### 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listed below to be either withdrawn, or as amended by the Commission on December 14,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## 116.730, adopted November 16, 1994, and repealed and readopted June 17, 1998;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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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 fi led within 30 days after the newspaper publication of the notice. To request a conte sted case hearing, you must

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

of

fi cial representative), mailing a ddress, daytime phone number, and

fax number, if any; (2) the name of the Pet itioner 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 gene ral 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 hearin g must be submitted in writing to the

Of

fi ce 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 fi led within 30 days after

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

the Executive Director will not approve the petition and will forward

the petition and hearing req uest to the TCEQ Commissioners for their

consideration at a scheduled Commi ssion meeting. If a contested case hearing is held, it will be a legal proceeding similar to a civil trial in

state district court. Writ ten hearing requests should be submitted to the

Of

fi ce 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 Inter est 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 r egarding TCEQ can be found at our web site at

www.tceq.state.tx.us.

TRD-201003601

LaDonna Castañuela

Chief Clerk

Texas Commission on En vironmental Quality

Filed: June 23, 2010



### Notice of Public Hearings on Proposed Revisions to 30 TAC

Chapter 114 and Revisi ons to the State Implementation Plan

The Texas Commission o n 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 Po llution 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; Te xas 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 81 st 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 Publ ic Safety and increasing the maximum time allowed

from fi ve to ten days that counties will have to reimburse dealerships

participating in the Low Income Vehicle Repair Assistance, Retro fi t,

and Accelerat ed Vehicle Retirement Assistance Program, respectively.

The proposed rulemaking would also streamline the process for implementing minor non-programmatic modi fi cations to the vehicle emissions inspec tion analyzer speci fi cations 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 Sess ion, related to requiring low-volume vehicle emissions inspection stations to meet the criteria for a lowvolume waiver established by the Texas Department of Public Safety.

The proposed revision would also streaml ine the process for implementing minor non-programmatic modi fi cations to the vehicle emissions inspection analyzer speci fi cations and include various non-substantive changes to apply appropriate a nd 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. a t the TCEQ, Region 4 Offi ce, 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 a re 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 permitte d 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 at tend the hearings should contact Charlotte

Horn, Of fi ce 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,

Of

fi ce 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.sta te.tx.us/rules/ecomments/. File size restrictions

may apply to comments being subm itted 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 o btained 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 W eb site at http://www.tceq.state.tx.us/implemen

tation/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, 2 010



### 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 Modi fi cation, §§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 fl exible air permit rules

to address the EPA’s proposed disapproval of the fl exible permit program as part of the Texas SIP by EPA. The pro posed rules would more clearly identify that federal permit ting requirements must be met independently of the fl exible permit program; ensure that the fl exible permit rules cannot be used to circumvent fe deralpermitting requirements;

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

The commission will hold a public he aring on this proposal in Austin

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

is structured for the receipt of or al 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 st aff 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, Of fi ce 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,

Of

fi ce of Legal Services, Texas Commission on Environmental

Quality, P.O. Box 13087, A ustin, 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 commen ts 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 rulemak ing 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, Environme ntal Law Division

Texas Commission on Environmental Quality

Filed: June 18, 2010



### Notice of Water Qualit y Applications

The following notice w as 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 Of fi ce 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 SECTIO N

Douglas Wayne Hall f or 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 IN C 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 e xisting 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 fl ow variable basis. The current perm it authorizes the discharge

of cooling tower blowdown and previously monitored ef fl uents (low

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

gallons per day via Outfall 001. The fa cility 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, previous ly monitored ef fl uents, and storm water

runoff at a daily average fl ow not to exceed 1,320,000,000 gallons per day via Outfall 001; the discharge of storm water runoff at an intermittent and fl ow variable basis v ia Outfalls 003, 006, 007, 008, 011, 013,

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

at an intermittent and fl ow 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 Antoni o, Bexar County, Texas TX 78112.

WRB REFINING LLC which op erates Borger Railway Maintenance

Center, a railcar cleaning, maintena nce, and testing center, has applied

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

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

authorize a dischar ge 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 DEPA RTMENT 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 modi fi cation of the irrigation acres from 195 acres to 198 acres.

The current per mit authorizes the discharge of treated groundwater and

rinsate at a daily average fl ow 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 fl ow 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 treate d domestic wastewater at an annual average fl ow 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 a nd the land application of Class A sludge on property-owned,

leased or under the direct control o f the permittee. The facility is

located approximately one mile west of the intersection of Mauermann

Road an d 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 transfe rred to a participating automobile

dealership no later than 1 0 [ fi ve ] busines s days after the county receives

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

entity. A list of all administrative doc uments 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 replacemen t 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. Participat ing automobile dealers shall be located

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

dealer is voluntary.

(2) Participating counties shall develop a document for

con fi rming a person’s eligibil ity 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 identi fi cation number of the retired vehicle, expiration date of the do cument, the program administrator’s contact information, and the amount of m oney available to the participating

vehicle owner.

(B) The document must be presented to a participating

dealer by the person seekin g 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 con fi rm the eligibility

of the person purchasing a replacement vehicle in the manner provided

by this section.

This agency hereby certi fi es that the proposal has been reviewed

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

Filed with the Of fi ce 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 Impleme ntation Plan (SIP) with the exception

of §§116.711(a)(2)(C)(iii), 11 6.715(f)(2)(A), 116.730, and

116.740(b).

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS

FOR THE PROPOSED RU LES On September 23, 2009, the EPA published notice in the Federal

Register (74 FR 48480) (hereafter "Notice") of its intent to disapprove the TCEQ fl exible permit program r ules 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 mon ths 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 h olders of fl exible 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 fl exible

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 circum vention of major NSR requirements; 2) The program does not require that an applicability determination for major NSR be made fi rst for construction or modi fi cation that could potenti ally 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 l acks replicable, speci fi c, established

implementation procedures for establishing the emission cap in

a minor NSR fl exible permit; 5) The program is not an enforceable minor NSR permittin g program; 6) The program allows the

issuance of fl exible permits that do not incorporate emission limitations and other requirements of the Texas SIP; and 7) The program lacks the necessa ry 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 co mpliance. The EPA also identi fi ed a number of related concerns with the Texas fl exible permit program in

correspondence to the commission dated March 12, 2008.

The Texas fl exible permit program rules (Chapter 116, Subchapter G, Flexible Per mits) became effective on December 8, 1994.

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

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

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

fl exible 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 fl exibility for emission reductions with the

fi nal goal being a well-controlled facility. At the time the fl exible

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

The fl exible permit program was intended to provide grandfathered fac ilities with a voluntary authorization mechanism that

would reduce emissions. Only one fl exible 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 fl exible permit. The applicant

for a fl exible permit can combine existing facilities and new facilitie s into the fl exible permit. The fl exible permit would then

become the controlling authorization for all facilities included in

the permit, succeeding any existing minor NSR permits that may

have b een applicable to all or part of the facilities. The fl exible

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

if federal NSR review is triggered. The fl exible 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

per mitted facility. The environmental bene fi ts of the fl exible per

## PROPOSED RULES July 2, 2010 35 TexReg 5729mit program have included the permitting of grandfathered units,

substantial emission reductions from the installation of controls,

and a comprehensive evaluation of emissi on impacts.

The commission maintains that its fl exible permit program rules,

as adopted and implemented, are fully approvable as revisions

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

NSR permit program which requires the ap plication 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 detaile d 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 fl exible permit progr am 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 fl exible permit rules are consistent with the FCAA

and EPA rules implementing NSR.

As originally developed and subsequently implemented by

TCEQ in 1994, the Texas fl exibl e permit program is a minor

NSR program. No provision of the Texas fl exible permit program

rules may be read to circumvent federal requirements. The

rules expressly require co mpliance with all applicable requirements relating to nonattainment and Prevention of Signi fi cant

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 fl exibl e permit program may not be used as a

shield for protection or exemption from federal programs. Persons making changes under a fl exible permit must maintain suffi cient documentatio n to demonstrate that the project will comply

with Subchapter B, Division 5, Nonattainment Review Permits;

Division 6, Prevention of Signi fi cant Deterioration Review; and

Subchapter E, Haza rdous Air Pollutants: Regulations Governing

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

40 CFR Part 63). A major modi fi cation, as de fi ned in §116.12,

may not occur wit hout fi rst being subject to a Nonattainment

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

fl exible permit rules to avoid maximum achievable control technology (MACT) r equirements 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) Pa rt 63, National Emission Standards for Hazardous

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

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

federal NSR permit or major modi fi cation under the appropriate

federal NS R 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 fl exible 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 fi nds that such a condition exists.

As the EP A 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 §5 1.101(e) and (g);

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

1088, 1092 (9th Cir. 2007)). States have signi fi cant discretion

to tailor minor NSR requirements that ar e 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 a re 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 reaf fi rm the commission ’s position

that the rules for the fl exible 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 De fi n itions

The commission is proposing det ailed MRR requirements

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

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

the commission is proposing d e fi nitions of continuous emission

monitoring system (CEMS), conti nuous parameter monitoring

system (CPMS), and predictive e missions monitoring system

(PEMS). The proposed de fi n itions for these terms are derived

from similar de fi nitions established in 40 CFR §52.21, with minor

changes to account for their use in the fl exible permit program.

The proposed changes rel ating to MRR are intended to address

the EPA’s comment that the Texas fl exible permit program lacks

the specialized MRR requirements necessary to enforce fl exible

permits.

The commission propos es to revise the de fi nition of "emission

cap" and the de fi nition of "individual emission limitation" under

§116.13 to delete references to the "insigni fi cant emissions

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

discussed in following secti ons of this preamble. The EPA

identi fi ed the insig ni fi cant emissions factor as a concern in

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

proposed changes to eliminate the insigni fi cant emissions factor

would improve the accounting of emissions authorized under

the fl exible permit, and would address the EPA’s comments

that the Texas fl exible permit program lacks replicable, speci fi c,

established imp lementation procedures for establishing the

emission cap, and does not suf fi ciently address major NSR

requirements.

§116.710, Applicability

The EPA has commented that the Texas fl exible permit program

is not clearly l imited 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 fl exible permit to avoid the

requirement to obtain preconstruction permit authorizations for

projects th at would otherwise require a major NSR preconstruction permit. As previously d iscussed in the BACKGROUND

AND SUMMARY section, the commission does not concur

with the EP A’s comment that the fl exible permit program allows sources to circumvent or avoid major NSR requirements.

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

and empha size that any project that constitutes a new major

stationary source or major modi fi cation that would trigger major



## 35 TexReg 5730 July 2, 2010 Texas RegisterNSR 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 requireme nts in §116.111. The commission also proposes minor changes throughout this section to update terminology and corre ct 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 con trolled 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 modi fi catio n 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 co ntrols. 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 t hat the fl exible 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 nonattainm ent NSR projects.

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

would specify that fl exible permits shall specify requirements for

initial compliance testing and methods of determining ongoing

compliance. The EP A expressed a concern that the existing rule

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

not suf fi ciently speci fi c. Although fl exible permits already specify appropriate c ompliance 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 fl exible permit program is

lacking in supporting MRR requirements, and is not suf fi ciently

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 fi rst perform an analysis to

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

program cou ld be used to exempt or shield changes from federal

permitting requirements because the program does not require

that fi rst an applicability determination be made whether the construction or modi fi cation is subject to major NSR.

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

would add a requirement that any permit application for a new

fl exible 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 fl exible permit program does not suf fi ciently protect the NAA QS.

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 emis sions cap. This proposed

change addresses the EPA’s comment that fl exible permits must

be structured in such a way that they suf fi ciently identify which

units are subject to emission caps a nd 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 fl exible permit application must identify any terms, conditions, and representations in any Subchapter B permit or permits which will be superseded or incorporated under a fl exible

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

carried forward in the propos ed fl exible 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 accoun ted for.

§116.715, General and Spec ial 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 particula r 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 perm itting. This requirement has been reorganized and relocated to §116.715(f).

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

cap for a speci fi c 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 tha t an exceedance of a fl exible 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 corres pondence 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 fl exible permit specify req uirements for monitoring or demonstrating compliance with emission caps and individual emission limits in the

fl exible permit. Proposed §116.71 5(c)(5)(B) would require that

each fl exible p ermit specify emission calculation methods for calculating annual and short term emissions for each pollutant when

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

suf fi ciently speci fi c concerning the monitoring and enforcement

of fl exible p ermit emission caps and individual emission limits.



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

proposed amendment would reorganize the recordkeeping

requirements applicable to fl exible perm its, and add speci fi c

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 propo sed recordkeeping requirements would require fl exible permit applicants to

maintain records of any other permit applications associated

with the fl exible permit; would requir e speci fi c recordkeeping

to document compliance with annual and short term emission

caps and individual emission limitations; and would require that

fl exible permit holders maintain r ecords for fi ve 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 fl e xible permit application. This

requirement parallels existing requirements relating to representations under §116.116.

In the Notice, the EPA commented that the fl exible permit program lacked suf fi cient MRR to e nsure accountability and determine compliance with fl exible permits. The commission does

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

establishes appropriate M RR requirements on a case-by-case

basis. However, more speci fi c rule language relating to MRR

may be appropriate to clearly establish MRR requirements in

the rule, especially rel ating to emission ca ps. The commission

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

procedures associated with emission caps in a fl exible permit.

The proposed rules woul d 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, corresponden ce to the commission. The proposed rules

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

characteristics o f 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 A pplicability Limits, for which the commission

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

fl exible permit program.

§116.716, Emis sion Caps and Individual Emission Limitations

The commission i s 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 fl exible permit program lacks replicable,

speci fi c, established implementation procedures for determining

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

in the March 1 2, 2008, correspondence to the commission.

The commissi on 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 wo uld 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 re fi ning process units. The executive director would

reserve the right to exclude a pro posed facility from an emissions cap if the executive direct or determines that the inclusion

of the f acility 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 expre ssed concern in the

Notice that under the existing rules, hundreds of unrelated emission sources could be subject to o ne emission cap and/or individual emission limitati ons. 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 commis sion 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 technolog y for any project that constitutes a

federal major source or major modi fi cation. This provision is intended to further address EPA’s stated concerns that the fl exible

permit program could allow a faci lity 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 incl uded 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 fede ral 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 determi ned 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 prop osing §116.716(c), which would require

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

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

each fl exible permit must be structured in such a manner that it

will be clear which f acilities are included under the permit and

emission cap, and which facilitie s 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 insigni fi cant 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. Propos ed §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 requir e 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 emission s 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 oper ating. 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 pr oposes §116.716(d)(2) to clarify that a permit amendment is required to add a facility to a fl exible permit emission cap.

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

shall be d etermined when the permit is amended.



## 35 TexReg 5732 July 2, 2010 Texas RegisterProposed §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 pr oposed 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 fl exible

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 t he executive director before

the control schedule deadline speci fi ed in the permit passes. In

addition, the commission has added language to this section to

acknowledge and emphasize tha t 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. T he 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 ens ure that the fl exible permit program

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

§116.718, Signi fi cant Emission Increase

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

may not be used to authoriz e an emission increase under a fl exible permit for any project that constitutes a federal major modi fi cation. Proposed §116.718(b) further requires that the permit

holder must document t hat any increases under this section are

not major modi fi cations. The proposed changes further address

the EPA’s comments that the fl exible permit program could be

used to avoid applica ble major NSR requirements.

The commission propo ses §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 mai ntenance of the NAAQS. This proposed

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

fl exible permit program does not contain suf fi cient assurances

that the NAAQS wil l not be violated.

§116.720, Limita tion on Physical and Operational Changes

The commission pro poses 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 fl exible permit amendment is required. The propo sed 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 modi fi

cation would re quire 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 "backsli ding" of emission controls, and ensure that projects

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

also propose s 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 fl exible permit program

allows holders of a fl exible 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 prec onstruction 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 genera lly 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 corres ponding reevaluation (or reopening) of the original BACT determination may be necessary,

and cited a memo from 1987.

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

is attempting to support. Authorizing facilities in a fl exible permit

emission cap (regardless of their previous status) is a modi fi

cation and requires a comple te preconstruction review. Once

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

of operation) of minor and m ajor 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, fl exible 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 rela ted to BACT requires a permit amendment,

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

could result in a major modi fi cation as well as any fuel switch

must undergo a precon struction review, §116.721(a).

§116.730, Complian ce History

The commission propo ses 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 rulem aking, 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 Reconsiderat ion and Contested Case Hearings; Public Comment, Subchapter E. Some of these changes apply to fl exible

permit applications.

§116.750, Flexible Permit Fee

The commission proposes an amendment to §116.750 that

would revise how fees for fl exible permits are determined.

Since the inception of the fl exible permit program in 1994,

fees for fl exible permits have been determined based on the

quantity of emi ssions 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 fl exible permit fees be

based on a perc entage of project capital cost, rather than based

on emission rate. The proposed changes would make fl exible

permits subject to the existing fee system used for Subchapter

B air permit s, as speci fi ed 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 volu me of fl exible 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 publ ishes fi nal approval

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

2012. Until such time, the existing Subchapter G rules concerning fl exible permitting would remain in e ffect.

FISCAL NOTE: COSTS TO STATE AND LOCAL GOVE RNMENT

Nina Chamness, Analyst, Strategic Planning and Assessment,

has determined that, for the fi rst fi ve-year period the proposed

rules are in effect, no signi fi cant fi s cal implication s 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 fl exible permit fee on t he 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 e xpected to be signi fi cant. Most

local governments are not expected to experience fi scal impacts

as a result of the proposed rules, but some governmental entities that have fl exible permit s could experience fi scal impacts if

they choose to apply for a new fl exible permit or modify facilities

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

fl exible permit.

The EPA has proposed to disa pprove existing rules in Subchapter G that relate to the fl exible air permits program. The existing

fl exible permits program allows different sources to be grouped

together under an emissio ns 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 fl exible pe rmits program.

For the most part, the p roposed rules are clari fi cations of already

existing agency practices and policies concerning the review and

issuance of fl exible permits. The proposed rules provide more

detail, reorganize e xisting requirements, clarify and reference

applicable federal requirements if a project triggers federal NSR

permitting, clearly state that the fl exible permits program cannot

be used to circumve nt federal NSR permitting, clearly state that

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

entities.

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

expected to be si gni fi cant. The proposed rules will only have

fi scal impacts on regulated entities if they apply for a new

fl exible permit or are required to amend an existing fl exible

permit. Provis ions of the proposed rules that may have a fi scal

impact on regulated entities include changes to require that

new permit or amendment applications include an air quality

analysis to d emonstrate that proposed actions will not interfere

with attainment and maintenance of NAAQS, and specify a

fi ve-year record retention period.

The proposed rules may have a fi scal impact on agency revenue, but th e impact is not expected to be signi fi cant. The basis for calculating the fl exible permit fee will change from being

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

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

construction permit. Based on historical data, the average fee

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

permit co uld range from $900 to $75,000. The number of initial fl exible permits has been fi ve to seven per year, and the number

of fl exible and construction amendments have averaged 30 per

year. The average fee for a fl exible 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 fl exi ble permits and 30 fl exible 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

fl exible 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 com plex 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 fi scal implicat ions as a result of the proposed

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

an existing fl exible 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 fl exible and construction permits under current rules, t he fee for an initial fl exible permit could

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

to conduct an air qualit y 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 fi ve years i nstead 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 m odify 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 s imilar 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 government s with fl exible 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 fi scal 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 fi rst

fi ve years the proposed rules are in effect, the public bene fi t anticipated fro m the changes seen in the proposed rules will be

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

Individuals are not expected to experience fi scal impacts as a

result of the proposed rules. Individuals do not typically operate

facilities that would elect to use the fl exible permit program for

operational fl exibility.

Large businesses will be affected by the proposed rules if they

elect to app ly for a new fl exible permit or elect to modify facilities

in a way that requires an amendment of a fl exible permit. Trends

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

could be af fected by the proposed rules, and examples of businesses that might be affected include chemical plants, re fi neries,

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

others. F iscal implications will vary depending on the complexity

of each project. Permit fees paid will vary depending on the com

## 35 TexReg 5734 July 2, 2010 Texas Registerplexity of the project, but based on the difference in average fees

charged for fl exible and construction permits under current rules,

the fee for an initial fl exible permit coul d decrease by $8,000 per

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

increase. New or amended fl exible permits will require a local

government or other governmental entit y 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 kee p records for fi ve 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 fi scal impacts are expected as a result of the proposed rules

for those situations.

SMALL BUSINESS AND MICRO-BU SINESS ASSESSMENT

No adverse fi scal implication s are anticipated for small or micro-businesses that operate facilities under fl exible permits unless they apply for a new fl exible permit or modify facilities in

a way that would require the m to amend their fl exible permits.

Agency records indicate that most fl exible permits are held by

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

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

requires an amendment of a fl exible permit, they will experience

the same fi scal impacts a s 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 fl exibility 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 fl exible permit program

rules meet federal r equirements. For purposes of the fi scal analysis, the requirements of the fl exible 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 lo cal employment impact statement is not required because the proposed rules do not adversely affect a local economy in a material way for the fi rst fi ve years that the

proposed rules a re in effect.

DRAFT REGULATOR Y IMPACT ANALYSIS DETERMINATION

The commission r eviewed 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 de fi nition o f a major environmental rule as de fi ned in that

statute, and in addition, if it did meet the de fi nition, would not be

subject to the requirement to prepare a regulatory impact analysis.

A major enviro nmental rule means a rule, the speci fi c intent of

which is to protect the environment or reduce risks to human

health from environmental exposure, and that may adversely affect in a mate rial 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 speci fi c inten t of the proposed rules is to amend various sections of Subchapter G to address concerns expressed by the EPA regarding the agency’s fl exible permit program submitted by the

commission as a revision to the SIP. The pr oposed changes to

established rules for the fl exible permit program are necessary

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

Texas SIP. Speci fi cally, these amendmen ts: 1) include detailed

MRR requirements; 2) propose replicable, speci fi c, 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 L AER control technology determination that is required for major PSD or Nonattainment NSR

projects; 6) specify requirements for initial compliance testing

and methods of determining ongo ing compliance; 7) ensure that

the NAAQS are suf fi ciently protected; 8) include requirements

for clarity of which facilities are included under the permit and

any emission cap, and that th ere are suf fi cient monitoring and

enforcement requirements for the emission caps and individual

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

As de fi ned in the Texas Government Code, §2001.0225 only applies to a major environmen tal rule, the result of which is to: 1)

exceed a standard set by federal law, unless the rule is speci fi

cally required by state law; 2) exceed an express requirement of

state law, unless the ru le is speci fi cally 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 imp lement a state and federal program; or 4) adopt a rule solely under the general powers of the agency

instead of under a speci fi c state law. This rulemaking action

does not meet any of th ese four applicability requirements of a

"major environmental rule." Speci fi cally, the proposed amendments were developed to correct EPA-identi fi ed de fi ciencies in

the commission’s fl exible 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 requ irement of a delegation agreement, and was

not developed solely under the general powers of the agency,

but was speci fi cally developed to meet the requirements of the

Texas SIP, and t he requirements of the FCAA and its associated regulations, and is authorized by speci fi c 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 s ubmitted to the contact person

at the address listed under the SUBMITTAL OF COMMENTS

portion of this preamble.

TAKINGS IM PACT 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 gover nmental 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 Constituti on; 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

restri cts 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 5735the 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 propert y 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 taking s 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 fl exible permit s 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 pri vate 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 propos ed 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 sub ject 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 co mmission 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 Manageme nt 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 consisten cy 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 applica ble to this proposed rulemaking action is

the goal to protect, preserve, and e nhance the diversity, quality,

quantity, functions, and values of coastal natural resource areas (31 TAC §501.12(l )). The proposed amendments will bene fi t the

environment by ensuring that the fl exible permit program meets

applicable federal requirements, and is adequately enforceable

so that air quali ty 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 af fi rms that

this rulemaking action is consistent with CMP goals and policies.

