. The fee shall be $32 per ton

with the minimum fee being $900 and the maximum fee $75,000. For

flexible permit amendments, the fee shall be calculated based on $32

per ton for the incremental emission increase with the minimum fee

being $900 and the maximum fee being $75,000].

­

­

(c) Payment of fees. All permit fees for a flexible permit shall

be remitted in the form of a check, certified check, electronic funds

transfer, or money order made payable to the Texas Commission on

Environmental Quality and delivered with the application for flexible

permit or flexible permit amendment to the commission’s Air [New

Source Review] Permits Division. Required fees must be received before the agency will begin examination of the application.

(d) Return of fees. Fees must be paid at the time an application

for a flexible permit or flexible permit amendment is submitted. If the

applicant withdrawsthe application prior to issuance of the flexible permit or flexible permit amendment, one-half of the fee will be refunded,

except that the entire fee will be refunded for any such application for

which a permit by rule under Chapter 106 of this title (relating to Permits by Rule) is allowed. No fees will be refunded after a deficient

application has been voided, denied, or after a flexible permit or flexible permit amendment has been issued by the agency.

§116.765. Delayed Effective Date.

The amendments to §§116.710, 116.711, 116.715 - 116.718, 116.720,

116.721, 116.730, 116.740 and 116.750 of this title (relating to Applicability, Flexible Permit Application, General and Special Conditions,

Emission Caps and Individual Emission Limitations, Implementation

Schedule for Additional Controls, Significant Emission Increase, Limitation on Physical and Operational Changes, Amendments and Alterations, Compliance History, Public Notice and Comment, and Flexible

Permit Fee; respectively) adopted by the commission on December 1,

2010, shall be effective on the earlier of 60 days after publication in the

Federal Register of the final approval by the United States Environmental Protection Agency of these sections as revisions to the Texas

State Implementation Plan, or December 1, 2012. Until such time,

these sections, as they existed prior to the adoption of these amendments, remain in effect.

This agency hereby certifies that the proposal has been reviewed

by legal counsel and found to be within the agency’s legal authority to adopt.

Filed with the Office of the Secretary of State on June 18, 2010.

TRD-201003436

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Earliest possible date of adoption: August 1, 2010

For further information, please call: (512) 239-2548

CHAPTER 305. CONSOLIDATED PERMITS

SUBCHAPTER P. EFFLUENT GUIDELINES

AND STANDARDS FOR TEXAS POLLUTANT

DISCHARGE ELIMINATION SYSTEM (TPDES)

PERMITS

30 TAC §305.541

The Texas Commission on Environmental Quality (commission

or TCEQ) proposes an amendment to §305.541.

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS

FOR THE PROPOSED RULE

The rulemaking is necessary to adopt by reference the new

United States Environmental Protection Agency (EPA) construction storm water rules, which were adopted in 40 Code of

35 TexReg 5744 July 2, 2010 Texas Register
Bryan W. Shaw, Ph.D., Chairman 

Buddy Garcia, Commissioner 

Carlos Rubinstein, Commissioner 

Mark R. Vickery, P.G., Executive Director 

TEXAS COMMISSION ON ENVIRONMENTAL QUALITY 

Protecting Texas by Reducing and Preventing Pollution 

NOTICE OF PUBLIC HEARING ON PROPOSED REVISIONS TO 30 TAC CHAPTER 116 

AND REVISIONS TO THE STATE IMPLEMENTATION PLAN 

The Texas Commission on Environmental Quality (commission) will conduct a public hearing to receive 

testimony regarding proposed revisions to 30 Texas Administrative Chapter (TAC) Chapter 116, Control 

of Air Pollution by Permits for New Construction or Modification, §§116.13, 116.710, 116.711, 116.715-

116.718, 116.720, 116.721, 116.730, 116.740, 116.750, and 116.765; and to the state implementation plan 

(SIP), under the requirements ofTexas Health and Safety Code, §382.017; Texas Government Code, 

Chapter 2001, Subchapter B; and 40 Code of Federal Regulations §51.102 of the United States 

Environmental Protection Agency (EPA) regulations concerning SIPs. 

The proposed rulemaking would revise the flexible air permit rules to address the EPA's proposed 

disapproval of the flexible permit program as part of the Texas SIP by EPA The proposed rules would 

more clearly identify that federal permitting requirements must be met independently of the flexible 

permit program; ensure that the flexible permit rules cannot be used to circumvent federal permitting 

requirements; address monitoring, recordkeeping, and reporting associated with flexible permits; and 

implement other changes necessary to obtain SIP approval for the minor new source review flexible 

permit program. 

The commission will hold a public hearing on this proposal in Austin on July 29, 2010, at 2:00p.m., in 

Building E, Room 201S, at the commission's central office located at 12100 Park 35 Circle. The hearing 

is structured for the receipt of oral or written comments by interested persons. Individuals may present 

oral statements when called upon in order of registration. Open discussion will not be permitted during 

the hearing; however, commission staff members will be available to discuss the proposal 30 minutes 

prior to the hearing. 

Persons who have special communication or other accommodation needs who are planning to attend the 

hearing should contact Charlotte Horn, Office of Legal Services at (512) 239-0779. Requests should be 

made as far in advance as possible. 
Written comments may be submitted to Michael Parrish, MC 205, Office of Legal Services, Texas 

Commission on Environmental Quality, P.O. Box 13087, Austin, Texas 78711-3087, or faxed to (512) 

239-4808. Electronic comments may be submitted at: http://www5.tceq.state.tx.uslrules/ecomments/. 

File size restrictions may apply to comments being submitted via the eComments system. All comments 

should reference Rule Project Number 2010-007-116-PR. The comment period closes August 2, 2010. 

Copies of the proposed rulemaking can be obtained from the commission's Web site at 

http://www. tceq.state. tx. us/navlrules/propose _adopt. html. For further information, please contact Mr. 

Michael Wilhoit, Air Permits Division, at (512) 239-1222. 

Reference Number 

W-1 

W-2 

W-3 

W-4 

w-s 

W-6 

W-7 

W-8 

INDEX OF WRITTEN TESTIMONY 

Submitted By 

State Representative Lon Burnam 

Baker Botts L.L.P., on behalf of the Texas Industry Project 

City of Houston 

Environmental Integrity Project 

Texas Chemical Council 

Texas Oil and Gas Association 

United States Department of Energy Pantex Plant 

United States Environmental Protection Agency Region 6 
TEXAS H·OUSE OF REPRESENTATIVES 

CAPITOL OFFICE: 

P.O. BOX 2910 

AUSTIN, TEXAS 78768-2910 

512-463-Q740 

DISTRICT OFFICE: 

1 067 W. MAGNOLIA 

FORT WORTH, TEXAS 761 04 

8 1 7-924-1 997 

EMAIL: LON.BURNAM@HOUSE.STATE.TX.US 

August 2, 2010 

LoN BuRNAM 

DISTRICT 90 • FORT WORTH 

TARRANT COUNTY DELEGATION, CO-CHAIR 

MEXICAN-AMERICAN LEGISLATIVE CAUCUS 

LEGISLATIVE STUDY GROUP, VICE CHAIR 

ENVIRONMENTAL LEGISLATIVE CAUCUS 

WOMEN'S HEALTH CAUCUS 

Comments to TCEQ on Rule Project Number 2010-007-116-PR: Flexible Permitting 

Thank you for the opportunity to comment on the proposed changes to the Flexible 

Permits program. I am very invested in our state's air permitting program. The flexible 

permits program affects several flexible permit holders in House District 90 directly, but 

air permitting and air quality affect all of us: government, industry, and citizenry alike. 

My hope is that the Commission will craft an air permitting program that positively 

affects and affirmatively protects the public health. 

I commend the TCEQ's timely addressing EPA's disapproval of the current program with 

a new revision. It is imperative that Texas industry receive clear guidance on how to 

operate while protecting the public from the harms of excessive pollution. I appreciate 

TCEQ's efforts to provide regulation that EPA can agree complies with the federal Clean 

Air Act. 

This proposed rule addresses several issues EPA raised regarding the current flexible 

permits program. The proposal attempts to clarify that flexible permitting is a minor 

New Source Review program. The proposed addition of§ 116.710(a)(5) and revisions to 

§ 116.718(b) explicitly address these concerns, as well as the concern that a permit holder 

could use the flexible permits program to circumvent the more stringent requirements of 

major New Source Review. Added§§ 116.71l(a)(2)(H) and (I) require the permit holder 

to perform an analysis in the first instance to determine the applicability of 

Nonattainment and PSD requirements. These additions also address some of EPA's 

enforceability concerns. Thankfully, the proposed rule deletes § 116. 716( d), the 

"insignificant emissions factor11 of up to nine percent; and adds§ 116.716(c), requiring 

that each flexible permit clearly identify which facilities within a permit are subject to 

which standards. 

1 

COMMITTEES: ENVIRONMENTAL REGULATIONS • PUBLIC SAFETY 

PRINTED ON RECYCLED PAPER 
I agree with these parts of the proposed rule, but I am concerned that they do not go far 

enough towards addressing the fundamental concerns EPA has expressed. Without 

meeting the reasons for disapproval of the program, the state may lose its delegated 

authority to regulate its own industry. Texans want a permitting program that Texans 

control; one that complies with the Clean Air Act and protects the health of our citizens. 

EPA expressed disapproval b.ecause there are no "specific, established, replicable 

procedures" in the submitted program for determining emissions caps. The proposed 

revisions respond by requiring each permit to specify these procedures. This solution 

may maintain the flexibility and administrative advantages· the flexible permits program 

is designed to support, but it does not appear to respond to EPA's concerns. 

One basic problem is that EPA requires specific methodologies for determining 

emissions caps and other terms and limitations of a permit to be completely defined in the 

regulations so as to be independently replicable, while the proposed regulations provide 

that complete, detailed methodology is described in the individual permits. It is a 

shortcoming that the regulations do not provide a greater level of specificity: agencies, 

courts, and the public have too little information to assure compliance. 

Furthermore, under the current program, a flexible permit applicant may determine the 

emissions cap using a potential-to-emit baseline. Even l.ltilizing the control technology 

standard provided in the regulations, starting from a high-end baseline allows for too 

lenient an emissions standard. The proposed revision does not appear to address this 

shortcoming. Actual emissions should be used in making applicability determinations. 

A more specific problem is that proposed § § 116. 718(b) and (c) refer to a de minimis 

standard without defining "de minimis." "De minimis" is not an enforceable standard. 

Although proposed§ 116.711[(a)](2)(J) requires new permits and permit amendments to 

conduct an air quality analysis, it only "may" require computerized air dispersion 

modeling "and/or" ambient monitoringto determine impacts. Using the permissive verb 

and the disjunctive construction removes all obligation from the provision. In addition, 

assessing ambient impacts without computer dispersion modeling is no longer considered 

scientifically valid, and even some computer models are no longer favored. 

Finally, the proposed rule attempts to address concerns about the variety of individual 

sources covered under a single emissions cap in proposing§ 116.716(a)(l), which 

restricts emissions caps to "like-kind" facilities in the absence of a site-wide cap. 

However, the effect of this limitation is unclear; a site-wide emission cap would 

presumably cover facilities not of like kind. Even if any permit that does not include a 

site-wide cap limits emissions caps to like-kind facilities, it is still unclear how this 

provision removes the uncertainty about which facilities are in fact included under a 

given emissions cap, or even which facilities are "like-kind." 

2 
For these reasons, the TCEQ should not adopt the proposed flexible permitting program. 

The proposed flexible permitting rule addresses some of the concerns EPA expressed in 

its disapproval of the current program. However, EPA is likely to require still greater 

specificity in defining a replicable methodology for setting emissions caps and assuring 

compliance with those caps. We need a regulatory program robust enough to provide 

industry with dear direction on how to operate efficiently and protect the public health. 

With proper cooperation, TCEQ and EPA can work together to craft a flexible permitting 

program that offers industry clear guidance and protects human health and welfare in 

accordance with the Clean Air Act. 

I appreciate this opportunity to offer my views to the Commission. Please feel free to 

contact me with any questions. Thank you. 

Lon Burnam 

3 
BAKER BOTTS LlP. 

August 2, 2010 

005580.0135 

BY ELECTRONIC FILING 

Mr. Michael Parrish, MC 205 

Office of Legal Services 

W-2 

Texas Commission on Environmental Quality 

P.O. Box 13087 

Austin, Texas 78711-3087 

Re: Comments on Rule Project No. 2010-007-116-PR 

Dear Michael: 

ONE SHELL PLAZA 

910 LOUISIANA 

HOUSTON, TEXAS 

77002·4995 

TEl + 1 713.229.1234 

FAX +1713.229.1522 

www.bakerbotts.com 

Kathleen E. Weir 

TEL +1 713.229.2108 

ABU DHABI 

AUSTIN 

BEUING 

DALLAS 

DUBAI 

HONG KONG 

HOUSTON 

LONDON 

woscow 

NEW YORK 

PALO ALTO 

RIYADH 

WASHINGTON 

FAX + 1 713.229.7908 

kathleen. weir@bakerbotts.com 

The Texas Industry Project ("TIP") appreciates the opportunity to provide 

comments on Texas Commission on Environmental Quality's (''TCEQ") proposed revisions to 

the flexible air permit program as embodied in 30 Texas Administrative Code Sections 116.13, 

116.710, 116.711, 116.115 - 116.718, 116.720, 116.721, 116.730, 116.740, 116.750 and 

proposed new 116.765. TIP is comprised of63 companies in the chemical, refining, oil and gas, 

electronics, forest products, terminal, electric utility, and transportation industries with 

operations in Texas.1 

TIP supports the existing flexible air permit program. The program has 

contributed to the marked and sustained improvements in Texas air quality over the last decade. 

Between 1999 and 2005, NOx emissions in the Houston-Galveston area decreased from almost 

TIP members participating in these comments are: Albemarle Corporation, Arkema Inc., Ascend 

Performance Materials LLC, BASF Corporation, BP, Celanese Chemicals, Ltd., CenterPoint Energy Houston 

Electric, LLC, Chevron Corporation, Chevron Phillips Chemical Company LP, CITGO Petroleum Corporation, 

ConocoPhillips, DCP Midstream, LLC, Degussa Engineered Carbons, LP, Delek Refining Ltd., Dixie Chemical 

Company, Inc., Dow Chemical Company, The Dynegy Inc., Eagle Rock Energy, Eastman Chemical Company, E. I. 

Du Pont de Nemours & Company, Entergy Texas, Enterprise Products Operating LLC, Exelon Power Texas, 

ExxonMobil Chemical Company, Firestone Polymers, LLC, GB Biosciences Corporation, Halliburton Company, 

Huntsman Corporation, INEOS NOV A LLC, Intercontinental Terminals Company, International Paper Company, 

International Power, Kinder Morgan Liquids Terminals, LLC, LANXESS Corporation, LBC Houston, LP, Lyondell 

Chemical Company, Marathon Petroleum Company LLC, MeadWestvaco Corporation, Merisol USA, L.L.C., NRG 

Texas Power LLC, Odfjell Terminals (Houston) LP, Oiltanking Holding USA, Inc., Pasadena Refming System, Inc., 

PL Propylene, Praxair, Inc., Rohm and Haas Texas, Incorporated, Shell Oil Company, Shintech, Inc., Sterling 

Chemicals, Inc., Stolthaven Houston Inc., Suez Energy North America, TARGA, Temple-Inland Inc., Texas 

Instruments Incorporated, TPC Group, Total Petrochemicals USA, Inc., Union Pacific Railroad Company, Valero 

Energy Corporation, Vopak Logistics North America, Inc., Western Refining Co., L.P. 

HOU02: 1204911.9 
BAKER BOTTS U.P 

Mr. Michael Parrish -2- August 2, 2010 

1,200 tons per day to under 600 tons per day.2 Ozone as measured under the one-hour standard 

in the Houston-Galveston area has declined from 220 parts per billion ("ppb") in 1991 to 127 

ppb in 2009.3 Under the eight-hour standard, ozone in the Houston-Galveston area has declined 

from 119 ppb in 1991 to 84 ppb in 2009.4 There has been a similar improvement in toxic air 

emissions. Between 2003 and 2008, there has been a 50% decrease in highly reactive volatile 

organic compounds ("HRVOCs") in the Houston area.5 Similarly, in the Dallas-Fort Worth area, 

ozone as measured under the one-hour standard declined from 140 ppb in 1991 to 115 ppb in 

2009.6 Ozone for the Dallas-Fort Worth area under the eight-hour standard has declined from 

105 ppb in 1991 to 86 ppb in 2009.7 Moreover, between 1988 and 2008, there has been an 80% 

reduction in VOC compound indicators in the Houston area;8 Notably, according to recent 

TCEQ review, all areas of Texas are in attainment for nitrogen dioxide, sulfur dioxide, and 

carbon monoxide.9 

TIP supports revisions and clarifications to the flexible permit program that 

further the goal of a fully federally-approved set of regulations. TIP objects, however, to several 

portions of the proposed revisions that are not needed to address EPA's concerns with the current 

program. TIP's objections are detailed below. 

Section 116.13 

In the proposed revisions to § 116.13, TCEQ offers new definitions of continuous 

emission monitoring system ("CEMS"), continuous parameter monitoring system ("CPMS") and 

predictive emissions monitoring system ("PEMS''). The proposed definitions in § 116.13 depart 

from the definitions for the terms found elsewhere in the Texas rules, including those found.in 

Chapters 117 and 115. 10 For example, § 115.725 discusses "operational parameters" and 

establishment of operating limits for selected parameters as an hourly average of the parameters. 

That provision requires installation of a "continuous monitoring" (defined in Chapter 115 general 

provisions) system to record the parameters but it does not use the term "continuous parameter 

monitoring system" as defined in this rule proposal. Section 117.140(h)(2) also refers to a 

"continuous monitoring system." While Chapter 117 does not define the term "continuous 

monitoring system," it does define CEMS and PEMS differently than the language proposed here 

in§ 116.13. 

2 Susana M. Hildebrand, TCEQ Chief Engineer, Update of Air Quality in Texas (presented at Oct. 29, 2009 

Commission Work Session, and available at TCEQ.com), 13. 

3 /d. at 13. 

4 /d. 

5 Houston Regional Monitoring, Total HRVOC Network Average Concentrations: Houston Ship Channel 

PAMS-GC Monitoring Sites. 6 /d. at 16. 

7 /d. 8 Houston Regional Monitoring, Annual Average Trends for VOC Indicator Compounds for HRM Network 

from 1988 through 2008. 9· Susana M. Hildebrand, TCEQ Chief Engineer, Update of Air Quality in Texas (Oct. 29, 2009), 10. 10 See, e.g., 30 Tex. Admin. Code§ 117.10(10). 

HOU02: 1204911.9 
BAKER BOTTS ur 

Mr. Michael Parrish - 3 - August 2, 2010 

Further, the proposed defmition for a "continuous parameter monitoring system" 

suggests recording an "average" operational parameter value on a continuous basis. The 

proposal fails to specify the type of averaging period that will apply. TCEQ should consider 

adding "record in units of the applicable emission limit" to the definition, and allow for any 

further averaging period details to be specified in applicable permits as necessary. 

TCEQ should align all substantive definitions of these terms with existing 

definitions to avoid inconsistency and confusion among various programs and portions of the 

. Texas rules. This could be best accomplished if TCEQ added the proposed definitions to the 

general provisions of Chapter 101. 

Section 116.711 

Section 116.711(2)(C)(i) 

The proposed rule language appears to limit the ability to balance control levels 

among new and existing facilities. TIP objects to the extent that only existing facilities would be 

allowed to balance control levels. 

For example, in§ 116.711(2)(C)(i), TCEQ proposes new language·regarding the 

application of BACT to facilities operating under a flexible permit. Under the existing rules, one 

or more facilities operating under a flexible permit cap may be controlled over and above BACT, 

so that the aggregate emissions of all facilities comply with the cap. The language of the 

proposed revision, however, appears to limit the ability to apply additional controls beyond 

BACT to only existing facilities. The proposal states: "Control technology beyond BACT may 

be used on certain existing facilities to provide the emission reductions necessary to comply with 

this requirement on a group of existing facilities basis, provided however, that the existing level 

of control may not be lessened for any facility." 11 TIP objects to the insertion of "existing" in 

this provision. Owners and operators should have the option to apply controls above BACT to 

both new and existing facilities. Limiting the application of additional controls to existing 

facilities only is unnecessary. TCEQ should remove "existing" from the proposed revision to 

this subsection. 

Section 116.711(2)(H) and (I) 

In the proposed revisions to § 116.711(2)(H) and (I), TCEQ would introduce a 

requirement that a "separate analysis shall be made for the project to determine the applicability 

or nonapplicability" of federal PSD or nonattainment review. TIP is concerned that this 

language is redundant of the existing requirement to assure compliance with major NSR, and is 

not clear as to the scope and extent of the "separate analysis" requirement. The meaning of 

"separate,'' for example, is not clear. The major NSR applicability analysis is typically 

II Proposed§ 116.711(2)(CXi). 

HOU02:1204911.9 
BAKER BOlTS U.P 

Mr. Michael Parrish -4- August 2, 201 0 

combined for one or more pollutants, and is typically integrated into a· single application 

document with a discussion of each of the other rule requirements for a permit. 

The existing regulations explicitly require that "each facility shall comply with all 

applicable requirements in this chapter" concerning major NSR review. The existing language is 

sufficient to establish the requirement to assure compliance with major NSR requirements. TIP 

objects to adding a "separate" documentation requirement to an already a robust requirement to 

demonstrate compliance with federal NSR requirements. The additional language does not add 

protections beyond those afforded in the existing language. 

Section 116.711(2)(J) 

The proposed revisions to § 116.711(2)(1) would require owners or operators 

applying for a flexible permit or for an amendment to increase a permit emission cap or 

individual emission limitation to include an "air quality analysis to demonstrate that the proposed 

action will not interfere with attainment and maintenance of National Ambient Air Quality 

Standards." This provision, like the proposed additional language on major NSR applicability, is 

redundant to existing requirements. Further, the language appears to track the federal statutory 

requirement relating to SIP revisions under FCAA Section 11 0(1), a test that is not applicable to 

individual permit actions. Creating a separate obligation with regard to NAAQS creates 

confusion with regard to the air quality analysis that is more generally required in Chapter 116 

permitting. The existing language of § 116.711(2)(1) already requires "[c]omputerized air 

dispersion modeling and/or ambient monitoring may be required by the commission's New 

Source Review Permits Division to determine the air quality impacts from the facility, group of 

facilities, or account." 

Section 116.711(2)(M)(vii) 

In the proposed revisions to § 116.711(2)(M)(vii), TCEQ attempts to address 

EPA's concern about the disposition of terms and conditions of permits issued under Subchapter 

B when a flexible permit is issued. In relevant part, the proposal requires the applicant to 

"include an analysis of how the conditions and control requirement of Subchapter B permits will 

be carried forward in the proposed flexible permit."12 

TIP supports TCEQ's efforts to respond to EPA's concerns about terms and 

conditions of previously-issued permits. The proposed provision, however, is unworkable. 

Conditions from previously-issued permits can, and do, change. Not every condition from past 

permits can be codified in future permits. Indeed, there would be no need for permit 

amendments or alterations if conditions remained static. TCEQ allows owners and operators to 

change conditions where the amendment, alteration, or other revision requirements are met. The 

proposal should provide for the opportunity for applicants to show how conditions from 

previously-issued permits changed, or are changing, in a flexible permit or permit amendment. 

12 Proposed§ 116.711(2)(M)(vii) (emphasis added). 

HOU02:!204911.9 
BAKER BOTTS LLP 

Mr. Michael Parrish 

Section 116.715 

-5- . August 2, 2010 

In the proposed revisions to § 116.715, TCEQ seeks to add a spate of new 

monitoring, recordkeeping and reporting requirements. The proposals appear to based on the 

language of the federal requirements for Plantwide Applicability Limit ("PAL") permits. TIP 

supports changes to address EPA's concerns that flexible permits contain adequate monitoring 

and recordkeeping requirements to demonstrate compliance. Such changes, however, should not 

impose PAL requirements where they confuse and unnecessarily complicate the operation of the 

flexible permit program for sites not opting into the PAL program. Specific concerns about these 

provisions are outlined more fully below. 

Section 116.715(c)(12) 

The proposed changes to § 116.715(c)(12)(A) would require flexible permit 

holders to submit a semiannual report to TCEQ within 30 days of the end of each reporting 

period that contains various details, including exceedances of emission caps and a list of 

facilities that have undergone a modification as defined in §116.12. These reports are 

duplicative of Title V reports and of reports required by 30 Texas Administrative Code § 

101.201. The additional requirement of a separate semiannual report is excessive and unduly 

burdensome. 

TIP supports recordkeeping requirements that are sufficient to demonstrate 

compliance with emission caps and sufficient monitoring of performance of facilities under 

flexible permits, but the proposed semi-annual reporting requirements are redundant and 

unnecessary. 

Additionally, §116.715(c)(12)(A)(i)(VII) requires notification of a shutdown of 

"any monitoring system." The provision, however, does not defme "monitoring system." The 

provision is vague and could apply to various types of equipment including fuel flowmeters and 

hydrogen sulfide analyzers, which could possibly qualify as ''monitoring systems" as they are 

used to calculate actual emissions. 

Proposed § 116.715(c)(12)(B) would require a facility owner or operator to 

record and report maximum emissions "without considering enforceable emission limitations or 

operational restrictions for a facility during any period of time that there is no monitoring data, 

unless another method of determining emissions during such periods is specified in the flexible. 

permit special conditions." TIP objects to this proposal because reporting maximum emissions 

due to missing monitoring data may create false permit exceedances. TCEQ should allow 

owners and operators to employ demonstrated good engineering practices to address any absence 

of monitoring data. Instead of the wholesale incorporation of federal PAL provisions into the 

flexible permit regulations, TCEQ should consider drawing from other sources such as the Texas 

NOx and HRVOC rules, which are SIP-approved, for provisions to address data issues. For 

example, §117.340(c)(3) provides several methods owners and operators can use as substitute 

emissions compliance data during periods when NOx monitors are off-line. The HRVOC rules 

allow data substitution, for example, at§ 115.764(A) and (B). 

HOU02:1204911.9 
BAKER BOlTS lLP 

Mr. Michael Parrish -6- August 2, 2010 

Under proposed § 116.715(c)(12)(C), owners and operators must revalidate "any 

site generated test data used to determine the emission rates for facilities under the cap" through 

performance testing or other scientifically valid means approved by the executive director every 

five years. This requirement would result in testing every 5 years where those emission rates are 

used to establish actual emissions. For example, if a site builds a new heater, stack testing is 

usually required by permit within a set period after startup up of the heater. Generally, those 

tests are conducted at maximum firing rates and the resulting permit will usually indicate the 

furnace cannot exceed those tested rates unless stack testing is repeated. The same logic should 

be applied to emission factors. Only a significant change justifies a re-test. Other examples also 

illustrate that a mandatory five-year retest is unnecessary. Consider the following: if a site 

undertakes a comprehensive sampling program to determine VOC speciation in process lines to 

support emissions estimations for LDAR, re-sampling should only be required unless a process 

change is made that would significantly alter the assumed speciation. TIP therefore objects to 

this proposal as unnecessary, burdensome and costly. · 

Additionally, proposed §116.715(c)(12)(A)(i)(VIII) contains what appears to be 

an unintended reference to shutdowns lasting "one week." TIP objects to changes to the existing 

provisions addressing short-term "shutdowns," an undefined term that could sweep in many 

turnarounds and other routine maintenance activities. As noted below, this is not an EPA 

approval issue, and the existing language should be retained. This provision also appears to 

contain an incorrect cross-reference. The reference to §116.716(e)(l) should be §116.716(d)(l). 

Section 116.715(d)(2) 

The proposed § 116.715(d)(2)(D)(i) would require an owner or operator using 

emission factors to monitor pollutant emissions to adjust those emission factors "to account for 

the degree of uncertainty or limitations in the factors' development." Further, 

§ 116. 715( d)(2)(D)(ii) specifies that a facility must then operate within the determined range. 

These provisions are unworkable. A better process would be for owners and operators to 

identify what the emission factor will be with the TCEQ permit engineer, and then operate below 

the resulting emissions rate. 

In proposed § 116.715(d)(2)(D)(iii), owners and operators "of a significant 

facility as defined in §116.12" using emission factors to monitor pollutant emissions "shall 

conduct testing to determine a site-specific emission factor within six months of permit issuance 

or start of operation of the facility, whichever is later, unless the executive director determines 

that testing is not required." TIP objects to this provision as unclear and as more stringent than 

comparable federal requirements. 

The definition for "significant facility" found in § 116.12 is: "[a] facility that 

emits or has the potential to emit a plant-wide applicability limit (PAL) pollutant in an amount 

that is equal to or greater than the significant level for that PAL pollutant."13 It is unclear 

13 30 TEX. ADMfN. CODE§ 116.12(33). 

HOU02: 1204911.9 
BAKER BOTIS LLP 

11r.~chae1Panish -7- August 2, 2010 

whether the proposed requirement of § 116.715(d)(2)(D)(iii) only applies to those facilities 

operating under a PAL permit, or if the definition of a PAL significant facility is to be applied to 

facilities that have the potential to emit pollutants that are being regulated by a flexible permit 

emission cap. 

Additionally, this requirement is more stringent than the comparable federal 

requirement. Under the federal PAL rules of 40 CFR § 52.21 (aa)(l2)(vi)(C), site-specific testing 

of emission factors is only required "[i]f technically practicable." This qualified is an important 

component of the federal rule, and should be retained. 

Section 116.715(d)(3) 

TIP objects to proposed 116.715(d)(3) (B) as unnecessary. 

116.715(d)(3) states: 

Proposed 

Where an owner or operator of a facility cannot demonstrate a correlation 

between monitored parameter(s) and the pollutant emissions rate at all operating 

points of the facility, the executive director shall: (A) establish default value(s) for 

determining compliance with the emission cap based on the highest potential 

· emissions reasonably estimated at such operating point(s); or (B) determine that 

operation of the facility during operating conditions when there is no correlation 

between monitored parameter(s) and the pollutant emissions is a violation of the 

emission cap. 

116.715(d)(3)(A) requires that when a facility lacks a monitored parameter, a 

maximum emissions rate is established and used as the default emissions rate for compliance. 

This obviates the need for 116.715(d)(3)(B) which requires determination that a facility is out of 

compliance. 

Section 116.716 

TIP reiterates its support for site wide emission caps for flexible permits as a 

valuable tool for the regulated community and as a program that has contributed to sustained 

improvements in Texas air quality. However, TIP has concerns with specific aspects of the 

proposal that are outlined below. 

Section 116.716(a)(3) 

TIP objects to the proposed change in § 116.716(a)(3) in which facilities subject 

to lowest achievable emission rate ("LAER") review must be included in separate emission caps. 

The control technology for these facilities may be appropriate for a permit condition, but there is 

no reason for segregating these facilities into their own caps. Facilities subject to MACT, 

BACT, LAER and other control levels are eligible for cap inclusion under the federal PAL 

rules--there seems to be no EPA-related rationale for segregating LAER-controlled facilities. 

HOU02:1204911.9 
BAKER BOTTS Lll' 

Mr. Michael Parrish - 8- August 2, 2010 

To the contrary, these well-controlled facilities are well-suited for caps, as long as they maintain 

the control levels required by relevant special conditions. 

Section 116. 716( d)(l) 

TIP opposes the proposed revision to § 116.716(d)(l). Under this proposal, if a 

facility subject to an emission cap is shutdown for a period longer than six months, "the emission 

cap shall be adjusted by lowering the emission cap by an amount that the shutdown facility 

contributed to the ori.ginal calculation of the emissions cap." The existing regulation calls for a 

cap readjustment when a facility is shut down for more than twelve months. 

TIP believes that the existing 12-month provision should be retained. Cap 

readjustment after a facility has been shutdown for an extended period was not one of EPA's 

stated concerns with the flexible permit program. The change to six months, therefore, is 

unnecessary and will create confusion. The proposed six-month period takes away flexibility 

from the regulated community without cause. There are instances, including repairs following 

hurricanes, that require an individual facility to be shut down more than six months. Also, 

economic conditions may warrant an extended downtime for one unit when other facilities can 

adjust production rates to meet market conditions in a more cost-effective manner. The existing 

12-month provision is already more stringent than EPA's reactivation policy, which carries a 

two-year presumption. 14 The existing provision should be retained. 

Section 117.716(d)(3) 

TIP strongly objects to the proposed revisions to§ 116.716(d)(3). That proposed 

rule states in relevant part : 

For purposes of determining whether an increase in the emission cap constitutes a 

major modification for the pollutant as defined by §116.12 of this title, all 

facilities under that cap shall be considered modified unless there has been no 

physical modification of that facili~ and a separate permit limit or physical 

constraint limits its potential to emit. 5 

In general, TIP objects to rule revisions re-defining major NSR applicability principles, which 

are the subject of a mature set of EPA and TCEQ rules and guidance documents developed with 

extensive stakeholder input spanning several decades. This proposed requirement is at odds with 

the Texas statutory definition of "modification" and with federal NSR applicability requirements 

established in several rounds of rulemaking, most recently NSR reform. This provision is 

unnecessary and redundant to other provisions that require compliance with major NSR. 

Whatever their merits, TIP strongly objects to the establishment by rule of a special-purpose set 

14 See Memorandtun from Edward E. Reich, EPA Stationary Source Enforcement to Stephen A. Dvorkin, 

EPA Region II (Sept. 6, 1978). 15 Proposed§ 116.716(d)(3) (emphasis added). 

HOU02: 1204911.9 
BAKER BOTTS LLP 

Mr. Michael Parrish -9- August 2, 2010 

of major NSR applicability definitions and principles, divorced from both the statutory language 

and the established regulatory requirements. 

Section 117.716(e) 

The proposed§ 117.716(e) states: 

Each emission cap or individual emission limitation shall specify an annual 

emission limitation in tons per year, based on a rolling 12-month period. Each 

emission cap or individual emission limitation shall also specify a practically 

enforceable short term emission limitation. 

TIP supports practical enforceability, but objects to the implication that both long- and shortterm caps are required in a given flexible permit. TCEQ should preserve the option for permit 

holders to establish annual emission caps, while retaining individual short-term emission 

limitations. Under this approach, a facility could be subject to a year-long rolling emission cap, 

but be subject to a short-term emission limit that is specific to the facility. This option should 

especially be retained in light of the proposed increased monitoring and recordkeeping 

requirements that will more clearly demonstrate compliance with emission caps. 

Section 116.717 

The proposed revisions to § 116.717 are: 

If a facility requires the installation of additional control or controls to meet an 

emission cap for a pollutant, the flexible permit shall specify an implementation 

schedule for such additional controls. The permit may also specify how the 

emission cap will be adjusted if such a facility is taken out of service [or fails to 

ia:stall the additioa:al eoa:trol equijnnent as provided by the implementation 

sehedule]. In the event that the controls and implementation schedule specified by 

a flexible permit cannot be met, a permit amendment or alteration to modify the 

controls and implementation schedule must be approved .by the executive director 

before the applicable control schedule deadline. Control · technology that is 

required by federal maior new source review requirements must be operational at 

start of operation and is not eligible for an implementation schedule under this 

section. 

TIP objects to the proposed revisions. The proposed provision would be problematic, for 

example, when a permit amendment for a phased construction project is issued, and the 

equipment is modified in sequential fashion and brought online in a phased approach. If there 

has been over-control balanced against under-control to meet the equivalenr BACT emissions 

level, then potential exists that the project sequence will dictate that the under-controlled device 

may come back online before the over-controlled device. Therefore, TCEQ should allow for an 

implementation schedule that accommodates the phasing of emission controls. 

HOU02:1204911.9 
BAKERBOTIS LLP 

Mr. Michael Parrish 

Section 116.718 

- 10- August 2, 2010 

TIP strongly objects to the proposed revisions to § 116.718(b). As discussed 

above, major NSR applicability principles are well-established in rules and guidance, and the 

proposed special-purpose set of principles in this provision are at odds with those requirements. 

TIP objects to setting broad, new principles in the proposed rule language that conflicts with 

existing regulations and mature and robust guidance. 

In particular, the proposal states, "where the permit holder elects to use potential 

to emit rather than projected actual emissions from the facility to determine the project emission 

increase, the potential to emit shall be considered as the proposed emissions cap unless a 

separate permit limit or physical constraint limits the facility's potential to emit . . . ."16 ·The 

meaning of the bolded phrase is unclear, and could be read to require that each facility in a 

flexible permit must have a physical constraint in order to avoid having a physical or operational 

change attributed to it, with the potential to emit of one facility being set as the potential· to emit 

for the entire emission cap. Physical or operational changes triggering major NSR are welldefined principles in TCEQ and EPA rules and guidance. The proposal is inconsistent with those 

requirements. · 

Section 116.765 

TIP supports TCEQ's proposed§ 116.765 which delays the effective date ofthe 

revisions to the flexible permit program until such time as EPA approves the revisions into the 

state implementation plan ("SIP"). In light of the length of time it has historically required for a 

SIP revision to be acted on by EPA, TIP would suggest that TCEQ remove the alternative of 

December 1, 2012 as an earlier effective date. In order to serve their stated function, these rule 

revisions should become effective when EPA approves them. 

For further information, please do not hesitate to contact me. 

~?.0~ Kathleen E. Weir 

16 Proposed§ 116.718(b) (emphasis added). 

HOU02: 1204911.9 
···.EJ-3 : •' .. ··· 

CITY. OFi HOlJSTON~-'-'-'----......_ ....... An_n_is_e_o_. P_a~rk-'-e_r ~­

. Department of Health and Human Services 

August 2, 20 I 0 

.. . · ... ·.·.·.···.· . 

Michael Parrish · MC 205, Oftlce o:f~ Services 

Texas Com~n on Environmental Quality (TCEQ) 

P.O. Boxl3()87 

Austin, TX78'7U-3Q87 

· Via electronic submittal 

. < • http://www 5. tceq .state.tx. us/rules/ ecomments/ 

. ~ 

. .. . ...... . 

~:~~~ ~:~~~~~:~:!.PA and Human ServiCes • ······. 8000 N. Sta<tltltn Drive 

Houston, 1~!3>tt654-1823 

T. 832.393A906 

F. 832:393.5259 

www,houstonhealth.org 

Re: Amendments to 30 T AC § 116, generally, the Flexible Permit Program, Rule Project Number 2o 10-

007-116-PR: CO~TS 

Mr. Parrish: 

On July 2, 2010, the TCEQ proposed changes to the Texas Flexible Permits State Program (TFP) in 

response to EPA's September 23,2009 proposal to disapprove this and other TCEQ air quality programs 

35 Tex. Reg. 5n9 (July 2, 2010). On June 30, 2010, EPA announced that it was disapproving the TFP 

because it did not meet the requirements for a substitute Major New Source Review (NSR) State 

Implementation Plan (SIP) revision under the federal Clean Air Act. As explained below in these 

comments submitted on behalf of the City ofHouston, the proposed changes do not address EPA's 

concerns and the proposed TFP changes do not ensure ooQipliance with tbe requirements of the federal Clean Air Act. . . . . . . . ·. . .. 

EPA identified problems with the TFP because it was not fimited to only minor sources and because the 

TFP failed to properly regulate and authorize tbe JIK)()itication process of major sources subject to federal 

NSR and Pr:evention of Significant Detefioration (PSD) requinmlents. PSD and NSR require complex yet 

specific applicability determinations to be. made. The failure to include specific provisiOD.S in the TFP 

rules as to ht:Jw those ~inations sb®ld be made, EPA cOntends, means that that the TFP fails to 

ensure that the propei emissions ·contparisons are correctly applied for eacb modification. EPA's 

disapproval abo states that the TFP rules fail to include requirements fur.adequate accountability 

provisions, (lt)lllpliance determination ~ures, and monitoring, recordkeeplng and reporting (MRR) .to 

ensure protecllon of~ national ambiellt air quality standards (NAAQS) and noninterference wlthlbe: · 

Texas SIP control strategies and reasonable further progress (RFP). . .. 

TCEQ proposed aJnellding 30TAC § ll6_7ll(a)(2)(H) and (1), to specii)r that priQrto applying the 

requirements of Subchapter G, the TFr regulations, the applicant must fust perform an analysis to 

determine th¢ applicability or nonapftlJCability of federal NSR and PSD requirements. These proposed 

changes attempt to address EPA's colmnent that the TFP could be used to exempt or shield c.hanges in 

facility operations. fiou:tfederal pennitting requirements because the program does not requif:e that an 

. . . . . . . 

Council Members: Brenda Stardig Jarvis Johnson Anne Clutterbuck Wanda Adams Mlke SuHivan AI Hoang OliverP~nnington Edward Gonzalez 

James G. Rodriguez · $tephen C. Costello Sue Lovell Melissa Noriega C:O. "Brad" Bradford Jolanda "Jo• J~s Controller. Ronald C. Green 
Comments: Rule Project# 2010-007-116-PR 

August 2, 2010 

applicability determination be made as to whether the construction or modification is subject to Major 

NSRJPSD. 

The existing and proposed changes to the TFP rules fail to adequately address 40 CFR §Sl.l65(a)(2)(ii), 

which requires that the TFP include applicability determination procedures for NSR applicability review 

that use the specific provisions of 40 CFR §Sl.l65(a)(2)(ii)(A)tbrough (F) unJess the TFP regulations are 

at least as stringent in all respects as the provisions in the federal provisions. The proposed changes to the 

TFP rules also fail to address 40 CFR §S 1.166(a)(71 which requires that the TFP regulations include the 

specific applicability determination proceduresof40 CFR §51.166(a)(7)(i)through (vi) for PSD 

applicability review. TCEQ's existing and proposed TFP regulations do not include applicability 

determination provisions for NSR review that are at least as stringent as, or more stringent than, the 

federal rules. Similarly, the TFP regulations do not include the applicability determination procedures of 

40 CFR §51.166(a)(7)(i) through (vi) for PSD applicability review. TCEQ's proposed changes to 30 TAC 

§ll6.711(a)(2)(H)and (I) do not adequately address EPA's applicability determination concern because 

the TCEQ proposal is for the TFP permit applicant to simply conduct "a separate analysis" as the 

applicabtlity review and submit it with the TFP application. Allowing a regulated ~to make 

applicabtlity determinations is not consistent with the federal NSR and PSD applicabJlity review 

requirements. Additionally, the methodology described in 40 CFR §5l.166(a)(1) aod 40 CFR 

§51.165(a)(2)(ii) for applicability review is extensive, whereas the proposed TCEQ TFP regulations only 

mention "a separate analysis" to be conducted by the applicant to determine applicability, thus failing to 

prescribe the specific applicability review requirements. 

The analysis proposed byTCEQto determine applicability in30TAC §116.71l(a)(2)(H)and (1), which 

is to be submitted with the TFP permit application, allows the applicant to self-evaluate NSR and PSD 

applicability. If the applicant incorrectly determines that NSR or PSD are not triggered, there is no 

mechanism in the existing and proposed TFP regulations to prevent this erroneous determination from 

being carried forward. The applicability analysis and determination should be conducted by the TCEQ 

and that analysis should be consistent with the requirements of 40 CFR §51.166(a)(1) and 40 CFR 

§51.165(aX2)(ii). 

The TCEQ proposal to amend §116.711(a)(2XG), would require flexible permits 1o specify requirements 

for initial compliance testing and methods of determining ongoing compliance. The EPA expressed a 

ooncem that the existing rule language contains the term "may" instead of"shaJJ," and is not sufficiently 

specific. The proposed rule makes initial compliance testing with ongoing compliance as determined by 

engineering calculations on measured process variables, parametric or predictive monitoring, stack 

monitoring, or stack testing obligatory instead of an option within TCEQ's discretion. However, allowing 

the use of engineering ealculations for compliauee detaminatioos that rely oa measured process variables 

indicates that emissions factors can be used to demonstrate ongoing compliance. In most instances, 

emissions estimations based on emissions factors are a replication of what the emissions limitations are 

based on, rendering the emissions limitations meaningless and the permit need only limit the process 

variable. Compliance with the emissions limitations should be independently verified through 

measurement as part of the perf~ demoosbation. The perfonoaoce demonstration should include 

continuous or periodic parametric or predietive monitoring. emissions monitoring or stack. testing. if 

engineering calculations on measured process variables are used to determine ongoing compliance. 

The TCEQ proposal to amend 30 TAC §116.711(a)(2XJ). would add a requirement that any pennit 

application for a new flexible permit, or permit amendment, must include an air quality analysis to 

demonstrate that the proposed actioo will not interfere with attainment and maintenance of the NAAQS. 

This proposed change attempts to address EPA's COIIlD1e8t that the flexible permit program does not 

sufficiently protect the NAAQS. TCEQ's proposed TFP regulation revisions clarify that air dispersion 

modeling and/or ambient monitoring will be used to evaluate whether or not the proposed source or 

modification will intetfele with NAAQS attainment. However. the regulation should require air 

dispersion modeling and ambient monitoring, Air dispersioo modeling is always PJefened by facilities 

Page2 of4 
Comments: Rule Project# 2010-007-116-PR 

August 2, 2010 

over ambient monitoring. While air dispersion modeling has a use, validation and verification of the 

model must be conducted through ambient monitoring data to ground truth the modeL Monitoring allows 

for background concentrations to be measured and considered to ensure that proposed emissions increases 

will not interfere with attainment and maintenance of the NAAQS. Monitoring and modeling should both 

be required to demonstrate that the proposed action will not interfere with attainment and maintenance of 

theNAAQS. 

The proposed TFP regulation changes should include a requirement that each worst-case emissions from 

each individual source be included in the permit application and that these limits from the permit 

application should be included in the permit as an emissions limit. Alternatively, TCEQ should clarify in 

the role, if only certain individual source's emissions limits are included in the permit and others are not, 

what the criteria are for individual source's emissions limits being included in the permit. The TFP roles 

should stipulate that all source specifte emissions limitations that are based on requirements for best 

available control technology (BACT) or lowest achievable emissions rate (LAER) must be in the permit 

documenL 

The current TFP regulations indicate that TFP permit application representations are enforceable; 

therefore the worst-case emissions representations in the application effectively become emissions 

limitations. However, not having enforceable emissions limitations documented in the permit document 

makes the limitations difficult to enforce, and this has led to a variety of different interpretations on how 

compliance with the emissions limitations of a TFP permit is determined. To be able to determine 

compliance, the individual emission limits of each source must be readily available in the permit 

document. Failing to incorporate individual emissions limitations into the permit, whether derived from 

BACT or LAER, or based on permit application representations alone, leads to situations that make 

compliance evaluations difficult. 

Thank you for the opportunity to comment on these proposals and TCEQ's continued efforts to address 

EPA's concerns about the TCEQ' s Flexible Pennit Program. 

Sincerely, 

/G,__/-4 

Ron Sandbeig, Rei.M., J.D., AsSistant Director 

Houston Department of Health and Human Services 

Cc: Guy Donaldson, Chief, Air Planning Section, Region 6, Environmental Protection Agency 

Michael Shaeffer, M.S., Director of Environmental Public Health, Harris County Public Health & 

Environmental Services 

Laura Spanjian, Director, Office of Sustainability, Mayor's Office, City of Houston 

Page 3 of4 
NOTE: there was no Page 4 of 4 of this letter in the copies of the submittal EPA received.
July 30, 2010 

Mr. Michael Parrish 

Office of Legal Services, MC 205 

Texas Commission on Environmental Quality 

P.O. Box 13087 

Austin, Texas 78711-3087 

1303 San Antonio Street, Suite 200 

Austin TX, 78701 

p: 512-637-9477 f: 512-584-8019 

· www.environmentalintegrity.org 

via TCEQ eComments 

Re: Rule Project No. 2010-007-116-PR (Flexible Permit rulemaking) 

Dear Mr. Parrish: 

These comments address the proposed amendments to 30 TAC § 116.13 (definitions) and 

30 TAC §§ 116.711 - 116.765 (the main Flexible Permit rules). The comments are offered on 

behalf of Environment Texas, Sustainable Energy and Economic Development Coalition, Sierra 

Club - Lone Star Chapter, Texas Environmental Justice Advocacy Services, Air Alliance 

Houston, Public Citizen Texas, Environmental Defense Fund and the Environmental Integrity 

Project. 

TCEQ's existing Flexible Permit rules have been used by regulated entities to circumvent 

federal Clean Air Act requirements, and the U.S. EPA has recently disapproved these rules for 

inclusion as part of the Texas SIP. While the TCEQ's new proposed Flexible Permit rules 

appear to address some of EPA's stated concerns, the proposed rules still fail to meet federal 

Clean Air Act standards and are not approvable as part of the Texas SIP. 

If adopted by TCEQ, the proposed Flex Permit rules will continue to put Texas industrial 

sources at risk of violating the Clean Air Act, because Flex Permits cannot and should not be 

used in lieu of federal major or minor new source review permits. 

I. GENERAL COMMENTS 

We acknowledge TCEQ's statements that the proposed rules (e.g., 30 TAC §§ 

116.710(a)(5), .711(2)(C)(11), .711(2)(H and 1), .716(a)(2)(B), and .718(b)) attempt to clarify 

that the Flexible Permit Program may not be used to circumvent, or be used in lieu of, the PSD 

or NNSR programs. The clarification that exceedances of Flexible Permit caps or individual 

emission limitations constitute violations, proposed 30 TAC § 116.715(b), is a good one, 

although most permitting agencies understand this basic element of environmental regulation as 

axiomatic. The requirement ofproposed 30 TAC § 116.715(c)(5) that the permit, itself, reflect 

most of the monitoring requirements and the algorithms (for limits that are not rather directly 

monitored) is an improvement. Making it explicit that application representations are conditions 

upon which a permit is issued (proposed 30 TAC § 116.715(c)(8)) is also a useful clarification. 

The requirement of proposed 30 TAC § 711(2)(M)(vii) that terms of existing NSR permitswhen superseded by, or incorporated into the terms of the Flexible Permit - be explicitly 

addressed in Flexible Permit applications is a good one. Similarly, the record keeping and 
production requirements of proposed rule 30 TAC § 116.715(c)(6) are an improvement from 

current rules. 

These are all useful clarifications of existing law. (These clarifications belie the TCEQ's 

and industry's recent pronouncements that existing Flex Permit regulations and the permits 

issued under these regulations do not run afoul of the federal Clean Air Act.) 

The proposed 30 TAC § 116.716(c) requirements may help make Flex Permits more 

practically enforceable. We are happy to see the arbitrary "de minimis" 9 percent extra cushion 

for Flex Permit caps removed from 30 TAC § 116.716(d). 

These improvements from existing Flex Permit rules do not resolve the larger problems 

with the Flexible Permit Program, including a lack of practical enforceability, opportunities for 

permittees to circumvent new source review, and a lack of public participation when changes are 

made at facilities covered by a Flex Permit. 

Our overall impression is that the overhead for the permittee, the agency's staff and the 

public associated with adhering to (for the permittee) and understanding and enforcing (for the 

staff and the public) a permit issued under the Flexible Permit Program, and meshing the 

requirements for that permit with those for the PSD, NNSR and other minor NSR programs, 

outweighs the benefits the permittee receives from this program. If adopted, the new proposed 

Flex Permit rules will continue to place Texas industry at risk of violating the federal Clean Air 

Act, and will deny the public the protections offered by that federal law. 

TCEQ should not approve the proposed Flexible Permit Program rules which consist of 

amendments to 30 TAC §§116.13, 116.710, 116.711, 116.715 - 116.718, 116.720, 116.721, 

116.730, 116.740, and 116.750; and new §116.765. As explained below, the Flexible Permit 

Program is not approvable into the Texas State Implementation Plan. Therefore, to the extent the 

State of Texas insists on providing a Flexible Permit program to the regulated community, the 

program can be an addition to federal SIP-approved requirements. But, the program cannot be 

used in lieu of, or replace the obligation of new sources of air pollution or modifications of 

existing sources to obtain New Source Review (NSR), including minor NSR, permits. 

II. THE PROPOSED FLEXIBLE PERMIT PROGRAM FAILS TO LIMIT ITS 

APPLICABLITY TO MINOR SOURCES 

In disapproving the current Flexible Permit Program as part of the Texas State 

Implementation Plan (SIP), EPA explained: 

The submitted Program has no express regulatory prohibition clearly limiting its 

use to Minor NSR and has no regulatory provision clearly prohibiting the use of 

this submitted Program from circumventing the Major NSR SIP requirements, 

thereby potentially exempting new major stationary sources and major 

modifications from the EPA Major NSR SIP requirements. 

2 
75 Fed. Reg. 41312, 41313 (July 15, 2010). TCEQ claims that proposed § 116.710(a)(5) 

resolves this problem. It does not. Proposed § 116.710(a)(5) explicitly allows Flexible Permits 

to be issued for major modifications and major new sources. 

Furthermore, the language of proposed § 116.715(f) is far from clear but it could be 

interpreted to mean that a source can have a flexible permit even if it is subject to the Prevention 

of Significant Deterioration (PSD) or Non-attainment New Source Review (NA NSR) so long as 

the Director does not require the source to obtain a standard permit or permit by rule. 

Proposed § 116.716(a)(2)(B) is clearer. It clearly allows a PSD or NA NSR source to 

obtain a Flexible Permit. 

Thus, all of the reasons EPA stated for rejecting the current Flexible Permit Program as 

not meeting substitute major NSR program requirements apply to the proposed Flexible Permit 

Program. 

In addition, EPA disapproved the existing Flexible Permit Program because it fails to 

include the requirement to make Major NSR applicability determinations based on actual 

emissions and on emissions increases and decreases (netting) that occur within a major stationary 

source. 75 Fed. Reg. at 41313. TCEQ proposes §116.711(a)(2)(H) and (I) as the remedy for this 

shortfall. These provisions, however, do not remedy the problem. To begin with, they do not 

provide any requirements for how the applicability determination is to be made. They do not 

state that the applicability determination must be based on actual emissions and on emissions 

increases and decreases that occur within a major stationary source as that term is used in the 

PSD and NA NSR programs. Furthermore, the proposed provisions do not require that the 

applicability determination be submitted to the state or EPA or that the public be given an 

opportunity to review and comment on it. Without this; the applicability determination 

requirement is not enforceable as a practical matter, and the public is given no opportunity to 

assess the validity of that determination. 

Furthermore, proposed§ 116.716(d)(2) makes this situation more confusing. It explicitly 

allows the addition of new facilities via a Flexible Permit Amendment but does not require a 

major source applicability determination and does not state that the new facility must be a minor 

modification. 

Proposed § 116.718(b) does not provide any help in this regard. It attempts to rely on 

existing §§ 116.12 and 116.121. However, we are concerned that the relevant parts of these 

regulations are not SIP approved. EPA will have to rely on the SIP approved version of these 

regulations, which are not adequate for determining whether a major modification has occurred. 

3 
III. THE FLEXffiLE PERMIT PROGRAM FAILS AS A MINOR NEW 

SOURCE REVIEW PROGRAM 

A. THE PROGRAM FAILS TO ENSURE THAT MINOR 

SOURCES WILL NOT CAUSE OR CONTRffiUTE TO A 

VIOLATION OF A NAAQS OR INCREMENT IN TEXAS 

OR OTHER STATES 

The proposed § 116.718(c) does not resolve EPA's previous grounds for rejecting the 

flexible permit program because it lacks a requirement that minor sources demonstrate that they 

will not cause or contribute to a violation of a NAAQS. See 74 Fed. Reg. at 48482. 1 The 

proposed § 116.718(c) only requires a source to submit its air quality analysis if off-site ambient 

concentrations may be greater than de minimis. This provision is problematic for a number of 

reasons. 

One is that it does not define de minimis. Nor does Texas have a SIP approved definition 

of de minimis for ozone, PM2.5, the new 1- hour N02 primary NAAQS or the new 1 hour S02 

primary NAAQS. Thus, this requirement is not enforceable as a practical matter because it is 

vague. 

Another problem is that an applicant may or may not be required to use "computer 

dispersion modeling." See Proposed § 116.71l[(a)](2)(J). Assessing ambient impacts without 

computer dispersion modeling is no longer considered scientifically valid, yet this regulation 

does just that. In addition, even if required to use "computer dispersion modeling" the regulation 

does not specify which computer dispersion modeling must be used. However, 40 C.F .R. § 

51.160(f)(l) requires the proposed program to use the Guideline on Air Quality Modeling (40 

C.F .R. Part 51, Appendix W). There are numerous computer models that are no longer 

considered to deliver scientifically valid results and there are other computer models that are 

only meant to be used as screening tools. The proposed regulation improperly allows the use of 

all these inadequate tools to determine if a NAAQS will be violated. 

A related problem is the lack of agency or public review for any analysis that an applicant 

believes shows impacts below the de minimis level. This is faulty, circular logic. Without 

agency and public review, we cannot know if the analysis truly shows impacts below the de 

minimis level, whatever they may be. Applicants' ambient impacts analyses contain errors all 

the time. Sometimes these errors are as simple as an applicant copying the wrong emission rate 

out of the application and into the computer modeling program. Sometimes these errors are 

much more complex or difficult to detect, such as applicants using unreliable meteorological data 

inputs, or applicants including emission units in the model but setting the emission unit to 

operate zero hours per day. It is the role of the regulatory agency to scrutinize applications, 

modeling files, and applicants' assumptions, but sometimes regulatory agencies fall down on the 

job; without combined public and regulatory agency review, it will not be possible to determine 

if the applicant has validly concluded that sources will only cause de minimis ambient impacts. 

1 We occasionally cite to the proposed disapproval rather than the final disapproval because the proposal provided 

more detail on some issues than the final and because the final relied upon the same reasoning as the proposal. 

4 
Moreover, the Flexible Permit Program allows changes of emission levels from one 

emission point to another as long as there is an emission cap covering the emission points and 

the emission cap is not violated. This type of change . can result in sources creating or 

contributing to new NAAQS or increment violations. Take for example a source such as a 

refinery that has two emission points under one emission cap. One emission point has a 300 foot 

stack that is located a half mile from the fence line. The other emission point has a 14 foot stack 

and is located 50 yards from fence line. Transferring a substantial amount of emissions from the 

emission point with the tall stack far from the fence line to the other emission point with a short 

stack close to the fence line will almost certainly have an ambient air impact, and could cause or 

contribute to new NAAQS or increment violations. Thus, the proposed Flexible Permit program 

fails to assure that sources will not cause or contribute to an ambient air problem and/or a 

NAAQS or PSD increment violation. 

B. THE PROGRAM FAILS TO REQUIRE THAT A SOURCE 

MUST FIRST CONDUCT A MAJOR SOURCE OR MAJOR 

MODIFICATION APPLICABILITY DETERMINATION 

EPA denied SIP approval of the current Flexible Permit Program because it does not first 

require a source to conduct a proper applicability determination for major NSR. See e.g. 74 Fed. 

Reg. at 48491. As explained above, TCEQ's proposed §116.71l(a)(2)(H) and (I) and § 

116. 718(b) do not adequately remedy this shortfall. 

C. THE PROGRAM FAILS TO REQUIRE AN ENFORCEABLE 

EMISSION CAP TO ENSURE THAT THE SOURCE MAINTAINS 

ITS MINOR SOURCE STATUS 

EPA denied SIP approval of the current Flexible Permit Program because it lacks 

replicable, specific, established implementation procedures for establishing the emission cap in a 

Minor NSR Flexible Permit. EPA explained: 

In sum, the submittal lacks specific, established, replicable procedures providing 

available means to determine independently how the source or the State will 

calculate an emission cap, determine the coverage of a Flexible Permit, establish 

individual emissions limitations for each site, a facility on the site, a group of 

units on the site, or for one pollutant but not another. It also is not cJear to EPA 

what the process is and how the emission cap is adjusted for the addition of new 

facilities. See submitted 30 T AC 116. 716( c). Furthermore, the submitted 

regulations include a term, "multiple emission caps," with an ambiguous 

meaning. See submitted 30 TAC 116.715(b). It is not clear whether this term 

means multiple emission caps because there is one cap for each pollutant, or 

whether there can be more than one cap for one pollutant. 

74 Fed. Reg. at 78492. 

5 
TCEQ offers the proposed § 116.716 in response. However, § 116.716(a)(l) does not 

change anything. First, "like-kind" facilities is not defined in the regulations so it is simply an 

invitation for confusion and protracted litigation rather than for an enforceable cap. Second, 

proposed§ 116.716(a)(l) still allows site-:-wide caps so it does not change anything. 

D. THEPROGRAM FAILS TO REQUIRE SUFFICIENT 

MONITORING, RECORD KEEPING AND REPORTING 

In disapproving the current Flexible Permit program, EPA found that: 

[T]he Program does not meet the requirements of section 11 O(a)(2)(A)-(C), 

which require that SIP revision submittals be enforceable. There are no specific 

upfront methodologies in the submitted Program to be able to determine 

compliance. Nor did EPA find the testing, recordkeeping, reporting, and 

monitoring provisions necessary to establish how compliance will be determined 

and to ensure that the NAAQS are protected. For example, the Program could 

allow hundreds of unrelated emission sources to be subject to one emission cap 

and/or individual emission limitations. Yet the submitted Program contains no 

time period for the cap (e.g., hourly, monthly, and/or annual limits such as rolling 

limits). 

Submitted 116.117(7) is an illustration of our concerns. It states that initial 

compliance testing with ongoing compliance by engineering calculations ''may 

be required.'' This means that under the Program, compliance testing may not be 

required at all and provides no guidance for when monitoring will be required. 

74 Fed. Reg. at 48492. 

TCEQ proposes §116.715(c)(5), (6) and (12) and (d) and §116.7ll(a)(2)(G) to remedy 

this defect. They do not. 

Proposed § 116.715(c)(5)(A) requires monitoring or demonstrating compliance. Thus, 

monitoring is not required. Furthermore, 715(c)(5)(C) provides that whatever monitoring does 

actually make it into the permit can nevertheless be disregarded without any public review if the 

permittee requests it. Similarly, 715(d)(2)(E) again provides the Director with wide latitude for 

picking a monitoring system regardless of the parameters set forth in 715(d)(2)(A)- (D). 

E. THE PROGRAM FAILS TO REQUIRE RETENTION AND 

COMPLIANCE WITH OTHER REQUIREMENTS 

In disapproving the existing Flexible Permit Program, EPA found it failed to: 

[M)aintain recordkeeping sufficient to ensure that all terms and conditions of 

existing permits (including representations in the applications for such permits) 

that are incorporated into the Flexible Permit continue to be met. The submitted 

Program lacks adequate program requirements for the tracking of existing SIP 

6 
permits' major and minor NSR terms, limits and conditions, and whether such 

requirements are incorporated into a Flexible Permit or they remain outside the 

coverage of the Flexible Permit. Minor and Major NSR permits, as well as minor 

NSR SIP Permits by Rule and Standard Permits, can be incorporated into a 

Flexible Permit without any program requirement in place that ensures the SIP 

permits' terms and conditions are included in the Flexible Permit. 

74 Fed. Reg. at 4'8493. The proposed Flexible Permit Program has the same problem. The 

proposal explains that the "flexible permit would then become the controlling authorization for 

all facilities included in the permit, succeeding any existing minor NSR permits that may have 

been applicable to all or part of the facilities." Proposal at 2. 

F. THE PROGRAM FAILS TO PROHIBIT SOURCES FROM 

MAKING DE FACTO CHANGES TO EXISTING SIP PERMITS 

EPA explained, when disapproving the existing Flexible Permit program, that: 

We also are proposing to disapprove the submitted Program because it would 

allow holders of a Flexible Permit to make de facto amendments of existing SIP 

permits, including changes in the terms and conditions (such as throughput, fuel 

type, hours of operation) of minor and major NSR permits, without a 

preconstruction review by Texas. 

74 Fed. Reg. at 48493. TCEQ does not offer any changes to the regulations to address this 

concern. However, the language of§ 116.721(c) plainly supports EPA's concern that a Flexible 

Permit can allow changes to SIP permit terms such as limits on throughput and fuel type. Thus, 

the proposed Flexible Permit program continues to fail to meet applicable requirements. 

G. THE PROGRAM FAILS TO REQUIRE IDENTIFICATION OF 

ALL THE RELEVANT EMISSION UNITS AND APPLICABLE 

REQUIREMENTS IN THE PERMIT 

TCEQ proposes §116.711(a)(2)(M)(vii) to address EPA's comment that existing SIP 

permits' major and minor NSR terms, limits and conditions, must be tracked and accounted for. 

However, §116.711(a)(2)(M)(vii) is just a requirement of what needs to be the in an application, 

not a permit itself. Thus, it fails to address EPA's concern. 

TCEQ proposes§ 116.716(a)(2)(B) and (a)(3) to address "EPA's stated concerns that the 

flexible permit program could allow a facility to avoid federally-required control technology." 

We assume that this section means to discuss how the emission cap will be determined, even 

though it actually says it is determining "emissions." Emissions, of course, have to be 

determined by monitoring, testing and record keeping. 

