### Department 

## of Environmental 

### Quality

Alan Matheson Exeailive Direclor DIVISION OFAIR QUALITY Bryce C. Bird Director GARYR HERBERT Coventor
SPENCER J.COX Lieulenanl Governor 

### DAQP-059-16
September

### 30,2016

Monica Morales 

### Acting

### Air Program 

### Director US 

### EPA Region 8 1595 

### Wynkoop Street Denver, 

### Colorado 80202-1 129 Dear 

### Ms. Morales: The U.S. 

### Environmental Protection 

### Agency (EPA) has noted 

### potential deficiencies 

### in certain 

### portions of Utah's nonattainment new source 

### review OrNSR) permitting rules 

### in its State 

### Implementation Plan (SIP). 

### By no laterthan December 

### 8,2017, the Utah 

### Division of

### Air Quality 

### (UDAQ) commits 

### to:

## l) adopt enforceable revisions 

### to our nonattainment 

### permitting rules, located 

### in R307-403 and 

### identified below, and2) submit these 

### revisions in a SIP 

### revision submittal 

### to EPA,

### following all applicable notice and 

### public hearing requirements.
These revisions 

### will incorporate 

### all of the40 CFR 51.165 

### NNSR applicability permitting requirements 

### for new and 

### modified major stationary sources 

### in a nonattainment area, 

### including revising R307-403 

### to add requirements 

### to regulate PM2 5,and

### will clarify and revise 

### Lowest Achievable Emission Rate 

### (LAER) requirements and applicable offset requirements, 

### including banking 

### of offset emissions. 

### Specifically, 

### UDAQ's revisions 

### will include the

### following:



# . R307-403-1 (Purpose and 

### Definitions): The

### definition of "regulated NSR 

### pollutant" in paragraph 

### (4Xb) states 

### "ammonia is 

### not a

### precursorto 

### PMzs...." Additionally, R307-403-l states that

### all40 CFR references are to theversion 

### in effect on

### July 1,2012, unless otherwise specified, 

### which does 

### not include the new 

### definitions and new requirements regarding ammonia 

### in 40 CFR 51.165that 

### EPA recently 

### finalized in the PM2 sSIP Requirements Rules and becomes 

### effective on October 

### 24,2016. Consistent 

### with the

### court's opinion 

### in NRDC v. 

### EPA,706F.3d428 (D.C. 

### Cir. 2013),the provisionsfound in Clean

### AirAct (CAA) section 189(e) also applies

### to major stationary sources 

### offine particulate matter (PM2 5). 

### EPA recently 

### finalized a new 

### provision at 40 CFR 5 I .165(a)( I3)that 

### codifiesthis requirement, as 

### it applies

### to PM2 5, in the federal regulations. 

### R307-403-l states that 

### "ammonia is not a precursor 

### to PM2 sin the 

### Logan, Salt Lake 

### City, and Provo PMz snonattainment areas as 

### defined inthe

### July I , 20 10version 

### of 40 CFR 8 I 

### .345"; however, 

### UDAQ has

### notsubmitted ananalysis demonstrating 

### that sources 

### of ammonia, as a PM2 5precursor, do not contribute 

### significantly to PMz slevels that exceed the 

### National Ambient 

### Air Quality Standards 

### (NAAQS) in nonattainment areas in the State.

195 North 1950West. Salt Lake City, UT Maif ingAddress: P.O. Box 14/.820'Salt Lake City, UT 841144820 relephone (80 r)5364000'