Written comments on the consistency of the proposed rulemaking may be sub mitted 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 PRO GRAM

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 pro gram 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

requirem ents. 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 of fi ce 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 r egistration. Open discussion will not be permitted during the hearing; however, commission staff members will be avai lable to discuss the proposal

30 minutes prior to the hearing.

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

Charlotte Horn, Of fi ce of Legal Services at (512) 239-0779. Requests should be made as far in adva nce as possible.

SUBMITTAL OF COMMENTS

Written comments may be submitte d to Michael Parrish, MC

205, Of fi ce of Legal Services, Texa s Commission on Environmental Quality, P.O. Box 13087, Austin, Texas 78711-3087,

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

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

File size restrictions may appl y to comments being submitted

via the eComments system. All c omments 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. DEFINITION S

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 car ry 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 consis tent 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 commiss ion purpose to safeguard the state’s air resources, consistent with the pro tection of public health, general welfare, and physical property; §382.003, concerning De fi nitions; §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 signi fi cantly contribute air contaminants to the atmosphere; §382.0513, concerning Permit Conditions, which authorizes the com mission to establish and enforce permit conditions;

and §382.0514, concerning Sampling, Monitoring, and Certi fi cation.

This rulemaking implements THSC, §§382.002, 382.003,

382.011, 38 2.012, 382.051, 382.0513, and 382.0514.



## 35 TexReg 5736 July 2, 2010 Texas Register

## ♦ ♦ ♦ §116.13. Flexible Permit De fi nitions.

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 Sub chapter 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 fl ow rate, O or CO concentrations), and to record average operational parameter v 2 2 alue(s) on a continuous basis.

(3) [(1) ] Emission cap--Emission limit for a speci fi c air

contaminant based on total emissions of that pollutant [a djusted by an insigni fi cant emissions factor ] from all f acilities [sources ] that are included in a fl exible 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 speci fi c air contaminant [n ot covered by an emission cap ] for a n individual facility [a djusted by an insigni fi cant 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 fl ow rate,

O

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

rat e 2 (for example, pounds per hour) on a continuous basis.

This agency hereby certi fi es that the proposal has been reviewed

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

­

Filed with the Of fi ce 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 protecti on of public health, general welfare, and physical property; §382.003, concerning De fi nitions; §382.011, concerning General Powers and Duties, which

authorizes the commission to control th e 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 signi fi cantly contribute air contaminants to the atmosphere; §381.0511, concerning Permit Consolidation and Amendment; §382.0512, concerning Modi fi cation of Existing Facility,

which restricts what the commis sion may consider in determining a facility modi fi cation; §382.0513, concerning Permit Conditions, which authorizes the commission to establish and enforce

permit conditions; §382.05 14, concerning Sampling, Monitoring,

and Certi fi cation; §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 modi fi ed; §382.056, concerning Notice of Intent to Obtain P ermit 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, 3 82.0517, 382.0518, 382.056 and

382.062.

§116.710. Applicability.

(a) Flexible permit. A person may obtain a fl exible permit

which allows for phys ical 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 existin g permit under §116.116 of this title (relating to

Amendments and Alterations). A person may obtain a fl exible permit

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

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

begun, provided however:

(1) only one fl exible permit may be issued f or [at ] an account [s ite ];

(2) modi fi cations to existing facilities i ncluded in [covered

by ] a fl exible per mit may be authorized by [handled through ] the

amendment of an existing fl exible permit;

(3) [p ermitting of ] a new facility may be a uthorized by

[handled through ] the amendment of a fl exible permit; [a nd]

(4) a fl exible permit may not cover f acilities [sources ] at

more than one ac count ; and [site.]

(5) a fl exible pe rmit 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 modi fi ca tion as de fi ned by §116.12 of this title (relating to Nonat

tainment and Prevention of Signi fi cant Deterioration Review De fi ni

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

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

Prevention of Signi fi cant Deterioration Review, respectively), as ap plicable. No person shall use this subchapter to circumvent applicable

requiremen ts of Subchapter B, Division 5 or 6 of this chapter.

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

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

­

­



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

fl exible 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, bu t prior to the transfer of a permit

requiring a permit alteration, the original permit holder remains responsible for ensuring compliance wi th the existing fl exible permit and all

rules and regulations of the commissi on.

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

(d) Responsibility for fl exible permit application. The owner

of the facility, group of faciliti es, 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 Appl ication.

[Any application for a new fl exible permit or fl exible 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 speci fi es additional support information which ­

­

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

owner or operator of the propos ed 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 speci fi ed on the form must be provided before the application is complete;

(2) information which demonstrates that emissions from

the facility, inclu ding 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 determin ed under §116.716 of this title (relating to Emission Caps and Individual Emission Limitations), will comply with all a pplicable rules [a nd 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 fl exible permit

for construction or modi fi cation 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 exhaust stacks and construction of sampling platforms in accordance with

guidelines in the "Texas Natural R esource 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 reducin g or eliminating the emissions from the facility on a proposed

facility, group of facilities, or account basis ]. E xisting 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 m ay be used on certain existing facilities to provide the emissio n reductions necessary to comply

with this requirement on a group of e xisting facilities [ o r account ]

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

lessened for any facility. [ F or new facilities and proposed affected

sources (as de fi ned in §116.15(1) of this title (relating to Section

112(g) De fi nitions)) subject to Su bchapter 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 demonstr ated for the individual facility or

affected source. ]

(ii) For pollutants from new or modi fi ed facilities

that constitute a new major stationary source or major modi fi cation

as de fi ned by §116.12 of this t itle (relating to Nonattainment and Prevention of Signi fi cant Deterioration Review De fi nitions), control technology shall be demonstrated as required by §§116.150, 116.151, or

116.160 of this title (rela ting to New Major Source or Major Modifi cation in Ozone Nonattainment Areas; New Major Source or Major

Modi fi cation in Nonattainment Area Other Than Ozone; and Prevention of Signi fi cant Dete rioration Requirements, respectively), as applicable, for each new or modi fi ed facility.

(iii) For new facilities and proposed affected sources

(as de fi ned in §116.15(1) of this title (relating to Section 112(g) De fi

nitions)) subject to Su bchapter 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 demonstrat ed fo r the individual facility or affected source.

(D) [(4) ] New Source P erformance Standards (NSPS).

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

any applicable NSP S 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 (N ESHAPS). The emissions from each facility as defi ned 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 author ity granted under the FCAA, §112, as amended.

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

of any applicable m aximum achievable control technology ( MACT)

standard as li sted 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 S ource Categories (FCAA, §112, 40 CFR 63)).

(G) [(7) ] Per formance demonstration. The proposed

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

speci fi ed in the fl exible permit application. The applicant may be required to su bmit additional engineering data after a fl exible permit has

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

group of facilities, or account will achieve the performance speci fi ed in

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

measured process variables, parametric or predictive monitoring, stack

monitori ng, or stack testing shall [may ] be required a s speci fi ed in each

fl exible 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 appli cable requirements concerning

nonattainment review in this chapter. P rior 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 Signi fi cant Deterioration (PSD)

review. If the proposed facility, gr oup of facilities, or account is located in an attainment area, each facility shall comply with all applicable requirements in this chapter c oncerning 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 sha ll be made for the project to determine

the applicability or nonapplicability of federal PSD review.

(J) [(10) ] Air dispersion modeling or ambient monitoring. A ny permit application for a new fl exible permit, or permit amend

ment to increase a fl exible per mit 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 Qu ality Standards. Computerized air dispersion modeling and/or ambient monitoring may be required by the commission’s A ir [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 mo deling 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 standa rds 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 a ffected source (as de fi ned 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, Subc hapter H, Division 3 of this title (relating to Mass

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

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

other requireme nts of this c hapter, the applicant shall:

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

emission cap is desired;

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

fl exible permit;

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

included in the fl exible permit and for each source of emissions identify

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

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

facility iden ti fi cation 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; [.] ­

­ (vi) include calcu lations used to determine the con

trolled emission rates from each facility performed in accordance with

TCEQ Air Permits Division guidance; and

(vii) if the fl exible permit application in cludes 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 rep resentations in the Subchapter

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

the fl exible permit. The applicant shall include an analysis of how the

conditions and control requiremen ts of Subchapter B permits will be

carried forward in the proposed fl exible permit.

(N) [(14) ] Proposed control technology and compliance demonstration. The applicant shall specify the control technology proposed for each unit [t o 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 contai n general and special conditions. The holders of fl exible permits shall comply with any and all

such conditions. [U pon a speci fi c fi nding by the executive director

that an increase of a particula r 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 Signi fi cant Deterioration Review)

or Subchapter C of this chapter (relating to Hazardous Air Pollutants:

Regulations Governing Co nstructed 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 b efore 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 speci fi c emission cap o r [m ultiple emission

caps and/or ] individu al emission limitations shall be established for

each air contaminant for all facilities authorized by the fl exible permit.

A fl exible permit may contain more than one emission cap for a speci fi c ­

­

­

­

air cont aminant. Th e holder of a fl exible permit shall comply with all

fl exible permit emission cap(s) and individual emission limitations. An

exceedance of the fl exible permit emission cap(s) or individual emission limitations is a vi olation of the permit.

(c) The following g eneral conditions shall be applicable to every fl exible permit.

(1) Applicability. This section does not apply to physical

or operational changes allowed wit hout an amendment under §116.721

of this title (re lating 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 [s hall be reported ] to the appropriate

regional of fi ce of the commission not later than 15 working days after

occurrence of the event.

(3) Start-up noti fi cation.

(A) The p ermit holder shall notify the appropriate regional of fi ce of the commission and any local program having jurisdiction [s hall be noti fi ed ] 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) T he permit holder shall provide a separate noti fi

cation for th e commencement of operations for each unit of phased

construction, which may involve a series of facilities commencing op- ­



## PROPOSED RULES July 2, 2010 35 TexReg 5739erations at different times. [Phased construction, which may involve a

series of facilities commencing operations at different times, shall pro

vide separate noti fi cation for the commen cement of operations for each

facility.]

(C) Prior to beginning operations of the facilities authorized by the permit, the permit holder shall identify to the A ir Per

mits Division [Of fi ce of Permitting, Rem ediation, 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 [o f stacks or process vents ] is required,

the fl exible permit holder shall contact the commission’s Of fi ce of

Compliance and Enforcement prior to sampling to obtain the proper

data forms and procedures.

(B) All sampling and testing proc edures must be approved by the executive director and coordinated with the appropriate

regional of fi ce of the commission.

(C) The fl exible permit holder is also responsible for

providing sampling facilities and conducting the sampling operations

or contracting with an indepe ndent sampling consultant.

(5) M onitoring, Calculations, and Equivalency of Methods.

(A) Each fl exible permit shall specify requirements for

monitoring or demonstrating compliance with emission caps and indi

vidual emission limits in the fl exible permit. ­

­

­

(B) Each fl exible permit shall specify methods for calculating annual and short term emissions for each pollutant for a given

type of facility when conti nuous emission monitoring or continuous

operating parameter monitoring is not required to be used to monitor

emissions for that t ype of facility.

(C) [It shall be the responsibility of the] The fl exible

permit holder m ust [to ] de monstrate or otherwise justify the equivalency of emission control methods, sampling or other emission testing methods, and monitoring o r calculation methods proposed as alternatives to methods i ndicated in the conditions of the fl exible permit. R equests for alternative [Alternative] emission control, sampling,

monitoring, or calculation methods [s hall be applied for] must be sub

mitted in writing f or r eview and approval [and must be reviewed and

approved ] by the executive director prior to their use in ful fi lling any requirements of the permit.

(6) Recordkeeping. T he permit holder shall:

(A) maintain a [A ] copy of the fl exible permit ( and any permit application s associated with the fl exible permit) along with information and data suf fi cient to demonstrate continuous compliance

with the emission caps and individual emission limitations contained

in the fl exible perm it [ shall be maintained in a fi le 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 ­

normall y operate unattended, this information shall be maintained at

the nearest staffed location within Texas speci fi ed by the permit holder

in the permit application. This information may include, but is not limited to, emissi on cap and individual emission limitation calculations

based on a 12-month rolling basis and production records and operating hours. Additional recordkeeping requirements may be speci fi ed in

special condi tions attached to the fl exible permit. Information in the

fi le shall be ret ained for at least two years following the date that the

information or data is obtained ]. T his information and data shall in

clude, but is not limited to: ­ (i) emission cap an d individual emission limitation

calculations based on a 12-month rolling basis;

(ii) emission cap and individual emission limitation

calculations corresponding to any short t erm emission limitation; and

(iii) Production records and operating ho urs.

(B) keep all required records in a fi le at the p lant site. If,

however, the facility site normally operates unattended, records must

be maintained at an of fi ce within Texas having day-to-day operational

control of the facility site;

(C) make the records available at the re quest 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 av ailable to the public in a timely

manner;

(D) comply with any additional recordkeeping require

ments speci fi ed in special conditions in the permit; and

(E) retain information in the fi le for at least fi ve years following the date the informatio n or data is obtained.

(7) Maximum allowable emission ra tes. A fl exible 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 fl exible permit. Flexible permitted f acilities [sources ] are limited to the emission limits and

other conditions speci fi ed in the table i n [attached to ] the fl exible permit.

(8) Representations and condi tions. The following are the

conditions upon which a fl exible permit or a fl exible permit amendment

is issued:

(A) representations with regard to construction plans

and operation procedures i n an application for a permit or permit ­

­

­

amendm ent; and

(B) any general and special conditions included in the

permit.

(9) [(8 ) ] Emission cap readjustment. If a schedule to install additional control s is included in the fl exible permit and a facility

subject to such a schedule is taken out of service, the emission cap contained in the fl exible 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 c ondition [provision ] speci fi es 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 fl exible 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 . Noti fi cation 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; a nd Scheduled Maintenance, Startup, and Shutdown

Reporting and Recordkeeping Requirements).

(11) [(10) ] Compliance with rules. Acceptance of a fl exible permit by a permit applicant constitutes an acknowledgment and

agreement that th e 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

fl exible permit condition are applicable, then the most stringent limit

or condition shall govern and be the standard by which compliance

shall be demon strated. Acceptance of the permit includes consent to ­



## 35 TexReg 5740 July 2, 2010 Texas Registerthe entrance of commission employees and agents into the permitted

premises at reasonable times to i nvestigate conditions relating to the

emission or concentration of air contami nants, including compliance

with the fl exible 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 e nd of each reporting period that

contains:

(I) the identi fi cation 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 e ach month in the reporting

period;

(III) the identi fi cation 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 q uality 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 modi fi ed as de fi ned in

§116.12 of this title (relating to Nonattainment and Prevention of Signi fi cant Deterioration Review De fi nitions) during the preceding sixmonth period and the documentation required by §116.718(b) of this

title (relating to Signi fi cant 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 subjec t to the federal operating permits program in

Chapter 122 of this title (relating to Federal Operating Permits Program) this may be satis fi ed by referencing the fl exible permit number

in the semiannual report f or the site submitted under §122.145 of this

title (relating to Reporting Terms and Conditions);

(VII) a noti fi cation 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 p eriod 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 enf orceable 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 speci fi ed in the fl exible 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 scienti fi cally valid means approved by the executive director. Suc h testing must occur at least

once every fi ve 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 r equirements 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 term s 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 scienti fi c procedures for

data quality and manipulation.

(2) The monitoring system must e mploy 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 e missions 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 fa cility;

(ii) assume that the facilit y 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 p ublishes 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-speci fi c data or a site-speci fi c 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 require ments.

(i) The CEMS must compl y with applicable performance speci fi cations found in 40 Code of Federal Regulations Part 60,

Appendix B.

(ii) The CEMS must sample, analyze, and record

data at least every 1 5 minutes while the emissions unit is operating.

(C) An owner or operat or 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 PE MS must be based on current

site-speci fi c data demonstrating a correlation between the monitored

parameter(s) and the pollutant emissions across the range of operation

of the facility; a nd

(ii) Each CPMS or P EMS 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 polluta nt emissions shall meet the following requirements:



## PROPOSED RULES July 2, 2010 35 TexReg 5741(i) All emission factors must be adjusted as speci fi ed

by the permit, if appropriate, to account for the degree of uncertainty

or limitations in the factors’ developme nt;

(ii) The facility must operate within the d esignated

range of use for the emission factor, if applicable; and

(iii) The owner or operator of a signi fi cant facility as

de fi ned in §116.12 of this title that relies on an emission factor to calculate pollutant emissions shall conduc t validation testing to determine

a site-speci fi c 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 syste m 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 mon itored 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 i ncluded

in [a ttached to ] a fl exible permit upon issuance or amendment of the

permit. Such conditions in a fl exible 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 pe rmit 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 speci fi cally fi nds that an increase of a particular pollutant could

either:

(1) result in a signi fi cant 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: Regul ations 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 Signi fi cant Deteri oration Review, respectively).

§116.716. Emission C aps and Individual Emission Limitations.

(a) Emission ca ps. Each emission cap for a speci fi c 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 emi ssions 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: [b ased on application of current

Best Availab le 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 modi fi cation for the

pollutant as de fi ned by §116.12 of this title (relating to Nonattainment

and Prevention of Signi fi cant Deteriora tion Review De fi nitions), 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 Preve ntion of Signi fi cant 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 i ncluded in a separate emissions

cap or listed as individual emission limitations.

(4) [( 2) ] the calculated emissions f or all facilities within

an emission cap will be summed.

(5) a lower emission cap than that determined by paragraph

(4) of this subsection may be pro posed 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 establis hed in the same permit for each pollutant

not i ncluded in [c overed by ] an emission cap for facilities a uthorized [c overed ] by the fl exible permit. In addition, an individual

emission limitation may be established for a pollutant i ncluded in

[c overed by ] an emission cap when the expected capacity of a facility

is less than the expected maximum c apacity to prevent a facility from

exceeding emission level s appropriate for the proposed controls.

(c) The permit shall clea rly 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) ] A djustment [R eadjustment ] of emission cap.

(1) If a facility subject to an emission cap is shut down for

a period longer than s ix [1 2 ] months, the emission cap shall be a djusted [r eadjusted] by lowering the emission cap by an amount that the

shut down facility contributed to the original calculation of the emission cap. I f a shut down facility is returned to operation, the emission

cap shall be adjuste d 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 a mount.

(2) If a [n ew ] facil ity is t o be added to [b rought into ] the

fl exible permit, a permit amendment is required to establish a revised

emission cap [, an emission cap shall be adjusted by modifying the

emissions cap acc ordingly ].

(3) If an existing emission cap is to be increased through a permit amendment as a result of adding a new facility or the modi fi

cation of a facility within the emission cap, the emission cap shall be

increased by th e sum of the emissions from each of the new or modifi ed 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 modi fi ed. For the purpose of determining

whether an increase in the emission cap constitutes a major modi fi

cation for the pollutant as de fi ned by §116.12 of this title, all facilities under th at cap shall be considered modi fi ed unless there has been



## 35 TexReg 5742 July 2, 2010 Texas Registerno physical modi fi cation of that facility and a separate permit limit or physical constraint limits its potential to emit.

[(d) Insigni fi cant emission factor. The emission caps and in

dividual emissions limitation calculate d pursuant to this section may

include an Insigni fi cant Emissions Factor which does not exceed 9.0%

of the total emission cap or individual emission limitation.]

(4) [(e) ] An emission cap will be a djusted [readjusted]

downward for any facility a uthorized [co vered ] by a fl exible permit

if that facility becomes subject to any new state or federal r ule or regulation which would lower emissions or require an emission reduction.

The adjustment will be made [a t ] the n ext time the fl exible permit is

amended or altered. If an amendment to a fl exible permit is not required to meet the new r equirement [regulation ], then within 60 days

of making the change, the permitte e 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 limi tation 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. ­

­

§116.717. Implementation Sch edule for Additional Controls.

If a facility requires the installation of additional c ontrol or controls to

meet an emissio n cap for a pollutant, the fl exible permit shall specify

an implementation schedule for such additional controls. The permit

may also specify how the emission ca p will be adjusted if such a facility is take n out of service [ o r fails to install the additional control

equipment as provided by the implementation schedule ]. I n the event

that the controls and implementation schedule speci fi ed by a fl exible

permit canno t 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

technolog y 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. Signi fi cant Emission Increase.

( a) An increase in emissions from operational or physical

changes at an existing facility a uthorized [covered ] by a fl exible

permit is insigni fi cant, for the purposes of m inor [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 modi fi cation as de fi ned by

§116.12 of this title (relating to Nonattainment and Prevention of Sig ­

­

ni fi cant D eterioration Review De fi nitions). 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 modi fi cation as defi ned 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 modi fi cation as de fi ned in §116.12 of this title, the

project emissions increase and the project net shall be determined as speci fi ed as de fi ned in §116.12 of this title, regardless of how the existing facilities are authorized. For new facilities or modi fi ed 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 a separate

permit limit or physical constraint limits the facility’s potential to emit.

If the project emission increase is such t hat 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 informat ion 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 Nationa l Ambient Air Quality Standards

if there may be an increase in emissions from operational or physical

changes at an existing facility authorized by a fl exible permit and the

area is not designated as nonattai nment 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 a pproval prior to making the change.

§116.720. Limitation on Physi cal and Operational Changes.

Operational or [ Neither operational nor ] physical changes authorized

under this subchapter may n ot result in an increase in actual emissions

at facilities not a uthorized [ covered ] by the fl exible 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 amendme nts. All representations with regard to construction plans and operation procedures in an application

for a fl exible permit o r fl exible permit amendment

, as well as any general and special c ondition s [provisions attached ], become conditions

upon which the subsequent fl exible permit is issued. It shall be unlawful f or any person t o vary from such representation or fl exible permit

provision if the change will cause a change in the method of control

of emissions o r[, ] the character of the emissions, w ill relax emission

controls, will add a new facility or facilities, [or ] will result in a significant increase in emis sions, or will constitute a major modi fi cation as

de fi ned by §116.12 of this title (relating to Nonattainment and Preven

tion of Signi fi cant Deterioration Review De fi nitions) unless application

is made to the executi ve director to amend the fl exible permit in that

regard and such amendment is approved by the executive director or

commission. Applications to amend a fl exible permit shall be submit­ ­

ted with a co mplete d 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 fl exible permit alteration is for any variation from a representation in a fl exible permit application or a general or special

provision of a fl ex ible permit that does not require a fl exible permit

amendment.

(2) All fl exible permit alterations which may involve a change in a general or special condition contained in the fl exible

permit, or affec t control equipment performance must receive prior

approval by the executive director. The executive director shall be

noti fi ed in writing of all other fl exible permit alterations within ten

days of impleme nting the change, unless the permit provides for a

different method of noti fi cation. Any fl exible permit alteration request

or noti fi cation shall include information suf fi cient to demonstrate that

the change do es 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

appropriat e commission regional of fi ce and any local air pollution

program having jurisdiction shall be provided copies of all fl exible

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 identi fi ed in

§116.711(3) of this title.

(c) Changes not requiring an amendment or a lteration. 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 o r[, ] the cha racter of the emissions,

will relax emission controls, will add a new facility, [or ] will result

in a signi fi cant increase in emissions a s determined under §116.718 of

this title (relating to Signi fi cant Emission Increase), constitutes a major

modi fi cation as de fi ned by §116.12 of this title, or con fl icts 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 per mit by rule under Chapter 106 of this

title unless prohibited by perm it 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 ti me as the permit is amended or renewed.