Even with that correction, the section fails to achieve its objective because it does not 

discuss averaging times. If, for example, a BACT limit is based on a one hour averaging time 

and it is used to calculate an annual emission cap, the BACT limit is no longer being used 

7 
because averaging time is a component of an emission limit. While the proposed regulations say 

there should be a "short term" emission cap, the regulations do not require the emission cap to 

match the original emission limit and do not even define short term. Moreover, any emission 

limit that is averaged into a cap with other emission limits from other emission points no longer 

exists if it is not applied to the specific unit for which it is meant. The same problems exist with 

proposed§ 116.716(a)(3)'s attempt to address LAER. 

Proposed § 116.716(d)(l) just makes this problem worse. It effectively weakens an 

emission rate based on BACT, LAER or other requirements, at least for six months, when a 

facility that was used to calculate the emission cap is shut down. 

IV. THE PROPOSED FLEXIBLE PERMIT PROGRAM SUFFERS FROM THE 

SAME PERSISTENT PROBLEMS REGARDING PERMIT ALTERATIONS 

Proposed § 116.740(a) does not require public notice and comment on Flexible Permit 

alterations. Permit alterations have been widely abused by applicants seeking to make 

modifications, emissions increases, or removing previously enforceable important application 

representations. TCEQ has routinely allowed permit alterations when emissions increases are 

expected as long as emissions are not expected to exceed allowable limits. Moreover, TCEQ has 

routinely granted permit alterations when emissions could increase, on the theory that emissions 

will not, under all operating scenarios, increase. 

TCEQ's rules regarding permit alterations and permit amendments, 30 TAC 116.116, are 

reasonable on their face. Commenters acknowledge that permit alterations that could never 

result in an emissions increase or change the method of operation are reasonable; commenters 

also acknowledge that such alterations can be made without public notice. However, TCEQ has 

a long and clear history of complacency or complicity when it comes to allowing permit 

alterations that would never be allowed under federal rules or longstanding EPA policies. For 

example, TCEQ allows permit alterations to remove existing operational restraints such as 

increasing hours of operation, removing throughput or heat input limitations, or increasing 

emissions so long as there is no increase in allowables. For these reasons, commenters oppose 

alterations to Flex Permits when the alteration lacks public notice or opportunity for comment. 

V. SUGGESTED IMPROVEMENTS TO THE PROPOSED RULES, IF 

ADOPTED 

As explained above, we oppose TCEQ's proposed Flexible Permit I?rogram. The 

proposed rules suffer from many of the same problems as the existing rules and, we believe, 

should not be approved by TCEQ, or incorporated into the Texas SIP. 

However, if TCEQ intends to finalize these proposed rules, we urge that the rules be 

improved and clarified consistent with our concerns detailed above. In addition, we suggest the 

following improvements: 

1. Require NAAQS impact modeling for all amendments or alterations to flexible 

permits for which dispersion modeling was not previously required. Proposed § 

8 
116.711(2)(1) would not require this, if the amendment or alteration did not increase an 

individual limit or the overall cap. The existing permissive rule language theoretically 

allowed applications, amendments and alterations to be approved without NAAQS 

modeling, and many facilities availed themselves of this omission. 

2. Permit alteration or amendment materials for flexible permits should identify any 

terms, conditions, and representations of prior permits that will be superseded by or 

incorporated into the altered or amended flexible permit. A variation of proposed 30 

TAC § 116.711(2)(M)(vii) would accomplish this. 

3. The proposed 30 TAC § 116.715(f) should be rewritten to make the "approval" 

requirement a mandatory condition of flexible permits. There should be a nondiscretionary check on the impact of standard permit and permit-by-rule emission 

increases at sites where some or all facilities are covered by a flexible permit. Also, 

"significant impact on the air environment" is not a conventional term of art, so it should 

be defined. 

4. 30 TAC § 116. 715( c)( 5), as proposed, would not require a permit statement of the 

emissions calculation that is used for compliance in those situations where there is 

continuous operating parameter monitoring but where CEMS are not measuring 

emissions levels. The method of converting the parameter measurements to emission 

estimates should be specified. Along these lines, the CPMS definition (30 TAC § 

116.13(2)) should clarify when, if ever, what are thought to be abnormal readings may be 

discarded in the recording of the "average operational parameter values." 

5. The requirement of proposed 30 TAC § 116.715(c)(8) regarding application 

representations should explicitly say that a violation of a condition on which a permit was 

issued is a permit violation. Further, we are worried that the term "operation procedures" 

does not have a sufficiently agreed-upon connotation. A few examples (e.g., design heat 

rate or average fluid residence time or tons/hour throughput) would help with this 

problem. 

6. The decision in proposed 30 TAC § 116.715(c)(12)(C) that revalidation of sitegenerated test data must occur only every 5 years is too generous. Data should be 

revalidated no less often than every three years, and, if a year's results deviate more than 

some percentage, we recommend 1 0%, from the originally-generated data (i.e., the data 

on which the permit was based), then, the revalidations should occur annually for a 

period of years. Also, there should be added a reporting requirement (e.g., 30 TAC § 

116.715(c)(l2)(D)), requiring the permittee to promptly forward to the agency the results 

of testing at the site that is directly relevant to determining emission rates or the character 

of emissions for covered facilities. 

7. The permit should specify which of the four options provided by proposed 30 

TAC § 116.715(d)(2) is used to determine the levels of which emissions from which 

facility. 

9 
8. The cap calculation in proposed 30 TAC § 116.716(a)(2)(A) relies on the 

definition of"expected maximum capacity" in 30 TAC § 116.13(4). This, in turn, allows 

the capacity . value to be less than the physical and operational design value, if the 

"planned operation" of the facility were less than its physical and operational design. If 

the cap is to be calculated taking into consideration the "planned operation" of a facility 

at less than its physical and operational design, then, the lesser level of operation needs to 

be specified as a permit term. If that is not desirable, then, the § 116.13(4) definition 

needs to be amended to remove the "planned operation" relaxation. 

9. The fmal sentence of proposed 30 TAC §116.716(d)(3) needs to be clarified. If a 

like-kind cap were being increased because of the modification of a covered unit (say, a 

physically-changed catalytic cracking unit), would the rule require that all the other likekind facilities under the cap be treated as though they, too, were modified, unless each 

one of them were, in fact, unmodified and had a unit-specific limit or PTE constraint? If 

all or some covered units that are not subject to separate permit limits will experience a 

change in their methods of operation, so as to realize the benefits of the physicallymodified unit, but have not themselves had physical modifications, will those covered 

units be considered "not modified," even though their PTEs had earlier been based on 

their "planned operation," rather than on their physical design limits? The re-calculation 

of the permit cap over time is important and difficult, and the rules for this need to be 

particularly clear. At the very least, the preamble language for the final adoption needs to 

present a couple of examples reflecting how the texts of proposed §§ 116.13 and 

116.711(a) and (d) interact. 

10. Proposed 30 TAC § 116.718(c) should make an increase in off-site emission 

impacts, not an increase in facility emissions, the trigger for NAAQS-impact modeling. 

Particularly for the new one-hour N02 standard, the locations within a site from which 

emissions emanate can impact off-site NAAQS attainment, even in the absence of an 

over-all increase in site criteria pollutant emissions. 

11. Proposed 30 TAC § 116.721(a) defines "a significant increase in emissions" as a 

trigger for the requirement of a permit amendment. This term needs to be defined, or 

there needs to be a reference to a definition stated elsewhere. Also, the term should 

clearly refer to actual, as opposed to allowable, emissions. The trigger should specify 

that the determination of an emissions increase be a determination based on actual typical 

short-term or typical annual emissions; it is simply too easy to hypothesize a short-term 

scenario (a particularly clean fuel or a particularly high-moisture-content fuel, for 

example) under which there will be no anticipated emissions increase, even though, when 

compared to typical conditions, there will be an emissions increase. Thus, we believe the 

term should be restated: "a significant increase in actual emissions under any typical 

short-term or annual operating conditions." 

12. The proposed rule should also clarify that a delay in the implementation of 

required emission controls is a relaxation of emission controls; the "alteration" language 

in proposed 30 TAC § 116.717 might be read to imply that delays in required emission 

controls may be allowed by permit alteration. 

10 
VI. CONCLUSION 

In closing, we urge TCEQ to discard its Flexible Permit Program. Flexible Permits, 

permit alterations, permits by rule, and standard permits, are all examples of TCEQ regulations 

that are intended to give the regulated community flexible and streamlined permitting 

mechanisms. Yet, these mechanisms are implemented in ways that deny the public adequate 

protections guaranteed by the federal Clean Air Act. 

The proposed Flexible Permit rules contain some improvements over the current rules, 

but are still not approvable as part of the Texas SIP. Moreover, we remain concerned that 

implementation of the rules will result in the same systemic problems which EPA and public 

interest advocates have complained of for many years. It remains our view that this program 

will continue to result in permits for which the determination of compliance is nearly impossible. 

Thank you for the opportunity to provide these comments. 

11 

Respectfully Submitted, 

Ilan Levin 

Sr. Attorney and Texas Program Director 

Environmental Integrity Project 

1303 San Antonio Street, Suite 200 

Austin, Texas 78701 

Phone: (512) 637-9477 

Fax: (512) 584-8019 
TEXAS CHEMICAL COUNCIEJ 

1402Nueces Street • Austin,Texas 78701-1586 • (512} 646-6400 • Fax (51'2) 646-6420 

August 2, 2010 

Mr. Michael Parrish 

Texas Commission on Environmental Quality 

MC205 

P.O. Box 13087 

Austin, Texas 78711-3087 

Re: Rule Project Number 2010-007-116-PR (Flexible Permits) 

Dear Mr. Parrish: 

The Texas Chemical Council (TCC) appreciates the opportunity to provide comments to the 

Texas Commission on Environmental Quality (TCEQ) on proposed revisions to the Texas new 

source review (NSR) air permitting program rules for Flexible Permits as published in the Texas 

Register on July 2, 2010 (35 Tex. Reg. 5,729- 5,744). 

TCC is a statewide trade association representing over 70 chemical manufacturers with more 

than 200 Texas facilities. Our industry has invested more than $50 billion in physical assets in 

the state and pays over $1 billion annually in state and. local taxes. TCC's members provide 

approximately 70,000 direct jobs and over 400,000 indirect jobs to Texans across the state. TCC 

member companies manufacture products that improve the quality of life for all Americans. 

Chemicals are the state's largest export with over $30 billion each year. 

In response to the U.S. Environmental Protection Agency's (EPA) proposed disapproval of the 

Flexible Permit Program on September 23, 2009, the TCEQ developed these proposed rules to 

address EPA's specific concerns with the program. However, shortly after TCEQ commissioners 

approved this proposed rule on June 16, 2010, the EPA announced final disapproval of the 

Flexible Permit Program on June 30 citing that it "does not meet several national Clean Air Act 

requirements that help to assure the protection of health and the environment." 

Prior to EPA's final disapproval, the alleged deficiencies in the flexible permit rules that were 

cited in the September 23, 2009 proposed disapproval included the following: 1) The program is 

not clearly limited to use in minor NSR and does not clearly prevent circumvention of major 

NSR requirements; 2) The program does not require that an applicability determination for major 

NSR be made first for construction or modification that could potentially be subject to major 

NSR; 3) The program fails to meet the statutory and regulatory requirements for a state 

implementation plan (SIP) revision and is not consistent with guidance on SIP revisions; 4) The 

program lacks replicable, specific, established implementation procedures for establishing the 

emission cap in a minor NSR flexible permit; 5) The program is not an enforceable minor NSR 

permitting program; 6) The program allows the issuance of flexible permits that do not 

incorporate emission limitations and other requirements of the Texas SIP; 7) The program lacks 

the necessary more specialized monitoring, recordkeeping, and reporting requirements required 
for this type of minor NSR program, to ensure accountability and provide a means to determine 

compliance, 

TCC respectfully submits these comments, despite the action taken by EPA on June 30, 2010. 

TCC has always supported the full approval of the Texas Flexible Permit Program. Similar to 

other minor NSR programs such as the Qualified Facilities Program, the Flexible Permit 

Program does not shield a source from major NSR permitting requirements. The state's Flexible 

Permit Program, as it is currently implemented, is a robust, legally defensible program that is 

intended to add operational flexibility through the use of emission caps, certain control 

technology and other operational practices to achieve emissions reduction with the ultimate goal 

of having a well-controlled facility after the fmal cap is implemented. A flexible permit is an 

alternative to the traditional minor NSR authorization and is not a mechanism used to determine 

federal NSR applicability. The program does not allow new stationary sources to construct 

without a major NSR permit if a determination is made that one is necessary. 

While TCC understands the need for the state to make revisions to satisfy EPA concerns so that 

this program can be approved as part of the Texas SlP, we would like to provide several 

comments on the proposed revisions, some of which concern TCC members: 

§116.13. Flexible Permit Definitions. (35 Tex. Reg. 5,737) 

The following words and terms, when used in this chapter, shall have the following meanings, unless the context 

clearly indicates otherwise. 

(1) Continuous emission monitoring system (CEMS)--All of the equipment that may be required to meet the data 

acquisition and availabilitv requirements of Subchapter G of this chapter, to sample. condition (if applicable). 

analyze. and provide a record of emissions on a continuous basis. 

(2) Continuous parameter monitoring system (CPMS)--All of the equipment necessary to meet the data acquisition 

and availability requirements of Subchapter G of this chapter. to monitor process and control device operational 

parameters (for example. control device secondary voltages and electric currents) and other information (for 

example. gas flow rate. 0:£ or CO£ concentrations). and to record average operational parameter value(s) on a 

continuous basis. 

TCC Comment: 

Federal regulations define both "continuous emission monitoring system" and "continuous 

parameter monitoring system" (see 40 CFR § 52.21). However, in this rule proposal, TCEQ 

amends the federal definitions for the purpose of the Flexible Permit Program. TCC believes 

that the state and federal definitions need to be consistent to avoid confusion and promote 

clarity. In addition, the proposed definitions are not even consistent with similar TCEQ 

definitions for "continuous monitoring" found in Chapter 115 and "CEMS" and "PEMS" 

found in Chapter 117. TCC encourages TCEQ to align these definitions and put them in 

Chapter 101. 
§116. 715. General and Special Conditions. (35 Tex. Reg. 5,741- 5.742) 

(c) The following general conditions shall be applicable to every flexible permit ... 

(12) Emissions Caps. The following requirements apply to facilities with emissions subject to emissions caps. 

(A) Recordkeeping and reporting. 

(i) A semiannual report shall be submitted to the executive director within 30 days of the end of each reporting 

period that contains: ... 

av> all data relied upon. including. but not limited to. any quality assurance or qualitv control data. in calculating 

the monthly and annual emission cap pollutant emissions. and short-term emission cap pollutant emissions; ... 

(VJD a notification of a shutdown of any monitoring system. whether the shutdown was permanent or temporary. 

the reason for the shutdown. the anticipated date that the monitoring system will be fully operational or replaced 

with another monitoring system. whether the facilitv monitored by the monitoring system continued to operate. and 

the calculation of the emissions of the pollutant or the emissions determined by method included in the permit; 

(VJJI) the readjusted emission cap for each pollutant if a facility subject to an emission cap is shut down for a period 

longer than one week as required by §116.716(e)(l) of this title (relating to Emission Caps and Individual Emission 

Limitations); and ... 

(B) Absence of monitoring data. A facility owner or operator shall record and report maximum potential emissions 

without considering enforceable emission limitations or operational restrictions for a facility during any period of 

time that there is no monitoring data. unless another method for determining emissions during such periods is 

specified in the flexible permit special conditions. 

(C) Revalidation. Any site generated test data used to determine the emission rates for facilities under the cap must 

be revalidated through performance testing or other scientifically valid means approved by the executive director. 

Such testing must occur at least once every five years after the facility has been added to an emission cap. 

(d) Each permit with emission caps must include special conditions that satisfy the following requirements for 

facilities subject to those caps. These requirements do not apply to facilities that are not subject to an emission 

cap ... 

(3) Where an owner or operator of a facility cannot demonstrate a correlation between monitored parameter(s) and 

the pollutant emissions rate at all operating points of the facility. the executive director shall: 

(A) establish default value(s) for determining compliance with the emission cap based on the highest potential 

emissions reasonably estimated at such operating point(s); or 

B) determine that operation of the facility during operating conditions when there is no correlation between 

monitored parameter (s) and the pollutant emissions is a violation of the emission cap. 

TCC Comments: 

TCC opposes the enormous reporting burden proposed in (c)(J2)(A)(i). The Flexible Permit 

Program is a minor NSR program, and TCC believes the burden created here is not justified 

for a minor NSR program. A requirement to keep records sufficient to show compliance is all 

that should be necessary. If TCEQ decides to go forward with this reporting requirement, 

TCC has the additional following concerns. In subsection IV, the language states that "all 

data relied upon, including, but not limited to, any quality assurance or quality control data, in 

calculating the monthly and annual emission cap pollutant" will need to be included in a 

semiannual report to the TCEQ Executive Director. This is a very broad statement that needs 
to be clarified. The amount of data that would be subject io this recordkeeping and reporting 

requirement is immense in size, and producing this data will be a considerable administrative 

burden for both the facility and the agency. 

In subsection VII, the term "monitoring system" is not defined. There needs to be more 

clarification as to what this will specifically refer. 

In subsection VIII, there is a reference to section §116.716(e)(1). This section does not exist. 

We believe that it is actually referencing §116. 716(d)(1). 

TCC believes that the language in section (c)(12)(B) could potentially lead to a permit 

exceedance. In those instances where there is an absence of monitoring data, TCC 

recommends that facilities be allowed to utilize data substitutions rather than be required to 

use maximum potential emissions. Chapters 115 and 117 both provide for data substitution to 

address missing monitoring data. Additionally, facilities should be able to use an alternative 

method for determining emissions at a later point and not have to have that designated at the 

time the permit is written. 

With regard to section (c)(12)(C), emissions testing at every facility every 5 years is impractical 

and far too costly. Oftentimes a site will test one facility to establish representative emissions 

for all similar facilities at the site. Having a requirement to retest all the facilities would be 

unduly burdensome and economically unreasonable. TCC requests that TCEQ take time, 

resources, and cost considerations into account with regard to the revalidation requirements 

in this rule proposal. 

TCC does not understand the need for (d)(2)(D)(i) and (ii) and encourages TCEQ to remove 

those requirements. If emissions factors are suggested by the applicant, the permit engineer 

will determine the appropriate emissions factor based on the degree of uncertainty or 

limitation of the suggested factor and set an emissions limit. The permitee then must operate 

that facility below that emissions limit to be in compliance. There is no need to have an 

"operating range" specified in the permit. 

TCC also has concerns with section (d)(3)(A)-(B). Having the Executive Director establish 

default values for determining compliance with the emissions cap based on the highest 

potential emissions is all that is needed when a correlation between monitored parameters and 

the pollution emissions rate at all operating points of the facility cannot be demonstrated. TCC 

believes that subsection B is unnecessary and should be removed from the proposed rule 

language. 

p 16. 716. Emission Caps and Individual Emission Limitations. (35 Tex. Reg. 5, 742) 

(d)(l) If a facility subject to an emission cap is shut down for a period longer than six [H] months, the emission cap 

shall be adjusted [readjl:lstea] by lowering the emission cap by an amount that the shut down facility contributed to 

the original calculation of the emission cap. If a shut down facility is returned to operation, the emission cap shall be 

adjusted by increasing the emission cap by the amount that the facility contributed to the original calculation of the 

emission cap; however, the emission cap cannot be increased beyond the original emission cap amount. 
TCC Comment: 

There are several situations where, due to maintenance or a shutdown due to malfunction, a 

facility subject to an emissions cap would be shut down for longer than 6 months. TCC 

requests that TCEQ return to the original rule language and allow for a 12-month shutdown 

period. Additionally, EPA has not taken issue with the 12-month shutdown period in the 

existing rule, so TCEQ should leave it unchanged. Furthermore, TCEQ should clarify that 

increasing the emissions cap back to its original amount when a facility is started back up 

requires only a permit alteration. 

§116.717. Implementation Schedule tor Additional Controls. (35 Tex. Reg. 5.743) 

If a facility requires the installation of additional control or controls to meet an emission cap for a pollutant, the 

flexible permit shall specify an implementation schedule for such additional controls. The permit may also specify 

how the emission cap will be adjusted if such a facility is taken out of service [or fails to iBstall the additioool 

eofltrol eE}tlipmeffi as provided by the implemeffiatioB sehedule]. In the event that the controls and implementation 

schedule specified by a flexible permit cannot be met. a permit amendment or alteration to modify the controls and 

implementation schedule must be approved by the executive director before the applicable control schedule 

deadline. Control technology that is required by federal major new source review requirements must be operational 

at start of operation and is not eligible for an implementation schedule under this section. 

TCC Comment: 

There are certain situations where this would be problematic. An example would be when a 

permit amendment for a phased construction project is issued, and the equipment is modified 

in sequential process and brought online in a phased manner and over time. If sources have 

been combined in the permit and there has been over-control balanced against under-control 

to meet the equivalent BACT emissions level, then there is the potential that the project 

sequence will dictate that the under controlled device may come back online before the over 

controlled device is brought back online. Therefore, the implementation schedule must allow 

for phasing of emission controls. 

In conclusion, TCC appreciates the time and effort that TCEQ has dedicated to addressing EPA's 

concerns with the state's Flexible Permit Program. TCC is also disappointed that EPA has once 

again disapproved one of TCEQ's programs without giving adequate consideration to the 

agency's proposed revisions to the program. 

Thank you in advance for your consideration of these comments. If you have any questions, 

please do not hesitate to contact me at (512) 646-6404 or mmcmullen@txchemcouncil.org. 

Sincerely, 

1-IJJfr----

Director of Regulatory Affairs 

Texas Chemical Council 
DJstrii:t 

'Vi<;¢-:i'rc$h:iorn.l$ 

AlMt- t,·Smhh .. .I busmn 

hit. ~/'i'>H4 ">'·~. ~tf(C•/,,<,f 

TE~$ OIL & GAS AI!SOClATIQtoll 

August 2. 2010 

Mr. Michael Parrish, Me 205 

Office ofLegal Services 

Texas Commission onEnvironme.nta.I Qua:Uty 

P.O. Box 13087 

Austin; Texas 7871.1-3087 

EJ 

Sitl>trtitm(i Via Electronic Fil$$ 

Re~ Chapter 116- Control of Air Pollution by Permits for New Construction or 

Modification · 

Rule Project No. 2010-007~116-PR 

Dear Mr. Patrish: 

The texas ORand Gas Association (TxOGA) is the largest and oldest petroleum 

organization fnTexas, representing4,000 met1lJ:ters. The'~embership of't~A 

producesm·.excess of90 percent of Texas' crutileOiJ andaatura.I gas, operates 100 per~tjt.ofthestate's refining:eapacity, and is responsible for the vast majority of 

the.$~atl'~ pipelines. According to the most f~@,t®la~ Xhe' oiJ and gas industry 

employ:st~9.000 Texat;ts, prayiding payrolland be:rtefits·cl'over $24 billlon in 

Texas alone. In addition, large associated capital investment$ by the oil and gas 

industry generate signific.antsecondary economic benefits for Texas. 

TxOGA appreciates the opportunity to comment on the proposed revisions to the, 

flexible permit rules. The T~J~as flexible permit progr!'l.m has been effective in 

reducing air emissions and in meeting the standards ofthe Clean Ai.rAct. We 

support the current program and encourage the Commission to make only limited 

changes as necessary to address reasonable concerns of the Environmental 

Protection Agency (EPA). 

Our .t:nember companies have worked closely with the Texas Industry Project 

(Tffi} M.d We concur with the detailed comments submitted by Tffi~ As discus$ed 

in the T1P CODlnl~nts on the proposed Section 116.765, we agree with the rule 

provisiQl;! Qla.t ~~lays the effective date oftM rule unt!I EPA approv~ the 

.revisions intoQ:re•state implementation pl~ (SIP) however, we sugg~t deleting 

the alternative date currently.in the draft Furtheri. TxOGA encourages the 

Commission· to focus only olt.l revisions that are necessary to address the concerns 

of EPA and to leave intact k1S much of tlie successful Texas program as possible, 

30.4.West Thirteenth Stree~ ~· Austin, Texas 73701-1325 ., Telephone: 5"12/ 478-6631 • fax: 5.12] 472-3859 
Rule Proji;~Jtf:IN. 2fil~7-116-PI? - Chaptif:r: 116, 'Ccmtrol of AiJ?PJ€1}/l~ifintfp~J~exmitsfor New 

Constru,;tion or·~¥Ji:lifieation , · · 

Page2 

'IxOOr\j)sp supports site::-W:id~~emission ttM' flexible pemJits:,and we share in TIP concerns 

witlt ~,~ oftne provisions ()f tbe propos .··· .. ·· · .·. •.... 16.716. ·$~~ally? our members . . . disagre~~ l(equiring separat¢ emissiC;;n capsfttr ~UU~s that are 'subject toJQw:est achievable 

emissiorrr.reviewrrequiring both short.,term and:J~+:t'erm caps for a facility; and cap 

readjustnitm!t,nfter a six month shutdown. Additioplij~~~ ~xOOA objects toredefining by rule 

maJor Ne'W i;ource Review applitabilitydefinitionsai:ui•princip1es. 

Again, t~oo~ supports the highly effective flexible ~mit program; itis a workable program 

that we lJe]~ve•isSIP approvable and we urge the Co~ission to not make any unwarranted 

changes. 

Thank you ·for the ~rtunity to comment on this important matter. Should you have any 

questions, pl~$C contaet me at dhastings®txoga.org otSl2147Sr(l63L 

Sincerely, 

( 

Debbie H~til:lgs 

V.i.ce Presl.~Qct for Environmental Affairs 
Subject: 

Comments on TCEQ~s Proposed Changes to 30 TAC 116 Subchapter G 

DocketNo. 2010-0359.;RUL 

Rule Project :No. 2010-007 -116-PR 

(Flexible Permitting) 

Rule Project Number 2010-007-116~PR (Flexible Permits) 

Docket Number 201 0-0359-RUL 

The United States Department of Energy/National Nuclear Security Administration (DOE/NNSA) is 

the owner and co-operator of the Pantex Plant located near Amarillo, Texas. Babcock and Wilcox 

Technical Services, Pantex LLC is the co-operator of the Pantex Plant under a management and 

operating contract to the DOE/NNSA. The emissions ofthe Plant are, in-part, authorized by Flexible 

Air Permit 84802. Therefore, the DOE/NNSA Pantex Plant is potentially directly impacted by the 

Agency's proposed rule changes to 30 TAC §116, Subchapter G, and offers the following comments 

to those proposed regulations. 

I. Proposed §116.715(c)(5)(B): (c) The following general conditions shall be applicable to 

every flexible permit: (5) Monitoring, Calculations, and Equivalency of Methods. (B) Each flexible 

permit shall specify methods for calculating annual and short term emissions for each pollutant for a 

given type of facility when continuous emission monitoring or continuous operating parameter I 

monitoring is not required to be used to monitor emissions for that type of facility. 

Comment 1 

§116.711 (Flexible Permit Application), as proposed, does not include any requirement for an 

applicant to represent the use of continuous emission monitoring or continuous operating parameter 

monitoring in the application. With respect to §116.715, how would the Agency determine if 

continuous emission monitoring or continuous operating parameter monitoring is to be included in 

the operation of the unit? 

Comment 2 

To meet the terms of Proposed §116.715(c)(5)(B), does the Agency propose incorporation by 

reference (to the permit application), or will the Agency extract the methodologies from the 

application and incorporate them into the Permit? 

II. Proposed §116.715(d)(1) & (2): (d) Each permit with emission caps must include special 

conditions that satisfy the following requirements for facilities subject to those caps. These 

requirements do not apply to facilities that are not subject to an emission cap. (1) The monitoring 

system must accurately determine all emissions of the pollutants in terms of mass per unit of time. 

Any monitoring system authorized for use in the permit must be based on sound science and meet 

generally acceptable scientific procedures for data quality and manipulation. (2) The monitoring 

system must employ one or more ofthe general monitoring approaches meeting the minimum 

requirements as described in subparagraphs (A) - (D) of this paragraph. 

Comment 3 

§116.715(c)(5)(B) and §116.715(d)(1) & (2) appear redundant or at least overlapping regarding 

conditions that must be provided in the permit to be issued. For clarity, the provisions should be 

combined. 

Comment4 

With respect to §116.715(d), if a permittee desires to change the methodology for calculating or 

measuring emissions, would they handle this by way of a permit alteration, or amendment? 

Comments from the U.S. DOE Pantex Plant Page 1 
Comments on TCEQ's Pr.oposed Changes to 30 TAC 116 Subchapter G 

Docket No. 2010:.0359-RUL 

Rule Project No. 2010..:007-116-PR 

(Flexible Permitting) 

Ill. Proposed §116.715(c)(12)(A)(IV): (12)Emissions Caps. The following requirements apply to 

facilities with emissions subject to emission caps (A) Recordkeeping and reporting. (i) A semiannual 

report shall be submitted to the executive director within 30 days of the end of each reporting period 

that contains:. . . (IV) all data relied upon, including, but not limited to, any quality assurance or 

quality control data, in calculating the monthly and annual emission cap pollutant emissions, and 

short-term emission cap pollutant emissions; . . . 

Comment 5 

The requirement for "all data" in §116.715(c)(12)(A)(IV) is a concern. While it is understood that the 

Agency needs sufficient detail to verify the information that has been certified by the permittee, a 

literal reading of the requirement could require a permittee to provide all QA/QC data for each 

source and for parameter monitored. As an example, a source as simple as a boiler could have four 

or more parameters monitored; if the system maintains data points for every 15 minutes, this would 

be 11 ,520 data points for a 30-day month, from just one boiler. This does not include the QA/QC 

span and zero-span checks that might be performed by a continuously monitored system. 

While this language in §116.715(c)(12)(A)(IV) replicates language provided in Subchapter C of 

§116, literal compliance would inundate the Agency with detailed information that might never be 

reviewed in evaluating compliance. Additionally, the data could be provided in a format that the 

Agency might not be able to review (e.g., require use of an electronic information management 

system that Agency has no applications to open). It is recommended that the term be replaced with 

"all pertinent data", "all data sufficient to demonstrate compliance," or a requirement that each permit 

provide case-by-case specification of data to be submitted. 

IV. Proposed §116.715(c)(12)(A)(V/II): (VIII) the readjusted emission cap for each pollutant if a 

facility subject to an emission cap is shut down for a period longer than one week as required by 

§116. 716(e)(1) of this title (relating to Emission Caps and Individual Emission Limitations) 

Comment 6 

There is no §116.716(e)(1) of this title in the newly formatted regulations. It is believed that the 

reference was meant to be §116.716(d)(1). 

Comment 7 

§116.716(d)(1) refers to a shut down lasting six-months, while §116.715(c)(12)(A)(VIII) refers to a 

one-week shut down. This discrepancy should be resolved. The United States Department of 

Energy/National Nuclear Security Administration (DOE/NNSA) recommends use of the six-months 

time frame, for reasons provided in Comment 8. 

Comment 8 

A clarification of the term "shut down" in §116.715(c)(12)(A)(VII) should be made. It is the 

DOE/NNSA concern that the latter form of shut down is not uncommon for many non-continuous 

flow manufacturing processes. Under 30 TAG §116.110, any source emitting pollutants to the air of 

Texas is required to have an authorization. In a facility that produces products on a batch basis, 

some units may be used to produce a specific product once annually or biennially. In this example, 

the unit has not been shut down as inferred by the use of the term nor to allow additional capacity to 

another unit. 

Frequent adjustment of an emission cap due to temporary pauses in operation, or for units that are 

designed and managed on a campaign basis, may pose a significant opportunity for permittees to 

inadvertently find themselves in violation, if only administratively. DOEINNSA further recommends 

that the term be applied only in regard to continuously operated units. 

Comments from the U.S. DOE Pantex Plant Page2 
Cc;>mments on TCEQ's'Pr()posed Changes to 30 TAC 116 Subchapter G 

D.ocl<et No. 2010-0359-RUL 

Rule Project No. 2010-007-116.;PR 

(Flexible Permitting) 

V. Proposed §116.715(c)(12)(C): (C) Revalidation. Any site generated test data used to 

determine the emission rates for .facilities under the cap must be revalidated through performance 

testing or other scientifically valid means approved by the executive director. Such testing must 

occur at least once every five years after the facility has been added to an emission cap. 

Comment 9 

The term "site generated test data" in §116.715(c)(12)(C) is ambiguous. It is common for the 

Agency to require performance testing of a source to demonstrate that the source or the source with 

emission controls meet emission rates stated in the permit application and translated to the 

Maximum Allowable Emission Rate (MAER) table in the Permit. If the intent of the Agency is to 

require performance testing of a source every five years, then the provision should state that the 

Agency will require the action in permits issued pursuant to Subchapter G, 

If not, then the Agency should define the term "site generated test data," and its expectations on 

what forms of "revalidation" will be considered as compliant. 

VI. Proposed 30 TAC §116.715(d)(2)(D)(iii): The owner or operator of a significant facility as 

defined in §116. 12 of this title that relies on an emission factor to calculate pollutant emissions shall 

conduct validation testing to determine a site-specific emission factor within six months of permit 

issuance or start of operations of the facility, whichever is later, unless the executive director 

determines that testing is not required. 

Comment 10 

With the insertion of the term "significant facility as defined in §116.12 of this title," into 

§116.715(d)(2)(D)(iii), the Agency created a degree of ambiguity as to the intent of the proposed 

regulation. From the context of 30 TAC §116.715(d)(2)(D)(iii), this proposed regulation is intended 

to be applicable to all sources applying for a permit under 30 T AC § 116, Subchapter G (Flexible 

Permits), with or without a Plant-wide Applicability Limit(s) (PAL) permit. 30 TAC §116.12, titled 

Nonattainment and Prevention of Significant Deterioration Review Definitions, are terms applicable 

to permit review for major source construction and major source modification in nonattainment 

areas. If 30 TAC § 116. 715( d)(2)(D)(iii) is applicable only to permit reviews for major source 

construction and major source modification in nonattainment areas, then it should be so stated in the 

text of §116.715(d)(2)(D)(iii). 

Comment 11 

30 TAC §116.715(d)(2)(D)(iii) is applicable to any significant facility as defined in §116.12. 

§116.12(33) defines "significant facility" as "a facility that emits or has the potential to emit a plantwide applicability limit (PAL) pollutant in an amount that is equal to or greater than the significant 

level for that PAL pollutant. If 30 TAC § 116. 715)(d)(2)(D)(iii) is intended to be applicable only to 

permits that also have a PAL, then it should be so stated in the text of §116.715(d)(2)(D)(iii). 

Comment 12 

30 TAC §116.715(d)(2)(D)(iii) is applicable to a significant facility as defined in §116.12. 

§ 116.12(33) defines "significant facility" as "a facility that emits or has the potential to emit a Plantwide applicability limit (PAL} pollutant in an amount that is equal to or greater than the significant 

level for that PAL pollutant. Neither 30 TAC §116.10, §116.112 nor §116.113 defines "significant 

level for that PAL pollutant." For clarity §116.12 or §116.10 should contain a definition of "significant 

level for that PAL pollutant." 

Comment 13 

Comments from the U.S. DOE Pantex Plant Page3 
Comments on TCEQ's Proposed Changes to 30 TAC 116 Subchapter G 

Docket No.· 201 0..;0359-RUL 

Rule Project No. 2010-007 -116-PR 

(Flexible Permitting) 

If 30 TAC §116.715(d)(2)(D)(iii) is intended to be applicable to all sources applying for a permit 

under 30 TAC §116, Subchapter G (Flexible Permits) with or without a PAL, the proposed 

regulations needs to reworded to make the intent of the regulation clear and unambiguous. If the 

proposed regulation does contain terms that need to be defined; i.e. "significant facility" and 

"significant level," those terms need to be defined in 30 T AC § 116.10 or § 116.113 without using the 

term PAL. 

Comments from the U.S. DOE Pantex Plant Page4 
Comments on TCEQ's Proposed Changes to 30 TAC 116 Subchapter G 

Docket No. 2010-0359-RUL 

Rule Project No. 2010-007-116-PR 

(Flexible Permitting) 

Comment 14 

With regard to §116.715(d)(2)(D)(iii}, the intent of the Agency and an applicant applying for a permit 

under §116 Subchapter G is to produce a clear and unambiguous permit that is protective of the 

environment and the public. It is common for the Agency to require performance testing of a source 

to demonstrate that the source or the source with emission controls meet emission rates stated in 

the permit application and translated to the MAER table in the Permit. 

When a permit is issued that does not contain a provision requiring the performance testing of a 

source, by the issuance of the Permit, the Agency has determined (i.e. the executive director has 

determined) that performance testing is not required. 

When the Agency does not require performance testing in a permit, either the emission factors are 

well understood, or there are not practical means to conduct performance testing. As part of the 

technical review of the application by the Agency and negotiation of permit provisions, the Agency 

determines what is needed to protect the public and the environment and produce permit provisions 

that are both necessary and practical. 

The literal terms of this provision would require every valve, pump seal, vent of identical and like 

sources, relief valve, or other source to undergo performance testing, even though the emission 

from these sources are well understood. 

With the agencies current promulgated discretion, and to provide the regulated certainty in permits 

issued, §116.715(d)(2}(D)(iii) should be revised to read: 

"The owner or operator of a major facility as defined in §116.12(16) of this title that relies on 

an emission factor to calculate pollutant emissions shall conduct validation testing to 

determine a site-specific emission factor within six months of permit issuance or start of 

operations of the facility, whichever is later, as prescribed in the issued permit." 

VII. Proposed §116.716(b): (b) Individual emission limitations. An individual emission limitation 

will be established in the same permit for each pollutant not included in an emission cap for facilities 

authorized by the flexible permit. In addition, an individual emission limitation may be established for 

a pollutant included in an emission cap when the expected capacity of a facility is less than the 

expected maximum capacity to prevent a facility from exceeding emission levels appropriate for the 

proposed controls. 

Comment 15 

With regard to §116.716(b), if the permit has an emission cap for "Volatile Organic Compounds 

(VOC)", and the application and permit identify all facilities which may emit "VOC", does that 

constitute 'inclusion' for all the chemicals that are considered VOC, and similar, for all other 

'grouped' air contaminants (e.g., Ozone Depleting Substances, Hazardous Air Pollutants)? 

Comments from the U.S. DOE Pantex Plant Page 5 
Aug 02 2010 3~~4PM 

:1\.fr. Michael :Parrish 

HP LASER.JET FAX 

UNITED STATCS ENVIRONMENTAL PROTECTION AGENCY .. . REGIONS 

1445ROSSAVENUE,SUITE 1200 

DALLAS TX 75202.:.2733 

AUG 0 2 2010 

Office of Legal Services (MC 205) 

Texas Commission ofEnvironmental Quality 

P.O. Box 13087 

Austin, Texas 78711-3087 

Re: EPA Comments on Rules Project Number 2010-007 -116-PR 

Mr. Parrish: 

Thank you for providing us the opportunity to review and comment on the proposed 

revisions to 30 Texas Administrative Code (TAC) Chapter 116, Control of Air Pollution by 

Permits for New Construction or Modification sections 116.13, 116.710~ 116.711~ 116.715~. 

116.718, 116.720, 116.721, 116.730, 116.740, 116.740~ 116.750, and 161.765- Subchapter G 

Flexible Permits, and the proposed revisions to the Texas State Implementation plan (SIP). This 

proposed rulemaking revises TCEQ's flexible permit program rules in response to our June 30, 

2010, disapproval of the program (75 FR 41312). 

Please note that these oonunents do not constitute fmal determinations concerning 

approvability ofthe revisions to the Texas SIP. At this time, the only flexible permitting 

programs that have been established under federal rules are for major stationary sources and 

major modifications; they are the Plantwide Applicability Limits (PAL) in EPA's NSR reform 

F. 1 

· rules, and those found in the Operating Permit Programs,· Flexible Air Permitting Rule (74 FR 

51418) published October 6,. 2009. EPA cannot approve a SIP revision if it would interfere with 

any applicable requirement concerning attainment and reasonable further progress. or any other 

applicable requirement of the Act. We are providing these comments to assist TCEQ in the 

development of regulatory language. 

We look forward to working with the TCEQ as you move forward in responding to these 

comments and finalizing the revisions to the Texas SIP. If you have ariy questions, please call 

Mr. Stanley Spruie1l of rp.y staff at (214) 665-7212. 

Enclosure 

~ 

Sincerely yours, 

V.l(:)'l$6' 

Thomas H. Diggs 

Associate Director for Air Programs 

Multimedia Plamring and 

Permitting Division 

Internet Addres~t (URL} • http:/Jwww_epa.gov/reglon6 

RecyclediRecyc!able • Printed with Vegetable Oil Based Inks on 100% Recyded Paper, Process Chlorine Free 
Aug 02 2010 3154PH HP LASERJET FAX 

Enclosure 

1. Because TCEQ is proposing to ~elete the insignificant emissions factor in Subchapter G, 

the reference to it in the definitions of~•Emission capn and "'Individual emission 

limitation" at 30 TAC 116.13, must be deleted. 

p.2 

2. Proposed 30 TAC 116.711(2)(M)(.(vii)must be revised as follows to ensure it is clear that 

a flexible permit cannot be used for a major stationary source or major modification: 

"(vii) .ifthe flexible permit application includes facilities currently authorized by a 

Minor permit issued under Subchapter B of this chapter (relating to New Sol,U'ce 

Review Permits) the applicant shall identify any terms, conditions, and representations in 

the Subchapter B Minor permit or permits which will be superseded by or incorporated 

into the flexible permit. The applicant shall include an analysis of how the conditions 

and control requirements of Subchapter B permits will be carried forward :in the 

proposed flexible permit. The flexible permit application cannot include facilities 

currently authorized by a Major NNSR or PSD permit issued under Subchapter B of this 

chapter." 

3. Proposed new 30 TAC 116.716(a)(2)(A) must be revised as follows to ensure it is clear 

that a flexible permit cannot be used for a major stationary source or major modification:. 

"(2) emissions will be calculated for each facility within an emission cap as follows~ 

(A) based on application ofMinor best available control technology at expected 

maximum capacity;" 

4. Proposed 30 TAC 116. 716(a)(2)(B) must be revised to ensure it is clear that a flexible 

permit cannot be used for a major stationary source or major modification. As written, 

the introductory ph.r.Uie, "if the permit is used to authorize" can be inte:tpreted to allow 

PSD and NNSR major stationary sources and major modifications to be covered under a 

flexible permit. 

5. Proposed new 30 ll6.716(a)(3) for NNSR major stationary sources and major 

modifications is not acceptable. As written, it can be interpreted that a nonattainment 

major stationary source or major modification can be covered under a separate emissions 

cap established under a flexible permit. No major stationary source or major 

modification can be authorized under a flexible permit. A major stationary source or 

major modification must be authorized under a PSD or NNSR SIP permit. as established 

in the SIP rules codified at 30 TAC 116.1 SO - 116.151 and 30 T AC 116.160,. which EPA 

approved as meeting the requirements ofTitle I, Parts C and D of the Act and 40 CFR 

51.165 and 52.166. 

6. Proposed new 30 T AC 116.716(aX 4) must be revised to be clear that the emissions from 

facilities subject to PSD BACT and/or NNSR LAER cannot be included in the 

summation ofthe flexible permit's emission cap(s). Moreover, it must be clear that 

Minor NSR BACT determinations are required to be at least as stringent as the federal 

applicable requirement, e.g .• SIP rule, NSPS, NESHAPS, and MACT. Please provide the 
Rue 02 2010 3:54PM HP LASERJET FAX p.3 

SIP rule that contains this requirement or submit the TCEQ rule for approval as a SIP · revision. · · 

7. Proposed new 30TAC ll6.718(b), second sentence, seems to exclude the holder of a 

flexible permit from having the documentation that a change is not a major modification 

ifthere is a PAL limit established for the pollutant. This makes no sense because a.P AL 

is for Major NSR, not Minor NSR Therefore, why is the hol4er of a Minor NSR 

Flexible Pennit excluded from having this documentation? This sentence must be 

revised to ensure it is clear that a flexible permit cannot be used for a major stationary 

source· or major modificati:~n. · 

8. Each individual unit covered under an emission cap must still meet at the very least. its 

specific emission limitation derived from a·federal applicable requirement. e.g., a SIP 

rule, Minor NSR SIP BACT detennination. NSPS, MACT, NESHAPS . .A unit cannot 

violate its federal applicable requirement. An excep~ion could be units that were 

previously grandfath.ered units not subject to any fede{a} applicable requirement other 

than a Min,or NSR SIP BACT determination rpade at the time of the issuance of the 

. original flexible permit. . 

9. The TCEQ must delineate the definitions of "accmmt,•~ Hfacility, » and "group of . 

facilities" in Subchapter G •. For example, proposed 30 TAC 116.711 (7)(N) in Subchapter 

0 uses ''unit" for specification of the control technology for each unit to meet the 

emission cap and demonstration of compliance with all emission caps. The proposed 

Program contained in Subchapter ~ is not clear how a "unit .. relates to the other terms 

cont;rined in Subchapter G, "facility," "group of facilities," and "account:' 

All four terms must be explained sufficiently so that it is clear why one (or more) is used 

in certairt instances and not in other instances throughout Subchapter G. This is 

important to limit the botindaries of the emission cap to be an acceptable Minor NSR 

emission cap SIP program. 

Furtbennore, proposed 30 T AC 116. 7te)(aXl) in Subchapter G provides for either a sitewide emission cap or a like-kind facilities. cap. "Site" is defined in the Texas SIP as 

including "any proj>erty identified in the permit or used in connection with the regulated 

activity at the same street address or location." Tiris definition is too broad and provides 

broad director- discretion to delmeate the boundaries of the site covered by the emission 

cap.. Under this definition~ a site-wide emission cap could c-over all minor stationary 

sources and an minor modifi.i"!ations on tQe company's property. 

10. For proposed 30 TAC 116.7ll(2)(M)(ii), (iv);and (vi)~ please explain why the 

identification does not include "in an account." Also~ please explain why (ii) and (vi) 

should not require the identification ?f•'each facility included in a •group offaciliti~s· /' 

11. Included together here are seyeral comments regarding reference to .. accqunt" and "group 

offacilities". In 30 TAC 116.715(c)(7).1ast sentence, it must include a reference to 

"account/' In 30 TAC 116.715(c)(10) it also must include a reference to "account." In 

proposed revised 30TAC 116.716(d)(4) and in proposed new 30 TAC 116.718(c), they 

must include references to "accounf' and "group of facilities." 
INDEX OF ORAL TESTIMONY 

Public Hearing 

July 29, 2010, in Austin 

TCEQ received no oral testimony for this rulemaking. 
·'~'i 

- 1 -

Texas Commission on Environmental Quality 

Public Hearing Registration 

Date: July 29, 2010 

Time: 2:00 PM 

Rule Project No.: 2010-007-116-PR 

Short Title: Flexible Permitting 

Location: TCEQ Complex, 12100 Park 35 Circle, Building E, Room 201s; Austin, Texas 

Concerning: Proposec:! revisions to 30 TAC Chapter 116 

Name and Phone No. or E-mail Address Representing Presenting Oral Testimony? 

(Please Print) · (Circle One) 

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~2~ 

Texas Commission on Environmental Quality 

Public Hearing Registration 

Date: July 29, 2010 

Time: 2:00 PM 

Rule Project No.: 2010-007 -116-PR 

Short Title: Flexible Permitting 

Location: TCEQ Complex, 12100 Park 35 Circle, Building E, Room 2018, Austin, Texas 

Concerning: Proposed revisions to 30 TAC Chapter 116 

iJ.i!:!li'···,·,'··-

· (Please Print) ~Wa~ma (Circle One) 

·-.-··':Si-12~ JfJrr Sc.. r-s:---e f ~,vc tt/"\ y~ I 

., 

I 

Yes No 

Yes No I 

Yes No I 

Yes No 

-

Yes No I 

Yes No 

Yes No 
HEARING OFFICER REPORT 

I am the hearing officer assigned to conduct the public hearing regarding proposed 

revisions to 30 TAC Chapter 116 rules. (Rule Project No. 2010-007-116-PR) 

A public hearing was scheduled for July 29, 2010 at 2:00PM in 12100 Park 35 Circle, 

Building E, Room 201S, Austin, Texas. 

At 2:00, the room was open, TCEQ staff and a court reporter were present and ready to 

open the hearing for public comment. After waiting for 10 minutes, no one had arrived 

to make comments. on the record. Therefore, the public hearing was not formally opened 

for comment and no transcript was prepared. 

~ Hearing Officer 

Date signed 
( 

~ 

..e 

= -

= = --· 0 

= 
Texas Commission on Environmental Quality 

INTEROFFICE MEMORANDUM 

To: 

· Thru: 

From: 

Docket No.: 

Subject: 

Commissioners 

LaDonna Castafiuela, Chief Clerk 

Mark R. Vickery, P.G., Executive Direct.(or 

Richard A. Hyde, P.E., Deputy Director 

Office of Permitting and Registration 

2010-0359-RUL 

Commission Approval for Rulemaking Adoption 

Date: November 19, 2010 

Chapter 116, Control of Air Pollution by Permits for New Construction or 

Modification 

Flexible Permit Program Revisions 

Rule Project No. 2010-007-116-PR 

Background and reaso:n(s) for the rulemaking: 

The Texas flexible permit program rules (Subchapter G of Title 30 Texas Administrative Code 

(TAC) Chapter 116, Control of Air Pollution by Permits for New Construction or Modification) 

became effective on December 8, 1994. The flexible permit program was established to improve 

flexibility for participating facilities by eliminating the need for a permit amendment each time an 

operational or physical change was made at the permitted facility. The flexible permit rules were 

submitted to the United States Environmental Protection Agency (EPA) as a state implementation 

plan (SIP) revision after their adoption, but the EPA took no formal action on the rules until 

September 23, 2009, when EPA published notice of the proposed disapproval of the flexible permit 

rules as a SIP revision. In the notice of proposed disapproval, the EPA identified a number of 

alleged deficiencies in the flexible permit rules. The EPA published notice of final disapproval of 

the flexible permit rules on July 15, 2010. The purpose of this rulemaking is to revise the flexible 

permit rules to address the EPA's concerns, so that Subchapter G can be approved as part of the 

. Texas SIP and the flexible permit program can continue. 

The deficiencies which the EPA cited in the September 23, 2009, Federal Register (FR) notice (74 

FR 48480, attached) and in the July 15, 2010 notice (75 FR 41312) included the following: 1) the 

program is not clearly limited to use in minor new source review (NSR) and does not clearly 

prevent circumvention of major NSR requirements; 2) the program does not require that an 

applicability determination ~or major NSR be made first for construction or modification that could 

potentially be subject to major NSR; 3) the program fails to meet the statutory and regulatory 

requirements for a SIP revision and is not consistent with guidance on SIP revisions; 4) the 

program lacks replicable, specific, established implementation procedures for establishing the 

emission cap in a minor NSR flexible permit; 5) the program is not an enforceable minor NSR 

permitting program; 6) the program fails to ensure that the terms and conditions of major NSR 

SIP permits are retained; and 7) the program lacks the necessary more specialized monitoring, 

recordkeeping, and reporting requirements required for this type of minor NSR program, to ensure 

accountability and provide a means to determine compliance. 

Scope of the rulemaking: 

The rules implement a number of changes to address the EPA's alleged deficiencies in the flexible 

permit program. The rules also reorganize portions of Subchapter G for greater readability and 

consistency with other portions of Chapter 116, and update obsolete references and terminology. 
Commissioners 

Page2 

November 19, 2010 

Re: Docket No. 2010-0359-RUL 

The executive director is preparing documentation consistent with §uo(l) of the FCAA. in support 

of these rules for submission to EPA This document will be included with the hearing record book 

transmitting ~s rulemaking to EPA for its consideration as a revision to the SIP. 

A) Summary of what the rulemaking will do: 

1. Added language to highlight federal Prevention of Significant Deterioration (PSD) and 

Nonattainment NSR requirements. Added language to specifically reference federal Best Available 

Control Technology (BACT) and Lowest Achievable Emission Rate (LAER) requirements. · 

2. Added language to require that applicants determine major NSR applicability first, before 

applying Subchapter G. 

3. Added language to emphasize that applicants may. not use Subchapter G to circumvent major 

NSR requirements, including those requirements which include retention of established limits. 

4· Revised the rules to state that each flexible permit shall specify appropriate testing, monitoring, 

and/ or calculation~ to demonstrate initial and ongoing compliance. 

5· Added specific recordkeeping, monitoring, and reporting requirements for units subject to 

emission caps. · 

6. Added language to emphasize that an exceedance of the flexible permit emission cap(s) or 

individual emission limitations is a violation of the permit. 

7· Added language to require that each emission cap or individual limit will contain an annual limit 

(rolling 12-month) and a short-term emission limit. Permit holders must maintain records to 

demonstrate compliance with both. 

8. Added language to clarify that adding new facilities to a flexible permit requires a permit 

amendment to revise the cap, and added language to clarify how the revised emission cap is 

determined for several other situations; including the shutdown of facilities for extended periods. 

g. Set. a five-year record retention period, instead of the two-year period in the current rule. 

10. Added a requirement that any new flexible permit or amendment must include an air quality 

analysis to demonstrate that the proposed action will not interfere with attainment and 

maintenance of national ambient air quality standards tNAAQS). 

11. Added a requirement that if a flexible permit application includes facilities currently authorized 

by a traditional Subchapter B air permit, the applicant shall identify any terms, conditions, and 

representations in the Subchapter B permit which will be superseded or incorporated under the 

flexible permit. 

12. Deleted the 9% "insignificant emissions factor" allowance in the current rule. 

13. ·Revised requirements relating to the implementation schedule for controls. Federally required 

BACT or LAER controls must be in place before facility operation. 
Commissioners 

Page3 

November 19, 2010 

Re: Docket No. 2010-0359-RUL 

14. Revised requirements allowing insignificant emission increases, to state that any projects that 

are a major modification do not qualify. The permit holder must document that the increase is not 

a major modification. The permit holder must also perform an air quality analysis to demonstrate 

that the proposed increase will not interfere with the NAAQS. 

15. Revised flexible permit fees. Fees would be calculated the same as for traditional Subchapter B 

construction permits, based on a percentage of project capital cost, instead of based on project 

emissions. 

B) Scope required by federal regulations or state statutes: 

The rules are intended to revise the flexible permit program so that it can be approved by the EPA 

-as a SIP revision, so the rule changes generally are the'result of comments and directives from the 

EPA However, the changes are generally not explicitly required by any specific federal regulations. 

There is no federal requirement for states or permitting authorities to operate or implement a 

flexible permit program, but because these rules would affect federal requirements regarding 

permitting, the rules must be SIP revisions. 

C) Additional staff recommendations that are not required by federal rule or state 

statute: 

The staff is recommending a change in the method by which fees are determined for flexible 

permits. This change would make the fee calculation for flexible permits consistent with the 

method used by traditional air construction permits. Under current rules, fees for flexible permits 

are based on the quantity of emissions authorized, where for traditional air permits the fees are . 

based on a percentage of the project capital cost. 

StatUtory authority: 

The amendments are adopted under Texas Water Code, §5.102, concerning General Powers, that 

provides the commission with the general powers to carry out its duties under the TWC; §5.103, 

concerning Rules, §5.105, concerning General Policy, which authorize the commission to adopt 

rules necessary to carry out its powers and duties under the Texas Water Code; and §7.101, 

concerning Violation, which provides that a person may not violate a statute or rule under the 

commission's jurisdiction; and under Texas Health and Safety Code {THSC), §382.017, concerning 

Rules, which authorizes the commission to adopt rules consistent with the policy and purposes of 

the Texas Clean Air Act. The amendments are also adopted under Texas Health and Safety Code, 

§382.002, concerning Policy and Purpose, which establishes the commission purpose to safeguard 

the state's air resources, consistent with the protection of public health, general welfare, and 

physical property; §382.003, concerning Definitions; §382.011, concerning General Powers and 

Duties, which authorizes the commission to control the quality of the state's air; §382.012, 

concerning State Air Control Plan, which authorizes the commission to prepare and develop a 

general, comprehensive plan for the control of the state's air; §382.051, concerning Permitting 

Authority of Commission; Rules, which authorizes the commission to issue a permit by rule for 

types of facilities that will not significantly contribute air contaminants to the atmosphere; 

§381.0511, concerning Permit Consolidation and Amendment; §382.0512, concerning Modification 

of Existing Facility, which restricts what the commission may consider in determining a facility 

modification; §382.0513, concerning Permit Conditions, which authorizes the commission to 

establish and enforce permit conditions; §382.0514, concerning Sampling, Monitoring, and 

Certification; §382.0515, concerning Application for Permit, §382.0517, concerning Determination 

of Administrative Completion of Application, §382.0518, concerning Preconstruction Permit, 

which authorizes the commission to require a permit before a facility is constructed or modified; 
Commissioners 

Page4 

November 19, 2010 

Re: Docket No. 2010-0359-RUL 

§382.056, concerning Notice oflntent to Obtain Permit or Permit Review; Hearing; and §382.062, 

concerning Application, Permit, and Inspection Fees. 

Effect on the: 

A) Regulated community: The rules would affect any owner or operator seeking a new flexible 

permit or a flexible permit amendment. The rules would tend to increase the cost of obtaining a 

flexible permit or flexible permit amendment, and would tend to require more detailed 

recordkeeping and reporting than current rules regarding flexible permits. However, this is still 

preferable to the disapproval of the flexible permit program. 

B) Public: The rules will not have a significant effect on the public. The principal benefit to the 

public would be greater clarity of the flexible permit rules, and greater consistency with federal 

requirements. 

C) Agency programs: The rules would not have a significant effect on agency programs, 

policies, or revenues. 

Stakeholder meetings: 

No stakeholder meetings have been held. 

Public comment: 

The following entities and organizations submitted comment on the proposed rules: EPA Region 6, 

District 90 State Representative Lon Burnam (Rep. Burnam), The City of Houston, Environmental 

Integrity Project (EIP), Texas Chemical Council (TCC), Texas Industry Project (TIP), Texas Oil and 

Gas Association (TxOGA), and the United States Department of Energy Pantex Plant (Pantex). 

The comments from EIP, the City of Houston, and Rep. Burnam generally opposed the flexible 

permits program and the proposed rules. While acknowledging support for certain specific aspects 

of the proposed rules, these commenters stated that the proposed rules would still not be sufficient 

to fully address the EPA's alleged deficiencies with the flexible permits program. 

The comments from industry groups such as TCC, TIP, TxOGA, and Pantex varied, but in general, 

these groups supported the existing flexible permits program, and urged that TCEQ make only 

those changes that are necessary to obtain approval from the EPA. TCC, TIP, and TxOGA opposed 

the proposed requirement for a semiannual report detailing compliance with emission caps and 

recommended that the report be eliminated or scaled down. TCC, TIP, and TxOGA opposed the 

requirement for periodic (at least every five years) revalidation testing to update site-specific data 

used to determine emission rates for facilities under an emissions cap. TCC, TIP, and TxOGA 

opposed the requirement that emission caps be adjusted for facilities shut down for a period 

greater than six months. TIP and TxOGA recommended that the effective date of the proposed 

rules be delayed until the EPA's approval of the rules as a SIP revision. 

The comments from the EPA were submitted separately from the formal notices relating to 

disapproval of the flexible permit program. The EPA's comments primarily focused on the 

applicability of the flexible permit rules to major NSR sources (major modifications under the 

Prevention of Significant Deterioration program and Nonattainment New Source Review). The 

EPA stated that the rules must clearly exclude major NSR facilities from inclusion or authorization 

under a flexible permit. The EPA also stated that the proposed allowance for a site-vvide emission 
Commissioners 

Pages 

November 19, 2010 

Re: Docket No. 2010-0359-RUL 

· cap was too broad Other comments from EPA related to the definitions and usage of terms such as 

"facility," "group of facilities," "unit," and "account." · 

These comments have been addressed either through rule amendments or explanations in the 

response to comments in the rule preamble. 

Significant changes since proposal: 

1. The proposed requirement, in §116.716(a), that emission caps consist of either "like kind" 

facilities, or a site-wide cap, has been rephrased and the rule restructured, as comments suggested 

confusion over the implementation and meaning of the proposed language. The final rule allows 

applicants to establish an account-wide emission cap, or a cap made up of a designated group of 

facilities. The restructuring also ensures that the rule includes replicable procedures for 

establishing and adjusting a cap. 

2. A reco:rdkeeping requirement has been added to require that permit holders maintain records of . 

any air quality analysis required under §116.718(c), so that the TCEQ can verify that the source is 

complying with the rule and verify that the analysis is correct. This change was made in response 

to a comment that there were no assurances in the proposed rules that permit holders would 

perform the analysis correctly. · 

3. The rule has been revised to allow new facilities to use controls in excess of BACT in order to 

provide emission reductions that would allow other facilities to use a lower level of control, as long 

as the overall level of control meets or exceeds BACT. This change was made in response to a 

comment that the proposed rule was too limiting in only allowing existing facilities to balance 

controls. 

4. Proposed §116. 765 specified the effective date of the rules as the earlier of: 6o days after EPA 

approval as a SIP revision, or, December 1, 2012. In response to comments, the rule has been 

revised to eliminate the December 1, 2012 date, so that the rule would only become effective 6o 

days after EPA approval. Due to logistical issues with the Texas Administrative Code, the staff also 

recommends that this delayed effective date be implemented by establishing a compliance schedule 

within the rule, rather than delaying the effective date of the rule itself. 

s. There have been minor changes to rule language to narrow the scope of data that is required to 

be reported under the semiannual report for emission caps. This change was made in response to 

comments from industry groups that the proposed language concerning the data to be included in 

the report was too broad and inclusive. 

6. Language has,been· added, in new§ 116.716(h), that specifies that when a cap is established or 

adjusted, major new source review requirements must be met prior to issuance, amendment, or 

alteration of the permit. 

7. There have been minor changes to rule language to address certain EPA comments concerning 

the use of the terms facility, group of facilities, unit, and account. 

Potential controversial concerns and legislative interest remaining after proposal 

and public comment: 
Commissioners 

Page6 

November 19,2010 

Re: Docket No. 2010-0359-RUL 

The revisions would require somewhat more involved recordkeeping and reporting associated with 

flexible permits. The revisions also include a requirement for an air quality analysis to demonstrate 

that a proposed project will not cause an exceedance of applicable NAAQS. These changes would 

tend to increase the cost of obtaining a new flexible permit or permit amendment, and would tend 

to reduce the benefits of the flexible permits program for permit holders. 

Does this rulemaking affect any current policies or require development of new 

policies? No. 

What are the consequences if this rulemaking does not go forward? Are there 

· alternatives to rulemaking? The flexible permits program could be jeopardized if the rules are 

not revised to address the EPA's alleged deficiencies. There is no practical alternative besides 

rulemaking to resolve EPA's concerns. As an alternative to revising the rules to implement the 

restrictions and changes the EPA is seeking, the commission could repeal the flexible permit rules 

and eliminate the flexible permit program. 

Key points in adoption rulemaking schedule: 

Texas Register proposal publication date: 

Anticipated Texas Register publication date: 

Anticipated effective date: 

Six-month Texas Register filing deadline: 

Agency contacts: 

July2, 2010 

December 31, 2010 

January 6, 2011 

January 3, 2011 

Michael Wilhoit, Rule Project Manager, 239-1222, Air Permits Division 

Janis Hudson, Staff Attorney, 239-0466 

Michael Parrish, Texas Register Coordinator, 239-2548 

Attachments 

Copy of EPA's September 23, 2009, and July 15, 2010, notices of disapproval of the flexible permit 

program 

cc: Chief Clerk, 2 copies 

Executive Director's Office 

Susana M. Hildebrand, P.E. 

Kevin Patteson 

Curtis Seaton 

Ashley Morgan · 

Office of General Counsel 

Michael Wilhoit 

Michael Parrish 
Texas Commission on Environmental Quality Page 1 

Chapter 116 - Control·of Air Pollution by Permits for New Construction or Modification 

Rule Project No. 2010-007-116-PR 

The Texas Commission on Environmental Quality (TCEQ or commission) adopts new §116. 765 

and the amendments to §§116.13, 116.710, 116.711, 116.715-116.718, 116.720, 116.721, 116.730, 

116.740, and 116.750. 

Sections 116.711, 116.715, 116.716, 116.718, and 116.765 are adopted with changes to the 

proposed text as published in the July 2, 2010, issue of the Texas Register (35 TexReg 5729). 

Sections 116.13, 116.710, 116.717, 116.720, 116.721,116.730, 116.740, and 116.750 are adopted 

without changes and will not be republished. 

The amended sections will be submitted to the United States Environmental Protection Agency 

(EPA) as revisions to the State Implementation Plan (SIP) with the exception of 

§§116.711(2)(C)(iii), 116.715(f)(2)(A), 116.730, 116.740(b), and 116.765. 

