DEPARTMENT OF ENVIRONMENTAL 

CONSERVATION

DIVISION OF AIR QUALITY

FINAL

2014 FEE STUDY REPORT

May 21, 2015
2014 Fee Study Report Page 2

May 2015

Table of Contents

INTRODUCTION..............................................................................................................5

Fee Evaluation Report Requirements ..................................................................................5

Evaluation Methodology......................................................................................................5

Fee Report Findings Overall Program Costs – Previous Fee Study vs Current Fee Study .5

Permit administration fees:...........................................................................................6

Emission Fees:..............................................................................................................7

TITLE V PERMIT ADMINISTRATION FEES............................................................9

Title V Annual Permit Fees .................................................................................................9

Oil & Gas Source, PTE > 250 TPY...................................................................................10

Large Power Plant (Excluding Coal-Fired Plants), PTE > 250 TPY.................................11

New Category: Coal-Fired Plants.....................................................................................11

Small Power Plant, PTE > 250 TPY..................................................................................13

Oil & Gas or Soil Remediation Unit (SRU), PTE > 100 TPY and < 250 TPY.................13

Small Power Plant, PTE > 100 TPY and < 250 TPY ........................................................14

Title V Sources, other than described under (1) – (6) of this section and < 250 TPY.......14

TITLE V GENERAL PERMITS – OPERATING .......................................................15

Title V Sources Operating Under GP3 ..............................................................................15

Title V Sources Operating Under GPA, PTE > 100 TPY and < 250 TPY........................16

OTHER TITLE V PERMIT SERVICES......................................................................17

Owner Requested Limit (ORL), associated with a Title V Source....................................17

Combined Category – PAEL for Diesel Engines & Gasoline Distribution Facilities.......18

Excess Emissions...............................................................................................................18

Fee Appeals........................................................................................................................19

TITLE I PERMIT ADMINISTRATION FEES ...........................................................19

Title I Permit Amendments................................................................................................19

Title I Routine Compliance................................................................................................20

Other Title I Permits ..........................................................................................................21

Owner Requested Limit (ORL), associated with a Title I Source .....................................21

Fast Track Requests...........................................................................................................22

Open Burns ........................................................................................................................22

Excess Emissions...............................................................................................................23

Fee Appeals........................................................................................................................23

ACTIVITIES CHARGED TIME & EXPENSES.........................................................23

EMISSION FEES EVALUATION ................................................................................25

Setting of the Title V and Title I Emission Fees................................................................25

Title V Emissions Fees......................................................................................................26

Explanation of Fee Change................................................................................................27

Title V Unrealized Obligations for FY16 through FY19...........................................27

Emission Tonnage ......................................................................................................27

Title I Emissions Fees........................................................................................................28

Explanation of Fee Change................................................................................................28

Title I Unrealized Obligations for FY16 through FY19.............................................28

Emission Tonnage ......................................................................................................29

ADDITIONAL REVISIONS TO FEE REGULATIONS ............................................29
2014 Fee Study Report Page 3

May 2015

Negotiated Service Agreements.........................................................................................29

Transition Process for Permit Fees....................................................................................29

One-Time Emission Fees...................................................................................................30

Billing Procedures..............................................................................................................30

OTHER FEE CONSIDERATIONS...............................................................................30

Review of Fee Structure Alternatives................................................................................30

Emission fees for Small Sources........................................................................................31

Funding (Legislative) Options...........................................................................................31

Availability of General Funds............................................................................................31

Conclusions........................................................................................................................32

Table 1: Overall Program Costs.......................................................................................... 5

Table 2 – Percent Fee Change by Regulatory Source Category........................................ 6

Table 3 – Emission Fee Percent Changes........................................................................... 7

Table 4 – Oil & Gas Source, PTE > 250 TPY Annual Renewal Fee ............................... 10

Table 5 – Oil & Gas Source, PTE > 250 TPY Annual Compliance Fee .......................... 10

Table 6 – Large Power Plant (excluding coal-fired plants), PTE > 250 TPY Annual 

Renewal Fee.............................................................................................................. 11

Table 7 – Large Power Plant (excluding coal-fired plants), PTE > 250 TPY Annual 

Compliance Fee ........................................................................................................ 11