(2) Emission increases aut ho rized by Chapter 106 of this title at an existing facility a uthorized [covered ] by a fl exible permit shall

not cause an exceedance of the emissions cap or individual emission

limitation.

§116.730. Compliance Histo ry.

As part of a fl exible permit review, or the review of an amendment

of a fl exible permit, or renewal of an existing fl exible permit, the r e 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 fl exible permit or an amendment to a fl exible permit shall comply with the r equirements [provi

sions ] in Chapter 39 of this title (relating to Public Notice).

(b) Any person who applies for an amendment to a fl exible

permit regarding an affected source (as de fi ned in §116.15(1) of this

title (relating to Section 112(g) De fi nitions)) subject to Subchapter E

[C ] of this title (relating to Hazardous Air Pollutants: Regulations Governing Constructed or Reconstruc ted Major Sources (FCAA, §112(g),

40 CFR Part 63)) shall comply with the r equirements [provisions ] in

Chapter 39 of this title [( relating to Public Notice) ].

§116.750. Flexible Permit Fee.

(a) Fees required. Any person who applies for a fl exible permit

or for an amendment to an existing fl exible permit shall remit, at the

time of application fo r such permit, a fee as set forth in subsection (b)

of this section. Fees will not be charged for fl exible permit alterations,

changes of ownership, or changes of location of permitted facilities.

(b) Fee amounts. The fee to be remitted with a fl exible 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 fl exible pe rmit is being sought. The fee shall be $32 per ton

with the minimum fee being $900 and the maximum fee $75,000. For

fl exible permit amendments, the fee shall be calculated based on $32

per ton for the inc remental emission increase with the minimum fee

being $900 and the maximum fee being $75,000 ]. ­

­ (c) Payment of fees. All permit fees for a fl exible permit shall

be remitted in the form of a check, certi fi ed check, electronic funds

transfer, or money order made payable to t he Texas Commission on

Environmental Quality and delivered with the application for fl exible

permit or fl exible permit amendment to the commission’s A ir [New

Source Review ] Permits Division. Requi red 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 fl exible permit or fl exible permit amendment is submitted. If the

applicant withdraws the applicati on prior to issuance of the fl exible permit or fl exible 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 Chapte r 106 of this title (relating to Permits by Rule) is allowed. No fees will be refunded after a de fi cient

application has been voided, denied, or after a fl exible permit or fl exible permit amendment has been iss ued by the agency.

§116.765. Delayed Effective D ate.

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 Appli

cabili ty, Flexible Permit App lication, General and Special Conditions,

Emission Caps and Individual Emission Limitations, Implementation

Schedule for Additional Controls, Signi fi cant Emission Increase, Limitation on Physical and Oper ational 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 o n the earlier of 60 days after publication in the

Federal Register of the fi nal approval by the United States Environmental Protection Agency of these sections as revisions to the Texas

State Implementation P lan, 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 certi fi es that the proposal has been reviewed

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

Filed with the Of fi ce o f the Secretary of State on June 18, 2010.

TRD-201003436

Robert Martinez

Director, Environme ntal Law Division

Texas Commission on Environmental Quality

Earliest possible date of adoption: August 1, 2010

For further informati on, 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 Commissio n 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 Envi ronmental 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 factor 11 

## 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

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## 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

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### 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

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### 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

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## 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 th e 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 N0 2 

## 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 CouncilDJstrii: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)

l,C(tf-

### ~w 

### s-bovt

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# fiB)

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# ht.t•rbCM. @..

## he~1.1. s.e. 

## r;T-t:tfe

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# i2e

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# LCA/1**B~..t** I 11'/eA fA1



# Ca.s5all dora 

# Lot< =e 

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# tl~ttNAt 

# -**+I~~** Yes 

# @V

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# s rl'\ 

## c.& • 

# c a.fY\ 

# \**c.l~o** 

# fa S 

# Ca.**.r~.e** oM 

# Se 

# 1-C

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# <:9

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# A/SA-

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# - 

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# 6) 0 Ack.&,.:::JrJ

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# e

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# me.',

sso.... 1::)a 

# k.G'\$ 

# -r;:, t"""\'\ 

## LCN)<;<...J'

## ~1"'\t:- 

# \**Yes-~**

-···---**~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

## Texas Commission on Environmental Quality Page 8

Chapter 116

- Controlof Air Pollution by Permits for New Construction or Modification

Rule Project No. 2010-007-116-PR

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

## Texas Commission on Environmental Quality Page 9

Chapter 116

- Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2010-007-116-PR

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

## Texas Commission on Environmental Quality Page 10

Chapter 116 -Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2010-007-116-PR

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

## Texas Commission on Environmental Quality Page 11

Chapter 116

- Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2010-007-116-PR

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).

## Texas Commission on Environmental Quality Page 12

Chapter 116

- Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2010-007-116-PR

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

## Texas Commission on Environmental Quality Page 13

Chapter 116- Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2010-007-116-PR

§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

## Texas Commission on Environmental Quality Page 14

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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

## Texas Commission on Environmental Quality Page 15

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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

## Texas Commission on Environmental Quality Page 16

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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.

## Texas Commission on Environmental Quality Page 17

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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

## Texas Commission on Environmental Quality Page 18

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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)

## Texas Commission on Environmental Quality Page 19

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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."

## Texas Commission on Environmental Quality Page 20

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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

## Texas Commission on Environmental Quality Page 21

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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

## Texas Commission on Environmental Quality Page 22

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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

## Texas Commission on Environmental Quality Page 23

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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

## Texas Commission on Environmental Quality Page 24

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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

## Texas Commission on Environmental Quality Page 25

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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.

## Texas Commission on Environmental Quality Page 26

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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

## Texas Commission on Environmental Quality Page 27

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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

## Texas Commission on Environmental Quality Page 28

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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

## Texas Commission on Environmental Quality Page 29

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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,

## Texas Commission on Environmental Quality Page 30

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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

## Texas Commission on Environmental Quality Page 31

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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

## Texas Commission on Environmental Quality Page 32

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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

## Texas Commission on Environmental. Quality Page 33

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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.

## Texas Commission on Environmental Quality Page 34

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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

## Texas Commission on Environmental Quality Page 35

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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.

## Texas Commission on Environmental Quality Page 36

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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

## Texas Commission on Environmental Quality Page 37

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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

## Texas Commission on Environmental Quality Page 38

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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

## Texas Commission on Environmental Quality Page 39

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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

## Texas Commission on Environmental Quality Page 40

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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

## Texas Commission on Environmental Quality Page 41

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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

## Texas Commission on Environmental Quality Page 42

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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,

## Texas Commission on Environmental Quality Page 43

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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

## Texas Commission on Environmental Quality Page 44

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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

## Texas Commission on Environmental Quality Page 45

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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

## Texas Commission on Environmental Quality Page 46

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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

## Texas Commission on Environmental Quality Page 4 7

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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."

## Texas Commission on Environmental Quality Page 48

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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

## Texas Commission on Environmental Quality Page 49

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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

## Texas Commission on Environmental Quality Page 50

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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.

## Texas Commission on Environmental Quality Page 52

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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

## Texas Commission on Environmental Quality Page 53

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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

## Texas Commission on Environmental Quality Page 54

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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

## Texas Commission on Environmental Quality Page 55

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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."

## Texas Commission on Environmental Quality Page 56

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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

## Texas Commission on Environmental Quality Page 57

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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

## Texas Commission on Environmental Quality Page 58

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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

## Texas Commission on Environmental Quality Page 59

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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

## Texas Commission on Environmental Quality Page 6o

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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

## Texas Commission on Environmental Quality Page 61

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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

## Texas Commission on Environmental Quality Page 62

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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.

## Texas Commission on Environmental Quality Page 63

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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.

## Texas Commission on Environmental Quality Page 64

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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

## Texas Commission on Environmental Quality Page 65

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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.

## Texas Commission on Environmental Quality Page 66

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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

## Texas Commission on Environmental Quality Page 67

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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.

## Texas Commission on Environmental Quality Page 68

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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

## Texas Commission on Environmental Quality Page 69

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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

## Texas Commission on Environmental Quality Page 70

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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

## Texas Commission on Environmental Quality Page 71

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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

## Texas Commission on Environmental Quality Page 72

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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.

## Texas Commission on Environmental Quality Page 73

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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.

## Texas Commission on Environmental Quality Page 74

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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

## Texas Commission on Environmental Quality Page 75

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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.

## Texas Commission on Environmental Quality Page 76

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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).

## Texas Commission on Environmental Quality Page 77

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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

## Texas Commission on Environmental Quality Page 78

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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

## Texas Commission on Environmental Quality Page 79

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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.

## Texas Commission on Environmental Quality Page 8o

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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

## Texas Commission on Environmental Quality Page 81

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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

## Texas Commission on Environmental Quality Page 82

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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

## Texas Commission on Environmental Quality Page 84

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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.

## Texas Commission on Environmental Quality Page 86

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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

## Texas Commission on Environmental Quality Page 87

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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

## Texas Commission on Environmental Quality Page 88

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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

## Texas Commission on Environmental Quality Page 89

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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

## Texas Commission on Environmental Quality Page go Chapter 116

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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

## Texas Commission on Environmental Quality Page 91

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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

## Texas Commission on Environmental Quality Page 93

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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

## Texas Commission on Environmental Quality Page 94

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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

## Texas Commission on Environmental Quality Page 95

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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

## Texas Commission on Environmental Quality Page 96

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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

## Texas Commission on Environmental Quality Page·97

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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.

## Texas Commission on Environmental Quality Page 98

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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

## Texas Commission on Environmental Quality Page 99

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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.

## Texas Commission on Environmental Quality Page 100

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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)

## Texas Commission on Environmental Quality Page 101

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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.

## Texas Commission on Environmental Quality Page 102

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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.

## Texas Commission on Environmental Quality Page 103

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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.

## Texas Commission on Environmental Quality Page 104

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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

## Texas Commission on Environmental Quality Page 105

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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.

## Texas Commission on Environmental Quality Page 106

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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.

## Texas Commission on Environmental Quality Page 107

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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

## Texas Commission on Environmental Quality Page 108

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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 Chapter 116 -Control of Air Pollution by Permits for New Construction or Modification

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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



## Chapter 116 -Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2010-007-116-PR



## 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

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## 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.

## ~ f')



# = 

# e

e

I'D 

# = Q. 

# = 

# - -· = 

# =

## Texas Commission on Environmental Quality Page 118

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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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# 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

Chapter 116 -Control of Air Pollution by Permits for New Construction or Modification

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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

Chapter 116 -Control of Air Pollution by Permits for New Construction or Modification

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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;

## Texas Commission on Environmental Quality Page 131

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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.

## Texas Commission on Environmental Quality Page 132

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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

## Texas Commission on Environmental Quality Page 133

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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

## Texas Commission on Environmental Quality Page 134

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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.

## Texas Commission 'on Environmental Quality Page 135



## Chapter 116

- Control of Air Pollution by Permits for New Construction or Modification

Rule ProjectNo. 2010-007-116-PR

(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:

## Texas Commission on Environmental Quality Page 136

Chapter 116 -Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2010-007-116-PR

(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~**

## Texas Commission on Environmental Quality Page 137

Chapter 116

- Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2010-007-116-PR

(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

## Texas Commission on Environmental Quality Page 138

Chapter 116 -Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2010-007-116-PR

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

## Texas Commission on Environmental Quality Page 139

Chapter 116- Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2010-007-116-PR

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.

## Texas Commission on Environmental Quality Page 140

Chapter 116 -Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2010-007-116-PR

(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):

## Texas Commission on Environmental Quality Page 141

Chapter 116

- Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2010-007-116-PR



## 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.

## Texas Commission on Environmental Quality Page 142

Chapter 116- Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2010-007-116-PR

(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~**

## Texas Commission on Environmental Quality Page 143

Chapter 116 -Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2010-007-116-PR

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

## Texas Commission on Environmental Quality Page 144



## Chapter 116- Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2010-007-116-PR

(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

## Texas Commission on Environmental Quality Page 145



## Chapter 116

- Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2010-0o7-116-PR

(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

## Texas Commission on Environmental Quality Page 146

Chapter 116- Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2010-007-116-PR

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.

## Texas Commission on Environmental Quality Page 147

Chapter 116- Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2010-007-116-PR

(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:

## Texas Commission on Environmental Quality Page 148

Chapter 116 -Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2010-007-116-PR

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

## Texas Commission on Environmental Quality Page 149



## Chapter 116

- Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2010-007-116-PR

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

## Texas Commission on Environmental Quality Page 150

Chapter 116- Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2010-007-116-PR

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].

## Texas Commission on Environmental Quality Page 151

Chapter 116

- Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2010-007-116-PR

(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.

## Texas Commission on Environmental Quality Page 152

Chapter 116

- Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2010-007-116-PR

[(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**  :t**rf'lt::t;t:\cA-..i:rl~,:;..;~t..iS,.title.(rel"'·ti""""··"'"'···_.A~ePermit ~~i~\~,i~;~;,i..i.** **~~~~~~· ,'~~** **/c~t;:~~~~"~m** c

, •**~ ~~**  •

,**~)!~1ft~!,~~,;~**



## §116.717. 

## Implementation Schedule for Additional Controls.

## Texas Commission on Environmental Quality Page 153



## Chapter 116 -Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2010-007-116-PR

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.

## Texas Commission on Environmental Quality Page 154

Chapter 116 -Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2010-007-116-PR

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.

## Texas Commission on Environmental Quality Page 155



## 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~**

## liililliiiillliiliii:lillliiiiifui~!

## 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 sup ervisors or managers should be

required to be licensed and not be exempted as in the proposed

rules. TETC commented that mismanageme nt at these types

of facilities can result in vector issues as well as tire fi res. Ad

ditionally, TETC suggested that individuals that manage or su

pervise composting operations, us ed oil processing, recycling

operations (materia ls recycling facilities and exempted opera

tions) and fuel blenders be required to be licensed and not be

exempted as in the proposed rules.

The commission agrees with TETC th at 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 re

quirements for the safe storag e, transportation, processing, uti

lization, and disposal of used or scrap tires or tire pieces are

included in Chapters 328 and 330 and in the facility’s permit, reg

istration, or site operating plan. The commission decided not to

require licenses because individuals who operate these types of

facilities perform relatively lo w-risk MSW management activities

and adequate controls are i ncluded 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 s ection 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 commis

sion’s authority to adopt rules to carry out its powers and du

ties under the TWC and other laws of the State. These amend

ments and new section are also adopted under TWC, §§37.001

- 37.015, concerning: De fi nitions; Rules; License or Registra

tion Required; Quali fi cations; Issuance and Denial of Licenses

and Registrations; Renewal of License or Registration; Licens

ing Examinations; Training; Continuing Education; Fees; Adver

tising; Complaints; Compliance Information; Practice of Occupa

tion; Roster of Li cense Holders and Registrants; and Power to

Contract. These amendments and new section are also adopted

under Texas Health and Safety Code (THSC), §361.002, relat

ing to the commis sion’s policy to safeguard the health, welfare,

and physical property of the people and to protect the environ

ment; THSC, §361.011, relating to the commission’s jurisdiction

to manage soli d waste; THSC, §361.022, relating to the commis

sion’s policy to eliminate the generation of municipal solid waste

and municipal sludge to the maximum extent possible for the pro

tection of pu blic health and the environment; THSC, §361.024,

relating to the commission’s authority to adopt rules and estab

lish minimum standards for the management and control of solid

waste; and T HSC, §361.027, relating to the commission’s au

thority to license individuals who supervise the operation and

maintenance of solid waste facilities. These amendments and

new secti on are also adopted under THSC, §363.002, relating to

the commission’s policy to protect public health and the environ

ment 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 Comprehe nsive 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. Quali fi cations for Initial License.

To obtain a license, an individual m ust have met the requirements of

Subchapter A of this chapter (relating to Administration of Occupational Licenses and Reg istrations), 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 exa mination 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 a fter the expiration date of a provisional license, the provisional

license holder must:

(1) complete any missing requirements pertaining to the

corresponding license originally appl ied for before the expiration date

of the pr ovisional license; and

(2) have b een issued the class of license that is required for

the type of MSW facility being supervised.

This agency hereby certi fi es that the adoption has been reviewed

by legal counsel and found to be a valid exercise of the agency’s

legal a uthority.

Filed with the Of fi ce of the Secretary of State on December 17,

2010.

TRD-201007191

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Effecti ve date: January 6, 2011

Proposal publication date: August 13, 2010

For further information, please call: (512) 239-6090



## CHAPTER 1 16. CONTROL OF AIR

POLLUTIO N BY PERMITS FOR NEW

CONSTRU CTION OR MODIFICATION

The Texa s 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,

116.72 1, 116.730, 116.740, and 116.750.



## ADOPTED RULES December 31, 2010 35 TexReg 11909Sections 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 t o 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 fl exible permit program rules (Chapter 116, Subchapter G, Flexible Permits) fi rst becam e effective on December 8,

1994. The fl exible permit program was developed in response

to direction from the commission at the January 21, 1994, policy

agenda meeting. The fl exible per mit rules were developed after

considering the positional papers presented by industry, environ

mental 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 Natu

ral Resource Conservation Commi ssion (predecessor agencies

of the TCEQ), which was com prised of representatives of legal

and engineering professions, public utilities, business associa

tions, local chambers of commerce, city and county government,

consumer and environmen tal groups, and community organiza

tions for the purpose of advising the agency on industrial air

quality, water quality, and waste management issues. The rules

created a new type of min or New Source Review (NSR) permit

called a fl exible permit, which functions as an alternative to the

traditional preconstruction permits that are authorized in Chap

ter 116, Subchapter B

, New Source Review Permits. Flexible

permits were designed to exchange fl exibility for emission reduc

tions with the fi nal goal being a well-controlled facility, without re

laxation of any con trol requirements. At the time the fl exible per

mit program was developed, the commission lacked the authority

to require an air quality permit for grandfathered facilities. The

fl exible permit p rogram was intended to provide grandfathered

facilities with a voluntary authorization mechanism that would re

duce emissions, and signi fi cant reductions were achieved that

were otherwise not required by either state or federal law. Al

though that feature was environmentally bene fi cial, the program

was not limited to use by grandfathered facilities.

Only one fl exible permit can be issued for a particular plant or ac

tive account. However, multiple emission caps, multiple individ

ual emission limits, or any combination thereof can be included

in a fl exible permit. The applicant for a fl exible permit can com

bine existin g facilities and new facilities into the fl exible permit.

The fl exible permit then becomes the controlling authorization

for some or all facilities included in the permit, succeeding any

existing mi nor NSR permits that may have been applicable to

some or all of the facilities. The fl exible 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 fl exible permit be

used to circumvent or ignore compliance with other federal re

quirements, such as a national emission standard for hazardous

air poll utants (NESHAP). The fl exible permitting program is in

tended to eliminate the need for owners or operators of partic

ipating facilities to submit an amendment application each time

certai n operational or physical changes are made at a permit

ted facility. This type of fl exibility without backsliding of various requirements and without environmental harm provides owners

and operators options for their operations. The environmental

bene fi ts of the fl exible permit program hav e included the permit

ting of grandfathered facilities, substantial emission reductions

from the installation of controls, and a comprehensive evalua

tion of emission impacts.

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

Register (74 FR 48480) (hereafter "Notice") of its intent to disap

prove the TCEQ fl exible permit program rules that were fi rst sub

mitted to the EPA as a proposed SIP re vision 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 rev isions 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 befor e the EPA took any formal action,

and did so only in response to litigation brought by holders of

fl exible 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 fl exible permit program as a minor NSR revision: 1) The

program is not clearly limi ted to use in minor NSR and does

not clearly prevent circumvention of major NSR requirements;

2) The program does not require that an applicability determina

tion for major NSR be mad e fi rst for construction or modi fi cation

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 con sistent with guidance on SIP revisions; 4)

The program lacks replicable, speci fi c, established implementa

tion procedures for establishing the emission cap in a minor NSR

fl exible permit; 5) Th e program is not an enforceable minor NSR

permitting program; 6) The program allows the issuance of fl exi

ble permits that do not incorporate emission limitations and other

requirements of th e Texas SIP; and 7) The program lacks the

necessary more specialized monit oring, recordkeeping, and re

porting (MRR) requirements required for this type of minor NSR

program, to ensur e accountability and provide a means to deter

mine compliance. The EPA also identi fi ed a number of related

concerns with the Texas fl exible permit program in correspon

dence to the com mission dated March 12, 2008.

The commission maintains that its fl exible permit program rules,

as adopted and implemented prior to this rulemaking, are fully

approvable as revisions to the SIP. In fact, the Texas fl exible per

mit program is a minor NSR permit program which requires the

application of best available control technology (BACT) to mi

nor sources even though not required to do so under the FCAA.

Texas law re quires application of BACT to all permitted facilities

for all air contaminants, and this is a part of Texas’ SIP. The com

mission’s executive director provided detailed comments in re

sponse to t he Notice addressing each of the EPA assertions dis

cussed earlier and demonstrating that, as written and adminis

tered by the commission, the fl exible permit program rules are in

full conf ormity with all applicable federal requirements (see Let

ter 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). Addition

ally, permits issued under the fl exible permit rules are consistent

with the FCAA and EPA rules implementing NSR.

The EPA published fi nal notice of disapproval of the fl exible per

mits pr ogram in the Federal Register on July 15, 2010 (75 FR

41311), hereafter "Disapproval Notice." In the Disapproval No

tice, the EPA disapproved the fl exible permit program as both

a mino r NSR program and a major NSR program. The EPA’s



## 35 TexReg 11910 December 31, 2010 Texas Registergrounds 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 prov ision clearly pro

hibiting circumvention of major NSR; 2) The program is not an

enforceable NSR permitting program because it lacks require

ments necessary for enforcement and ass urance of compliance,

including speci fi c up front methodologies to be able to deter

mine compliance; 3) The prog ram lacks the necessary more

specialized MRR requirements, inclu ding the necessary applica

ble replicable procedures and adequate executive director dis

cretion, required for this type of minor NSR program to ensure

accountability and provide a mean s 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 perm its are retained; 6) The pro

gram 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 suf fi cient information to de

termine that this new permitting program will not interfere with

any applicable requiremen ts concerning attainment and reason

able 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 lan

guage stating that the p rogram 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 "modi fi cation" is at least as stringent

as the de fi nition of "modi fi cation" in the EPA major NSR SIP pro

gram 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 appl icability 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 statut ory and regulatory requirements for a major

NSR SIP revision and is not consistent with EPA policy and guid

ance on minor NSR SIP revisions; and 6) Due to these bases for

disapproval, a s well as some bases for disapproval as a minor

NSR SIP revision, the EPA lacks suf fi cient information to deter

mine that this new permitting program will not interfere with any

applicable re quirements concerning attainment and reasonable

further progress or any other requirement of the FCAA.