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE ADOPTED RULES 

The Texas flexible permit program rules (Chapter 116, Subchapter G, Flexible Permits) first 

became effective on December 8, 1994. The flexible permit program was developed in response 

to direction from the commission at the January 21, 1994, policy agenda meeting. The flexible 

permit rules were developed after considering the positional papers presented by industry, 

environmental groups, and local government environmental programs under the supervision of 

Task Force 21, a regulatory negotiation committee of the Texas Water Commission and the 

Texas Natural Resource Conservation Commission (predecessor agencies of the TCEQ), which 

was comprised of representatives oflegal and engineering professions, public utilities, business 

associations, local chambers of commerce, city and county government, consumer and 
Texas Commission on Environmental Quality Page 2 

Chapter 116 - Controlof Air Pollution by Permits for New Construction or Modification 

Rule Project No. 2010-007-116-PR 

environmental groups, and community organizations for the purpose of advising the agency on 

industrial air quality, water quality, and waste management issues. The rules created a new type 

of minor New Source Review (NSR) permit called a flexible permit, which functions as an 

alternative to the traditional preconstruction permits that are authorized in Chapter 116, 

Subchapter B, New Source Review Permits. Flexible permits were designed to exchange 

flexibility for emission reductions with the final goal being a well-controlled facility, without 

relaxation of any control requirements. At the time the flexible permit program was developed, 

the commission lacked the authority to require an air quality permit for grandfathered facilities. 

The flexible permit program was intended to provide grandfathered facilities with a voluntary 

authorization mechanism that would reduce emissions, and significant reductions were 

achieved that were otherwise not required by either state or federal law. Although that feature 

was environmentally beneficial, the program was not limited to use by grandfathered facilities. 

Only one flexible permit can be issued for a particular plant or active account. However, 

multiple emission caps, multiple individual emission limits, or any combination thereof can be 

included in a flexible permit. The applicant for a flexible permit can combine existing facilities 

and new facilities into the flexible permit. The flexible permit then becomes the controlling 

authorization for some or all facilities included in the permit, succeeding any existing minor 

NSR permits that may have been applicable to some or all of the facilities; The flexible permit is 

not and has never been a substitute for or in lieu of major NSR permitting if major NSR review 

is triggered. Nor can the flexible permit be used to circumvent or ignore compliance with other 

federal requirements, such as a national emission standard for hazardous air pollutants 

(NESHAP). The flexible permitting program is intended to eliminate the need for owners or 
Texas Commission on Environmental Quality Page 3 

Chapter 116- Control of Air Pollution by Permits for New Construction or Modification 

Rule Project No. 2010-007-116-PR 

operators of participating facilities to submit an amendment application each time certain 

operational or physical changes are made at a permitted facility. This type of flexibility without 

backsliding of various requirements and without environmental harm provides owners and 

operators options for their operations. The environmental benefits of the flexible permit 

program have included the permitting of grandfathered facilities, substantial emission 

reductions from the installation of controls, and a comprehensive evaluation of emission 

impacts. 

On September 23, 2009, the EPA published notice in the Federal Register (74 FR 48480) 

(hereafter "Notice") of its intent to disapprove the TCEQ flexible permit program rules that were 

first submitted to the EPA as a proposed SIP revision in 1994 as well as subsequent rule 

amendments that were submitted several times between 1998 and 2003. Although the Federal 

Clean Air Act (FCAA) requires that proposed revisions to the SIP be reviewed within 18 months 

after submittal (See 42 United States Code (USC) §7410(k)(1)(B) and (k)(2)), more than 15 years 

passed from the initial submittal before the EPA took any formal action, and did so only in 

response to litigation brought by holders of flexible permits (see BCCA Appeal Group, et al v. 

United States EPA et al, No. 3-o8CV1491-G (N.D. Texas)). In the Notice, the EPA cited the 

following assertions as the basis for disapproval of the flexible permit program as a minor NSR 

revision: 1) The program is not clearly limited to use in minor NSR and does not clearly prevent 

circumvention of major NSR requirements; 2) The program does not require that an 

applicability determination for major NSR be made first for construction or modification that 

could potentially be subject to major NSR; 3) The program fails to meet the statutory and 

regulatory requirements for a SIP revision and is not consistent with guidance on SIP revisions; 
Texas Commission on Environmental Quality Page 4 

Chapter 116- Control of Air Pollution by Permits for New Construction or Modification 

Rule Project No. 2010-007-116-PR 

4) The program lacks replicable, specific, established implementation procedures for 

establishing the emission cap in a minor NSR flexible permit; 5) The program is not an 

enforceable minor NSR permitting program; 6) The program allows the issuance of flexible 

permits that do not incorporate emission limitations and other requirements of the Texas SIP; 

and 7) The program lacks the necessary more specialized monitoring, recordkeeping, and 

reporting (MRR) requirements required for this type of minor NSR program, to ensure 

accountability and provide a means to determine compliance. The EPA also identified a number 

of related concerns with the Texas flexible permit program in correspondence to the commission 

dated March 12, 2008. 

The commission maintains that its flexible permit program rules, as adopted and implemented 

prior to this rulemaking, are fully approvable as revisions to the SIP. In fact, the Texas flexible 

permit program is a minor NSR permit program which requires the application of best available 

control technology (BACT) to minor sources even though not required to do so under the FCAA. 

Texas law requires application of BACT to all permitted facilities for all air contaminants, and 

this is a part of Texas' SIP. The commission's executive director provided detailed comments in 

response to the Notice addressing each of the EPA assertions discussed earlier and 

demonstrating that, as written and administered by the commission, the flexible permit 

program rules are in full conformity with all applicable federal requirements (see Letter from M. 

Vickery, Executive Director, TCEQ to S. Spruiell, Air Permits Section (EPA Region 6), November 

23,2009, included in EPA's docket No. EPA-Ro6-0AR-2oos-TX-0032). Additionally, permits 

issued under the flexible permit rules are consistent with the FCAA and EPA rules implementing 

NSR. 
Texas Commission on Environmental Quality Page 5 

Chapter 116 - Control of Air Pollution by Permits for New Construction or Modification 

Rule Project No. 2010-007-116-PR 

The EPA published final notice of disapproval of the flexible permits program in the Federal 

Register on July 15, 2010 (75 FR 41311), hereafter "Disapproval Notice." In the Disapproval 

Notice, the EPA disapproved the flexible permit program as both a minor NSR program and a 

major NSR program. The EPA's grounds for disapproval as a minor NSR program were: 1) The 

program has no express regulatory prohibition clearly limiting its use to minor NSR and has no 

regulatory provision clearly prohibiting circumvention of major NSR; 2) The program is not an 

enforceable NSR permitting program because it lacks requirements necessary for enforcement 

and assurance of compliance, including specific up front methodologies to be able to determine 

compliance; 3) The program lacks the necessary more specialized MRR requirements, including 

the necessary applicable replicable procedures and adequate executive director discretion, 

required for this type of minor NSR program to ensure accountability and provide a means to 

determine compliance; 4) The program lacks replicable procedures for establishing an emissions 

cap; 5) The program fails to ensure that the terms and conditions of major NSR SIP permits are 

retained; 6) The program fails to meet the statutory and regulatory requirements for a minor 

NSR SIP revision and is not consistent with EPA policy and guidance on minor NSR SIP 

revisions; and 7) Due to these bases for disapproval, the EPA lacks sufficient information to 

determine that this new permitting program will not interfere with any applicable requirements 

concerning attainment and reasonable further progress or any other requirement of the FCAA. 

The EPA's grounds for disapproval of the program as a major NSR program were: 1) The rules 

do not include express language stating that the program is clearly limited to minor NSR and 

prohibits circumvention of major NSR; 2) The program does not include a demonstration that 
Texas Commission on Environmental Quality Page 6 

Chapter 116 -Control ,of Air Pollution by Permits for New Construction or Modification 

Rule Project No. 2010-007-116...,PR 

shows how the program as a whole and how the use of "modification" is at least as stringent as 

the definition of "modification" in the EPA major NSR SIP program and meets the FCAA; 3) The 

program does not include a demonstration that shows how the program as a whole is at least as 

stringent as the EPA major NSR SIP program and meets the FCAA; 4) The program does not 

include the requirement to make major NSR applicability determinations based on actual 

emissions and on emissions increases and decreases (netting) that occur within a major 

stationary source; 5) The program fails to meet the statutory and regulatory requirements for a 

major NSR SIP revision and is not consistent with EPA policy and guidance on minor NSR SIP 

revisions; and 6) Due to these bases for disapproval, as well as some bases for disapproval as a 

minor NSR SIP revision, the EPA lacks sufficient information to determine that this new 

permitting program will not interfere with any applicable requirements concerning attainment 

and reasonable further progress or any other requirement of the FCAA. 

Again, the commission maintains that the flexible permit rules as adopted and implemented are 

approvable as a minor NSR permit program revision to the Texas SIP. The commission now 

adopts amendments to the rules to provide even greater clarity that they operate as a minor NSR 

program in the state of Texas. In the Disapproval Notice, the EPA states that it acknowledges 

that the commission has undertaken this rulemaking, and will consider any rule changes if and 

when they are submitted to the EPA. EPA Region 6 timely submitted comments on some of the 

subsections of four of the proposed rules to be amended. And, although those comments were 

submitted after the publication of the Disapproval Notice, the EPA did not expressly comment 

on all of the issues which form the basis for its disapproval. 
Texas Commission on Environmental Quality Page 7 

Chapter 116 -Control of Air Pollution by Permits for New Construction or Modification 

Rule Project No. 2010-007-116-PR 

The EPA's comments for this rulemaking primarily concern the following issues: 1) the EPA's 

position that a major source cannot be subject to an emissions cap, and similarly that a flexible 

permit cannot authorize or be used for a major stationary source or major modification, and the 

emissions from facilities subject to Prevention of Significant Deterioration (PSD) BACT and 

nonattainment new source review (NNSR) Lowest Achievable Emission Rate (LAER) cannot be 

included in the summation of the flexible permit's emissions cap(s); 2) that each individual unit 

under an emissions cap must meet at the very least, its specific emission limitation derived from 

a federal applicable requirement; and 3) the use of terminology unique to the Texas SIP, namely 

the use of the SIP-approved terms "facility" and "account." The commission's responses to 

those comments are discussed elsewhere in this preamble. Notably, the EPA did not provide 

any comments that indicated its review of the proposed amendments found that the rules are 

inadequate for most of the reasons included in its Disapproval Notice. 

As the EPA recognizes, under the applicable federal regulations, states have broad discretion to 

determine the scope of their minor NSR programs as needed to attain and maintain the national 

ambient air quality standards (NAAQS). The development of NSR requirements and procedures 

tailored for the air quality needs of each state is not only consistent with the FCAA, it is 

encouraged under the law and the EPA's implementing regulations (see 42 USC §7407(a) and 

40 Code of Federal Regulations (CFR) §51.101(e) and (g); see also Safe Air for Everyone v. 

United States EPA, 488 F.3d 1088, 1092 (9th Cir. 2007)). States have significant discretion to 

tailor minor NSR requirements that are consistent with the requirements of 40 CFR Part 51 

(Requirements for Preparation, Adoption, and Submittal oflmplementation Plans), and may 

also provide a rationale for why the rules are at least as stringent as the Part 51 requirements 
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where the revisions are different from Part 51. These amendments are intended to remove any 

doubt that the EPA might have, and to reaffirm the commission's position that the rules for the 

flexible permit program are environmentally beneficial and approvable as a minor NSR 

permitting program as part of the Texas SIP. 

In response to the Disapproval Notice, and in support of these rule amendments, the 

commission provides the following information. The EPA did not find that the current rules 

actually are ambiguous on the commission's position that these rules are for a minor NSR 

permitting program. Rather, the EPA wants express language, despite the rule text that requires 

consideration of major NSR requirements. That part of the Disapproval Notice as well as the 

EPA's comments regarding this rulemaking not only ignore the current rule text, but also the 

commission's amendments which make this abundantly clear. The EPA also ignores the 

fundamental structure of the SIP-approved Texas permitting system, which requires a permit 

for all facilities, including a major NSR permit when applicable. 

As originally developed and subsequently implemented by TCEQ in 1994, the Texas flexible 

permit program is a minor NSR program. The flexible permit does not substitute for PSD or 

NNSR. No provision of the Texas flexible permit program rules may be read to circumvent 

major NSR permitting or any state or federal permitting requirements. The rules expressly 

require compliance with all applicable requirements relating to nonattainment and PSD review. 

That limitation, adopted in 1994 as §116.711(8) and (g), continues as §116.711(2)(H) and (I); see 

also, e.g., §§116.71o(a)(5), 116.711(2)(C)(ii), and 116.718(b) and (c). The program does not 
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supersede or negate federal requirements, nor allow circumvention of those requirements. The 

flexible permit program may not be used as a shield for protection or exemption from federal 

programs including major NSR permitting. Persons making changes under a flexible permit 

must maintain sufficient documentation to demonstrate that the project will comply with 

Subchapter B, Division 5, Nonattainment Review Permits; Division 6, Prevention of Significant 

Deterioration Review; and Subchapter E, Hazardous Air Pollutants: Regulations Governing 

Constructed or Reconstructed Major Sources (FCAA, §112(g), 40 CFR Part 63). A major 

modification, as defined in §116.12, may not occur without first being subject to a 

Nonattainmentandjor PSD review. Likewise, an owner or operator may not use flexible permit 

rules to avoid maximum achievable control technology (MACT) requirements for the 

construction or reconstruction of major sources of hazardous air pollutants (HAP) as they are 

described and addressed in the 40 CFR Part 63, National Emission Standards for Hazardous Air 

Pollutants (NESHAP) rules. If a proposed project is determined to be a major modification 

under NNSR and/ or PSD rules, or meets the definition of construction or reconstruction under 

40 CFR Part 63, the owner or operator must obtain a major NSR permit or major modification 

under the appropriate major NSR program, as well as a HAP permit to meet requirements of 

FCAA, §112(g) if case-by-case MACT applies; and a minor NSR permit amendment. Further, the 

flexible permit program does not impair the commission's authority to control the quality of the 

state's air and to take action to control a condition of air pollution if the commission finds that 

such a condition exists. 

The EPA's concerns, expressed in its comments in this rulemaking, focus on ensuring PSD BACT 

and NNSR IAER are met. In its Disapproval Notice, the EPA stated that the flexible permits 
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program fails to ensure that the terms and conditions of major NSR SIP permits are retained. 

The EPA fails to recognize that the flexible permits program is a minor NSR program, and that 

TCEQ's implementation of PSD and nonattainment permit requirements is not impaired by its 

choice to issue both a minor NSR permit and a major NSR permit in one document. That 

practice does not impair compliance with all applicable rules, nor does it allow a minor NSR 

permit to remove any major NSR permit requirements. Allowing major sources to operate 

under an allowable-based emission cap, while ensuring that any federal emissions limitation is 

not circumvented, is not prohibited under the FCAA. Emission caps are developed based on the 

potential to emit after the application of BACT or LAER emission controls, as applicable. This is 

exactly the same emission standard as required for other permitting. Further, allowable 

emission limits, expressed as a cap or for an individual facility, are expressed in terms of annual 

(tons per year) or short term (e.g., pounds per hour) units. BACT is typically expressed in terms 

of a mass emission calculation, such as pounds per million British thermal units (lb/MMBtu) or 

parts per million (ppm). Establishment of caps after application of the appropriate control 

technology necessarily does not relax the control technology, and therefore the EPA has no basis 

to prescribe exclusion of PSD and NNSR facilities from flexible permit authorization or the caps 

established by the flexible permit. 

Control technology flexibility is available under the flexible permit program for existing facilities 

to the extent that an applicant may over-control one facility, i.e., with technology or practices 

that are more stringent than BACT in order to avoid additional controls at another facility, 

provided that the net sum of control technologies is equivalent to (or better than) BACT being 

applied to each facility. However, the flexible permit rules prohibit avoidance of controls 
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required under PSD and NNSR, and such facility-specific requirements are included within the 

permit document. Operational flexibility is available under the flexible permit to the extent that 

an owner or operator may vary throughput rates, charge rates, firing rates, etc. as long as control 

requirements are met and compliance with emission caps and/ or individual emission limits are 

maintained. New facilities authorized through the flexible permit process must meet BACT at 

initial issuance ofthe permit or at such time they are authorized by the flexible permit through 

subsequent amendments. For new facilities, BACT shall be demonstrated for that individual 

facility or affected source. Therefore, the existing facilities do not operate in violation of any 

BACT requirements. Similarly, because major NSR permitting is not circumvented, the flexible 

permit program is an approvable minor NSR program. 

The rules are an enforceable NSR permitting program because they include requirements 

necessary for enforcement and assurance of compliance, including specific up front 

methodologies to support the determination of compliance. These requirements are found, for 

example, in §§116.711, 116.715, and 116.716. 

The TCEQ includes specific MRR conditions in flexible permits issued under the current rules, 

as appropriate for the type of facilities and emissions authorized under a cap, and these MRR 

conditions are adequate for determining compliance. In addition, the permit file contains 

documentation about how caps are established in the permits. Regardless, more specific MRR 

requirements are in these amendments, are adopted to satisfy EPA's concerns about 

accountability, and the means of determining compliance are found in §116. 715( d). 
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The commission has added text to ensure that the rules include replicable procedures for 

establishing an emissions cap; see §116. 716. 

The EPA stated that the program fails to meet the statutory and regulatory requirements for a 

minor NSR SIP revision and is not consistent with EPA policy and guidance on minor NSR SIP 

revisions. By requiring controls at least as stringent as BACT, the flexible permit program rules 

assure that the NAAQS are achieved and thereby satisfy the requirements of FCAA §11o(a)(2)(C) 

and EPA's rules regarding minor NSR permitting. Mor~over, Texas requires regulation of 

facilities that are broader in scope than the specific requirements for regulation of major 

stationary sources as required by FCAA, Title I, Parts C and D. Texas law, and its SIP, is 

broader, in terms of types of facilities and pollutants subject to regulation. The flexible permit 

program as it exists and as amended in this rulemaking action meets both the FCAA and the 

Texas Clean Air Act. 

Finally, EPA provides no basis for its conclusion that the program is not consistent with EPA 

policy and guidance on minor NSR SIP revisions. The commission responds that these 

amendments ensure that the program meets applicable statutory and regulatory requirements 

and are approvable as revisions to the Texas SIP. 

The executive director is preparing documentation consistent with §no(l) of the FCAA, in 

support of these rules for submission to EPA. 

SECTION BY SECTION DISCUSSION 
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§116.13, Flexible Permit Definitions 

The commission is adopting detailed MRR requirements in proposed §116.715( c)(5), ( 6) and {12) 

and (d); see also §116. 711(2)( G). To support these MRR requirements, the commission is 

adopting definitions of continuous emission monitoring system (CEMS), continuous parameter 

monitoring system (CPMS), and predictive emissions monitoring system (PEMS) in §116.13. 

The definitions for these terms are derived from similar definitions established in 40 CFR 

§52.21, with minor changes to account for their use in the flexible permit program. The changes 

relating to MRR are intended to address the EPA's comment that the Texas flexible permit 

program lacks the specialized MRR requirements necessary to enforce flexible permits. 

The commission adopts amendments to the definition of"emission cap" and the definition of 

"individual emission limitation" under §116.13 to delete references to the "insignificant 

emissions factor." The commission has also removed the insignificant emission factor from 

other sections of Subchapter G as discussed in following sections of this preamble. The EPA 

identified the insignificant emissions factor as a concern in the March 12, 2008, correspondence 

to the commission. The elimination of the insignificant emissions factor would improve the 

accounting of emissions authorized under the flexible permit, and in part addresses the EPA's 

comments that the Texas flexible permit program lacks replicable, specific, established 

implementation procedures for establishing the emission cap, and does not sufficiently address 

major NSR requirements. 

§116. 710, Applicability 
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The commission adopts the amendment to §116.710(a)(5) to clarify and emphasize that any 

project that constitutes a new major stationary source or major modification that would trigger 

major NSR requirements must comply with Subchapter B, Division 5 or 6, as applicable. 

Amended §n6.710(a)(5) also contains a statement to emphasize that Subchapter G cannot be 

used to circumvent applicable major NSR permit requirements, including those requirements 

which include retention of established limits. The adopted changes address the EPA's 

comments that the Texas flexible permit program is not clearly limited to minor NSR thereby 

allowing new major stationary sources to construct without a major NSR permit, and has no 

regulatory provisions clearly prohibiting the use of the program from circumventing the major 

NSR SIP requirements. 

The commission also adopts minor editorial changes throughout §116.710 to correct outdated 

cross-references and obsolete terminology. 

§116.711, Flexible Permit Application 

The commission adopts amendments throughout §116. 711 to restructure and renumber the 

contents of this section to provide improved readability and greater consistency with similar 

requirements in §116.111. The commission also adopts minor changes throughout this section to 

update terminology and corr~ct cross-references. 

The commission adopts the amendment to §n6.711(2)(C)(i) to more clearly describe the 

application of BACT to new and existing facilities. New §116. 711(2)(C)(i)(I) requires all new 

facilities are required to use BACT. New §n6.711(2)(C)(i)(II) provides that facilities may be 
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considered on a grouped basis, such that some facilities within the group may be controlled at a 

higher level than BACT in order to provide the emission reductions necessary so that other 

facilities within the group may be controlled to a lesser degree. In response to a comment, the 

rule has been revised to allow new facilities to employ controls exceeding BACT in order to 

provide emission reductions that could be used to balance a lower level of control on existing 

facilities, so long as the overall level of control is at least as good as BACT. The existing level of 

control may not be reduced for any facility from its current authorization. 

The commission adopts the amendment to §116.711(2)(C)(ii), which contains language to clarify 

that projects which constitute a new major source or major modification that would be subject 

to federal PSD or nonattainment permitting must comply with applicable requirements of 

§§116.150, 116.151, or 116.160 to determine the necessary emission controls. This amendment is 

intended to ensure that applicants understand and comply with all applicable federal major NSR 

control requirements. This amendment addresses the EPA's comments that the flexible permit 

rules could be used to bypass the federal BACT or LAER control technology determination that 

is required for major PSD or NNSR projects. Compliance with control requirements established 

for facilities subject to PSD or NNSR and which are included in a cap in a flexible permit is 

discussed in the RESPONSE TO COMMENTS portion of this preamble. 

The commission adopts the amendment to §116.711(2)(G), which requires that flexible permits 

shall specify requirements for initial compliance testing and methods of determining ongoing 

compliance. The EPA expressed a concern that the existing rule language, which contains the 

term "may" instead of "shall," is not sufficiently specific. Although flexible permits already 
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specify appropriate compliance testing and compliance determination methods within the 

conditions of the permit, the commission has revised the rule language for greater clarity. This 

amendment, in combination with others in this proposal, addresses the EPA's comments that 

the flexible permit program is lacking in supporting MRR requirements, and is not sufficiently 

enforceable. 

The commission adopts amended §116. 711(2)(H) and (I), which specify that prior to applying the 

requirements of Subchapter G, the applicant must first perform an analysis to determine the 

applicability or nonapplicability of federal NNSR requirements or PSD requirements. These 

amendments address the EPA's comment that the flexible permit program could be used to 

exempt or shield changes from federal permitting requirements because the program does not 

require that first an applicability determination be made whether the construction or 

modification is subject to major NSR. In response to a comment, the word "separate" was 

deleted from the rule text as proposed, to clarify that the federal applicability determination 

analysis could be part of the permit application. 

The commission adopts the amendment to §116. 711(2)(J), which adds a requirement that any 

permit application for a new flexible permit,. or permit amendment, shall include an air quality 

analysis to demonstrate that the proposed action will not interfere with attainment and 

maintenance of the NAAQS. This amendment addresses the EPA's comment that the flexible 

permit program does not sufficiently protect the NAAQS. 
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The commission adopts the amendment to §116. 711(2)(M)(iv), which requires that permit 

applicants provide a complete description of the emission point numbers (EPNs) and facilities 

that will be included in an emissions cap. This amendment addresses the EPA's comment that 

flexible permits must be structured in such a way that they sufficiently identify which units are 

subject to emission caps and individual emission limits. 

The commission adopts the amendment to §116. 711(2)(M)( vi) to specify that calculations to 

determine the controlled emission rates from each facility shall be performed in accordance with 

TCEQ Air Permits Division guidance. 

The commission adopts the amendment to §116. 711(2)(M)(vii) to specify that the flexible permit 

application must identify any terms, conditions, and representations in any Subchapter B permit 

or permits which will be superseded or incorporated under a flexible permit. The applicant shall 

include an analysis of how the conditions and control requirements of Subchapter B permits will 

be carried forward in the proposed flexible permit. This amendment addresses the EPA's 

comment that existing SIP permits' major and minor NSR terms, limits and conditions, must be 

tracked and accounted for. 

The commission adopts an amendment to §116.711(2)(N). In response to a comment, the 

commission has deleted the term "unit" and replaced it with the more appropriate term 

"facility." 

§116.715, General and Special Conditions 
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The commission adopts the amendments to restructure and renumber portions of §116. 715, and 

adopts other minor changes to improve readability and update terminology and cross-references 

throughout the section. Other amendments to §116.715 address the EPA's comments that the 

flexible permit program lacked sufficient MRR to ensure accountability and determine 

compliance with flexible permits. 

The commission adopts the amendment to §116.715(a) by deleting existing language concerning 

the executive director's ability to limit the use of standard permits or permits by rule in cases 

where the increase of a particular air contaminant could result in a significant impact on the air 

environment, or could cause the facility, group of facilities, or account to become subject to 

federal PSD or nonattainment permitting. This requirement has been reorganized and relocated 

to §116. 715(f). 

The commission adopts the amendment to §116. 715(b) to clarify that a flexible permit may 

contain more than one emission cap for a specific air contaminant. The commission also adopts 

language to specify that a permit holder shall comply with any emission caps and individual 

emission limitations in the permit, and that an exceedance of a flexible permit emission cap(s) 

or individual emission limitations is a violation of the permit. These amendments are in 

response to comments in the EPA's correspondence to the commis~ion dated March 12, 2008. 

The commission adopts the amendments to §116.715(c)(5). Amended §116.715(c)(5)(A) requires 

that each flexible permit specify requirements for monitoring or demonstrating compliance with 

emission caps and individual emission limits in the flexible permit. Amended §116.715(c)(5)(B) 
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requires that each flexible permit specify emission calculation methods for calculating annual 

and short term emissions for each pollutant. These amendments address the EPA's concerns 

that the flexible permit rules are not sufficiently specific concerning the monitoring and 

enforcement of flexible permit emission caps and individual emission limits. 

The commission adopts the amendment to §116.715(c)(6). The amendment reorganizes the 

recordkeeping requirements applicable to flexible permits, and adds specific new recordkeeping 

requirements to address certain EPA comments in the Notice and in the March 12, 2008, 

correspondence from the EPA to the commission. The amended requirements require flexible 

permit applicants to maintain records of any other permit applications associated with the 

flexible permit; require specific recordkeeping to document compliance with annual and short 

term emission caps and individual emission limitations; and require that flexible permit holders 

maintain records for five years instead of two years, as suggested by the EPA's March 12, 2008, 

correspondence. In response to a comment, the commission has added a recordkeeping 

requirement under §116. 715( c)( 6)(A)(iv) to specify that permit holders shall maintain records of 

any air quality analyses performed under §116.718(c). 

The commission adopts the amendments to §116.715(c)(7). In response to a comment, the 

commission has revised this paragraph to include references to "group of facilities" and 

"account." 
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The commission adopts amendments to §116.715(c)(8), concerning compliance with 

representations in a flexible permit application. The proposed language concerning 

representations was slightly revised in response to a comment. 

The commission adopts the amendments to §116.715(c)(g). In response to a comment, the 

commission has replaced the term "unit" with the more appropriate term "facility." 

The commission adopts the amendments to §116.715(c)(1o). In response to a comment, the 

commission has revised this paragraph to include references to "group offacilities" and 

"account." 

The commission adopts the amendments to §116.715(c)(12) and (d), which specify MRR 

procedures associated with emission caps in a flexible permit. The amendments require 

semiannual reporting relating to compliance with long and short term emission caps similar to 

the semiannual reporting suggested by the EPA's March 12, 2008, correspondence to the 

commission. The amendments include requirements to address absence of monitoring data, 

require revalidation of site generated data, and define minimum characteristics of the 

monitoring system. In response to a comment, the commission has added language to the 

revalidation requirements to clarify that if revalidation testing shows that emission factors have 

increased, the permit holder must obtain a permit alteration or amendment to adjust the factor 

and account for the increased emissions. Also in response to a comment, the commission has 

revised §116.715(c)(12)(A)(i)(IV) so that only data that is necessary to demonstrate compliance 

is required to be included in the semiannual report. The commission has also revised 
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§116. 715( c)(12)(A)(i)(VII) in response to a comment, to clarify that the term monitoring system 

means a system that is used for determining compliance with the emission cap or any individual 

emission limit of the permit. In response to comments, the commission has also revised 

§116.715(c)(12)(A)(i)(VIII) to correct an erroneous cross-reference, and to reference the sixmonth period for adjusting emission caps due to the shutdown of facilities. The commission has 

also revised §116.715(c)(12)(C) in order to clarify what action is needed in the event that 

revalidation testing demonstrates that emissions have increased. 

In response to a comment, the commission also adopts an amendment to §n6.715(d) which 

requires that the permit specify which of the monitoring options under §116. 715( d)(2)(A)-(E) are 

designated as the method of determining compliance. 

In response to comments, the commission has revised §116.715(d)(2)(D)(iii) to eliminate the 

proposed reference to the term "significant facility." The adopted rule maintains the validation 

testing requirement, but instead of applying to significant facilities as defined in §116.12, this 

requirement would apply to facilities that emit or have the potential to emit the relevant 

pollutant(s) in quantities that exceed PSD or NNSR significance levels. 

The commission adopts the amendments to §116.715(e) and (f) without change from the 

proposed text. 

§116.716, Emission Caps and Individual Emission Limitations 
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The commission has adopted changes throughout this section to improve readability and update 

terminology, and has restructured proposed changes in subsection (a) to now be located in 

subsections (a)- (c). Other amendments throughout §116.716 are intended to address the EPA's 

comment that the flexible permit program lacks replicable, specific, established implementation 

procedures for determining an emissions cap, and address several of the EPA's comments in the 

March 12, 2008, correspondence to the commission. 

The commission is adopting an amendment to §116.716(a). In response to comments, the 

commission has revised the proposed language concerning like-kind facilities and a site-wide 

emission cap, and has restructured and rephrased subsection (a) to use more appropriate 

terminology which is consistent with definitions in Chapter 101, General Air Quality Rules, and 

to improve clarity. The adopted rule allows a permit applicant to establish an emission cap for 

all facilities at an account, which would include every facility at the account, or to establish an 

emission cap comprised of a designated group of facilities at the account. A designated group 

would logically be a subset of all of the facilities at an account. Account is defined in §101.1 as, 

"for those sources required to be permitted under Chapter 122 of this title (relating to Federal 

Operating Permits Program), all sources that are aggregated as a site. For all other sources, any 

combination of sources under common ownership or control and located on one or more 

contiguous properties, or properties contiguous except for intervening roads, railroads, rightsof-way, waterways, or similar divisions. " The amended rule allows permit applicants full 

flexibility to designate facilities for inclusion in an emission cap as they see fit, without 

, restriction on the type or location of the facility, as long as it complies with the definition of 

account. The rule still provides, as proposed in subsection (a)(1) and adopted in new subsection 
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(b), that the executive director may exclude a proposed facility from an emissions cap if the 

executive director determines that the inclusion of the facility in the cap could interfere with the 

ability to monitor compliance with the permit, or determines that the inclusion of the facility in 

the cap could interfere with the protection of human health and the environment. 

The commission adopts the amendment proposed to §u6.716(a)(2), adopted as §u6.716(c)(1), 

which contains requirements associated with the required application of controls for facilities 

under an emission cap. The amendment adds language to clarify and reinforce the application 

of federally-required control technology for any project that constitutes a major stationary 

source or major modification. This provision further addresses the EPA's stated concerns that 

the flexible permit program could allow a facility to avoid federally-required control technology. 

The commission adopts the amendment proposed to §u6.716(a)(3), adopted as §u6.716(c)(2), 

which requires that facilities subject to LAER in accordance with Subchapter B, Division 5, must 

be included in a separate emissions cap or provided with individual emission limitations. This 

provision ensures that sources subject to LAER are fully controlled as required by federal NSR 

regulations and Subchapter B. 

The commission aqopted no changes to proposed §u6.716(a)(4), but has renumbered this 

paragraph as §u6.716(c)(3). 

The commission adopts the amendment proposed to §n6.716(a)(5), adopted as §u6.716(c)(4), 

which specifies that a permit applicant may propose an emission cap that is lower than the 
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emission cap determined by subsection ( c)(3), if the permit applicant provides technical 

information to demonstrate that it is feasible to operate in compliance with the proposed 

emission cap. 

The commission adopted no changes to proposed §116.716(b), but has renumbered it at 

adoption as §116.716(d). 

The commission adopts the amendment proposed to §116.716(c), adopted as §116.716(e), which 

requires that each flexible permit clearly identify, by a table or other appropriate means, the 

facilities that are subject to an emission cap, and the facilities that are subject to individual 

emission limitations. This amendment addresses the EPA's comment that each flexible permit 

must be structured in such a manner that it will be clear which facilities are included under the 

permit and emission cap, and which facilities are subject to individual emission limitations. 

The commission deletes existing §116.716(d), concerning the "insignificant emissions factor" 

which the EPA had identified as a concern. 

The commission adopts the amendment proposed to §116.716(d), adopted as §116.716(0, which 

clarify how an emission cap is to be adjusted or determined for several situations. Section 

116. 716(0(1) requires that an emission cap be adjusted downward to account for the shutdown 

of a facility for a period longer than six months. This would ensure that the emissions cap 

corresponds to the actual operation of the facilities under the cap and ensure that appropriate 

emission control is maintained even when some sources within the cap are not operating. The 
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commission also adopts language to clarify how the emission cap is to be adjusted when a 

previously shut down facility is restored to operation. 

Section 116. 716(0(2) is amended to clarify that a permit amendment is required to add a facility 

to a flexible permit emission cap. Section 116. 716(0(3) is also amended to further explain how 

the emission cap shall be adjusted when new facilities are added or when facilities in the cap are 

modified. The commission has rephrased and restructured §116. 716(0(3) in response to a 

comment relating to major NSR applicability. Subsection (0(3) is further subdivided into 

subparagraphs (A) and (B) to provide clarity with regard to the types of facilities included in 

application for adjustment that is an increase in an emission cap. 

The commission adopts the amendment proposed to §116.716(d)(4), adopted as §116.716(0(4), 

concerning the adjustment of emission caps when facilities under a cap become subject to new 

rules or regulations that require emission reductions. The commission has added references to 

the terms "group of facilities" and "account" to this paragraph in response to a comment. 

The commission adopts the amendment proposed to §116.716(e), adopted as §116.716(g), which 

requires that each emission cap or individual emission limitation have an annual emission limit, 

based on a 12-month rolling period. The adopted rule also requires that each emission cap or 

individual emission limitation include an appropriate short term (such as hourly) emission 

limit. 
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The commission adopts §116. 716(h) which provides that when a cap is established or adjusted, 

major NSR requirements must be met prior to issuance, amendment, or alteration of the permit. 

§116.717, Implementation Schedule for Additional Controls 

The commission adopts the amendment to §116. 717 to clarify that any control implementation 

schedule contained in a flexible permit is a requirement of the permit, such that if the schedule 

cannot be met, the permit holder must obtain a permit amendment or alteration to revise the 

control schedule in order to maintain compliance with the permit. The permit amendment or 

alteration would have to be approved by the executive director before the control schedule 

deadline specified in the permit passes. In addition, the commission has adopted language in 

this section to acknowledge and emphasize that certain federally-required controls, such as 

BACT or lAER required by PSD or NNSR, must be in place and operational before the 

permitted facility can begin operation. The amendment addresses the EPA's comments relating 

to implementation schedules in the March 12, 2008, correspondence from the EPA to the 

commission, and further ensures that the flexible permit program cannot be used to forestall or 

avoid major NSR control requirements. 

§116.718, Significant Emission Increase 

The commission adopts the amendment to §116.718(b) which clarifies that this section may not 

be used to authorize an emission increase under a flexible permit for any project that constitutes 

a federal major modification. Adopted §116. 718(b) further requires that the permit holder must 

document that any increases under this section are not major modifications. The amendment 
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further addresses the EPA's comments that the flexible permit program could be used to avoid 

applicable major NSR requirements. 

The commission adopts the amendment to §116.718(c) which requires a permit holder to 

perform an air quality analysis to demonstrate that any increases under this section would not 

interfere with attainment and maintenance of the NAAQS. This amendment addresses the 

EPA's comment in the Notice that the flexible permit program does not contain sufficient 

assurances that the NAAQS will not be violated. In response to a comment, the commission has 

slightly revised the language to clarify that the air quality analysis is required if operational or 

physical changes cause an increase in emissions from any facility (even if there are emission 

decreases at other facilities). The commission has also revised §116.718(c) to include references 

to "group of facilities" and "account," as suggested by a comment. 

§116.720, Limitation on Physical and Operational Changes 

The commission adopts the amendment to §116. 720, which consists of minor changes to 

improve readability. 

§116.721, Amendments and Alterations 

The commission adopts the amendment to §116.721 which clarifies under what circumstances a 

flexible permit amendment is required. The amendment to §116. 721(a) includes language 

stating that any action that would relax emission controls, add a new facility or facilities, or 

would constitute a major modification requires the permit holder to obtain a permit 

amendment. Similar language has been added to §116.721(c) for the same purpose. These 
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changes are intended to prevent "backsliding" of emission controls, and ensure that projects that 

constitute a major modification are subject to an appropriate review for applicable federal 

requirements. The commission also adopts minor editorial changes to this section to update 

terminology and improve readability. 

§116.730, Compliance History. 

The commission adopts minor editorial changes to §116. 730 to improve readability and update 

terminology. 

§116.740, Public Notice and Comment 

The commission adopts minor editorial changes to §116.740 to improve readability and correct 

outdated cross-references. In a separate action, the commission has adopted revised rules 

regarding public participation in Chapter 39, Public Notice, Subchapters H and K, and in 

Chapter 55, Requests for Reconsideration and Contested Case Hearings; Public Comment, 

Subchapter E. Some of these changes apply to flexible permit applications. 

§116.750, Flexible Permit Fee 

The commission adopts an amendment to §116. 750 that revises how fees for flexible permits are 

determined. Since the inception of the flexible permit program in 1994, fees for flexible permits 

have been determined based on the quantity of emissions authorized, at a rate of $32 per ton 

(with a minimum fee of $900, and a maximum fee of $75,000). The amended rule requires that 

flexible permit fees be based on a percentage of project capital cost, rather than based on 

emission rate. The amendments make flexible permits subject to the existing fee system used 
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for Subchapter B air permits, as specified in §116.141. The minimum fee of $goo and the 

maximum fee of $75,000 have been retained. 

§116.765, Compliance Schedule. 

The commission adopts new §116. 765 to specify that the rule changes in this action would not 

apply to permit applications or permit amendments until the date 6o days after the EPA 

publishes final approval of these sections as revisions to the Texas SIP. Until such time, the 

existing Subchapter G rules concerning flexible permitting would apply. The commission has 

eliminated the proposed alternate compliance date of December 1, 2012, in response to a 

comment. The commission has also revised the rule language so that this section specifies a 

compliance date, rather than an effective date for the rule. This change provides the 

commission with more flexibility to revise these rule sections, if necessary, in the future. 

FINAL REGULATORY IMPACT ANALYSIS DETERMINATION 

The commission reviewed the adopted rulemaking in light of the regulatory impact analysis 

requirements of Texas Government Code, §2001.0225, and determined that the rulemaking 

does not meet the definition of a major environmental rule as defined in that statute, and in 

addition, if it did meet the definition, would not be subject to the requirement to prepare a 

regulatory impact analysis. 

A major environmental rule means a rule, the specific intent of which is to protect the 

environment or reduce risks to human health from environmental exposure, and that may 

adversely affect in a material way the economy, a sector of the economy, productivity, 
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competition, jobs, the environment, or the public health and safety of the state or a sector of the 

state. The specific intent of the adopted rules is to amend various sections of Subchapter G to 

address concerns expressed by the EPA regarding the agency's flexible permit program 

submitted by the commission as a revision to the SIP. These changes to established rules for the 

flexible permit program are necessary to ensure that the rules can be a federally-approved part 

of the Texas SIP. Specifically, these amendments: 1) include detailed MRR requirements; 2) 

provide replicable, specific, established implementation procedures for establishing the 

emission cap; 3) clearly limit the rules to minor NSR; 4) include regulatory provisions clearly 

prohibiting the use of the program from circumventing the major NSR permitting; 5) ensure 

that the rules cannot be used to bypass the federal BACT or LAER control technology 

determination that is required for major PSD or NNSR projects; 6) specify requirements for 

initial compliance testing and methods of determining ongoing compliance; 7) ensure that the 

NAAQS are sufficiently protected; 8) include requirements for clarity of which facilities are 

included under the permit and any emission cap, and that there are sufficient monitoring and 

enforcement requirements for the emission caps and individual emission limits; and 9) provide 

for a delayed compliance date. 

As defined in the Texas Government Code, §2001.0225 only applies to a major environmental 

rule, the result of which is to: 1) exceed a standard set by federal law, unless the rule is 

specifically required by state law; 2) exceed an express requirement of state law, unless the rule 

is specifically required by federal law; 3) exceed a requirement of a delegation agreement or 

contract between the state and an agency or representative of the federal government to 

implement a state and federal program; or 4) adopt a rule solely under the general powers of the 
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agency instead of under a specific state law. This rulemaking action does not meet any of these 

four applicability requirements of a "major environmental rule." Specifically, the amendments 

were developed to correct EPA-identified deficiencies in the commission's flexible permit 

program to ensure SIP approval by the EPA and thus meet a requirement of federal law. This 

rulemaking action does not exceed an express requirement of state law or a requirement of a 

delegation agreement, and was not developed solely under the general powers of the agency, but 

was specifically developed to meet the requirements of the Texas SIP, and the requirements of 

the FCAA and its associated regulations, and is authorized by specific sections of Texas Health 

and Safety Code, Chapter 382 (also known as the Texas Clean Air Act), and the Texas Water 

Code, which are cited in the STATUTORY AUTHORI1Y section of this preamble. 

Therefore, this rulemaking action is not subject to the regulatory analysis provisions of Texas 

Government Code, §2001.0225(b). The commission did not receive any comment on the 

DRAFT REGULATORY IMPACT ANALYSIS. 

TAKINGS IMPACT ASSESSMENT 

Under Texas Government Code, §2007.002(5), taking means a· governmental action that affects 

private real property, in whole or in part or temporarily or permanently, in a manner that 

requires the governmental entity to compensate the private real property owner as provided by 

the Fifth and Fourteenth Amendments to the United States Constitution or §17 or §19, Article I, 

Texas Constitution; or a governmental action that affects an owner's private real property that is 

the subject of the governmental action, in whole or in part or temporarily or permanently, in a 

manner that restricts or limits the owner's right to the property that would otherwise exist in the 
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absence of the governmental action; and is the producing cause of a reduction of at least 25 

percent in the market value of the affected private real property, determined by comparing the 

market value of the property as if the governmental action is not in effect and the market value 

of the property determined as if the governmental action is in effect. 

The commission completed a takings impact analysis for this rulemaking action under Texas 

Government Code, §2007.043. The primary purpose of this rulemaking action, as discussed 

elsewhere in this preamble, is to amend the rules related to flexible permits to obtain federal 

approval of the rules into the Texas SIP. The rules will not create any additional burden on 

private real property. The rules will not affect private real property in a manner that would 

require compensation to private real property owners under the United States Constitution or 

the Texas Constitution. The rules also will not affect private real property in a manner that 

restricts or limits an owner's right to the property that would otherwise exist in the absence of 

the governmental action. Therefore, the adopted rules will not cause a taking under Texas 

Government Code, Chapter 2007. 

The commission did not receive any comment regarding the Takings Impact Assessment. 

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM 

The commission determined that this rulemaking action relates to an action or actions subject to 

the Texas Coastal Management Program (CMP) in accordance with the Coastal Coordination Act 

of 1991, as amended (Texas Natural Resources Code, §§33.201 et seq.), and commission rules in 

Chapter 281, Applications Processing, Subchapter B. As required by §281.45(a)(3) and 31 TAC 
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§505.11(b)(2), relating to Actions and Rules Subject to the Coastal Management Program, 

commission rules governing air pollutant emissions must be consistent with the applicable goals 

and policies of the CMP. The commission reviewed this action for consistency with the CMP 

goals and policies in accordance with the rules of the Coastal Coordination Council and 

determined that the action is consistent with the applicable CMP goals and policies. 

The CMP goal applicable to this rulemaking action is the goal to protect, preserve, and enhance 

the diversity, quality, quantity, functions, and values of coastal natural resource areas (31 TAC 

§501.12(1)). The adopted rules will benefit the environment by ensuring that the flexible permit 

program meets applicable federal requirements, and is adequately enforceable so that air quality 

is protected. The CMP policy applicable to this rulemaking action is the policy that commission 

rules comply with federal regulations in 40 CFR, to protect and enhance air quality in the 

coastal areas (31 TAC §501.32). Therefore, in accordance with 31 TAC §505.22(e), the 

commission affirms that this rulemaking action is consistent with CMP goals and policies. 

The commission invited public comment regarding the consistency with the coastal 

management program during the public comment period. No comments were received. 

EFFECT ON SITES SUBJECT TO THE FEDERAL OPERATING PERMITS PROGRAM 

Chapter 116 is an applicable requirement under Chapter 122, Federal Operating Permits 

Program. Owners or operators subject to the federal operating permit program must, consistent 

with the revision process in Chapter 122, upon the effective date of the adopted rulemaking, 

revise their operating permit to include any new applicable Chapter 116 requirements. 
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PUBLIC COMMENT 

The commission held a public hearing on the proposed rules in Austin on July 29, 2010, at 2:00 

pm, in Building E Room 201S, at the commission's central office located at 12100 Park 35 Circle. 

The comment period closed on August 2, 2010. The commission received comments from EPA 

Region 6, District 90 State Representative Lon Burnam (Rep. Burnam), The City of Houston, 

Environmental Integrity Project (EIP), Texas Chemical Council (TCC), Texas Industry Project 

(TIP), Texas Oil and Gas Association (TxOGA), and the United States Department of Energy 

Pantex Plant (Pantex). 

RESPONSE TO COMMENTS 

General Comments or Comments Covering Multiple Sections 

The City of Houston.commented that the proposed rules do not adequately address the EPA's 

concerns and do not ensure compliance with the FCAA, and that its comments support this 

conclusion. 

The commission does not concur that the proposed rules do not address the EPA's 

concerns and do not ensure compliance with the FCAA. This is demonstrated by 

the rule text and accompanying preamble text. 

TIP expressed support for the existing flexible permits program and stated that it has 

contributed toward significant air quality improvements over the last decade. TIP stated that 
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they support revisions and clarifications to the program that further the goal of a federallyapproved set of regulations. 

The commission appreciates the support and concurs that the flexible permits 

program has contributed toward air quality improvements. 

TxOGA stated that it supports the current flexible permits program and encouraged TCEQ to 

make only limited changes as necessary to address reasonable concerns of the EPA 

The commission appreciates the support, and in general, nearly all of the rule 

changes are directly or indirectly related to concerns identified by the EPA. 

TxOGA indicated concurrence with the detailed comments submitted by TIP. 

The commission has added a reference to TxOGA in association with detailed 

comments submitted by TIP. 

TxOGA stated that it opposes redefining by rule major NSR applicability definitions and 

principles. 
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This rulemaking concerns the flexible permits program, which is a minor NSR 

permit program. It does not affect major NSR requirements. Rather, the 

amendments to §u6.711(H) and (I) were added to reinforce the current rule 

requirement that major NSR review is always the first review conducted when an 

application is received. 

Rep. Burnam expressed support for certain specific aspects of the proposed rulemaking (such as 

§u6.710(a)(5), §u6.718(b), §u6.716(c), and the proposed deletion of §u6.716(d), relating to the 

nine percent insignificant emission factor), but also expressed concern that the proposed 

changes as a whole do not go far enough toward addressing the EPA's fundamental concerns 

about the program. Rep. Burnam commented that the commission should not adopt the 

proposed flexible permitting program. 

The commission appreciates Rep. Burnam's support for the referenced provisions. 

The commission does not concur that the proposed changes are not sufficient to 

address the EPA's fundamental concerns with the program. The proposed changes 

have addressed the EPA's major alleged deficiencies, in areas such as: practical 

enforceability {by improved MRR requirements); protection of air quality and 

NAAQS (by the proposed requirement for an air quality analysis for changes that 

could affect air quality); prevention of circumvention of major NSR requirements; 

replicable procedures for determining emission caps (by more explicit 

requirements concerning the determination of the emission cap and adjustments 
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to the emission cap); and other changes. These are discussed more thoroughly 

elsewhere in this preamble, and the commission refers the commenter to that 

discussion. 

Rep. Burnam commented that the proposed revisions do not address the shortcoming that a 

permit applicant may determine the emission cap using a potential-to-emit baseline. Rep. 

Burnam stated that starting from a high-end baseline allows for too lenient an emission 

standard. Rep. Burnam stated that actual emissions should be used to make applicability 

determinations. 

Emission caps are developed based on the potential to emit after the application of 

BACT or LAER emission controls, as applicable. This is exactly the same emission 

standard as required for other permitting. The term "baseline" is used in 

determining the applicability of major NSR. The newly adopted rule makes these 

.requirements more explicit in §u6.711(H) and (I). This evaluation requires the 

use of actual emissions, not the potential to emit. TCEQ rules do not, and never 

have, allow the use of allowable emissions in lieu of actual emissions in this 

analysis. 

The City of Houston stated that the proposed rules fail to adequately address 40 CFR 

§s1.l6s(a)(2)(ii), which requires that the flexible permits program include applicability 

determination procedures for major NSR applicability review that use the specific provisions of 
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40 CFR §st.t6s(a)(2)(ii)(A) - (F) unless the flexible permit regulations are at least as stringent in 

all respects as the federal provisions. The City of Houston also commented that the proposed 

rules do not adequately address 40 CFR §s1.166(a)(7), which requires that the flexible permit 

regulations include the specific applicability determination procedures of §51.166(a)(7)(i) - (vi) 

for PSD applicability review. 

Section 116.711(2)(H) and (I) ofthe flexible permit rules require that these 

applicability determinations be performed. The commission's rules regarding 

PSD review in Chapter 116, Subchapter B, Division 6 are approved as part of the 

Texas SIP. The most recent versions of the commission's rules regarding 

nonattainment review in Chapter 116, Subchapter B, Division 5, as adopted prior 

to 2006, were previously approved as part of the Texas SIP. The commission has 

proposed rule amendments, as published in the August 27, 2010 issue of the Texas 

Register, to address the EPA's concerns with the rules as amended in 2006, and is 

confident that these proposed amendments will be approved by the EPA as 

revisions to the SIP and are at least as stringent as the EPA's rules. Regardless, 

PSD and nonattainment applicability reviews are properly conducted for all 

permit applications. 

The City of Houston commented that the proposed rules should require both air dispersion 

modeling and ambient air monitoring. The City of Houston stated that air monitoring could be 

used to validate and verify the required dispersion modeling, and monitoring allows for 
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background concentrations to be measured and considered to ensure that proposed emission 

increases will not interfere with the attainment and maintenance of the NAAQS. 

No change was made in response to this comment. Although the commission 

agrees that ambient air monitoring is a useful tool, it is simply not practical, 

necessary, or economically feasible to require site-specific air monitoring, either 

before or after construction, for every project which results in an emission 

increase. The commission already conducts extensive air monitoring for purposes 

of monitoring regional air quality, and specialized air monitoring in targeted areas 

where emissions of certain pollutants are known to be a concern. Permits issued 

by the commission are demonstrated to be protective, so there is typically no 

justification to require monitoring in conjunction with the permit. It is possible 

that in specific cases, a flexible permit may include provisions for ambient air 

monitoring, but this would be decided on a case-by-case basis and would not be a 

generalized requirement for all flexible permits. 

The City of Houston commented that the rule changes should include a requirement that the 

worst-case emissions from each individual source be included in the permit application, and 

that these limits from the permit application be included in the permit as an emission limit. 

Alternatively, the City of Houston stated that TCEQ should clarify in the rule, if only certain 

individual source's emission limitations are included in the permit and others are not, what the 

criteria are for individual source's emission limits being included in the permit. The City of 
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Houston stated that the individual emission limitations of each source should be readily 

available in the permit document, in order to support compliance determinations. 

No changes were made in response to this comment. The application must identify 

the facilities to be included in emission caps and the emissions at the maximum 

expected capacity; however, these rates may change if minor operational or 

physical changes are made after the permit is issued; of course, prior to these 

changes the review for major NSR determined that it was not triggered. Individual 

emission rate limits may be included in the permit if requested by the applicant. 

Other reasons for individual limits, separate caps, or subcaps may be to clearly 

specify a mode of operation (such as emission caps for maintenance, startup, and 

shutdown) or to limit emissions of a specific compound (such as benzene). The 

permit will clearly identify any sources subject to individual emission limitations, 

and will clearly identify the applicable emission limit for those sources. 

The City of Houston commented that the rules should stipulate that all source-specific emission 

limitations that are based on BACT or LAER must be in the permit document. 

Any source-specific emission rate limits must be shown in the permit regardless of 

whether they are based on BACT, IAER, or some other more stringent basis, such 

as off-property impacts concerns. Note that most, if not all, control technology 
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requirements are independent of a facility's operating rate and are specified in the 

permit conditions. No change was made in response to this comment. 

EIP acknowledged that certain aspects of the proposed rules ip.cluded useful clarifications or 

positive changes relative to the existing flexible permit rules. EIP specifically noted the 

following proposed rule changes as being improvements: the language clarifying that the flexible 

permit program may not be used to circumvent, or be used in lieu of, the PSD or NNSR 

programs; the clarification that exceedances of flexible permit caps or individual emission 

limitations constitute violations; the requirement of proposed §116. 715( c)(S) that the permit, 

itself, reflect most of the monitoring requirements and the algorithms (for limits that are not 

rather directly monitored); the requirement that application representations are conditions 

upon which a permit is issued; the requirement that terms of existing NSR permits - when 

superseded by, or incorporated into the terms of the flexible permit - be explicitly addressed in 

flexible permit applications; and, the proposed recordkeeping and production requirements of 

proposed §116.715(c)(6). 

The commission appreciates the support for the cited portions of the proposed 

rule. 

EIP commented that although the proposed rules may contain certain improvements, the 

proposed rule changes are not sufficient to resolve larger problems with the flexible permit 
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program, including a lack of practical enforceability, and opportunities for permit applicants to 

circumvent NSR. 

The commission does not agree that the rules lack practical enforceability, allow 

circumvention of applicable NSR requirements, or lack public participation. 

Specifically, the commission notes that there are several rule amendments that 

address practical enforceability issues, including, for example, the changes to 

§116.715(b), which specifies that the permit holder shall comply with all flexible 

permit emission caps and individual emission limitations; §u6.715(c)(5),(6), and 

(12), regarding MRR requirements; §116.715(d), regarding specifications for 

monitoring systems; and §116.716(g), regarding specification of an annual 

emission limitation in tons per year and a practically enforceable short term 

emission limitation. This rulemaking also contains a number of amendments 

specifically addressing major NSR requirements, relating to applicability, 

circumvention, and appropriate control technology reviews for major NSR. No 

change was made in response to this comment. 

EIP commented that there is a lack of public participation when changes are made at facilities 

covered by a flexible permit. 

No change was made in response to this comment. Although the EPA formally 

disapproved the public participation rule in the flexible permit program, §116.740, 
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the commission adopted new and amended rules in Chapters 39 and 55 on June 2, 

2010 (as published in the June 18, 2010 issue of the Texas Register) that address 

concerns with and applicability of public participation requirements for flexible 

permit applications. Therefore, this comment is beyond the scope of this 

rulemaking. 

EIP commented that the overhead for the permit applicant, TCEQ staff, and the public 

associated with adhering to (for the permit holder) and understanding and enforcing (for the 

staff and the public) a permit issued under the flexible permit program, and meshing the 

requirements for that permit with those for the PSD, NNSR and other minor NSR programs, 

outweighs the benefits the permit applicant receives from this program. EIP stated that if 

adopted, the proposed rules will continue to place Texas industry at risk of violating the FCAA, 

and will deny the public the protections offered by that federal law. 

No changes were made to the rules in response to this comment. The commenter 

has not clearly explained what it means that the flexible permit program creates an 

"overhead" of requirements that outweigh the benefits of the program for 

applicants, the public, or TCEQ, and therefore the commission cannot provide a 

response that specifically addresses this comment. The flexible permit rules are 

for a separate minor NSR program, and are developed to provide operational 

flexibility while ensuring that major NSR is not circumvented, and that practically 

enforceable permits are issued which meet requirements for control technology 
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and are protective of public health and the environment. The EPA has consistently 

recognized that states have flexibility to develop their minor NSR programs, 

required by §uo(a)(2)(C) of the FCAA. Texas has done this while meeting the 

applicable federal and state statutory and regulatory requirements. The 

amendments adopted in this rulemaking ensure that the practices of the 

commission in developing and issuing enforceable permits are adequately and 

thoroughly included in the rules for this minor NSR program. Over the prior years 

that this program has been in place, substantial air quality improvements have 

been made under the flexible permits program, and at the same time, flexible 

permit holders have benefited from the flexibility afforded by the program. The 

commission does not concur that the flexible permit program violates the FCAA, 

and it expressly finds that these rules meet the applicable requirements of the 

FCAA. 

EIP commented that TCEQ should not approve the proposed flexible permit program rules 

because the flexible permit program is not approvable into the Texas SIP. EIP stated that the 

program can be an addition to federal SIP-approved requirements, but the program cannot be 

used in lieu of or replace the obligation of new sources of air pollution or modifications of 

existing sources to obtain NSR, including minor NSR, permits. 

This comment is not specific as to why the flexible permit program is not 

approvable into the SIP. The flexible permits program does not replace or 
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eliminate the obligation of new or modified sources to obtain NSR authorization, 

be they minor or major sources. The rules do not replace the major source 

permitting rules in Chapter 116, Subchapter B, Divisions 5 and 6. Further, these 

rules do not replace the minor NSR rules in Chapter 116, Subchapter B; rather, this 

is an additional minor NSR permit program that can be approved by the EPA as 

part of the Texas SIP. No change was made in response to this comment. 

EIP commented that, based on the language of proposed §116.710(a)(5), §116.715(0, and 

§116.716(a)(2)(B), a PSD or NNSR source could obtain a flexible permit, and therefore all of the 

reasons the EPA stated for rejecting the current flexible permit program as not meeting 

substitute major NSR program requirements also apply to the proposed flexible permit 

program. 

The commenter is correct that under the existing and proposed flexible permit 

rules, a project with facilities subject to PSD or NNSR can be included in a flexible 

permit, and can be included in a cap in a flexible permit; this is discussed in more 

detail elsewhere in this preamble. However, the flexible permit authorization is a 

minor NSR authorization only, and does not exempt any facilities from meeting all 

applicable major NSR requirements, such as appropriate federal BACT, or LAER, 

or other federal requirements. In summary, if there are facilities subject to PSD 

and/or NNSR requirements, a PSD and/or NNSR authorization is part of the same 
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document that includes the minor NSR flexible permit authorization. No change 

was made in response to this comment. 

EIP commented that the EPA disapproved the current flexible permit program because the MRR 

was not sufficient to satisfy the criteria of enforceability. EIP stated that the proposed changes 

(§116.715(c)(5), (6), and (12); (d); and §n6.711(2)(G)) do not remedy this defect. EIP stated that 

proposed §n6.715(c)(5)(A) requires monitoring or demonstrating compliance, thus, monitoring 

is not necessarily required. Furthermore, §n6.715(c)(5)(C) provides that whatever monitoring 

is actually included in the permit can nevertheless be disregarded without any public review if 

the permittee requests it. EIP stated that similarly §n6.715(d)(2)(E) also provides the executive 

director with wide latitude for picking a monitoring system regardless of the parameters set 

forth in §n6.715(d)(2)(A)- (D). 

The commission does not agree with the comment. The language in proposed 

§u6.715(c)(5)(A) relating to monitoring or demonstrating compliance is a 

deliberate choice because in some cases direct monitoring of emissions or 

parameters may not be the only possible method of determining compliance. In 

addition, in some cases the permit may specify a method of monitoring plus 

additional methods or techniques related to determining compliance. Proposed 

§116.715( c)(5)(C) and ( d)(2)(E) do allow for a permit holder to request an 

alternative method of monitoring or sampling, but these requests must be 

approved by the executive director prior to their use. The ability of the executive 

director to approve alternate methods is necessary because the rules and standard 
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methods cannot address every possible fact situation, and at times a unique or 

creative approach is needed, or is more efficient than a standard method. Both 

rules adopted by the commission, such as §u6.us(b)(2)(D) and §115.725(a)(4), 

and permits routinely provide the executive director with the authority to evaluate 

and approve alternate methods of testing and monitoring. No change was made in 

response to this comment. 

EIP commented that, in disapproving the existing flexible permit program, the EPA found the 

rules fail to require specific recordkeeping sufficient to ensure that all terms and conditions of 

existing permits (including representations in the applications for such permits) that are 

incorporated into the flexible permit continue to be met. The rules lack adequate program 

requirements for the tracking of existing SIP permits' major and minor NSR terms, limits, and 

conditions, and whether such requirements are incorporated into a flexible permit or they 

remain outside the coverage of the flexible permit. Minor and major NSR permits, as well as 

minor NSR SIP permits by rule and standard permits, can be incorporated into a flexible permit 

without any program requirement in place that ensures the SIP permits' terms and conditions 

are included in the flexible permit, as published in the Federal Register (74 FR 48493). EIP 

stated that the proposed rules have the same problem. EIP stated that the proposal explains 

that the "flexible permit would then become the controlling authorization for all facilities 

included in the permit, succeeding any existing minor NSR permits that may have been 

applicable to all or part of the facilities." 
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No change was made in response to this comment. Section u6.711(2)(M)(vii) 

specifically requires applications that include currently authorized facilities issued 

under Chapter 116, Subchapter B must identify any terms, conditions, and 

representations in the Subchapter B permit or permits which will be superseded 

by or incorporated into the flexible permit. The applicant shall include an analysis 

of how the conditions and control requirements of Subchapter B permits will be 

carried forward in the proposed flexible permit. This will allow the commission to 

review the application to ensure there is no backsliding from existing 

requirements. Therefore, to be eligible for a flexible permit, applicants will have 

to maintain sufficient records to meet this specific requirement. 

In addition, although an applicant can apply for a flexible permit to change the 

authorization for minor sources from authorization under Subchapter B, or from 

a standard permit to permit by rule, partial permitting is not allowed. As a result, 

facilities cannot have both a Subchapter B minor NSR permit and a Subchapter G 

minor NSR permit. Facilities that are currently authorized by a permit by rule or a 

standard permit that are proposed to become authorized under a flexible permit 

must meet the requirements to be authorized under the Subchapter G rules. 

The primary purpose of this rulemaking is to address deficiencies alleged by the 

EPA, as discussed elsewhere in this preamble. With regard to major sources, 

§u6.710(a)(6) specifically provides that no person shall use the rules in 
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Subchapter G to circumvent the requirements for major NSR permits that are in 

Chapter 116, Subchapter B, Divisions 5 and 6. This paragraph, together with 

§116.711(2)(H) and (I), ensure that major NSR is considered prior to issuance or 

amendment of a flexible permit, a minor NSR permit, and that any existing major 

NSR permit continues to comply with the applicable requirements. Therefore, 

there is no basis for adding additional requirements in the flexible permit rules for 

tracking major NSR permit terms in the Subchapter G minor NSR permit. 

The EPA commented that the commission must delineate the definitions of" account," "facility" 

and "group of facilities" where used in Subchapter G. In addition, it is not clear how a "unit" 

relates to these terms. The EPA states that the use of these terms must be explained sufficiently 

so that it is clear why one (or more) of these terms is used in certain instances and not in others 

throughout Subchapter G. 

The commission has revised the rules in response to this comment. As the EPA is 

aware, the cornerstone of the Texas air quality permitting program is a "facility." 

The term is defined in the Texas Clean Air Act, Texas Health and Safety Code, 

§382.009(3), and in commission rule in §116.10(4), and is approved as part of the 

Texas SIP. "Facility" is defined as "a discrete or identifiable structure, device, 

item, equipment, or enclosure that constitutes or contains a stationary source, 

including appurtenances other than emission control equipment. A mine, quarry, 

well test, or road is not considered to be a facility." A facility may constitute or 
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contain a stationary source - a point of origin of an air contaminant. The 

commission did not intend the use of the term "unit" and has replaced it with the 

most appropriate term "facility" in §u6.711(2)(N) and §u6.715(c)(9). 