Table 8 – Coal-Fired Plants Annual Renewal Fee............................................................ 12

Table 9 – Coal-Fired Plants Annual Compliance Fee ...................................................... 12

Table 10 – Small Power Plant, PTE > 250 TPY Annual Renewal Fee ............................ 13

Table 11 – Small Power Plant, PTE > 250 TPY Annual Compliance Fee....................... 13

Table 12 – Oil & Gas or SRU, PTE > 100 TPY and < 250 TPY Annual Renewal Fee... 13

Table 13 – Oil & Gas or SRU, PTE > 100 TPY and < 250 TPY Annual Compliance Fee

................................................................................................................................... 13

Table 14 – Small Power Plant, PTE > 100 PTY and < 250 TPY Annual Renewal Fee... 14

Table 15 – Small Power Plant, PTE > 100 PTY and < 250 TPY Annual Compliance Fee

................................................................................................................................... 14

Table 16 – Title V Sources, other than described under 18 AAC 50.400(a)(1) – (6), PTE 

< 250 TPY Annual Renewal Fee .............................................................................. 14

Table 17 – Title V Sources, other than described under 18 AAC 50.400(a)(1) – (6), PTE 

< 250 TPY Annual Compliance Fee......................................................................... 15

Table 18 – GP3 Annual Compliance Fee ......................................................................... 16

Table 19 – GPA, PTE > 100 TPY and < 250 TPY Annual Compliance Fee ................... 16

Table 20 – ORL Administrative Fee................................................................................. 17

Table 21 – ORL Annual Compliance Fee......................................................................... 17

Table 22 – PAEL Administrative Fee............................................................................... 18

Table 23 – PAEL Annual Compliance Fee....................................................................... 18

Table 24 – Excess Emissions Report Fee ......................................................................... 19

Table 25 – Fee Appeal Fee ............................................................................................... 19

Table 26 – Administrative Permit Amendments .............................................................. 19

Table 27 – Title I Minor Permits not classified as needing a Title V Permit Annual 

Compliance Fee ........................................................................................................ 21

Table 28 – ORL associated with at Title I Source Administrative Fee ............................ 21
2014 Fee Study Report Page 4

May 2015

Table 29 – Fast Track Permit Fee..................................................................................... 22

Table 30 – Open Burn Application Fee ............................................................................ 22

Table 31 – Excess Emissions Administrative Fee ............................................................ 23

Table 32 – Fee Appeal Fee ............................................................................................... 23

Table 33 – Emission Fee Rates......................................................................................... 25

Figure 1 – Title V Prior Year's Costs – FY010 – FY13 ............................................... 26

Figure 2 – Title I Prior Year's Costs – FY10 – FY13.......................................28
2014 Fee Study Report Page 5

May 2015

Introduction

Alaska Statutes require that the Department of Environmental Conservation (the 

Department) evaluate fees every four years and establish revised fees in regulation. 

Alaska Statues additionally require that the results of the fee study be published in a 

report. As a result of the current fee study, the Department is proposing revised fees in 

the Air Quality regulations, 18 AAC 50, Article 4, User Fees. This report is the 

companion document to proposed revisions to 18 AAC 50, Article 4. Please reference 

the report for an analysis of proposed fee adjustments.

Unlike other regulatory programs that receive up to 60% of their funding from federal or 

general funds, federal law requires that the Title V permit program be 100% funded by 

permit fees. The current permit administration and emission fee rates that became 

effective on July 1, 2010, no longer cover the full costs of permit and compliance 

services. Failure to expeditiously adopt the new permit administration and emission fees 

proposed in 18 AAC 50, Article 4 will result in a funding shortfall which may disrupt 

permitting services.

Fee Evaluation Report Requirements

The Department is required under AS 46.14.240(b) (for permit administration fees) and 

AS 46.14.250(g) (for emission fees) to evaluate fees for services every four years. The 

current permit administration fees and emission fees became effective July 1, 2010. This 

report covers the four year period of July 1, 2009, through June 30, 2013, and includes

the evaluation for both permit administration fees and emission fees. The Department 

evaluated the permit administration fee rates established by AS 46.14.240 and 18 AAC 

50.400 and the emission fee rates established by AS 46.14.250 and 18 AAC 50.410. 