Again, the commission maintains that the fl exible permit rules

as adopted and implemented are approvable as a minor NSR

permit prog ram 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 Disa pproval 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 R egion 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 Di sapproval 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 subj ect to an emissions cap, and similarly that a fl exible permit

cannot authorize or be used for a major stationary source or ma

jor modi fi cation, and the emissions from facilities subject to Pre

venti on of Signi fi cant Deterioration (PSD) BACT and nonattain

ment new source review (NNSR) Lowest Achievable Emission

Rate (LAER) cannot be included in the summation of the fl exible

permit’s emissions cap(s); 2) that each i ndividual unit under an

emissions cap must meet at the very least, its speci fi c emission

limitation derived from a federal applicable requirement; and 3)

the use of terminology unique to the Texa s SIP, namely the use

of the SIP-approved terms "facil ity" and "account." The commis

sion’s responses to those comm ents are discussed elsewhere in

this preamble. Notably, the EPA did no t 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 ap plicable federal regulations,

states have broad discretion to determine the scope of their mi

nor NSR programs as needed to attain and maintain the na

tional ambient air quality stand ards (NAAQS). The development

of NSR requirements and procedures tailored for the air qual

ity needs of each state is not only consistent with the FCAA, it

is encouraged under the law a nd the EPA’s implementing regu

lations (see 42 USC §7407(a) and 40 Code of Federal Regula

tions (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 signi fi cant discretion to tailor minor NSR requirements that

are consistent with the requirements of 40 CFR Part 51 (Require

ments for Preparation, Adoption, and Submittal of Implementa

tion 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 differe nt from Part 51. These amendments are in

tended to remove any doubt that the EPA might have, and to

reaf fi rm the commission’s position that the rules for the fl exible

permit program are en vironmentally bene fi cial 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 infor

mation. The EPA did not fi nd 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 ex

press language, d espite the rule text that requires consideration

of major NSR requirements. That part of the Disapproval No

tice 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 sy stem, which requires a permit for all facilities, in

cluding a major NSR permit when applicable.

As originally developed and subsequently implemented by

TCEQ in 1994, the Texas fl exible permit program is a minor

NSR program. The fl exible permit does not substitute for PSD

or NNSR. No provision of the Texas fl exible permit program

rules may be read to circumvent major NSR permitting or any

state or fe deral 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), contin

ues as §11 6.711(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 circumven

tion of t hose requirements. The fl exible permit program may

not be used as a shield for protection or exemption from fed

eral programs including major NSR permitting. Persons making

change s under a fl exible permit must maintain suf fi cient docu

mentation to demonstrate that the project will comply with Sub

## ADOPTED RULES December 31, 2010 35 TexReg 11911chapter B, Division 5, Nonattain ment Review Permits; Division

6, Prevention of Signi fi cant Deterioration Review; and Subchap

ter E, Hazardous Air Pollutants: Regulat ions Governing Con

structed or Reconstructed Major Sources (FCAA, §112(g), 40

CFR Part 63). A major modi fi cation, as de fi ned in §116.12, may

not occur without fi rst being subject to a Nonattainment and/or

PSD review. Likewise, an owner or operator may not use fl ex

ible permit rules to avoid maximum achievable control technol

ogy (MACT) requirements for the const ruction or reconstruction

of major sources of hazardous air pollutants (HAP) as they are

described and addressed in the 40 CFR Part 63, National Emis

sion Standards for Hazardous Air P ollutants (NESHAP) rules.

If a proposed project is determined to be a major modi fi cation

under NNSR and/or PSD rules, or meets the de fi nition of con

struction or reconstruction un der 40 CFR Part 63, the owner or

operator must obtain a major NSR permit or major modi fi cation

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 fl exible permit program does not impair the commission’s au

thority to control the qual ity of the state’s air and to take action

to control a condition of air pollution if the commission fi nds that

such a condition exists.

The EPA’s concerns, expressed in its comments in this rulemak

ing, focus on ensuring P SD BACT and NNSR LAER are met. In

its Disapproval Notice, the EPA stated that the fl exible permits

program fails to ensure that the terms and conditions of major

NSR SIP permits are ret ained. The EPA fails to recognize that

the fl exible permits program is a minor NSR program, and that

TCEQ’s implementation of PSD and nonattainment permit re

quirements is not imp aired 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 mino r NSR permit to remove any major NSR per

mit requirements. Allowing major sources to operate under an

allowable-based emission cap, while ensuring that any federal

emissions limita tion 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 L AER 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 indivi dual facility, are expressed in

terms of annua l (tons per year) or short term (e.g., pounds per hour) units. BACT is typically expressed in terms of a mass emis

sion calculation, such as pounds per million British thermal units

(lb/MMBtu) or parts per million (ppm). Establishment of caps af

ter 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

fl exible permit authorization or the caps established by the fl exi

ble permit.

Control technology fl exibility is available under the fl exible per

mit progr am 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

control s at another facility, provided that the net sum of control

technologies is equivalent to (or better than) BACT being ap

plied to each facility. However, the fl exible permit rules prohibit

avoida nce of controls required under PSD and NNSR, and such

facility-speci fi c requirements are included within the permit doc

ument. Operational fl exibility is available under the fl exible per

mit to the extent that an owner or operator may vary throughput

rates, charge rates, fi ring rates, etc. as long as control require

ments are met and compliance with emission caps and/or indi

vidual emission limits are maintained. New facilities authorized

through the fl exible permit process must m eet BACT at initial is

suance of the permit or at such time they are authorized by the

fl exible permit through subsequent amendments. For new facil

ities, BACT shall be demonstrated for th at 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, t he fl exible permit program

is an approvable minor NSR program.

The rules are an enforceable NSR permitting program because

they include requirements necessary for enforcement and assur

ance of compliance, including spe ci fi c 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 speci fi c MRR conditions in fl exible permits

issued under the current rules

, as appropriate for the type of fa

cilities and emissions authorized under a cap, and these MRR

conditions are adequate for determining compliance. In addi

tion, the permit fi le contains documentation about how caps are

established in the permits. Regardless, more speci fi c MRR re

quirements are in these amendments, are adopted to satisfy

EPA’s concerns about accou ntability, and the means of deter

mining 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 pro gram 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 requ iring controls at least as stringent as

BACT, the fl exible permit program rules assure that the NAAQS

are achieved and thereby satisfy the requirements of FCAA

§110(a)(2)(C) and EP A’s rules regarding minor NSR permitting.

Moreover, Texas requires regulation of facilities that are broader

in scope than the speci fi c 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 fl exible 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 c ommission responds that these amendments

ensure that the program meets applicable statutory and regula

tory requirements and are approvable as revisions to the Texas

SIP.

The executive d irector 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 De fi nitions

The commission is adopting detailed MRR requirements

in proposed §1 16.715(c)(5), (6) and (12) and (d); see also

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

commission is adopting de fi nitions of continuous emission

monitoring s ystem (CEMS), continuous parameter monitoring

system (CPMS), and predictive e missions monitoring system

(PEMS) in §116.13. The de fi nitions for these terms are derived

from simil ar de fi nitions established in 40 CFR §52.21, with



## 35 TexReg 11912 December 31, 2010 Texas Registerminor changes to account for their use in the fl exible permit

program. The changes relating to MRR are intended to address

the EPA’s comment that the Texas fl exible p ermit program lacks

the specialized MRR requirements necessary to enforce fl exible

permits.

The commission adopts amendments to the de fi nition of "emis

sion cap" and the de fi nition of "individu al emission limitation"

under §116.13 to delete references to the "insigni fi cant emis

sions factor." The commission has also removed the insigni fi

cant emission factor from other sec tions of Subchapter G as dis

cussed in following sections of this preamble. The EPA identi

fi ed the insigni fi cant emissions factor as a concern in the March

12, 2008, correspondence to the co mmission. The elimination

of the insigni fi cant emissions factor would improve the account

ing of emissions authorized under the fl exible permit, and in part

addresses the EPA’s comments tha t the Texas fl exible permit

program lacks replicable, speci fi c, established implementation

procedures for establishing the emission cap, and does not suf

fi ciently address major NSR r equirements.

§116.710, Applicability

The commission adopts the ame ndment to §116.710(a)(5) to

clarify and emphasize that any project that constitutes a new ma

jor stationary source or major modi fi cation that would trigger ma

jor 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 m ajor NSR permit requirements, including

those requirements which include retention of established lim

its. The adopted changes address the EPA’s comments that the

Texas fl exible permit pr ogram is not clearly limited to minor NSR

thereby allowing new major stationary sources to construct with

out a major NSR permit, and has no regulatory provisions clearly

prohibiting the use o f 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 ter

minology.

§116.711, Flexibl e Permit Application

The commission adop ts amendments throughout §116.711 to

restructure and renumber the co ntents of this section to pro

vide improved readability and greater consistency with similar

requirements in § 116.111. The commission also adopts minor

changes throughout this section to update terminology and cor

rect cross-references.

The commission adopts the amendment to §116.711(2)(C)(i) to

more clearly des cribe the application of BACT to new and ex

isting facilities. New §116.711(2)(C)(i)(I) requires all new facili

ties are required to use BACT. New §116.711(2)(C)(i)(II) provides

that facilitie s 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 nec

essary 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 exceed

ing BACT in o rder 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 existi ng 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 modi fi cation th at 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 contr ols. 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 commen ts that the fl exible per

mit 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 es

tablished for facilities subject to PSD or NNSR and which are

included in a cap in a fl exible permit is discussed in the RE

SPONSE TO COMMENTS portion of th is preamble.

The commission adopts the amendm ent to §116.711(2)(G),

which requires that fl exible permits shall specify requirements

for initial compliance testing and methods of determining on

going compliance. The EPA ex pressed a concern that the

existing rule language, which contains the term "may" instead

of "shall," is not suf fi ciently speci fi c. Although fl exible permits

already specify appropria te 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 comb ination with others in this proposal,

addresses the EPA’s comments that the fl exible permit program

is lacking in supporting MRR requirements, and is not suf fi ciently

enforceable.

The commission adopts a mended §116.711(2)(H) and (I), which

specify that prior to applying the requirements of Subchapter G,

the applicant must fi rst perform an analysis to determine the ap

plicability or nona pplicability of federal NNSR requirements or

PSD requirements. These amendments address the EPA’s com

ment that the fl exible permit program could be used to exempt

or shield changes f rom federal permitting requirements because

the program does not require that fi rst an applicability determina

tion be made whether the construction or modi fi cation is subject

to major NSR. In re sponse 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 applica tion.

The commission adopts the amendment to §116.711(2)(J),

which adds a requirement that any permit application for a

new fl exible permit, or permit amendment, shall include an air

quality analy sis 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 fl exible

permit progr am does not suf fi ciently protect the NAAQS.

The commissi on adopts the amendment to §116.711(2)(M)(iv),

which requires that permit applicants provide a complete de

scription of the emission point numbers (EPNs) and facilities

that will be included in an emissions cap. This amendment ad

dresses the EPA’s comment that fl exible permits must be struc

tured in such a way that they suf fi ciently identify which units are

subject t o emission caps and individual emission limits.

The commis sion adopts the amendment to §116.711(2)(M)(vi)

to specify that calculations to de termine the controlled emission

rates from each facility shall be performed in accordance with

TCEQ Air P ermits Division guidance.

The commi ssion adopts the amendment to §116.711(2)(M)(vii)

to specify that the fl exible permit application must identify any



## ADOPTED RULES December 31, 2010 35 TexReg 11913terms, conditions, and representations in any Subchapter B per

mit or permits which will be superseded or incorporated under

a fl exible permit. The applicant shall inc lude an analysis of how

the conditions and control requirements of Subchapter B per

mits will be carried forward in the proposed fl exible permit. This

amendment addresses the EPA’s comment t hat existing SIP per

mits’ 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 commissi on 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 t erminology and cross-refer

ences throughout the section. Other amendments to §116.715

address the EPA’s comments that the fl exible permit program

lacked suf fi cient MRR to ensure a ccountability and determine

compliance with fl exible permits.

The commission adopts the amendment to §116.715(a) by delet

ing existing language concerning the executive director’s ability

to limit the use of standard per mits or permits by rule in cases

where the increase of a particular air contaminant could result

in a signi fi cant impact on the air environment, or could cause

the facility, group of faci lities, 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 clar

ify that a fl exible permit m ay contain more than one emission

cap for a speci fi c air contaminant. The commission also adopts

language to specify that a permit holder shall comply with any

emission caps and indi vidual emission limitations in the permit,

and that an exceedance of a fl exible permit emission cap(s) or

individual emission limitations is a violation of the permit. These

amendments are in res ponse to comments in the EPA’s corre

spondence 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 fl exible permit

specify requiremen ts for monitoring or demonstrating com

pliance with emission caps and individual emission limits in

the fl exible permit. Amended §116 .715(c)(5)(B) requires that

each fl exible perm it specify emission calculation methods for

calculating annual and short term emissions for each pollu

tant. These amendments address the EPA’s concerns that the

fl exible permit r ules are not suf fi ciently speci fi c concerning the

monitoring and enforcement of fl exible permit emission caps

and individual emission limits.

The commission adopts the amendment to §116.715(c)(6). The

amendment reor ganizes the recordkeeping requirements appli

cable to fl exible permits, and adds speci fi c new recordkeeping

requirements to address certain EPA comments in the Notice

and in the Marc h 12, 2008, correspondence from the EPA to the

commission. The amended requirements require fl exible permit

applicants to maintain records of any other permit applications

associated with the fl exible permit; require speci fi c recordkeep

ing to document compliance with annual and short term emission

caps and individual emission limitations; and require that fl exi

ble permit holders maintain records for fi ve years instead of two

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

dence. In response to a comment, the commission has added a

recordke eping requirement under §116.715(c)(6)(A)(iv) to spec

ify 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 r evised this para

graph to include references to "group of facilities" and "account."

The commission adopts amendments to §116.715(c)(8), con

cerning compliance with representations in a fl exible permit ap

plication. The proposed language concer ning 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 ter m "facility."

The commission adopts the amendments to §116.715(c)(10). In

response to a comment, the commission has revised this para

graph to include references to "group of facilities" and "account."

The commission adopts the amendments to §116.715(c)(12)

and (d), which specify MRR procedu res associated with

emission caps in a fl exible permit. The amendments require

semiannual reporting relating to compliance with long and

short term emission caps simila r to the semiannual reporting

suggested by the EPA’s March 12, 2008, correspondence to

the commission. The amendments include requirements to

address absence of monitori ng data, require revalidation of

site generated data, and de fi ne minimum characteristics of the

monitoring system. In response to a comment, the commission

has added language to the re validation 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 fa ctor 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 demonstr ate compliance is required to be included

in the semiannual report. The commission has also revised

§116.715(c)(12)(A)(i)(VII) in r esponse to a comment, to clarify

that the term monitor ing 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 com

mission has also re vised §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 c ommission has also revised §116.715(c)(12)(C)

in order to clarify what action is needed in the event that revali

dation testing demonstrates that emissions have increased.

In response to a comment, the commission also adopts an

amendment to §11 6.715(d) which requires that the permit spec

ify 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 "signi fi cant facility." The adopted rule maintains the valida

tion testing requirement, but instead of applying to signi fi cant

facilities as de fi ned 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 signi fi cance

levels.

The commissi on 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 RegisterThe commission has adopted changes throughout this section

to improve readability and update terminology, and has restruc

tured 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 fl exible per

mit program lacks replicable, speci fi c, established implementa

tion procedures for determining an emissions cap, and address

several of the EPA’s comments in the March 12, 2008, corre

spondence to the commission.

The commission is adopting an amend ment to §116.716(a). In

response to comments, the commission has revised the pro

posed language concerning like-kind facilities and a site-wide

emission cap, and has restructure d and rephrased subsection

(a) to use more appropriate terminology which is consistent with

de fi nitions in Chapter 101, General Air Quality Rules, and to

improve clarity. The adopted rul e 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 d esignated group of facilities at

the account. A designated group would logically be a subset

of all of the facilities at an account. Account is de fi ned in §101.1

as, "for those sources requ ired to be permitted under Chapter

122 of this title (relating to Fede ral Operating Permits Program),

all sources that are aggregated as a site. For all other sources,

any combination of sour ces 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 per

mit applicants full fl exibility to designate facilities for inclusion in

an emission cap as they see fi t, without restriction on the type or

location of the facil ity, as long as it complies with the de fi nition

of account. The rule still provides, as proposed in subsection

(a)(1) and adopted in new subsection (b), that the executive di

rector 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, o r 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 re

quirements associated with the required application of controls

for facilities under an emission cap. The amendment adds

language to cl arify and reinforce the application of federally-re

quired control technology for any project that constitutes a major

stationary source or major modi fi cation. This pro vision further

addresses t he EPA’s stated concerns that the fl exible 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

§116.71 6(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 speci fi es that

a permi t 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 complian ce 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), wh ich requires that each

fl exible 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 indiv idual emission limitations. This

amendment addresses the EPA’s comment that each fl exible

permit must be structured in such a manner that it will be clear

which facilities are included und er the permit and emission cap,

and which facilities are subject to i ndividual emission limitations.

The commission deletes existing §116.716(d), concerning the

"insigni fi cant emissions factor" which the EPA had identi fi ed as

a concern.

The commission adopts the amend ment proposed to

§116.716(d), adopted as §116.716(f), which clarify how an

emission cap is to be adjusted or determined for several sit

uations. 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 correspo nds 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 com mission also adopts language to

clarify how the emission cap is t o be adjusted when a previously

shut down facility is restored to operation.

Section 116.716(f)(2) is amended to clarify that a permit amend

ment is required to add a facility to a fl exible 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 facilit ies in the cap are modi fi ed. 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 subdivi ded 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 be

come 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), a dopted 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 requ ires 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 estab lished 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 11915The commission adopts the amendment to §116.717 to clarify

that any control implementation schedule contained in a fl exible

permit is a requirement of the permit, suc h that if the schedule

cannot be met, the permit holder must obtain a permit amend

ment or alteration to revise the control schedule in order to main

tain compliance with the permit. The per mit amendment or alter

ation would have to be approved by the executive director before

the control schedule deadline speci fi ed in the permit passes. In

addition, the commission has adopted language in this section to

acknowledge and emphasize that certain federally-required con

trols, such as BACT or LAER required by PSD or NNSR, must

be in place and operational before the permitted facility can be

gin operation. The amendment addresses the EPA’s comments

relating to implementation schedules in the March 12, 2008, cor

respondence from the EPA to the c ommission, and further en

sures that the fl exible permit program cannot be used to forestall

or avoid major NSR control requirements.

§116.718, Signi fi cant Emission Increase

The commission adopts the amendment to §116.718(b) which in

cludes several requirements related to major NSR review. Since

proposal, the commission has subdivided the rule into six para

graphs for clarity and readability. This subsection clari fi es that

a physical or operational c hange under a fl exible permit for any

project that constitutes a federal major modi fi cation 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 modi fi cations. The amendment

further addresses the EPA’s comments that the fl exible permit

program could be used to avoid applicable major NSR require

ments by specifying that when determining whether a change

is a major modi fi cation as de fi ned in §116.12, the project emis

sions increase and t he project net shall be determined as spec

i fi ed as de fi ned in §116.12, regardless of how the existing facili

ties are authorized. In addition, this subsection requires that for

new facilities, or modi fi ed facilities under an emission cap for the

pollutant where the permit holder elects to use potential to emit

rather than projected actual emi ssions from the fa cility to deter

mine the project e missions increase, the potential to emit shall

be considered as the propose d emissions cap (unless the use

of an alternate method is demonstrated).

The commission adopts the amendment to §116.718(c) which

requires a perm it holder to perform an air quality analysis to

demonstrate that any increases under this section would not in

terfere with attainment and maintenance of the NAAQS. This

amendment add resses the EPA’s comment in the Notice that the

fl exible permit program does not contain suf fi cient assurances

that the NAAQS will not be violated. In response to a com

ment, the com mission 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 ar e emission decreases at other facilities). The commis

sion 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 con

sists of mi nor changes to improve readability.

§116.721, Amendments and Alterations

The commis sion adopts the amendment to §116.721 which clari

fi es under what circumstances a fl exible permit amendment is re

quired. The amendment to §116.721(a) includes language stat

ing that a ny action that would relax emission controls, add a new facility or facilities, or would constitute a major modi fi cation requires the permit holder to obtain a permit amendment. Similar

language has been added to §116.721(c) fo r the same purpose.

These changes are intended to pr event "backsliding" of emission controls, and ensure that projects that constitute a major

modi fi cation are subject to an appropria te 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 editori al 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 Hear ings; Public Comment, Subchapter E. Some of these changes apply to fl exible permit applications.

§116.750, Flexible Permit Fee

The commission adopts an amendment to §116.750 that revises

how fees for fl exible permits a re determined. Since the inception

of the fl exible permit program in 1994, fees for fl exible permits

have been de termined 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

fl exible permit fees be based on a percentage of project capital cost, rather than bas ed on emission rate. The amendments

make fl exible permits subject to the existing fee system used for

Subchapter B air permits, as speci fi ed in §116.141. The minimum fee of $900 and the ma ximum 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 un til the date 60 days after the EPA publishes fi nal approval of these sections as revisions to the Texas

SIP. Until such time, the existing Subchapter G rules concerning

fl exible 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 t hat this section speci fi es a compliance date,

rather than an effective date for the rule. This change provides

the commission with more fl exibility to revise these rule sections,

if necessary, in the future.

FINAL REGULATORY IMPACT ANALYSIS DETERMINATION

The commission re viewed 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 de fi nit ion of a major environmental rule as de fi ned in

that statute, and in addition, if it did meet the de fi nition, would

not be subject to the requirement to prepare a regulatory impact

analysis.

A major enviro nmental rule means a rule, the speci fi c intent of

which is to protect the environment or reduce risks to human

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

## 35 TexReg 11916 December 31, 2010 Texas Registerductivity, competition, jobs, the environment, or the public health

and safety of the state or a sector of the state. The speci fi c intent

of the adopted rules is to amend various se ctions of Subchap

ter G to address concerns expressed by the EPA regarding the

agency’s fl exible permit program submitted by the commission

as a revision to the SIP. These changes to established rules for

the fl exible permit program are necessary to ensure that the rules

can be a federally-approved part of the Texas SIP. Speci fi cally,

these amendments: 1) include detaile d MRR requirements; 2)

provide replicable, speci fi c, established implementation proce

dures for establishing the emission cap; 3) clearly limit the rules

to minor NSR; 4) include regulator y provisions clearly prohibiting

the use of the program from circumventing the major NSR per

mitting; 5) ensure that the rules cannot be used to bypass the

federal BACT or LAER control tec hnology determination that is

required for major PSD or NNSR projects; 6) specify require

ments for initial compliance testing and methods of determining

ongoing compliance; 7) ensu re that the NAAQS are suf fi ciently

protected; 8) include requirements for clarity of which facilities

are included under the permit and any emission cap, and that

there are suf fi cient monito ring and enforcement requirements for

the emission caps and individual emission limits; and 9) provide

for a delayed compliance date.

As de fi ned in the Texas Government Code, §2001.0225 only ap

plies to a major environ mental rule, the result of which is to: 1)

exceed a standard set by federal law, unless the rule is speci fi

cally required by state law; 2) exceed an express requirement of

state law, unless the r ule is speci fi cally required by federal law;

3) exceed a requirement of a delegation agreement or contract

between the state and an agency or representative of the fed

eral government to im plement a state and federal program; or 4)

adopt a rule solely under the general powers of the agency in

stead of under a speci fi c state law. This rulemaking action does

not meet any of thes e four applicability requirements of a "major

environmental rule." Speci fi cally, the amendments were devel

oped to correct EPA-identi fi ed de fi ciencies in the commission’s

fl exible permit pr ogram 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 re

quirement of a d elegation agreement, and was not developed

solely under the general powers of the agency, but was speci fi

cally developed to meet the requirements of the Texas SIP, and

the requireme nts of the FCAA and its associated regulations,

and is authorized by speci fi c sections of Texas Health and Safety

Code, Chapter 382 (also known as the Texas Clean Air Act), and

the Texas Wa ter Code, which are cited in the STATUTORY AU

THORITY section of this preamble.

Therefore, this rulemaking action is not subject to the regulatory

analysis provisions of Texas Government Code, §2001.0225(b).