However, the commission has made no change with regard to the use of these 

three terms in Subchapter G, except as discussed elsewhere in this preamble 

relating to the EPA's comment concerning the use of the terms "account" and 

"group of facilities" in specific rule sections. A flexible permit is limited to 

facilities at one account, and can cover a group of facilities or all the facilities at 

that account. Further, the term "account" is defined in §101.1(1) as "for those 

sources required to be permitted under Chapter 122, all sources that are 

aggregated as a site. For all other sources, any combination of sources under 

common ownership or control and located on one or more contiguous properties, 

or properties contiguous except for intervening roads, railroads, rights-of-way, 

waterways, or similar divisions." An account can include multiple "sources," 

which, for these rules, is equivalent to multiple "facilities" under Texas minor NSR 

definitions. This definition, and the definition of"facility," are included in the 

commission's "General Rules" Chapter, and as such are applicable to all of the 

commission's rules for its air quality programs. 

In its final disapproval of the flexible permit rules, the EPA stated that the 

definition of "account" is not limited to a single major stationary source and may 

include multiple major stationary sources, or in other circumstances, may include 
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a subset of a major stationary source. The EPA approved the use of similar text in 

§116.111(2)(C) without a similar limitation. The commission cannot adopt a 

change to the definition of "account" because it was not proposed for change. 

Regardless, the commission declines to effectively limit the use of the term 

"account" in the Subchapter G rules because major sources can be included under 

a cap, as discussed elsewhere in this preamble. The flexible permit rules allow for 

different federal sources, which may have different primary Standard Industrial 

Classification (SIC) codes, located at the same account to be treated separately in 

the flexible permit if necessary to establish limits on potential to emit. This 

situation is expected to be rare as there are very few accounts that contain more 

than one federal source. Regardless, the sources are reviewed to determine major 

NSR applicability and the requirements are followed if triggered. Therefore, the 

EPA's concern is not warranted. 

Inclusion of Major Sources in a Flexible Permit 

The EPA submitted several comments relating to various portions of §§116. 711, §116. 716, and 

116.718, stating that, as proposed, the rules could be interpreted as allowing nonattainment 

major stationary sources or major modifications to be authorized under a flexible permit. The 

EPA stated that the rules must be revised to ensure it is clear that a flexible permit cannot be 

used for a major stationary source or major modification. The EPA also stated that emissions 

from facilities subject to PSD BACT and/ or NNSR LAER cannot be included in an emission cap. 

The EPA provided suggested rule language to clarify that a flexible permit application cannot 

include facilities authorized by a PSD or major NNSR permit. 
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The commission does not agree with the EPA's position that the flexible permit 

rules must categorically exclude major stationary sources and major 

modifications from coverage within a flexible permit or an emission cap. The 

commission emphasizes that projects that trigger major NSR requirements such 

as PSD review or NNSR are required to comply with applicable major NSR 

requirements, as specified under Chapter 116, Subchapter B, Division 5 or 6, as 

applicable, and under applicable federal regulations. These requirements include 

appropriate control technology determinations for major NSR BACf or LAER. 

The inclusion of a major stationary source or major modification in a cap 

established in a flexible permit does not negate or circumvent the application of 

applicable federal major source requirements any more so than the inclusion of 

such a project in a traditional NSR permit authorized under Chapter 116, 

Subchapter B. When facilities are to be placed under an emissions cap, the project 

is reviewed as a modification of those facilities, and if the project increase and the 

net emission increase are significant, it is reviewed as major. For changes under a 

cap that are subject to major NSR, the application is reviewed to determine 

whether the facilities are collocated on the basis of whether they are on contiguous 

or adjacent property, are under common control and ownership, and whether they 

are part of the same primary SIC code, just like changes to any facility or unit that 

is not under a cap. Otherwise, it is reviewed as a minor modification in the same 

manner as for a construction permit. For flexible permits which include major 

sources, as with all major NSR permits, the TCEQ does not aggregate or combine 
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major stationary sources which have different primary SIC codes for purposes of 

majorNSR. 

Subsequent to the submittal of these comments, the executive director's staffheld 

discussions with representatives of EPA's Region 6 Office, Office of Air Quality 

Planning and Standards, and Office of General Counsel. The EPA representatives 

stated that major sources, subject to PSD or NNSR permitting requirements, can 

be included in and operate under a cap. However, EPA representatives also stated 

that those major sources (units) must still comply with all PSD or NNSR 

requirements, as applicable, including any requirements that were effective prior 

to the unit being included in a cap. For example, if a limit, such as a pound per 

hour or pound per million Btu, is established in a prior PSD permit, then the unit 

remains subject to such limit. Although an annual BACf limit is not required by 

EPA, if one has been established, the PSD unit must still comply with it also. In 

addition, EPA representatives also noted that if a unit is later modified and a new 

BACf determination is made without any annual limit, then it can remain in or be 

removed from the cap as long as the change is made using a SIP-approved process 

for PSD permits, including evaluation of BACf, preparation of an air quality 

analysis, and public notice. 

In response to EPA's comments, the commission revised §1.16.710 by adding text 

that provides, that major NSR requirements, including retention of established 
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limits must be included for issuance of a flexible permit. In addition, the 

commission added §116.716(h) from proposal that requires that when a cap is 

established or adjusted, major NSR requirements must be met prior to issuance, 

amendment or alteration of the permit. 

The EPA stated that it must be clear that minor NSR BACT determinations are required to be at 

least as stringent as the federal applicable requirement, e.g. SIP rule, new source performance 

standards (NSPS), NESHAPS, and MACT. 

The commission respectfully disagrees with the comment that minor NSR B.~CT 

determinations are required to be at least as stringent as federal requirements of 

the type listed in the comment. Section 116.711 of the flexible permit rules requires 

that any facilities authorized by the permit meet all of the requirements cited 

(such as NSPS, NESHAP, and MACT emission standards) in addition to BACT. The 

application of BACT is an additional requirement, not a replacement or substitute. 

Facilities which are subject to a combination of standards must comply with all 

applicable requirements, including whichever is most stringent. The commission 

notes that §u6.715(1o) provides that acceptance of a flexible permit by a permit 

applicant constitutes an acknowledgment and agreement that the holder will 

comply with all rules and orders of the commission and the conditions precedent 

to the granting of 'the permit. If more than one state or federal rule or regulation 

or flexible permit condition are applicable, then the most stringent limit or 
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condition shall govern and be the standard by which compliance shall be 

demonstrated. No change was made in response to this comment. 

The EPA commented that each individual unit under an emission cap must still meet at least its 

specific emission limitation derived from a federal applicable requirement, e.g., a SIP rule, 

Minor NSR SIP BACT determination, NSPS, MACT, or NESHAPS. The EPA stated that a unit 

cannot violate its federal applicable requirement. The EPA stated that an exception could be 

units that were previously grandfathered units not subject to any federal applicable requirement 

other than a Minor NSR SIP BACT determination made at the time of issuance of the original 

flexible permit. 

Regardless of whether a unit is included in a flexible permit emission cap, any 

emission limitation originating from a federal requirement (such as major source 

BACT or LAER, NSPS, MACT, or NESHAPS) still applies. Compliance with federal 

requirements such as major source BACT or LAER, NSPS, NESHAPs, and MACT is 

required by §116.711(2)(C), (D), (E), and (F) respectively. No change was made in 

response to this comment. 

The EPA stated that proposed §n6.715(c)(7), last sentence, must include a reference to 

"account." The EPA also stated that proposed §n6.715(c)(10) must include a reference to 

"account." The EPA stated that proposed §n6.716(d)(4) and §n6.718(c) must include 

references to "account" and "group of facilities." 
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As discussed in more detail in the Section by Section portion of this p:reamble for 

§116.716, the commission has revised the cited rules to include references to the 

terms "group of facilities" and "account" as requested by the EPA. 

Comments on §116.13 

The EPA stated that because the commission is proposing to eliminate the insignificant 

emissions factor, the reference to it in the definitions of"emissions cap" and "individual 

emission limitation" at §116.13 must be deleted. 

These changes recommended by the EPA were already included in the proposed 

revisions to the referenced definitions in §116.13, as indicated by the bracketed 

text, so no further action is necessa:ry. 

Pantex commented that neither §§116.10, 116.12, nor 116.13 defines "significant level for that 

plant-wide applicability limit (PAL) pollutant." Pantex recommended that for clarity, §116.12 or 

§116.10 should contain a definition of "significant level for that PAL pollutant." 

The rule has been revised to eliminate the reference to "significant facility" as 

defined in §116.12, which is the origin of the language that this comment 
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references. Therefore, there is no longer a need for a definition of the referenced 

phrase in the adopted rules. 

EIP stated that the CPMS definition in §116.13(2) should clarify when, if ever, what are thought 

to be abnormal readings may be discarded in the recording of the "average operational 

parameter values." 

The definition for CPMS is consistent with the EPA's NSR rules and therefore the 

commission will not attempt to specify criteria for "abnormal readings" in this 

rule. The permits issued by the TCEQ typically require that all data be used except 

if the monitor is malfunctioning. No change was made in response to this 

comment. 

TIP and TXOGA commented that the proposed definition of CPMS fails to specify the type of 

averaging period that will apply. TIP and TxOGA suggested adding the phrase "record in units 

of the applicable emission limit" to the definition, and allow for any further averaging period 

details to be specified in applicable permits as necessary. 

The commission has not changed the rule in response to this comment. The 

addition of the suggested language to the definitions of CEMS, CPMS, and PEMS 
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would complicate the definitions and add little new information. The relevant 

averaging period and any associated details will be specified in the permit. 

TCC, TIP, and TxOGA commented on the proposed definitions of "continuous emission 

monitoring system" and "continuous parameter monitoring system" in §116.13. TCC stated that 

the commission's proposed definitions are modified versions of federal definitions of these 

terms, and that the commission revised these definitions for the purpose of the flexible permit 

program. TCC stated that the state and federal definitions should be consistent to avoid 

confusion and promote clarity. TCC, TIP, and TxOGA also noted that the proposed definitions 

are different from the commission's definitions for "continuous monitoring" found in Chapter 

115, Control of Air Pollution from Volatile Organic Compounds, and "CEMS" and "PEMS" found 

in Chapter 117, Control of Air Pollution from Nitrogen Compounds. TCC, TIP, and TxOGA 

recommended that TCEQ align these various definitions and place them in Chapter 101. 

The commission has not changed the rule in response to this comment. TCC is 

correct that the commission adapted federal definitions of "continuous emission 

monitoring system" and "continuous parameter monitoring system" for use in 

§116.13. Although this did introduce minor differences between the definitions of 

these terms as stated in §116.13, and 40 CFR §52.21, these differences are minimal 

and administrative in nature and should not introduce any confusion. TCC is also 

correct that the proposed definitions in §116.13 are not the same as the definitions 

of"continuous monitoring", "CEMS", and "PEMS" in otherTCEQ rule chapters 
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such as Chapter 115or Chapter 117. Chapters 115 and 117 are rules intended to 

ensure that reasonably available control technology is applied to new and existing 

sources in specific areas in order to help those areas achieve and maintain 

attainment with the ozone NAAQS. The objectives, control technology 

requirements, implementation strategy, and underlying rule language is 

necessarily different when comparing a minor NSR authorization program such as 

the commission's flexible permits program, to rules such as those in Chapters 115 

and 117. The definitions as proposed are more appropriate for use with the flexible 

permits program than are the existing definitions within Chapters 115 and 117. 

Revising the definitions in Chapters 115 and 117, or establishing new definitions 

within Chapter 101, would be beyond the scope of this rule change. 

Comments on §116.711 

TIP and TxOGA stated that proposed §116. 711(2)(C)(i) appears to limit the ability to apply 

additional controls beyond BACT to only existing facilities. TIP and TxOGA stated that permit 

applicants should have the option to apply controls above BACT to both new and existing 

facilities. TIP and TxOGA stated that TCEQ should delete the term "existing" from the proposed 

rule. 

The commission agrees that permit applicants should have the option to apply 

additional controls to new facilities as part of the flexible permit. The commission 

has revised the rule so that permit applicants would have the option to apply 
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controls in excess of BACf to new facilities to offset or balance controls on existing 

facilities. 

The City of Houston commented on §116.711(2)(G), stating that the proposed rule makes initial 

compliance testing with ongoing compliance as determined by engineering calculations, 

parametric or predictive monitoring, stack monitoring, or stack testing obligatory instead of an 

option within TCEQ's discretion. The City of Houston stated that emission estimates based on 

emission factors typically are a replication of what the emission limitations are based on, 

rendering the emission limitations meaningless, and the permit need only limit the relevant 

process variable. The City of Houston stated that compliance should be independently verified 

by measurement as part of the performance demonstration. The City of Houston stated that the 

performance demonstration should include continuous or periodic parametric or predictive 

monitoring, emissions monitoring, or stack testing, if engineering calculations based on process 

variables are used to determine ongoing compliance. 

No change was made in response to this comment. Emission limitations for 

individual facilities are typically based on BACf, not on emission factors 

developed from stack testing. If technically feasible and economically warranted, 

a stack test will be required to determine actual emissions of pollutants from the 

facility. These results may be used to develop an emission factor which may be 

then used in determining and reporting actual emissions from the facility. For 

example, if fuel flow to a heater is monitored, emissions factors may be generated 
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in terms of pounds of pollutant per cubic foot of natural gas flow firing the heater. 

There are other sources, such as tanks, where stack testing is not practical. In 

these cases, generally accepted calculation methods are used with measured 

parameters, such as throughput, to estimate actual emissions. 

The City of Houston and EIP commented that proposed §116. 711(2)(H) and (I) do not 

adequately address the EPA's applicability determination concern because they allow the permit 

applicant to conduct a separate analysis as the applicability review and submit it with the 

application. EIP stated that the proposed rules do not provide requirements for how the 

applicability determination is to be made; and do not state that the applicability determination 

must be based on actual emissions and on emissions increases and decreases that occur within a 

major stationary source. The City of Houston stated that allowing a regulated source to make 

applicability determinations is not consistent with federal NSR and PSD applicability review 

requirements. In addition, the City of Houston commented that the methodology prescribed by 

40 CFR §51.165(a)(2)(ii) and §51.166(a)(7) is extensive, and the proposed rules fail to prescribe 

the specific applicability review requirements. 

State and federal rules require that regulated sources complete applicability 

determinations in accordance with the applicable rules. The reviewing authority 

will then review the analysis submitted, require additional information, if 

necessary, and ultima~ely agree or disagree with the analysis. The commission 

respectfully disagrees that its rules, in §§1.16.12, 116.150, 116.151, and 116.160, fail 
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to prescribe the .specific applicability review requirements. No change was made 

in response to these comments. 

The City of Houston and EIP commented that the proposed rules allow the applicant to selfevaluate for NSR and PSD applicability, without review by the state or the public, and that the 

proposed rules contain no mechanism to prevent an erroneous determination from being 

carried forward. The City of Houston commented that the applicability determination should be 

conducted by TCEQ and the analysis should be consistent with 40 CFR §51.165(a)(2)(ii) and 

§51.166(a)(7) . 

The federal rules cited do not require the reviewing authority to independently 

perform an analysis for federal NSR for every project contemplated by every 

regulated entity in the state. Rather, these rules require the permit program, 

though rules and implementation of those rules, specify the procedure identified 

(or equivalent). To require that every emission-related project be reviewed would 

be impractical. The proposed rule requires these analyses be submitted with any 

permit application, be submitted and approved before any physical change having 

a potential increase in actual emissions sufficient to require netting (§u6.718(a)), 

and to identify any changes to facilities in the semiannual report, 

(116.715(c)(12)(A)(i)(V)). No change was made in response to these comments. 
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TIP and TxOGA commented that in proposed §116.711(2)(H) and (I), the commission 

introduces a requirement for a separate analysis of applicability of federal PSD or 

nonattainment review. TIP and TxOGA expressed concerns that the proposed language is 

redundant of the existing requirement to ensure compliance with major NSR, and is not clear as 

to the scope of the "separate analysis" requirement. TIP and TxOGA commented that the major 

NSR applicability analysis is typically combined for one or more pollutants, and is typically 

integrated into a single application document with a discussion of each of the other rule 

requirements for a permit. TIP and TxOGA commented that the existing rule language is 

sufficient to establish the requirement to assure compliance with major NSR requirements, and 

objected to adding a new, separate documentation requirement. 

While the commission understands TIP's and TxOGA's concern that other existing 

rules already require compliance with major NSR, the proposed requirement is 

necessary to satisfy the EPA's concern that the existing flexible permits program 

could be used to circumvent major NSR. The EPA specifically requested rule 

language to require that a federal applicability determination be conducted before 

the permit applicant could use the rules in Subchapter G. The commission agrees 

that the term "separate" may be misleading and is unnecessary, and it has been 

removed from the rule. This analysis is required prior to commencing any 

physical or operational change that may be a major modification. 
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Rep. Burnam and EIP commented that §116. 711(2)(J) should require computer dispersion 

modeling. Rep. Burnam and EIP stated that assessing ambient impacts without computer 

dispersion modeling is no longer considered scientifically valid. In addition, should modeling be 

conducted, EIP stated that the regulation does not specify which computer dispersion modeling 

must be used. Rep. Burnam stated that some computer models are no longer favored. EIP 

stated that 40 CFR §51.16o(f)(1) requires the proposed program to use the Guideline on Air 

Quality Modeling (40 CFR Part 51, Appendix W). 

No change was made in response to this comment. There can be situations where 

computer dispersion modeling is not necessary to determine that a proposed 

change would interfere with the NAAQS or other impacts criteria. For example, it 

may be apparent through engineering judgment or calculations that a small 

increase at a site would not result in an impacts concern, especially if existing 

modeling was available demonstrating that the source before the proposed change 

was meeting applicable standards and effects screening levels by a significant 

margin. In addition, computer dispersion modeling carries substantial costs. The 

commission will retain the flexibility to determine which projects require 

computer dispersion modeling on a case-by-case basis. Although the commission 

generally concurs that dispersion modeling used to support permit actions should 

comply with the EPA's Guideline on Air Quality Modeling, this guideline is very 

general and may not adequately cover or address all source configurations or 

situations. In addition to 40 CFR Part 51, Appendix W, the TCEQ applies 

internally-developed guidance and procedures in the review of dispersion 
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modeling. Therefore, the commission declines to add the suggested reference to 

40 CFR Part 51, Appendix Wto the rule. 

EIP recommended that the rules require NAAQS impact modeling for all amendments or 

alterations to flexible permits for which dispersion modeling was not previously required. EIP 

commented that as written, proposed §116. 711(2)(J) would not require this if the amendment or 

alteration did not increase an ip.dividuallimit or the overall cap. 

As stated previously, computer dispersion modeling is not necessary in every case 

in order to determine if a proposed change would interfere with maintenance or 

attainment of the NAAQS. The commission will retain the flexibility to require 

computer modeling on a case-by-case basis. No change was made in response to 

this comment. 

TIP and TxOGA commented on proposed §116. 711(2)(J), which requires the permit applicant to 

conduct an air quality analysis to demonstrate that the proposed action will not interfere with 

attainment of maintenance of the NAAQS. TIP and TxOGA stated that this proposed 

requirement is redundant with existing requirements, and appears to track FCAA, §110(1), a test 

that is not applicable to individual permit actions. TIP and TxOGA also stated that creating a 

separate obligation with regard to NAAQS could create confusion with regard to the air quality 

analysis that is more generally required under Chapter 116 permitting. 
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The commission acknowledges that existing rules already provide the commission 

with the authority to require modeling or monitoring to assess air quality impacts, 

but this more explicit requirement with respect to the NAAQS is necessary to 

address the EPA's concerns that the flexible permits program does not sufficiently 

protect against changes that could interfere with attainment or maintenance of the 

NAAQS. The NAAQS-related requirement is sufficiently clear as to not cause 

co:Dfusion with other analyses or reviews that are required for air permits. No 

change was made in response to these comments. 

The EPA requested clarification of proposed §116.711(2)(M)(ii), (iv), and (vi), as to why the 

identification does not include "in an account." The EPA also asked for clarification as to why 

subparagraphs (ii) and (vi) should not require the identification of "each facility included in a 

'group offacilities'." 

The cited rules do not include the phrase "in an account" because a flexible permit 

may only authorize facilities at a single account, as required by §u6.710(a)(4). 

Similarly, by logical extension of the same rule, an emission cap can only include 

facilities that are all under a single account. Adding the phrase "in an account" to 

the cited rules would be redundant and not convey any new information about the 

facility or emission cap. With respect to the phrase "each facility included in a 

group of facilities," the existing rule requires that the permit applicant identify 

each facility; this implicitly includes any facilities that are part of a group of 

facilities. The phrasing suggested by the EPA would not change the information 
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provided by an applicant and would make the rule more confusing. The 

commission has not changed the rule in response to this comment. 

TIP and TxOGAcommented on §n6.711(2)(M)(vii), which requires an analysis ofhowterms 

and conditions of prior Subchapter B permits will be carried forward in a flexible permit. TIP 

and TxOGA stated that the proposed provision is unworkable as permit conditions do not 

remain static, and not every condition can be maintained. TIP and TxOGA stated that the 

proposed rule should provide an opportunity for applicants to show how conditions from 

previously-issued permits changed, or are changing, in a flexible permit or permit amendment. 

The commission has not changed the rule in response to this comment. The cited 

requirement is necessary so that the applicant and TCEQ can identify relevant 

terms and conditions of the existing Subchapter B permit and address them 

appropriately in the proposed flexible permit. The overall intent of this 

requirement is to ensure that the change to a flexible permit does not result in any 

backsliding of emission controls or any other applicable requirements. An 

analysis must be completed for each condition explaining how the requirements 

will be included in the proposed flexible permit. The commission agrees that 

permit conditions and limits do not remain static, and may change based on 

subsequent applications presented to the agency. The analysis required by 

§n6.711(2)(M)(vii) must justify changes and demonstrate that emission control 

requirements are not relaxed or eliminated with the issuance of a flexible permit. 
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The rule does not require that the prQposed flexible permit maintain identical 

terms, limits, and conditions compared to the original permit. Once a facility or 

facilities are authorized under the flexible permit, the terms and conditions of the 

previous permit would no longer apply but could be carried forward in the flexible 

permit. 

EIP commented that TCEQ proposed §116.711(2)(M)(vii) to address the EPA's comment that 

existing SIP permits' major and minor NSR terms, limits and conditions, must be tracked and 

accounted for. However, §116.711(2)(M)(vii) is just a requirement of what needs to be the in an 

application, not a permit itself. EIP stated that, therefore, the proposed rule fails to address the 

EPA's concern. 

The commission does not agree with the comment, and no change was made in 

response to this comment. The cited rule is necessary so that the applicant and 

TCEQ can identify relevant terms and conditions of the existing Subchapter B 

permit and address them appropriately in a subsequently issued flexible permit. 

The overall intent of this requirement is to ensure that the change to a flexible 

permit does not result in any backsliding of emission controls or any other 

applicable requirements. However, the permit terms, limits, and conditions may 

still change as part of this process. An analysis must justify changes and 

demonstrate that emission control requirements are not relaxed or eliminated 

with the issuance of a flexible permit. It would not be practical for the rule to 
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require that the proposed flexible permit maintain identical terms, limits, and 

conditions compared to the original Subchapter B permit. To do so would not 

result in providing operational flexibility that is a feature of this permit program. 

The rules adequately address the issue of backsliding, and the ability to properly 

review any requested change. 

EIP recommended that permit alteration or amendment materials for flexible permits should 

identify any terms, conditions, and representations of prior permits that will be superseded by 

or incorporated into the altered or amended flexible permit. EIP stated that a variation of 

proposed §116.711(2)(M)(vii) would accomplish this. 

The commission has not changed the rule in response to this comment. In cases 

where the terms, conditions, or representations of existing permits have been 

incorporated or superseded into a flexible permit, an analysis of those terms and 

conditions would be performed and any changes justified. In any subsequent 

permit action, a similar justification would be required if those permit terms or 

conditions were to change. 

Comments on §116.715 

EIP commented that §116.715(c)(5), as proposed, would not require a permit statement of the 

emissions calculation that is used for compliance in those situations where there is continuous 

operating parameter monitoring but where CEMS are not measuring emissions levels. EIP 
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stated that the method of converting the parameter measurements to emission estimates should 

be specified. 

The commission agrees that the calculation methods should be identified for all 

pollutants and facilities, and has removed the cited exceptions from the rule 

language. 

TIP and TxOGA commented that the proposed MRR requirements in §116.715 should not 

impose PAL requirements where they confuse or complicate the flexible permits program for 

sites that have not opted into the PAL program. 

The commission acknowledges that the emission cap MRR requirements of 

proposed §116.715 are similar to requirements of the federal PAL program. The 

commission used the PAL requirements as the foundation for these MRR 

requirements because the use of existing federally-approved requirements should 

be acceptable to the EPA. Although these requirements may have originated from 

another program, these requirements are reasonable to support compliance with 

emission caps in the flexible permit program. Many of the requirements and 

elements of these proposed MRR rules cover the same or similar information that 

is already maintained under existing flexible permit rules or permit requirements. 

Although the implementation of these requirements may require some changes in 
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flexible permits and in the practices of permit holders, these requirements can be 

implemented without unreasonable confusion or burden on the permit holder. 

Pantex noted that proposed §116. 715( c)(5)(B) requires that each flexible permit specify methods 

for calculating annual and short term emissions for each pollutant when continuous emission 

monitoring or continuous operating parameter monitoring is not required. Pantex further 

noted that §116. 711 as proposed does not include any requirement for an applicant to represent 

the use of continuous emission monitoring or continuous operating parameter monitoring in the 

application. Pantex asked, with respect to §116.715, how would TCEQ determine if continuous 

emission monitoring or continuous operating parameter monitoring is to be included in the 

operation of the unit. 

Several factors would be considered by both the permit applicant and TCEQ when 

making the determination as to whether continuous emission monitoring or 

continuous operating parameter monitoring would be required under the permit. 

The determination of the appropriate type of monitoring would be a case-by-case 

decision involving the nature of the facility and the nature of the pollutant(s) to be 

monitored. Certain processes, for example coatings operations, can accurately 

determine emissions using relatively straightforward material balance 

calculations. It would .generally not be necessary to require continuous emission 

monitors for such a situation, unless other factors were a concern. However, if a 

process has emissions ofpollutant(s) that cannot be predicted or calculated in a 
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straightforward way, continuous emission monitoring or continuous emission 

parameter monitoring is more likely to be required, so that compliance with the 

permit can be confirmed. No change was made in response to this comment. 

Pantex asked, with respect to the terms of proposed §116.715(c)(s)(B), whether the commission 

proposes incorporation by reference (to the permit application), or whether the commission 

extracts the methodologies from the application and incorporates them into the permit. 

In many cases, the TCEQ will reference standardized methods (such as those used 

to determine emissions from tanks or loading). In other cases, the permit may 

specify how sample data is to be used to estimate actual emissions, such as for 

cooling water. The permit application may be referenced in a permit condition, 

but it is unlikely that complex calculation methods would be reproduced in their 

entirety in the permit. In addition, §u6.u6(a) and §u6.715(c)(8) provide that the 

conditions upon which a permit is issued include the representations with regard 

to construction plans and operation procedures in an application for a permit, as 

well as any general and special conditions attached to the permit. No change was 

made in response to this comment. 

Pantex commented that proposed §116.715(c)(s)(B),(d)(1), and (2) appear to be redundant, or at 

least overlapping, regarding conditions that must be provided in the permit to be issued. Pantex 

commented that the provisions should be combined. 
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No change was made in response to this comment. Section u6.715(c)(5)(B) is 

intended to ensure that, in the general case, all flexible permits include 

appropriate calculation methods to determine emissions. Section 116.715(d)(1) 

and (2) contain more specific monitoring and calculation requirements that only 

apply to facilities that are subject to an emission cap. "While these rules may 

appear to be overlapping, the commission has purposely identified which 

conditions will be applicable in every permit in §116.715(c), and which conditions 

will be required for facilities subject to caps in a flexible permit. The commission 

has determined that this organization makes this sufficiently clear. 

EIP recommended that proposed §116.715(c)(8) regarding application representations should 

explicitly say that a violation of a condition on which a permit was issued is a permit violation. 

EIP expressed concern that the term "operation procedures" does not have a sufficiently agreedupon connotation. EIP suggested that providing examples (e.g., design heat rate or average 

fluid residence time or tons per hour throughput) would help clarify the term. 

The commission has rephrased §116.715(c)(8) to state that noncompliance with 

permit representations constitutes noncompliance with the permit. The term 

"operation procedures" has not been changed, as it has been used for many years 

in Chapter 116 rule language concerning permit representations, and the 

commission is not aware of any difficulties with the terminology. 
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TCC, TIP, and TxOGA opposed the proposed reporting requirements in §n6.715(c)(12)(A)(i). 

TCC stated that the flexible permit program is a minor NSR program, and TCC stated that the 

burden of the reporting requirements is not justified for a minor NSR program. TIP and TxOGA 

stated that the reporting requirements were duplicative of other rules such as the Federal 

Operating Permits Program and Chapter 101, and were excessive and unduly burdensome. TCC 

stated that a requirement to keep records sufficient to show compliance is all that should be 

necessary. 

No changes were made in response to this comment. The commission has 

determined that the reporting requirements are necessary as part of the changes 

needed to obtain EPA approval for the flexible permits program. The EPA's 

notices relating to disapproval of the program specifically referred to what it 

perceived as a lack of documentation and enforceability with respect to emission 

caps. The requirement for semiannual reporting will ensure that the owner or 

operator is attentive to how changes at the site may affect compliance with the 

emission cap, and ensures that the commission, and by extension the public, can 

readily determine whether or not the permit holder is maintaining compliance 

with the emission cap. 

Pantex and TCC expressed concern relating to the requirement for "all data" in 

§116.715(c)(12)(A)(i)(IV). Pantex and TCC stated that a literal reading of the requirement could 
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require a permittee to provide all quality assurance and quality control data for each source and 

parameter monitored, which could represent an immense and unwieldy amount of data. Pantex 

provided an example of a boiler that could have four or more parameters monitored; if the 

system maintains data points for every 15 minutes, this would be 11,520 data points for a 30-day 

month. This does not include the quality assurance and quality control span and zero-span 

checks that might be performed by a continuously monitored system. Pantex noted that while 

this language in §116.715(c)(12)(A)(i)(IV) replicates language in Chapter 116, Subchapter C, 

Plant-Wide Applicability Limits, literal compliance would inundate the TCEQ with detailed 

information that might never be reviewed, and the data could be provided in a format that the 

TCEQ might not be able to review. Pantex recommended that the term be replaced with "all 

pertinent data", "all data sufficient to demonstrate compliance," or a requirement that each 

permit provide case-by-case specification of data to be submitted. 

The commission concurs with the commenters' recommendation and reasoning to 

use more specific terminology in the cited rule, and has therefore rephrased this 

requirement so that the permit holder is only required to submit such data as is 

necessary to demonstrate compliance. 

TCC, TIP and TxOGA commented that the term "monitoring system" as used in 

§116.715{c)(12)(A)(i)(VII) is not defined. TCC stated that there should be more clarification of 

this term. TIP and TxOGA stated the term could be interpreted to mean equipment such as fuel 

flow meters or hydrogen sulfide analyzers as they are used to calculate actual emissions. 
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In §u6.715(c)(12)(A)(i)(VII), the term "monitoring system" is intended to mean 

any device, system, or method that is used to determine compliance with an 

emission cap, as described under §u6.715(d)(2)(A)- (D). The monitoring system 

could be a CEMS, PEMS, or a system that uses emission factors or mass balance 

calculations to determine emissions. The term is meant to encompass any systems 

providing an input into the emission rate determination. If equipment such as fuel 

flow meters or hydrogen sulfide analyzers are used as the basis for verifying 

compliance with the emission cap, then that equipment would be included in this 

requirement. The commission has revised the rule language to clarify that the 

term "monitoring system" as used in this rule applies only to systems that are used 

in determining compliance with the emission cap or any individual emission limit 

of the permit. 

Pantex and TCC commented that proposed §116.715(c)(12)(A)(i)(VIII) referred to §116.716(e)(1), 

but there is no §116. 716( e)(l) in the newly formatted regulations. Pantex and TCC suggested 

that the reference was meant to be §116.716(d)(1). 

Pantex and TCC are correct that the reference to §u6.716(e)(1) is an error. The 

citation has been corrected to refer to §u6.716(:Q(1). 
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Pantex, TIP, and TxOGAcommented that §116.716(d)(1) refers to a shutdown lasting six 

months, while §116.715(c)(12)(A)(i)(VIII) refers to a one-week shutdown. The United States 

Department of Energy/National Nuclear Security Administration recommended use of a sixmonth time frame for adjusting emission caps for shutdown facilities. TIP and TxOGA opposed 

the proposed changes to the existing rule concerning shutdowns, and stated that this aspect of 

the rule was not an EPA approval issue and the existing rule should be retained. 

The reference to a one-week shutdown period in §u6.715(c)(12)(A)(i)(VIII) is an 

error and has been corrected. The commission has maintained the proposed sixmonth timeframe for the adjustment of emission caps due to the shutdown of cap 

facilities. The six-month timeframe allows for a reasonable degree of operational 

flexibility, while ensuring the maintenance of appropriate emission controls on 

facilities subject to an emission cap. 

Pantex recommended that the term "shut down" as used in §116.715(c)(12)(A)(i)(VIII) should be 

clarified. TIP and TxOGA also noted that the term "shut down" was not defined and could be 

read to include turnarounds and other routine maintenance activities. Pantex gave an example 

of a facility that produces products on a batch basis, where some units may be used to produce a 

specific product once annually or biennially. In this example, the unit has not been "shut down" 

as inferred by the use of the term nor to allow additional capacity to another unit. Pantex 

further stated that frequent adjustment of an emission cap due to temporary pauses in 

operation, or for units that are designed and managed on a campaign basis, may pose a 
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significant opportunity for permittees to inadvertently find themselves in violation, if only 

administratively. Pantex recommended that the term "shut down" in this context be applied 

only in regard to continuously operated units. 

No change was made in response to this comment. The term "shut down" as used 

in the proposed rule is not formally defined, but generally means the cessation of 

production or operation of a facility so that it is in an idle state and has no 

potential for emissions to the atmosphere. TCEQ uses the term "shutdown" in 

several different rules without an explicit definition, and the term is sufficiently 

clear within the context of the rules and the general understanding of the term. 

For Pantex's example of a batch facility that only operates one or two times in a 

given year, the TCEQ would consider that facility to be shut down when it is not in 

operation producing a product or otherwise performing its intended purpose, and 

it is also not producing air emissions. The commission does not concur that this 

requirement should only apply to continuously operated units, as other 

commission requirements relating to shutdowns (such as in Chapter 101, 

Subchapter F, Emissions Events and Scheduled Maintenance, Startup, and 

Shutdown Activities) do not distinguish between batch and continuous operation. 

TCC, TIP, and TxOGA commented that the language in proposed §n6.715(c)(12)(B) could 

potentially lead to a permit exceedance. TCC recommended that in those instances where there 

is an absence of monitoring data, facilities be allowed to utilize data substitutions rather than be 
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required to use maximum potential emissions. TCC stated that Chapters 115 and 117 both 

provide for data substitution to address missing monitoring data. TIP and TxOGA commented 

that TCEQ should allow permit holders to use good engineering practices to address any 

absence of monitoring data. TCC also stated that facilities should be able to use an alternative 

method for determining emissions at a later point and not have to have that designated at the 

time the permit is written. 

No change was made in response to this comment. During periods when 

monitoring data is not available, there is typically not enough information to 

determine the actual emission rate from the facility. During these periods, it is 

conservative to assume maximum emission rates unless another method has been 

established in the permit. The rule does not exclude permit holders from using 

another method to determine emissions, including methods based on good 

engineering practices, as long as the method is reviewed and approved in the 

permit. In order to provide maximum flexibility for choices in monitoring data i 

collection, the regulated entity is encouraged to apply and obtain alternative (data 

substitution) methods written into the permit. It is beyond the scope of this 

rulemaking to attempt to list all current and future approvable data substitution 

methods as long as the permit review process allows for future review and 

approvals. The commission respectfully disagrees that data substitution methods 

should be allowed without approval as evidenced by their inclusion as a permit 

term. 
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TIP and TxOGA commented that instead of a wholesale incorporation of federal PAL provisions 

into the flexible permit regulations, the commission should consider drawing from other 

sources, such as the Texas NOx and highly-reactive volatile organic compound (HRVOC) rules 

for provisions to address data issues. TIP and TxOGA stated that §117.340(c)(3) allows several 

methods that can be used as substitute emissions compliance data when NOx monitors are 

offline. TIP and TxOGA noted that the HRVOC rule allows data substitution at "§115.764." 

Although the Chapter 115 HRVOC cooling tower rule allows for specific data 

substitution techniques, it also provides for manual sampling as a backup to the 

required monitoring. The HRVOC cooling tower monitoring requirements are 

intended to apply to a specific type of source and specific pollutants. Similarly, the 

Chapter 117 NOx rules are tailored for specific combustion sources and a specific 

pollutant. The proposed emission cap monitoring requirements are intended to be 

sufficiently general so that they are appropriate for virtually any type of source. 

Flexible permit applicants who seek an alternate method of demonstrating 

compliance with an emission cap during periods of monitoring system downtime 

can propose a different method, as allowed for under §116.715(c)(12)(B). This 

could include the use of data substitution or other methods if approved by the 

executive director. No change was made in response to these comments. 

Pantex commented that the term "site generated test data" in §n6.715(c)(12)(C) is ambiguous. 

Pantex noted that it is common for TCEQ to require performance testing of a source to 
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demonstrate compliance with a permit. Pantex stated that if the intent of the TCEQ is to require 

performance testing of a source every five years, then the provision should state that the TCEQ 

will require the action in permits issued pursuant to Subchapter G. If not, then the TCEQ 

should define the term "site generated test data," and its expectations on what forms of 

"revalidation" will be considered as compliant. 

Site generated test data, as used in the cited rule, means any data obtained by 

completing stack testing or sampling of site facilities, which is used to determine 

emissions. An emission factor generated from the testing may then be used with 

an operating parameter that will be continuously monitored during subsequent 

operation to estimate emissions. An example of this would be the use of stack 

sampling to measure the NOx emission rate from a heater at known fuel firing 

rates, and determining an emission factor from the test data. The revalidation 

would require testing/sampling under conditions similar to those maintained in 

the original test, using TCEQ-approved testing or sampling methods. The 

commission has added language to clarify that if revalidation testing shows that 

emission factors have increased, the permit holder must obtain a permit alteration 

or amendment to adjust the factor and account for the increased emissions. 

EIP stated that the requirement in proposed §116.715(c)(12)(C) that revalidation of site 

generated test data must occur only every five years is too generous. EIP recommended that 

data be revalidated no less often than every three years, and if a year's results deviate more than 
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some percentage, such as 10percent, from the original data (i.e., the data on which the permit 

was based), then the revalidations should occur annually for a period of years. EIP also stated 

that there should be a reporting requirement (e.g., §116.715(c)(12)(D)), requiring the permit 

holder to promptly forward to TCEQ the results of testing at the site that is directly relevant to 

determining emission rates or the character of emissions for covered facilities. 

No change was made as a result of this comment. The proposed revalidation 

period of five years is consistent with, and derived from, federal regulations 

authorizing plant-wide applicability limits, which is conceptually similar to a 

flexible permit. The commission does not have sufficient justification to require 

all data to be subject to revalidation on a more frequent basis than these federal 

regulations; however, the rule does allow for a more stringent revalidation period 

on a case-by-case basis. The proposed rule requires that revalidation testing 

results be submitted to the executive director no later than three months after 

completion of such test, which is a reasonably limited period of time given that in 

many cases a substantial amount of analysis is needed to evaluate the test results 

and develop a report. 

TCC commented that with regard to proposed §116.715(c)(12)(C), emissions testing at every 

facility every five years is impractical and too costly. TCC stated that often a site will test one 

facility to establish representative emissions for all similar facilities at the site. TCC stated that a 

. requirement to retest all the facilities would be unduly burdensome and economically 
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unreasonable. TCC stated that TCEQ should take time, resources, and cost considerations into 

account with regard to the revalidation requirements. 

No changes were made in response to this comment. The commission does not 

agree that revalidation testing to confirm site-specific data every five years is 

unreasonable. This requirement is analogous to the revalidation requirements 

used under federal regulations relating to plant-wide applicability limits. The 

revalidation would require testing or sampling under conditions similar to those 

maintained in the original test. In those limited cases where it may be appropriate 

to sample one facility to establish representative emissions for similar facilities, 

the revalidation may be performed in a similar manner. Note that in cases such as 

this, it is likely that sampling would be required more often than every five years 

and would be rotated so that all facilities are sampled. 

Pantex asked, with respect to §116.715(d), if a permittee desires to change the methodology for 

calculating or measuring emissions, what would be the appropriate permit action, an alteration, 

or amendment. 

The commission understands that this comment is made regarding a desired 

change after a flexible permit is issued. If the change in methodology would result 

in a lower calculation or measurement of emissions, the change can usually be 

accomplished with a permit alteration. If the change would result in an increase in 
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emissions, the change would require a permit amendment. No change was made 

in response to this comment. 

EIP stated that the permit should specify which of the four monitoring options provided by 

proposed §116.715(d)(2) is used to determine the levels of emissions from each facility. 

The commission has revised the rule to require that the permit identify which of 

the four monitoring options under §u6.715(d)(2) is applicable to each facility. 

This change will help clarify applicable monitoring requirements for the permit 

holder and for the TCEQ or other air pollution control agencies with jurisdiction. 

TCC stated that it does not understand the need for §116.715(d)(2)(D)(i) and (ii), and 

encouraged TCEQ to remove those requirements. TCC stated that if emissions factors are 

suggested by the applicant, the permit engineer will determine the appropriate factor based on 

the degree of uncertainty or limitation of the suggested factor and set an emissions limit. TCC 

stated that the permit holder then must operate that facility below that emissions limit to be in 

compliance. TCC stated that there is no need to have an "operating range" specified in the 

permit. 

The commission has not changed the rule in response to this comment. Section 

u6.715(d)(2)(D)(i) allows for the permit to specify how an emission factor is to be 
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adjusted in order to account for uncertainty or other limitations in the 

development of the factor. It is important that the factor being used to determine 

the emissions is clearly indicated in the permit so that compliance with the 

emission limit, including supporting calculations, can be verified. Section 

u6.715(d)(2)(D)(ii) is necessary because there could be situations where an 

emission factor is only valid for a certain range of operating parameters, and it 

would not be appropriate for a facility to use an emission factor as a monitoring or 

compliance method in operational circumstances where the factor is not reliable. 

TIP and TxOGA commented on proposed §n6.715(d)(2)(D)(i) and (ii), stating that the 

provisions that required permit holders to "adjust emission factors to account for the degree of 

uncertainty or limitations in the factor's development," and operate in the determined range, are 

unworkable. TIP and TxOGA recommended that owners or operators identify what the 

appropriate emission factor will be with the TCEQ permit engineer, and then operate below the 

resulting emissions rate. 

The commission did not change the rule in response to this comment. Section 

u6.715(d) specifies requirements that must be implemented through the permit 

special conditions. Any potential uncertainties, limitations in development, and 

applicable ranges of proposed emission factors should be identified in the permit 

application. These should then be incorporated into the permit special conditions 

developed for the facility. 
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Pantex commented that the phrase ''significant facility as defined in §116.12 of this title," in 

proposed §116.715(d)(2)(D)(iii), introduces ambiguity as to the intent of the proposed 

regulation. From the context of §116.715(d)(2)(D)(iii), this proposed regulation is intended to be 

applicable to all sources applying for a permit under Chapter 116, Subchapter G, with or without 

a PAL permit. In §116.12are terms applicable to permit review for major source construction 

and major source modification in nonattainment areas. Pantex commented if 

§116.715(d)(2)(D)(iii) is applicable only to permit reviews for major source construction and 

major source modification in nonattainment areas, then it should be so stated in the text of 

§116. 715( d)(2)(D)(iii). 

In order to reduce confusion with respect to the definition of "significant facility" 

and the references to PAL requirements in the proposed rules, the commission has 

deleted the reference to this definition, and has revised the rule to directly refer to 

the significance levels for PSD or nonattainment review applicability, which are 

more relevant criteria for characterizing large facilities under NSR permits. The 

significant thresholds for nonattainment pollutants are contained in Table I of 

§u6.12(18)(A), and the significant thresholds for PSD pollutants are located in 40 

CFR §51.166(b)(23). 

Pantex commented that proposed §116.715(d)(2)(D)(iii) is applicable to any significant facility as 

defined in §116.12. Section 116.12(33) defines "significant facility" as "a facility that emits or has 
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the potential to emit a plant-wide applicability limit (PAL) pollutant in an amount that is equal 

to or greater than the significant level for that PAL pollutant." ·Pant ex stated that if 

§116.715(d)(2)(D)(iii) is intended to be applicable only to permits that also have a PAL, then it 

should be so stated in the text of §116.715(d)(2)(D)(iii). Pantex also stated that if 

§116.715(d)(2)(D)(iii) is intended to be applicable to all sources applying for a permit under 

Subchapter G with or without a PAL, the proposed regulations need to be reworded to make the 

intent of the regulation clear and unambiguous. Pantex stated that if the proposed regulation 

contains terms that need to be defined (i.e. "significant facility" and "significant level") those 

terms need to be defined in §116.10 or §116.13 without using the term PAL. 

The cited rule requirement, as proposed, is not intended to only apply to facilities 

that have a PAL. In order to reduce confusion with respect to the references to 

PAL requirements in the proposed rules, the commission has removed the term 

"significant facility" and has revised the rule to directly refer to the significance 

levels for PSD or nonattainment review applicability. The revised rule would apply 

to facilities with emissions (or potential to emit) exceeding the threshold levels 

specified in Table I of §u6.12(18)(A), or 40 CFR §51.166(b)(23), as applicable. 

Pantex commented on proposed §116.715(d)(2)(D)(iii), stating that the literal terms of this 

provision would require every valve, pump seal, vent of identical and like sources, relief valve, or 

other source to undergo performance testing, even though the emissions from these sources are 

well understood. Pantex noted that it is common for the TCEQ to require performance testing of 
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a source to demonstrate that the source meets emission rates stated in the permit. Pantex stated 

that when a permit is issued that does not require the performance testing of a source, by the 

issuance of the permit, the executive director has determined that performance testing is not 

required. Pantex recommended that §116.715(d)(2)(D)(iii) should be revised to read: "The 

owner or operator of a major facility as defined in §116.12(16) of this title that relies on an 

emission factor to calculate pollutant emissions shall conduct validation testing to determine a 

site-specific emission factor within six months of permit issuance or start of operations of the 

facility, whichever is later, as prescribed in the issued permit." 

As previously discussed, the commission has revised the rule to refer to facilities 

that emit, or have the potential to emit, the monitored pollutant in quantities that 

meet or exceed major NSR significance levels. None of the examples identified in 

this comment would be large enough to exceed the applicability criteria of the 

cited rule. The rule as proposed allows for the executive director to not require 

testing in appropriate circumstances. The permit conditions should specify where 

site generated test data is to be used as well as the frequency it is required to be 

obtained. 

TIP and TxOGA commented on proposed §116.715(d)(2)(D)(iii), which states that "owners or 

operators of a significant facility as defined in §116.12" using emission factors to monitor 

emissions "shall conducttesting to determine a site-specific emission factor within six months of 

permit issuance or start of operation of the facility, whichever is later, unless the executive 
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director determines that testing is not required." TIP and TxOGA stated that this requirement is 

unclear as to whether it applies only to facilities operating under a PAL permit, or if the 

definition of significant facility is meant to be applied to facilities that have the potential to emit 

pollutants that are regulated under a flexible permit emission cap. TIP and TxOGA also stated 

that the proposed rule is more stringent than the corresponding federal PAL rule, at 40 CFR 

§52.21(aa)(12)(vi)(C), which only requires site-specific testing of emission factors if it is 

"technically practicable." 

In response to this and other comments on this subject, the commission has 

removed the term "significant facility" from the rule and has revised the rule to 

directly refer to the significance levels for PSD or nonattainment review 

applicability. The requirement in §116.715(d)(2)(D)(iii) does not depend on the 

applicability of PAL to the facility. The rule as proposed already allows the 

executive director the authority to not require testing. This includes situations 

where the executive director determines that testing would not be technically 

practicable. 

TCC, TIP, and TxOGA expressed concerns with §116.715(d)(3)(A)- (B). TCC stated that having 

the executive director establish default values for determining compliance with the emissions 

cap based on the highest potential emissions is all that is needed when a correlation between 

monitored parameters and the pollution emissions rate at all operating points of the facility 
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cannot be demonstrated. TCC, TIP, and TxOGA suggested that subparagraph (B) is unnecessary 

and should be removed from the rule language. 

No changes were made in response to this comment. "While its use is likely to be 

infrequent, there may be circumstances under which it is not possible to identify 

or agree upon a value based on the highest potential emissions. In these cases, 

limiting operation of the facility pursuant to §u6.715(d)(3)(B) may be appropriate. 

These issues would be addressed in the development of a draft permit. 

EIP recommended revising proposed §116.715(f) to make the "approval" requirement a 

mandatory condition of flexible permits. EIP stated that there should be a non-discretionary 

check on the impact of standard permit and permit by rule emission increases at sites where 

some or all facilities are covered by a flexible permit. EIP also stated that the phrase "significant 

impact on the air environment" is not a conventional term of art, so it should be defined. 

The commission has not changed the rule in response to this comment. Standard 

permits employ BACT and are carefully reviewed for impacts during development 

of the standard permit. In addition, standard permits have restrictions, where 

appropriate, on the use of the standard permit in combination with other types of 

authorization, when necessary to ensure protection of human health and the 

environment. Permits by rule authorize insignificant emission increases. It is not 

reasonable to require all flexible permit holders to obtain written approval in 
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advance of claiming or registering an applicable standard permit or permit by 

rule, nor is there any such requirement in the commission's existing SIP-approved 

minor NSR rules. The proposed language allows the executive director sufficient 

discretion to restrict the use of standard permits and permits by rule in those 

situations where special attention to small emission increases is warranted. With 

respect to the commenter's concern over the phrase "significant impact on the air 

environment", this text has been used for many years in the SIP-approved rules 

supporting Subchapter B NSR permits. The commission declines to adopt a 

definition because, as written, the commission has the ability to make case-by-case 

determinations of what is significant for any given situation. For example, the 

commission establishes "air pollutant watch list areas" where specific air quality 

concerns have been identified. If the application concerned one of those air 

contaminants in or near a current or historical area of concern, the commission 

has the ability to address that very specific concern. Further, the commission has 

not provided the public with an opportunity for notice and comment on such a 

definition, and therefore declines to do so at this time without following that 

procedure. 

Comments on §116.716 

EIP and Rep. Burnam commented that the EPA disapproved the original flexible permit 

program because it lacked replicable, specific, established implementation procedures for 

establishing the emission cap in a minor NSR flexible permit. EIP commented that the 

proposed §116.716 does not sufficiently change this situation. First, EIP stated that "like-kind" 
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facilities is not defined in the regulations, so it is an invitation for confusion and protracted 

litigation rather than provide for an enforceable cap. Second, EIP stated that proposed 

§116.716(a)(1) still allows site-wide caps, so it does not change anything. Rep. Burnam stated 

that the EPA requires the methodologies to be completely defined in the regulations so as to be 

independently replicable. Rep. Burnam stated that the proposed regulations do not provide 

enough specificity or information for agencies, courts, or the public to determine compliance. 

The commission does not agree that the proposed rules lack adequate procedures 

for establishing an emission cap. An emission cap is, by design, intended to be 

flexible in nature such that the selection of facilities participating in the cap, and 

the level of individual controls applied to those facilities, is not necessarily 

something that can be explicitly defined by rule. Even in cases of similar facilities 

seeking a flexible permit, the owners or operators of those facilities may have 

substantially different approaches or objectives for the emission cap. The flexible 

permits program is structured so that permit applicants can propose and use an 

emission cap that allows their facilities an appropriate degree of operational 

flexibility, while at the same time protecting human health and the environment, 

and maintaining the required level of emission control for sources under the cap. 

However, in response to this and other comments that suggested proposed 

§116.716(a)(1) could cause confusion or would not be effective, the commission has 

revised the language to eliminate the references to "like-kind" and "site-wide" 

emission caps. The revised rule, in §116.716(a), allows a permit applicant to 

request and the executive director to establish an emission cap which includes 
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every facility at the account, or to establish an emission cap for a designated group 

of facilities at an account. The revised language would maintain substantial 

flexibility for the construction of emission caps while using terminology that meets 

the regulatory purpose better than the use of the term "site." The commission 

respectfully disagrees with Rep. Burnam's comment that the rules do not provide 

enough specificity or information to allow a determination of compliance. As 

discussed elsewhere in more detail in this preamble, the rules require a 

comprehensive program ofMRR requirements to support enforcement of :flexible 

permits. 

Rep. Burnam commented on proposed §u6.716(a)(1), and stated that the proposed language 

was unclear. Rep. Burnam stated that a site-wide emission cap would presumably cover 

facilities that are not oflike-kind. Rep. Burnam also stated that even if a permit does not 

include a site-wide cap, it was still unclear as to what facilities are included under a given 

emission cap, or even which facilities are "like-kind". 

In response to this and other comments relating to the proposed language 

concerning site-wide emission caps and like-kind emission caps, the commission 

has revised the language for clarity, and has eliminated the references to "likekind" and "site-wide" emission caps. The final rule will not restrict emission caps 

to like-kind units and will not require emission caps to apply site-wide. The 

revised rule allows a permit applicant request and the executive director to 
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establish an emission cap which includes every facility at the account, or to 

establish an emission cap for a designated group of facilities at an account. The 

revised language maintains substantial flexibility for the construction of emission 

caps, while using more understandable terminology. An applicant can still request 

similar facilities at an account or all the facilities at an account be under a cap. 

The EPA commented that proposed §116. 716(a)(1) provides for a site-wide emission cap, and 

stated that the definition of site is too broad and provides broad discretion to delineate the 

boundaries of the emission cap. The EPA stated that under this definition, a site-wide emission 

cap could include all minor stationary sources and all minor modifications on a company's 

property. 

In response to this and other comments regarding proposed §116.716(a)(1), the 

commission has revised the language to eliminate the references to "like-kind" and 

"site-wide" emission caps. The revised rule allows for a permit applicant to 

request and the executive director to establish an emission cap, or an emission cap 

made up of a subset of facilities at an account. The term "account" is more 

appropriate for use in a minor NSR program such as Subchapter G than the 

proposed use of"site." The use of the word "site" in §116.716 could possibly lead to 

some confusion because it is a defined term in the commission's federal operating 

permit program in §122.1.0(27). The term "account" is the appropriate term to use 

because the flexible permit program is designed to work within the commission's 
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established, defined term "account." Account has been used in the flexible permit 

minor NSR context for purpose .of delineating the scope of the flexible permit 

authorization. As discussed elsewhere in this preamble, the use of "account" 

provides a boundary for what can be included. Therefore, there is no executive 

director discretion as to the boundaries of what facilities that may be included in a 

flexible permit. One of the objectives of the flexible permit program is to allow the 

permit applicant substantial flexibility in designating the facilities that are to be 

included in an emission cap or caps, subject, of course, to commission approval. 

This could range from a small number of facilities or all facilities at the account as 

long as it is practically enforceable. 

EIP stated that the cap calculation in proposed §n6.716(a)(2)(A) relies on the definition of 

"expected maximum capacity" in §116.13(4). EIP commented that this allows the capacity value 

to be less than the physical and operational design value, if the "planned operation" of the 

facility were less than its physical and operational design. EIP stated that if the cap is to be 

calculated taking into consideration the "planned operation" of a facility at less than its physical 

and operational design, then the lesser level of operation needs to be specified as a permit term. 

EIP stated that if that is not desirable, then the §116.13(4) definition needs to be amended to 

remove the "planned operation" relaxation. 

The commission has not changed the rule, now located in §n6.716(c)(1)(B), in 

response to this comment. The commenter has not explained why it is undesirable 
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to establish a lower emission limit in a flexible permit emission cap. One key 

intent of the flexible permit program is to allow for potential increases in 

operating rate with no increase in emissions (increased emission control) 

provided the increased operating rate does not trigger major NSR. 

EIP commented that TCEQ proposed §116.716(a)(2)(B) and (3) to address the EPA's concerns 

that the flexible permit program could allow a facility to avoid federally-required control 

technology. EIP stated that this section apparently means to discuss how the emission cap will 

be determined, even though it actually says it is determining "emissions." EIP stated that 

emissions have to be determined by monitoring, testing and recordkeeping. EIP further stated 

that even with the suggested correction, the section fails to achieve its objective because it does 

not discuss averaging times. EIP gave an example that if a BACT limit based on a one-hour 

averaging time is used to calculate an annual emission cap, the BACT limit is no longer being 

used because averaging time is a component of an emission limit. EIP stated that the proposed 

regulations do not require the emission cap to match the original emission limit and do not 

define the meaning of "short term." EIP also stated that any emission limit that is averaged into 

a cap with other emission limits from other emission points no longer exists if it is not applied to 

the specific unit for which it is meant. EIP stated that the same problems exist with proposed 

§u6.716(a)(3)'s attempt to address LAER. 

The commenter is correct that proposed §u6.716(a)(2)(B) and (3), the text of 

which is adopted as §u6.716(c)(1)(A) and (c)(2), are intended to describe how the 
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emission cap itself will initially be determined. This rule is not intended to 

describe how compliance with the emission cap will be determined, which will be 

with some combination of testing, monitoring, and calculations. Facility-specific 

maximum allowable emission rate limits only reflect BACT at the design operating 

condition. If it were relied upon to ensure BACT was in place, operation at rates 

less than the design capacity would not be required to meet BACT. Due to this, 

control technology requirements are usually captured in permit conditions and 

not the maximum allowable emission rates. This ensures that BACT is applied 

throughout the operating range and not only at the maximum operating rate. Due 

to this, BACT can be maintained for facilities in caps. For example, if a heater is 

authorized by a permit, BACT for NOx control may be identified as o.o1lb/MMBtu 

in the permit conditions. NOx emissions will be continuously monitored by a 

CEMS (also required by permit condition). If a heater is operated at 50 percent of 

its design firing rate, the permit condition will limit its NOx emissions to 50 

percent of the allowable emission rate. The allowable emission rate limit would 

allow NOx emissions of up to o.o2lb/MMBtu. No change was made in response to 

this comment. 

TIP and TxOGA opposed the requirement in proposed §116. 716( a)(3) that facilities subject to 

LAER review be included in separate emission caps. TIP and TxOGA stated that facilities 

subject to BACT, MACT, LAER, and other control levels are eligible for cap inclusion under the 

federal PAL rules. TIP and TxOGA stated that there seems to be no EPA-related rationale for 

segregating LAER-controlled facilities. 
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The commission has not changed the rule, the text of which is in adopted 

§116.716(c)(2), in response to this comment. The proposed rules are not intended 

to be the same as federal P AI. rules in all respects. Emission caps in flexible 

permits have little to do with whether subsequent modifications are subject to 

major NSR, while that is exactly the purpose ofP ALs. In most cases, when an 

emission cap is established, the permit holder has to either demonstrate that 

creating the emission cap does not result in a major modification (not subject to 

major NSR), or perform a major NSR review of all facilities subject to the cap per 

§§116.150, 116.151, or 116.160, as applicable. The representations made when 

requesting an emission cap typically allow for the greatest operational flexibility. 

This is not the case if facilities with differing control requirements are included in 

the same emission cap. This is most clearly illustrated with an example. Typically, 

if tanks are to be authorized under an emission cap, the application may state that 

throughput could be through a single tank or through all tanks (consistent with a 

demonstration of acceptable off-site impacts). This is not a concern because all 

tanks are reviewed for BACT. If a number of new tanks are to be added to that 

permit and a nonattainment review is required, the new tanks would be subject to 

LAER and the project emission increase must be offset. If the new tanks were to be 

added to the existing emission cap, the cap could not be increased or all existing 

tanks would be modified as well (if there are no other limits, they could now emit 

at the higher emission cap rate), and be subject to l..AER. If the new tanks were 

added to an unchanged emission cap, a subcap would be required for the new 
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tanks to limit the project increase to less than the magnitude of emission cap. This 

would be more restrictive than establishing a separate LAER cap. 

Pantex asked, with regard to proposed §116. 716(b ), if the permit has an emission cap for volatile 

organic compounds (VOC), and the application and permit identify all facilities which may emit 

VOC, whether that constitutes "inclusion" for all the chemicals that are considered VOC, and 

similarly, for all other "grouped" air contaminants (e.g., Ozone Depleting Substances, HAP). 

If a flexible permit has an emission cap for VOC (or some other grouped pollutant 

category), and the emission cap includes all facilities which may emit that category 

of pollutant, then that would constitute "inclusion" of all VOC. However, in order 

to protect human health, there may be individual air contaminants that, while 

being a subset ofVOC or other relevant contaminant category, have separate and 

distinct emission limits specified in the permit in addition to the emission cap for 

voc. 

EIP commented that the proposed requirements of §u6.716(c) may help make flexible permits 

more practically enforceable, and specifically noted support for the proposed deletion of the 

nine percent insignificant emission factor. 

The commission appreciates the support. 
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EIP commented on proposed §116. 716( d)(1) and stated that the proposed six-month adjustment 

period relating to shutdowns effectively weakens an emission rate based on BACT, LAER or 

other requirements, at least for six months, when a facility that was used to calculate the 

emission cap is shut down. TIP, TxOGA, and TCC also commented on proposed §116.716(d)(1), 

stating there are several situations where, due to maintenance or :;\ shutdown due to 

malfunction, weather events such as hurricanes, or market conditions, a facility subject to an 

emissions cap would be shut down for longer than six months. TIP, TxOGA, and TCC also 

stated that the EPA has not taken issue with the 12-month shutdown period in the existing rule, 

so the commission should leave it unchanged. TIP and TxOGA stated that the EPA's 

reactivation policy contains a two-year presumption. TCC also stated that the commission 

should clarify that increasing the emissions cap back to its original amount when a facility is 

started back up requires only a permit alteration. 

The commission has not changed the rule, located in adopted §116.716(0(1), in 

response to these comments. The commission has maintained the proposed sixmonth timeframe relating to the shutdown of cap facilities. The commission 

acknowledges and understands that some maintenance programs or natural 

events may result in extended shutdowns. A six-month timeframe provides an 

appropriate balance between operational flexibility and the need to ensure that 

emission caps reasonably correspond with actual conditions at the permitted 

facilities. TCC is correct that restoring a facility to operation under §116.716(0(1) 
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only requires a permit alteration, as long as the original emission cap amount is 

not exceeded. 

EIP commented that proposed §116. 716( d)(2) allows the addition of new facilities via a flexible 

permit amendment but does not require a major source applicability determination and does 

not state that the new facility must be a minor modification. 

No change was made in response to this comment. The addition of new facilities 

under adopted §u6.716(t)(2) requires a permit amendment, and such a permit 

amendment would require a major source applicability determination under 

§116.711(2)(H) and (I). The new facility does not necessarily have to be a minor 

modification so long as the project complies with all applicable major NSR 

requirements. 

TIP and TxOGA commented on proposed §116. 716( d)(3), stating that the revised language is at 

odds with the Texas statutory definition of "modification" and with federal NSR applicability 

requirements established in several rounds of rulemaking, most recently NSR reform. TIP and 

TxOGA stated that the provision is unnecessary and redundant to other provisions that require 

compliance with major NSR TIP and TxOGA objected to the establishment by rule of a specialpurpose set of major NSR applicability definitions and principles, divorced from the statutory 

language and established requirements. 
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The commission respectfully disagrees that the rule, as proposed, does not comply 

with Texas or federal law. However, changes have been made in response to this 

comment to ensure that the requirements are clearly stated. The term 

"modification" is typically used in relation to changes to facilities or sources; 

however, Texas Clean Air Act §382.003(9) provides that "a modification of an 

existing facility" does not include a physical change in, or change in the method of 

operation of, a facility where the change is within the scope of a flexible permit. 