### Y_rr:

## )::l:ee' r. D D. (80 r) e03-3 e78
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### DAQP-O59-16



### Page2


# o UDAQ commits 

### to submit a SIP 

### revision that either regulates 

### major stationary sources

### of

ammonia pursuant 

### to Utah's NNSR permiuing program, consistent

### with all applicable federal 

### regulatory requirements or demonstrates that sources 

### of ammonia, as a PM2 5 precursor, do not 

### contribute significantly to PM2 5levels that exceed the 

### NAAQS in nonattainment areas in the State, consistent

### with new 

### provisions at40CFR 

### 5l .1006(a)(3). 

# o UDAQ commits to revise R307-403-2, consistent 

### with the new 

### definitions in 40 CFR 51.165 that 

### EPA recently 

### finalized inthe PM2 5SIP Requirements Rules. 

### R307-403-3 (Review of

### Air Quality Impact): This section

### will be re-structured 

### to

## clari! that, 

### for sources proposing 

### to locate in a nonattainment area, applicable 

### NNSR requirements aredetermined solely based onwhether such source is a new or 

### modified major source 

### for the 

### pollutant for which the area is deemed 

### to be in nonattainment (as required 

### by

### CAA section 173(a) and 

### (c), and 40 CFR 51.165(a)). 

### Applicability of most or 

### all NNSR requirements under 

### Utah's current rules 

### could be interpreted to be contingent on determinations by the 

### director ofwhether the source 

### would cause a new

### violation or contribute 

### to an 

### existing

### violation of the 

### NAAQS. UDAQ commits 

### to reformat these requirements 

### into state-specific language 

### in a general 

### provision, R307-403-3, that 

### effectively imposes requirements on sources 

### in Utah,specifically as

### follows: 

# o UDAQ commits to revise 

### R307-403-3, including R307-403-3(3),to remove the reference to 

### NNSR determinations being made 

### "at the 

### time ofthe source's proposed start-up 

### date;" 

# o UDAQ commits 

### to revise 

### R307-403-3, including R307-403-3(2) and R307-403-3(3), 

### to specify that 

### NNSR permit requirements areapplicable 

### to all new 

### major stationary sources or 

### major modifications located 

### in a nonattainment area that are 

### majorfor the 

### pollutant 

### for which the area is designated nonattainment; 

# o UDAQ commits to revise 

### R307-403-3, in 

### addition to the 

### previously adopted

### definition 

### of LAER in R307-403-1, 

### to

### explicitly statethat 

### LAER applies

### toall major new sources and 

### major modifications for the relevant 

### pollutants in nonattainment areas. 

### R307-403-4 (General Offset 

### Requirements): This section

### will be revised because 

### it is 

### not currently clearthat the General Offset Requirements, R307-403-4, apply 

### to all offset transactions 

### for all pollutants (as required 

### by

### CAA Section 173(c) and 40 CFR 5 I .165). 

# o UDAQ commits to revise R307-403-4 

### to incorporate the requirements 

### from 40 CFR 51.165

### to establishthat 

### all generaloffset 

### permitting requirements apply 

### for 

### all offsets regardless 

### ofthe 

### pollutant at issue, and 

### to revise the 

### provision 

### to impose immediate and 

### direct general offset 

### permitting requirements on

### all new 

### major stationary sources or 

### major modifrcations located 

### in a nonattainment area that are 

### majorfor the 

### pollutant for which the area is designated nonattainment. 

### R307-403-4 

### (Offset Net

### Air Quality Benefit): This section

### will be revised to ensure offsets 

### provide a net 

### air quality benefit, asdiscussed 

### in 40 CFR 51, 

### Appendix S. 

# o UDAQ commits to

### work 

### with the Utah

### Air Quality Board 

### to revise R307-403-4 

### to reference the 

### criteria discussed 

### in section 

### IV.D. of 40 CFR 51, 

### Appendix S'

195 North 1950 West'Salt Lake City, UT Mailing Address: PO. Box 144820'Salt Lake City, UT 841144820 Telephone (S0l) 536-4000' Fax (801)536-4099' T.D.D. (801) 903-3978
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### DAQP-059-16

Page 3 

# o Pollutant Specific Offset 

### Requirements: UDAQ commitsto adding asectionto the state regulations 

### which addresses emission 

### offset requirements 

### for PMz 5nonattainment areas (as required 

### in 40 CFR 

### 51.165(a)(l 

### l)). 

# o UDAQ 

### will update R307-403 

### to include a new sectionthat imposes requirements 

### that address emission offsets 

### for PM2 5nonattainment areas (as required 

### in 40 CFR 

### 51.165(a)(l 

### l)) on 

### NNSR sources 

### in Utah. 

### UDAQ

### will revise 

### R307-403-3, including R307-403-3(3Xc), to cross reference

### this new section, as

### well asthe requirements 

### in R307-403-4. R307-403-5. and R307-403-6. 

# o R307-403-7 

### (Offset Baseline): This section

### will be revised 

### toclarifu the requirement when 

### crediting reductions 

### for offset purposes 

### (in accordance 

### with 

### CAA Section 

### 173(c)(l) and 40 

### cFR 51.16s). 

# o UDAQ commits to

### work 

### with the Utah 

### Air Quality Board 

### to revise

### this section

### to include the requirements 

### of

### CAA Section 

### 173(c)(l) and 40 CFR 51.165 

### (specifically 40 CFR 51.165(a)(3)) concerning the requirement that creditable reductions be calculated based on actual emissions 

### for offset purposes. 

### If you have any questions, please contact Sheila Vance 

### of my staff at 

### (801) 536-4001 

### or svance@utah.gov. Sincerely,

195 North 1950West. Salt Lake City, UT Mailing Address: P.O Box 144820. Salt Lake City, UT 841144820 Telephone (801 ) 5364000 . Fax (801)5364099
.T.D.D. (801 ) 903-3978 ww.deq.utoh gov Printed on 100% recycled paper