The commis sion 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 Unit ed States Constitution or §17 or §19, Article I, Texas Con

stitution; or a governmental action that affects an owner’s private

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

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

restricts or limits the owner’s right to the property that would oth

erwise 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 governmen

tal action is not in effect and the market value of the property

determined as if the governmental actio n is in effect.

The commission comple ted a takings impa ct 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 am end the rules related to fl ex

ible 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 a ffect private real property in a

manner that would require compensation to private real property

owners under the United States Constitution or the Texas Con

stitution. The rules also will no t 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 adop ted rules will not cause a taking un

der Texas Government Code, Chapter 2007.

The commission did not receive any comment regarding the Tak

ings Impact Assessment.

CONSISTENCY WITH THE COASTAL MANAGEMENT PRO

GRAM

The commission determined that this rulemaking action relates

to an action or actions subject to the Texas Coastal Manage

ment Program (CMP) in accordance with the Coastal Coordina

tion Act of 1991, as amende d (Texas Natural Resources Code,

§§33.201 et seq.), and commission rules in Chapter 281, Appli

cations 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 govern

ing 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 ac

cordance 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, quan

tity, functions, and values of coastal natural resource areas (31

TAC §501.12(l)). The adopted rules will bene fi t the environment

by ensuring that the fl exible permit program meets applicable

federal require ments, and is adequately enforceable so that air

quality is protected. The CMP policy applicable to this rulemak

ing action is the policy that commission rules comply with federal

regulations i n 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 af fi rms that this rulemaking

action is con sistent with CMP goals and policies.

The commissi on invited public comment regarding the consis

tency with the coastal management program during the public

comment period. No comments were received.

EFFECT ON SITES SUBJECT TO THE FEDERAL OPERATING

PERMITS PRO GRAM

Chapter 116 i s an applicable requirement under Chapter 122,

Federal Operating Permits Program. Owners or operators sub

ject to the federal operating permit program must, consistent with

the revisio n process in Chapter 122, upon the effective date of



## ADOPTED RULES December 31, 2010 35 TexReg 11917the 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 B uilding E Room

201S, at the commission’s central of fi ce located at 12100 Park

35 Circle. The comment period closed on August 2, 2010. The

commission received comments from EPA Re gion 6, District 90

State Representative Lon Burnam (Rep. Burnam), The City of

Houston, Environmental Integri ty Project (EIP), Texas Chemical

Council (TCC), Texas Industry Proje ct (TIP), Texas Oil and Gas

Association (TxOGA), and the United States Department of En

ergy 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 conc erns and do not ensure com

pliance with the FCAA, and that its comments support this con

clusion.

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 accompa

nying preamble text.

TIP expressed support for the existing fl exible permits program

and stated that it has contrib uted toward signi fi cant air quality

improvements over the last decade. TIP stated that they support

revisions and clari fi cations to the program that further the goal

of a federally-approved set of regulations.

The commission appreciate s the support and concurs that the

fl exible permits program has contributed toward air quality im

provements.

TxOGA stated that it supports the current fl exible permits pro

gram and encouraged TCEQ t o 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 con

cerns identi fi ed by the E PA.

TxOGA indicated concur rence with the detailed comments sub

mitted by TIP.

The commission has added a reference to TxOGA in association

with detailed comments submitted by TIP.

TxOGA stated that it opposes rede fi ning by rule major NSR ap

plicability de fi nitio ns and principles.

This rulemaking conce rns the fl exible 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 reinfor ce the current rule requirement that major

NSR review is always the fi rst review conducted when an appli

cation is received.

Rep. Burnam expressed support for certain speci fi c aspects of

the proposed rulema king (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 insigni fi cant emission factor), but also ex

pressed concern th at the proposed changes as a whole do not

go far enough toward addressing the EPA’s fundamental con

cerns about the program. Rep. Burnam commented that the commission should not adopt the proposed fl exible permitting

program.

The commission appreciates Rep. Burnam’s support for the ref

erenced provisions. The commission does n ot concur that the

proposed changes are not suf fi cient to address the EPA’s funda

mental concerns with the program. The proposed changes have

addressed the EPA’s major alleged de fi ci encies, in areas such

as: practical enforceability (by improved MRR requirements);

protection of air quality and NAAQS (by the proposed require

ment for an air quality analysis for changes that could affect

air quality); prevention of circumvention of major NSR require

ments; replicable procedures for determining emission caps (by

more explicit requirements conce rning 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 commissio n 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 poten tial-to-emit baseline. Rep. Bur

nam 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 develop ed based on the potential to emit after

the application of BACT or LAER emission controls, as applica

ble. This is exactly the same emission standard as required for

other permitting. The te rm "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 evalu

ation requires the use o f actual emissions, not the potential to

emit. TCEQ rules do not, and never have, allow the use of al

lowable emissions in lieu of actual emissions in this analysis.

The City of Houston stated that the proposed rules fail to ade

quately address 40 CF R §51.l65(a)(2)(ii), which requires that

the fl exible permits program include applicability determination

procedures for major NSR applicability review that use the spe

ci fi c provisions of 4 0 CFR §51.165(a)(2)(ii)(A) - (F) unless the

fl exible 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 fl exible permit regulations

include the speci fi c applicability determination procedures of

§51.166(a)(7)( i) - (vi) for PSD applicability review.

Section 116.711 (2)(H) and (I) of the fl exible permit rules require

that these applicability determinations be performed. The com

mission’s rules regarding PSD review in Chapter 116, Subchap

ter B, Divisio n 6 are approved as part of the Texas SIP. The

most recent versions of the commission’s rules regarding nonat

tainment review in Chapter 116, Subchapter B, Division 5, as

adopted prio r 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 con fi dent that these proposed amendments will be ap

proved by the EPA as revisions to the SIP and are at least as

stringent as the EPA’s rules. Regardless, PSD and nonattain

ment applicability reviews are properly conducted for all permit

applications.

The City of Houston commented that the proposed rules should

require b oth 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 Registervalidate and verify the required dispersion modeling, and moni

toring allows for background concentrations to be measured and

considered to ensure that proposed emiss ion 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, necess ary, or economically feasi

ble to require site-speci fi c air monitoring, either before or after

construction, for every project which results in an emission in

crease. The commission already con ducts extensive air moni

toring for purposes of monitoring regional air quality, and special

ized air monitoring in targeted areas where emissions of certain

pollutants are known to be a concer n. Permits issued by the

commission are demonstrated to be protective, so there is typi

cally no justi fi cation to require monitoring in conjunction with the

permit. It is possible that in spe ci fi c cases, a fl exible 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 fl exible 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 permi t 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 ar e included in the permit and others are

not, what the criteria are for ind ividual source’s emission limits

being included in the permit. The City of Houston stated that the

individual emission li mitations 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 appli

cation 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 p ermit 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 reques ted by the applicant. Other reasons for individ

ual limits, separate caps, or subcaps may be to clearly specify

a mode of operation (such as emission caps for maintenance,

startup, and sh utdown) or to limit emissions of a speci fi c com

pound (such as benzene). The permit will clearly identify any

sources subject to individual emission limitations, and will clearly

identify the a pplicable emission limit for those sources.

The City of Hou ston commented that the rules should stipulate

that all source-speci fi c emission limitations that are based on

BACT or LAER must be in the permit document.

Any source-speci fi c emission rate limits must be shown in the

permit regar dless 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 require

ments are in dependent of a facility’s operating rate and are spec

i fi ed in the permit conditions. No change was made in response

to this comment.

EIP acknowledged that certain aspects of the proposed rules in

cluded use ful clari fi cations or positive changes relative to the ex

isting fl exible permit rules. EIP speci fi cally noted the following

proposed rule changes as being improvements: the language

clarifyi ng that the fl exible permit program may not be used to

circumvent, or be used in lieu of, the PSD or NNSR programs; the clari fi cation that exceedances of fl exible permit caps or indi

vidual emission limitations consti tute violations; the requirement

of proposed §116.715(c)(5) that the perm it, itself, re fl ect most of

the monitoring requirements and the algorithms (for limits that

are not rather directly monitored); the requirement that applica

tion representations are conditions up on which a permit is is

sued; the requirement that terms of existing NSR permits - when

superseded by, or incorporated into the terms of the fl exible per

mit - be explicitly addressed in fl exib le permit applications; and,

the proposed recordkeeping and production requirements of pro

posed §116.715(c)(6).

The commission appreciates the support for the cited portions of

the proposed rule.

EIP commented that although the pr oposed rules may contain

certain improvements, the proposed rule changes are not suf fi

cient to resolve larger problems with the fl exible permit program,

including a lack of practical e nforceability, and opportunities for

permit applicants to circumvent NSR.

The commission does not agree that the rules lack practical

enforceability, allow circumvention of applicable NSR require

ments, or lack public partici pation. Speci fi cally, the commission

notes that there are several rule amendments that address

practical enforceability issues, including, for example, the

changes to §116.715(b), w hich speci fi es that the permit holder

shall comply with all fl exible permit emission caps and individual

emission limitations; §116.715 (c)(5),(6), and (12), regarding

MRR requirements; §116. 715(d), regarding speci fi cations for

monitoring systems; and §116 .716(g), regarding speci fi cation 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 speci fi cally addressing

major NSR requirements, relating to applicability, circumvention,

and appropriate cont rol 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 fa cilities covered by a fl exible permit.

No change was made in response to this comment. Although

the EPA formally di sapproved the public participation rule in the

fl exible permit program, §116.740, the commission adopted new

and amended rules in Chapters 39 and 55 on June 2, 2010 (as

published in the J une 18, 2010, issue of the Texas Register) that

address concerns with and applicability of public participation re

quirements for fl exible permit applications. Therefore, this com

ment is beyond th e scope of this rulemaking.

EIP commented th at 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 pe rmit issued under the fl exible permit program,

and meshing the requirements for that permit with those for the

PSD, NNSR and other minor NSR programs, outweighs the

bene fi ts the p ermit 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 p rotections offered by that federal law.

No changes w ere made to the rules in response to this comment.

The commenter has not clearly explained what it means that the

fl exible permit program creates an "overhead" of requirements

that outwe igh the bene fi ts of the program for applicants, the pub

lic, or TCEQ, and therefore the commission cannot provide a

response that speci fi cally addresses this comment. The fl exi

ble permi t rules are for a separate minor NSR program, and are



## ADOPTED RULES December 31, 2010 35 TexReg 11919developed to provide operational fl exibility while ensuring that

major NSR is not circumvented, and that practically enforceable

permits are issued which meet requiremen ts for control technol

ogy and are protective of public health and the environment. The

EPA has consistently recognized that states have fl exibility to

develop their minor NSR programs, requi red by §110(a)(2)(C)

of the FCAA. Texas has done this while meeting the applica

ble federal and state statutory and regulatory requirements. The

amendments adopted in this rulemakin g ensure that the prac

tices of the commission in developing and issuing enforceable

permits are adequately and thoroughly included in the rules for

this minor NSR program. Over the pr ior years that this program

has been in place, substantial air quality improvements have

been made under the fl exible permits program, and at the same

time, fl exible permit holders ha ve bene fi ted from the fl exibility af

forded by the program. The commission does not concur that the

fl exible permit program violates the FCAA, and it expressly fi nds

that these rules meet the app licable requirements of the FCAA.

EIP commented that TCEQ shou ld not approve the proposed

fl exible permit program rules because the fl exible permit pro

gram is not approvable into the Texas SIP. EIP stated that the

program can be an addition t o federal SIP-approved require

ments, but the program cannot be used in lieu of or replace the

obligation of new sources of air pollution or modi fi cations of ex

isting sources to obtai n NSR, including minor NSR, permits.

This comment is not speci fi c as to why the fl exible permit pro

gram is not approvable into the SIP. The fl exible permits pro

gram does not replace or eliminate the obligation of new or mod

i fi ed sources to obtain N SR 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 re place the minor NSR rules in Chapter 116,

Subchapter B; rather, this is an additional minor NSR permit pro

gram that can be approved by the EPA as part of the Texas SIP.

No change was made i n 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 fl exible permit, and therefore all

of the reasons th e EPA stated for rejecting the current fl exible

permit program as not meeting substitute major NSR program

requirements also apply to the proposed fl exible permit program.

The commenter is correct that under the existing and proposed

fl exible permit r ules, a project with facilities subject to PSD or

NNSR can be included in a fl exible permit, and can be included

in a cap in a fl exible permit; this is discussed in more detail else

where in this p reamble. However, the fl exible permit authoriza

tion is a minor NSR authorization only, and does not exempt any

facilities from meeting all applicable major NSR requirements,

such as appro priate federal BACT, or LAER, or other federal re

quirements. In summary, if there are facilities subject to PSD

and/or NNSR requirements, a PSD and/or NNSR authorization

is part of th e same document that includes the minor NSR fl ex

ible permit authorization. No change was made in response to

this comment.

EIP commented that the EPA disapproved the current fl exible

permit pro gram because the MRR was not suf fi cient 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 th is defect. EIP stated that proposed §116.715(c)(5)(A)

requires monitoring or demonstrating compliance, thus, monitor

ing is not necessarily required. Fu rthermore, §116.715(c)(5)(C)

provid es 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 exe cutive director with

wide latitude for picking a monit oring system regardless of the

parameters set forth in §116.715(d)(2)(A) - (D).

The commission does not agree with the comment. The lan

guage in proposed §116.715(c)(5)(A) re lating 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 de termining compliance.

In addition, in some cases the permit may specify a method

of monitoring plus additional methods or techniques related

to determining compliance. Propo sed §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 dire ctor 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 ef fi cient 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 respo nse to this comment.

EIP commented that, in di sapproving the existing fl exible permit

program, the EPA found the rules fail to require speci fi c recordkeeping suf fi cient to ensure that all terms and conditions of ex

isting permits (includ ing representations in the applications for

such permits) that are incorporated into the fl exible permit con

tinue to be met. The rules lack adequate program requirements

for the tracking of e xisting SIP permits’ major and minor NSR

terms, limits, and conditions, and whether such requirements

are incorporated into a fl exible permit or they remain outside the

coverage of the fl ex ible permit. Minor and major NSR permits,

as well as minor NSR SIP permits by rule and standard permits,

can be incorporated into a fl exible permit without any program

requirement in pl ace that ensures the SIP permits’ terms and

conditions are included in the fl exible permit, as published in the

Federal Register (74 FR 48493). EIP stated that the proposed

rules have the s ame problem. EIP stated that the proposal ex

plains that the " fl exible permit would then become the controlling

authorization for all facilities i ncluded in the permit, succeeding

any existing m inor 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) speci fi cally requires applications that include

currently au thorized facilities issued under Chapter 116, Sub

chapter B must identify any terms, conditions, and representa

tions in the Subchapter B permit or permits which will be super

seded by or incorporated into the fl exible permit. The applicant

shall include an analysis of how the conditions and control re

quirements of Subchapter B permits will be carried forward in

the propo sed fl exible permit. This will allow the commission to

review the application to ensure there is no backsliding from ex

isting requirements. Therefore, to be eligible for a fl exible per

mit, app licants will have to maintain suf fi cient records to meet

this speci fi c requirement.

In addition, although an applicant can apply for a fl exible permit

to change the authorization for minor sources from authorization

under S ubchapter 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 Registerhave 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 ar e proposed to become

authorized under a fl exible permit must meet the requirements

to be authorized under the Subchapter G rules.

The primary purpose of this rulemaking is to address de fi cien

cies alleged by the EPA, as discussed els ewhere in this pream

ble. With regard to major sources, §116.710(a)(6) speci fi cally

provides that no person shall use the rules in Subchapter G to

circumvent the requirements for ma jor 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 am endment of a fl exible permit,

a minor NSR permit, and that any existing major NSR permit

continues to comply with the applicable requirements. There

fore, there is no basis for adding additional requirements in the

fl exible permit rules for tracking major NSR permit terms in the

Subchapter G minor NSR permit.

The EPA commented that the co mmission must delineate the

de fi nitions of "account," "fa cility" 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 suf fi ciently 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 awa re, the cornerstone of the Texas

air quality permitting program is a "facility." The term is de fi ned

in the Texas Clean Air Act, Texas Health and Safety Code,

§382.009(3), and in com mission rule in §116.10(4), and is

approved as part of the Texas SIP. "Facility" is de fi ned as "a

discrete or identi fi able structure, device, item, equipment, or

enclosure that const itutes or contains a stationary source, in

cluding appurtenances other than emission control equipment.

A mine, quarry, well test, or road is not considered to be a facility." A facil ity 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 ter m "facility" in §116.711(2)(N) and §116.715(c)(9).

However, the comm ission has made no change with regard to

the use of these three terms in Subchapter G, except as dis

cussed elsewhere in this preamble relating to the EPA’s com

ment concerning the use of the terms "account" and "group of

facilities" in speci fi c rule sections. A fl exible permit is limited to

facilities at one account, and can cover a group of facilities or

all the facili ties at that account. Further, the term "account" is

de fi ned in §101.1(1) as "for those sources required to be per

mitted under Chapter 122, all sources that are aggregated as

a site. For al l other sources, any combination of sources un

der common ownership or control and located on one or more

contiguous properties, or properties contiguous except for inter

vening road s, railroads, rights-of-way, waterways, or similar di

visions." An account can include multiple "sources," which, for

these rules, is equivalent to multiple "facilities" under Texas mi

nor NSR de fi nitions. This de fi nition, and the de fi nition 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 fi na l disapproval of the fl exible permit rules, the EPA

stated that the de fi nition of "account" is not limited to a sin

gle major stationary source and may include multiple major

statio nary 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 th e de fi nition 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 beca use major sources

can be included under a cap, as discussed elsewhere in this

preamble. The fl exible permit rules allow for different federal

sources, which may have different pri mary Standard Industrial

Classi fi cation (SIC) codes, locate d at the same account to be

treated separately in the fl exible permit if necessary to establish

limits on potential to emit. This s ituation is expected to be rare

as there are very few accounts that contain more than one fed

eral 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 por

tions of §§116.711, §116.716, and 116.718, stating that, as pro

posed, the rules could be inte rpreted as allowing nonattainment

major stationary sources or major modi fi cations to be authorized

under a fl exible permit. The EPA stated that the rules must be

revised to ensure it is clea r that a fl exible permit cannot be used

for a major stationary source or major modi fi cation. The EPA

also stated that emissions from facilities subject to PSD BACT

and/or NNSR LAER cannot b e included in an emission cap. The

EPA provided suggested rule language to clarify that a fl exible

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

fl exible permit rules must categorically exclude major stationary

sources and major modi fi cations from coverage within a fl exible

permit or an emission cap. The commission emphasizes that

projects that trigger major NSR requirements such as PSD re

view or NNSR are required to comply with applicable major NSR

requirements, as s peci fi ed under Chapter 116, Subchapter B,

Division 5 or 6, as applicable, and under applicable federal reg

ulations. These requirements include appropriate control tech

nology determin ations for major NSR BACT or LAER. The in

clusion of a major stationary source or major modi fi cation in a

cap established in a fl exible permit does not negate or circum

vent the applic ation of applicable federal major source require

ments any more so than the inclusion of such a project in a tra

ditional NSR permit authorized under Chapter 116, Subchapter

B. When facili ties are to be placed under an emissions cap, the

project is reviewed as a modi fi cation of those facilities, and if the

project increase and the net emission increase are signi fi cant, it

is reviewed a s 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

contiguou s 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. Oth erwise, it is reviewed as a minor modi fi cation in the

same manner as for a construction permit. For fl exible permits

which include major sources, as with all major NSR permits, the

TCEQ doe s not aggregate or combine major stationary sources

which have different primary SIC codes for purposes of major

NSR.

Subsequent to the submittal of t hese comments, the executive

direct or’s staff held discussions with representatives of EPA’s

Region 6 Of fi ce, Of fi ce of Air Quality Planning and Standards,



## ADOPTED RULES December 31, 2010 35 TexReg 11921and Of fi ce of General Counsel. The EPA representatives stated

that major sources, subject to PSD or NNSR permitting requirements, can be included in and operate unde r 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 subj ect 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 no ted that if a unit is later modi fi ed

and

then it can remain in or be removed from the cap as long as the

change is made using a SIP-appro ved process for PSD permits,

including evaluation of BACT, preparation of an air quality analysis, and public notice.

In response to EPA’s comment s, 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 fl exible permit. In addition, the commission

added §116.716(h) from pro posal 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 t o 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 determin ations are required to be at least as

stringent as federal requirements of the type listed in the comment. Section 116.711 of the fl exible permit rules requires that

any facilities autho rized 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 requirem ent, 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 c ommission notes that §116.715(10) provides that

acceptance of a fl exible permit by a permit applicant constitutes

an acknowledgment and agreement that the holder will comply

with all rules a nd 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 fl exible permit condition are applicable, then th e 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 stil l meet at least its speci fi c emission limitation derived from a federal applicable requirement, e.g., a SIP rule, Minor NSR SIP BACT determination, NSPS, MACT, or NESHAPS.

The EPA stat ed 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 appl icable requirement other than a Minor NSR SIP BACT

determination made at the time of issuance of the original fl exible permit.

Regardless of whether a unit is included in a fl exible 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 s uch as major source BACT or LAER, NSPS, NESHAPs, and MACT is required by §116.711(2)(C), (D), (E), and (F) re

spectively. 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" an d "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 commis sion is proposing to

eliminate the insigni fi cant emissions factor, the reference to it in

the de fi nitions of "emissions cap" and "individual emission limi

tation" at §116.13 must be delete d.

These changes recommended by the E PA were already in

cluded in the proposed revisions to the referenced de fi nitions 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

de fi nes "signi fi cant level for that plant-wide applicability limit

(PAL) pollutant." Pantex recommended that for clarity, §116.12

or §116.10 should contain a de fi nition of "signi fi cant level for

that PAL pollutant."

The rule has been revised to eliminate the reference to "signif

icant facility" as de fi ned in §116.12, which is the origin of the

language that this comment r eferences. Therefore, there is no

longer a need for a de fi nition of the referenced phrase in the

adopted rules.

EIP stated that the CPMS de fi nition in §116.13(2) should clarify

when, if ever, what are tho ught to be abnormal readings may be

discarded in the recording of the "average operational parameter

values."

The de fi nition for CPMS is consistent with the EPA’s NSR rules

and therefore the commi ssion 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 moni

tor is malfunctioning

. No change was made in response to this

comment.

TIP and TXOGA commented that the proposed de fi nition 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 de fi nition, and

allow for any further averaging period details to be speci fi ed in

applicable permit s as necessary.

The commission has not changed the rule in response to this

comment. The addition of the suggested language to the de fi

nitions of CEMS, CPMS, and PEMS would complicate the def

initions and add l ittle new information. The relevant averaging

period and any associated details will be speci fi ed in the permit.

TCC, TIP, and TxOGA commented on the proposed de fi nitions

of "continuous emission monito ring system" and "continuous pa

rameter monitor ing system" in §116.13. TCC stated that the

commission’s proposed de fi nitions are modi fi ed versions of fed

eral de fi nitions of these terms, and that the commission revised

these de fi nitio ns for the purpose of the fl exible permit program.

TCC stated that the state and federal de fi nitions should be con



## 35 TexReg 11922 December 31, 2010 Texas Registersistent to avoid confusion and promote clarity. TCC, TIP, and TxOGA also noted that the proposed de fi nitions are different from

the commission’s de fi nitions for "contin uous monitoring" found in

Chapter 115, Control of Air Pollution from Volatile Organic Com

pounds, and "CEMS" and "PEMS" found in Chapter 117, Control

of Air Pollution from Nitrogen Compound s. TCC, TIP, and TxOGA recommended that TCEQ align these various de fi nitions

and place them in Chapter 101.