However, this does not mean that a flexible permit cannot be modified. A flexible 

permit is subject to requirements or an amendment when there is an emissions 

increase of the cap. Adding a new facility, or making a physical or operational 

change to an existing facility that results in an increase of an emission cap and/ or 

an individual emission limitation, is considered to be a modification of a flexible 

permit, and an amendment application is required for consideration of a change 

to a flexible permit cap or individual emission limit. If there is a change to a 

facility but that change would not result in a change to the cap, then an alteration 

application is required. In addition, the state's definition of"modification" is 

much broader than the federal definition, and does not require any consideration 

of the status of the other facilities already under the cap. Therefore, because 

major NSR applicability must be determined first, the commission has revised and 

restructured the rule as adopted §116.716(0(3) to ensure that the major 

modification analysis is conducted first for applications to add a facility to or 

modify a facility under the cap. 
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With regard to the portion of the comment regarding compliance with major NSR 

requirements, the commission respectfully disagrees that proposed §116.716 

(d)(3), adopted as §u6.716(f)(3), is at odds with federal applicability 

requirements. As TIP acknowledges, the federal definition of "modification" 

applies when the analysis is conducted for major NSR applicability. The use of the 

phrase "shall be considered modified" may be misunderstood. In the analysis of 

whether a change is a major modification, the commission properly assumes that, 

unless there are certain restrictions (specifically, a physical modification and a 

separate permit limit or physical constraint on the facility's potential to emit), all 

facilities could have an increased potential to emit by the addition of a new facility 

or the modification of a facility within the emission cap. This analysis doesn't 

result in a modification, which may be the confusion. The use of the word 

"considered" indicates that no final decision has been made as to whether a 

modification has occurred; note that the rule text does not say "shall be deemed" 

or "are" modified. If those facilities are subject to major NSR requirements, then 

they become modified sources because they can emit more. 

Although the major NSR applicability text may be redundant of other changes 

made in this rulemaking, the commission has retained it in this paragraph to 

ensure that the procedures for cap adjustment are clearly listed. 
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EIP commented that the final sentence of proposed §116.716(d)(3) needs to be clarified. EIP 

asked, if a like-kind cap were being increased because of the modification of a covered unit (say, 

a physically-changed catalytic cracking unit), whether the rule would require that all other likekind facilities under the cap be treated as though they too were modified, unless each one of 

them were, in fact, unmodified and had a unit-specific limit or potential to emit constraint. EIP 

asked whether all or some covered units that are not subject to separate permit limits will 

experience a change in their methods of operation, so as to realize the benefits of the physicallymodified unit, but have not themselves had physical modifications, will those covered units be 

considered "not modified," even tho:ugh their potential to emit had earlier been based on their 

"planned operation," rather than on their physical design limits. EIP stated that the recalculation of the permit cap over time is important and difficult, and the rules for this need to 

be particularly clear. EIP suggested that at a minimum, the preamble language should include 

examples reflecting how the texts of proposed §§116.13, 116.711, and §116. 716( d) interact. 

As discussed elsewhere in this preamble, the commission has revised §116.716 so 

that references to like-kind and site-wide emission caps have been deleted. With 

this change, the rule does not differentiate between the type of units within an 

emission cap. Under adopted §116.716(0(3), if a change or changes to facilities 

within an emission cap potentially constitute a major modification, all facilities 

within the cap are to be considered modified, unless there has been no physical 

modification of that facility and a separate permit limit or physical constraint 

limits its potential to emit. As stated in the rule, if covered units that are not 

subject to separate permit limits (or physical constraint) will experience a change 
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in their method of operation, they will be considered to be modified for the 

purposes of the major modification determination. See also the discussion 

regarding how facilities that are subject to PSD or NNSR may be included in a cap 

in a flexible permit discussed earlier in this preamble. 

TIP and TxOGA commented on proposed §n6.716(e), which requires both long and short term 

emission limits in an emission cap. TIP and TxOGA stated that the commission should preserve 

the option for permit holders to establish annual emission caps, while retaining individual short 

term emission limits. TIP and TxOGA explained that this approach allows a facility to be subject 

to a year-long rolling emission cap, while also being subject to a short term emission limit that is 

specific to the facility. 

The commission has not changed the rule in response to this comment. Adopted 

§116.716(g), renumbered from §116.716(e), does not prohibit permit holders from 

using a short term facility-specific individual emission limit in combination with 

an annual emission cap. 

TxOGA opposed the proposed rule requiring both long term and short term emission caps for a 

facility. 
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One aspect of the existing flexible permitting program that the EPA specifically 

identified as a concern was the lack of short term emission limitations for facilities 

under an emission cap. The commission attempted to address this in the proposed 

rule by stating that an emission cap must include long term and short term 

emission limits. However, the short term emission limitation may be in the form 

of a short term emission cap, or a short term individual emission limitation. No 

change was made in response to this comment. 

Comments on §116.717 

EIP comm~nted that the proposed rule should clarify that a delay in the implementation of 

required emission controls is a relaxation of emission controls; EIP stated that the "alteration" 

language in proposed §116. 717 might be read to imply that delays in required emission controls 

may be allowed by permit alteration. 

The commission agrees with the commenter that a delay in the implementation of 

permit-required controls would generally be considered a relaxation of emission 

controls, and would therefore require a permit amendment, not an alteration. 

However, there may be other circumstances involving changes to the control 

schedule or other details relating to the required controls in which a permit 

alteration would be all that is required. The commission will maintain the 

proposed language to account for both possibilities. 
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TCC, TIP, and TxOGA commented on proposed §116. 717, relating to the implementation 

schedule for controls. TCC stated that there are situations where the proposed rule would be 

problematic. TCC gave an example of a situation where a permit amendment for a phased 

construction project is issued, and the equipment is modified in sequential process and brought 

online in a phased manner over time. TCC and TIP stated that some project sequences may 

dictate that the under-controlled device come back online before the over-controlled device is 

brought back online. Therefore, TCC, TIP, and TxOGA stated that the implementation schedule 

must allow for phasing of emission controls. 

If a minor project involves existing facilities, emission controls must be 

implemented such that modified facilities are not, on average, uncontrolled upon 

startup. It must be emphasized that the controls on modified facilities must 

always meet or exceed BACf, on average, and no backsliding of existing controls is 

authorized. If a project is subject to major NSR review, all new and modified 

facilities must have BACT or LAER, as applicable. The permit applicant should 

work with the permit engineer to develop permit conditions that allow the desired 

flexibility while meeting applicable requirements for controls. No change was 

made in response to these comments. 

Comments on §116.718 

EIP commented that proposed §u6.718(b) attempts to rely on existing §116.12 and §116.121, but 

the relevant parts of those regulations are not SIP-approved. The EPA will have to rely on the 
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SIP-approved version of these rules, which are not adequate for determining whether a major 

modification has occurred. 

The commission has proposed some amendments to §116.12, and has proposed 

§116.121 be repealed and the text moved to a new §116.127. If the amendments are 

adopted by the commission, those sections will be presented to the EPA as 

revisions to the SIP. The commission respectfully disagrees that its rules are 

inadequate to determine whether a major modification has occurred. No change 

was made in response to this comment. 

TIP and TxOGA stated that it is strongly opposed to the proposed revisions in §u6.718(b). TIP 

and TxOGA stated that major NSR applicability principles are well established in rules and 

guidance, and the proposed special-purpose rules in this provision are at odds with those 

requirements. In particular, TIP and TxOGA referred to the language that stated that " ... the 

potential to emit shall be considered as the proposed emissions cap unless a separate permit 

limit or physical constraint limits the facility's potential to emit .... " TIP and TxOGA stated that 

this language was unclear and could be read to mean that each facility must have a physical 

constraint in order to avoid having a physical or operational change attributed to it with the 

potential to emit of one facility being set as the potential to emit of the entire emissions cap. TIP 

and TxOGA stated that the proposed language was inconsistent with the requirements and 

guidance related to physical or operational changes triggering major NSR. 
Texas Commission on Environmental Quality Page 109 

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The commission made no change in response to this comment. The commission 

respectfully disagrees with the assertion that this language is unclear and 

inconsistent with requirements and guidance to determine the applicability of 

major NSR. If there is not a permit limit or physical constraint limiting the 

potential to emit for a new or modified facility, it may emit as much as the cap 

allows. This is explained in the Federal New Source Review Permits Applicability 

Determination guidance document available on the TCEQ Air Permits Division 

web site, in which Example 3 states: "If the emission cap is increased, all the tanks 

under the cap are modified because they can all now emit up to •.. the cap limit •• , 

unless there are other operational limits in the permit conditions that would 

prevent them from emitting at that rate." 

EIP commented that the program fails to ensure that minor sources will not cause or contribute 

to a violation of NAAQS or increment in Texas or other states. EIP explained that proposed 

§n6.718(c) lacks a requirement that minor sources demonstrate that they will not cause or 

contribute to a violation ofNAAQS. EIP stated that proposed §u6.718(c) only requires a source 

to submit its air quality analysis if off-site ambient concentrations may be greater than de 

minimis. EIP and Rep. Burnam commented that this proposed rule does not define de minimis, 

nor does Texas have a SIP-approved definition of de minimis for ozone, particulate matter less 

than 2.5 micrometers (PM2.5), the new one-hour nitrogen dioxide (N02) primary NAAQS, or the 

new one-hour sulfur dioxide (S02) primary NAAQS. Rep. Burnam stated that the term "de 

minimis" is not an enforceable standard, and EIP stated that the proposed requirement is not 

enforceable as a practical matter. 
Texas Commission on Environmental Quality Page no 

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The commission respectfully disagrees with the commenter's assertion that the 

rule does not ensure that minor sources will not cause or contribute to a violation 

ofNAAQS. The flexible permit application requires, in §u6.711(2)(J), an analysis 

demonstrating that there will be no interference with attainment of maintenance 

of the NAAQS. Further, the commission specifically proposed, and has adopted 

§116.718(c), which includes this type of analysis for the types of increases covered 

by this section. The review will also ensure that there is no violation of any control 

strategy to ensure that the permits will comply with the SIP and the requirements 

of the FCAA. The commission has revised the recordkeeping requirements to 

ensure that permit holders maintain records of any air quality analyses required 

by §u6.718(c). Further, the term "de minimis impact" is defined in §101.1, and this 

definition is applicable to Chapter 116. The commission notes that the EPA has not 

established de minimis values for ozone, PM2.5 , the new one-hour N02 primary 

NAAQS, or the new one-hour S02 primary NAAQS. 

EIP stated that proposed §116.718(c) should make an increase in off-site emission impacts, not 

an increase in facility emissions, the trigger for NAAQS impact modeling. EIP stated that 

especially for the new one-hour N02 standard, the locations within a site from which emissions 

originate can impact off-site NAAQS attainment, even in the absence of an overall increase in 

site criteria pollutant emissions. 
Texas Commission on Environmental Qu,ality Page 111 

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The commission concurs with the comment that the specific location within a site 

from which emissions are released can influence off-site NAAQS attainment, even 

in cases where the overall site or cap emissions do not increase. However, it is not 

practical or economically reasonable to require a detailed impacts analysis for 

every change under a flexible permit. Using ambient impacts as the criteria or 

trigger for additional modeling would be substantially more complex than using 

an increase in emissions as the criteria. The commission has revised §u6.718(c) to 

require that the permit holder must conduct an air quality analysis for any 

' ' 

operational or physical change at facilities covered under a flexible permit, if the 

change may result in an increase in the emission rate from any facility under the 

flexible permit. This requirement would apply even if there are contemporaneous 

decreases in emissions at other facilities authorized by the flexible permit. 

EIP commented that the proposed rules lack agency or public review for any analysis that an 

applicant believes shows impacts below the de minimis level. EIP commented that permit 

applicants' ambient impacts analysis routinely contain errors. EIP stated that without combined 

public and regulatory agency review, it will not be possible to determine if the applicant has 

validly concluded that sources will only cause de minimis ambient impacts. 

The commission has revised the rule to specify that permit holders are required to 

maintain records of any air quality analyses required under §116.718( c). These 

records are to be made available upon request to the TCEQ or to any local air 
Texas Commission on Environmental Quality Page 112 

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pollution control agency with jurisdiction. Upon request, the commission shall 

make any such records available to the public in a timely manner. 

EIP commented that the variation or relocation of emissions under a flexible permit can result 

in sources creating or contributing to NAAQS or increment violations. EIP gave an example 

where emissions were increased at a source with a short stack located near the fenceline, and 

decreased at a source with a tall stack located farther from the fenceline. EIP noted that this 

could substantially change the impacts from the site, and could result in NAAQS or increment 

exceedances. 

The commission acknowledges that the impacts of a source can vary dramatically 

depending on the location and characteristics of the emission point(s). However, 

the air quality analysis impacts review for a flexible permit should take into 

account any reasonable possibility that emissions from the sources under an 

emissions cap may vary from source to source. The impacts review is based on 

conservative assumptions that make it unlikely that the facility would interfere 

with the NAAQS or other standards or criteria. Further, §116.718(c) requires that 

the permit holder perform an air quality analysis in such a case and, depending on 

the results, maintain records of the analysis or submit it to the TCEQ for review. 

The commission has slightly revised §u6.718(c) to clarify that the air quality 

analysis is required for any change that results in an emission increase at any 

existing facility, regardless of location. Finally, depending on the details, such a 
Texas Commission on Environmental Quality Page 113 

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change could be considered a variation from a representation in a flexible permit 

application, requiring an alteration request be submitted to TCEQ and 

demonstration of compliance with §116.711. 

Comments on §116.721 

EIP commented on proposed §116.721(a), which defines "a significant increase in emissions" as 

a trigger for the requirement of a permit amendment. EIP stated that this phrase needs to be 

defined, or there needs to be a reference to a definition stated elsewhere. EIP also stated that 

the phrase should clearly refer to actual, as opposed to allowable, emissions. EIP commented 

that the trigger should specify that the determination of an emissions increase be a 

determination based on actual typical short term or typical annual emissions. EIP 

recommended that the phrase be restated as: "a significant increase in actual emissions under 

any typical short term or annual operating conditions." 

The commission has not changed the rule in response to this comment. In 

§u6.721(a), the phrase "a significant increase in emissions" means an increase 

that is not insignificant as determined under §116.718. Any increase that fails to 

meet the criteria of §116.718(a) or (b) is a significant emission increase. When 

determining whether an emission increase is significant or insignificant, the 

increased actual emissions are compared to the allowable emissions under the 

applicable emission cap or individual emission limitation. The commission 
Texas Commission on Environmental Quality Page 114 

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declines to use the language suggested by the commenter because the existing 

terminology is well understood and sufficient. 

EIP commented that the proposed rules suffer from persistent problems regarding permit 

alterations. EIP stated that proposed §116.740(a) does not require public notice and comment 

on flexible permit alterations. EIP stated that permit alterations have been widely abused by 

applicants seeking to make modifications, emissions increases, or removing previously 

enforceable important application representations. EIP stated that TCEQ has routinely allowed 

permit alterations when emissions increases are expected as long as emissions are not expected 

to exceed allowable limits. EIP also stated that TCEQ has routinely granted permit alterations 

when emissions could increase, on the theory that emissions will not, under all operating 

scenarios, increase. EIP stated that TCEQ has routinely allowed permit alterations that would 

never be allowed under federal rules or longstanding EPA policies. EIP stated that TCEQ allows 

permit alterations to remove existing operational restraints such as increasing hours of 

operation, removing throughput or heat input limitations, or increasing emissions so long as 

there is no increase in allowables. EIP stated that for these reasons, the commenters oppose 

alterations to flexible permits when the alteration lacks public notice or opportunity for 

comment. 

Section 116.721(b) requires a flexible permit alteration for any variation from a 

representation in a flexible permit application or a general or special provision of 

a flexible permit that does not require a flexible permit amendment. This 
Texas Commission on Environmental Quality Page 115 

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requirement precludes the use of alterations for changes that would change the 

method of control or character of emissions, would relax emission controls, would 

add a new facility or facilities, would result in a significant increase in emissions, 

or would constitute a major modification as defined by §116.12. Note that in the 

case oftlexible permits, it would be possible to make changes through alteration 

that may increase actual emissions as long as the change did not result in 

emissions greater than any emission cap or limit, did not involve construction of a 

new facility, did not involve a change in method of control, or a relaxation of 

control. With the exception of this, the commission respectfully disagrees with 

EIP's characterizations of past permit changes made through permit alteration, 

made without any specific supporting examples or data, as abuses of the rules or 

process. EIP's comments fail to acknowledge that the commission's minor NSR 

SIP-approved program is an allowable-based program. 

The commission respectfully disagrees that the alteration rule in Subchapter B 

allows changes that would never be allowed under federal rules or longstanding 

EPA policies. This is because the EPA's rules prescribe requirements for major 

stationary sources and major modifications, for which the alteration rule does not 

violate. The EPA's very broad and general rules applicable to minor NSR do not 

prohibit the types of permit actions that are covered by the commission's 

alteration rule. Furthermore, the commission's alteration rule, §116.116{c), is an 

approved part of the Texas SIP. Finally, as discussed elsewhere in this preamble, 

the commission recently amended its public participation rules, and alterations 
Texas Commission on Environmental Quality Page 116 

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for flexible permits or for permits issued under Chapter 116, Subchapter B are not 

subject to the public notice requirements in Chapter 39 o(the commission's rules. 

No change was made in response to this comment. 

EIP stated that the language of §116. 721( c) plainly supports the EPA's concern that a flexible 

permit can allow changes to SIP permit terms such as limits on throughput and fuel type. 

Therefore, the proposed flexible permit program continues to fail to meet applicable 

requirements. 

If a SIP permit contains conditions that restrict throughput or fuel type, those 

conditions would be carried through into the flexible permit if justified, and under 

§n6.721(c), a permit amendment would be required to make a change that 

conflicts with an existing permit condition. No change was made in response to 

this comment. 

Comments on §116.765 

TIP and TxOGA expressed support for proposed §116. 765, which provides a delayed effective 

date for the proposed rules; however, TIP and TxOGA recommended deleting the portion of the 

rule that would establish December 1, 2012 as an earlier effective date. TIP and TxOGA's 

recommended change would mean that the rules would only go into effect after final approval by 

the EPA. 
Texas Commission on Environmental Quality Page 117 

Chapter 116- Control of Air Pollution by Permits for New Construction or Modification 

Rule Project No. 2o1o-oo7-116-PR 

The commission agrees with this comment and has revised the rule as suggested 

by the commenters to eliminate the alternate compliance date of December 1, 

2012. Under the requirements of the FCAA, the EPA has 18 months from receipt of 

the SIP submittal to take final action on this rulemaking. Allowing the EPA its 

fully allotted time to act, including publication of its f'mal rulemaking and effective 

date 30 - 6o days later would be close to December 1, 2012. Until the EPA acts, the 

rule provides that the current rules remain in effect. If the commission is · 

successful of its challenge of the EPA's disapproval of the existing rules in 

Subchapter G and requests the EPA tore-review them, then the rules will be 

available for the EPA's review. If the EPA approves the rules, then the effective 

date will be timely for applicants to use these rules for permit actions. 
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Texas Commission on Environmental Quality Page 118 

Chapter 116 -Control of Air Pollution by Permits for New Construction or Modification 

Rule Project No. 2010-007-116-PR 

SUBCHAPTERA: DEFINITIONS 

§116.13 

STATUTORY AUTHORITY 

The amendment is adopted under Texas Water Code, §5.102, concerning General Powers, that 

provides the commission with the general powers to carry out its duties under the Texas Water 

Code; §5.103, concerning Rules, and §5.105, concerning General Policy, which authorize the 

commission to adopt rules necessary to carry out its powers and duties under the Texas Water 

Code; and under Texas Health and Safety Code (THSC), §382.017, concerning Rules, which 

authorizes the commission to adopt rules consistent with the policy and purposes of the Texas 

Clean Air Act. The amendment is also adopted under THSC, §382.002, concerning Policy and 

Purpose, which establishes the commission purpose to safeguard the state's air resources, 

consistent with the protection of public health, general welfare, and physical property; 

§382.003, concerning Definitions; §382.011, concerning General Powers and Duties, which 

authorizes the commission to control the quality of the state's air; §382.012, concerning State 

Air Control Plan, which authorizes the commission to prepare and develop a general, 

comprehensive plan for the control of the state's air; §382.051, concerning Permitting Authority 

of Commission; Rules, which authorizes the commission to issue a permit by rule for types of 

facilities that will not significantly contribute air contaminants to the atmosphere; §382.0513, 

concerning Permit Conditions, which authorizes the commission to establish and enforce permit 

conditions; and §382.0514, concerning Sampling, Monitoring, and Certification. 
Texas Commission on Environmental Quality Page 119 

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This rulemaking implements THSC, §§382.002, 382.003, 382.011, 382.012, 382.051, 382.0513, 

and 382.0514. 

§116.13. Flexible Permit Definitions. 

The following words and terms, when used in this chapter, shall have the following 

meanings, unless the context clearly indicates otherwise. 

(1) Continuous emission monitoring system (CEMS)--All of the equipment that 

may be required to meet the data acquisition and availability requirements of Subchapter G of 

this chapter. to sample. condition (if applicable). analyze. and provide a record of emissions on a 

continuous basis. 

(2) Continuous parameter monitoring system (CPMS)--All of the equipment 

necessary to meet the data acquisition and availability requirements of Subchapter G of this 

chapter. to monitor process and control device operational parameters (for example. control 

device secondary voltages and electric currents) and other information (for example. gas flow 

rate. 02 or C02 concentrations). and to record average operational parameter value(s) on a 

continuous basis. 

f.3} [(1)JEmission cap--Emission limit for a specific air contaminant based on 

total emissions of that pollutant [adjusted by an insignificant emissions factor] from all facilities 

[sources] that are included in a flexible permit. 
Texas Commission on Environmental Quality Page 120 

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Rule Project No. 2010-007-116-'PR 

W [(2)] Expected maximum capacity--The maximum capacity of a facility 

according to its physical and operational design and planned operation . 

.(s). [(3)] Individual emission limitation--Emission limit for a specific air 

contaminant [not covered by an emission cap] for an individual facility [adjusted by an 

insignificant emissions factor]. 

(6) Predictive emissions monitoring system CPEMS)--All of the equipment 

necessary to monitor process and control device operational parameters (for example. control 

device secondary voltages and electric currents) and other information (for example. gas flow 

rate. 02 or C02 concentrations). and calculate and record the mass emissions rate (for example. 

pounds per hour) on a continuous basis. 
Texas Commission on Environmental Quality Page 121 

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SUBCHAPTERG: FLEXIBLE PERMITS 

STATUTORY AUTHORITY 

The amendments are adopted under Texas Water Code, §5.102, concerning General Powers, 

that provides the commission with the general powers to carry out its duties under the Texas 

Water Code; §5.103, concerning Rules, §5.105, concerning General Policy, which authorize the 

commission to adopt rules necessary to carry out its powers and duties under the Texas Water 

Code; and §7.101, concerning Violation, which provides that a person may not violate a statute 

or rule under the commission's jurisdiction; and under Texas Health and Safety Code (THSC), 

§382.017, concerning Rules, which authorizes the commission to adopt rules consistent with the 

policy and purposes of the Texas Clean Air Act. The amendments are also adopted under THSC, 

§382.002, concerning Policy and Purpose, which establishes the commission purpose to 

safeguard the state's air resources, consistent with the protection of public health, general 

welfare, and physical property; §382.003, concerning Definitions; §382.011, concerning General 

Powers and Duties, which authorizes the commission to control the quality of the state's air; 

§382.012, concerning State Air Control Plan, which authorizes the commission to prepare and 

develop a general, comprehensive plan for the control of the state's air; §382.051, concerning 

Permitting Authority of Commission; Rules, which authorizes the commission to issue a permit 

by rule for types of facilities that will not significantly contribute air contaminants to the 

atmosphere; §381.0511, concerning Permit Consolidation and Amendment; §382.0512, 

concerning Modification of Existing Facility, which restricts what the commission may consider 
Texas Commission on Environmental Quality Page 122 

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in determining a facility modification; §382.0513, concerning Permit Conditions, which 

authorizes the commission to establish and enforce permit conditions; §382.0514, concerning 

Sampling, Monitoring, and Certification; §382.0515, concerning Application for Permit, 

§382.0517, concerning Determination of Administrative Completion of Application, §382.0518, 

concerning Preconstruction Permit, which authorizes the commission to require a permit before 

a facility is constructed or modified; §382.056, concerning Notice of Intent to Obtain Permit or 

Permit Review; Hearing; and §382.062, concerning Application, Permit, and Inspection Fees. 

This rulemaking implements THSC, §§382.002, 382.003, 382.011, 382.012, 382.051, 381.0511, 

382.0512; 382.0513, 382.0514, 382.0515, 382.0517, 382.0518, 382.056 and 382.062. 

§116.710. Applicability. 

(a) Flexible permit. A person may obtain a flexible permit which allows for physical or 

operational changes as provided by this subchapter as an alternative to obtaining a new source 

review permit under §116.110 of this title (relating to Applicability), or in lieu of amending an 

existing permit under §116.116 of this title (relating to Amendments and Alterations). A person 

may obtain a flexible permit under §116. 711 of this title (relating to Flexible Permit Application) 

for a facility, group of facilities, or account before any actual work is begun, provided however: 

(1) only one flexible permit may be issued for [at] an account [site]; 
Texas Commission on Environmental Quality Page 123 

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(2) modifications to existing facilities included in [covered by] a flexible permit 

may be authorized by [handled through] the amendment of an existing flexible permit; 

(3) [permitting of] a new facility may be authorized by [handled through] the 

amendment of a flexible permit; [and] 

(4) a flexible permit may not cover facilities [sources] at more than one account 

[site.]: and 

(5) a flexible permit application. review. and issued permit used to authorize any 

facility. group of facilities. aeeount. or any change to existing facilities l:llh:UccoiUlt that 

constitutes a new major stationary source or major modification as defined by §116.12 of this 

title (relating to Nonattainment and Prevention of Significant Deterioration Review Definitions), 

shall be completed in accordance with Subchapter B. Division 5 or 6 of this chapter (relating to 

Nonattainment Review Permits: and Prevention of Significant Deterioration Review. 

:iiclfl.~titll as applieable. No person shall use this subchapter to circumvent applicable 

requirements of Subchapter B. Division 5 or 6 of this chapter. 

(b) Change in ownership. The new owner of a facility, group of facilities, or account shall 

comply with §116.11oCe) [§116.11o(d)] of this title, provided however, that all facilities authorized 

[covered] by a flexible permit must change ownership at the same time and to the same person, 

or both the new owner and existing permit holder must obtain a permit alteration allocating the 
Texas Commission on Environmental Quality Page 124 

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emission caps or individual emission limitation prior to the transfer of the permit by the 

commission. After the sale of a facility, or facilities, but prior to the transfer of a permit 

requiring a permit alteration, the original permit holder remains responsible for ensuring 

compliance with the existing flexible permit and all rules and regulations of the commission. 

(c) Submittal under seal of Texas licensed professional engineer. All applications for a 

flexible permit or flexible permit amendment shall comply with §116.11o(f) [§116.11o(e)] of this 

title. 

(d) Responsibility for flexible permit application. The owner of the facility, group of 

facilities, or account or the operator of the facility, group of facilities, or account who is 

authorized to act for the owner is responsible for complying with this section, except as provided 

by subsection (b) of this section. 

§116.711. Flexible Permit Application. 

[Any application for a new flexible permit or flexible permit amendment must include a 

completed Form PI-1 General Application. The Form PI-1 must be signed by an authorized 

representative of the applicant. The Form PI-1 specifies additional support information which 

must be provided before the application is deemed complete.] In order to be granted a flexible 

permit or flexible permit amendment, the owner or operator of the proposed facility shall 

submit a permit application which must include: [information to the commission which 

demonstrates that all of the following are met.] 
Texas Commission on Environmental Quality Page 125 

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(1) a completed Form PI -1 General Application signed by an authorized 

representative of the applicant. All additional support information specified on the form must 

be provided before the application is complete; 

(2) information which demonstrates that emissions from the facility. including 

any associated dockside vessel emissions. meet all of the following: 

(A)[(1)] Protection of public health and welfare. 

ill The emissions from the proposed facility, group of facilities, or 

account as determined under §116. 716 of this title (relating to Emission Caps and Individual 

Emission Limitations), will comply with all applicable rules [and regulations] of the commission 

and with the intent of the TCAA, including protection of the health and physical property of the 

people. 

(ill In considering the issuance of a flexible permit for 

construction or modification of any facility, group of facilities, or account within 3,000 feet or 

less of an elementary, junior high/middle, or senior high school, the commission shall consider 

any possible adverse short-term or long-term side effects that an air contaminant or nuisance 

odor from the facility, group of facilities, or account may have on the individuals attending these 

school facilities. 
Texas Commission on Environmental Quality Page 126 

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.(ID[(2)] Measurement ofemissions. The proposed facility, group of 

facilities, or account will have provisions for measuring the emission of air contaminants as 

determined by the executive director. This may include the installation of sampling ports on 

exhaust stacks and construction of sampling platforms in accordance with guidelines in the 

"Texas Natural Resource Conservation Commission Sampling Procedures Manual." 

.(Ql[(3)] Best available control technology (BACT) . 

• All new facilities must [The proposed facility, group of 

facilities, or account will] utilize BACT [, with consideration given to the technical practicability 

and economic reasonableness of reducing or eliminating the emissions from the facility on a 

proposed facility, group of facilities, or account basis]. 

II Existing facilities Ill shall utilize BACT with 

consideration given to the technical practicability and economic reasonableness of reducing or 

eliminating the emissions from the faeility on a proposed facility or group of existing faeilities 

basis. Control technology lltatli~~genUl\l:il beyond BACT may be used on certain 

existing facilities to provide the emission reductions necessary to comply with this requirement 

on a group of existing facilities [or account] basis, provided however, that the existing level of 

control may not be lessened for any facility from itiiiiiiiiia1.1thorizatitl- [For new facilities 
Texas Commission on Environmental Quality Page 127 

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and proposed affected sources (as defined in §116.15(1) of this title (relating to Section 112(g) 

Definitions)) subject to Subchapter C of this chapter (relating to Hazardous Air Pollutants: 

Regulations Governing Constructed or Reconstructed Major Sources (FCAA, §112(g), 40 CFR 

Part 63)), the use of BACT shall be demonstrated for the individual facility or affected source.] 

(ii) For pollutants from new or modified facilities that constitute a 

new major stationary source or major modification as defined by §116.12 of this title (relating to 

Nonattainment and Prevention of Significant Deterioration Review Definitions). control 

technology shall be demonstrated as required by §§116.150. 116.151. or 116.160 of this title 

(relating to New Major Source or Major Modification in Ozone Nonattainment Areas: New 

Major Source or Major Modification in Nonattainment Area Other Than Ozone: and Prevention 

of Significant Deterioration Requirements. respectively). as applicable. for each new or modified 

facility. 

(iii) For new facilities and proposed affected sources (as defined in 

§116.15(1) of this title (relating to Section 112Cg) Definitions)) subject to Subchapter E of this 

chapter (relating to Hazardous Air Pollutants: Regulations Governing Constructed or 

Reconstructed Major Sources CFCAA. §112(g), 40 CFR Part 63)), the use of BACT shall be 

demonstrated for the individual facility or affected source. 

021 [(4)] New Source Performance Standards (NSPS). The emissions 

from each affected facility as defined in 40 Code of Federal Regulations ( CFR), Part 6o will meet 
Texas Commission on Environmental Quality Page 128 

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at least the requirements of any applicable NSPS as listed under Title 40 CFR Part 6o, 

promulgated by the EPA under authority granted under the FCAA, §111, as amended. 

00 [(5)] National Emission Standards for Hazardous Air Pollutants 

(NESHAPS). The emissions from each facility as defined in 40 CFR Part 61 will meet at least the 

requirements of any applicable NESHAPS, as listed under 40 CFR Part 61, promulgated by EPA 

under authority granted under the FCAA, §112, as amended. 

ffl [(6)] NESHAPS for source categories. The emissions from each 

affected facility shall meet at least the requirements of any applicable maximum achievable 

control technology (MACT} standard as listed under 40 CFR Part 63, promulgated by the EPA 

under FCAA, §112 or as listed under Chapter 113, Subchapter C of this title (relating to National 

Emissions Standards for Hazardous Air Pollutants for Source Categories (FCAA, §112, 40 CFR 

63)). 

fill [(7)] Performance demonstration. The proposed facility, group of 

facilities, or account will achieve the performance specified in the flexible permit application. 

The applicant may be required to submit additional engineering data after a flexible permit has 

been issued in order to demonstrate further that the proposed facility, group of facilities, or 

account will achieve the performance specified in the flexible permit. In addition, initial 

compliance testing with ongoing compliance determined through engineering calculations based 

on measured process variables, parametric or predictive monitoring, stack monitoring, or stack 

testing shall [may] be required as specified in each flexible permit. 
Texas Commission on Environmental Quality Page 129 

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lli.l [(8)] Nonattainment review. If the proposed facility, group of 

facilities, or account is located in a nonattainment area, each facility shall comply with all 

applicable requirements concerning nonattainment review in this chapter. Prior to the 

application of this subchapter to a proposed facility. group of facilities. or account: or any 

change at an existing facility. group of facilities. or account: a sepaFate 11 analysis shall be made 

for the project to determine the applicability or nonapplicability of federal Nonattainment New 

Source Review requirements. 

ill [(9)] Prevention of Significant Deterioration (PSD) review. If the 

proposed facility, group of facilities, or account is located in an attainment area, each facility 

shall comply with all applicable requirements in this chapter concerning PSD review. Prior to 

the application of this subchapter to a proposed facility. group of facilities. or account: or any 

change at an existing facility. group of facilities. or account: a sepaFate an; analysis shall be made 

for the project to determine the applicability or nonapplicability of federal PSD review. 

fJ1 [(10)] Air dispersion modeling or ambient monitoring. Any permit 

application for a new flexible permit. or permit amendment to increase a flexible permit 

emission cap or individual emission limitation. shall include an air quality analysis to 

demonstrate that the proposed action will not interfere with attainment and maintenance of the 

National Ambient Air Quality Standards. Computerized air dispersion modeling and/or 

ambient monitoring may be required by the commission's Air [New Source Review] Permits 

Division to determine the air quality impacts from the facility, group of facilities, or account. In 
Texas Commission on Environmental Quality Page 130 

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conducting a review ofa permit application for a shipbuilding or ship repair operation, the 

commission will not require and may not consider air dispersion modeling results predicting 

ambient concentrations of non-criteria air contaminants over coastal waters of the state. The 

commission shall determine compliance with non-criteria ambient air contaminant standards 

and guidelines at land-based off-property locations. 

00 [(11)] Federal standards of review for constructed or reconstructed 

major sources of hazardous air pollutants. If the proposed source is an affected source (as 

defined in §116.15(1) of this title), it shall comply with all applicable requirements under 

Subchapter .E. [C] of this chapter . 

.(JJ [(12)] Mass cap and trade allocations. If subject to Chapter 101, 

Subchapter H, Division 3 of this title (relating to Mass Emissions Cap and Trade Program) the 

proposed facility, group of facilities, or account must obtain allocations to operate. 

(M) [(13)] Application content. In addition to [any] other requirements of 

this chapter, the applicant shall: 

ill [(A)] identify each air contaminant for which an emission cap is 

desired; 

ilil [(B)] identify each facility to be included in the flexible permit; 
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(iii) [(C)] identify each source ofemissions to be included in the 

flexible permit and for each source of emissions identify the Emission Point Number (EPN) and 

the air contaminants emitted; 

Civ) [(D)] for each emission cap, identify all associated EPNs and 

facilities (including description. common name. and facility identification number) and provide 

emission rate calcUlations based on the expected maximum capacity and the proposed control 

technology; 

fy} [(E)] for each individual emission limitation, identify the EPN 

and provide emission rate calculations based on the expected maximum capacity and the 

proposed control technology;.[.] 

(vi) include calcUlations used to determine the controlled emission 

rates from each facility performed in accordance with TCEQ Air Permits Division guidance: and 

C vii) if the flexible permit application includes facilities currently 

authorized by a permit issued under Subchapter B of this chapter (relating to New Source 

Review Permits). the applicant shall identify any terms. conditions. and representations in the 

Subchapter B permit or permits which will be superseded by or incorporated into the flexible 

permit. The applicant shall include an analysis of how the conditions and control requirements 

of Subchapter B permits will be carried forward in the proposed flexible permit. 
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.(N} [(14)] Proposed control technology and compliance demonstration. 

The applicant shall specify the control technology proposed for each-titi:it [to meet the 

emission cap] and demonstrate compliance with all emission caps at expected maximum 

production capacity. 

§116.715. General and Special Conditions. 

(a) Flexible permits may contain general and special conditions. The holders of flexible 

permits shall comply with any and all such conditions. [Upon a specific finding by the executive 

director that an increase of a particular air contaminant could result in a significant impact on 

the air environment, or could cause the facility, group of facilities, or account to become subject 

to review under §116.150 and §116.151 and §§116.160 - 116.163 of this title (relating to 

Nonattainment Review or Prevention of Significant Deterioration Review) or Subchapter C of 

this chapter (relating to Hazardous Air Pollutants: Regulations Governing Constructed or 

Reconstructed Major Sources (FCAA, §112(g), 40 CFR Part 63)), the permit may include a 

special condition which requires the permittee to obtain written approval from the executive 

director before constructing a facility under a standard permit or a permit by rule under Chapter 

106 of this title (relating to Permits by Rule).] 

(b) A pollutant specific emission cap or [multiple emission caps and/or] individual 

emission limitations shall be established for each air contaminant for all facilities authorized by 

the flexible permit. A flexible permit may contain more than one emission cap for a specific air 

contaminant. The holder of a flexible permit shall comply with all flexible permit emission 
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cap(s) and individual emission limitations. An exceedance of the flexible permit emission cap(s) 

or individual emission limitations is a violation of the permit. 

(c) The following general conditions shall be applicable to every flexible permit. 

(1) Applicability. This section does not apply to physical or operational changes 

allowed without an amendment under §116. 721 of this title (relating to Amendments and 

Alterations). 

(2) Construction progress. The permit holder shall report the start of 

construction, construction interruptions exceeding 45 days, and completion of construction 

[shall be reported] to the appropriate regional office of the commission not later than 15 

working days after occurrence of the event. 

(3) Start-up notification. 

(A) The permit holder shall notify the appropriate regional office of the 

commission and any local program having jurisdiction [shall be notified] prior to the 

commencement of operations of the facilities authorized by the permit in such a manner that a 

representative of the commission may be present. 

(B) The permit holder shall provide a separate notification for the 

commencement of operations for each unit of phased construction. which may involve a series 
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of facilities commencing operations at different times [Phased construction, which may involve 

a series offacilities commencing operations at different times, shall provide separate 

notification for the commencement of operations for each facility]. 

(C) Prior to beginning operations of the facilities authorized by the 

permit, the permit holder shall identify to the Air Permits Division [Office of Permitting, 

Remediation, and Registration] the source or sources of allowances to be utilized for compliance 

with Chapter 101, Subchapter H, Division 3 of this title (relating to Mass Emissions Cap and 

Trade Program). 

(4) Sampling requirements. 

(A) If sampling [of stacks or process vents] is required, the flexible permit 

holder shall contact the commission's 'jji'j~ regional ofitce Offiee of Complianee and 

Enforeement prior to sampling to obtain the proper data forms and procedures. 

Oll All sampling and testing procedures must be approved by the 

executive director and coordinated with the appropriate regional office of the commission . 

.(Q The flexible permit holder is also responsible for providing sampling 

facilities and conducting the sampling operations or contracting with an independent sampling 

consultant. 
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(5) Monitoring. Calculations. and Equivalency of Methods. 

(A) Each flexible permit shall specify requirements for monitoring or 

demonstrating compliance with emission caps and individual emission limits in the flexible 

permit. 

(B) Each flexible permit shall specify methods for calculating annual and 

short term emissions for each pollutant for a given type of facility when continuous emission 

monitoring OF continuous operating parameter monitoring is not required to be used to monitor 

emissions for that type offaeility . 

.(Q} [It shall be the responsibility of the] The flexible permit holder must 

[to] demonstrate or otherwise justify the equivalency of emission control methods, sampling or 

other emission testing methods, and monitoring or calculation methods proposed as 

alternatives to methods indicated in the conditions of the flexible permit. Requests for 

alternative [Alternative] emission control. sampling. monitoring. or calculation methods [shall 

be applied for] must be submitted in writing for review and approval [and must be reviewed and 

approved] by the executive director prior to their use in fulfilling any requirements of the 

permit. 

(6) Recordkeeping. The permit holder shall: 
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(A) maintain a [A] copy of the flexible permit (and any permit 

applications associated with the flexible permit) along with information and data sufficient to 

demonstrate continuous compliance with the emission caps and individual emission limitations 

contained in the flexible permit [shall be maintained in a file at the plant site and made available 

at the request of personnel from the commission or any air pollution control program having 

jurisdiction. For facilities that normally operate unattended, this information shall be 

maintained at the nearest staffed location within Texas specified by the permit holder in the 

permit application. This information may include, but is not limited to, emission cap and 

individual emission limitation calculations based on a 12-month rolling basis and production 

records and operating hours. Additional recordkeeping requirements may be specified in 

special conditions attached to the flexible permit. Information in the file shall be retained for at 

least two years following the date that the information or data is obtained]. This information 

and data shall include. but is not limited to: 

(i) emission cap and individual emission limitation calculations 

based on a 12-month rolling basis: 

(ii) emission cap and individual emission limitation calculations 

corresponding to any short term emission limitation: arul 

(iii) Production records and operating hours~ 
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(B) keep all required records in a file at the plant site. If. however. the 

facility site normally operates unattended. records must be maintained at an office within Texas 

having day-to-day operational control of the facility site: 

(C) make the records available at the request of personnel from the 

commission or any local air pollution control agency having jurisdiction over the site. which. 

upon request. the commission shall make any such records of compliance available to the public 

in a timely manner: 

(D) comply with any additional recordkeeping requirements specified in 

special conditions in the permit: and 

(E) retain information in the file for at least five years following the date 

the information or data is obtained. 

(7) Maximum allowable emission rates. A flexible permit covers only those 

sources of emissions and those air contaminants listed in the table entitled "Emission Sources, 

Emissions Caps and Individual Emission Limitations" in [attached to] the flexible permit. Etjj 

f1f1JXible Flexible permitted faeilities flltlitj~.g~oup offacilitie$J or"~ccounfli [sources] are limited 
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to the emission limits and other conditions specified in the table in [attached to] the flexible 

permit. 

(8) Representations and eonditions. The follo-Ning aFe the eonditions upon 

wfiieh a flexible peFmit OF a flexible peFmit amendment is issued: 

(/.d The representations with regard to construction plans and operation 

procedures in an application for a permit or permit amendment Ire the Q~l\~on$ up<ii~hidlua 

flexible pe:rniit or:'Permit amendment is issued. Noncq~pliaia:W)th th~ifipre~enmllns 

(B) any geneFal and speeial eonditions ineluded in the peFmit . 

.(91 [(8)] Emission cap readjustment. If a schedule to install additional controls is 

included in the flexible permit and a facility subject to such a schedule is taken out of service, the 

emission cap contained in the flexible permit will be readjusted for the period the {i~ tiftit is 

out of service to a level as if no schedule had been established. Unless a special condition 

[provision] specifies the method of readjustment of the emission cap, a permit alteration shall 

be obtained. 

flQl [(9)] Maintenance of emission control. The facilities il$'mlti\'erilflii~jJJ:r~ 

Q !liiilll authorized [covered] by the flexible permit shall not be operated unless all 

air pollution emission capture and abatement equipment is maintained in good working order 
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and operating properly during normal facility operations. Notification for emissions events and 

scheduled maintenance shall be made in accordance with §101.201 and §101.211 of this title 

(relating to Emissions Event Reporting and Recordkeeping Requirements; and Scheduled 

Maintenance, Startup, and Shutdown Reporting and Recordkeeping Requirements). 

M [(10)] Compliance with rules. Acceptance of a flexible permit by a permit 

applicant constitutes an acknowledgment and agreement that the holder will comply with all 

applicable Rules[, Regulations,] and Orders of the commission issued in conformity with the · 

Texas Clean Air Act [TCAA] and the conditions precedent to the granting of the permit. If more 

than one state or federal rule or regulation or flexible permit condition are applicable, then the 

most stringent limit or condition shall govern and be the standard by which compliance shall be 

demonstrated. Acceptance of the permit includes consent to the entrance of commission 

employees and agents into the permitted premises at reasonable times to investigate conditions 

relating to the emission or concentration of air contaminants, including compliance with the 

flexible permit. 

(12) Emissions Caps. The following requirements apply to facilities with 

emissions subject to emission caps. 

(A) Recordkeeping and reporting. 
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(i) A semiannual report shall be submitted to the IIJiiiBI 

~tiB executive director within 30 days of the end of each reporting period that 

contains: 

(I) the identification of the owner and operator and the 

permit number: 

(II) total annual emissions Cin tons per year) based on a 12-

month rolling total for each month in the reporting period: 

(III) the identification of any exceedances of a short-term 

emission cap during the reporting period: 

CM aH any data relied upon. including. but not limited to. 

any quality assurance or quality control data. in calculating the monthly and annual emission 

cap pollutant emissions. and short-term emission cap pollutant emission"f'tlitm:eiit 

M a list of any facility modified as defined in §116.12 of 

this title (relating to Nonattainment and Prevention of Significant Deterioration Review 

Definitions) during the preceding six-month period and the documentation required by 

§116.718(b) of this title (relating to Significant Emission Increase): 
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M) the number. duration. and cause of any deviations or 

monitoring malfunctions (other than the time associated with zero and span calibration checks). 

and any corrective action taken. For facilities that are subject to the federal operating permits 

program in Chapter 122 of this title (relating to Federal Operating Permits Program) this may be 

satisfied by referencing the flexible permit number in the semiannual report for the site 

submitted under §122.145 of this title (relating to Reporting Terms and Conditions); 

MD a notification of a shutdown of any monitoring 

()f the pe11l;lit. whether the shutdown was permanent or temporacy. the reason for the shutdown. 

the anticipated date that the monitoring system will be fully operational or replaced with 

another monitoring system. whether the facility monitored by the monitoring system continued 

to operate. and the calculation of the emissions of the pollutant or the emissions determined by 

method included in the permit: 

(VIII) the readjusted emission cap for each pollutant if a 

facility subject to an emission cap is shut down for a period longer than IIIiilll one V•<eek as 

required by §116.716rlfetC1) of this title (relating to Emission Caps and Individual Emission 

Limitations); and 

(IX) a signed statement by the owner or operator certifying 

the truth, accuracy. and completeness of the information provided in the report. 
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(ii) The reporting period for the semiannual report required under 

this section shall begin on the earliest date any facilities in an emission cap commence operation 

under the cap. 

(iii) The owner or operator shall submit the results of any 

revalidation test or method to the executive director within three months after completion of 

such test or method. 

(B) Absence of monitoring data. A facility owner or operator shall record 

and report maximum potential emissions without considering enforceable emission limitations 

or operational restrictions for a facility during any period of time that there is no monitoring 

data. unless another method for determining emissions during such periods is specified in the 

flexible permit special conditions. 

(C) Revalidation. Any site generated test data used to determine the 

emission rates for facilities under the cap must be revalidated through performance testing or 

other scientifically valid means approved by the executive director. Such testing must occur at 

least once every five years after the facility has been added to an emission cap. Emission ra~ 

(d) Each permit with emission caps must include special conditions that satisfy the 

following requirements for facilities subject to those caps. The permit sh@lipecify whici'Pf th~ 
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These requirements do 

not apply to facilities that are not subject to an emission cap. 

(1) The monitoring system must accurately determine all emissions of the 

pollutants in terms of mass per unit of time. Any monitoring system authorized for use in the 

permit must be based on sound science and meet generally acceptable scientific procedures for 

data quality and manipulation. 

(2) The monitoring system must employ one or more of the general monitoring 

approaches meeting the minimum requirements as described in subparagraphs (A)- (D) of this 

paragraph. 

(A) An owner or operator using mass balance calculations to monitor 

pollutant emissions from activities using coating or solvents shall meet the following 

requirements: 

(i) provide a demonstrated means of validating the published 

content of the pollutant that is contained in. or created by. all materials used in or at the facility: 

(ii) assume that the facility emits all of the pollutant that is 

contained in. or created by. any raw material or fuel used in or at the facility. if it cannot 

otherwise be accounted for in the process: and 
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(iii) where the vendor of a material or fuel that is used in or at the 

facility publishes a range of pollutant content from such material. the owner or operator shall 

use the highest value of the range to calculate the pollutant emissions unless the executive 

director determines that there is site-specific data or a site-specific monitoring program to 

support another content within the range. 

(B) An owner or operator using a continuous emission monitoring system 

CCEMS) to monitor pollutant emissions shall meet the following requirements. 

(i) The CEMS must comply with applicable performance 

specifications found in 40 Code of Federal Regulations Part 6o. Appendix B. 

(ii) The CEMS must sample. analyze. and record data at least 

every 15 minutes while the emissions unit is operating. 

CC) An owner or operator using a continuous parameter monitoring 

system CCPMS) or a predictive emission monitoring system CPEMS) to monitor pollutant 

emissions shall meet the following requirements: 

(i) The CPMS or the PEMS must be based on current site-specific 

data demonstrating a correlation between the monitored parameter(s) and the pollutant 

emissions across the range of operation of the facility: and 
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(ii) Each CPMS or PEMS must sample. analyze. and record data at 

least every 15 minutes or at another less frequent interval approved by the executive director. 

while the facility is operating. 

(D) An owner or operator using emission factors to monitor pollutant 

emissions shall meet the following requirements: 

(i) All emission factors must be adjusted as specified by the 

permit. if appropriate. to account for the degree of uncertainty or limitations in the factors' 

development; 

(ii) The facility must operate within the designated range of use 

for the emission factor. if applicable: and 

--as defined in §116.12 of this title that relies on an emission factor to calculate 

pollutant emissions; shall conduct validation testing to determine a site-specific emission factor 
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within six months of permit issuance or start of operation of the facility. whichever is later. 

unless the executive director determines that testing is not required. 

(E) An alternative monitoring system must meet the requirements in 

paragraph (1) of this subsection and be approved by the executive director. 

(3) Where an owner or operator of a facility cannot demonstrate a correlation 

between monitored parameter(s) and the pollutant emissions rate at all operating points of the 

facility. the executive director shall: 

(A) establish default value(s) for determining compliance with the 

emission cap based on the highest potential emissions reasonably estimated at such operating 

point(s): or 

(B) determine that operation of the facility during operating conditions 

when there is no correlation between monitored parameter(s) and the pollutant emissions is a 

violation of the emission cap. 

W [(d)] There may be additional special conditions included in [attached to] a flexible 

permit upon issuance or amendment of the permit. Such conditions in a flexible permit may be 

more restrictive than the requirements of this title. 
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(f) The executive director may require as a special condition that the permit holder 

obtain written approval before constructing a source under a standard permit under Subchapter 

F of this chapter (relating to Standard Permits) or a permit by rule under Chapter 106 of this 

title. Such written approval may be required if the executive director specifically finds that an 

increase of a particular pollutant could either: 

(1) result in a significant impact on the air environment. or 

(2) cause the facility. group of facilities. or account to become subject to review 

under: 

(A) Subchapter E of this chapter (relating to Hazardous Air Pollutants: 

Regulations Governing Constructed or Reconstructed Major Sources CFCAA. §112(g), 40 CFR 

Part 63)); or 

(B) the provisions in Subchapter B. Divisions 5 and 6 of this chapter 

(relating to Nonattainment Review Permits; and Prevention of Significant Deterioration Review. 

respectively). 

§116.716. Emission Caps and Individual Emission Limitations. 

(a) Emission caps. lllll~'fl~mtor:i~~;aiitillll:ll~'Mili4~:Q 

an e:n1is~ion capJt~:r:~ Eaeh emission eap for a speeifie pollutant 'Nill be established as follo>Ns: 
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either as a site wide eap or a like 

kind facilities eap. The executive director reserves the right to rejeet or exclude any facility from 

an emissions cap if necessary to ensure compliance with the permit or to ensure the protection 

of human health and the environment. 

~~) fg} [(1)] ll{$$i,()ns emissions will be calculated for each facility within an emission 

cap as follows: [based on application of current Best Available Control Technology at expected 

maximum capacity;] 

(/ ... ) based on appliee.-tion of best a·."B:ilable eontrol teehnology at eJWeeted 

mffifimum eapaeit;y: or 

~l 00 if the permit is used to authorize any facility. group of facilities. or 

account. or any change to existing facilities. that constitutes a new major stationary source or 

major modification for the pollutant as defined by §116.12 of this title (relating to 

Nonattainment and Prevention of Significant Deterioration Review Definitions). emissions shall 
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be based on control technology determined in accordance with Subchapter B. Division s or 6 of 

this chapter (relating to Nonattainment Review Permits: and Prevention of Significant 

Deterioration Review. respectively) as applicable. at expected maximum capacity;l"Sr:;: 

m w pollutants emitted from facilities subject to lowest achievable emission 

rate review in accordance with Subchapter B. Division 5 of this chapter must be included in a 

separate emissions cap or listed as individual emission limitations . 

• fM [(2)] the calculated emissions for all facilities within an emission cap will 

be summed. 

(4) W a lower emission cap than that determined by paragraph [11 fM of this 

subsection may be proposed by the permit applicant if technical information is provided to 

demonstrate that it is feasible to operate in compliance with the proposed emission cap. 

( 4} W Individual emission limitations. An individual emission limitation will be 

established in the same permit for each pollutant not included in [covered by] an emission cap 

for facilities authorized [covered] by the flexible permit. In addition, an individual emission 

limitation may be established for a pollutant included in [covered by] an emission cap when the 
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expected capacity of a facility is less than the expected maximum capacity to prevent a facility 

from exceeding emission levels appropriate for the proposed controls. 

(e) fe} The permit shall clearly identify. by a table or other appropriate means. the 

facilities that are subject to an emission cap. and the facilities that are subject to individual 

emission limitations. A facility may be subject to both an emission cap and an individual 

emission limitation. 

{f)@ [(c)] Adjustment [Readjustment] of emission cap. To ~nsure caps ·fi~ practicalli 

~nfor'Ceahli;ii~ ~~~~U:tive.di~cto:r; ~U use the,(()l1~llgJ.;J;iteria and pro¢edu~iB adj~tnt 

W If a facility subject to an emission cap is shut down for a period longer than six 

[12] months, the emission cap shall be adjusted [readjusted] by lowering the emission cap by an 

amount that the shut down facility contributed to the original calculation of the emission cap. If 

a shut down facility is returned to operation. the emission cap shall be adjusted by increasing 

the emission cap by the amount that the facility contributed to the original calculation of the 

emission cap: however. the emission cap cannot be increased beyond the original emission cap 

amount. 

(g). If a I new] facility is to be added to [brought into] the flexible permit. a permit 

amendment is required to establish a revised emission cap [, an emission cap shall be adjusted 

by modifying the emissions cap accordingly]. 
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(3) If an existing emission cap is to be increased through a permit amendment as 

a result of adding a new facility or the modification of a facility within the emission cap. ft! 

emission cap shaH be inCPeased by the sum of the emissions from eaeh of the ne>N or modified 

facilities determined in accordance with subsection (a) of this section and decreased by the sum 

of the previous emissien CBJ:> contributions from the facilities to be medified. 

(A) Determine For the purpose of detePmining whether an increase in the 

emission cap constitutes a major modification for the pollutant as defined by §116.12 of this titl~ 

em\l~'l- considered modified unless there has been no ph;ysieal modification of that facility 

and a sqparate permit limit or physical constraint limits its potential to emitj{~Jtd:;: 

{q).<>fth~section and Q:~eait:tb~~m~i<>:rt ~DJ~y tb,~~um of the prevk>til#rlssion ~g 

~tiji~ptions fi:Qm tht~Uities to be modified. 
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[(d) Insignificant emission factor. The emission caps and individual emissions limitation 

calculated pursuant to this section may include an Insignificant Emissions Factor which does 

not exceed g.o% of the total emission cap or individual emission limitation.] 

W [(e)] An emission cap will be adjusted [readjusted] downward for any facility, 

I authorized [covered] by a flexible permit if that facility becomes 

subject to any new state or federal rule or regulation which would lower emissions or require an 

emission reduction. The adjustment will be made [at] the next time the flexible permit is 

amended or altered. If an amendment to a flexible permit is not required to meet the new 

requirement [regulation], then within 6o days of making the change, the permittee must submit 

a request to alter the permit and include information describing how compliance with the new 

requirement will be demonstrated. 

(g) fe} Each emission cap or individual emission limitation,shall specify an annual 

emission limitation in tons per year. based on a rolling 12-month period. Each emission cap or 

individual emission limitation shall also specify a practically enforceable short term emission 

limitation. 

(h) When a cap is esttblished()r.adjusted, majQr i~:$ijttrce reviewr~qt{ai§pts ~ 

;;;.~~i-~;;:;:a·~n.$-tu6."7't ~~~~~~· ,'~~ /c~t;:~~~~"~m :t rf'lt::t;t:\cA-..i:rl~,:;..;~t..iS,.title.(rel"'·ti""""··"'"'···_.A~ePermit c , • ~ ~~ • , ~)!~1ft~!,~~,;~ ~~i~\~,i~;~;,i..i. 

§116.717. Implementation Schedule for Additional Controls. 
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If a facility requires the installation of additional control or controls to meet an emission 

cap for a pollutant, the flexible permit shall specify an implementation schedule for such 

additional controls. The permit may also specify how the emission cap will be adjusted if such a 

facility is taken out of service [or fails to install the additional control equipment as provided by 

the implementation schedule]. In the event that the controls and implementation schedule 

specified by a flexible permit cannot be met. a permit amendment or alteration to modify the 

controls and implementation schedule must be approved by the executive director before the 

applicable control schedule deadline. Control technology that is required by federal major new 

source review requirements must be operational at start of operation and is not eligible for an 

implementation schedule under this section. 

§116.718. Significant Emission Increase. 

WAn increase in emissions from operational or physical changes at an existing facility 

authorized [covered] by a flexible permit is insignificant, for th~ purposes of minor [state] new 

source review under this subchapter, if the increase does not exceed either the emission cap or 

individual emission limitation. This section does not apply to an increase in emissions from a 

new facility nor to the emission of an air contaminant not previously emitted by an existing 

facility. 
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does not apply to any ehange or series of related changes that would constitute a major 

modification as defined by §116.12 of this title (relating to Nonattainment and Prevention of 

~1 Unless a plant-wide applicability limit has been established for the pollutant 

under Subchapter C of this chapter (relating to Plant-wide Applicability Limits). the permit 

holder shall document that the change is not a major modification as defined in §116.12 of this 

title. and maintain the documentation required by Su~Qi~~ 

ill~ §116.121 of this title V· .. etual to Projeeted f..etual and Emissions ~elusion Test fop 

Emissions IneFeases). 

(ga When determining whether a change is a major modification as defined in 

§116.12 of this title. the project emissions increase and the project net shall be determined as 

specified as defined in §116.12 of this title. regardless of how the existing facilities are 

authorized. 
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Chapter 116 -Control of Air Pollution by Permits for New Construction or Modification 

Rule Project No. 2010-007-116-PR 

• For new facilitiesj or modified facilities under an emission cap for the 

pollutant where the permit holder elects to use potential to emit rather than projected actual 

emissions from the facility to determine the project emissions increase. the potential to emit 

shall be considered as the proposed emissions cap unless iiiliiiiti:ii:thod is deP:lci~~atil t1: 

sepaftlte pefffl:it limit oF physieal eonstFaint limits the faeility's potential to emit. 

II If the project emission increase is such that a de minimis threshold test 

(netting) is required for a pollutant. the analysis shall be submitted to the commission for review 

and approval prior to making the change. If netting is not required. the information shall be 

submitted with the next permit amendment or renewal application. 

(c) The permit holder shall complete an air quality analysis to demonstrate that the 

proposed action will not interfere with attainment and maintenance of the National Ambient Air 

Quality Standards if there may be an increase in emissions from operational or physical changes 

at ftll all'i existing facilityt group of facilities, or acc61ili authorized by a flexible permit and the 

area is not designated as nonattainment for the pollutant. If the emission increase may result in 

off site ambient concentrations greater than de minimis for that pollutant. the air quality 

analysis shall be submitted to the -ilia. eommission for review and approval prior 

to making the change. 
Texas Commission on Environmental Quality Page 156 

Chapter 116- Control of Air Pollution by Permits for New Construction or Modification 

Rule Project No. 2010-007-116-PR 

§116.720. Limitation on Physical and Operational Changes. 

Operational or [Neither operational nor] physical changes authorized under this 

subchapter may not result in an increase in actual emissions at facilities not authorized 

[covered] by the flexible permit unless those affected facilities are authorized pursuant to 

§116.110 of this title (relating to Applicability). 

§116.721. Amendments and Alterations. 

(a) Flexible permit amendments. All representations with regard to construction plans 

and operation procedures in an application for a flexible permit or flexible permit amendment, 

as well as any general and special conditions [provisions attached], become conditions upon 

which the subsequent flexible permit is issued. It shall be unlawful for any person to vary from 

such representation or flexible permit provision if the change will cause a change in the method 

of control of emissions or [,] the character of the emissions, will relax emission controls. will add 

a new facility or facilities. [or] will result in a significant increase in emissions, or will constitute 

a major modification as defined by §116.12 of this title (relating to Nonattainment and 

Prevention of Significant Deterioration Review Definitions) unless application is made to the 

executive director to amend the flexible permit in that regard and such amendment is approved 

by the executive director or commission. Applications to amend a flexible permit shall be 

submitted with a completed Form PI -1 and are subject to the requirements of §116. 711 of this 

title (relating to Flexible Permit Application). 
Texas Commission on Environmental Quality Page 157 

Chapter 116 - Control of Air Pollution by Permits for New Construction or Modification 

Rule Project No. 2010-007-116-PR 

(b) Flexible permit alterations. 

(1) A flexible permit alteration is for any variation from a representation in a 

flexible permit application or a general or special provision of a flexible permit that does not 

require a flexible permit amendment. 

(2) All flexible permit alterations which may involve a change in a general or 

special condition contained in the flexible permit, or affect control equipment performance must 

receive prior approval by the executive director. The executive director shall be notified in 

writing of all other flexible permit alterations within ten days of implementing the change, 

unless the permit provides for a different method of notification. Any flexible permit alteration 

request or notification shall include information sufficient to demonstrate that the change does 

not interfere with the owner or operator's previous demonstrations of compliance with the 

requirements of §116. 711 of this title, including the protection of public health and welfare. The 

appropriate commission regional office and any local air pollution program having jurisdiction 

shall be provided copies of all flexible permit alteration documents. 

(3) Flexible permit alterations shall not be subject to the requirements of Best 

Available Control Technology identified in §116. 711(3) of this title. 

(c) Changes not requiring an amendment or alteration. The following changes do not 

require an amendment or alteration, except that an amendment is required if the change will 
Texas Commission on Environmental Quality Page 158 

Chapter 116- Control of Air Pollution by Permits for New Construction or Modification 

Rule Project No. 2010-007-116-PR 

cause a change in the method of control of emissions or [,] the character of the emissions, will 

relax emission controls. will add a new facility. [or] will result in a significant increase in 

emissions as determined under §116.718 of this title (relating to Significant Emission Increase). 

constitutes a major modification as defined by §116.12 of this title. or conflicts with an existing 

permit condition: 

(1) a change in throughput; or 

(2) a change in feedstock. 

(d) Permit by rule under Chapter 106 of this title (relating to Permits by Rule) in lieu of 

permit amendment or alteration. 

(1) Notwithstanding subsections (a) or (b) of this section, no permit amendment 

or alteration is required if the changes to the permitted facility qualify for a permit by rule under 

Chapter 106 of this title unless prohibited by permit provision as provided in §116. 715 of this 

title (relating to General and Special Conditions). All such changes permitted by rule to a 

permitted facility shall be incorporated into that facility's permit at such time as the permit is 

amended or renewed. 

(2) Emission increases authorized by Chapter 106 of this title at an existing 

facility authorized [covered] by a flexible permit shall not cause an exceedance of the emissions 

cap or individual emission limitation. 
Texas Commission on Environmental Quality Page 159 

Chapter 116 -Control of Air Pollution by Permits for New Construction or Modification 

Rule Project No. 2010-007-116-PR 

§116.730. Compliance History. 

As part of a flexible permit review, or the review of an amendment of a flexible permit, or 

· renewal of an existing flexible permit, the requirements of [provisions found in] Chapter 6o of 

this title (relating to Compliance History) shall be applicable to the facility, group of facilities, or 

account being permitted, amended, or renewed. 

§116.740. Public Notice and Coinment. 

(a) Any person who applies for a flexible permit or an amendment to a flexible permit 

shall comply with the requirements [provisions] in Chapter 39 of this title (relating to Public 

Notice). 

(b) Any person who applies for an amendment to a flexible permit regarding an affected 

source (as defined in §116.15(1) of this title (relating to Section 112(g) Definitions)) subject to 

Subchapter E [C] of this title (relating to Hazardous Air Pollutants: Regulations Governing 

Constructed or Reconstructed Major Sources (FCAA, §112(g), 40 CFR Part 63)) shall comply 

with the requirements [provisions] in Chapter 39 of this title [(relating to Public Notice)]. 