Evaluation Methodology

The fee rates in this report are determined in accordance with AS 37.10.052, which 

requires that fixed fees not “exceed the estimated average reasonable direct cost incurred 

by the resource agency”. During the state fiscal years 2010 through 2013 (FY10 –

FY13) which were evaluated for this report, the Department used data from the 

Department’s cost accounting system BillQuick and the Division of Air Quality’s (the 

Division) permit data program AirTools. The two tracking systems allow the use of full 

cost accounting historical data to set fee rates under AS 37.10.052. These systems were 

reconciled with the State Accounting System (AKSAS).

Fee Report Findings Overall Program Costs – Previous Fee Study vs Current Fee 

Study

The previous fee study covered FY06 – FY09 and will be referred to as the 2010 Report; 

the current fee study covers FY10 – FY13 and will be referred to as this report.

Table 1: Overall Program Costs

Program Costs 2010 Report This Report Percent 

Change

Total Title V overall costs $9,586,690 $13,645,461 +42%

Total Title I overall costs $3,920,843 $5,734,281 +46%
2014 Fee Study Report Page 6

May 2015

As seen in the table above, the total cost to the Department to operate both the Title V 

and Title I programs increased over 40% each between the two fee studies. While the 

2010 Report recommended a reduction in most fees, in part due to the lower overall

program expenses of that time period analyzed, this report will show an increase in fees. 

In order to address the increase in program costs, the Department conducted an in-depth 

review of the fee categories, billing practices, and accounting systems. As a result of that 

review a number of recommendations and fee adjustments are proposed in this report.

Permit administration fees: 

The Department continues the direction established in the 2010 Report to reduce 

administration costs and fee complexity by reducing the number of different permit 

administration fees from 66 to 24. Some formerly separate permit administration fees 

and compliance fees (e.g. source test services) were combined into the annual permit 

administration fees and the annual compliance review fees. This provides for a single

annual fee for some service compared to multiple fees under the current regulations. 

One-time or after-permit-issuance fees that are more suited for time-and-expense billing 

were moved to that section of the regulations. This clear separation of fees for Title V 

and Title I related permits is continued in this current study. The Title I permit 

administration fees continue to remain directly billed on a time-and-expense basis 

(AS 37.10.052(d)) as recommended in the 2010 Report. 

In summary, for the Title V permits, the table below shows the percent change in annual 

fees for combined services paid by regulatory source categories. 

Table 2 – Percent Fee Change by Regulatory Source Category

Regulatory source category Percent 

Change

Oil & Gas Source, PTE > 250 TPY 37%

Large Power Plant, PTE > 250 TPY -10%

New Category: Coal-Fired Plants

(formerly included with Large Power Plant)

163%

Small Power Plant, PTE > 250 TPY -9%

Oil & Gas or SRU, PTE > 100 TPY and < 250 TPY -10%

Small Power Plant, PTE > 100 TPY and < 250 TPY 14%

Title V Sources, other than described under (1) – (6) of this section 

and < 250 TPY

-23%
2014 Fee Study Report Page 7

May 2015

Contributing factors to generally increasing fees overall include:

• contractors were used in addition to Department employees in order to reduce the 

backlog of permits; the addition of contractor labor increased the average cost per 

permit;

• new and more complicated federal rules required longer and more complex 

permits;

• a more rigorous adherence to federal permitting requirements and a greater 

number of permittee comments on average increased time spent on issuing the 

permit; 

• cost increases due to general inflation;

• the addition of the costs for administrative permit amendments that used to be 

billed separately but are now included in the revised annual permit administration 

fees calculation (please see Table 4);

• inclusion of costs previously separated into their own fees for Source Test Plan 

Reviews (STPs) and Source Test Result Reviews (STRs) into the annual 

compliance review fee to reduce costs for accounting tracking for both the 

department and industry;

• change of employee classifications which were updated to reflect increased 

responsibilities of qualified and experienced staff; and 

• the 2010 Report estimate failed to categorize some costs with the appropriate 

individual permit administration effort. Costs by effort were captured by better 

tracking and reconciling in this reporting period.