The commission has not changed the rule in response to this

comment. TCC is correct that the com mission adapted federal

de fi nitions of "continuous emission monitoring system" and "con

tinuous parameter monitoring system" for use in §116.13. Al

though this did introduce minor di fferences between the de fi ni

tions 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 confusi on. TCC is also correct that

the proposed de fi nitions in §116.13 are not the same as the

de fi nitions of "continuous monitoring", "CEMS", and "PEMS" in

other TCEQ rule chapters suc h as Chapter 115or Chapter 117.

Chapters 115 and 117 are rules intended to ensure that reason

ably available control technology is applied to new and existing

sources in speci fi c 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 langua ge is necessarily different when compar

ing a minor NSR authorization program such as the commis

sion’s fl exible permits program, to rules such as those in Chap

ters 115 and 117. The de fi nitions as proposed are more appropri

ate for use with the fl exible permits program than are the existing

de fi nitions within Chapters 115 and 117. Revising the de fi nitions

in Chapters 115 and 11 7, or establishing new de fi nitions 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 faci lities. TIP and TxOGA stated that permit ap

plicants should have the option to apply controls above BACT

to both new and existing facilities. TIP and TxOGA stated that

TCEQ should dele te the term "existing" from the proposed rule.

The commission ag rees that permit applicants should have the

option to apply additional controls to new facilities as part of the

fl exible permit. The commission has revised the rule so that per

mit applicants w ould 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 r ule makes initial compliance testing with ongo

ing compliance as determined by engineering calculations, para

metric or predictive monitoring, stack monitoring, or stack test

ing obligato ry instead of an option within TCEQ’s discretion. The

City of Houston stated that emission estimates based on emis

sion factors typically are a replication of what the emission lim

itations ar e based on, rendering the emission limitations mean

ingless, and the permit need only limit the relevant process vari

able. The City of Houston stated that compliance should be inde

pendently veri fi ed by measurement as part of the performance

demonstration. The City of Houston stated that the performance

demonstration should include continuous or periodic parametric

or predic tive 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 st ack testing. If tech

nically feasible and economically warranted, a stack test will be

required to determine actual emissions of pollutants from the fa

cility. These results may be used to deve lop an emission fac

tor which may be then used in determining and reporting actual

emissions from the facility. For example, if fuel fl ow to a heater

is monitored, emissions factors may b e generated in terms of

pounds of pollutant per cubic foot of natural gas fl ow fi ring the

heater. There are other sources, such as tanks, where stack

testing is not practical. In these cases, generally accepted cal

culation 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 ade quately address the EPA’s

applicability determination concern because they allow the per

mit 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 appli

cability determination is to be made; and do not state that the

applicability determinat ion 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 so urce 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 p rescribed by 40 CFR §51.165(a)(2)(ii)

and §51.166(a)(7) is extensive, and the proposed rules fail to

prescribe the speci fi c applicability review requirements.

State and federal rules require that regulated sources complete

applicability dete rminations in accordance with the applicable

rules. The reviewing authority will then review the analysis

submitted, require additional information, if necessary, and

ultimately agree o r 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 speci fi c applicability

review requireme nts. 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 applicabil

ity, without re view by the state or the public, and that the pro

posed rules contain no mechanism to prevent an erroneous de

termination from being carried forward. The City of Houston

commented tha t the applicability determination should be con

ducted 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 independe ntly 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

implementa tion of those rules, specify the procedure identi fi ed

(or equivalent). To require that e very emission-re lated project

be reviewed would be impractical. The proposed rule requires

these ana lyses be submitted with any permit application, be

submitted and approved before any physical change having

a potential increase in actual emissions suf fi cient 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 sepa

## ADOPTED RULES December 31, 2010 35 TexReg 11923rate analysis of applicability of federal PSD or nonattainment

review. TIP and TxOGA expressed concerns that the pro

posed language is redundant of the existi ng 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 appli cability 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 suf fi cient

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 fl exible permits program could be used

to circumvent major NSR. The EPA speci fi cally requested rule

language to require that a fe deral applicability determination be

conducted before the permit applicant could use the rules in Sub

chapter G. The commission agrees that the term "separate" may

be misleading and is unnece ssary, and it has been removed from

the rule. This analysis is required prior to commencing any phys

ical or operational change that may be a major modi fi cation.

Rep. Burnam and EIP commented that §116.711(2)(J) should

require computer disper sion modeling. Rep. Burnam and EIP

stated that assessing ambient impacts without computer disper

sion modeling is no longer considered scienti fi cally valid. In ad

dition, should modelin g be conducted, EIP stated that the regula

tion does not specify which computer dispersion modeling must

be used. Rep. Burnam stated that some computer models are

no longer favored. E IP stated that 40 CFR §51.160(f)(1) requires

the proposed program to use the Guideline on Air Quality Mod

eling (40 CFR Part 51, Appendix W).

No change was made in response to this comment. There can

be situations wher e computer dispersion modeling is not neces

sary to determine that a proposed change would interfere with

the NAAQS or other impacts criteria. For example, it may be

apparent throug h 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 befo re the proposed change was meeting applica

ble standards and effects screening levels by a signi fi cant mar

gin. In addition, computer dispersion modeling carries substan

tial costs. Th e commission will retain the fl exibility to deter

mine which projects require computer dispersion modeling on a

case-by-case basis. Although the commission generally concurs

that dispers ion 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 ad

dress all s ource con fi gurations or situations. In addition to 40

CFR Part 51, Appendix W, the TCEQ applies internally-devel

oped guidance and procedures in the review of dispersion mod

eling. Th erefore, 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 mod

eling for all amendments or alterations to fl exible permits for

which di spersion 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

indivi dual limit or the overall cap. As stated previously, computer dispersion modeling is not nec

essary in every case in order to determine if a proposed change

would interfere with maintenance or atta inment of the NAAQS.

The commission will retain the fl exibility 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 at

tainment of maintenance of the NAAQ S. TIP and TxOGA stated

that this proposed requirement is redundant with existing re

quirements, and appears to track FCAA, §110(l), a test that is

not applicable to individual perm it 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 t hat existing rules already pro

vide the commission with the authority to require modeling or

monitoring to assess air quality impacts, but this more explicit

requirement with respect to t he NAAQS is necessary to address

the EPA’s concerns that the fl exible permits program does not

suf fi ciently protect against changes that could interfere with at

tainment or maintenance of the NAAQS. The NAAQS-related

requirement is suf fi ciently clear as to not cause confusion with

other analyses or reviews that are required for air permits. No

change was made in respon se to these comments.

The EPA requested clari fi cation of proposed §116.711(2)(M)(ii),

(iv), and (vi), as to why the identi fi cation does not include "in an

account." The EPA also asked for clari fi cation as to why subpara

graphs (ii) and (vi) sho uld not require the identi fi cation of "each

facility included in a ’group of facilities’."

The cited rules do not include the phrase "in an account" be

cause a fl exible permit may only authorize facilities at a single

account, as required by §116.710(a)(4). Sim ilarly, by logical ex

tension of the same rule, an emi ssion cap can only include fa

cilities that are all under a single account. Adding the phrase "in

an account" to the ci ted rules would be redundant and not con

vey any new information about the facility or emission cap. With

respect to the phrase "each facility included in a group of facili

ties," the existi ng 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 in formation 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 re

quires an anal ysis of how terms and conditions of prior Subchap

ter B permits will be carried forward in a fl exible permit. TIP and

TxOGA stated that the proposed provision is unworkable as per

mit conditio ns 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 condi

tions from p reviously-issued permits changed, or are changing,

in a fl exible permit or permit amendment.

The commission has not changed the rule in response to this

comment. The cited requirement is necessary so that the appli

cant and TC EQ can identify relevant terms and conditions of the

existing Subchapter B permit and address them appropriately in

the proposed fl exible permit. The overall intent of this require

ment is to ensure that the change to a fl exible permit does not re

sult in any backsliding of emission controls or any other applica



## 35 TexReg 11924 December 31, 2010 Texas Registerble requirements. An analysis must be completed for each con

dition explaining how the requirements will be included in the pro

posed fl exible permit. The commission agr ees that permit condi

tions 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 j ustify changes and demon

strate that emission control requirements are not relaxed or elim

inated with the issuance of a fl exible permit. The rule does not

require that the proposed fl exible per mit maintain identical terms,

limits, and conditions compared to the original permit. Once a facility or facilities are authorized under the fl exible permit, the

terms and conditions of the previo us permit would no longer ap

ply but could be carried forward in the fl exible permit.

EIP commented that TCEQ proposed §116.711(2)(M)(vii) to ad

dress the EPA’s comment that existing SIP permits’ major and

minor NSR terms, limits and condi tions, must be tracked and ac

counted 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 appli cant and TCEQ can identify relevant

terms and conditions of the existing Subchapter B permit and

address them appropriately in a subsequently issued fl exible

permit. The overall inte nt of this requirement is to ensure that

the change to a fl exible permit does not result in any backsliding

of emission controls or any other applicable requirements. How

ever, 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 t he issuance of a fl exible permit. It would

not be practical for the rule to require that the proposed fl exible

permit maintain identical terms, limits, and conditions compared

to the original Sub chapter B permit. To do so would not result

in providing operational fl exibility that is a feature of this permit

program. The rules adequately a ddress the issue of backsliding,

and the ability to properly review any requested change.

EIP recommended that permit alteration or amendment mate

rials for fl exible permits should identify any terms, conditions,

and representations of prior permits that will be superseded by

or incorporate d into the altered or amended fl exible permit. EIP

stated that a variation of proposed §116.711(2)(M)(vii) would ac

complish this.

The commission has not changed the rule in response to this

comment. In ca ses where the terms, conditions, or representa

tions of existing permits have been incorporated or superseded

into a fl exible permit, an analysis of those terms and conditions

would be perf ormed and any changes justi fi ed. In any subse

quent permit action, a similar justi fi cation 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 re

quire a perm it statement of the emissions calculation that is used

for compliance in those situations where there is continuous op

erating parameter monitoring but where CEMS are not measur

ing emissi ons levels. EIP stated that the method of converting

the parameter measurements to emission estimates should be

speci fi ed. The commission agrees that the calculation methods should be

identi fi ed for all pollutants and facilities, and has removed the

cited exceptions from the rule language.

TIP and TxOGA commented that the proposed M RR require

ments in §116.715 should not impose PAL requirements where

they confuse or complicate the fl exible permits program for sites

that have not opted into the PAL program.

The commission acknowledges that the emi ssion cap MRR re

quirements of proposed §116.715 are similar to requirements of

the federal PAL program. The commission used the PAL require

ments 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 rea

sonable to support compliance with emission caps in the fl exi

ble 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 fl exible permit rules or

permit requirements. Although the implementation of these re

quirements may require some c hanges in fl exible 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 propose d §116.715(c)(5)(B) requires that

each fl exible permit specify methods for calculating annual and

short term emissions for each pollutant when continuous emis

sion monitoring or conti nuous 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 em ission monitoring or continuous oper

ating parameter monitoring in the application. Pantex asked,

with respect to §116.715, how would TCEQ determine if con

tinuous emission mon itoring or continuous operating parameter

monitoring is to be included in the operation of the unit.

Several factors would be considered by both the permit appli

cant and TCEQ when making the determination as to whether

continuous emissio n monitoring or continuous operating param

eter monitoring would be required under the permit. The de

termination of the appropriate type of monitoring would be a

case-by-case dec ision 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 emis

sions using rela tively straightforward material balance calcula

tions. It would generally not be necessary to require continuous

emission monitors for such a situation, unless other factors were

a concern. How ever, if a process has emissions of pollutant(s)

that cannot be predicted or calculated in a straightforward way,

continuous emission monitoring or continuous emission param

eter monitor ing is more likely to be required, so that compliance

with the permit can be con fi rmed. No change was made in re

sponse to this comment.

Pantex asked, with respect to the terms of proposed

§116.715(c )(5)(B), whether the commission proposes incorpo

ration by reference (to the permit application), or whether the

commission extracts the methodologies from the application

and incorp orates them into the permit.

In many cas es, the TCEQ will reference standardized methods

(such as those used to determine emissions from tanks or load

ing). In other cases, the permit may specify how sample data

is to be us ed to estimate actual emissions, such as for cool

ing water. The permit application may be referenced in a per

## ADOPTED RULES December 31, 2010 35 TexReg 11925mit 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 sp ecial 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 lea st 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 e nsure that, in the general case,

all fl exible permits include appropriate calculation methods to determine emissions. Section 116.715(d)(1) and (2) contain more

speci fi c monitoring and calcul ation 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

identi fi ed which conditions w ill be applicable in every permit in

§116.715(c), and which conditions will be required for facilities

subject to caps in a fl exible permit. The commission has determined that this organizati on makes this suf fi ciently clear.

EIP recommended that prop osed §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 t he term "operation procedures" does

not have a suf fi ciently agreed-upon connotation. EIP suggested

that providing examples (e.g., design heat rate or average fl uid

residence time or tons p er hour throughput) would help clarify

the term.

The commission has rephrased §116.715(c)(8) to state that non

compliance with permit representations constitutes noncompli

ance 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 aw are of any dif fi culties with the terminology.

TCC, TIP, and TxOGA opposed the proposed reporting require

ments in §116.715(c)(12 )(A)(i). TCC stated that the fl exible per

mit program is a minor NSR program, and TCC stated that the

burden of the repo rting requirements is not justi fi ed for a minor

NSR program. TIP and TxOGA stated that the reporting require

ments were duplicative of other rules such as the Federal Oper

ating Permits Pr ogram and Chapter 101, and were excessive

and unduly burdensome. TCC stated that a requirement to keep

records suf fi cient to show compliance is all that should be nec

essary.

No changes were made in response to this comment. The com

mission has determined that the reporting requirements are nec

essary as part of the changes needed to obtain EPA approval for

the fl exible p ermits program. The EPA’s notices relating to disap

proval of the program speci fi cally referred to what it perceived as

a lack of documentation and enforceability with respect to emis

sion caps. T he 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 commis sion, and by extension the p ublic, can readily deter

mine whether or not the permit holder is maintaining compliance

with the emission cap.

Pantex and TCC expressed concern relating to the requirement

for "all d ata" in §116.715(c)(12)(A)(i)(IV). Pantex and TCC stated that a literal reading of the requirement could require a permit

tee to provide all quality assurance and quality control data for

each source and parameter monitored, whi ch could represent

an immense and unwieldy amount of data. Pantex provided

an example of a boiler that could have four or more parame

ters 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 b e performed by a contin

uously monitored system. Pante x noted that while this language

in §116.715(c)(12)(A)(i)(IV) replicates language in Chapter 116,

Subchapter C, Plant-Wide Applica bility Limits, literal compliance

would inundate the TCEQ with detailed information that might

never be reviewed, and the data could be provided in a for

mat that the TCEQ might not be abl e to review. Pantex rec

ommended that the term be replaced with "all pertinent data",

"all data suf fi cient to demonstrate compliance," or a requirement

that each permit provide cas e-by-case speci fi cation of data to be

submitted.

The commission concurs with the commenters’ recommendation

and reasoning to use more speci fi c terminology in the cited rule,

and has therefore rephrase d 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 sys

tem" as used in §116.715( c)(12)(A)(i)(VII) is not de fi ned. TCC

stated that there should be more clari fi cation of this term. TIP

and TxOGA stated the term could be interpreted to mean equip

ment such as fuel fl ow met ers or hydrogen sul fi de analyzers as

they are used to calculate actual emissions.

In §116.715(c)(12)(A)(i)(VII), th e term "monitoring system" is in

tended to mean any device, system, or method that is used to

determine complianc e with an emission cap, as described un

der §116.715(d)(2)(A) - (D). Th e monitoring system could be a

CEMS, PEMS, or a system that uses emission factors or mass

balance calculati ons to determine emissions. The term is meant

to encompass any systems providi ng an input into the emission

rate determination. If equipment such as fuel fl ow meters or hy

drogen sul fi de an alyzers are used as the basis for verifying com

pliance with the emission cap, then that equipment would be in

cluded in this requirement. The commission has revised the rule

language to cla rify that the term "monitoring system" as used

in this rule applies only to syst ems 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 TC C 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 Sta tes 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 t he proposed changes to the existing rule concerning



## 35 TexReg 11926 December 31, 2010 Texas Registershutdowns, 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-mon th timeframe allows for

a reasonable degree of operational fl exibility, while ensuring

the maintenance of appropriate emission controls on facilities

subject to an emission cap.

Pantex recommended that the term "sh ut down" as used in

§116.715(c)(12)(A)(i)(VIII) should be clari fi ed. TIP and TxOGA

also noted that the term "shut down" was not de fi ned 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 speci fi c 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 fr equent 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 signif

icant opportunity for perm ittees to inadvertently fi nd themselves

in violation, if only administratively. Pantex recommended that

the term "shut down" in this context be applied only in regard to

continuously operated u nits.

No change was made in resp onse to this comment. The term

"shut down" as used in the proposed rule is not formally de fi ned,

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 emis

sions to the atmosphere. TCEQ uses the term "shutdown" in

several different rules without an explicit de fi nition, and the term

is suf fi ciently clear within the context of the rules and the general

understanding of the term. For Pantex’s example of a batch facil

ity that only operates one or two times in a given year, the TCEQ

would consider tha t facility to be shut down when it is not in op

eration producing a product or otherwise performing its intended

purpose, and it is also not producing air emissions. The com

mission does not concur that this requirement should only ap

ply to continuously operated units, as other commission require

ments relating to shutdowns (such as in Chapter 101, Subchap

ter F, Emission s 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 pro

posed §116.71 5(c)(12)(B) could potentially lead to a permit ex

ceedance. 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 maxi

mum potential emissions. TCC stated that Chapters 115 and 117

both provide for data substitution to address missing monitoring

data. TIP an d TxOGA commented that TCEQ should allow per

mit holders to use good engineering practices to address any ab

sence 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 pe

riods whe n 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

maximu m emission rates unless another method has been es

tablished in the permit. The rule does not exclude permit holders

from using another method to determine emissions, including

methods based on good engineering practi ces, as long as the

method is reviewed and approved in the permit. In order to pro

vide maximum fl exibility for choices in monitoring data collection,

the regulated entity is encouraged to ap ply and obtain alterna

tive (data substitution) methods written into the permit. It is be

yond the scope of this rulemaking to attempt to list all current and

future approvable data substitution methods as long as the per

mit review process allows for future review and approvals. The

commission respectfully disagrees that data substitution meth

ods should be allowed without appr oval as evidenced by their

inclusion as a permit term.

TIP and TxOGA commented that instead of a wholesale incor

poration of federal PAL provisions into the fl exible permit reg

ulations, the commission should consider drawing from other

sources, such as the Texas NO

X and highly-reactive volatile or

ganic compound (HRVOC) rules for provisions to address data

issues. TIP and TxOGA stated that §117.340(c)(3) allows sev

eral methods that can be used as substitute emissions compli

ance data when NO

X monitors are of fl ine. TIP and TxOGA noted

that the HRVOC rule allows d ata substitution at "§115.764."

Although the Chapter 115 HR VOC cooling tower rule allows for

speci fi c data substitution techniques, it also provides for manual

sampling as a backup to the required monitoring. The HRVOC

cooling tower monitorin g requirements are intended to apply

to a speci fi c ty pe of source and speci fi c pollutants. Similarly,

the Chapter 117 NO rules are tailored for speci fi c combustion

sources and a speci X fi c po llutant. The proposed emission cap

monitoring requirements are intended to be suf fi ciently general

so that they are appropriate for virtually any type of source.

Flexible permit app licants who seek an alternate method of

demonstrating compliance with an emission cap during periods

of monitoring system downtime ca n propose a different method,

as allowed for unde r §116.715(c)(12)(B). This could include the

use of data su bstitution or other methods if approved by the

executive director. No change was made in response to these

comments.

Pantex commente d 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 co mpliance with a permit. Pantex stated that if the

intent of the TCEQ is to require performance testing of a source

every fi ve years, then the provision should state that the TCEQ

will require t he action in permits issued pursuant to Subchapter

G. If not, then the TCEQ should de fi ne the term "site generated

test data," and its expectations on what forms of "revalidation"

will be consi dered as compliant.

Site generat ed test data, as used in the cited rule, means any

data obtained by completing stack testing or sampling of site fa

cilities, which is used to determine emissions. An emission factor

generated f rom 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 sta ck sampling to measure the NO

X emission rate from a

heater at known fuel fi ring rates, and determining an emission

factor from the test data. The revalidation would require test

ing/sam pling under conditions similar to those maintained in the

original test, using TCEQ-approved testing or sampling meth

ods. The commission has added language to clarify that if reval

idatio n testing shows that emission factors have increased, the



## ADOPTED RULES December 31, 2010 35 TexReg 11927permit 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 d ata must occur only ev

ery fi ve 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 percenta ge, 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 re

quirement (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 determini ng 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 fi ve years is consistent with, and derived

from, federal regulations aut horizing plant-wide applicability lim

its, which is conceptually similar to a fl exible permit. The com

mission does not have suf fi cient justi fi cation 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 strin

gent revalidation period on a ca se-by-case basis. The proposed

rule requires that revalid ation 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 subst antial 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 fi ve

years is impractical an d 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 faci lities would be unduly burdensome and

economically unreasonable. TCC stated that TCEQ should

take time, resources, and cost considerations into account with

regard to the reval idation requirements.

No changes were made in response to this comment. The com

mission does not agree that revalidation testing to con fi rm site

speci fi c data every fi ve years is unreasonable. This requirement

is analogous to th e revalidation requirements used under fed

eral 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 appropria te to sample one facility to es

tablish representative emissions for similar facilities, the revali

dation may be p erformed in a similar manner. Note that in cases

such as this, it is likely that sampling would be required more

often than every fi ve years and would be rotated so that all facil

ities are sam pled.

Pantex asked

, with respect to §116.715(d), if a permittee de

sires to change the methodology for calculating or measuring

emissions, what would be the appropriate permit action, an al

teration, o r amendment.

The commiss ion understands that this comment is made regard

ing a desired change after a fl exible permit is issued. If the

change in methodology would result in a lower calculation or

measureme nt of emissions, the change can usually be accom

plished with a permit alteration. If the change would result in

an increase in emissions, the change would require a permit

amendmen t. No change was made in response to this comment. EIP stated that the permit should specify which of the four mon

itoring options provided by proposed §116.715(d)(2) is used to

determine the levels of emissions from ea ch facility.

The commission has revised the rule to requ ire 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 req uirements 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 th e 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 b e in compliance. TCC stated that

there is no need to have an "operating range" speci fi ed 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 ac

count for uncertainty or other limitations in the development of

the factor. It is importan t that the factor being used to determine

the emissions is clearly indicated in the permit so that compli

ance with the emission limit, including supporting calculations,

can be veri fi ed. Section 1 16.715(d)(2)(D)(ii) is necessary be

cause 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 tha t the provisions that required permit holders

to "adjust emission factors to account for the degree of uncer

tainty or limitations in the factor’s development," and operate in

the determined rang e, are unworkable. TIP and TxOGA recom

mended 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 di d not change the rule in response to this com

ment. Section 116.715(d) speci fi es requirements that must be

implemented through the permit special conditions. Any po

tential uncerta inties, limitations in development, and applicable

ranges of proposed emission factors should be identi fi ed in the

permit application. These should then be incorporated into the

permit specia l conditions developed for the facility.