§116.750. Flexible Permit Fee •. 
Texas Commission on Environmental Quality Page 160 

Chapter 116 -Control of Air Pollution by Permits for New Construction or Modification 

Rule Project No. 2010-007-116-PR 

(a) Fees required. Any person who applies for a flexible permit or for an amendment to 

an existing flexible permit shall remit, at the time of application for such permit, a fee as set 

forth in subsection (b) of this section. Fees will not be charged for flexible permit alterations, 

changes of ownership, or changes of location of permitted facilities. 

(b) Fee amounts. The fee to be remitted with a flexible permit application shall be 

determined as set forth in §116.141 of this title (relating to Determination of Fees) [based on the 

total annual allowable emissions from the permitted facility, group of facilities, or account for 

which the flexible permit is being sought. The fee shall be $32 per ton with the minimum fee 

being $900 and the maximum fee $75,000. For flexible permit amendments, the fee shall be 

calculated based on $32 per ton for the incremental emission increase with the minimum fee 

being $900 and the maximum fee being $75,000]. 

(c) Payment of fees. All permit fees for a flexible permit shall be remitted in the form of a 

check, certified check, electronic funds transfer, or money order made payable to the Texas 

Commission on Environmental Quality and delivered with the application for flexible permit or 

flexible permit amendment to the commission's Air [New Source Review] Permits Division. 

Required fees must be received before the agency will begin examination of the application. 

(d) Return of fees. Fees must be paid at the time an application for a flexible permit or 

flexible permit amendment is submitted. If the applicant withdraws the application prior to 

issuance of the flexible permit or flexible permit amendment, one-half of the fee will be 

refunded, except that the entire fee will be refunded for any such application for which a permit 
Texas Commission on Environmental Quality Page 161 

Chapter 116 -Control of Air Pollution by Permits for New Construction or Modification 

Rule Project No. 2010-007-116-PR 

by rule under Chapter 106 of this title (relating to Permits by Rule) is allowed. No fees will be 

refunded after a deficient application has been voided, denied, or after a flexible permit or 

flexible permit amendment has been issued by the agency. 

Del&yetl Bffeetive D&te. 

the amendments to §§116.710. 116.711. 116.715-116.118. 116.120. 116.721. 116.730. 116.740 and 

116.zso of this title (relating to Applicability. Flexible Permit Application. General and Special 

Conditions. Emission Caps and Individual Emission Limitations. Implementation Schedule for 

Additional Controls. Significant Emission Increase. Limitation on Physical and Operational 

Changes. Amendments and Alterations. Compliance Histocy. Public Notice and Comment. and 

Flexible Permit Fee: respectively) adopted by the commission on December •. 2010. shall be 

effeetive Oil th:e earlier of eo days after publieatioll ill the Fcderel Register of the filial approval 

by th:e Umted States EIWiroiimemal Proteetioll l\geliey of th:ese seetiolls as revisiolis to th:e Texas 

State Implemematioll Plali, or Deeember 1, 2012. Uiitil sueh time, th:ese seetioilS, as th:ey existed 

prior to th:e adoptioli of these ameiidmeiits, remaill ill effeet. 
Texas Commission on Environmental Quality Page 162 

Chapter 116 - Control of Air Pollution by Permits for New Construction or Modification 

Rule Project No. 2010-007-116-PR 

iililil!lilii6:7iQlllitijJJii;liiili&iiiia]miediiti1Y bi'iii'iliiiiiflli2ott~.milli(jl 

~wallf:ili&MJlii~ •... Al~liel:~iJpj]i~pteJtiii~ 

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TEXAS CoMMISSION oN ENVIRONMENTAL QuALITY 

THE STATE OF TEXAS 

COUNTY OF TRAVIS 

I hereby certify that this Is a true and correct copy of 1 

Texas Commission on Environmental Quality document, 

which is filed in the permanent records of the Commission. 

Given un er my the seal of office on 

DEC 2 9 2010 

La a Gastanue!a, Chief C!erk 

ORDER ADOPTING NEW and AMENDED R~~~n on Environmental Quality 

REVISIONS TO THE STATE IMPLEMENTATION PIAN 

Docket No. 2010-0359-RUL 

On December 14, 2010, the Texas Commission on Environmental Quality (Commission), 

during a public meeting, considered adoption of new§ 116.765 and the amendments to §§ 116.13, 

116.710, 116.711, 116.715- 116.718, 116.720, 116.721, 116.730, 116.740, and 116.750. TheCommission 

.. _____ ;:tdp_pJ:s_the new and am.en.de.d_rul_e._s_in._Chapter 116, Control of Air.Jlollution_by . .Permits for New 

Construction or Modification; and corresponding revisions to the state implementation plan (SIP). 

The amended sections, with the exception of §§ 116.711(2)(C)(iii), n6.715(f)(2)(A), 116.730, and 

n6.740(b), are submitted to EPA as revisions to the SIP. New§ 116.765 is also not submitted as a 

revision to the SIP. The new and amended rules revise the commission's flexible permit program. 

Under Tex. Health & Safety Code Ann. §§ 382.011, 382.012, and 382.023 (Vernon 2001), the 

Commission has the authority to control the quality of the state's air and to issue orders consistent 

with the policies and purposes of the Texas Clean Air Act, Chapter 382 of the Tex. Health & Safety 

Code. The proposed rules were published for comment in the July 2, 2010, issue of the Texas Register 

(35 TexReg 5729). 

Pursuant to Tex. Health & Safety Code Ann. § 382.017 (Vernon 2001), Tex. Gov't Code Chapter 

2001 (Vernon 2008), and 40 Code of Federal Regulations § 51.102, and after proper notice, the 

Commission conducted a public hearings to consider the new and amended rules and revisions to the 

SIP. Proper notice included prominent advertisement in the areas affected at least 30 days prior to 

the date of the hearing. A public hearing was held in Austin, Texas on July 29, 2010. 

The Commission circulated hearing notices of its intended action to the public, including 

interested persons, the Regional Administrator of the EPA, and all applicable local air pollution 

control agencies. The public was invited to submit data, views, and recommendations on the 

proposed new and amended rules and SIP revisions, either orally or in writing, at the hearing or 

during the comment period. Prior to the scheduled hearings, copies of the proposed new and 

amended rules and SIP revisions were available for public inspection at the Commission's central 

office and on the Commission's Web site. 

Data, views, and recommendations of interested persons regarding the proposed new and 

amended rules and SIP revisions were submitted to the Commission during the comment period, and 

were considered by the Commission as reflected in the analysis of testimony incorporated by reference 

to this Order. The Commission finds that the analysis of testimony includes the names of all 

interested groups or associations offering comment on the proposed new and amended rules and the 

SIP revisions and their position concerning the same. 

IT IS THEREFORE ORDERED BY THE COMMISSION that the new and amended rules and 

revisions to the SIP incorporated by reference to this Order are hereby adopted. The Commission 

further authorizes staff to make any non-substantive revisions to the rules necessary to comply with 
Texas Register requirements. The adopted rules and the preamble to the adopted rules and the 

revisionsto the SIP are incorporated by reference in this Order as if set forth at length verbatim in this 

Order. 

fr IS FURTHER ORDERED BY THE COMMISSION that on behalf of the Commission, the 

Chainnan should transmit a copy of this Order, together with the adopted rules and revisions to the 

SIP,to the Regional Administrator of EPA as a proposed revision to the Texas SIP pursuant to the 

Fed~ral Clean Air Act, codified at 42 U.S. Code Ann.§§ 7401-7671q, as amended. 

This Order constitutes the Order of the Commission required by the Administrative Procedure 

Act, Tex. Gov't Code, § 2001.033 (Vernon 2008). 

If any portion of this Order is for any reason held to be invalid by a court of competent 

jurisdiction, the invalidity of any portion shall not affect the validity of the remaining portions. 

Issueddate: DEC 2 9 2010 

TEXAS COMMISSION ON 

ENVIRONMENTAL QUALITY 
♦ ♦ ♦

The commission acknowledges TETC’s support of the rules. The

commission made no changes to the rules in response to this

comment.

In regards to §30.214, TETC commented that Type VIII (used

and scrap tire) MSW facility supervisors or managers should be

required to be licensed and not be exempted as in the proposed

rules. TETC commented that mismanagement at these types

of facilities can result in vector issues as well as tire fires. Additionally, TETC suggested that individuals that manage or supervise composting operations, used oil processing, recycling

operations (materials recycling facilities and exempted operations) and fuel blenders be required to be licensed and not be

exempted as in the proposed rules.

The commission agrees with TETC that used and scrap tires are

a solid waste or a recyclable material and that the facilities that

store or process tires are MSW facilities. Procedures and requirements for the safe storage, transportation, processing, utilization, and disposal of used or scrap tires or tire pieces are

included in Chapters 328 and 330 and in the facility’s permit, registration, or site operating plan. The commission decided not to

require licenses because individuals who operate these types of

facilities perform relatively low-risk MSW management activities

and adequate controls are included in the rules and provisions

of the facility’s permit or registration or site operating plan. The

commission made no changes to the rules in response to this

comment.

STATUTORY AUTHORITY

These amendments and new section are adopted under Texas

Water Code (TWC), §5.013, relating to the general jurisdiction

of the commission; TWC, §5.102, relating to the general powers

of the commission; and TWC, §5.103, relating to the commission’s authority to adopt rules to carry out its powers and duties under the TWC and other laws of the State. These amendments and new section are also adopted under TWC, §§37.001

- 37.015, concerning: Definitions; Rules; License or Registration Required; Qualifications; Issuance and Denial of Licenses

and Registrations; Renewal of License or Registration; Licensing Examinations; Training; Continuing Education; Fees; Advertising; Complaints; Compliance Information; Practice of Occupation; Roster of License Holders and Registrants; and Power to

Contract. These amendments and new section are also adopted

under Texas Health and Safety Code (THSC), §361.002, relating to the commission’s policy to safeguard the health, welfare,

and physical property of the people and to protect the environment; THSC, §361.011, relating to the commission’s jurisdiction

to manage solid waste; THSC, §361.022, relating to the commission’s policy to eliminate the generation of municipal solid waste

and municipal sludge to the maximum extent possible for the protection of public health and the environment; THSC, §361.024,

relating to the commission’s authority to adopt rules and establish minimum standards for the management and control of solid

waste; and THSC, §361.027, relating to the commission’s authority to license individuals who supervise the operation and

maintenance of solid waste facilities. These amendments and

new section are also adopted under THSC, §363.002, relating to

the commission’s policy to protect public health and the environment by encouraging proper management and reduction of solid

waste; §363.021, relating to the commission’s authority to adopt

rules to implement the Comprehensive Municipal Solid Waste

Management, Resource Recovery, and Conservation Act; and

THSC, §363.022, relating to the commission’s powers and duties

to implement the Comprehensive Municipal Solid Waste Management, Resource Recovery, and Conservation Act.

These adopted amendments and new section implement

TWC, §§5.013, 5.102, 5.103, and 37.001 - 37.015; and THSC,

§§361.002, 361.011, 361.022, 361.024, 361.027, 363.002,

363.021 and 363.022.

§30.210. Qualifications for Initial License.

To obtain a license, an individual must have met the requirements of

Subchapter A of this chapter (relating to Administration of Occupational Licenses and Registrations), and the following requirements for

each class of license:

Figure: 30 TAC §30.210

§30.211. Provisional Licenses.

(a) A provisional license may be issued to an individual applying for a class "A" or "B" license who:

(1) has completed the required training, passed the applicable examination and met the minimum education requirements, but

lacks the required experience; or

(2) has passed the applicable examination, met the education and experience requirements, but lacks the required training.

(b) A provisional license shall have:

(1) a validity period of two years; and

(2) an application fee of $74.00.

(c) Provisional licenses are not renewable.

(d) To continue to supervise a municipal solid waste (MSW)

facility after the expiration date of a provisional license, the provisional

license holder must:

(1) complete any missing requirements pertaining to the

corresponding license originally applied for before the expiration date

of the provisional license; and

(2) have been issued the class of license that is required for

the type of MSW facility being supervised.

This agency hereby certifies that the adoption has been reviewed

by legal counsel and found to be a valid exercise of the agency’s

legal authority.

Filed with the Office of the Secretary of State on December 17,

2010.

TRD-201007191

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Effective date: January 6, 2011

Proposal publication date: August 13, 2010

For further information, please call: (512) 239-6090

CHAPTER 116. CONTROL OF AIR

POLLUTION BY PERMITS FOR NEW

CONSTRUCTION OR MODIFICATION

The Texas Commission on Environmental Quality (TCEQ

or commission) adopts new §116.765 and the amendments

to §§116.13, 116.710, 116.711, 116.715 - 116.718, 116.720,

116.721, 116.730, 116.740, and 116.750.

ADOPTED RULES December 31, 2010 35 TexReg 11909
Sections 116.710, 116.711, 116.715, 116.716, 116.718, and

116.765 are adopted with changes to the proposed text as

published in the July 2, 2010, issue of the Texas Register (35

TexReg 5729). Sections 116.13, 116.717, 116.720, 116.721,

116.730, 116.740, and 116.750 are adopted without changes

and will not be republished.

The amended sections will be submitted to the United States

Environmental Protection Agency (EPA) as revisions to

the State Implementation Plan (SIP) with the exception of

§§116.711(2)(C)(iii), 116.715(f)(2)(A), 116.730, 116.740(b), and

116.765.

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS

FOR THE ADOPTED RULES

The Texas flexible permit program rules (Chapter 116, Subchapter G, Flexible Permits) first became effective on December 8,

1994. The flexible permit program was developed in response

to direction from the commission at the January 21, 1994, policy

agenda meeting. The flexible permit rules were developed after

considering the positional papers presented by industry, environmental groups, and local government environmental programs

under the supervision of Task Force 21, a regulatory negotiation

committee of the Texas Water Commission and the Texas Natural Resource Conservation Commission (predecessor agencies

of the TCEQ), which was comprised of representatives of legal

and engineering professions, public utilities, business associations, local chambers of commerce, city and county government,

consumer and environmental groups, and community organizations for the purpose of advising the agency on industrial air

quality, water quality, and waste management issues. The rules

created a new type of minor New Source Review (NSR) permit

called a flexible permit, which functions as an alternative to the

traditional preconstruction permits that are authorized in Chapter 116, Subchapter B, New Source Review Permits. Flexible

permits were designed to exchange flexibility for emission reductions with the final goal being a well-controlled facility, without relaxation of any control requirements. At the time the flexible permit program was developed, the commission lacked the authority

to require an air quality permit for grandfathered facilities. The

flexible permit program was intended to provide grandfathered

facilities with a voluntary authorization mechanism that would reduce emissions, and significant reductions were achieved that

were otherwise not required by either state or federal law. Although that feature was environmentally beneficial, the program

was not limited to use by grandfathered facilities.

Only one flexible permit can be issued for a particular plant or active account. However, multiple emission caps, multiple individual emission limits, or any combination thereof can be included

in a flexible permit. The applicant for a flexible permit can combine existing facilities and new facilities into the flexible permit.

The flexible permit then becomes the controlling authorization

for some or all facilities included in the permit, succeeding any

existing minor NSR permits that may have been applicable to

some or all of the facilities. The flexible permit is not and has

never been a substitute for or in lieu of major NSR permitting if

major NSR review is triggered. Nor can the flexible permit be

used to circumvent or ignore compliance with other federal requirements, such as a national emission standard for hazardous

air pollutants (NESHAP). The flexible permitting program is intended to eliminate the need for owners or operators of participating facilities to submit an amendment application each time

certain operational or physical changes are made at a permitted facility. This type of flexibility without backsliding of various

requirements and without environmental harm provides owners

and operators options for their operations. The environmental

benefits of the flexible permit program have included the permitting of grandfathered facilities, substantial emission reductions

from the installation of controls, and a comprehensive evaluation of emission impacts.

On September 23, 2009, the EPA published notice in the Federal

Register (74 FR 48480) (hereafter "Notice") of its intent to disapprove the TCEQ flexible permit program rules that were first submitted to the EPA as a proposed SIP revision in 1994 as well as

subsequent rule amendments that were submitted several times

between 1998 and 2003. Although the Federal Clean Air Act

(FCAA) requires that proposed revisions to the SIP be reviewed

within 18 months after submittal (See 42 United States Code

(USC) §7410(k)(1)(B) and (k)(2)), more than 15 years passed

from the initial submittal before the EPA took any formal action,

and did so only in response to litigation brought by holders of

flexible permits (see BCCA Appeal Group, et al v. United States

EPA et al, No. 3-08CV1491-G (N.D. Texas)). In the Notice, the

EPA cited the following assertions as the basis for disapproval

of the flexible permit program as a minor NSR revision: 1) The

program is not clearly limited to use in minor NSR and does

not clearly prevent circumvention of major NSR requirements;

2) The program does not require that an applicability determination for major NSR be made first for construction or modification

that could potentially be subject to major NSR; 3) The program

fails to meet the statutory and regulatory requirements for a SIP

revision and is not consistent with guidance on SIP revisions; 4)

The program lacks replicable, specific, established implementation procedures for establishing the emission cap in a minor NSR

flexible permit; 5) The program is not an enforceable minor NSR

permitting program; 6) The program allows the issuance of flexible permits that do not incorporate emission limitations and other

requirements of the Texas SIP; and 7) The program lacks the

necessary more specialized monitoring, recordkeeping, and reporting (MRR) requirements required for this type of minor NSR

program, to ensure accountability and provide a means to determine compliance. The EPA also identified a number of related

concerns with the Texas flexible permit program in correspondence to the commission dated March 12, 2008.

The commission maintains that its flexible permit program rules,

as adopted and implemented prior to this rulemaking, are fully

approvable as revisions to the SIP. In fact, the Texas flexible permit program is a minor NSR permit program which requires the

application of best available control technology (BACT) to minor sources even though not required to do so under the FCAA.

Texas law requires application of BACT to all permitted facilities

for all air contaminants, and this is a part of Texas’ SIP. The commission’s executive director provided detailed comments in response to the Notice addressing each of the EPA assertions discussed earlier and demonstrating that, as written and administered by the commission, the flexible permit program rules are in

full conformity with all applicable federal requirements (see Letter from M. Vickery, Executive Director, TCEQ to S. Spruiell, Air

Permits Section (EPA Region 6), November 23, 2009, included

in EPA’s docket No. EPA-R06-OAR-2005-TX-0032). Additionally, permits issued under the flexible permit rules are consistent

with the FCAA and EPA rules implementing NSR.

The EPA published final notice of disapproval of the flexible permits program in the Federal Register on July 15, 2010 (75 FR

41311), hereafter "Disapproval Notice." In the Disapproval Notice, the EPA disapproved the flexible permit program as both

a minor NSR program and a major NSR program. The EPA’s

35 TexReg 11910 December 31, 2010 Texas Register
grounds for disapproval as a minor NSR program were: 1) The

program has no express regulatory prohibition clearly limiting its

use to minor NSR and has no regulatory provision clearly prohibiting circumvention of major NSR; 2) The program is not an

enforceable NSR permitting program because it lacks requirements necessary for enforcement and assurance of compliance,

including specific up front methodologies to be able to determine compliance; 3) The program lacks the necessary more

specialized MRR requirements, including the necessary applicable replicable procedures and adequate executive director discretion, required for this type of minor NSR program to ensure

accountability and provide a means to determine compliance;

4) The program lacks replicable procedures for establishing an

emissions cap; 5) The program fails to ensure that the terms and

conditions of major NSR SIP permits are retained; 6) The program fails to meet the statutory and regulatory requirements for

a minor NSR SIP revision and is not consistent with EPA policy

and guidance on minor NSR SIP revisions; and 7) Due to these

bases for disapproval, the EPA lacks sufficient information to determine that this new permitting program will not interfere with

any applicable requirements concerning attainment and reasonable further progress or any other requirement of the FCAA.

The EPA’s grounds for disapproval of the program as a major

NSR program were: 1) The rules do not include express language stating that the program is clearly limited to minor NSR

and prohibits circumvention of major NSR; 2) The program does

not include a demonstration that shows how the program as a

whole and how the use of "modification" is at least as stringent

as the definition of "modification" in the EPA major NSR SIP program and meets the FCAA; 3) The program does not include

a demonstration that shows how the program as a whole is at

least as stringent as the EPA major NSR SIP program and meets

the FCAA; 4) The program does not include the requirement to

make major NSR applicability determinations based on actual

emissions and on emissions increases and decreases (netting)

that occur within a major stationary source; 5) The program fails

to meet the statutory and regulatory requirements for a major

NSR SIP revision and is not consistent with EPA policy and guidance on minor NSR SIP revisions; and 6) Due to these bases for

disapproval, as well as some bases for disapproval as a minor

NSR SIP revision, the EPA lacks sufficient information to determine that this new permitting program will not interfere with any

applicable requirements concerning attainment and reasonable

further progress or any other requirement of the FCAA.

Again, the commission maintains that the flexible permit rules

as adopted and implemented are approvable as a minor NSR

permit program revision to the Texas SIP. The commission now

adopts amendments to the rules to provide even greater clarity

that they operate as a minor NSR program in the state of Texas.

In the Disapproval Notice, the EPA states that it acknowledges

that the commission has undertaken this rulemaking, and will

consider any rule changes if and when they are submitted to the

EPA. EPA Region 6 timely submitted comments on some of the

subsections of four of the proposed rules to be amended. And,

although those comments were submitted after the publication

of the Disapproval Notice, the EPA did not expressly comment

on all of the issues which form the basis for its disapproval.

The EPA’s comments for this rulemaking primarily concern the

following issues: 1) the EPA’s position that a major source cannot

be subject to an emissions cap, and similarly that a flexible permit

cannot authorize or be used for a major stationary source or major modification, and the emissions from facilities subject to Prevention of Significant Deterioration (PSD) BACT and nonattainment new source review (NNSR) Lowest Achievable Emission

Rate (LAER) cannot be included in the summation of the flexible

permit’s emissions cap(s); 2) that each individual unit under an

emissions cap must meet at the very least, its specific emission

limitation derived from a federal applicable requirement; and 3)

the use of terminology unique to the Texas SIP, namely the use

of the SIP-approved terms "facility" and "account." The commission’s responses to those comments are discussed elsewhere in

this preamble. Notably, the EPA did not provide any comments

that indicated its review of the proposed amendments found that

the rules are inadequate for most of the reasons included in its

Disapproval Notice.

As the EPA recognizes, under the applicable federal regulations,

states have broad discretion to determine the scope of their minor NSR programs as needed to attain and maintain the national ambient air quality standards (NAAQS). The development

of NSR requirements and procedures tailored for the air quality needs of each state is not only consistent with the FCAA, it

is encouraged under the law and the EPA’s implementing regulations (see 42 USC §7407(a) and 40 Code of Federal Regulations (CFR) §51.101(e) and (g); see also Safe Air for Everyone v.

United States EPA, 488 F.3d 1088, 1092 (9th Cir. 2007)). States

have significant discretion to tailor minor NSR requirements that

are consistent with the requirements of 40 CFR Part 51 (Requirements for Preparation, Adoption, and Submittal of Implementation Plans), and may also provide a rationale for why the rules

are at least as stringent as the Part 51 requirements where the

revisions are different from Part 51. These amendments are intended to remove any doubt that the EPA might have, and to

reaffirm the commission’s position that the rules for the flexible

permit program are environmentally beneficial and approvable

as a minor NSR permitting program as part of the Texas SIP.

In response to the Disapproval Notice, and in support of these

rule amendments, the commission provides the following information. The EPA did not find that the current rules actually are

ambiguous on the commission’s position that these rules are for

a minor NSR permitting program. Rather, the EPA wants express language, despite the rule text that requires consideration

of major NSR requirements. That part of the Disapproval Notice as well as the EPA’s comments regarding this rulemaking

not only ignore the current rule text, but also the commission’s

amendments which make this abundantly clear. The EPA also

ignores the fundamental structure of the SIP-approved Texas

permitting system, which requires a permit for all facilities, including a major NSR permit when applicable.

As originally developed and subsequently implemented by

TCEQ in 1994, the Texas flexible permit program is a minor

NSR program. The flexible permit does not substitute for PSD

or NNSR. No provision of the Texas flexible permit program

rules may be read to circumvent major NSR permitting or any

state or federal permitting requirements. The rules expressly

require compliance with all applicable requirements relating to

nonattainment and PSD review.

That limitation, adopted in 1994 as §116.711(8) and (9), continues as §116.711(2)(H) and (I); see also, e.g., §§116.710(a)(5),

116.711(2)(C)(ii), and 116.718(b) and (c). The program does not

supersede or negate federal requirements, nor allow circumvention of those requirements. The flexible permit program may

not be used as a shield for protection or exemption from federal programs including major NSR permitting. Persons making

changes under a flexible permit must maintain sufficient documentation to demonstrate that the project will comply with SubADOPTED RULES December 31, 2010 35 TexReg 11911
chapter B, Division 5, Nonattainment Review Permits; Division

6, Prevention of Significant Deterioration Review; and Subchapter E, Hazardous Air Pollutants: Regulations Governing Constructed or Reconstructed Major Sources (FCAA, §112(g), 40

CFR Part 63). A major modification, as defined in §116.12, may

not occur without first being subject to a Nonattainment and/or

PSD review. Likewise, an owner or operator may not use flexible permit rules to avoid maximum achievable control technology (MACT) requirements for the construction or reconstruction

of major sources of hazardous air pollutants (HAP) as they are

described and addressed in the 40 CFR Part 63, National Emission Standards for Hazardous Air Pollutants (NESHAP) rules.

If a proposed project is determined to be a major modification

under NNSR and/or PSD rules, or meets the definition of construction or reconstruction under 40 CFR Part 63, the owner or

operator must obtain a major NSR permit or major modification

under the appropriate major NSR program, as well as a HAP

permit to meet requirements of FCAA, §112(g) if case-by-case

MACT applies; and a minor NSR permit amendment. Further,

the flexible permit program does not impair the commission’s authority to control the quality of the state’s air and to take action

to control a condition of air pollution if the commission finds that

such a condition exists.

The EPA’s concerns, expressed in its comments in this rulemaking, focus on ensuring PSD BACT and NNSR LAER are met. In

its Disapproval Notice, the EPA stated that the flexible permits

program fails to ensure that the terms and conditions of major

NSR SIP permits are retained. The EPA fails to recognize that

the flexible permits program is a minor NSR program, and that

TCEQ’s implementation of PSD and nonattainment permit requirements is not impaired by its choice to issue both a minor

NSR permit and a major NSR permit in one document. That

practice does not impair compliance with all applicable rules, nor

does it allow a minor NSR permit to remove any major NSR permit requirements. Allowing major sources to operate under an

allowable-based emission cap, while ensuring that any federal

emissions limitation is not circumvented, is not prohibited under

the FCAA. Emission caps are developed based on the potential

to emit after the application of BACT or LAER emission controls,

as applicable. This is exactly the same emission standard as

required for other permitting. Further, allowable emission limits,

expressed as a cap or for an individual facility, are expressed in

terms of annual (tons per year) or short term (e.g., pounds per

hour) units. BACT is typically expressed in terms of a mass emission calculation, such as pounds per million British thermal units

(lb/MMBtu) or parts per million (ppm). Establishment of caps after application of the appropriate control technology necessarily

does not relax the control technology, and therefore the EPA has

no basis to prescribe exclusion of PSD and NNSR facilities from

flexible permit authorization or the caps established by the flexible permit.

Control technology flexibility is available under the flexible permit program for existing facilities to the extent that an applicant

may over-control one facility, i.e., with technology or practices

that are more stringent than BACT in order to avoid additional

controls at another facility, provided that the net sum of control

technologies is equivalent to (or better than) BACT being applied to each facility. However, the flexible permit rules prohibit

avoidance of controls required under PSD and NNSR, and such

facility-specific requirements are included within the permit document. Operational flexibility is available under the flexible permit to the extent that an owner or operator may vary throughput

rates, charge rates, firing rates, etc. as long as control requirements are met and compliance with emission caps and/or individual emission limits are maintained. New facilities authorized

through the flexible permit process must meet BACT at initial issuance of the permit or at such time they are authorized by the

flexible permit through subsequent amendments. For new facilities, BACT shall be demonstrated for that individual facility or

affected source. Therefore, the existing facilities do not operate

in violation of any BACT requirements. Similarly, because major

NSR permitting is not circumvented, the flexible permit program

is an approvable minor NSR program.

The rules are an enforceable NSR permitting program because

they include requirements necessary for enforcement and assurance of compliance, including specific up front methodologies to

support the determination of compliance. These requirements

are found, for example, in §§116.711, 116.715, and 116.716.

The TCEQ includes specific MRR conditions in flexible permits

issued under the current rules, as appropriate for the type of facilities and emissions authorized under a cap, and these MRR

conditions are adequate for determining compliance. In addition, the permit file contains documentation about how caps are

established in the permits. Regardless, more specific MRR requirements are in these amendments, are adopted to satisfy

EPA’s concerns about accountability, and the means of determining compliance are found in §116.715(d).

The commission has added text to ensure that the rules include

replicable procedures for establishing an emissions cap; see

§116.716.

The EPA stated that the program fails to meet the statutory

and regulatory requirements for a minor NSR SIP revision and

is not consistent with EPA policy and guidance on minor NSR

SIP revisions. By requiring controls at least as stringent as

BACT, the flexible permit program rules assure that the NAAQS

are achieved and thereby satisfy the requirements of FCAA

§110(a)(2)(C) and EPA’s rules regarding minor NSR permitting.

Moreover, Texas requires regulation of facilities that are broader

in scope than the specific requirements for regulation of major

stationary sources as required by FCAA, Title I, Parts C and D.

Texas law, and its SIP, is broader, in terms of types of facilities

and pollutants subject to regulation. The flexible permit program

as it exists and as amended in this rulemaking action meets

both the FCAA and the Texas Clean Air Act.

Finally, EPA provides no basis for its conclusion that the program

is not consistent with EPA policy and guidance on minor NSR SIP

revisions. The commission responds that these amendments

ensure that the program meets applicable statutory and regulatory requirements and are approvable as revisions to the Texas

SIP.

The executive director is preparing documentation consistent

with §110(l) of the FCAA, in support of these rules for submission

to EPA.

SECTION BY SECTION DISCUSSION

§116.13, Flexible Permit Definitions

The commission is adopting detailed MRR requirements

in proposed §116.715(c)(5), (6) and (12) and (d); see also

§116.711(2)(G). To support these MRR requirements, the

commission is adopting definitions of continuous emission

monitoring system (CEMS), continuous parameter monitoring

system (CPMS), and predictive emissions monitoring system

(PEMS) in §116.13. The definitions for these terms are derived

from similar definitions established in 40 CFR §52.21, with

35 TexReg 11912 December 31, 2010 Texas Register
minor changes to account for their use in the flexible permit

program. The changes relating to MRR are intended to address

the EPA’s comment that the Texas flexible permit program lacks

the specialized MRR requirements necessary to enforce flexible

permits.

The commission adopts amendments to the definition of "emission cap" and the definition of "individual emission limitation"

under §116.13 to delete references to the "insignificant emissions factor." The commission has also removed the insignificant emission factor from other sections of Subchapter G as discussed in following sections of this preamble. The EPA identified the insignificant emissions factor as a concern in the March

12, 2008, correspondence to the commission. The elimination

of the insignificant emissions factor would improve the accounting of emissions authorized under the flexible permit, and in part

addresses the EPA’s comments that the Texas flexible permit

program lacks replicable, specific, established implementation

procedures for establishing the emission cap, and does not sufficiently address major NSR requirements.

§116.710, Applicability

The commission adopts the amendment to §116.710(a)(5) to

clarify and emphasize that any project that constitutes a new major stationary source or major modification that would trigger major NSR requirements must comply with Subchapter B, Division

5 or 6, as applicable. Amended §116.710(a)(5) also contains

a statement to emphasize that Subchapter G cannot be used to

circumvent applicable major NSR permit requirements, including

those requirements which include retention of established limits. The adopted changes address the EPA’s comments that the

Texas flexible permit program is not clearly limited to minor NSR

thereby allowing new major stationary sources to construct without a major NSR permit, and has no regulatory provisions clearly

prohibiting the use of the program from circumventing the major

NSR SIP requirements.

The commission also adopts minor editorial changes throughout

§116.710 to correct outdated cross-references and obsolete terminology.

§116.711, Flexible Permit Application

The commission adopts amendments throughout §116.711 to

restructure and renumber the contents of this section to provide improved readability and greater consistency with similar

requirements in §116.111. The commission also adopts minor

changes throughout this section to update terminology and correct cross-references.

The commission adopts the amendment to §116.711(2)(C)(i) to

more clearly describe the application of BACT to new and existing facilities. New §116.711(2)(C)(i)(I) requires all new facilities are required to use BACT. New §116.711(2)(C)(i)(II) provides

that facilities may be considered on a grouped basis, such that

some facilities within the group may be controlled at a higher

level than BACT in order to provide the emission reductions necessary so that other facilities within the group may be controlled

to a lesser degree. In response to a comment, the rule has

been revised to allow new facilities to employ controls exceeding BACT in order to provide emission reductions that could be

used to balance a lower level of control on existing facilities, so

long as the overall level of control is at least as good as BACT.

The existing level of control may not be reduced for any facility

from its current authorization.

The commission adopts the amendment to §116.711(2)(C)(ii),

which contains language to clarify that projects which constitute

a new major source or major modification that would be subject

to federal PSD or nonattainment permitting must comply with

applicable requirements of §§116.150, 116.151, or 116.160 to

determine the necessary emission controls. This amendment

is intended to ensure that applicants understand and comply

with all applicable federal major NSR control requirements. This

amendment addresses the EPA’s comments that the flexible permit rules could be used to bypass the federal BACT or LAER

control technology determination that is required for major PSD

or NNSR projects. Compliance with control requirements established for facilities subject to PSD or NNSR and which are

included in a cap in a flexible permit is discussed in the RESPONSE TO COMMENTS portion of this preamble.

The commission adopts the amendment to §116.711(2)(G),

which requires that flexible permits shall specify requirements

for initial compliance testing and methods of determining ongoing compliance. The EPA expressed a concern that the

existing rule language, which contains the term "may" instead

of "shall," is not sufficiently specific. Although flexible permits

already specify appropriate compliance testing and compliance

determination methods within the conditions of the permit, the

commission has revised the rule language for greater clarity.

This amendment, in combination with others in this proposal,

addresses the EPA’s comments that the flexible permit program

is lacking in supporting MRR requirements, and is not sufficiently

enforceable.

The commission adopts amended §116.711(2)(H) and (I), which

specify that prior to applying the requirements of Subchapter G,

the applicant must first perform an analysis to determine the applicability or nonapplicability of federal NNSR requirements or

PSD requirements. These amendments address the EPA’s comment that the flexible permit program could be used to exempt

or shield changes from federal permitting requirements because

the program does not require that first an applicability determination be made whether the construction or modification is subject

to major NSR. In response to a comment, the word "separate"

was deleted from the rule text as proposed, to clarify that the

federal applicability determination analysis could be part of the

permit application.

The commission adopts the amendment to §116.711(2)(J),

which adds a requirement that any permit application for a

new flexible permit, or permit amendment, shall include an air

quality analysis to demonstrate that the proposed action will

not interfere with attainment and maintenance of the NAAQS.

This amendment addresses the EPA’s comment that the flexible

permit program does not sufficiently protect the NAAQS.

The commission adopts the amendment to §116.711(2)(M)(iv),

which requires that permit applicants provide a complete description of the emission point numbers (EPNs) and facilities

that will be included in an emissions cap. This amendment addresses the EPA’s comment that flexible permits must be structured in such a way that they sufficiently identify which units are

subject to emission caps and individual emission limits.

The commission adopts the amendment to §116.711(2)(M)(vi)

to specify that calculations to determine the controlled emission

rates from each facility shall be performed in accordance with

TCEQ Air Permits Division guidance.

The commission adopts the amendment to §116.711(2)(M)(vii)

to specify that the flexible permit application must identify any

ADOPTED RULES December 31, 2010 35 TexReg 11913
terms, conditions, and representations in any Subchapter B permit or permits which will be superseded or incorporated under

a flexible permit. The applicant shall include an analysis of how

the conditions and control requirements of Subchapter B permits will be carried forward in the proposed flexible permit. This

amendment addresses the EPA’s comment that existing SIP permits’ major and minor NSR terms, limits and conditions, must be

tracked and accounted for.

The commission adopts an amendment to §116.711(2)(N). In

response to a comment, the commission has deleted the term

"unit" and replaced it with the more appropriate term "facility."

§116.715, General and Special Conditions

The commission adopts the amendments to restructure and

renumber portions of §116.715, and adopts other minor changes

to improve readability and update terminology and cross-references throughout the section. Other amendments to §116.715

address the EPA’s comments that the flexible permit program

lacked sufficient MRR to ensure accountability and determine

compliance with flexible permits.

The commission adopts the amendment to §116.715(a) by deleting existing language concerning the executive director’s ability

to limit the use of standard permits or permits by rule in cases

where the increase of a particular air contaminant could result

in a significant impact on the air environment, or could cause

the facility, group of facilities, or account to become subject to

federal PSD or nonattainment permitting. This requirement has

been reorganized and relocated to §116.715(f).

The commission adopts the amendment to §116.715(b) to clarify that a flexible permit may contain more than one emission

cap for a specific air contaminant. The commission also adopts

language to specify that a permit holder shall comply with any

emission caps and individual emission limitations in the permit,

and that an exceedance of a flexible permit emission cap(s) or

individual emission limitations is a violation of the permit. These

amendments are in response to comments in the EPA’s correspondence to the commission dated March 12, 2008.

The commission adopts the amendments to §116.715(c)(5).

Amended §116.715(c)(5)(A) requires that each flexible permit

specify requirements for monitoring or demonstrating compliance with emission caps and individual emission limits in

the flexible permit. Amended §116.715(c)(5)(B) requires that

each flexible permit specify emission calculation methods for

calculating annual and short term emissions for each pollutant. These amendments address the EPA’s concerns that the

flexible permit rules are not sufficiently specific concerning the

monitoring and enforcement of flexible permit emission caps

and individual emission limits.

The commission adopts the amendment to §116.715(c)(6). The

amendment reorganizes the recordkeeping requirements applicable to flexible permits, and adds specific new recordkeeping

requirements to address certain EPA comments in the Notice

and in the March 12, 2008, correspondence from the EPA to the

commission. The amended requirements require flexible permit

applicants to maintain records of any other permit applications

associated with the flexible permit; require specific recordkeeping to document compliance with annual and short term emission

caps and individual emission limitations; and require that flexible permit holders maintain records for five years instead of two

years, as suggested by the EPA’s March 12, 2008, correspondence. In response to a comment, the commission has added a

recordkeeping requirement under §116.715(c)(6)(A)(iv) to specify that permit holders shall maintain records of any air quality

analyses performed under §116.718(c).

The commission adopts the amendments to §116.715(c)(7). In

response to a comment, the commission has revised this paragraph to include references to "group of facilities" and "account."

The commission adopts amendments to §116.715(c)(8), concerning compliance with representations in a flexible permit application. The proposed language concerning representations

was slightly revised in response to a comment.

The commission adopts the amendments to §116.715(c)(9). In

response to a comment, the commission has replaced the term

"unit" with the more appropriate term "facility."

The commission adopts the amendments to §116.715(c)(10). In

response to a comment, the commission has revised this paragraph to include references to "group of facilities" and "account."

The commission adopts the amendments to §116.715(c)(12)

and (d), which specify MRR procedures associated with

emission caps in a flexible permit. The amendments require

semiannual reporting relating to compliance with long and

short term emission caps similar to the semiannual reporting

suggested by the EPA’s March 12, 2008, correspondence to

the commission. The amendments include requirements to

address absence of monitoring data, require revalidation of

site generated data, and define minimum characteristics of the

monitoring system. In response to a comment, the commission

has added language to the revalidation requirements to clarify

that if revalidation testing shows that emission factors have

increased, the permit holder must obtain a permit alteration or

amendment to adjust the factor and account for the increased

emissions. Also in response to a comment, the commission

has revised §116.715(c)(12)(A)(i)(IV) so that only data that is

necessary to demonstrate compliance is required to be included

in the semiannual report. The commission has also revised

§116.715(c)(12)(A)(i)(VII) in response to a comment, to clarify

that the term monitoring system means a system that is used for

determining compliance with the emission cap or any individual

emission limit of the permit. In response to comments, the commission has also revised §116.715(c)(12)(A)(i)(VIII) to correct

an erroneous cross-reference, and to reference the six-month

period for adjusting emission caps due to the shutdown of

facilities. The commission has also revised §116.715(c)(12)(C)

in order to clarify what action is needed in the event that revalidation testing demonstrates that emissions have increased.

In response to a comment, the commission also adopts an

amendment to §116.715(d) which requires that the permit specify which of the monitoring options under §116.715(d)(2)(A)-(E)

are designated as the method of determining compliance.

In response to comments, the commission has revised

§116.715(d)(2)(D)(iii) to eliminate the proposed reference to the

term "significant facility." The adopted rule maintains the validation testing requirement, but instead of applying to significant

facilities as defined in §116.12, this requirement would apply

to facilities that emit or have the potential to emit the relevant

pollutant(s) in quantities that exceed PSD or NNSR significance

levels.

The commission adopts the amendments to §116.715(e) and (f)

without change from the proposed text.

§116.716, Emission Caps and Individual Emission Limitations

35 TexReg 11914 December 31, 2010 Texas Register
The commission has adopted changes throughout this section

to improve readability and update terminology, and has restructured proposed changes in subsection (a) to now be located in

subsections (a) - (c). Other amendments throughout §116.716

are intended to address the EPA’s comment that the flexible permit program lacks replicable, specific, established implementation procedures for determining an emissions cap, and address

several of the EPA’s comments in the March 12, 2008, correspondence to the commission.

The commission is adopting an amendment to §116.716(a). In

response to comments, the commission has revised the proposed language concerning like-kind facilities and a site-wide

emission cap, and has restructured and rephrased subsection

(a) to use more appropriate terminology which is consistent with

definitions in Chapter 101, General Air Quality Rules, and to

improve clarity. The adopted rule allows a permit applicant to

establish an emission cap for all facilities at an account, which

would include every facility at the account, or to establish an

emission cap comprised of a designated group of facilities at

the account. A designated group would logically be a subset

of all of the facilities at an account. Account is defined in §101.1

as, "for those sources required to be permitted under Chapter

122 of this title (relating to Federal Operating Permits Program),

all sources that are aggregated as a site. For all other sources,

any combination of sources under common ownership or control

and located on one or more contiguous properties, or properties

contiguous except for intervening roads, railroads, rights-of-way,

waterways, or similar divisions." The amended rule allows permit applicants full flexibility to designate facilities for inclusion in

an emission cap as they see fit, without restriction on the type or

location of the facility, as long as it complies with the definition

of account. The rule still provides, as proposed in subsection

(a)(1) and adopted in new subsection (b), that the executive director may exclude a proposed facility from an emissions cap if

the executive director determines that the inclusion of the facility

in the cap could interfere with the ability to monitor compliance

with the permit, or determines that the inclusion of the facility in

the cap could interfere with the protection of human health and

the environment.

The commission adopts the amendment proposed to

§116.716(a)(2), adopted as §116.716(c)(1), which contains requirements associated with the required application of controls

for facilities under an emission cap. The amendment adds

language to clarify and reinforce the application of federally-required control technology for any project that constitutes a major

stationary source or major modification. This provision further

addresses the EPA’s stated concerns that the flexible permit

program could allow a facility to avoid federally-required control

technology.

The commission adopts the amendment proposed to

§116.716(a)(3), adopted as §116.716(c)(2), which requires that

facilities subject to LAER in accordance with Subchapter B,

Division 5, must be included in a separate emissions cap or

provided with individual emission limitations. This provision

ensures that sources subject to LAER are fully controlled as

required by federal NSR regulations and Subchapter B.

The commission adopted no changes to proposed

§116.716(a)(4), but has renumbered this paragraph as

§116.716(c)(3).

The commission adopts the amendment proposed to

§116.716(a)(5), adopted as §116.716(c)(4), which specifies that

a permit applicant may propose an emission cap that is lower

than the emission cap determined by subsection (c)(3), if the

permit applicant provides technical information to demonstrate

that it is feasible to operate in compliance with the proposed

emission cap.

The commission adopted no changes to proposed §116.716(b),

but has renumbered it at adoption as §116.716(d).

The commission adopts the amendment proposed to

§116.716(c), adopted as §116.716(e), which requires that each

flexible permit clearly identify, by a table or other appropriate

means, the facilities that are subject to an emission cap, and the

facilities that are subject to individual emission limitations. This

amendment addresses the EPA’s comment that each flexible

permit must be structured in such a manner that it will be clear

which facilities are included under the permit and emission cap,

and which facilities are subject to individual emission limitations.

The commission deletes existing §116.716(d), concerning the

"insignificant emissions factor" which the EPA had identified as

a concern.

The commission adopts the amendment proposed to

§116.716(d), adopted as §116.716(f), which clarify how an

emission cap is to be adjusted or determined for several situations. Section 116.716(f)(1) requires that an emission cap

be adjusted downward to account for the shutdown of a facility

for a period longer than six months. This would ensure that

the emissions cap corresponds to the actual operation of the

facilities under the cap and ensure that appropriate emission

control is maintained even when some sources within the cap

are not operating. The commission also adopts language to

clarify how the emission cap is to be adjusted when a previously

shut down facility is restored to operation.

Section 116.716(f)(2) is amended to clarify that a permit amendment is required to add a facility to a flexible permit emission

cap. Section 116.716(f)(3) is also amended to further explain

how the emission cap shall be adjusted when new facilities are

added or when facilities in the cap are modified. The commission

has rephrased and restructured §116.716(f)(3) in response to a

comment relating to major NSR applicability. Subsection (f)(3)

is further subdivided into subparagraphs (A) and (B) to provide

clarity with regard to the types of facilities included in application

for adjustment that is an increase in an emission cap.

The commission adopts the amendment proposed to

§116.716(d)(4), adopted as §116.716(f)(4), concerning the

adjustment of emission caps when facilities under a cap become subject to new rules or regulations that require emission

reductions. The commission has added references to the terms

"group of facilities" and "account" to this paragraph in response

to a comment.

The commission adopts the amendment proposed to

§116.716(e), adopted as §116.716(g), which requires that each

emission cap or individual emission limitation have an annual

emission limit, based on a 12-month rolling period. The adopted

rule also requires that each emission cap or individual emission

limitation include an appropriate short term (such as hourly)

emission limit.

The commission adopts §116.716(h) which provides that when

a cap is established or adjusted, major NSR requirements must

be met prior to issuance, amendment, or alteration of the permit.

§116.717, Implementation Schedule for Additional Controls

ADOPTED RULES December 31, 2010 35 TexReg 11915
The commission adopts the amendment to §116.717 to clarify

that any control implementation schedule contained in a flexible

permit is a requirement of the permit, such that if the schedule

cannot be met, the permit holder must obtain a permit amendment or alteration to revise the control schedule in order to maintain compliance with the permit. The permit amendment or alteration would have to be approved by the executive director before

the control schedule deadline specified in the permit passes. In

addition, the commission has adopted language in this section to

acknowledge and emphasize that certain federally-required controls, such as BACT or LAER required by PSD or NNSR, must

be in place and operational before the permitted facility can begin operation. The amendment addresses the EPA’s comments

relating to implementation schedules in the March 12, 2008, correspondence from the EPA to the commission, and further ensures that the flexible permit program cannot be used to forestall

or avoid major NSR control requirements.

§116.718, Significant Emission Increase

The commission adopts the amendment to §116.718(b) which includes several requirements related to major NSR review. Since

proposal, the commission has subdivided the rule into six paragraphs for clarity and readability. This subsection clarifies that

a physical or operational change under a flexible permit for any

project that constitutes a federal major modification must comply

with Subchapter B, Division 5 or 6. Adopted §116.718(b) further

requires that the permit holder must document that any increases

under this section are not major modifications. The amendment

further addresses the EPA’s comments that the flexible permit

program could be used to avoid applicable major NSR requirements by specifying that when determining whether a change

is a major modification as defined in §116.12, the project emissions increase and the project net shall be determined as specified as defined in §116.12, regardless of how the existing facilities are authorized. In addition, this subsection requires that for

new facilities, or modified facilities under an emission cap for the

pollutant where the permit holder elects to use potential to emit

rather than projected actual emissions from the facility to determine the project emissions increase, the potential to emit shall

be considered as the proposed emissions cap (unless the use

of an alternate method is demonstrated).

The commission adopts the amendment to §116.718(c) which

requires a permit holder to perform an air quality analysis to

demonstrate that any increases under this section would not interfere with attainment and maintenance of the NAAQS. This

amendment addresses the EPA’s comment in the Notice that the

flexible permit program does not contain sufficient assurances

that the NAAQS will not be violated. In response to a comment, the commission has slightly revised the language to clarify

that the air quality analysis is required if operational or physical

changes cause an increase in emissions from any facility (even

if there are emission decreases at other facilities). The commission has also revised §116.718(c) to include references to "group

of facilities" and "account," as suggested by a comment.

§116.720, Limitation on Physical and Operational Changes

The commission adopts the amendment to §116.720, which consists of minor changes to improve readability.

§116.721, Amendments and Alterations

The commission adopts the amendment to §116.721 which clarifies under what circumstances a flexible permit amendment is required. The amendment to §116.721(a) includes language stating that any action that would relax emission controls, add a new

facility or facilities, or would constitute a major modification requires the permit holder to obtain a permit amendment. Similar

language has been added to §116.721(c) for the same purpose.

These changes are intended to prevent "backsliding" of emission controls, and ensure that projects that constitute a major

modification are subject to an appropriate review for applicable

federal requirements. The commission also adopts minor editorial changes to this section to update terminology and improve

readability.

§116.730, Compliance History

The commission adopts minor editorial changes to §116.730 to

improve readability and update terminology.

§116.740, Public Notice and Comment

The commission adopts minor editorial changes to §116.740 to

improve readability and correct outdated cross-references. In a

separate action, the commission has adopted revised rules regarding public participation in Chapter 39, Public Notice, Subchapters H and K, and in Chapter 55, Requests for Reconsideration and Contested Case Hearings; Public Comment, Subchapter E. Some of these changes apply to flexible permit applications.

§116.750, Flexible Permit Fee

The commission adopts an amendment to §116.750 that revises

how fees for flexible permits are determined. Since the inception

of the flexible permit program in 1994, fees for flexible permits

have been determined based on the quantity of emissions authorized, at a rate of $32 per ton (with a minimum fee of $900, and

a maximum fee of $75,000). The amended rule requires that

flexible permit fees be based on a percentage of project capital cost, rather than based on emission rate. The amendments

make flexible permits subject to the existing fee system used for

Subchapter B air permits, as specified in §116.141. The minimum fee of $900 and the maximum fee of $75,000 have been

retained.

§116.765, Compliance Schedule

The commission adopts new §116.765 to specify that the rule

changes in this action would not apply to permit applications or

permit amendments until the date 60 days after the EPA publishes final approval of these sections as revisions to the Texas

SIP. Until such time, the existing Subchapter G rules concerning

flexible permitting would apply. The commission has eliminated

the proposed alternate compliance date of December 1, 2012, in

response to a comment. The commission has also revised the

rule language so that this section specifies a compliance date,

rather than an effective date for the rule. This change provides

the commission with more flexibility to revise these rule sections,

if necessary, in the future.

FINAL REGULATORY IMPACT ANALYSIS DETERMINATION

The commission reviewed the adopted rulemaking in light of the

regulatory impact analysis requirements of Texas Government

Code, §2001.0225, and determined that the rulemaking does not

meet the definition of a major environmental rule as defined in

that statute, and in addition, if it did meet the definition, would

not be subject to the requirement to prepare a regulatory impact

analysis.

A major environmental rule means a rule, the specific intent of

which is to protect the environment or reduce risks to human

health from environmental exposure, and that may adversely affect in a material way the economy, a sector of the economy, pro35 TexReg 11916 December 31, 2010 Texas Register
ductivity, competition, jobs, the environment, or the public health

and safety of the state or a sector of the state. The specific intent

of the adopted rules is to amend various sections of Subchapter G to address concerns expressed by the EPA regarding the

agency’s flexible permit program submitted by the commission

as a revision to the SIP. These changes to established rules for

the flexible permit program are necessary to ensure that the rules

can be a federally-approved part of the Texas SIP. Specifically,

these amendments: 1) include detailed MRR requirements; 2)

provide replicable, specific, established implementation procedures for establishing the emission cap; 3) clearly limit the rules

to minor NSR; 4) include regulatory provisions clearly prohibiting

the use of the program from circumventing the major NSR permitting; 5) ensure that the rules cannot be used to bypass the

federal BACT or LAER control technology determination that is

required for major PSD or NNSR projects; 6) specify requirements for initial compliance testing and methods of determining

ongoing compliance; 7) ensure that the NAAQS are sufficiently

protected; 8) include requirements for clarity of which facilities

are included under the permit and any emission cap, and that

there are sufficient monitoring and enforcement requirements for

the emission caps and individual emission limits; and 9) provide

for a delayed compliance date.

As defined in the Texas Government Code, §2001.0225 only applies to a major environmental rule, the result of which is to: 1)

exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement of

state law, unless the rule is specifically required by federal law;

3) exceed a requirement of a delegation agreement or contract

between the state and an agency or representative of the federal government to implement a state and federal program; or 4)

adopt a rule solely under the general powers of the agency instead of under a specific state law. This rulemaking action does

not meet any of these four applicability requirements of a "major

environmental rule." Specifically, the amendments were developed to correct EPA-identified deficiencies in the commission’s

flexible permit program to ensure SIP approval by the EPA and

thus meet a requirement of federal law. This rulemaking action

does not exceed an express requirement of state law or a requirement of a delegation agreement, and was not developed

solely under the general powers of the agency, but was specifically developed to meet the requirements of the Texas SIP, and

the requirements of the FCAA and its associated regulations,

and is authorized by specific sections of Texas Health and Safety

Code, Chapter 382 (also known as the Texas Clean Air Act), and

the Texas Water Code, which are cited in the STATUTORY AUTHORITY section of this preamble.

Therefore, this rulemaking action is not subject to the regulatory

analysis provisions of Texas Government Code, §2001.0225(b).

The commission did not receive any comment on the DRAFT

REGULATORY IMPACT ANALYSIS.

TAKINGS IMPACT ASSESSMENT

Under Texas Government Code, §2007.002(5), taking means a

governmental action that affects private real property, in whole or

in part or temporarily or permanently, in a manner that requires

the governmental entity to compensate the private real property

owner as provided by the Fifth and Fourteenth Amendments to

the United States Constitution or §17 or §19, Article I, Texas Constitution; or a governmental action that affects an owner’s private

real property that is the subject of the governmental action, in

whole or in part or temporarily or permanently, in a manner that

restricts or limits the owner’s right to the property that would otherwise exist in the absence of the governmental action; and is

the producing cause of a reduction of at least 25 percent in the

market value of the affected private real property, determined by

comparing the market value of the property as if the governmental action is not in effect and the market value of the property

determined as if the governmental action is in effect.

The commission completed a takings impact analysis for this

rulemaking action under Texas Government Code, §2007.043.

The primary purpose of this rulemaking action, as discussed

elsewhere in this preamble, is to amend the rules related to flexible permits to obtain federal approval of the rules into the Texas

SIP. The rules will not create any additional burden on private

real property. The rules will not affect private real property in a

manner that would require compensation to private real property

owners under the United States Constitution or the Texas Constitution. The rules also will not affect private real property in a

manner that restricts or limits an owner’s right to the property

that would otherwise exist in the absence of the governmental

action. Therefore, the adopted rules will not cause a taking under Texas Government Code, Chapter 2007.

The commission did not receive any comment regarding the Takings Impact Assessment.

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM

The commission determined that this rulemaking action relates

to an action or actions subject to the Texas Coastal Management Program (CMP) in accordance with the Coastal Coordination Act of 1991, as amended (Texas Natural Resources Code,

§§33.201 et seq.), and commission rules in Chapter 281, Applications Processing, Subchapter B. As required by §281.45(a)(3)

and 31 TAC §505.11(b)(2), relating to Actions and Rules Subject

to the Coastal Management Program, commission rules governing air pollutant emissions must be consistent with the applicable

goals and policies of the CMP. The commission reviewed this

action for consistency with the CMP goals and policies in accordance with the rules of the Coastal Coordination Council and

determined that the action is consistent with the applicable CMP

goals and policies.

The CMP goal applicable to this rulemaking action is the goal

to protect, preserve, and enhance the diversity, quality, quantity, functions, and values of coastal natural resource areas (31

TAC §501.12(l)). The adopted rules will benefit the environment

by ensuring that the flexible permit program meets applicable

federal requirements, and is adequately enforceable so that air

quality is protected. The CMP policy applicable to this rulemaking action is the policy that commission rules comply with federal

regulations in 40 CFR, to protect and enhance air quality in the

coastal areas (31 TAC §501.32). Therefore, in accordance with

31 TAC §505.22(e), the commission affirms that this rulemaking

action is consistent with CMP goals and policies.

The commission invited public comment regarding the consistency with the coastal management program during the public

comment period. No comments were received.

EFFECT ON SITES SUBJECT TO THE FEDERAL OPERATING

PERMITS PROGRAM

Chapter 116 is an applicable requirement under Chapter 122,

Federal Operating Permits Program. Owners or operators subject to the federal operating permit program must, consistent with

the revision process in Chapter 122, upon the effective date of

ADOPTED RULES December 31, 2010 35 TexReg 11917
the adopted rulemaking, revise their operating permit to include

any new applicable Chapter 116 requirements.

PUBLIC COMMENT

The commission held a public hearing on the proposed rules

in Austin on July 29, 2010, at 2:00 p.m., in Building E Room

201S, at the commission’s central office located at 12100 Park

35 Circle. The comment period closed on August 2, 2010. The

commission received comments from EPA Region 6, District 90

State Representative Lon Burnam (Rep. Burnam), The City of

Houston, Environmental Integrity Project (EIP), Texas Chemical

Council (TCC), Texas Industry Project (TIP), Texas Oil and Gas

Association (TxOGA), and the United States Department of Energy Pantex Plant (Pantex).

RESPONSE TO COMMENTS

General Comments or Comments Covering Multiple Sections

The City of Houston commented that the proposed rules do not

adequately address the EPA’s concerns and do not ensure compliance with the FCAA, and that its comments support this conclusion.

The commission does not concur that the proposed rules do not

address the EPA’s concerns and do not ensure compliance with

the FCAA. This is demonstrated by the rule text and accompanying preamble text.

TIP expressed support for the existing flexible permits program

and stated that it has contributed toward significant air quality

improvements over the last decade. TIP stated that they support

revisions and clarifications to the program that further the goal

of a federally-approved set of regulations.

The commission appreciates the support and concurs that the

flexible permits program has contributed toward air quality improvements.

TxOGA stated that it supports the current flexible permits program and encouraged TCEQ to make only limited changes as

necessary to address reasonable concerns of the EPA.

The commission appreciates the support, and in general, nearly

all of the rule changes are directly or indirectly related to concerns identified by the EPA.

TxOGA indicated concurrence with the detailed comments submitted by TIP.

The commission has added a reference to TxOGA in association

with detailed comments submitted by TIP.

TxOGA stated that it opposes redefining by rule major NSR applicability definitions and principles.

This rulemaking concerns the flexible permits program, which

is a minor NSR permit program. It does not affect major NSR

requirements. Rather, the amendments to §116.711(H) and (I)

were added to reinforce the current rule requirement that major

NSR review is always the first review conducted when an application is received.

Rep. Burnam expressed support for certain specific aspects of

the proposed rulemaking (such as §116.710(a)(5), §116.718(b),

§116.716(c), and the proposed deletion of §116.716(d), relating

to the nine percent insignificant emission factor), but also expressed concern that the proposed changes as a whole do not

go far enough toward addressing the EPA’s fundamental concerns about the program. Rep. Burnam commented that the

commission should not adopt the proposed flexible permitting

program.

The commission appreciates Rep. Burnam’s support for the referenced provisions. The commission does not concur that the

proposed changes are not sufficient to address the EPA’s fundamental concerns with the program. The proposed changes have

addressed the EPA’s major alleged deficiencies, in areas such

as: practical enforceability (by improved MRR requirements);

protection of air quality and NAAQS (by the proposed requirement for an air quality analysis for changes that could affect

air quality); prevention of circumvention of major NSR requirements; replicable procedures for determining emission caps (by

more explicit requirements concerning the determination of the

emission cap and adjustments to the emission cap); and other

changes. These are discussed more thoroughly elsewhere in

this preamble, and the commission refers the commenter to that

discussion.

Rep. Burnam commented that the proposed revisions do not

address the shortcoming that a permit applicant may determine

the emission cap using a potential-to-emit baseline. Rep. Burnam stated that starting from a high-end baseline allows for too

lenient an emission standard. Rep. Burnam stated that actual

emissions should be used to make applicability determinations.

Emission caps are developed based on the potential to emit after

the application of BACT or LAER emission controls, as applicable. This is exactly the same emission standard as required for

other permitting. The term "baseline" issued in determining the

applicability of major NSR. The newly adopted rule makes these

requirements more explicit in §116.711(H) and (I). This evaluation requires the use of actual emissions, not the potential to

emit. TCEQ rules do not, and never have, allow the use of allowable emissions in lieu of actual emissions in this analysis.

The City of Houston stated that the proposed rules fail to adequately address 40 CFR §51.l65(a)(2)(ii), which requires that

the flexible permits program include applicability determination

procedures for major NSR applicability review that use the specific provisions of 40 CFR §51.165(a)(2)(ii)(A) - (F) unless the

flexible permit regulations are at least as stringent in all respects

as the federal provisions. The City of Houston also commented

that the proposed rules do not adequately address 40 CFR

§51.166(a)(7), which requires that the flexible permit regulations

include the specific applicability determination procedures of

§51.166(a)(7)(i) - (vi) for PSD applicability review.

Section 116.711(2)(H) and (I) of the flexible permit rules require

that these applicability determinations be performed. The commission’s rules regarding PSD review in Chapter 116, Subchapter B, Division 6 are approved as part of the Texas SIP. The

most recent versions of the commission’s rules regarding nonattainment review in Chapter 116, Subchapter B, Division 5, as

adopted prior to 2006, were previously approved as part of the

Texas SIP. The commission has proposed rule amendments, as

published in the August 27, 2010, issue of the Texas Register, to

address the EPA’s concerns with the rules as amended in 2006,

and is confident that these proposed amendments will be approved by the EPA as revisions to the SIP and are at least as

stringent as the EPA’s rules. Regardless, PSD and nonattainment applicability reviews are properly conducted for all permit

applications.

The City of Houston commented that the proposed rules should

require both air dispersion modeling and ambient air monitoring.

The City of Houston stated that air monitoring could be used to

35 TexReg 11918 December 31, 2010 Texas Register
validate and verify the required dispersion modeling, and monitoring allows for background concentrations to be measured and

considered to ensure that proposed emission increases will not

interfere with the attainment and maintenance of the NAAQS.

No change was made in response to this comment. Although

the commission agrees that ambient air monitoring is a useful

tool, it is simply not practical, necessary, or economically feasible to require site-specific air monitoring, either before or after

construction, for every project which results in an emission increase. The commission already conducts extensive air monitoring for purposes of monitoring regional air quality, and specialized air monitoring in targeted areas where emissions of certain

pollutants are known to be a concern. Permits issued by the

commission are demonstrated to be protective, so there is typically no justification to require monitoring in conjunction with the

permit. It is possible that in specific cases, a flexible permit may

include provisions for ambient air monitoring, but this would be

decided on a case-by-case basis and would not be a generalized

requirement for all flexible permits.

The City of Houston commented that the rule changes should

include a requirement that the worst-case emissions from each

individual source be included in the permit application, and that

these limits from the permit application be included in the permit

as an emission limit. Alternatively, the City of Houston stated that

TCEQ should clarify in the rule, if only certain individual source’s

emission limitations are included in the permit and others are

not, what the criteria are for individual source’s emission limits

being included in the permit. The City of Houston stated that the

individual emission limitations of each source should be readily

available in the permit document, in order to support compliance

determinations.

No changes were made in response to this comment. The application must identify the facilities to be included in emission caps

and the emissions at the maximum expected capacity; however,

these rates may change if minor operational or physical changes

are made after the permit is issued; of course, prior to these

changes the review for major NSR determined that it was not

triggered. Individual emission rate limits may be included in the

permit if requested by the applicant. Other reasons for individual limits, separate caps, or subcaps may be to clearly specify

a mode of operation (such as emission caps for maintenance,

startup, and shutdown) or to limit emissions of a specific compound (such as benzene). The permit will clearly identify any

sources subject to individual emission limitations, and will clearly

identify the applicable emission limit for those sources.

The City of Houston commented that the rules should stipulate

that all source-specific emission limitations that are based on

BACT or LAER must be in the permit document.