Emission Fees: 

Table 3 – Emission Fee Percent Changes

Category Current fee 

rate/ton

Proposed fee 

rate/ton

Change

Title V Emission $19.32 $33.16 +$13.84

Title I Emission $9.25 $9.79 +$0.54

Total $28.57 $42.95 +$14.38

After the anticipated permit administration receipts are applied to the overall cost of the 

Air Permits Program (the Program), the Title V program must make up an average of 

$2.8 million dollars through emissions fees in order to cover the remaining cost of the 

program. This results in a new Title V emission fee rate proposed to be set at $33.16 per 

ton allocated to the CAPF. 

Contributing factors for the increase in the Title V per ton emission rate include:

• a decrease of 14.3% in the emissions tonnage for Title V, which will increase the 

rate per ton to cover the Program’s cost (please see discussion on page 25); 

• the future obligations (unrealized obligations)

1 anticipated at the time of the 2010 

Report were not sufficient to offset the actual increase in program costs;

 1 Unrealized obligations means “Duty to make a future payment not already recorded in the accounting 

system.”
2014 Fee Study Report Page 8

May 2015

• the permit administration hourly fee rate is currently set at 149% of the hourly 

employee cost to the state for Air Permit employees under AS 37.10.058. The 

Department would have needed to have charged 157% in FY13 to fully recover 

the costs through direct billing, resulting in the 8% gap being covered instead by 

Title I and Title V emissions fees (please see the discussion on page 31);

• general inflation increased costs;

• 37 % ($5.07 of the $13.84) of the increase in Title V emission costs is due to a 

$1.6 million dollar unrealized obligation (please see the discussion on page 27).

Contributing factors for the slight increase in the Title I per ton emission rate include:

• the permit administration hourly fee rate is currently set at 149% of the hourly 

employee cost to the state for Air Permit employees under AS 37.10.058. The 

Department would have needed to have charged 157% in FY13 to fully recover 

the costs through direct billing, resulting in the 8% gap being covered instead by

Title I and Title V emissions fees (please see the discussion on page 31);

• general inflation increased costs;

• there are no unrealized obligations in the Title I emission fee; had there been any 

to include, they would have increased the proposed rate further. 
2014 Fee Study Report Page 9

May 2015

Title V Permit Administration Fees

The following are the recommended permit administration fees for each regulatory service 

listed in 18 AAC 50.400. The Department is proposing to repeal and readopt this entire section 

of regulations for consistency and based on Department of Law (DOL) guidelines.

Title V Annual Permit Fees

Regulation Citations as of February 2015 – 18 AAC 50.400(a)

Annual permit administration fees in this section pay for the direct service costs for the renewal 

of a Title V permit and the routine compliance of such permit.

There are two types of annual fees for permit services:

1. Permit Administration Fee

Title V permits have a term of five years, but they do not expire if the permittee 

submits a timely and complete renewal application. The fees are calculated based on 

the total cost to issue the permit, divided by five years, to arrive at an annual fee. The 

five year annualized fee structure is based on public input from permit holders 

requesting an annual equalization of the cost of the permit. This fee structure also 

provides level funding across the years. 

This report moves the administrative amendment fee into the annual permit 

administration fee. Administrative permit amendments are minor changes in a permit 

document that do not result in material changes in permit terms or conditions. 

Administrative amendments fees in the regulation citations as of February 2015 are 

18 AAC 50.400(f)(2) and 18 AAC 50.400(f)(3). The Department finds that the fee 

structure for administrative permit amendments should be changed to reflect the cost 

associated with the applicable permit classification. The Department had difficulty 

isolating the BillQuick data for the original permit from amendments to the permit. 

Also, the costs varied significantly between permit amendment actions, making 

establishment of an equitable fixed fee challenging. Finally, Title I permits are often 

incorporated into Title V permits as an administrative amendment. The funding for 

Title I and Title V activities must remain separate under federal rules. The need to 

track the fees separately increased the costs for accounting tracking and permit 

processing time. Both industry and staff have expressed concerns that these crossover 

actions are confusing and have resulted in project delays while billing issues were 

pending resolution. Modifying the fee structure will align costs to the direct use of the 

permit service, eliminate confusion, and allow for seamless transition among the 

various permitting elements. 