Pantex comment ed that the phrase "signi fi cant facility as de

fi ned 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 cont ext of §116.715(d)(2)(D)(iii), this proposed regu

lation 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 modi fi cation in nonattain

ment areas. Pantex commented if §116.715(d)(2)(D)(iii) is appli

cable only to permit reviews for major source construction and

major source modi fi cation 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 de fi nition of "sig

ni fi cant f acility" and the references to PAL requirements in the



## 35 TexReg 11928 December 31, 2010 Texas Registerproposed rules, the commission has deleted the reference to

this de fi nition, and has revised the rule to directly refer to the

signi fi cance levels for PSD or nonattainm ent review applicabil

ity, which are more relevant crit eria for characterizing large fa

cilities under NSR permits. The signi fi cant thresholds for nonat

tainment pollutants are contained in Ta ble I of §116.12(18)(A),

and the signi fi cant 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 signi fi cant facil ity as de fi ned in §116.12.

Section 116.12(33) de fi nes "signi fi cant 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 signi fi cant 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, th en 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 S ubchapter 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 regula tion contains terms that need to be

de fi ned (i.e. "signi fi cant facility" and "signi fi cant level") those

terms need to be de fi ned in §116.10 or §116.13 without using

the term PAL.

The cited rule requireme nt, 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 pro

posed rules, the commis sion has removed the term "signi fi cant

facility" and has revised the rule to directly refer to the signi fi

cance levels for PSD or nonattainment review applicability. The

revised rule would a pply to facilities with emissions (or poten

tial to emit) exceeding the threshold levels speci fi ed 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 te rms 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 emis

sions 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 pe rmit. 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 exe cutive director has determined

that performa nce 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 de fi ned in §116.12(16) of this

title that re lies on an emission factor to calculate pollutant emis

sions shall conduct validation testing to determine a site-speci fi c

emission factor within six month s of permit issuance or start of

operation s 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

monitore d pollutant in quantities that meet or exceed major NSR

signi fi cance levels. None of the examples identi fi ed in this com

ment would be large enough to exceed the applicability criteria

of the ci ted 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 ob

tained. TIP and TxOGA commented on proposed §116.715(d)(2)(D)(iii),

which states that "owners or operators of a signi fi cant facility as

de fi ned in §116.12" using emission factor s to monitor emissions

"shall conduct testing to determine a site-speci fi c emission fac

tor within six months of permit issuance or start of operation of

the facility, whichever is later, unles s the executive director de

termines that testing is not required." TIP and TxOGA stated that

this requirement is unclear as to whether it applies only to facili

ties operating under a PAL permit, or i f the de fi nition of signi fi cant

facility is meant to be applied to facilities that have the poten

tial to emit pollutants that are regulated under a fl exible permit

emission cap. TIP and TxOGA also st ated 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-spe

ci fi c testing of emission factor s if it is "technically practicable."

In response to this and other comm ents on this subject, the com

mission has removed the term "signi fi cant facility" from the rule

and has revised the rule to di rectly refer to the signi fi cance levels

for PSD or nonattainment rev iew 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 exec

utive director the authori ty 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 whe n 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 tha t 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 poss ible to identify or agree upon a value based

on the highest potential emissions. In these cases, limiting oper

ation of the facility pursuant to §116.715(d)(3)(B) may be appro

priate. These is sues 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 fl exible permits.

EIP stated that t here 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 fl exible per

mit. EIP also s tated that the phrase "signi fi cant impact on the air

environment" is not a conventional term of art, so it should be

de fi ned.

The commission has not changed the rule in response to this

comment. Sta ndard permits employ BACT and are carefully re

viewed for impacts during development of the standard permit.

In addition, standard permits have restrictions, where appropri

ate, on the u se 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

insigni fi c ant emission increases. It is not reasonable to require

all fl exible 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 exist

ing SIP-approved minor NSR rules. The proposed language al

lows the executive director suf fi cient discretion to restrict the use

of stan dard permits and permits by rule in those situations where



## ADOPTED RULES December 31, 2010 35 TexReg 11929special attention to small emissi on increases is warranted. With

respect to the commenter’s concern over the phrase "signi fi cant

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 de fi nition because,

as written, the commission has the abili ty to make case-by-case

determinations of what is signi fi cant for any given situation. For

example, the commission establishes "air pollutant watch list ar

eas" where speci fi c air quality concer ns have been identi fi ed. 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 sp eci fi c concern. Further, the

commission has not provided the public with an opportunity for

notice and comment on such a de fi nition, and therefore declines

to do so at this time without foll owing that procedure.

Comments on §116.716

EIP and Rep. Burnam commented t hat the EPA disapproved

the original fl exible permit program because it lacked replicable,

speci fi c, established implementation procedures for establishing

the emission cap in a minor NSR fl exible permit. EIP commented

that the proposed §116.716 does not suf fi ciently change this sit

uation. First, EIP stated that "like-kind" facilities is not de fi ned 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 chang e anything. Rep. Burnam stated that

the EPA requires the methodologies to be completely de fi ned in

the regulations so as to be independently replicable. Rep. Bur

nam stated that the prop osed regulations do not provide enough

speci fi city or information for agencies, courts, or the public to de

termine compliance.

The commission does not agree that the proposed rules lack ad

equate procedures fo r establishing an emission cap. An emis

sion cap is, by design, intended to be fl exible in nature such

that the selection of facilities participating in the cap, and the

level of individua l controls applied to those facilities, is not nec

essarily something that can be explicitly de fi ned by rule. Even in

cases of similar facilities seeking a fl exible permit, the owners or

operators of tho se facilities may have substantially different ap

proaches or objectives for the emission cap. The fl exible permits

program is structured so that permit applicants can propose and

use an emission cap that allows their facilities an appropriate de

gree of operational fl exibility, while at the same time protecting

human health and the environment, and maintaining the required

level of emiss ion 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 commissi on has revised the language to eliminate the refer

ences 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 lan

guage wou ld maintain substantial fl exibility for the construction

of emission caps while using terminology that meets the regula

tory purpose better than the use of the term "site." The commis

sion res pectfully disagrees with Rep. Burnam’s comment that

the rules do not provide enough speci fi city or information to al

low a determination of compliance. As discussed elsewhere in

more de tail in this preamble, the rules require a comprehensive

program of MRR requirements to support enforcement of fl exible

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 woul d 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 includ ed 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, t he commission has r evised the language for

clarity, and has eliminated the references to "like-kind" and

"site-wide" emission caps. The fi nal rule will not restrict emis

sion caps to like-kind units and wi ll 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 fl exibility for the

construction of emission ca ps, 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, a nd stated that the de fi nition of site is

too broad and provides broad discretion to delineate the bound

aries of the emission cap. The EPA stated that under this de fi ni

tion, a site-wide emissi on cap could include all minor stationary

sources and all minor modi fi cations on a company’s property.

In response to this and other co mments regard ing proposed

§116.716(a)(1), the commission has revised the language to

eliminate the referenc es 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 o f 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 de fi ned term in the commission’s

federal operating permit program in §122.10(27). The term

"account" is the appropriate term to use because the fl exible

permit program is designed to work within the commission’s

established, de fi ned term "account." Account has been used in

the fl exible per mit minor NSR context for purpose of delineating

the scope of the fl exible permit authorization. As discussed

elsewhere in this preamble, the use of "account" provides a

boundary for w hat can be included. Therefore, there is no ex

ecutive director discretion as to the boundaries of what facilities

that may be included in a fl exible permit. One of the objectives

of the fl exibl e permit program is to allow the permit applicant

substantial fl exibility in designating the facilities that are to be

included in an emission cap or caps, subject, of course, to

commissio n 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 de fi nition 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 v alue, 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

operat ion" of a facility at less than its physical and operational

design, then the lesser level of operation needs to be speci fi ed



## 35 TexReg 11930 December 31, 2010 Texas Registeras a permit term. EIP stated that if that is not desirable, then

the §116.13(4) de fi nition needs to be amended to remove the

"planned operation" relaxation.

The commission has not changed the rule, no w located in

§116.716(c)(1)(B), in response to this comment. The com

menter has not explained why it is undesirable to establish a

lower emission limit in a fl exible permit emission cap. One key

intent of the fl exible permit program is to allow for potential

increases in operating rate with no increase in emissions (in

creased emission control) provide d 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 fl exible permit program

could allow a facility to avoid fed erally-required control technol

ogy. EIP stated that this section apparently means to discuss

how the emission cap will be determined, even though it actu

ally says it is determining "em issions." EIP stated that emissions

have to be determined by monitoring, testing and recordkeep

ing. EIP further stated that even with the suggested correction,

the section fails to achieve i ts objective because it does not dis

cuss averaging times. EIP gave an example that if a BACT limit

based on a one-hour averaging time is used to calculate an an

nual emission cap, the BACT limit is no longer being used be

cause 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 de fi ne 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 long er exists if it is not applied to the speci fi c

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 compli

ance with the emiss ion cap will be determined, which will be with

some combination of testing, monitoring, and calculations. Fa

cility-speci fi c maximum allowable emission rate limits only re fl ect

BACT at the desig n operating condition. If it were relied upon to

ensure BACT was in place, operation at rates less than the de

sign capacity would not be required to meet BACT. Due to this,

control techno logy 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 NO

X control may be identi

fi ed as 0.01 lb /MMBtu in the permit conditions. NO

X emissions

will be continuously monitored by a CEMS (also required by per

mit condition). If a heater is operated at 50 percent of its design

fi ring rate

, the permit condition will limit its NO

X emissions to 50

percent of the allowable emission rate. The allowable emission

rate limit would allow NO

X emissions of up to 0.02 lb/MMBtu. No

change wa s made in response to this comment.

TIP and Tx OGA 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 seg regating 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 s ame as federal PAL

rules in all respects. Emission caps in fl exible permits have lit

tle to do with whether subsequent modi fi cations are subject to

major NSR, while that is exactly the purp ose of PALs. In most

cases, when an emission cap is e stablished, the permit holder

has to either demonstrate that creating the emission cap does

not result in a major modi fi cation (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 representa

tions made when requesting an emis sion cap typically allow for

the greatest operational fl exibility. This is not the case if facili

ties with differing control requirements are included in the same

emission cap. This is most clear ly 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 sin

gle 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 no nattainment 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 ca p, the cap could not be increased or all

existing tanks would be modi fi ed as well (if there are no other lim

its, 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 mor e 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 an d 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 fl exible permi t 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 constitu te "inclusion" of all VOC. However, in order to pro

tect human health, there may be individual air contaminants that,

while being a subset of VOC or other relevant contaminant cate

gory, have sep arate and distinct emission limits speci fi ed in the

permit in addition to the emission cap for VOC.

EIP commented that the proposed requirements of §116.716(c)

may help make fl exible permits more practically enforceable, and

speci fi cally noted support for the proposed deletion of the nine

percent insigni fi cant 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 ef

fectively w eakens an emission rate based on BACT, LAER or

other requirements, at least for six months, when a facility that

was used to calculate the emissi on cap is shut down. TIP, TxOGA, and TC C 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 hur

ricanes, 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 com

## ADOPTED RULES December 31, 2010 35 TexReg 11931mission 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 shoul d clarify that increas

ing 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 co mments. The commis

sion has maintained the proposed six-month timeframe relating

to the shutdown of cap facilities. The commission acknowledges

and understands that some maintena nce programs or natural

events may result in extended shutdowns. A six-month timeframe provides an appropriate balance between operational fl ex

ibility and the need to ensure that emission caps reasonably cor

respond 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 alteratio n, as long as the original emission

cap amount is not exceeded.

EIP commented that proposed §116.716(d)(2) allows the addi

tion of new facilities via a fl exible permit amendment but does

not require a major source app licability determination and does

not state that the new facility must be a minor modi fi cation.

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 perm it amendment would require a ma

jor source applicability determination under §116.711(2)(H) and

(I). The new facility does not necessarily have to be a minor mod

i fi cation so long as the pr oject complies with all applicable major

NSR requirements.

TIP and TxOGA commented on proposed §116.716(d)(3), stat

ing that the revised language is at odds with the Texas statutory

de fi nition of "modi fi ca tion" and with federal NSR applicability re

quirements established in several rounds of rulemaking, most

recently NSR reform. TIP and TxOGA stated that the provision

is unnecessary and re dundant 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 ap

plicability de fi nit ions and principles, divorced from the statutory

language and established requirements.

The commission respectfully disagrees that the rule, as pro

posed, 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

"modi fi cation" is typically used in relation to changes to facilities

or sources; howe ver, Texas Clean Air Act §382.003(9) provides

that "a modi fi cation of an existing facility" does not include a

physical change in, or change in the method of operation of,

a facility whe re the change is within the scope of a fl exible

permit. However, this does not mean that a fl exible permit

cannot be modi fi ed. A fl exible permit is subject to requirements

or an amendme nt 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 ca p and/or an individual emission limitation, is consid

ered to be a modi fi cation of a fl exible permit, and an amendment

application is required for consideration of a change to a fl exible

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 d e fi nition of "modi fi cation" is much broader than the

federal de fi nition, and does not require any consideration of the

status of the other facilities already under the cap. Therefore,

becaus e major NSR applicability must be determined fi rst, the commission has revised and restructured the rule as adopted

§116.716(f)(3) to ensure that the major modi fi cation analysis is

conducted fi rst for applications to add a f acility to or modify a facility under the cap.

With regard to the portion of the comment regarding compliance

with major NSR requirements, the commission respect

fully 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 de fi nition of "modi fi cation" ap

plies when the analysis is conducte d for major NSR applicability.

The use of the phrase "shall be considered modi fi ed" may be

misunderstood. In the analysis of whether a change is a major

modi fi cation, the commission prop erly assumes that, unless

there are certain restrictions (speci fi cally, a physical modi fi cation

and a separate permit limit or physi cal constraint on the facility’s

potential to emit), all faciliti es could have an increased potential

to emit by the addition of a new facility or the modi fi cation of

a facility within the emission cap. This analysis doesn’t result

in a modi fi cation, which may b e 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 fi nal decision has

been made as to whether a modi fi cation has occurred.

Although the major NSR applicability text may be redundant of

other changes made in this rulemaking, the commission has re

tained it in this paragra ph to ensure that the procedures for cap

adjustment are clearly listed.

EIP commented that the fi nal sentence of proposed

§116.716(d)(3) needs to be clari fi ed. EIP asked, if a like-kind

cap were being increase d because of the modi fi cation 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

modi fi ed, unless each one of them were, in fact, unmodi fi ed

and had a unit-speci fi c limit or potential to emit constraint.

EIP asked whether a ll 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 bene fi ts of the

physically-mod i fi ed unit, but have not themselves had physical

modi fi cations, will those covered units be considered "not

modi fi ed," 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 dif fi cult, and the rules for this need

to be particul arly clear. EIP suggested that at a minimum, the

preamble language should include examples re fl ecting 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 emis

sion cap. Un der adopted §116.716(f)(3), if a change or changes

to facilities within an emission cap potentially constitute a ma

jor modi fi cation, 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 fl exible 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 pre

serve the option for permit holders to establish annual emission

caps, w hile retaining individual short term emission limits. TIP



## 35 TexReg 11932 December 31, 2010 Texas Registerand TxOGA explained that this approach allows a facility to be

subject to a year-long rolling emission cap, while also being sub

ject to a short term emission limit that is speci fi c to the facility.

The commission has not changed the rule in r esponse to this

comment. Adopted §116.716(g), renumbered from §116.716(e),

does not prohibit permit holders from using a short term facilityspeci fi c individual emission limit in co mbination with an annual

emission cap.

TxOGA opposed the proposed rule requiring both long term and

short term emission ca ps for a facility.

One aspect of the existing fl exible permitting program that the

EPA speci fi cally identi fi ed as a conce rn was the lack of short term

emission limitations for facilities under an emission cap. The

commission attempted to addre ss this in the proposed rule by

stating that an emission cap must in clude long term and short

term emission limits. However, th e short term emission limitation

may be in the form of a short term emission cap, or a short term

individual emission limitatio n. No change was made in response

to this comment.

Comments on §116.717

EIP commented that the proposed rule should clarify that a de

lay in the implementation of required emission controls is a re

laxation of emission contro ls; EIP stated that the "alteration" lan

guage 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-r equired controls would generally be

considered a relaxation of emission controls, and would there

fore require a permit amendment, not an alteration. However,

there may be other circum stances involving changes to the con

trol schedule or other details relating to the required controls in

which a permit alteration would be all that is required. The com

mission will maintain t he proposed language to account for both

possibilities.

TCC, TIP, and TxOGA commented on proposed §116.717, re

lating to the implementation schedule for controls. TCC stated

that there are situat ions where the proposed rule would be prob

lematic. TCC gave an example of a situation where a permit

amendment for a phased construction project is issued, and the

equipment is modi fi e d 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 be fore the over-controlled device is brought

back online. Therefore, TCC, TIP, and TxOGA stated that the im

plementation schedule must allow for phasing of emission con

trols.

If a minor projec t involves existing faci lities, emission controls

must be implemented such that modi fi ed facilities are not, on

average, uncontrolled upon startup. It must be emphasized that

the controls on modi fi ed facilities must always meet or exceed

BACT, on average, and no backsliding of existing controls is au

thorized. If a project is subject to major NSR review, all new and

modi fi ed facil ities must have BACT or LAER, as applicable. The

permit applicant should work with the permit engineer to develop

permit conditions that allow the desired fl exibility while meeting

applicable r equirements 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 EP A will have to rely on

the SIP-approved version of these rules, which are not adequate

for determining whether a major modi fi cation has occurred.

The commission has proposed some amendments to §116.12,

and has proposed §116.121 be repealed an d the text moved to a

new §116.127. If the amendments are adopted by the commis

sion, those sections will be presented to the EPA as revisions

to the SIP. The commission respectf ully disagrees that its rules

are inadequate to determine whether a major modi fi cation has

occurred. No change was made in response to this comment.

TIP and TxOGA stated that it is strongly opposed to the pro

posed revisions in §116.718(b). T IP and TxOGA stated that ma

jor NSR applicability principles are well established in rules and

guidance, and the proposed special-purpose rules in this provi

sion are at odds with those requ irements. In particular, TIP and

TxOGA referred to the language that stated that "... the poten

tial to emit shall be considered as the proposed emissions cap

unless a separate permit limi t or physical constraint limits the

facility’s potential t o emit...." TIP and TxOGA stated that this lan

guage was unclear and could be read to mean that each facility

must have a physical constr aint in order to avoid having a physi

cal or operational change attributed to it with the potential to emit

of one facility being set as the potential to emit of the entire emis

sions cap. TIP and TxOGA s tated 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 clari ty and readability. The commission re

spectfully disagrees with the assertion that this language is in

consistent with requirements and guidance to determine the ap

plicability of major NSR. If there is not a permit limit or physical

constraint limiting the potential to emit for a new or modi fi ed fa

cility, it may emit as much as the cap allows. This is explained

in the Federal New S ource Review Permits Applicability Deter

mination guidance document available on the TCEQ Air Permits

Division web site, in which Exa mple 3 states: "If the emission

cap is increased

, all the tanks under the cap are modi fi ed be

cause they can all now emit up to ...the cap limit.., unless there

are other operational limits in the permit conditions that would

prevent them fr om emitting at that rate." The commission has

added language to §116.718(b)(4) to clarify that, instead of po

tential to emit, an alternative method, if demonstrated, may be

used to determ ine 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 §11 6.718(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 s ubmit 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 de fi ne de

minimis, nor does Texas have a SIP-approved de fi nition of de

minimis for ozone, particulate matter less than 2.5 microme

ters (PM

2.5 ), the new one-hour nitrogen dioxide (NO

2 ) primary

NAAQS, o r the new one-hour sulfur dioxide (SO

2 ) primary

NAAQS. Rep. Burnam stated that the term "de minimis" is not

an enforceable standard, and EIP stated that the proposed

requir ement is not enforceable as a practical matter.



## ADOPTED RULES December 31, 2010 35 TexReg 11933The commission respectfully disagrees with the commenter’s as

sertion that the rule does not ensure that minor sources will not

cause or contribute to a violation of NAAQ S. The fl exible permit

application requires, in §116.711(2)(J), an analysis demonstrat

ing that there will be no interference with attainment of mainte

nance of the NAAQS. Further, the commiss ion speci fi cally pro

posed, 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 n o violation of any control

strategy to ensure that the permi ts will comply with the SIP and

the requirements of the FCAA. The commission has revised the

recordkeeping requirements to en sure that permit holders main

tain records of any air quality analyses required by §116.718(c).

Further, the term "de minimis impact" is de fi ned in §101.1, and

this de fi nition is applicable to Chapter 116. The commission

notes that the EPA has not established de minimis values for

ozone, PM

2.5 , the new one-hour NO

2 primary NAAQS, or the new

one-hour SO

2 primary NAAQS.

EIP stated that proposed §11 6.718(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 espe

cially for the new one-hour NO

2 standard, the locations within a

site from which emissions originate can impact off-site NAAQS

attainment, even in the absence o f an overall increase in site cri

teria pollutant emissi ons.

The commission concurs w ith the comment that the speci fi c lo

cation within a site from which emissions are released can in fl u

ence 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 analy

sis for every change under a fl exible permit. Using ambient im

pacts as the criteri a 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 re

quire that the perm it holder must conduct an air quality analysis

for any operational or physical change at facilities covered un

der a fl exible permit, if the change may result in an increase in

the emission rate from any facility under the fl exible permit. This

requirement would apply even if there are contemporaneous de

creases in emissions at other facilities authorized by the fl exible

permit.

EIP commented t hat the proposed rules lack agency or public re

view for any analysis that an applicant believes shows impacts

below the de minimis level. EIP commented that permit appli

cants’ ambien t impacts analysis routinely contain errors. EIP

stated that without combined public and regulatory agency re

view, it will not be possible to determine if the applicant has

validly conc luded that sources will only cause de minimis am

bient impacts.

The c ommission has revised the rule to specify that permit holders are required to maintain records of any air quality analyses

required un der §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 s uch records available to the public in a timely manner.

EIP commented that the variation or relocation of emissions under a fl exible permit can result in sources creating or contributing

to NAAQS o r 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

locate d 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 locati on and characteristics

of the emission point(s). However, the air quality analysis im

pacts review for a fl exible 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 re

view is based on conservative assumptions that make it unlikely

that the facility would interfere w ith the NAAQS or other stan

dards or criteria. Further, §116.718(c) requires that the permit

holder perform an air quality analysis in such a case and, de

pending on the results, maintain r ecords 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 emis sion increase at any existing

facility, regardless of location. Finally, depending on the details,

such a change could be considered a variation from a represen

tation in a fl exible permit ap plication, requiring an alteration re

quest be submitted to TCEQ and demonstration of compliance

with §116.711.

Comments on §116.721

EIP commented on proposed §116.721(a), which de fi nes "a sig

ni fi cant increase in emiss ions" as a trigger for the requirement

of a permit amendment. EIP stated that this phrase needs to be

de fi ned, or there needs to be a reference to a de fi nition stated

elsewhere. EIP also stat ed 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 determina tion based on actual typical short term

or typical annual emissions. EIP recommended that the phrase

be restated as: "a signi fi cant increase in actual emissions under

any typical short ter m or annual operating conditions."

The commission has no t changed the rule in response to this

comment. In §116.721(a), the phrase "a signi fi cant increase in

emissions" means an increase that is not insigni fi cant as de

termined under §116 .718. Any increase that fails to meet the

criteria of §116.718(a) or (b) is a signi fi cant emission increase.

When determining whether an emission increase is signi fi cant

or insigni fi cant, the increased actual emissions are compared to

the allowable emissions under th e applicable emission cap or

individual emission limitation. The commission declines to use

the language sug gested by the commenter because the existing

terminology is well understood and suf fi cient.