Any source-specific emission rate limits must be shown in the

permit regardless of whether they are based on BACT, LAER, or

some other more stringent basis, such as off-property impacts

concerns. Note that most, if not all, control technology requirements are independent of a facility’s operating rate and are specified in the permit conditions. No change was made in response

to this comment.

EIP acknowledged that certain aspects of the proposed rules included useful clarifications or positive changes relative to the existing flexible permit rules. EIP specifically noted the following

proposed rule changes as being improvements: the language

clarifying that the flexible permit program may not be used to

circumvent, or be used in lieu of, the PSD or NNSR programs;

the clarification that exceedances of flexible permit caps or individual emission limitations constitute violations; the requirement

of proposed §116.715(c)(5) that the permit, itself, reflect most of

the monitoring requirements and the algorithms (for limits that

are not rather directly monitored); the requirement that application representations are conditions upon which a permit is issued; the requirement that terms of existing NSR permits - when

superseded by, or incorporated into the terms of the flexible permit - be explicitly addressed in flexible permit applications; and,

the proposed recordkeeping and production requirements of proposed §116.715(c)(6).

The commission appreciates the support for the cited portions of

the proposed rule.

EIP commented that although the proposed rules may contain

certain improvements, the proposed rule changes are not sufficient to resolve larger problems with the flexible permit program,

including a lack of practical enforceability, and opportunities for

permit applicants to circumvent NSR.

The commission does not agree that the rules lack practical

enforceability, allow circumvention of applicable NSR requirements, or lack public participation. Specifically, the commission

notes that there are several rule amendments that address

practical enforceability issues, including, for example, the

changes to §116.715(b), which specifies that the permit holder

shall comply with all flexible permit emission caps and individual

emission limitations; §116.715(c)(5),(6), and (12), regarding

MRR requirements; §116.715(d), regarding specifications for

monitoring systems; and §116.716(g), regarding specification of

an annual emission limitation in tons per year and a practically

enforceable short term emission limitation. This rulemaking

also contains a number of amendments specifically addressing

major NSR requirements, relating to applicability, circumvention,

and appropriate control technology reviews for major NSR. No

change was made in response to this comment.

EIP commented that there is a lack of public participation when

changes are made at facilities covered by a flexible permit.

No change was made in response to this comment. Although

the EPA formally disapproved the public participation rule in the

flexible permit program, §116.740, the commission adopted new

and amended rules in Chapters 39 and 55 on June 2, 2010 (as

published in the June 18, 2010, issue of the Texas Register) that

address concerns with and applicability of public participation requirements for flexible permit applications. Therefore, this comment is beyond the scope of this rulemaking.

EIP commented that the overhead for the permit applicant,

TCEQ staff, and the public associated with adhering to (for the

permit holder) and understanding and enforcing (for the staff and

the public) a permit issued under the flexible permit program,

and meshing the requirements for that permit with those for the

PSD, NNSR and other minor NSR programs, outweighs the

benefits the permit applicant receives from this program. EIP

stated that if adopted, the proposed rules will continue to place

Texas industry at risk of violating the FCAA, and will deny the

public the protections offered by that federal law.

No changes were made to the rules in response to this comment.

The commenter has not clearly explained what it means that the

flexible permit program creates an "overhead" of requirements

that outweigh the benefits of the program for applicants, the public, or TCEQ, and therefore the commission cannot provide a

response that specifically addresses this comment. The flexible permit rules are for a separate minor NSR program, and are

ADOPTED RULES December 31, 2010 35 TexReg 11919
developed to provide operational flexibility while ensuring that

major NSR is not circumvented, and that practically enforceable

permits are issued which meet requirements for control technology and are protective of public health and the environment. The

EPA has consistently recognized that states have flexibility to

develop their minor NSR programs, required by §110(a)(2)(C)

of the FCAA. Texas has done this while meeting the applicable federal and state statutory and regulatory requirements. The

amendments adopted in this rulemaking ensure that the practices of the commission in developing and issuing enforceable

permits are adequately and thoroughly included in the rules for

this minor NSR program. Over the prior years that this program

has been in place, substantial air quality improvements have

been made under the flexible permits program, and at the same

time, flexible permit holders have benefited from the flexibility afforded by the program. The commission does not concur that the

flexible permit program violates the FCAA, and it expressly finds

that these rules meet the applicable requirements of the FCAA.

EIP commented that TCEQ should not approve the proposed

flexible permit program rules because the flexible permit program is not approvable into the Texas SIP. EIP stated that the

program can be an addition to federal SIP-approved requirements, but the program cannot be used in lieu of or replace the

obligation of new sources of air pollution or modifications of existing sources to obtain NSR, including minor NSR, permits.

This comment is not specific as to why the flexible permit program is not approvable into the SIP. The flexible permits program does not replace or eliminate the obligation of new or modified sources to obtain NSR authorization, be they minor or major

sources. The rules do not replace the major source permitting

rules in Chapter 116, Subchapter B, Divisions 5 and 6. Further,

these rules do not replace the minor NSR rules in Chapter 116,

Subchapter B; rather, this is an additional minor NSR permit program that can be approved by the EPA as part of the Texas SIP.

No change was made in response to this comment.

EIP commented that, based on the language of proposed

§116.710(a)(5), §116.715(f), and §116.716(a)(2)(B), a PSD or

NNSR source could obtain a flexible permit, and therefore all

of the reasons the EPA stated for rejecting the current flexible

permit program as not meeting substitute major NSR program

requirements also apply to the proposed flexible permit program.

The commenter is correct that under the existing and proposed

flexible permit rules, a project with facilities subject to PSD or

NNSR can be included in a flexible permit, and can be included

in a cap in a flexible permit; this is discussed in more detail elsewhere in this preamble. However, the flexible permit authorization is a minor NSR authorization only, and does not exempt any

facilities from meeting all applicable major NSR requirements,

such as appropriate federal BACT, or LAER, or other federal requirements. In summary, if there are facilities subject to PSD

and/or NNSR requirements, a PSD and/or NNSR authorization

is part of the same document that includes the minor NSR flexible permit authorization. No change was made in response to

this comment.

EIP commented that the EPA disapproved the current flexible

permit program because the MRR was not sufficient to satisfy the

criteria of enforceability. EIP stated that the proposed changes

(§116.715(c)(5), (6), and (12); (d); and §116.711(2)(G)) do not

remedy this defect. EIP stated that proposed §116.715(c)(5)(A)

requires monitoring or demonstrating compliance, thus, monitoring is not necessarily required. Furthermore, §116.715(c)(5)(C)

provides that whatever monitoring is actually included in the

permit can nevertheless be disregarded without any public

review if the permittee requests it. EIP stated that similarly

§116.715(d)(2)(E) also provides the executive director with

wide latitude for picking a monitoring system regardless of the

parameters set forth in §116.715(d)(2)(A) - (D).

The commission does not agree with the comment. The language in proposed §116.715(c)(5)(A) relating to monitoring or

demonstrating compliance is a deliberate choice because in

some cases direct monitoring of emissions or parameters may

not be the only possible method of determining compliance.

In addition, in some cases the permit may specify a method

of monitoring plus additional methods or techniques related

to determining compliance. Proposed §116.715(c)(5)(C) and

(d)(2)(E) do allow for a permit holder to request an alternative

method of monitoring or sampling, but these requests must

be approved by the executive director prior to their use. The

ability of the executive director to approve alternate methods

is necessary because the rules and standard methods cannot

address every possible fact situation, and at times a unique

or creative approach is needed, or is more efficient than a

standard method. Both rules adopted by the commission, such

as §116.115(b)(2)(D) and §115.725(a)(4), and permits routinely

provide the executive director with the authority to evaluate

and approve alternate methods of testing and monitoring. No

change was made in response to this comment.

EIP commented that, in disapproving the existing flexible permit

program, the EPA found the rules fail to require specific recordkeeping sufficient to ensure that all terms and conditions of existing permits (including representations in the applications for

such permits) that are incorporated into the flexible permit continue to be met. The rules lack adequate program requirements

for the tracking of existing SIP permits’ major and minor NSR

terms, limits, and conditions, and whether such requirements

are incorporated into a flexible permit or they remain outside the

coverage of the flexible permit. Minor and major NSR permits,

as well as minor NSR SIP permits by rule and standard permits,

can be incorporated into a flexible permit without any program

requirement in place that ensures the SIP permits’ terms and

conditions are included in the flexible permit, as published in the

Federal Register (74 FR 48493). EIP stated that the proposed

rules have the same problem. EIP stated that the proposal explains that the "flexible permit would then become the controlling

authorization for all facilities included in the permit, succeeding

any existing minor NSR permits that may have been applicable

to all or part of the facilities."

No change was made in response to this comment. Section

116.711(2)(M)(vii) specifically requires applications that include

currently authorized facilities issued under Chapter 116, Subchapter B must identify any terms, conditions, and representations in the Subchapter B permit or permits which will be superseded by or incorporated into the flexible permit. The applicant

shall include an analysis of how the conditions and control requirements of Subchapter B permits will be carried forward in

the proposed flexible permit. This will allow the commission to

review the application to ensure there is no backsliding from existing requirements. Therefore, to be eligible for a flexible permit, applicants will have to maintain sufficient records to meet

this specific requirement.

In addition, although an applicant can apply for a flexible permit

to change the authorization for minor sources from authorization

under Subchapter B, or from a standard permit to permit by rule,

partial permitting is not allowed. As a result, facilities cannot

35 TexReg 11920 December 31, 2010 Texas Register
have both a Subchapter B minor NSR permit and a Subchapter

G minor NSR permit. Facilities that are currently authorized by a

permit by rule or a standard permit that are proposed to become

authorized under a flexible permit must meet the requirements

to be authorized under the Subchapter G rules.

The primary purpose of this rulemaking is to address deficiencies alleged by the EPA, as discussed elsewhere in this preamble. With regard to major sources, §116.710(a)(6) specifically

provides that no person shall use the rules in Subchapter G to

circumvent the requirements for major NSR permits that are in

Chapter 116, Subchapter B, Divisions 5 and 6. This paragraph,

together with §116.711(2)(H) and (I), ensure that major NSR is

considered prior to issuance or amendment of a flexible permit,

a minor NSR permit, and that any existing major NSR permit

continues to comply with the applicable requirements. Therefore, there is no basis for adding additional requirements in the

flexible permit rules for tracking major NSR permit terms in the

Subchapter G minor NSR permit.

The EPA commented that the commission must delineate the

definitions of "account," "facility" and "group of facilities" where

used in Subchapter G. In addition, it is not clear how a "unit"

relates to these terms. The EPA states that the use of these

terms must be explained sufficiently so that it is clear why one

(or more) of these terms is used in certain instances and not in

others throughout Subchapter G.

The commission has revised the rules in response to this

comment. As the EPA is aware, the cornerstone of the Texas

air quality permitting program is a "facility." The term is defined

in the Texas Clean Air Act, Texas Health and Safety Code,

§382.009(3), and in commission rule in §116.10(4), and is

approved as part of the Texas SIP. "Facility" is defined as "a

discrete or identifiable structure, device, item, equipment, or

enclosure that constitutes or contains a stationary source, including appurtenances other than emission control equipment.

A mine, quarry, well test, or road is not considered to be a

facility." A facility may constitute or contain a stationary source -

a point of origin of an air contaminant. The commission did not

intend the use of the term "unit" and has replaced it with the most

appropriate term "facility" in §116.711(2)(N) and §116.715(c)(9).

However, the commission has made no change with regard to

the use of these three terms in Subchapter G, except as discussed elsewhere in this preamble relating to the EPA’s comment concerning the use of the terms "account" and "group of

facilities" in specific rule sections. A flexible permit is limited to

facilities at one account, and can cover a group of facilities or

all the facilities at that account. Further, the term "account" is

defined in §101.1(1) as "for those sources required to be permitted under Chapter 122, all sources that are aggregated as

a site. For all other sources, any combination of sources under common ownership or control and located on one or more

contiguous properties, or properties contiguous except for intervening roads, railroads, rights-of-way, waterways, or similar divisions." An account can include multiple "sources," which, for

these rules, is equivalent to multiple "facilities" under Texas minor NSR definitions. This definition, and the definition of "facility,"

are included in the commission’s "General Rules" Chapter, and

as such are applicable to all of the commission’s rules for its air

quality programs.

In its final disapproval of the flexible permit rules, the EPA

stated that the definition of "account" is not limited to a single major stationary source and may include multiple major

stationary sources, or in other circumstances, may include a

subset of a major stationary source. The EPA approved the

use of similar text in §116.111(2)(C) without a similar limitation.

The commission cannot adopt a change to the definition of

"account" because it was not proposed for change. Regardless,

the commission declines to effectively limit the use of the term

"account" in the Subchapter G rules because major sources

can be included under a cap, as discussed elsewhere in this

preamble. The flexible permit rules allow for different federal

sources, which may have different primary Standard Industrial

Classification (SIC) codes, located at the same account to be

treated separately in the flexible permit if necessary to establish

limits on potential to emit. This situation is expected to be rare

as there are very few accounts that contain more than one federal source. Regardless, the sources are reviewed to determine

major NSR applicability and the requirements are followed if

triggered. Therefore, the EPA’s concern is not warranted.

Inclusion of Major Sources in a Flexible Permit

The EPA submitted several comments relating to various portions of §§116.711, §116.716, and 116.718, stating that, as proposed, the rules could be interpreted as allowing nonattainment

major stationary sources or major modifications to be authorized

under a flexible permit. The EPA stated that the rules must be

revised to ensure it is clear that a flexible permit cannot be used

for a major stationary source or major modification. The EPA

also stated that emissions from facilities subject to PSD BACT

and/or NNSR LAER cannot be included in an emission cap. The

EPA provided suggested rule language to clarify that a flexible

permit application cannot include facilities authorized by a PSD

or major NNSR permit.

The commission does not agree with the EPA’s position that the

flexible permit rules must categorically exclude major stationary

sources and major modifications from coverage within a flexible

permit or an emission cap. The commission emphasizes that

projects that trigger major NSR requirements such as PSD review or NNSR are required to comply with applicable major NSR

requirements, as specified under Chapter 116, Subchapter B,

Division 5 or 6, as applicable, and under applicable federal regulations. These requirements include appropriate control technology determinations for major NSR BACT or LAER. The inclusion of a major stationary source or major modification in a

cap established in a flexible permit does not negate or circumvent the application of applicable federal major source requirements any more so than the inclusion of such a project in a traditional NSR permit authorized under Chapter 116, Subchapter

B. When facilities are to be placed under an emissions cap, the

project is reviewed as a modification of those facilities, and if the

project increase and the net emission increase are significant, it

is reviewed as major. For changes under a cap that are subject

to major NSR, the application is reviewed to determine whether

the facilities are collocated on the basis of whether they are on

contiguous or adjacent property, are under common control and

ownership, and whether they are part of the same primary SIC

code, just like changes to any facility or unit that is not under

a cap. Otherwise, it is reviewed as a minor modification in the

same manner as for a construction permit. For flexible permits

which include major sources, as with all major NSR permits, the

TCEQ does not aggregate or combine major stationary sources

which have different primary SIC codes for purposes of major

NSR.

Subsequent to the submittal of these comments, the executive

director’s staff held discussions with representatives of EPA’s

Region 6 Office, Office of Air Quality Planning and Standards,

ADOPTED RULES December 31, 2010 35 TexReg 11921
and Office of General Counsel. The EPA representatives stated

that major sources, subject to PSD or NNSR permitting requirements, can be included in and operate under a cap. However,

EPA representatives also stated that those major sources (units)

must still comply with all PSD or NNSR requirements, as applicable, including any requirements that were effective prior to the

unit being included in a cap. For example, if a limit, such as a

pound per hour or pound per million Btu, is established in a prior

PSD permit, then the unit remains subject to such limit. Although

an annual BACT limit is not required by EPA, if one has been

established, the PSD unit must still comply with it also. In addition, EPA representatives also noted that if a unit is later modified

and 

then it can remain in or be removed from the cap as long as the

change is made using a SIP-approved process for PSD permits,

including evaluation of BACT, preparation of an air quality analysis, and public notice.

In response to EPA’s comments, the commission revised

§116.710 by adding text that provides, that major NSR requirements, including retention of established limits must be included

for issuance of a flexible permit. In addition, the commission

added §116.716(h) from proposal that requires that when a cap

is established or adjusted, major NSR requirements must be

met prior to issuance, amendment or alteration of the permit.

a new BACT determination is made without any annual limit,

The EPA stated that it must be clear that minor NSR BACT determinations are required to be at least as stringent as the federal

applicable requirement, e.g. SIP rule, new source performance

standards (NSPS), NESHAPS, and MACT.

The commission respectfully disagrees with the comment that

minor NSR BACT determinations are required to be at least as

stringent as federal requirements of the type listed in the comment. Section 116.711 of the flexible permit rules requires that

any facilities authorized by the permit meet all of the requirements cited (such as NSPS, NESHAP, and MACT emission standards) in addition to BACT. The application of BACT is an additional requirement, not a replacement or substitute. Facilities which are subject to a combination of standards must comply with all applicable requirements, including whichever is most

stringent. The commission notes that §116.715(10) provides that

acceptance of a flexible permit by a permit applicant constitutes

an acknowledgment and agreement that the holder will comply

with all rules and orders of the commission and the conditions

precedent to the granting of the permit. If more than one state

or federal rule or regulation or flexible permit condition are applicable, then the most stringent limit or condition shall govern and

be the standard by which compliance shall be demonstrated. No

change was made in response to this comment.

The EPA commented that each individual unit under an emission

cap must still meet at least its specific emission limitation derived from a federal applicable requirement, e.g., a SIP rule, Minor NSR SIP BACT determination, NSPS, MACT, or NESHAPS.

The EPA stated that a unit cannot violate its federal applicable

requirement. The EPA stated that an exception could be units

that were previously grandfathered units not subject to any federal applicable requirement other than a Minor NSR SIP BACT

determination made at the time of issuance of the original flexible permit.

Regardless of whether a unit is included in a flexible permit emission cap, any emission limitation originating from a federal requirement (such as major source BACT or LAER, NSPS, MACT,

or NESHAPS) still applies. Compliance with federal requirements such as major source BACT or LAER, NSPS, NESHAPs,

and MACT is required by §116.711(2)(C), (D), (E), and (F) respectively. No change was made in response to this comment.

The EPA stated that proposed §116.715(c)(7), last sentence,

must include a reference to "account." The EPA also stated that

proposed §116.715(c)(10) must include a reference to "account."

The EPA stated that proposed §116.716(d)(4) and §116.718(c)

must include references to "account" and "group of facilities."

As discussed in more detail in the Section by Section portion

of this preamble for §116.716, the commission has revised the

cited rules to include references to the terms "group of facilities"

and "account" as requested by the EPA.

Comments on §116.13

The EPA stated that because the commission is proposing to

eliminate the insignificant emissions factor, the reference to it in

the definitions of "emissions cap" and "individual emission limitation" at §116.13 must be deleted.

These changes recommended by the EPA were already included in the proposed revisions to the referenced definitions in

§116.13, as indicated by the bracketed text, so no further action

is necessary.

Pantex commented that neither §§116.10, 116.12, nor 116.13

defines "significant level for that plant-wide applicability limit

(PAL) pollutant." Pantex recommended that for clarity, §116.12

or §116.10 should contain a definition of "significant level for

that PAL pollutant."

The rule has been revised to eliminate the reference to "significant facility" as defined in §116.12, which is the origin of the

language that this comment references. Therefore, there is no

longer a need for a definition of the referenced phrase in the

adopted rules.

EIP stated that the CPMS definition in §116.13(2) should clarify

when, if ever, what are thought to be abnormal readings may be

discarded in the recording of the "average operational parameter

values."

The definition for CPMS is consistent with the EPA’s NSR rules

and therefore the commission will not attempt to specify criteria

for "abnormal readings" in this rule. The permits issued by the

TCEQ typically require that all data be used except if the monitor is malfunctioning. No change was made in response to this

comment.

TIP and TXOGA commented that the proposed definition of

CPMS fails to specify the type of averaging period that will

apply. TIP and TxOGA suggested adding the phrase "record

in units of the applicable emission limit" to the definition, and

allow for any further averaging period details to be specified in

applicable permits as necessary.

The commission has not changed the rule in response to this

comment. The addition of the suggested language to the definitions of CEMS, CPMS, and PEMS would complicate the definitions and add little new information. The relevant averaging

period and any associated details will be specified in the permit.

TCC, TIP, and TxOGA commented on the proposed definitions

of "continuous emission monitoring system" and "continuous parameter monitoring system" in §116.13. TCC stated that the

commission’s proposed definitions are modified versions of federal definitions of these terms, and that the commission revised

these definitions for the purpose of the flexible permit program.

TCC stated that the state and federal definitions should be con35 TexReg 11922 December 31, 2010 Texas Register
sistent to avoid confusion and promote clarity. TCC, TIP, and TxOGA also noted that the proposed definitions are different from

the commission’s definitions for "continuous monitoring" found in

Chapter 115, Control of Air Pollution from Volatile Organic Compounds, and "CEMS" and "PEMS" found in Chapter 117, Control

of Air Pollution from Nitrogen Compounds. TCC, TIP, and TxOGA recommended that TCEQ align these various definitions

and place them in Chapter 101.

The commission has not changed the rule in response to this

comment. TCC is correct that the commission adapted federal

definitions of "continuous emission monitoring system" and "continuous parameter monitoring system" for use in §116.13. Although this did introduce minor differences between the definitions of these terms as stated in §116.13, and 40 CFR §52.21,

these differences are minimal and administrative in nature and

should not introduce any confusion. TCC is also correct that

the proposed definitions in §116.13 are not the same as the

definitions of "continuous monitoring", "CEMS", and "PEMS" in

other TCEQ rule chapters such as Chapter 115or Chapter 117.

Chapters 115 and 117 are rules intended to ensure that reasonably available control technology is applied to new and existing

sources in specific areas in order to help those areas achieve

and maintain attainment with the ozone NAAQS. The objectives,

control technology requirements, implementation strategy, and

underlying rule language is necessarily different when comparing a minor NSR authorization program such as the commission’s flexible permits program, to rules such as those in Chapters 115 and 117. The definitions as proposed are more appropriate for use with the flexible permits program than are the existing

definitions within Chapters 115 and 117. Revising the definitions

in Chapters 115 and 117, or establishing new definitions within

Chapter 101, would be beyond the scope of this rule change.

Comments on §116.711

TIP and TxOGA stated that proposed §116.711(2)(C)(i) appears

to limit the ability to apply additional controls beyond BACT to

only existing facilities. TIP and TxOGA stated that permit applicants should have the option to apply controls above BACT

to both new and existing facilities. TIP and TxOGA stated that

TCEQ should delete the term "existing" from the proposed rule.

The commission agrees that permit applicants should have the

option to apply additional controls to new facilities as part of the

flexible permit. The commission has revised the rule so that permit applicants would have the option to apply controls in excess

of BACT to new facilities to offset or balance controls on existing

facilities.

The City of Houston commented on §116.711(2)(G), stating that

the proposed rule makes initial compliance testing with ongoing compliance as determined by engineering calculations, parametric or predictive monitoring, stack monitoring, or stack testing obligatory instead of an option within TCEQ’s discretion. The

City of Houston stated that emission estimates based on emission factors typically are a replication of what the emission limitations are based on, rendering the emission limitations meaningless, and the permit need only limit the relevant process variable. The City of Houston stated that compliance should be independently verified by measurement as part of the performance

demonstration. The City of Houston stated that the performance

demonstration should include continuous or periodic parametric

or predictive monitoring, emissions monitoring, or stack testing,

if engineering calculations based on process variables are used

to determine ongoing compliance.

No change was made in response to this comment. Emission

limitations for individual facilities are typically based on BACT,

not on emission factors developed from stack testing. If technically feasible and economically warranted, a stack test will be

required to determine actual emissions of pollutants from the facility. These results may be used to develop an emission factor which may be then used in determining and reporting actual

emissions from the facility. For example, if fuel flow to a heater

is monitored, emissions factors may be generated in terms of

pounds of pollutant per cubic foot of natural gas flow firing the

heater. There are other sources, such as tanks, where stack

testing is not practical. In these cases, generally accepted calculation methods are used with measured parameters, such as

throughput, to estimate actual emissions.

The City of Houston and EIP commented that proposed

§116.711(2)(H) and (I) do not adequately address the EPA’s

applicability determination concern because they allow the permit applicant to conduct a separate analysis as the applicability

review and submit it with the application. EIP stated that the

proposed rules do not provide requirements for how the applicability determination is to be made; and do not state that the

applicability determination must be based on actual emissions

and on emissions increases and decreases that occur within

a major stationary source. The City of Houston stated that

allowing a regulated source to make applicability determinations

is not consistent with federal NSR and PSD applicability review

requirements. In addition, the City of Houston commented

that the methodology prescribed by 40 CFR §51.165(a)(2)(ii)

and §51.166(a)(7) is extensive, and the proposed rules fail to

prescribe the specific applicability review requirements.

State and federal rules require that regulated sources complete

applicability determinations in accordance with the applicable

rules. The reviewing authority will then review the analysis

submitted, require additional information, if necessary, and

ultimately agree or disagree with the analysis. The commission

respectfully disagrees that its rules, in §§116.12, 116.150,

116.151, and 116.160, fail to prescribe the specific applicability

review requirements. No change was made in response to

these comments.

The City of Houston and EIP commented that the proposed rules

allow the applicant to self-evaluate for NSR and PSD applicability, without review by the state or the public, and that the proposed rules contain no mechanism to prevent an erroneous determination from being carried forward. The City of Houston

commented that the applicability determination should be conducted by TCEQ and the analysis should be consistent with 40

CFR §51.165(a)(2)(ii) and §51.166(a)(7).

The federal rules cited do not require the reviewing authority

to independently perform an analysis for federal NSR for every

project contemplated by every regulated entity in the state.

Rather, these rules require the permit program, though rules and

implementation of those rules, specify the procedure identified

(or equivalent). To require that every emission-related project

be reviewed would be impractical. The proposed rule requires

these analyses be submitted with any permit application, be

submitted and approved before any physical change having

a potential increase in actual emissions sufficient to require

netting (§116.718(a)), and to identify any changes to facilities

in the semiannual report, (116.715(c)(12)(A)(i)(V)). No change

was made in response to these comments.

TIP and TxOGA commented that in proposed §116.711(2)(H)

and (I), the commission introduces a requirement for a sepaADOPTED RULES December 31, 2010 35 TexReg 11923
rate analysis of applicability of federal PSD or nonattainment

review. TIP and TxOGA expressed concerns that the proposed language is redundant of the existing requirement to

ensure compliance with major NSR, and is not clear as to

the scope of the "separate analysis" requirement. TIP and

TxOGA commented that the major NSR applicability analysis is

typically combined for one or more pollutants, and is typically

integrated into a single application document with a discussion

of each of the other rule requirements for a permit. TIP and

TxOGA commented that the existing rule language is sufficient

to establish the requirement to assure compliance with major

NSR requirements, and objected to adding a new, separate

documentation requirement.

While the commission understands TIP’s and TxOGA’s concern

that other existing rules already require compliance with major

NSR, the proposed requirement is necessary to satisfy the EPA’s

concern that the existing flexible permits program could be used

to circumvent major NSR. The EPA specifically requested rule

language to require that a federal applicability determination be

conducted before the permit applicant could use the rules in Subchapter G. The commission agrees that the term "separate" may

be misleading and is unnecessary, and it has been removed from

the rule. This analysis is required prior to commencing any physical or operational change that may be a major modification.

Rep. Burnam and EIP commented that §116.711(2)(J) should

require computer dispersion modeling. Rep. Burnam and EIP

stated that assessing ambient impacts without computer dispersion modeling is no longer considered scientifically valid. In addition, should modeling be conducted, EIP stated that the regulation does not specify which computer dispersion modeling must

be used. Rep. Burnam stated that some computer models are

no longer favored. EIP stated that 40 CFR §51.160(f)(1) requires

the proposed program to use the Guideline on Air Quality Modeling (40 CFR Part 51, Appendix W).

No change was made in response to this comment. There can

be situations where computer dispersion modeling is not necessary to determine that a proposed change would interfere with

the NAAQS or other impacts criteria. For example, it may be

apparent through engineering judgment or calculations that a

small increase at a site would not result in an impacts concern,

especially if existing modeling was available demonstrating that

the source before the proposed change was meeting applicable standards and effects screening levels by a significant margin. In addition, computer dispersion modeling carries substantial costs. The commission will retain the flexibility to determine which projects require computer dispersion modeling on a

case-by-case basis. Although the commission generally concurs

that dispersion modeling used to support permit actions should

comply with the EPA’s Guideline on Air Quality Modeling, this

guideline is very general and may not adequately cover or address all source configurations or situations. In addition to 40

CFR Part 51, Appendix W, the TCEQ applies internally-developed guidance and procedures in the review of dispersion modeling. Therefore, the commission declines to add the suggested

reference to 40 CFR Part 51, Appendix W to the rule.

EIP recommended that the rules require NAAQS impact modeling for all amendments or alterations to flexible permits for

which dispersion modeling was not previously required. EIP

commented that as written, proposed §116.711(2)(J) would not

require this if the amendment or alteration did not increase an

individual limit or the overall cap.

As stated previously, computer dispersion modeling is not necessary in every case in order to determine if a proposed change

would interfere with maintenance or attainment of the NAAQS.

The commission will retain the flexibility to require computer

modeling on a case-by-case basis. No change was made in

response to this comment.

TIP and TxOGA commented on proposed §116.711(2)(J), which

requires the permit applicant to conduct an air quality analysis

to demonstrate that the proposed action will not interfere with attainment of maintenance of the NAAQS. TIP and TxOGA stated

that this proposed requirement is redundant with existing requirements, and appears to track FCAA, §110(l), a test that is

not applicable to individual permit actions. TIP and TxOGA also

stated that creating a separate obligation with regard to NAAQS

could create confusion with regard to the air quality analysis that

is more generally required under Chapter 116 permitting.

The commission acknowledges that existing rules already provide the commission with the authority to require modeling or

monitoring to assess air quality impacts, but this more explicit

requirement with respect to the NAAQS is necessary to address

the EPA’s concerns that the flexible permits program does not

sufficiently protect against changes that could interfere with attainment or maintenance of the NAAQS. The NAAQS-related

requirement is sufficiently clear as to not cause confusion with

other analyses or reviews that are required for air permits. No

change was made in response to these comments.

The EPA requested clarification of proposed §116.711(2)(M)(ii),

(iv), and (vi), as to why the identification does not include "in an

account." The EPA also asked for clarification as to why subparagraphs (ii) and (vi) should not require the identification of "each

facility included in a ’group of facilities’."

The cited rules do not include the phrase "in an account" because a flexible permit may only authorize facilities at a single

account, as required by §116.710(a)(4). Similarly, by logical extension of the same rule, an emission cap can only include facilities that are all under a single account. Adding the phrase "in

an account" to the cited rules would be redundant and not convey any new information about the facility or emission cap. With

respect to the phrase "each facility included in a group of facilities," the existing rule requires that the permit applicant identify

each facility; this implicitly includes any facilities that are part of

a group of facilities. The phrasing suggested by the EPA would

not change the information provided by an applicant and would

make the rule more confusing. The commission has not changed

the rule in response to this comment.

TIP and TxOGA commented on §116.711(2)(M)(vii), which requires an analysis of how terms and conditions of prior Subchapter B permits will be carried forward in a flexible permit. TIP and

TxOGA stated that the proposed provision is unworkable as permit conditions do not remain static, and not every condition can

be maintained. TIP and TxOGA stated that the proposed rule

should provide an opportunity for applicants to show how conditions from previously-issued permits changed, or are changing,

in a flexible permit or permit amendment.

The commission has not changed the rule in response to this

comment. The cited requirement is necessary so that the applicant and TCEQ can identify relevant terms and conditions of the

existing Subchapter B permit and address them appropriately in

the proposed flexible permit. The overall intent of this requirement is to ensure that the change to a flexible permit does not result in any backsliding of emission controls or any other applica35 TexReg 11924 December 31, 2010 Texas Register
ble requirements. An analysis must be completed for each condition explaining how the requirements will be included in the proposed flexible permit. The commission agrees that permit conditions and limits do not remain static, and may change based on

subsequent applications presented to the agency. The analysis

required by §116.711(2)(M)(vii) must justify changes and demonstrate that emission control requirements are not relaxed or eliminated with the issuance of a flexible permit. The rule does not

require that the proposed flexible permit maintain identical terms,

limits, and conditions compared to the original permit. Once a

facility or facilities are authorized under the flexible permit, the

terms and conditions of the previous permit would no longer apply but could be carried forward in the flexible permit.

EIP commented that TCEQ proposed §116.711(2)(M)(vii) to address the EPA’s comment that existing SIP permits’ major and

minor NSR terms, limits and conditions, must be tracked and accounted for. However, §116.711(2)(M)(vii) is just a requirement

of what needs to be the in an application, not a permit itself.

EIP stated that, therefore, the proposed rule fails to address the

EPA’s concern.

The commission does not agree with the comment, and no

change was made in response to this comment. The cited rule is

necessary so that the applicant and TCEQ can identify relevant

terms and conditions of the existing Subchapter B permit and

address them appropriately in a subsequently issued flexible

permit. The overall intent of this requirement is to ensure that

the change to a flexible permit does not result in any backsliding

of emission controls or any other applicable requirements. However, the permit terms, limits, and conditions may still change

as part of this process. An analysis must justify changes and

demonstrate that emission control requirements are not relaxed

or eliminated with the issuance of a flexible permit. It would

not be practical for the rule to require that the proposed flexible

permit maintain identical terms, limits, and conditions compared

to the original Subchapter B permit. To do so would not result

in providing operational flexibility that is a feature of this permit

program. The rules adequately address the issue of backsliding,

and the ability to properly review any requested change.

EIP recommended that permit alteration or amendment materials for flexible permits should identify any terms, conditions,

and representations of prior permits that will be superseded by

or incorporated into the altered or amended flexible permit. EIP

stated that a variation of proposed §116.711(2)(M)(vii) would accomplish this.

The commission has not changed the rule in response to this

comment. In cases where the terms, conditions, or representations of existing permits have been incorporated or superseded

into a flexible permit, an analysis of those terms and conditions

would be performed and any changes justified. In any subsequent permit action, a similar justification would be required if

those permit terms or conditions were to change.

Comments on §116.715

EIP commented that §116.715(c)(5), as proposed, would not require a permit statement of the emissions calculation that is used

for compliance in those situations where there is continuous operating parameter monitoring but where CEMS are not measuring emissions levels. EIP stated that the method of converting

the parameter measurements to emission estimates should be

specified.

The commission agrees that the calculation methods should be

identified for all pollutants and facilities, and has removed the

cited exceptions from the rule language.

TIP and TxOGA commented that the proposed MRR requirements in §116.715 should not impose PAL requirements where

they confuse or complicate the flexible permits program for sites

that have not opted into the PAL program.

The commission acknowledges that the emission cap MRR requirements of proposed §116.715 are similar to requirements of

the federal PAL program. The commission used the PAL requirements as the foundation for these MRR requirements because

the use of existing federally-approved requirements should be

acceptable to the EPA. Although these requirements may have

originated from another program, these requirements are reasonable to support compliance with emission caps in the flexible permit program. Many of the requirements and elements of

these proposed MRR rules cover the same or similar information

that is already maintained under existing flexible permit rules or

permit requirements. Although the implementation of these requirements may require some changes in flexible permits and

in the practices of permit holders, these requirements can be

implemented without unreasonable confusion or burden on the

permit holder.

Pantex noted that proposed §116.715(c)(5)(B) requires that

each flexible permit specify methods for calculating annual and

short term emissions for each pollutant when continuous emission monitoring or continuous operating parameter monitoring

is not required. Pantex further noted that §116.711 as proposed

does not include any requirement for an applicant to represent

the use of continuous emission monitoring or continuous operating parameter monitoring in the application. Pantex asked,

with respect to §116.715, how would TCEQ determine if continuous emission monitoring or continuous operating parameter

monitoring is to be included in the operation of the unit.

Several factors would be considered by both the permit applicant and TCEQ when making the determination as to whether

continuous emission monitoring or continuous operating parameter monitoring would be required under the permit. The determination of the appropriate type of monitoring would be a

case-by-case decision involving the nature of the facility and the

nature of the pollutant(s) to be monitored. Certain processes, for

example coatings operations, can accurately determine emissions using relatively straightforward material balance calculations. It would generally not be necessary to require continuous

emission monitors for such a situation, unless other factors were

a concern. However, if a process has emissions of pollutant(s)

that cannot be predicted or calculated in a straightforward way,

continuous emission monitoring or continuous emission parameter monitoring is more likely to be required, so that compliance

with the permit can be confirmed. No change was made in response to this comment.

Pantex asked, with respect to the terms of proposed

§116.715(c)(5)(B), whether the commission proposes incorporation by reference (to the permit application), or whether the

commission extracts the methodologies from the application

and incorporates them into the permit.

In many cases, the TCEQ will reference standardized methods

(such as those used to determine emissions from tanks or loading). In other cases, the permit may specify how sample data

is to be used to estimate actual emissions, such as for cooling water. The permit application may be referenced in a perADOPTED RULES December 31, 2010 35 TexReg 11925
mit condition, but it is unlikely that complex calculation methods

would be reproduced in their entirety in the permit. In addition,

§116.116(a) and §116.715(c)(8) provide that the conditions upon

which a permit is issued include the representations with regard

to construction plans and operation procedures in an application

for a permit, as well as any general and special conditions attached to the permit. No change was made in response to this

comment.

Pantex commented that proposed §116.715(c)(5)(B), (d)(1), and

(2) appear to be redundant, or at least overlapping, regarding

conditions that must be provided in the permit to be issued. Pantex commented that the provisions should be combined.

No change was made in response to this comment. Section

116.715(c)(5)(B) is intended to ensure that, in the general case,

all flexible permits include appropriate calculation methods to determine emissions. Section 116.715(d)(1) and (2) contain more

specific monitoring and calculation requirements that only apply

to facilities that are subject to an emission cap. While these rules

may appear to be overlapping, the commission has purposely

identified which conditions will be applicable in every permit in

§116.715(c), and which conditions will be required for facilities

subject to caps in a flexible permit. The commission has determined that this organization makes this sufficiently clear.

EIP recommended that proposed §116.715(c)(8) regarding application representations should explicitly say that a violation of a

condition on which a permit was issued is a permit violation. EIP

expressed concern that the term "operation procedures" does

not have a sufficiently agreed-upon connotation. EIP suggested

that providing examples (e.g., design heat rate or average fluid

residence time or tons per hour throughput) would help clarify

the term.

The commission has rephrased §116.715(c)(8) to state that noncompliance with permit representations constitutes noncompliance with the permit. The term "operation procedures" has not

been changed, as it has been used for many years in Chapter

116 rule language concerning permit representations, and the

commission is not aware of any difficulties with the terminology.

TCC, TIP, and TxOGA opposed the proposed reporting requirements in §116.715(c)(12)(A)(i). TCC stated that the flexible permit program is a minor NSR program, and TCC stated that the

burden of the reporting requirements is not justified for a minor

NSR program. TIP and TxOGA stated that the reporting requirements were duplicative of other rules such as the Federal Operating Permits Program and Chapter 101, and were excessive

and unduly burdensome. TCC stated that a requirement to keep

records sufficient to show compliance is all that should be necessary.

No changes were made in response to this comment. The commission has determined that the reporting requirements are necessary as part of the changes needed to obtain EPA approval for

the flexible permits program. The EPA’s notices relating to disapproval of the program specifically referred to what it perceived as

a lack of documentation and enforceability with respect to emission caps. The requirement for semiannual reporting will ensure

that the owner or operator is attentive to how changes at the site

may affect compliance with the emission cap, and ensures that

the commission, and by extension the public, can readily determine whether or not the permit holder is maintaining compliance

with the emission cap.

Pantex and TCC expressed concern relating to the requirement

for "all data" in §116.715(c)(12)(A)(i)(IV). Pantex and TCC stated

that a literal reading of the requirement could require a permittee to provide all quality assurance and quality control data for

each source and parameter monitored, which could represent

an immense and unwieldy amount of data. Pantex provided

an example of a boiler that could have four or more parameters monitored; if the system maintains data points for every 15

minutes, this would be 11,520 data points for a 30-day month.

This does not include the quality assurance and quality control

span and zero-span checks that might be performed by a continuously monitored system. Pantex noted that while this language

in §116.715(c)(12)(A)(i)(IV) replicates language in Chapter 116,

Subchapter C, Plant-Wide Applicability Limits, literal compliance

would inundate the TCEQ with detailed information that might

never be reviewed, and the data could be provided in a format that the TCEQ might not be able to review. Pantex recommended that the term be replaced with "all pertinent data",

"all data sufficient to demonstrate compliance," or a requirement

that each permit provide case-by-case specification of data to be

submitted.

The commission concurs with the commenters’ recommendation

and reasoning to use more specific terminology in the cited rule,

and has therefore rephrased this requirement so that the permit

holder is only required to submit such data as is necessary to

demonstrate compliance.

TCC, TIP and TxOGA commented that the term "monitoring system" as used in §116.715(c)(12)(A)(i)(VII) is not defined. TCC

stated that there should be more clarification of this term. TIP

and TxOGA stated the term could be interpreted to mean equipment such as fuel flow meters or hydrogen sulfide analyzers as

they are used to calculate actual emissions.

In §116.715(c)(12)(A)(i)(VII), the term "monitoring system" is intended to mean any device, system, or method that is used to

determine compliance with an emission cap, as described under §116.715(d)(2)(A) - (D). The monitoring system could be a

CEMS, PEMS, or a system that uses emission factors or mass

balance calculations to determine emissions. The term is meant

to encompass any systems providing an input into the emission

rate determination. If equipment such as fuel flow meters or hydrogen sulfide analyzers are used as the basis for verifying compliance with the emission cap, then that equipment would be included in this requirement. The commission has revised the rule

language to clarify that the term "monitoring system" as used

in this rule applies only to systems that are used in determining

compliance with the emission cap or any individual emission limit

of the permit.

Pantex and TCC commented that proposed

§116.715(c)(12)(A)(i)(VIII) referred to §116.716(e)(1), but

there is no §116.716(e)(1) in the newly formatted regulations.

Pantex and TCC suggested that the reference was meant to be

§116.716(d)(1).

Pantex and TCC are correct that the reference to §116.716(e)(1)

is an error. The citation has been corrected to refer to

§116.716(f)(1).

Pantex, TIP, and TxOGA commented that §116.716(d)(1)

refers to a shutdown lasting six months, while

§116.715(c)(12)(A)(i)(VIII) refers to a one-week shutdown. The

United States Department of Energy/National Nuclear Security

Administration recommended use of a six-month time frame for

adjusting emission caps for shutdown facilities. TIP and TxOGA

opposed the proposed changes to the existing rule concerning

35 TexReg 11926 December 31, 2010 Texas Register
shutdowns, and stated that this aspect of the rule was not an

EPA approval issue and the existing rule should be retained.

The reference to a one-week shutdown period in

§116.715(c)(12)(A)(i)(VIII) is an error and has been corrected.

The commission has maintained the proposed six-month

timeframe for the adjustment of emission caps due to the

shutdown of cap facilities. The six-month timeframe allows for

a reasonable degree of operational flexibility, while ensuring

the maintenance of appropriate emission controls on facilities

subject to an emission cap.

Pantex recommended that the term "shut down" as used in

§116.715(c)(12)(A)(i)(VIII) should be clarified. TIP and TxOGA

also noted that the term "shut down" was not defined and could

be read to include turnarounds and other routine maintenance

activities. Pantex gave an example of a facility that produces

products on a batch basis, where some units may be used to

produce a specific product once annually or biennially. In this

example, the unit has not been "shut down" as inferred by the

use of the term nor to allow additional capacity to another unit.

Pantex further stated that frequent adjustment of an emission

cap due to temporary pauses in operation, or for units that are

designed and managed on a campaign basis, may pose a significant opportunity for permittees to inadvertently find themselves

in violation, if only administratively. Pantex recommended that

the term "shut down" in this context be applied only in regard to

continuously operated units.

No change was made in response to this comment. The term

"shut down" as used in the proposed rule is not formally defined,

but generally means the cessation of production or operation of a

facility so that it is in an idle state and has no potential for emissions to the atmosphere. TCEQ uses the term "shutdown" in

several different rules without an explicit definition, and the term

is sufficiently clear within the context of the rules and the general

understanding of the term. For Pantex’s example of a batch facility that only operates one or two times in a given year, the TCEQ

would consider that facility to be shut down when it is not in operation producing a product or otherwise performing its intended

purpose, and it is also not producing air emissions. The commission does not concur that this requirement should only apply to continuously operated units, as other commission requirements relating to shutdowns (such as in Chapter 101, Subchapter F, Emissions Events and Scheduled Maintenance, Startup,

and Shutdown Activities) do not distinguish between batch and

continuous operation.

TCC, TIP, and TxOGA commented that the language in proposed §116.715(c)(12)(B) could potentially lead to a permit exceedance. TCC recommended that in those instances where

there is an absence of monitoring data, facilities be allowed to

utilize data substitutions rather than be required to use maximum potential emissions. TCC stated that Chapters 115 and 117

both provide for data substitution to address missing monitoring

data. TIP and TxOGA commented that TCEQ should allow permit holders to use good engineering practices to address any absence of monitoring data. TCC also stated that facilities should

be able to use an alternative method for determining emissions

at a later point and not have to have that designated at the time

the permit is written.

No change was made in response to this comment. During periods when monitoring data is not available, there is typically not

enough information to determine the actual emission rate from

the facility. During these periods, it is conservative to assume

maximum emission rates unless another method has been established in the permit. The rule does not exclude permit holders

from using another method to determine emissions, including

methods based on good engineering practices, as long as the

method is reviewed and approved in the permit. In order to provide maximum flexibility for choices in monitoring data collection,

the regulated entity is encouraged to apply and obtain alternative (data substitution) methods written into the permit. It is beyond the scope of this rulemaking to attempt to list all current and

future approvable data substitution methods as long as the permit review process allows for future review and approvals. The

commission respectfully disagrees that data substitution methods should be allowed without approval as evidenced by their

inclusion as a permit term.

TIP and TxOGA commented that instead of a wholesale incorporation of federal PAL provisions into the flexible permit regulations, the commission should consider drawing from other

sources, such as the Texas NOX and highly-reactive volatile organic compound (HRVOC) rules for provisions to address data

issues. TIP and TxOGA stated that §117.340(c)(3) allows several methods that can be used as substitute emissions compliance data when NOX monitors are offline. TIP and TxOGA noted

that the HRVOC rule allows data substitution at "§115.764."

Although the Chapter 115 HRVOC cooling tower rule allows for

specific data substitution techniques, it also provides for manual

sampling as a backup to the required monitoring. The HRVOC

cooling tower monitoring requirements are intended to apply

to a specific type of source and specific pollutants. Similarly,

the Chapter 117 NO rules are tailored for specific combustion

sources and a speciX

fic pollutant. The proposed emission cap

monitoring requirements are intended to be sufficiently general

so that they are appropriate for virtually any type of source.

Flexible permit applicants who seek an alternate method of

demonstrating compliance with an emission cap during periods

of monitoring system downtime can propose a different method,

as allowed for under §116.715(c)(12)(B). This could include the

use of data substitution or other methods if approved by the

executive director. No change was made in response to these

comments.

Pantex commented that the term "site generated test data" in

§116.715(c)(12)(C) is ambiguous. Pantex noted that it is common for TCEQ to require performance testing of a source to

demonstrate compliance with a permit. Pantex stated that if the

intent of the TCEQ is to require performance testing of a source

every five years, then the provision should state that the TCEQ

will require the action in permits issued pursuant to Subchapter

G. If not, then the TCEQ should define the term "site generated

test data," and its expectations on what forms of "revalidation"

will be considered as compliant.

Site generated test data, as used in the cited rule, means any

data obtained by completing stack testing or sampling of site facilities, which is used to determine emissions. An emission factor

generated from the testing may then be used with an operating

parameter that will be continuously monitored during subsequent

operation to estimate emissions. An example of this would be the

use of stack sampling to measure the NOX emission rate from a

heater at known fuel firing rates, and determining an emission

factor from the test data. The revalidation would require testing/sampling under conditions similar to those maintained in the

original test, using TCEQ-approved testing or sampling methods. The commission has added language to clarify that if revalidation testing shows that emission factors have increased, the

ADOPTED RULES December 31, 2010 35 TexReg 11927
permit holder must obtain a permit alteration or amendment to

adjust the factor and account for the increased emissions.

EIP stated that the requirement in proposed §116.715(c)(12)(C)

that revalidation of site generated test data must occur only every five years is too generous. EIP recommended that data be

revalidated no less often than every three years, and if a year’s

results deviate more than some percentage, such as 10percent,

from the original data (i.e., the data on which the permit was

based), then the revalidations should occur annually for a period

of years. EIP also stated that there should be a reporting requirement (e.g., §116.715(c)(12)(D)), requiring the permit holder

to promptly forward to TCEQ the results of testing at the site that

is directly relevant to determining emission rates or the character

of emissions for covered facilities.

No change was made as a result of this comment. The proposed

revalidation period of five years is consistent with, and derived

from, federal regulations authorizing plant-wide applicability limits, which is conceptually similar to a flexible permit. The commission does not have sufficient justification to require all data

to be subject to revalidation on a more frequent basis than these

federal regulations; however, the rule does allow for a more stringent revalidation period on a case-by-case basis. The proposed

rule requires that revalidation testing results be submitted to the

executive director no later than three months after completion

of such test, which is a reasonably limited period of time given

that in many cases a substantial amount of analysis is needed

to evaluate the test results and develop a report.

TCC commented that with regard to proposed

§116.715(c)(12)(C), emissions testing at every facility every five

years is impractical and too costly. TCC stated that often a site

will test one facility to establish representative emissions for

all similar facilities at the site. TCC stated that a requirement

to retest all the facilities would be unduly burdensome and

economically unreasonable. TCC stated that TCEQ should

take time, resources, and cost considerations into account with

regard to the revalidation requirements.

No changes were made in response to this comment. The commission does not agree that revalidation testing to confirm sitespecific data every five years is unreasonable. This requirement

is analogous to the revalidation requirements used under federal regulations relating to plant-wide applicability limits. The

revalidation would require testing or sampling under conditions

similar to those maintained in the original test. In those limited

cases where it may be appropriate to sample one facility to establish representative emissions for similar facilities, the revalidation may be performed in a similar manner. Note that in cases

such as this, it is likely that sampling would be required more

often than every five years and would be rotated so that all facilities are sampled.

Pantex asked, with respect to §116.715(d), if a permittee desires to change the methodology for calculating or measuring

emissions, what would be the appropriate permit action, an alteration, or amendment.

The commission understands that this comment is made regarding a desired change after a flexible permit is issued. If the

change in methodology would result in a lower calculation or

measurement of emissions, the change can usually be accomplished with a permit alteration. If the change would result in

an increase in emissions, the change would require a permit

amendment. No change was made in response to this comment.

EIP stated that the permit should specify which of the four monitoring options provided by proposed §116.715(d)(2) is used to

determine the levels of emissions from each facility.

The commission has revised the rule to require that the

permit identify which of the four monitoring options under

§116.715(d)(2) is applicable to each facility. This change will

help clarify applicable monitoring requirements for the permit

holder and for the TCEQ or other air pollution control agencies

with jurisdiction.

TCC stated that it does not understand the need for

§116.715(d)(2)(D)(i) and (ii), and encouraged TCEQ to remove

those requirements. TCC stated that if emissions factors are

suggested by the applicant, the permit engineer will determine

the appropriate factor based on the degree of uncertainty or

limitation of the suggested factor and set an emissions limit.

TCC stated that the permit holder then must operate that facility

below that emissions limit to be in compliance. TCC stated that

there is no need to have an "operating range" specified in the

permit.

The commission has not changed the rule in response to this

comment. Section 116.715(d)(2)(D)(i) allows for the permit to

specify how an emission factor is to be adjusted in order to account for uncertainty or other limitations in the development of

the factor. It is important that the factor being used to determine

the emissions is clearly indicated in the permit so that compliance with the emission limit, including supporting calculations,

can be verified. Section 116.715(d)(2)(D)(ii) is necessary because there could be situations where an emission factor is only

valid for a certain range of operating parameters, and it would

not be appropriate for a facility to use an emission factor as a

monitoring or compliance method in operational circumstances

where the factor is not reliable.

TIP and TxOGA commented on proposed §116.715(d)(2)(D)(i)

and (ii), stating that the provisions that required permit holders

to "adjust emission factors to account for the degree of uncertainty or limitations in the factor’s development," and operate in

the determined range, are unworkable. TIP and TxOGA recommended that owners or operators identify what the appropriate

emission factor will be with the TCEQ permit engineer, and then

operate below the resulting emissions rate.

The commission did not change the rule in response to this comment. Section 116.715(d) specifies requirements that must be

implemented through the permit special conditions. Any potential uncertainties, limitations in development, and applicable

ranges of proposed emission factors should be identified in the

permit application. These should then be incorporated into the

permit special conditions developed for the facility.

Pantex commented that the phrase "significant facility as defined in §116.12 of this title," in proposed §116.715(d)(2)(D)(iii),

introduces ambiguity as to the intent of the proposed regulation.

From the context of §116.715(d)(2)(D)(iii), this proposed regulation is intended to be applicable to all sources applying for a

permit under Chapter 116, Subchapter G, with or without a PAL

permit. In §116.12are terms applicable to permit review for major

source construction and major source modification in nonattainment areas. Pantex commented if §116.715(d)(2)(D)(iii) is applicable only to permit reviews for major source construction and

major source modification in nonattainment areas, then it should

be so stated in the text of §116.715(d)(2)(D)(iii).

In order to reduce confusion with respect to the definition of "significant facility" and the references to PAL requirements in the

35 TexReg 11928 December 31, 2010 Texas Register
proposed rules, the commission has deleted the reference to

this definition, and has revised the rule to directly refer to the

significance levels for PSD or nonattainment review applicability, which are more relevant criteria for characterizing large facilities under NSR permits. The significant thresholds for nonattainment pollutants are contained in Table I of §116.12(18)(A),

and the significant thresholds for PSD pollutants are located in

40 CFR §51.166(b)(23).

Pantex commented that proposed §116.715(d)(2)(D)(iii) is

applicable to any significant facility as defined in §116.12.

Section 116.12(33) defines "significant facility" as "a facility

that emits or has the potential to emit a plant-wide applicability

limit (PAL) pollutant in an amount that is equal to or greater

than the significant level for that PAL pollutant." Pantex stated

that if §116.715(d)(2)(D)(iii) is intended to be applicable only

to permits that also have a PAL, then it should be so stated

in the text of §116.715(d)(2)(D)(iii). Pantex also stated that if

§116.715(d)(2)(D)(iii) is intended to be applicable to all sources

applying for a permit under Subchapter G with or without a PAL,

the proposed regulations need to be reworded to make the

intent of the regulation clear and unambiguous. Pantex stated

that if the proposed regulation contains terms that need to be

defined (i.e. "significant facility" and "significant level") those

terms need to be defined in §116.10 or §116.13 without using

the term PAL.

The cited rule requirement, as proposed, is not intended to only

apply to facilities that have a PAL. In order to reduce confusion

with respect to the references to PAL requirements in the proposed rules, the commission has removed the term "significant

facility" and has revised the rule to directly refer to the significance levels for PSD or nonattainment review applicability. The

revised rule would apply to facilities with emissions (or potential to emit) exceeding the threshold levels specified in Table I of

§116.12(18)(A), or 40 CFR §51.166(b)(23), as applicable.

Pantex commented on proposed §116.715(d)(2)(D)(iii), stating

that the literal terms of this provision would require every valve,

pump seal, vent of identical and like sources, relief valve, or other

source to undergo performance testing, even though the emissions from these sources are well understood. Pantex noted

that it is common for the TCEQ to require performance testing of

a source to demonstrate that the source meets emission rates

stated in the permit. Pantex stated that when a permit is issued

that does not require the performance testing of a source, by the

issuance of the permit, the executive director has determined

that performance testing is not required. Pantex recommended

that §116.715(d)(2)(D)(iii) should be revised to read: "The owner

or operator of a major facility as defined in §116.12(16) of this

title that relies on an emission factor to calculate pollutant emissions shall conduct validation testing to determine a site-specific

emission factor within six months of permit issuance or start of

operations of the facility, whichever is later, as prescribed in the

issued permit."

As previously discussed, the commission has revised the rule

to refer to facilities that emit, or have the potential to emit, the

monitored pollutant in quantities that meet or exceed major NSR

significance levels. None of the examples identified in this comment would be large enough to exceed the applicability criteria

of the cited rule. The rule as proposed allows for the executive

director to not require testing in appropriate circumstances. The

permit conditions should specify where site generated test data

is to be used as well as the frequency it is required to be obtained.

TIP and TxOGA commented on proposed §116.715(d)(2)(D)(iii),

which states that "owners or operators of a significant facility as

defined in §116.12" using emission factors to monitor emissions

"shall conduct testing to determine a site-specific emission factor within six months of permit issuance or start of operation of

the facility, whichever is later, unless the executive director determines that testing is not required." TIP and TxOGA stated that

this requirement is unclear as to whether it applies only to facilities operating under a PAL permit, or if the definition of significant

facility is meant to be applied to facilities that have the potential to emit pollutants that are regulated under a flexible permit

emission cap. TIP and TxOGA also stated that the proposed

rule is more stringent than the corresponding federal PAL rule,

at 40 CFR §52.21(aa)(12)(vi)(C), which only requires site-specific testing of emission factors if it is "technically practicable."

In response to this and other comments on this subject, the commission has removed the term "significant facility" from the rule

and has revised the rule to directly refer to the significance levels

for PSD or nonattainment review applicability. The requirement

in §116.715(d)(2)(D)(iii) does not depend on the applicability of

PAL to the facility. The rule as proposed already allows the executive director the authority to not require testing. This includes

situations where the executive director determines that testing

would not be technically practicable.

TCC, TIP, and TxOGA expressed concerns with

§116.715(d)(3)(A) - (B). TCC stated that having the executive

director establish default values for determining compliance

with the emissions cap based on the highest potential emissions

is all that is needed when a correlation between monitored

parameters and the pollution emissions rate at all operating

points of the facility cannot be demonstrated. TCC, TIP, and

TxOGA suggested that subparagraph (B) is unnecessary and

should be removed from the rule language.

No changes were made in response to this comment. While its

use is likely to be infrequent, there may be circumstances under

which it is not possible to identify or agree upon a value based

on the highest potential emissions. In these cases, limiting operation of the facility pursuant to §116.715(d)(3)(B) may be appropriate. These issues would be addressed in the development of

a draft permit.

EIP recommended revising proposed §116.715(f) to make the

"approval" requirement a mandatory condition of flexible permits.

EIP stated that there should be a non-discretionary check on the

impact of standard permit and permit by rule emission increases

at sites where some or all facilities are covered by a flexible permit. EIP also stated that the phrase "significant impact on the air

environment" is not a conventional term of art, so it should be

defined.

The commission has not changed the rule in response to this

comment. Standard permits employ BACT and are carefully reviewed for impacts during development of the standard permit.

In addition, standard permits have restrictions, where appropriate, on the use of the standard permit in combination with other

types of authorization, when necessary to ensure protection of

human health and the environment. Permits by rule authorize

insignificant emission increases. It is not reasonable to require

all flexible permit holders to obtain written approval in advance of

claiming or registering an applicable standard permit or permit by

rule, nor is there any such requirement in the commission’s existing SIP-approved minor NSR rules. The proposed language allows the executive director sufficient discretion to restrict the use

of standard permits and permits by rule in those situations where

ADOPTED RULES December 31, 2010 35 TexReg 11929
special attention to small emission increases is warranted. With

respect to the commenter’s concern over the phrase "significant

impact on the air environment", this text has been used for many

years in the SIP-approved rules supporting Subchapter B NSR

permits. The commission declines to adopt a definition because,

as written, the commission has the ability to make case-by-case

determinations of what is significant for any given situation. For

example, the commission establishes "air pollutant watch list areas" where specific air quality concerns have been identified. If

the application concerned one of those air contaminants in or

near a current or historical area of concern, the commission has

the ability to address that very specific concern. Further, the

commission has not provided the public with an opportunity for

notice and comment on such a definition, and therefore declines

to do so at this time without following that procedure.

Comments on §116.716

EIP and Rep. Burnam commented that the EPA disapproved

the original flexible permit program because it lacked replicable,

specific, established implementation procedures for establishing

the emission cap in a minor NSR flexible permit. EIP commented

that the proposed §116.716 does not sufficiently change this situation. First, EIP stated that "like-kind" facilities is not defined in

the regulations, so it is an invitation for confusion and protracted

litigation rather than provide for an enforceable cap. Second,

EIP stated that proposed §116.716(a)(1) still allows site-wide

caps, so it does not change anything. Rep. Burnam stated that

the EPA requires the methodologies to be completely defined in

the regulations so as to be independently replicable. Rep. Burnam stated that the proposed regulations do not provide enough

specificity or information for agencies, courts, or the public to determine compliance.

The commission does not agree that the proposed rules lack adequate procedures for establishing an emission cap. An emission cap is, by design, intended to be flexible in nature such

that the selection of facilities participating in the cap, and the

level of individual controls applied to those facilities, is not necessarily something that can be explicitly defined by rule. Even in

cases of similar facilities seeking a flexible permit, the owners or

operators of those facilities may have substantially different approaches or objectives for the emission cap. The flexible permits

program is structured so that permit applicants can propose and

use an emission cap that allows their facilities an appropriate degree of operational flexibility, while at the same time protecting

human health and the environment, and maintaining the required

level of emission control for sources under the cap. However, in

response to this and other comments that suggested proposed

§116.716(a)(1) could cause confusion or would not be effective,

the commission has revised the language to eliminate the references to "like-kind" and "site-wide" emission caps. The revised

rule, in §116.716(a), allows a permit applicant to request and the

executive director to establish an emission cap which includes

every facility at the account, or to establish an emission cap for

a designated group of facilities at an account. The revised language would maintain substantial flexibility for the construction

of emission caps while using terminology that meets the regulatory purpose better than the use of the term "site." The commission respectfully disagrees with Rep. Burnam’s comment that

the rules do not provide enough specificity or information to allow a determination of compliance. As discussed elsewhere in

more detail in this preamble, the rules require a comprehensive

program of MRR requirements to support enforcement of flexible

permits.

Rep. Burnam commented on proposed §116.716(a)(1), and

stated that the proposed language was unclear. Rep. Burnam

stated that a site-wide emission cap would presumably cover

facilities that are not of like-kind. Rep. Burnam also stated that

even if a permit does not include a site-wide cap, it was still

unclear as to what facilities are included under a given emission

cap, or even which facilities are "like-kind".

In response to this and other comments relating to the proposed

language concerning site-wide emission caps and like-kind

emission caps, the commission has revised the language for

clarity, and has eliminated the references to "like-kind" and

"site-wide" emission caps. The final rule will not restrict emission caps to like-kind units and will not require emission caps

to apply site-wide. The revised rule allows a permit applicant

request and the executive director to establish an emission cap

which includes every facility at the account, or to establish an

emission cap for a designated group of facilities at an account.

The revised language maintains substantial flexibility for the

construction of emission caps, while using more understandable

terminology. An applicant can still request similar facilities at an

account or all the facilities at an account be under a cap.

The EPA commented that proposed §116.716(a)(1) provides for

a site-wide emission cap, and stated that the definition of site is

too broad and provides broad discretion to delineate the boundaries of the emission cap. The EPA stated that under this definition, a site-wide emission cap could include all minor stationary

sources and all minor modifications on a company’s property.

In response to this and other comments regarding proposed

§116.716(a)(1), the commission has revised the language to

eliminate the references to "like-kind" and "site-wide" emission

caps. The revised rule allows for a permit applicant to request

and the executive director to establish an emission cap, or an

emission cap made up of a subset of facilities at an account.

The term "account" is more appropriate for use in a minor NSR

program such as Subchapter G than the proposed use of "site."

The use of the word "site" in §116.716 could possibly lead to

some confusion because it is a defined term in the commission’s

federal operating permit program in §122.10(27). The term

"account" is the appropriate term to use because the flexible

permit program is designed to work within the commission’s

established, defined term "account." Account has been used in

the flexible permit minor NSR context for purpose of delineating

the scope of the flexible permit authorization. As discussed

elsewhere in this preamble, the use of "account" provides a

boundary for what can be included. Therefore, there is no executive director discretion as to the boundaries of what facilities

that may be included in a flexible permit. One of the objectives

of the flexible permit program is to allow the permit applicant

substantial flexibility in designating the facilities that are to be

included in an emission cap or caps, subject, of course, to

commission approval. This could range from a small number of

facilities or all facilities at the account as long as it is practically

enforceable.

EIP stated that the cap calculation in proposed

§116.716(a)(2)(A) relies on the definition of "expected maximum

capacity" in §116.13(4). EIP commented that this allows the

capacity value to be less than the physical and operational

design value, if the "planned operation" of the facility were less

than its physical and operational design. EIP stated that if the

cap is to be calculated taking into consideration the "planned

operation" of a facility at less than its physical and operational

design, then the lesser level of operation needs to be specified

35 TexReg 11930 December 31, 2010 Texas Register
as a permit term. EIP stated that if that is not desirable, then

the §116.13(4) definition needs to be amended to remove the

"planned operation" relaxation.

The commission has not changed the rule, now located in

§116.716(c)(1)(B), in response to this comment. The commenter has not explained why it is undesirable to establish a

lower emission limit in a flexible permit emission cap. One key

intent of the flexible permit program is to allow for potential

increases in operating rate with no increase in emissions (increased emission control) provided the increased operating rate

does not trigger major NSR.

EIP commented that TCEQ proposed §116.716(a)(2)(B) and (3)

to address the EPA’s concerns that the flexible permit program

could allow a facility to avoid federally-required control technology. EIP stated that this section apparently means to discuss

how the emission cap will be determined, even though it actually says it is determining "emissions." EIP stated that emissions

have to be determined by monitoring, testing and recordkeeping. EIP further stated that even with the suggested correction,

the section fails to achieve its objective because it does not discuss averaging times. EIP gave an example that if a BACT limit

based on a one-hour averaging time is used to calculate an annual emission cap, the BACT limit is no longer being used because averaging time is a component of an emission limit. EIP

stated that the proposed regulations do not require the emission

cap to match the original emission limit and do not define the

meaning of "short term." EIP also stated that any emission limit

that is averaged into a cap with other emission limits from other

emission points no longer exists if it is not applied to the specific

unit for which it is meant. EIP stated that the same problems

exist with proposed §116.716(a)(3)’s attempt to address LAER.

The commenter is correct that proposed §116.716(a)(2)(B) and

(3), the text of which is adopted as §116.716(c)(1)(A) and (c)(2),

are intended to describe how the emission cap itself will initially

be determined. This rule is not intended to describe how compliance with the emission cap will be determined, which will be with

some combination of testing, monitoring, and calculations. Facility-specific maximum allowable emission rate limits only reflect

BACT at the design operating condition. If it were relied upon to

ensure BACT was in place, operation at rates less than the design capacity would not be required to meet BACT. Due to this,

control technology requirements are usually captured in permit

conditions and not the maximum allowable emission rates. This

ensures that BACT is applied throughout the operating range

and not only at the maximum operating rate. Due to this, BACT

can be maintained for facilities in caps. For example, if a heater

is authorized by a permit, BACT for NOX control may be identified as 0.01 lb/MMBtu in the permit conditions. NOX emissions

will be continuously monitored by a CEMS (also required by permit condition). If a heater is operated at 50 percent of its design

firing rate, the permit condition will limit its NOX emissions to 50

percent of the allowable emission rate. The allowable emission

rate limit would allow NOX emissions of up to 0.02 lb/MMBtu. No

change was made in response to this comment.

TIP and TxOGA opposed the requirement in proposed

§116.716(a)(3) that facilities subject to LAER review be included

in separate emission caps. TIP and TxOGA stated that facilities

subject to BACT, MACT, LAER, and other control levels are

eligible for cap inclusion under the federal PAL rules. TIP and

TxOGA stated that there seems to be no EPA-related rationale

for segregating LAER-controlled facilities.

The commission has not changed the rule, the text of which is

in adopted §116.716(c)(2), in response to this comment. The

proposed rules are not intended to be the same as federal PAL

rules in all respects. Emission caps in flexible permits have little to do with whether subsequent modifications are subject to

major NSR, while that is exactly the purpose of PALs. In most

cases, when an emission cap is established, the permit holder

has to either demonstrate that creating the emission cap does

not result in a major modification (not subject to major NSR), or

perform a major NSR review of all facilities subject to the cap per

§§116.150, 116.151, or 116.160, as applicable. The representations made when requesting an emission cap typically allow for

the greatest operational flexibility. This is not the case if facilities with differing control requirements are included in the same

emission cap. This is most clearly illustrated with an example.

Typically, if tanks are to be authorized under an emission cap,

the application may state that throughput could be through a single tank or through all tanks (consistent with a demonstration of

acceptable off-site impacts). This is not a concern because all

tanks are reviewed for BACT. If a number of new tanks are to be

added to that permit and a nonattainment review is required, the

new tanks would be subject to LAER and the project emission

increase must be offset. If the new tanks were to be added to

the existing emission cap, the cap could not be increased or all

existing tanks would be modified as well (if there are no other limits, they could now emit at the higher emission cap rate), and be

subject to LAER. If the new tanks were added to an unchanged

emission cap, a subcap would be required for the new tanks to

limit the project increase to less than the magnitude of emission

cap. This would be more restrictive than establishing a separate

LAER cap.

Pantex asked, with regard to proposed §116.716(b), if the permit

has an emission cap for volatile organic compounds (VOC), and

the application and permit identify all facilities which may emit

VOC, whether that constitutes "inclusion" for all the chemicals

that are considered VOC, and similarly, for all other "grouped"

air contaminants (e.g., Ozone Depleting Substances, HAP).

If a flexible permit has an emission cap for VOC (or some other

grouped pollutant category), and the emission cap includes all

facilities which may emit that category of pollutant, then that

would constitute "inclusion" of all VOC. However, in order to protect human health, there may be individual air contaminants that,

while being a subset of VOC or other relevant contaminant category, have separate and distinct emission limits specified in the

permit in addition to the emission cap for VOC.

EIP commented that the proposed requirements of §116.716(c)

may help make flexible permits more practically enforceable, and

specifically noted support for the proposed deletion of the nine

percent insignificant emission factor.

The commission appreciates the support.

EIP commented on proposed §116.716(d)(1) and stated that the

proposed six-month adjustment period relating to shutdowns effectively weakens an emission rate based on BACT, LAER or

other requirements, at least for six months, when a facility that

was used to calculate the emission cap is shut down. TIP, TxOGA, and TCC also commented on proposed §116.716(d)(1),

stating there are several situations where, due to maintenance

or a shutdown due to malfunction, weather events such as hurricanes, or market conditions, a facility subject to an emissions

cap would be shut down for longer than six months. TIP, TxOGA, and TCC also stated that the EPA has not taken issue with

the 12-month shutdown period in the existing rule, so the comADOPTED RULES December 31, 2010 35 TexReg 11931
mission should leave it unchanged. TIP and TxOGA stated that

the EPA’s reactivation policy contains a two-year presumption.

TCC also stated that the commission should clarify that increasing the emissions cap back to its original amount when a facility

is started back up requires only a permit alteration.

The commission has not changed the rule, located in adopted

§116.716(f)(1), in response to these comments. The commission has maintained the proposed six-month timeframe relating

to the shutdown of cap facilities. The commission acknowledges

and understands that some maintenance programs or natural

events may result in extended shutdowns. A six-month timeframe provides an appropriate balance between operational flexibility and the need to ensure that emission caps reasonably correspond with actual conditions at the permitted facilities. TCC is

correct that restoring a facility to operation under §116.716(f)(1)

only requires a permit alteration, as long as the original emission

cap amount is not exceeded.

EIP commented that proposed §116.716(d)(2) allows the addition of new facilities via a flexible permit amendment but does

not require a major source applicability determination and does

not state that the new facility must be a minor modification.

No change was made in response to this comment. The addition

of new facilities under adopted §116.716(f)(2) requires a permit

amendment, and such a permit amendment would require a major source applicability determination under §116.711(2)(H) and

(I). The new facility does not necessarily have to be a minor modification so long as the project complies with all applicable major

NSR requirements.

TIP and TxOGA commented on proposed §116.716(d)(3), stating that the revised language is at odds with the Texas statutory

definition of "modification" and with federal NSR applicability requirements established in several rounds of rulemaking, most

recently NSR reform. TIP and TxOGA stated that the provision

is unnecessary and redundant to other provisions that require

compliance with major NSR. TIP and TxOGA objected to the

establishment by rule of a special-purpose set of major NSR applicability definitions and principles, divorced from the statutory

language and established requirements.

The commission respectfully disagrees that the rule, as proposed, does not comply with Texas or federal law. However,

changes have been made in response to this comment to

ensure that the requirements are clearly stated. The term

"modification" is typically used in relation to changes to facilities

or sources; however, Texas Clean Air Act §382.003(9) provides

that "a modification of an existing facility" does not include a

physical change in, or change in the method of operation of,

a facility where the change is within the scope of a flexible

permit. However, this does not mean that a flexible permit

cannot be modified. A flexible permit is subject to requirements

or an amendment when there is an emissions increase of the

cap. Adding a new facility, or making a physical or operational

change to an existing facility that results in an increase of an

emission cap and/or an individual emission limitation, is considered to be a modification of a flexible permit, and an amendment

application is required for consideration of a change to a flexible

permit cap or individual emission limit. If there is a change to

a facility but that change would not result in a change to the

cap, then an alteration application is required. In addition, the

state’s definition of "modification" is much broader than the

federal definition, and does not require any consideration of the

status of the other facilities already under the cap. Therefore,

because major NSR applicability must be determined first, the

commission has revised and restructured the rule as adopted

§116.716(f)(3) to ensure that the major modification analysis is

conducted first for applications to add a facility to or modify a

facility under the cap.

With regard to the portion of the comment regarding compliance

with major NSR requirements, the commission respectfully disagrees that proposed §116.716 (d)(3), adopted as

§116.716(f)(3), is at odds with federal applicability requirements.

As TIP acknowledges, the federal definition of "modification" applies when the analysis is conducted for major NSR applicability.

The use of the phrase "shall be considered modified" may be

misunderstood. In the analysis of whether a change is a major

modification, the commission properly assumes that, unless

there are certain restrictions (specifically, a physical modification

and a separate permit limit or physical constraint on the facility’s

potential to emit), all facilities could have an increased potential

to emit by the addition of a new facility or the modification of

a facility within the emission cap. This analysis doesn’t result

in a modification, which may be the confusion. Therefore, the

rule was revised to provide that all facilities under the cap will

be included in the evaluation for major NSR applicability. The

use of the word "evaluation" indicates that no final decision has

been made as to whether a modification has occurred.

Although the major NSR applicability text may be redundant of

other changes made in this rulemaking, the commission has retained it in this paragraph to ensure that the procedures for cap

adjustment are clearly listed.

EIP commented that the final sentence of proposed

§116.716(d)(3) needs to be clarified. EIP asked, if a like-kind

cap were being increased because of the modification of a

covered unit (say, a physically-changed catalytic cracking

unit), whether the rule would require that all other like-kind

facilities under the cap be treated as though they too were

modified, unless each one of them were, in fact, unmodified

and had a unit-specific limit or potential to emit constraint.

EIP asked whether all or some covered units that are not

subject to separate permit limits will experience a change in

their methods of operation, so as to realize the benefits of the

physically-modified unit, but have not themselves had physical

modifications, will those covered units be considered "not

modified," even though their potential to emit had earlier been

based on their "planned operation," rather than on their physical

design limits. EIP stated that the re-calculation of the permit cap

over time is important and difficult, and the rules for this need

to be particularly clear. EIP suggested that at a minimum, the

preamble language should include examples reflecting how the

texts of proposed §§116.13, 116.711, and §116.716(d) interact.

As discussed elsewhere in this preamble, the commission has

revised §116.716 so that references to like-kind and site-wide

emission caps have been deleted. With this change, the rule

does not differentiate between the type of units within an emission cap. Under adopted §116.716(f)(3), if a change or changes

to facilities within an emission cap potentially constitute a major modification, all facilities within the cap will be evaluated for

major NSR applicability. See also the discussion regarding how

facilities that are subject to PSD or NNSR may be included in a

cap in a flexible permit discussed earlier in this preamble.

TIP and TxOGA commented on proposed §116.716(e), which

requires both long and short term emission limits in an emission

cap. TIP and TxOGA stated that the commission should preserve the option for permit holders to establish annual emission

caps, while retaining individual short term emission limits. TIP

35 TexReg 11932 December 31, 2010 Texas Register
and TxOGA explained that this approach allows a facility to be

subject to a year-long rolling emission cap, while also being subject to a short term emission limit that is specific to the facility.

The commission has not changed the rule in response to this

comment. Adopted §116.716(g), renumbered from §116.716(e),

does not prohibit permit holders from using a short term facilityspecific individual emission limit in combination with an annual

emission cap.

TxOGA opposed the proposed rule requiring both long term and

short term emission caps for a facility.

One aspect of the existing flexible permitting program that the

EPA specifically identified as a concern was the lack of short term

emission limitations for facilities under an emission cap. The

commission attempted to address this in the proposed rule by

stating that an emission cap must include long term and short

term emission limits. However, the short term emission limitation

may be in the form of a short term emission cap, or a short term

individual emission limitation. No change was made in response

to this comment.

Comments on §116.717

EIP commented that the proposed rule should clarify that a delay in the implementation of required emission controls is a relaxation of emission controls; EIP stated that the "alteration" language in proposed §116.717 might be read to imply that delays in

required emission controls may be allowed by permit alteration.

The commission agrees with the commenter that a delay in the

implementation of permit-required controls would generally be

considered a relaxation of emission controls, and would therefore require a permit amendment, not an alteration. However,

there may be other circumstances involving changes to the control schedule or other details relating to the required controls in

which a permit alteration would be all that is required. The commission will maintain the proposed language to account for both

possibilities.

TCC, TIP, and TxOGA commented on proposed §116.717, relating to the implementation schedule for controls. TCC stated

that there are situations where the proposed rule would be problematic. TCC gave an example of a situation where a permit

amendment for a phased construction project is issued, and the

equipment is modified in sequential process and brought online

in a phased manner over time. TCC and TIP stated that some

project sequences may dictate that the under-controlled device

come back online before the over-controlled device is brought

back online. Therefore, TCC, TIP, and TxOGA stated that the implementation schedule must allow for phasing of emission controls.

If a minor project involves existing facilities, emission controls

must be implemented such that modified facilities are not, on

average, uncontrolled upon startup. It must be emphasized that

the controls on modified facilities must always meet or exceed

BACT, on average, and no backsliding of existing controls is authorized. If a project is subject to major NSR review, all new and

modified facilities must have BACT or LAER, as applicable. The

permit applicant should work with the permit engineer to develop

permit conditions that allow the desired flexibility while meeting

applicable requirements for controls. No change was made in

response to these comments.

Comments on §116.718

EIP commented that proposed §116.718(b) attempts to rely on

existing §116.12 and §116.121, but the relevant parts of those

regulations are not SIP-approved. The EPA will have to rely on

the SIP-approved version of these rules, which are not adequate

for determining whether a major modification has occurred.

The commission has proposed some amendments to §116.12,

and has proposed §116.121 be repealed and the text moved to a

new §116.127. If the amendments are adopted by the commission, those sections will be presented to the EPA as revisions

to the SIP. The commission respectfully disagrees that its rules

are inadequate to determine whether a major modification has

occurred. No change was made in response to this comment.

TIP and TxOGA stated that it is strongly opposed to the proposed revisions in §116.718(b). TIP and TxOGA stated that major NSR applicability principles are well established in rules and

guidance, and the proposed special-purpose rules in this provision are at odds with those requirements. In particular, TIP and

TxOGA referred to the language that stated that "... the potential to emit shall be considered as the proposed emissions cap

unless a separate permit limit or physical constraint limits the

facility’s potential to emit...." TIP and TxOGA stated that this language was unclear and could be read to mean that each facility

must have a physical constraint in order to avoid having a physical or operational change attributed to it with the potential to emit

of one facility being set as the potential to emit of the entire emissions cap. TIP and TxOGA stated that the proposed language

was inconsistent with the requirements and guidance related to

physical or operational changes triggering major NSR.

Section 116.718(b) has been restructured from the proposed

version to ensure clarity and readability. The commission respectfully disagrees with the assertion that this language is inconsistent with requirements and guidance to determine the applicability of major NSR. If there is not a permit limit or physical

constraint limiting the potential to emit for a new or modified facility, it may emit as much as the cap allows. This is explained

in the Federal New Source Review Permits Applicability Determination guidance document available on the TCEQ Air Permits

Division web site, in which Example 3 states: "If the emission

cap is increased, all the tanks under the cap are modified because they can all now emit up to ...the cap limit.., unless there

are other operational limits in the permit conditions that would

prevent them from emitting at that rate." The commission has

added language to §116.718(b)(4) to clarify that, instead of potential to emit, an alternative method, if demonstrated, may be

used to determine the emission cap.

EIP commented that the program fails to ensure that minor

sources will not cause or contribute to a violation of NAAQS

or increment in Texas or other states. EIP explained that

proposed §116.718(c) lacks a requirement that minor sources

demonstrate that they will not cause or contribute to a violation

of NAAQS. EIP stated that proposed §116.718(c) only requires

a source to submit its air quality analysis if off-site ambient

concentrations may be greater than de minimis. EIP and Rep.

Burnam commented that this proposed rule does not define de

minimis, nor does Texas have a SIP-approved definition of de

minimis for ozone, particulate matter less than 2.5 micrometers (PM2.5), the new one-hour nitrogen dioxide (NO2

) primary

NAAQS, or the new one-hour sulfur dioxide (SO2

) primary

NAAQS. Rep. Burnam stated that the term "de minimis" is not

an enforceable standard, and EIP stated that the proposed

requirement is not enforceable as a practical matter.

ADOPTED RULES December 31, 2010 35 TexReg 11933
The commission respectfully disagrees with the commenter’s assertion that the rule does not ensure that minor sources will not

cause or contribute to a violation of NAAQS. The flexible permit

application requires, in §116.711(2)(J), an analysis demonstrating that there will be no interference with attainment of maintenance of the NAAQS. Further, the commission specifically proposed, and has adopted §116.718(c), which includes this type of

analysis for the types of increases covered by this section. The

review will also ensure that there is no violation of any control

strategy to ensure that the permits will comply with the SIP and

the requirements of the FCAA. The commission has revised the

recordkeeping requirements to ensure that permit holders maintain records of any air quality analyses required by §116.718(c).

Further, the term "de minimis impact" is defined in §101.1, and

this definition is applicable to Chapter 116. The commission

notes that the EPA has not established de minimis values for

ozone, PM2.5, the new one-hour NO2 primary NAAQS, or the new

one-hour SO2 primary NAAQS.

EIP stated that proposed §116.718(c) should make an increase

in off-site emission impacts, not an increase in facility emissions,

the trigger for NAAQS impact modeling. EIP stated that especially for the new one-hour NO2 standard, the locations within a

site from which emissions originate can impact off-site NAAQS

attainment, even in the absence of an overall increase in site criteria pollutant emissions.

The commission concurs with the comment that the specific location within a site from which emissions are released can influence off-site NAAQS attainment, even in cases where the overall

site or cap emissions do not increase. However, it is not practical

or economically reasonable to require a detailed impacts analysis for every change under a flexible permit. Using ambient impacts as the criteria or trigger for additional modeling would be

substantially more complex than using an increase in emissions

as the criteria. The commission has revised §116.718(c) to require that the permit holder must conduct an air quality analysis

for any operational or physical change at facilities covered under a flexible permit, if the change may result in an increase in

the emission rate from any facility under the flexible permit. This

requirement would apply even if there are contemporaneous decreases in emissions at other facilities authorized by the flexible

permit.

EIP commented that the proposed rules lack agency or public review for any analysis that an applicant believes shows impacts

below the de minimis level. EIP commented that permit applicants’ ambient impacts analysis routinely contain errors. EIP

stated that without combined public and regulatory agency review, it will not be possible to determine if the applicant has

validly concluded that sources will only cause de minimis ambient impacts.

The commission has revised the rule to specify that permit holders are required to maintain records of any air quality analyses

required under §116.718(c). These records are to be made available upon request to the TCEQ or to any local air pollution control agency with jurisdiction. Upon request, the commission shall

make any such records available to the public in a timely manner.

EIP commented that the variation or relocation of emissions under a flexible permit can result in sources creating or contributing

to NAAQS or increment violations. EIP gave an example where

emissions were increased at a source with a short stack located

near the fenceline, and decreased at a source with a tall stack

located farther from the fenceline. EIP noted that this could substantially change the impacts from the site, and could result in

NAAQS or increment exceedances.

The commission acknowledges that the impacts of a source can

vary dramatically depending on the location and characteristics

of the emission point(s). However, the air quality analysis impacts review for a flexible permit should take into account any

reasonable possibility that emissions from the sources under an

emissions cap may vary from source to source. The impacts review is based on conservative assumptions that make it unlikely

that the facility would interfere with the NAAQS or other standards or criteria. Further, §116.718(c) requires that the permit

holder perform an air quality analysis in such a case and, depending on the results, maintain records of the analysis or submit

it to the TCEQ for review. The commission has slightly revised

§116.718(c) to clarify that the air quality analysis is required for

any change that results in an emission increase at any existing

facility, regardless of location. Finally, depending on the details,

such a change could be considered a variation from a representation in a flexible permit application, requiring an alteration request be submitted to TCEQ and demonstration of compliance

with §116.711.

Comments on §116.721

EIP commented on proposed §116.721(a), which defines "a significant increase in emissions" as a trigger for the requirement

of a permit amendment. EIP stated that this phrase needs to be

defined, or there needs to be a reference to a definition stated

elsewhere. EIP also stated that the phrase should clearly refer to

actual, as opposed to allowable, emissions. EIP commented that

the trigger should specify that the determination of an emissions

increase be a determination based on actual typical short term

or typical annual emissions. EIP recommended that the phrase

be restated as: "a significant increase in actual emissions under

any typical short term or annual operating conditions."

The commission has not changed the rule in response to this

comment. In §116.721(a), the phrase "a significant increase in

emissions" means an increase that is not insignificant as determined under §116.718. Any increase that fails to meet the

criteria of §116.718(a) or (b) is a significant emission increase.

When determining whether an emission increase is significant

or insignificant, the increased actual emissions are compared to

the allowable emissions under the applicable emission cap or

individual emission limitation. The commission declines to use

the language suggested by the commenter because the existing

terminology is well understood and sufficient.

EIP commented that the proposed rules suffer from persistent

problems regarding permit alterations. EIP stated that proposed

§116.740(a) does not require public notice and comment on flexible permit alterations. EIP stated that permit alterations have

been widely abused by applicants seeking to make modifications, emissions increases, or removing previously enforceable

important application representations. EIP stated that TCEQ has

routinely allowed permit alterations when emissions increases

are expected as long as emissions are not expected to exceed

allowable limits. EIP also stated that TCEQ has routinely granted

permit alterations when emissions could increase, on the theory

that emissions will not, under all operating scenarios, increase.

EIP stated that TCEQ has routinely allowed permit alterations

that would never be allowed under federal rules or longstanding

EPA policies. EIP stated that TCEQ allows permit alterations to

remove existing operational restraints such as increasing hours

of operation, removing throughput or heat input limitations, or increasing emissions so long as there is no increase in allowables.

35 TexReg 11934 December 31, 2010 Texas Register
♦ ♦ ♦

EIP stated that for these reasons, the commenters oppose alterations to flexible permits when the alteration lacks public notice

or opportunity for comment.

Section 116.721(b) requires a flexible permit alteration for any

variation from a representation in a flexible permit application or

a general or special provision of a flexible permit that does not require a flexible permit amendment. This requirement precludes

the use of alterations for changes that would change the method

of control or character of emissions, would relax emission controls, would add a new facility or facilities, would result in a significant increase in emissions, or would constitute a major modification as defined by §116.12. Note that in the case of flexible

permits, it would be possible to make changes through alteration

that may increase actual emissions as long as the change did not

result in emissions greater than any emission cap or limit, did not

involve construction of a new facility, did not involve a change in

method of control, or a relaxation of control. With the exception

of this, the commission respectfully disagrees with EIP’s characterizations of past permit changes made through permit alteration, made without any specific supporting examples or data, as

abuses of the rules or process. EIP’s comments fail to acknowledge that the commission’s minor NSR SIP-approved program

is an allowable-based program.

The commission respectfully disagrees that the alteration rule in

Subchapter B allows changes that would never be allowed under

federal rules or longstanding EPA policies. This is because the

EPA’s rules prescribe requirements for major stationary sources

and major modifications, for which the alteration rule does not

violate. The EPA’s very broad and general rules applicable to

minor NSR do not prohibit the types of permit actions that are

covered by the commission’s alteration rule. Furthermore, the

commission’s alteration rule, §116.116(c), is an approved part

of the Texas SIP. Finally, as discussed elsewhere in this preamble, the commission recently amended its public participation

rules, and alterations for flexible permits or for permits issued

under Chapter 116, Subchapter B are not subject to the public

notice requirements in Chapter 39 of the commission’s rules. No

change was made in response to this comment.

EIP stated that the language of §116.721(c) plainly supports the

EPA’s concern that a flexible permit can allow changes to SIP

permit terms such as limits on throughput and fuel type. Therefore, the proposed flexible permit program continues to fail to

meet applicable requirements.

If a SIP permit contains conditions that restrict throughput or fuel

type, those conditions would be carried through into the flexible

permit if justified, and under §116.721(c), a permit amendment

would be required to make a change that conflicts with an existing permit condition. No change was made in response to this

comment.

Comments on §116.765

TIP and TxOGA expressed support for proposed §116.765,

which provides a delayed effective date for the proposed rules;

however, TIP and TxOGA recommended deleting the portion of

the rule that would establish December 1, 2012 as an earlier

effective date. TIP and TxOGA’s recommended change would

mean that the rules would only go into effect after final approval

by the EPA.

The commission agrees with this comment and has revised the

rule as suggested by the commenters to eliminate the alternate

compliance date of December 1, 2012. Under the requirements

of the FCAA, the EPA has 18 months from receipt of the SIP

submittal to take final action on this rulemaking. Allowing the

EPA its fully allotted time to act, including publication of its final

rulemaking and effective date 30 - 60 days later would be close

to December 1, 2012. Until the EPA acts, the rule provides that

the current rules remain in effect. If the commission is successful

of its challenge of the EPA’s disapproval of the existing rules in

Subchapter G and requests the EPA to re-review them, then the

rules will be available for the EPA’s review. If the EPA approves

the rules, then the effective date will be timely for applicants to

use these rules for permit actions.

SUBCHAPTER A. DEFINITIONS

30 TAC §116.13

STATUTORY AUTHORITY

The amendment is adopted under Texas Water Code, §5.102,

concerning General Powers, that provides the commission with

the general powers to carry out its duties under the Texas Water Code; §5.103, concerning Rules, and §5.105, concerning

General Policy, which authorize the commission to adopt rules

necessary to carry out its powers and duties under the Texas

Water Code; and under Texas Health and Safety Code (THSC),

§382.017, concerning Rules, which authorizes the commission

to adopt rules consistent with the policy and purposes of the

Texas Clean Air Act. The amendment is also adopted under

THSC, §382.002, concerning Policy and Purpose, which establishes the commission purpose to safeguard the state’s air resources, consistent with the protection of public health, general welfare, and physical property; §382.003, concerning Definitions; §382.011, concerning General Powers and Duties, which

authorizes the commission to control the quality of the state’s air;

§382.012, concerning State Air Control Plan, which authorizes

the commission to prepare and develop a general, comprehensive plan for the control of the state’s air; §382.051, concerning

Permitting Authority of Commission; Rules, which authorizes the

commission to issue a permit by rule for types of facilities that

will not significantly contribute air contaminants to the atmosphere; §382.0513, concerning Permit Conditions, which authorizes the commission to establish and enforce permit conditions;

and §382.0514, concerning Sampling, Monitoring, and Certification.

This rulemaking implements THSC, §§382.002, 382.003,

382.011, 382.012, 382.051, 382.0513, and 382.0514.

This agency hereby certifies that the adoption has been reviewed

by legal counsel and found to be a valid exercise of the agency’s

legal authority.

Filed with the Office of the Secretary of State on December 17,

2010.

TRD-201007205

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Effective date: January 6, 2011

Proposal publication date: July 2, 2010

For further information, please call: (512) 239-2548

SUBCHAPTER G. FLEXIBLE PERMITS

ADOPTED RULES December 31, 2010 35 TexReg 11935
30 TAC §§116.710, 116.711, 116.715 - 116.718, 116.720,

116.721, 116.730, 116.740, 116.750, 116.765

STATUTORY AUTHORITY

The amendments and new rule are adopted under Texas Water

Code, §5.102, concerning General Powers, that provides the

commission with the general powers to carry out its duties under

the Texas Water Code; §5.103, concerning Rules, §5.105,

concerning General Policy, which authorize the commission to

adopt rules necessary to carry out its powers and duties under

the Texas Water Code; and §7.101, concerning Violation, which

provides that a person may not violate a statute or rule under the

commission’s jurisdiction; and under Texas Health and Safety

Code (THSC), §382.017, concerning Rules, which authorizes

the commission to adopt rules consistent with the policy and

purposes of the Texas Clean Air Act. The amendments are

also adopted under THSC, §382.002, concerning Policy and

Purpose, which establishes the commission purpose to safeguard the state’s air resources, consistent with the protection of

public health, general welfare, and physical property; §382.003,

concerning Definitions; §382.011, concerning General Powers

and Duties, which authorizes the commission to control the

quality of the state’s air; §382.012, concerning State Air Control

Plan, which authorizes the commission to prepare and develop

a general, comprehensive plan for the control of the state’s

air; §382.051, concerning Permitting Authority of Commission;

Rules, which authorizes the commission to issue a permit by

rule for types of facilities that will not significantly contribute

air contaminants to the atmosphere; §381.0511, concerning

Permit Consolidation and Amendment; §382.0512, concerning Modification of Existing Facility, which restricts what the

commission may consider in determining a facility modification;

§382.0513, concerning Permit Conditions, which authorizes

the commission to establish and enforce permit conditions;

§382.0514, concerning Sampling, Monitoring, and Certification;

§382.0515, concerning Application for Permit, §382.0517,

concerning Determination of Administrative Completion of Application, §382.0518, concerning Preconstruction Permit, which

authorizes the commission to require a permit before a facility is

constructed or modified; §382.056, concerning Notice of Intent

to Obtain Permit or Permit Review; Hearing; and §382.062,

concerning Application, Permit, and Inspection Fees.

This rulemaking implements THSC, §§382.002, 382.003,

382.011, 382.012, 382.051, 381.0511, 382.0512; 382.0513,

382.0514, 382.0515, 382.0517, 382.0518, 382.056 and

382.062.

§116.710. Applicability.

(a) Flexible permit. A person may obtain a flexible permit

which allows for physical or operational changes as provided by this

subchapter as an alternative to obtaining a new source review permit

under §116.110 of this title (relating to Applicability), or in lieu of

amending an existing permit under §116.116 of this title (relating to

Amendments and Alterations). A person may obtain a flexible permit

under §116.711 of this title (relating to Flexible Permit Application)

for a facility, group of facilities, or account before any actual work is

begun, provided however:

(1) only one flexible permit may be issued for an account;

(2) modifications to existing facilities included in a flexible

permit may be authorized by the amendment of an existing flexible

permit;

(3) a new facility may be authorized by the amendment of

a flexible permit;

(4) a flexible permit may not cover facilities at more than

one account; and

(5) a flexible permit application, review, and issued permit

used to authorize any facility, group of facilities, or any change to existing facilities at an account that constitutes a new major stationary

source or major modification as defined by §116.12 of this title (relating to Nonattainment and Prevention of Significant Deterioration Review Definitions), shall be completed in accordance with Subchapter

B, Division 5 or 6 of this chapter (relating to Nonattainment Review

Permits; and Prevention of Significant Deterioration Review, respectively), including retention of established limits where there has been

no subsequent modification. No person shall use this subchapter to circumvent applicable requirements of Subchapter B, Division 5 or 6 of

this chapter.

(b) Change in ownership. The new owner of a facility, group

of facilities, or account shall comply with §116.110(e) of this title, provided however, that all facilities authorized by a flexible permit must

change ownership at the same time and to the same person, or both the

new owner and existing permit holder must obtain a permit alteration

allocating the emission caps or individual emission limitation prior to

the transfer of the permit by the commission. After the sale of a facility, or facilities, but prior to the transfer of a permit requiring a permit

alteration, the original permit holder remains responsible for ensuring

compliance with the existing flexible permit and all rules and regulations of the commission.

(c) Submittal under seal of Texas licensed professional engineer. All applications for a flexible permit or flexible permit amendment shall comply with §116.110(f) of this title.

(d) Responsibility for flexible permit application. The owner

of the facility, group of facilities, or account or the operator of the facility, group of facilities, or account who is authorized to act for the owner

is responsible for complying with this section, except as provided by

subsection (b) of this section.

§116.711. Flexible Permit Application.

In order to be granted a flexible permit or flexible permit amendment,

the owner or operator of the proposed facility shall submit a permit

application which must include:

(1) a completed Form PI-1 General Application signed by

an authorized representative of the applicant. All additional support

information specified on the form must be provided before the application is complete;

(2) information which demonstrates that emissions from

the facility, including any associated dockside vessel emissions, meet

all of the following:

(A) Protection of public health and welfare.

(i) The emissions from the proposed facility, group

of facilities, or account as determined under §116.716 of thistitle (relating to Emission Caps and Individual Emission Limitations), will comply with all applicable rules of the commission and with the intent of

the TCAA, including protection of the health and physical property of

the people.

(ii) In considering the issuance of a flexible permit

for construction or modification of any facility, group of facilities, or

account within 3,000 feet or less of an elementary, junior high/middle, or senior high school, the commission shall consider any possible

adverse short-term or long-term side effects that an air contaminant or

nuisance odor from the facility, group of facilities, or account may have

on the individuals attending these school facilities.

35 TexReg 11936 December 31, 2010 Texas Register
(B) Measurement of emissions. The proposed facility,

group of facilities, or account will have provisions for measuring the

emission of air contaminants as determined by the executive director.

This may include the installation of sampling ports on exhaust stacks

and construction of sampling platforms in accordance with guidelines

in the "Texas Natural Resource Conservation Commission Sampling

Procedures Manual."

(C) Best available control technology (BACT).

(i) All facilities authorized by the flexible permit

shall utilize BACT consistent with the following:

(I) All new facilities must utilize BACT.

(II) Existing facilities must utilize BACT with

consideration given to the technical practicability and economic reasonableness of reducing or eliminating the emissions. Control technology that is more stringent than BACT may be used on certain facilities

to provide the emission reductions necessary to comply with this requirement on a group of existing facilities, provided however, that the

existing level of control may not be lessened for any facility from its

current authorization.

(ii) For pollutants from new or modified facilities

that constitute a new major stationary source or major modification

as defined by §116.12 of this title (relating to Nonattainment and Prevention of Significant Deterioration Review Definitions), control technology shall be demonstrated as required by §§116.150, 116.151, or

116.160 of this title (relating to New Major Source or Major Modification in Ozone Nonattainment Areas; New Major Source or Major

Modification in Nonattainment Area Other Than Ozone; and Prevention of Significant Deterioration Requirements, respectively), as applicable, for each new or modified facility.

(iii) For new facilities and proposed affected sources

(as defined in §116.15(1) of this title (relating to Section 112(g) Definitions)) subject to Subchapter E of this chapter (relating to Hazardous

Air Pollutants: Regulations Governing Constructed or Reconstructed

Major Sources (FCAA, §112(g), 40 CFR Part 63)), the use of BACT

shall be demonstrated for the individual facility or affected source.

(D) New Source Performance Standards (NSPS). The

emissions from each affected facility as defined in 40 Code of Federal

Regulations (CFR), Part 60 will meet at least the requirements of any

applicable NSPS as listed under Title 40 CFR Part 60, promulgated by

the EPA under authority granted under the FCAA, §111, as amended.

(E) National Emission Standards for Hazardous Air

Pollutants (NESHAPS). The emissions from each facility as defined in

40 CFR Part 61 will meet at least the requirements of any applicable

NESHAPS, as listed under 40 CFR Part 61, promulgated by EPA

under authority granted under the FCAA, §112, as amended.

(F) NESHAPS for source categories. The emissions

from each affected facility shall meet at least the requirements of any

applicable maximum achievable control technology (MACT) standard

as listed under 40 CFR Part 63, promulgated by the EPA under FCAA,

§112 or as listed under Chapter 113, Subchapter C of this title (relating to National Emissions Standards for Hazardous Air Pollutants for

Source Categories (FCAA, §112, 40 CFR 63)).

(G) Performance demonstration. The proposed facility,

group of facilities, or account will achieve the performance specified in

the flexible permit application. The applicant may be required to submit additional engineering data after a flexible permit has been issued

in order to demonstrate further that the proposed facility, group of facilities, or account will achieve the performance specified in the flexible

permit. In addition, initial compliance testing with ongoing compliance determined through engineering calculations based on measured

process variables, parametric or predictive monitoring, stack monitoring, or stack testing shall be required as specified in each flexible permit.

(H) Nonattainment review. If the proposed facility,

group of facilities, or account is located in a nonattainment area, each

facility shall comply with all applicable requirements concerning

nonattainment review in this chapter. Prior to the application of this

subchapter to a proposed facility, group of facilities, or account; or

any change at an existing facility, group of facilities, or account; an

analysis shall be made for the project to determine the applicability

or nonapplicability of federal Nonattainment New Source Review

requirements.

(I) Prevention of Significant Deterioration (PSD) review. If the proposed facility, group of facilities, or account is located

in an attainment area, each facility shall comply with all applicable

requirements in this chapter concerning PSD review. Prior to the

application of this subchapter to a proposed facility, group of facilities,

or account; or any change at an existing facility, group of facilities,

or account; an analysis shall be made for the project to determine the

applicability or nonapplicability of federal PSD review.

(J) Air dispersion modeling or ambient monitoring.

Any permit application for a new flexible permit, or permit amendment

to increase a flexible permit emission cap or individual emission

limitation, shall include an air quality analysis to demonstrate that the

proposed action will not interfere with attainment and maintenance

of the National Ambient Air Quality Standards. Computerized air

dispersion modeling and/or ambient monitoring may be required by

the commission’s Air Permits Division to determine the air quality

impacts from the facility, group of facilities, or account. In conducting

a review of a permit application for a shipbuilding or ship repair

operation, the commission will not require and may not consider

air dispersion modeling results predicting ambient concentrations of

non-criteria air contaminants over coastal waters of the state. The

commission shall determine compliance with non-criteria ambient

air contaminant standards and guidelines at land-based off-property

locations.

(K) Federal standards of review for constructed or reconstructed major sources of hazardous air pollutants. If the proposed

source is an affected source (as defined in §116.15(1) of this title), it

shall comply with all applicable requirements under Subchapter E of

this chapter.

(L) Mass cap and trade allocations. If subject to Chapter 101, Subchapter H, Division 3 of this title (relating to Mass Emissions Cap and Trade Program) the proposed facility, group of facilities,

or account must obtain allocations to operate.

(M) Application content. In addition to other requirements of this chapter, the applicant shall:

(i) identify each air contaminant for which an emission cap is desired;

(ii) identify each facility to be included in the flexible permit;

(iii) identify each source of emissions to be included

in the flexible permit and for each source of emissions identify the

Emission Point Number (EPN) and the air contaminants emitted;

(iv) for each emission cap, identify all associated

EPNs and facilities (including description, common name, and facility

identification number) and provide emission rate calculations based on

the expected maximum capacity and the proposed control technology;

ADOPTED RULES December 31, 2010 35 TexReg 11937
(v) for each individual emission limitation, identify

the EPN and provide emission rate calculations based on the expected

maximum capacity and the proposed control technology;

(vi) include calculations used to determine the controlled emission rates from each facility performed in accordance with

TCEQ Air Permits Division guidance; and

(vii) if the flexible permit application includes facilities currently authorized by a permit issued under Subchapter B of this

chapter (relating to New Source Review Permits), the applicant shall

identify any terms, conditions, and representations in the Subchapter

B permit or permits which will be superseded by or incorporated into

the flexible permit. The applicant shall include an analysis of how the

conditions and control requirements of Subchapter B permits will be

carried forward in the proposed flexible permit.

(N) Proposed control technology and compliance

demonstration. The applicant shall specify the control technology proposed for each facility and demonstrate compliance with all emission

caps at expected maximum production capacity.

§116.715. General and Special Conditions.

(a) Flexible permits may contain general and special conditions. The holders of flexible permits shall comply with any and all

such conditions.

(b) A pollutant specific emission cap or individual emission

limitationsshall be established for each air contaminant for all facilities

authorized by the flexible permit. A flexible permit may contain more

than one emission cap for a specific air contaminant. The holder of a

flexible permitshall comply with all flexible permit emission cap(s) and

individual emission limitations. An exceedance of the flexible permit

emission cap(s) or individual emission limitations is a violation of the

permit.

(c) The following general conditions shall be applicable to every flexible permit.

(1) Applicability. This section does not apply to physical

or operational changes allowed without an amendment under §116.721

of this title (relating to Amendments and Alterations).

(2) Construction progress. The permit holder shall report

the start of construction, construction interruptions exceeding 45 days,

and completion of construction to the appropriate regional office of

the commission not later than 15 working days after occurrence of the

event.

(3) Start-up notification.

(A) The permit holder shall notify the appropriate regional office of the commission and any local program having jurisdiction prior to the commencement of operations of the facilities authorized by the permit in such a manner that a representative of the

commission may be present.

(B) The permit holder shall provide a separate notification for the commencement of operations for each unit of phased

construction, which may involve a series of facilities commencing operations at different times.

(C) Prior to beginning operations of the facilities authorized by the permit, the permit holder shall identify to the Air Permits

Division the source or sources of allowances to be utilized for compliance with Chapter 101, Subchapter H, Division 3 of this title (relating

to Mass Emissions Cap and Trade Program).

(4) Sampling requirements.

(A) If sampling is required, the flexible permit holder

shall contact the commission’s appropriate regional office prior to sampling to obtain the proper data forms and procedures.

(B) All sampling and testing procedures must be approved by the executive director and coordinated with the appropriate

regional office of the commission.

(C) The flexible permit holder is also responsible for

providing sampling facilities and conducting the sampling operations

or contracting with an independent sampling consultant.

(5) Monitoring, Calculations, and Equivalency of Methods.

(A) Each flexible permit shall specify requirements for

monitoring or demonstrating compliance with emission caps and individual emission limits in the flexible permit.

(B) Each flexible permit shall specify methods for calculating annual and short term emissions for each pollutant for a given

type of facility.

(C) The flexible permit holder must demonstrate or otherwise justify the equivalency of emission control methods, sampling

or other emission testing methods, and monitoring or calculation methods proposed as alternatives to methods indicated in the conditions of

the flexible permit. Requests for alternative emission control, sampling, monitoring, or calculation methods must be submitted in writing

for review and approval by the executive director prior to their use in

fulfilling any requirements of the permit.

(6) Recordkeeping. The permit holder shall:

(A) maintain a copy of the flexible permit (and any permit applications associated with the flexible permit) along with information and data sufficient to demonstrate continuous compliance with

the emission caps and individual emission limitations contained in the

flexible permit. This information and data shall include, but is not limited to:

(i) emission cap and individual emission limitation

calculations based on a 12-month rolling basis;

(ii) emission cap and individual emission limitation

calculations corresponding to any short term emission limitation;

(iii) Production records and operating hours; and

(iv) Records of any air quality analysis required under §116.718(c) of this title (relating to Significant Emission Increase).

These records shall be maintained for at least five years following the

date that the analysis was performed.

(B) keep all required records in a file at the plantsite. If,

however, the facility site normally operates unattended, records must

be maintained at an office within Texas having day-to-day operational

control of the facility site;

(C) make the records available at the request of personnel from the commission or any local air pollution control agency having jurisdiction over the site, which, upon request, the commission shall

make any such records of compliance available to the public in a timely

manner;

(D) comply with any additional recordkeeping requirements specified in special conditions in the permit; and

(E) retain information in the file for at least five years

following the date the information or data is obtained.

(7) Maximum allowable emission rates. A flexible permit covers only those sources of emissions and those air contaminants

35 TexReg 11938 December 31, 2010 Texas Register
listed in the table entitled "Emission Sources, Emissions Caps and Individual Emission Limitations" in the flexible permit. Each flexible

permitted facility, group of facilities, or account is limited to the emission limits and other conditions specified in the table in the flexible

permit.

(8) Representations. The representations with regard to

construction plans and operation procedures in an application for a

permit or permit amendment are the conditions upon which a flexible

permit or permit amendment is issued. Noncompliance with these

representations constitutes noncompliance with the permit.

(9) Emission cap readjustment. If a schedule to install additional controls is included in the flexible permit and a facility subject

to such a schedule is taken out of service, the emission cap contained

in the flexible permit will be readjusted for the period the facility is out

of service to a level as if no schedule had been established. Unless a

special condition specifies the method of readjustment of the emission

cap, a permit alteration shall be obtained.

(10) Maintenance of emission control. Each facility, group

of facilities, or account authorized by the flexible permit shall not be

operated unless all air pollution emission capture and abatement equipment is maintained in good working order and operating properly during normal facility operations. Notification for emissions events and

scheduled maintenance shall be made in accordance with §101.201

and §101.211 of this title (relating to Emissions Event Reporting and

Recordkeeping Requirements; and Scheduled Maintenance, Startup,

and Shutdown Reporting and Recordkeeping Requirements).

(11) Compliance with rules. Acceptance of a flexible permit by a permit applicant constitutes an acknowledgment and agreement that the holder will comply with all applicable Rules and Orders

of the commission issued in conformity with the Texas Clean Air Act

and the conditions precedent to the granting of the permit. If more

than one state or federal rule or regulation or flexible permit condition

are applicable, then the most stringent limit or condition shall govern

and be the standard by which compliance shall be demonstrated. Acceptance of the permit includes consent to the entrance of commission

employees and agents into the permitted premises at reasonable times

to investigate conditions relating to the emission or concentration of air

contaminants, including compliance with the flexible permit.

(12) Emissions Caps. The following requirements apply to

facilities with emissions subject to emission caps.

(A) Recordkeeping and reporting.

(i) A semiannual report shall be submitted to the appropriate regional office within 30 days of the end of each reporting

period that contains:

(I) the identification of the owner and operator

and the permit number;

(II) total annual emissions (in tons per year)

based on a 12-month rolling total for each month in the reporting

period;

(III) the identification of any exceedances of a

short-term emission cap during the reporting period;

(IV) any data relied upon, including, but not limited to, quality assurance or quality control data, in calculating the

monthly and annual emission cap pollutant emissions, and short-term

emission cap pollutant emissions, to the extent necessary to demonstrate compliance;

(V) a list of any facility modified as defined in

§116.12 of this title (relating to Nonattainment and Prevention of Significant Deterioration Review Definitions) during the preceding sixmonth period and the documentation required by §116.718(b) of this

title;

(VI) the number, duration, and cause of any deviations or monitoring malfunctions (other than the time associated with

zero and span calibration checks), and any corrective action taken. For

facilities that are subject to the federal operating permits program in

Chapter 122 of this title (relating to Federal Operating Permits Program) this may be satisfied by referencing the flexible permit number

in the semiannual report for the site submitted under §122.145 of this

title (relating to Reporting Terms and Conditions);

(VII) a notification of a shutdown of any monitoring system used in determining compliance with the emission cap

or any individual emission limit of the permit, whether the shutdown

was permanent or temporary, the reason for the shutdown, the anticipated date that the monitoring system will be fully operational or replaced with another monitoring system, whether the facility monitored

by the monitoring system continued to operate, and the calculation of

the emissions of the pollutant or the emissions determined by method

included in the permit;

(VIII) the readjusted emission cap for each pollutant if a facility subject to an emission cap is shut down for a period

longer than six months as required by §116.716(f)(1) of this title (relating to Emission Caps and Individual Emission Limitations); and

(IX) a signed statement by the owner or operator

certifying the truth, accuracy, and completeness of the information provided in the report.

(ii) The reporting period for the semiannual report

required under this section shall begin on the earliest date any facilities

in an emission cap commence operation under the cap.

(iii) The owner or operatorshallsubmit the results of

any revalidation test or method to the executive director within three

months after completion of such test or method.

(B) Absence of monitoring data. A facility owner or

operator shall record and report maximum potential emissions without

considering enforceable emission limitations or operational restrictions

for a facility during any period of time that there is no monitoring data,

unless another method for determining emissions during such periods

is specified in the flexible permit special conditions.

(C) Revalidation. Any site generated test data used to

determine the emission rates for facilities under the cap must be revalidated through performance testing or other scientifically valid means

approved by the executive director. Such testing must occur at least

once every five years after the facility has been added to an emission

cap. Emission rate factors shall be adjusted through a permit alteration

or amendment if the revalidation test results determine that the emission rate factor has increased.

(d) Each permit with emission caps must include special conditions that satisfy the following requirements for facilities subject to

those caps. The permit shall specify which of the monitoring options

under paragraph (2)(A) - (E) of this subsection, shall be used to determine compliance for facilities subject to monitoring under this subsection. These requirements do not apply to facilities that are not subject

to an emission cap.

(1) The monitoring system must accurately determine all

emissions of the pollutants in terms of mass per unit of time. Any

monitoring system authorized for use in the permit must be based on

sound science and meet generally acceptable scientific procedures for

data quality and manipulation.

ADOPTED RULES December 31, 2010 35 TexReg 11939
(2) The monitoring system must employ one or more of the

general monitoring approaches meeting the minimum requirements as

described in subparagraphs (A) - (D) of this paragraph.

(A) An owner or operator using mass balance calculations to monitor pollutant emissions from activities using coating or

solvents shall meet the following requirements:

(i) provide a demonstrated means of validating the

published content of the pollutant that is contained in, or created by, all

materials used in or at the facility;

(ii) assume that the facility emits all of the pollutant

that is contained in, or created by, any raw material or fuel used in or at

the facility, if it cannot otherwise be accounted for in the process; and

(iii) where the vendor of a material or fuel that is

used in or at the facility publishes a range of pollutant content from

such material, the owner or operator shall use the highest value of the

range to calculate the pollutant emissions unless the executive director

determines that there is site-specific data or a site-specific monitoring

program to support another content within the range.

(B) An owner or operator using a continuous emission

monitoring system (CEMS) to monitor pollutant emissions shall meet

the following requirements.

(i) The CEMS must comply with applicable performance specifications found in 40 Code of Federal Regulations Part 60,

Appendix B.

(ii) The CEMS must sample, analyze, and record

data at least every 15 minutes while the emissions unit is operating.

(C) An owner or operator using a continuous parameter

monitoring system (CPMS) or a predictive emission monitoring system (PEMS) to monitor pollutant emissions shall meet the following

requirements:

(i) The CPMS or the PEMS must be based on current

site-specific data demonstrating a correlation between the monitored

parameter(s) and the pollutant emissions across the range of operation

of the facility; and

(ii) Each CPMS or PEMS mustsample, analyze, and

record data at least every 15 minutes or at another less frequent interval

approved by the executive director, while the facility is operating.

(D) An owner or operator using emission factors to

monitor pollutant emissions shall meet the following requirements:

(i) All emission factors must be adjusted asspecified

by the permit, if appropriate, to account for the degree of uncertainty

or limitations in the factors’ development;

(ii) The facility must operate within the designated

range of use for the emission factor, if applicable; and

(iii) The owner or operator of a facility which emits

or has the potential to emit the pollutant in an amount equal to or

greater than the prevention ofsignificant deterioration or nonattainment

as applicable, significant level for that pollutant, provided in Table I of

§116.12(18)(A) of thistitle for nonattainment pollutants and in 40 Code

of Federal Regulations §51.166(b)(23) for those subject to prevention

of significant deterioration review, and which relies on an emission factor to calculate pollutant emissions, shall conduct validation testing to

determine a site-specific emission factor within six months of permit

issuance or start of operation of the facility, whichever is later, unless

the executive director determines that testing is not required.

(E) An alternative monitoring system must meet the requirements in paragraph (1) of this subsection and be approved by the

executive director.

(3) Where an owner or operator of a facility cannot demonstrate a correlation between monitored parameter(s) and the pollutant

emissions rate at all operating points of the facility, the executive director shall:

(A) establish default value(s) for determining compliance with the emission cap based on the highest potential emissions

reasonably estimated at such operating point(s); or

(B) determine that operation of the facility during operating conditions when there is no correlation between monitored parameter(s) and the pollutant emissions is a violation of the emission

cap.

(e) There may be additional special conditions included in a

flexible permit upon issuance or amendment of the permit. Such conditions in a flexible permit may be more restrictive than the requirements

of this title.

(f) The executive director may require as a special condition

that the permit holder obtain written approval before constructing a

source under a standard permit under Subchapter F of this chapter (relating to Standard Permits) or a permit by rule under Chapter 106 of

this title. Such written approval may be required if the executive director specifically finds that an increase of a particular pollutant could

either:

(1) result in a significant impact on the air environment, or

(2) cause the facility, group of facilities, or account to become subject to review under:

(A) Subchapter E of this chapter (relating to Hazardous

Air Pollutants: Regulations Governing Constructed or Reconstructed

Major Sources (FCAA, §112(g), 40 CFR Part 63)); or

(B) the provisions in Subchapter B, Divisions 5 and 6

of this chapter (relating to Nonattainment Review Permits; and Prevention of Significant Deterioration Review, respectively).

§116.716. Emission Caps and Individual Emission Limitations.

(a) Emission caps. To establish a cap for a pollutant, the executive director will develop an emission cap for:

(1) all facilities at an account; or

(2) a designated group of facilities at an account.

(b) Notwithstanding subsection (a) of this section, the executive director reservesthe right to exclude any facility from an emissions

cap if necessary to ensure compliance with the permit or to ensure the

protection of human health and the environment.

(c) Emissions will be calculated for each facility within an

emission cap as follows:

(1) Determination of control technology:

(A) if the permit is used to authorize any facility, group

of facilities, or account, or any change to existing facilities, that constitutes a new major stationary source or major modification for the

pollutant as defined by §116.12 of this title (relating to Nonattainment

and Prevention of Significant Deterioration Review Definitions), emissions shall be based on control technology determined in accordance

with Subchapter B, Division 5 or 6 of this chapter (relating to Nonattainment Review Permits; and Prevention of Significant Deterioration

Review, respectively) as applicable, at expected maximum capacity; or

35 TexReg 11940 December 31, 2010 Texas Register
(B) based on application of best available control technology as defined in §116.10 of this title (relating to General Definitions), at expected maximum capacity.

(2) pollutants emitted from facilities subject to lowest

achievable emission rate review in accordance with Subchapter B,

Division 5 of this chapter must be included in a separate emissions

cap or listed as individual emission limitations.

(3) the calculated emissions for all facilities within an

emission cap will be summed.

(4) a lower emission cap than that determined by paragraph

(3) of thissubsection may be proposed by the permit applicant if technical information is provided to demonstrate that it is feasible to operate

in compliance with the proposed emission cap.

(d) Individual emission limitations. An individual emission

limitation will be established in the same permit for each pollutant not

included in an emission cap for facilities authorized by the flexible permit. In addition, an individual emission limitation may be established

for a pollutant included in an emission cap when the expected capacity of a facility is less than the expected maximum capacity to prevent

a facility from exceeding emission levels appropriate for the proposed

controls.

(e) The permit shall clearly identify, by a table or other appropriate means, the facilities that are subject to an emission cap, and the

facilities that are subject to individual emission limitations. A facility

may be subject to both an emission cap and an individual emission limitation.

(f) Adjustment of emission cap. To ensure caps are practically

enforceable, the executive director will use the following criteria and

procedures for adjustment of a cap.

(1) If a facility subject to an emission cap is shut down for

a period longer than six months, the emission cap shall be adjusted by

lowering the emission cap by an amount that the shut down facility contributed to the original calculation of the emission cap. If a shut down

facility is returned to operation, the emission cap shall be adjusted by

increasing the emission cap by the amount that the facility contributed

to the original calculation of the emission cap; however, the emission

cap cannot be increased beyond the original emission cap amount.

(2) If a facility isto be added to the flexible permit, a permit

amendment is required to establish a revised emission cap.

(3) If an existing emission cap is to be increased as a result

of adding a new facility or the modification of a facility within the

emission cap, an amendment application is required. In considering

the application, the commission shall:

(A) Determine whether an increase in the emission cap

constitutes a major modification for the pollutant as defined by §116.12

of this title. For purposes of this determination, all facilities under that

cap shall be included in the evaluation; and

(B) for facilities that are not major modifications as determined by the analysis in paragraph (3)(A) of this subsection, increase the emission cap by the sum of the emissions from each of the

new or modified facilities determined in accordance with subsection

(c) of this section and decrease the emission cap by the sum of the previous emission cap contributions from the facilities to be modified.

(4) An emission cap will be adjusted downward for any facility, group of facilities, or account authorized by a flexible permit if

that facility becomes subject to any new state or federal rule or regulation which would lower emissions or require an emission reduction. The adjustment will be made the next time the flexible permit

is amended or altered. If an amendment to a flexible permit is not required to meet the new requirement, then within 60 days of making

the change, the permittee must submit a request to alter the permit and

include information describing how compliance with the new requirement will be demonstrated.

(g) Each emission cap or individual emission limitation shall

specify an annual emission limitation in tons per year, based on a rolling

12-month period. Each emission cap or individual emission limitation

shall also specify a practically enforceable short term emission limitation.

(h) When a cap is established or adjusted, major new source

review requirements as referenced in §116.711(2)(H) or (I) of this title (relating to Flexible Permit Application) must be met for the new

or modified sources prior to issuance, amendment, or alteration of the

permit.

§116.718. Significant Emission Increase.

(a) An increase in emissions from operational or physical

changes at an existing facility authorized by a flexible permit is

insignificant, for the purposes of minor new source review under this

subchapter, if the increase does not exceed either the emission cap

or individual emission limitation. This section does not apply to an

increase in emissions from a new facility nor to the emission of an air

contaminant not previously emitted by an existing facility.

(b) For purposes of major new source review, determination

of a significant increase in emissions that does not result in an increase

to the emission cap includes evaluation of the following:

(1) An increase in emissions from operational or physical

changes or series of related changesthat would constitute a major modification as defined by §116.12 of this title (relating to Nonattainment

and Prevention of Significant Deterioration Review Definitions) must

comply with Subchapter B, Division 5 or 6 of this chapter (relating to

Nonattainment Review Permits; and Prevention of Significant Deterioration Review, respectively).

(2) Unless a plant-wide applicability limit has been established for the pollutant under Subchapter C of this chapter (relating to

Plant-wide Applicability Limits), the permit holdershall document that

the change is not a major modification as defined in §116.12 of thistitle,

and maintain the documentation required by Subchapter B, Division 1

of this chapter (relating to New Source Review Permits) concerning

actual to projected actual emission increases.

(3) When determining whether a change is a major modification as defined in §116.12 of this title, the project emissions increase and the project net shall be determined as specified as defined

in §116.12 of this title, regardless of how the existing facilities are authorized.

(4) For new facilities, or modified facilities under an emission cap for the pollutant where the permit holder elects to use potential

to emit rather than projected actual emissions from the facility to determine the project emissions increase, the potential to emit shall be

considered as the proposed emissions cap unless an alternate method

is demonstrated.

(5) A separate permit limit or physical constraint may be

established to limit the facility’s potential to emit for facilities that are

under a cap or have individual emission limits.

(6) If the project emission increase issuch that a de minimis

threshold test (netting) is required for a pollutant, the analysis shall be

submitted to the commission for review and approval prior to making

the change. If netting is not required, the information shall be submitted

with the next permit amendment or renewal application.

ADOPTED RULES December 31, 2010 35 TexReg 11941
♦ ♦ ♦

(c) The permit holder shall complete an air quality analysis

to demonstrate that the proposed action will not interfere with attainment and maintenance of the National Ambient Air Quality Standards

if there may be an increase in emissions from operational or physical

changes at any existing facility, group of facilities, or account authorized by a flexible permit and the area is not designated as nonattainment for the pollutant. If the emission increase may result in ambient

concentrations greater than de minimis for that pollutant, the air quality analysis shall be submitted to the executive director for review and

approval prior to making the change.

§116.765. Compliance Schedule.

(a) Any application for a permit or permit amendment under

this subchapter submitted on or after the compliance date specified by

subsection (b) of this section shall comply with the amendments to

§§116.710, 116.711, 116.715 - 116.718, 116.720, 116.721, 116.730,

116.740 and 116.750 of thistitle (relating to Applicability, Flexible Permit Application, General and Special Conditions, Emission Caps and

Individual Emission Limitations, Implementation Schedule for Additional Controls, Significant Emission Increase, Limitation on Physical

and Operational Changes, Amendments and Alterations, Compliance

History, Public Notice and Comment, and Flexible Permit Fee; respectively) adopted by the commission on December 14, 2010.

(b) The compliance date is 60 days after publication in the

Federal Register of the final approval by the United States Environmental Protection Agency of these sections as revisions to the Texas

State Implementation Plan.

(c) Until the compliance date specified by subsection (b)

of this section, applications for flexible permits are governed by

§§116.710, 116.711, 116.715 - 116.718, 116.720, 116.721, 116.730,

116.740 and 116.750 of this title, as they existed immediately before

January 5, 2011, and those rules are continued in effect for that

purpose. All other sections in this subchapter remain applicable to

applications for flexible permits.

This agency hereby certifies that the adoption has been reviewed

by legal counsel and found to be a valid exercise of the agency’s

legal authority.

Filed with the Office of the Secretary of State on December 17,

2010.

TRD-201007206

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Effective date: January 6, 2011

Proposal publication date: July 2, 2010

For further information, please call: (512) 239-2548

CHAPTER 291. UTILITY REGULATIONS

SUBCHAPTER H. UTILITY SUBMETERING

AND ALLOCATION

30 TAC §291.126

The Texas Commission on Environmental Quality (TCEQ,

agency, or commission) adopts the repeal of §291.126 without

changes as published in the September 10, 2010, issue of the

Texas Register (35 TexReg 8299).

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS

FOR THE ADOPTED RULE

In September 1987, the submetering program was transferred by

the legislature from the Public Utility Commission (PUC) to the

Texas Water Commission, a predecessor agency of the TCEQ.

While at the PUC, the submetering program adopted rules to allow an owner to disconnect a tenant’s water utility service for

non-payment to conform to other PUC rules. When the submetering program was transferred, the Texas Water Commission

adopted rules similar to the PUC’s, including the provision allowing an owner to disconnect a tenant’s water utility service for

non-payment. The TCEQ’s current rules still contain this provision in Chapter 291, Subchapter H, Utility Submetering and Allocation, §291.126, Discontinuation of Service.

In 1995, the 74th Legislature amended Texas Property Code,

§92.008, by passing House Bill (HB) 2803. In 2009, Texas

Property Code, §92.008 was amended again when the 81st

Legislature passed HB 882. Currently, Texas Property Code,

§92.008(b) states that a landlord may not interrupt or cause

interruption of water, wastewater, gas, or electric service furnished to a tenant by the landlord as an incident of tenancy or

by other agreement unless the interruption results from bona

fide repairs, construction, or an emergency. Non-payment is not

a reason for interruption of service under Texas Property Code,

§92.008. Therefore, the commission proposes this rulemaking

to ensure that the commission’s rules conform with the Texas

Property Code.

SECTION DISCUSSION

The commission adopts the repeal to §291.126. Section

291.126 provided that a tenant’s water utility service may be

disconnected if payment was not received by the due date, and

the owner issues a disconnection notice after the due date at

least ten days prior to a stated date of disconnection. Texas

Property Code, §92.008(b), does not allow a landlord to interrupt

water services furnished to a tenant by the landlord as an incident of tenancy or by other agreement unless the interruption

results from bona fide repairs, construction, or emergency. Until

now, the commission held that its rule did not conflict with the

Texas Property Code. However, recent legal analysis by the

commission has resulted in the determination that the rule is not

consistent with the statute. Specifically, since Texas Property

Code, §92.008, only allows for the disconnection of water services that are provided to a tenant by the landlord as an incident

of tenancy or by other agreement for the three previous reasons

listed, the commission’s rule that allows for disconnection due

to non-payment was in conflict with this section. To ensure that

the commission’s rules and the Texas Property Code conform,

the commission adopts this repeal.

FINAL REGULATORY IMPACT ANALYSIS DETERMINATION

The commission reviewed the adopted rulemaking in light of the

regulatory analysis requirements of Texas Government Code,

§2001.0225, and determined that the rulemaking is not subject

to §2001.0225 because it does not meet the definition of a "major environmental rule" as defined in the Texas Administrative

Procedure Act. A "major environmental rule" is a rule that is

specifically intended to protect the environment or reduce risks

to human health from environmental exposure, and that may adversely affect in a material way the economy, a sector of the

economy, productivity, competition, jobs, the environment, or the

public health and safety of the state or a sector of the state.

This rulemaking does not meet the statutory definition of a "major environmental rule" because it is not the specific intent of

the rule repeal to protect the environment or reduce risks to hu35 TexReg 11942 December 31, 2010 Texas Register