EIP commented that the proposed rules suffer from persistent

problems regarding permit alterations. EIP stated that proposed

§116.740(a) d oes not require public notice and comment on fl ex

ible permit alterations. EIP stated that permit alterations have

been widely abused by applicants seeking to make modi fi ca

tions, emiss ions increases, or removing previously enforceable

important application representations. EIP stated that TCEQ has

routinely allowed permit alterations when emissions increases

are expecte d 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 emiss ions 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 polic ies. 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 in

creasi ng 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 alter

ations to fl exible permits when the alteration lacks public notice

or opportunity for comment.

Section 116.721(b) requires a fl exible per mit alteration for any

variation from a representation in a fl exible permit application or

a general or special provision of a fl exible permit that does not re

quire a fl exible permit amendment. This r equirement precludes

the use of alterations for changes that would change the method

of control or character of emissions, would relax emission con

trols, would add a new facility or fa cilities, would result in a sig

ni fi cant increase in emissions, or would constitute a major mod

i fi cation as de fi ned by §116.12. Note that in the case of fl exible

permits, it would be possible to ma ke 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 fac ility, did not involve a change in

method of control, or a relaxation of control. With the exception

of this, the commission respectful ly disagrees with EIP’s char

acterizations of past permi t changes made through permit alter

ation, made without any speci fi c supporting examples or data, as

abuses of the rules or process. EIP’s comments fail to acknowl

edge 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 longsta nding EPA policies. This is because the

EPA’s rules prescribe requirements for major stationary sources

and major modi fi cations, 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 alte ration rule. Furthermore, the

commission’s alter ation rule, §116.116(c), is an approved part

of the Texas SIP. Finally, as discussed elsewhere in this pre

amble, the commission recently amended its public participation

rules, and alterat ions for fl exible permits or for permits issued

under Chapter 116, Subchapter B are not subject to the public

notice requirements in Chapte r 39 of the commission’s rules. No

change was made in response to this comment.

EIP stated that t he language of §116.721(c) plainly supports the

EPA’s concern that a fl exible permit can allow changes to SIP

permit terms such as limits on throughput and fuel type. There

fore, the propo sed fl exible 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 fl exible

permit if just i fi ed, and under §116.721(c), a permit amendment

would be required to make a change that con fl icts with an exist

ing 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 tha t 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 fi nal approval

by the EPA.

The commis sion 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 fi nal action on this rulemaking. Allowing the

EPA its fully allotted time to act, includ ing publication of its fi nal

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 th e 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 r eview. 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 Tex as Water Code, §5.102,

concerning General Powers, that provides the commission with

the general powers to carry out its duties under the Texas Wa

ter Code; §5.103, concerning Ru les, 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 Hea lth 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 ame ndment is also adopted under

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

lishes the commission purpose to safeguard the state’s air re

sources, consistent with the protection of public health, gen

eral welfare, and physical property; §382.003, concerning De fi ni

tions; §382.011, concerning General Powers and Duties, which

authorizes the commissi on 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, comprehen

sive plan for the cont rol 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 signi fi cant ly contribute air contaminants to the atmos

phere; §382.0513, concerning Permit Conditions, which autho

rizes the commission to establish and enforce permit conditions;

and §382.0514, co ncerning Sampling, Monitoring, and Certi fi ca

tion.

This rulemaking implements THSC, §§382.002, 382.003,

382.011, 382.012, 382.051, 382.0513, and 382.0514.

This agency hereby certi fi es that the adoption has been reviewed

by legal counsel a nd found to be a valid exercise of the agency’s

legal authority.

Filed with the Of fi ce of the Secretary of State on December 17,

2010.

TRD-201007205

Robert Martinez

Director, Envir onmental Law Division

Texas Commission on Environmental Quality

Effective date: January 6, 2011

Proposal public ation 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 unde r 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, con cerning 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, §382.0 02, concerning Policy and

Purpose, which establishes the commission purpose to safeguard the state’s air resources, consistent with the protection of

public health, general welfa re, and physical property; §382.003,

concerning De fi nitions; §382.011, concerning General Powers

and Duties, which authorize s 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, concerni ng Permitting Authority of Commission;

Rules, which authorizes the commission to issue a permit by

rule for types of facilities that will not signi fi cantly contribute

air contaminants to the atmosphere; §381.0511, concerning

Permit Consolidation and Am endment; §382.0512, concerning Modi fi cation of Existing Facility, which restricts what the

commission may consid er in determining a facility modi fi cation;

§382.0513, concerning Permit Conditions, which authorizes

the commission to establish and enforce permit conditions;

§382.0514, concer ning Sampling, Monitoring, and Certi fi cation;

§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 modi fi ed; §382.056, concerning Notice of Intent

to Obtain Permi t 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 fl exible permit

which allows for physical or operational changes as provided by this

subchapter as an alternative to obt aining 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 fl exible 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 fl exible permit may be issued for an account;

(2) modi fi cations to existing facilities included in a fl exible

permit may be authorized by the amendment of an existing fl exible

permit;

(3) a new facility may be authorized by the amendment of

a fl exible permit; (4) a fl exible permit may not cover facilities at more than

one account; and

(5) a fl exible permit application, review, and issued permit

used to authorize any facility, group of fa cilities, or any change to existing facilities at an account that constitutes a new major stationary

source or major modi fi cation as de fi ned by §116.12 of this title (relating to Nonattainment and Prevention of S igni fi cant Deterioration Review De fi nitions), shall be completed in accordance with Subchapter

B, Division 5 or 6 of this chapter (relating to Nonattainment Review

Permits; and Prevention of Signi fi c ant Deterioration Review, respectively), including retention of established limits where there has been

no subsequent modi fi cation. 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 facili ties authorized by a fl exible 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 p ermit holder remains responsible for ensuring

compliance with the existing fl exible permit and all rules and regulations of the commission.

(c) Submittal under seal of Texas licensed professional engineer. All applications f or a fl exible permit or fl exible permit amendment shall comply with §116.110(f) of this title.

(d) Responsibility for fl exible permit application. The owner

of the facility, group of facilities, or account or the operator of the facility, group of faciliti es, 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 fl exible permit or fl exible 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 repre sentative of the applicant. All additional support

information speci fi ed on the form must be provided before the application is complete;

(2) information which demonstrates that emissions from

the facility, incl uding any associated docks ide 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 determin ed under §116.716 of this title (relating to Emission Ca ps 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 consider ing the issuance of a fl exible permit

for construction or modi fi cation of any facility, group of facilities, or

account within 3,000 feet or less of an elementary, junior high/middle, or senior h igh 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 indivi duals 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 determin ed 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 Conserva tion Commission Sampling

Procedures Manual."

(C) Best available control technology (BACT).

(i) All facilities authorized by the fl exible 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 reductio ns necessary to comply with this requirement on a group of existing faci lities, 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 m odi fi ed facilities

that constitute a new major stationary source or major modi fi cation

as de fi ned by §116.12 of this title (relating to Nonattainment and Prevention of Signi fi cant Deter ioration Review De fi nitions), 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 Modi fi

cation in Ozone Nonattainm ent Areas; New Major Source or Major

Modi fi cation in Nonattainment Area Other Than Ozone; and Prevention of Signi fi cant Deterioration Requireme nts, respectively), as applicable, for each new or modi fi ed facility.

(iii) For new facilities and proposed affected sources

(as de fi ned in §116.15(1) of this title (relating to Section 112(g) De fi

nitions)) subject to Subchapter E of this chapter (relating to Hazardous

Air Pollutants: Regula tions 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 a ffected facility as de fi ned 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 author ity granted under the FCAA, §111, as amended.

(E) National Emissi on Standards for Hazardous Air

Pollutants (NESHAPS). The emissions from each facility as de fi ned in

40 CFR Part 61 will meet at least the requirements of any applicable

NESHAPS, as liste d 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 maxim um achievable control technology (MACT) standard

as listed under 40 CFR Part 63, prom ulgated 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 speci fi ed in

the fl exible pe rmit application. The applicant may be required to submit additional engineering data after a fl exible permit has been issued

in order to demonstrate further that the proposed facility, group of facilities, or acc ount will achieve the performance speci fi ed in the fl exible

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 speci fi ed in each fl exible permit.

(H) Nonattainment review. If the proposed facility,

group of facilities, or account is lo cated in a nonattainment area, each

facility shall comply with all applicab le 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 N onattainment New Source Review

requirements.

(I) Prevention of Signi fi cant Dete rioration (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 c oncerning 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 fl exible permit, or permit amendment

to increase a fl exible perm it 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 A ir 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 facili ty, 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 model ing 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 st andards and guidelines at land-based off-property

locations.

(K) Federal standards of rev iew for constructed or reconstructed major sour ces of hazardous air pollutants. If the proposed

source is an affec ted source (as de fi ned 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, Subchap ter 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 ch apter, the applicant shall:

(i) identify ea ch air contaminant for which an emission cap is desired;

(ii) identify each facility to be included in the fl exible permit;

(iii) identify each source of emissions to be included

in the fl exible 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

identi fi cati on 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 contro l technology;

(vi) include calculations used to determi ne the controlled emission rates from each facility performed in accordance with

TCEQ Air Permits Division guidance; and

(vii) if the fl exible permit application includes facilities currently authorized by a permit is sued 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 supe rseded by or incorporated into

the fl exible 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 fl e xible permit.

(N) Proposed control technology an d compliance

demonstration. The applicant shall specify the control technology proposed for each facility and demonstrate compliance with all emission

caps at expected maximum produc tion capacity.

§116.715. General and Special C onditions.

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

such conditions.

(b) A pollutant speci fi c emiss ion cap or individual emission

limitations shall be established for each air contaminant for all facilities

authorized by the fl exible permit. A fl exible permit may contain more

than one emission cap for a sp eci fi c air contaminant. The holder of a

fl exible permit shall comply with all fl exible permit emission cap(s) and

individual emission limitations. An exceedance of the fl exible permit

emission cap(s) or individ ual emission limitations is a violation of the

permit.

(c) The following general conditions shall be applicable to every fl exible permit.

(1) Applicability. This section does not apply to physical

or operational changes a llowed 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 cons truction to the appropriate regional of fi ce of

the commission not later than 15 wor king days after occurrence of the

event.

(3) Start-up noti fi cation.

(A) The permit holder shall notify the appropriate regional of fi ce of the co mmission 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 pr esent.

(B) The permit holde r shall provide a separate noti fi

cation for the commencement of operations for each unit of phased

construction, which may involve a series of facilities commencing operations at diffe rent times.

(C) Prior to begin ning 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 Chapte r 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 fl exible permit holder

shall contact the commission’s appropriate regional of fi ce prior to sampling to obtain the proper data forms and p rocedures.

(B) All sampling and testing procedures mu st be approved by the executive director and coordinated with the appropriate

regional of fi ce of the commission.

(C) The fl exible permit holder is also responsible for

providing sampling facilities and condu cting the sampling operations

or contracting with an indepe ndent sampling consultant.

(5) Monitoring, Calculations, and Equivalency of Methods.

(A) Each fl exible permit shall specify requirements for

monitoring or demonstrating complia nce with emission caps and individual emission limits in the fl exible permit.

(B) Each fl exible permit shall specify methods for calculating annual and short term emissions for each pollutant for a given

type of facility.

(C) The fl exible 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 m ethods indicated in the conditions of

the fl exible 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

ful fi lling any requirements of the permit.

(6) Recordkeeping. The permit holder shall:

(A) maintain a copy of the fl exible permit (and any permit applications associated with the fl exible permit) along with information and data suf fi cient t o demonstrate continuous compliance with

the emission caps and individual emission limitations contained in the

fl exible permit. This information and data shall include, but is not limited to:

(i) emission cap and indiv idual 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 t itle (relating to Signi fi cant Emission Increase).

These records shall be maintained for at least fi ve years following the

date that the analysis was performed.

(B) keep all required records in a fi le at the plant site. If,

however, the facility site normally operates unattended, records must

be maintained at an of fi ce within Texas having day-to-day operational

control of the facility site;

(C) make the records available at the request of personnel from the commissi on 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 a dditional recordkeeping requirements speci fi ed in special conditions in the permit; and

(E) retain information in the fi le for at least fi ve years following the date the information or data is obtained.

(7) Maximum allowable emission rates. A fl exible permit covers only th ose sources of emissions and those air contaminants



## 35 TexReg 11938 December 31, 2010 Texas Registerlisted in the table entitled "Emis sion Sources, Emissions Caps and Individual Emission Limitations" in the fl exible permit. Each fl exible

permitted facility, group of facilities

, or account is limited to the emission limits and other conditions speci fi ed in the table in the fl exible

permit.

(8) Representations. The representations with regard to

construction plans and operation proce dures in an application for a permit or permit amendment are the conditions upon which a fl exible

permit or permit amendment is issued. Noncompliance with these

representations constitutes nonc ompliance with the permit.

(9) Emission cap readjustment. If a s chedule to install additional controls is included in the fl exible permit and a facility subject

to such a schedule is taken out of service, the emission cap contained

in the fl exible permit will be readj usted for the period the facility is out

of service to a level as if no schedule had been established. Unless a special condition speci fi es the method of readjustment of the emission

cap, a permit alteration shall be obtained.

(10) Maintenance of emission co ntrol. Each facility, group

of facilities, or account authorized by the fl exible permit shall not be

operated unless all air pollution emission capture and abatement equipment is maintained in good wor king order and operating properly during normal facility operations. Noti fi cation 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 S cheduled Maintenance, Startup,

and Shutdown Reporting and Reco rdkeeping Requirements).

(11) Compliance with rules. Acceptance of a fl exible permit by a permit applicant c onstitutes 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 pre cedent to the granting of the permit. If more

than one state or federal rule or regulation or fl exible 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 cons ent to the entrance of commission

employees and agents into the permit ted premises at reasonable times

to investigate cond itions relating to the emission or concentration of air

contaminants, including compliance with the fl exible 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 regiona l of fi ce within 30 days of the end of each reporting

period that contains:

(I) the identi fi cation of the owner and operator

and the permit number;

(II) total annual emissions (in tons per year)

based on a 12-mont h rolling total for each month in the reporting

period;

(III) the identi fi cation of any exceedances of a

short-term emission cap during the reporting period;

(IV) any data relied upon, including, but not limited to, qualit y assurance or quality control data, in calculating the

monthly and annual emission cap pol lutant emissions, and short-term

emission cap pollutant emissions, to the extent necessary to demonstrate compli ance;

(V) a list of any facility modi fi ed as de fi ned in

§116.12 of this title (relating to Nonattainment and Prevention of Signi fi cant Deterioration Review De fi nitions) 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 (o ther than the time associated with

zero and span calibration checks), and any corrective action taken. For

facilities that are subject to the feder al operating permits program in

Chapter 122 of this title (relating to Federal Operating Permits Program) this may be satis fi ed by referencing the fl exible permit number

in the semiannual report for the sit e submitted under §122.145 of this

title (relating to Reporting Terms and Conditions);

(VII) a noti fi cation of a shutdown of any monitoring system used in determining compliance with the emission cap

or any individual emission limit o f 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 monitorin g 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 emissi on 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 an d Individual Emission Limitations); and

(IX) a signed statement by t he 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 secti on shall begin on the earliest date any facilities

in an emission cap commenc e 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 completio n of such test or method.

(B) Absence of monitori ng 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 speci fi ed in the fl exible permit special conditions.

(C) Revalidation. Any site generated test data used to

determine the emiss ion rates for facilities under the cap must be revalidated through performance testing or other scienti fi cally valid means approved by the executive director

. Such testing must occur at least

once every fi ve yea rs after the facility has b een added to an emission

cap. Emission rate factors shall be adjusted through a permit alteration

or amendment if the revalidation tes t results determine that the emission rate factor has increased.

(d) Each permit wi th 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 paragrap h (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 monito ring 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 scienc e and meet generally acceptable scienti fi c 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 th is 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 i s 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 operato r shall use the highest value of the

range to calculate the pollutant emissions unless the executive director

determines that there is site-speci fi c data or a site-speci fi c monitoring

program to support another content within the range.

(B) An owner or operator using a continuous emission

monitoring system (CEMS) to mon itor pollutant emissions shall meet

the following requirements.

(i) The CEMS must comply with applicable performance speci fi cations found in 40 Code of Federal Regulations Part 60,

Appendix B.

(ii) The CEMS must sample, ana lyze, 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 pollu tant emissions shall meet the following

requirements:

(i) The CPMS or the PEMS must be based on current

site-speci fi c data demonstrating a correlation between the monitored

parameter(s) and the poll utant emissions across the range of operation

of the facility; and

(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 executi ve 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 speci fi ed

by the permit, if appropriate, to account for the degree of uncertainty

or limitations in the f actors’ 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 prev ention of signi fi cant deterioration or nonattainment

as applicable, signi fi cant level for that pollutant, provided in Table I of

§116.12(18)(A) of this title for nonattainment pollutants and in 40 Code

of Federal Regulat ions §51.166(b)(23) for those subject to prevention

of signi fi cant deterioration review, and w hich r elies on an emission factor to calculate pollutant emissions

, shall conduct validation testing to

determine a site- speci fi c 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 monito red parameter(s) and the pollutant

emissions rate at all operating points of the facility, the executive director shall:

(A) establish default value(s) for deter mining 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 c orrelation 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

fl exible permit upon issuance or a mendment of the permit. Such conditions in a fl exible 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 wr itten 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 app roval may be required if the executive director speci fi cally fi nds that an increase of a particular pollutant could

either:

(1) result in a signi fi cant 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 cha pter (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 Signi fi cant 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 deve lop an emission cap for:

(1) all facilities at an a ccount; or

(2) a designated group of facilities at an account.

(b) Notwithstanding subs ection (a) of this section, the executive director reserves the right to exclude any facility from an emissions

cap if necessary to ensure compliance with the permit or to ensure the

protection of human hea lth and the environment.

(c) Emissions will be ca lculated 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 st ationary source or major modi fi cation for the

pollutant as de fi ned by §116.12 of this titl e (relating to Nonattainment

and Prevention of Signi fi cant Deterioration Review De fi nitions), emissions shall be based o n control technology determined in accordance

with Subchapter B, Division 5 or 6 of this chapter (relating to Nonattainment Review Permits; and Prevention of Signi fi cant Deterioration

Review, respectiv ely) 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 de fi ned in §116.10 of this title (relating to General De fi nitions), at expected maximum capacity.

(2) pollutants emitted from facilities su bject 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 lim itations.

(3) the calculated emissions for all faci lities within an

emission cap will be summed.

(4) a lower emission cap than that determined by paragraph

(3) of this subsection may be proposed by the permit applicant if technical information is provided to demon strate 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 f or fa cilities authorized by the fl exible 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 facilitie s 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 c ap. 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 m onths, 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 increas ed beyond the original emission cap amount.

(2) If a facility is to be added to the fl exible 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 modi fi cation of a facility within the

emission cap, an amen dment application is required. In considering

the application, the commission shall:

(A) Determine whether an increase in the emission cap

constitutes a major modi fi cation for the pollutant as de fi ned by §116.12

of this title. For p urposes of this determinati on, all facilities under that

cap shall be included in the evaluation; and

(B) for facilities that are not major modi fi cations as determined by the analysis in paragraph (3)(A) of this subsection, increase the emissi on cap by the sum of the emissions from each of the

new or modi fi ed facilities determined in a ccordance 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 modi fi ed.

(4) An emission c ap will be adjusted downward for any facility, group of facilities, or account authorized by a fl exible permit if

that facility becomes subject to any new state or federal rule or regulation which w ould lower emissions or require an emission reduction. The adjustment will be made the next time the fl exible permit is amended or altered. If an amendment to a fl exible permit is not required to meet the new requirement, then within 60 days of making

the change, the permittee must submit a re quest 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 i n 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 adjus ted, 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 modi fi ed sources prior to issuan ce, amendment, or alteration of the

permit.

§116.718. Signi fi cant Emission Increase.

(a) An increase in emissions from operational or physical

changes at an existing facility au thorized by a fl exible permit is

insigni fi cant, for the purposes of minor new source review under this

subchapter, if the increase does not exceed either the emission cap

or individual emission limitat ion. 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 signi fi cant increase in em issions 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 changes that would constitute a major modi fi cation as de fi ned by §116.1 2 of this title (relating to Nonattainment

and Prevention of Signi fi cant Deterioration Review De fi nitions) must

comply with Subchapter B, Division 5 or 6 of this chapter (relating to

Nonattainment Review Pe rmits; and Prevention of Signi fi cant 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 Applicabili ty Limits), the permit holder shall document that

the change is not a major modi fi cation as de fi ned in §116.12 of this title,

and maintain the documentation required by Subchapter B, Division 1

of this chapter (rela ting to New Source Review Permits) concerning

actual to projected actual emission increases.

(3) When determining whether a change is a major modi fi cation as de fi ned in §116.12 of this title, the project emissions increase and the projec t net shall be determined as speci fi ed as de fi ned

in §116.12 of this title, regardless of how the existing facilities are authorized.

(4) For new facilities, or modi fi ed facilities under an emission cap for the pol lutant where the permit holder elects to use potential

to emit rather than projected actual emissions from the facility to determine the project emissions increa se, the potential to emit shall be

considered as the proposed emissions cap unless an alternate method

is demonstrated.

(5) A separate permit limit o r physical constraint may be

established to limit the facility’s potential to emit for facilities that are

under a cap or ha ve individual emission limits.

(6) If the projec t 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 n etting 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 Ambi ent 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 fl exible permit and the area is n ot designated as nonattainment for the pollutant. If the emissi on 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 speci fi ed 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 this title (relating to Applicability, Flexible Permit Application, General and Special Conditions, Emission Caps and

Individual Emission Limitations, Imp lementation Schedule for Additional Controls, Signi fi cant 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 fi nal approval by the United States Environmental Protection Agency of these sections as revisions to the Texas

State Implementation Plan.

(c) Until the compliance date speci fi ed by subsection (b)

of this section, applications for fl exible 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 fl exible permits.

This agency hereby certi fi es 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 Of fi ce 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 U tility Commission (PUC) to the

Texas Water Commission, a predecessor ag ency of the TCEQ.

While at the PUC, the submetering program adopted rules to al

low an owner to disconnect a tenant’s water utility service for

non-payment to conform to other PUC rule s. When the subme

tering program was transferred, the Texas Water Commission

adopted rules similar to the PUC’s, including the provision al

lowing an owner to disconnect a tenant ’s water utility service for

non-payment. The TCEQ’s current rules still contain this provi

sion in Chapter 291, Subchapter H, Utility Submetering and Al

location, §291.126, Discontinua tion of Service.

In 1995, the 74th Legislature amen ded 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. Curre ntly, Texas Property Code,

§92.008(b) states that a landlord may not interrupt or cause

interruption of water, wastewater, gas, or electric service fur

nished to a tenant by the land lord as an incident of tenancy or

by other agreement unless the interruption results from bona

fi de repairs, construction, or an emergency. Non-payment is not

a reason for interruption o f 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 th e 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 disco nnection 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 furni shed to a tenant by the landlord as an inci

dent of tenancy or by other agreement unless the interruption

results from bona fi de repairs, construction, or emergency. Until

now, the commissio n held that its rule did not con fl ict 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. Speci fi cally, since Texas Property

Code, §92.008, only allows for the disconnection of water ser

vices 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 con fl ict with this section. To ensure that

the commissio n’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 de fi nition of a "ma

jor environmental rule" as de fi ned in the Texas Administrative

Procedure A ct. A "major environmental rule" is a rule that is

speci fi cally intended to protect the environment or reduce risks

to human health from environmental exposure, and that may ad

versely af fect 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 de fi nition of a "ma

jor envir onmental rule" because it is not the speci fi c intent of

the rule repeal to protect the environment or reduce risks to hu



## 35 TexReg 11942 December 31, 2010 Texas Register