2. Annual Compliance Review Fee

The fees in this subsection include the annual fixed fees for routine compliance. These 

fees pay for the routine compliance services related to Title V permits, including 

routine reviews of facility compliance evaluations (FCEs), annual compliance 

certifications (ACCs), facility operating reports (FORs), and other routine reports. 
2014 Fee Study Report Page 10

May 2015

This report proposes moving the source test plan reviews (STPs; these are found in 18 

AAC 50.400(g)(1) of the February 2015 regulations) and source test result reviews 

(STRs; these are found in 18 AAC 50.400(g)(2) of the February 2015 regulations) costs 

into the annual compliance review fee. Although not every permittee will require a 

STP or STR each year, eventually most permittees will require these services. Tracking 

the time spent specifically on STRs and STPs separately from other compliance work is 

difficult. Combining the STPs and STRs into the annual compliance review will 

ultimately reduce overall cost for accounting tracking for both the Department and 

industry. 

 

Compliance services that are non-routine are not included in the fixed fee, and the 

direct cost of non-routine compliance services is computed on a time-and-expense 

basis.

There are seven Title V permit types that require annual permit fees and annual compliance 

fees. Those fee categories and the recommended changes to their fees are outlined below. 

Please note each proposed category includes administrative amendments and source test plan 

services, which had been separate fee categories in the past.

Oil & Gas Source, PTE > 250 TPY

The total five year cost to issue a Title V permit in this category is now $21,305. 

Annually, a permittee in this category can expect to pay $8,697 for their permit renewal and 

routine compliance requirements. This represents an annual permitting and compliance cost 

increase of $2,357 or 37%.

A number of reasons may have contributed to the increased cost of these permits above the 

anticipated rate of inflation. These include: A) the use of contractors to assist state employees 

with permitting to reduce permit backlog; B) new and more complicated federal rules that 

resulted in longer and more complex permits; and C) a greater number of permittee comments 

on average increased time spent on issuing these permits.

Annual Permit Renewal Fee

Table 4 – Oil & Gas Source, PTE > 250 TPY Annual Renewal Fee

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015 (*)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(a)(1)(A) $2,675

18 AAC 50.400(f)(2) $225

18 AAC 50.400(f)(3) $220

Proposed Combined 

Services Fee

$3,120 $4,261 +$1,141 37%

(*) Note: In the current fee regulation, the fees under 18 AAC 50.400(f)(2) and 18 AAC 50.400(f)(3) are charged on an asneeded basis.

Annual Routine Compliance Fee

Table 5 – Oil & Gas Source, PTE > 250 TPY Annual Compliance Fee 

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015 (**)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(a)(1)(B) $1,895

18 AAC 50.400(g)(1) $665

18 AAC 50.400(g)(2) $660
2014 Fee Study Report Page 11

May 2015

Proposed Combined 

Services Fee

$3,220 $4,436 +$1,216 38%

(**) Note: In the current fee regulation, the fees under 18 AAC 50.400(g)(1)) and 18 AAC 50.400(g)(2) are charged on an asneeded basis.

Large Power Plant (Excluding Coal-Fired Plants), PTE > 250 TPY

The total five year cost to issue a Title V permit in this category is now $12,635. 

Annually, a permittee in this category can expect to pay $5,899 for their permit renewal and 

routine compliance requirements. This represents an annual permitting and compliance cost 

decrease of $686 or 10%.

Annual Permit Renewal Fee

Table 6 – Large Power Plant (excluding coal-fired plants), PTE > 250 TPY Annual Renewal Fee

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015 (*)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(a)(2)(A) $3,080

18 AAC 50.400(f)(2) $225

18 AAC 50.400(f)(3) $220

Proposed Combined 

Services Fee

$3,525 $2,527 -$998 -28%

(*) Note: In the current fee regulation, the fees under 18 AAC 50.400(f)(2) and 18 AAC 50.400(f)(3) are charged on an asneeded basis.

Annual Routine Compliance Fee

Table 7 – Large Power Plant (excluding coal-fired plants), PTE > 250 TPY Annual Compliance Fee

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015 (**)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(a)(2)(B) $1,735

18 AAC 50.400(g)(1) $665

18 AAC 50.400(g)(2) $660

Proposed Combined 

Services Fee

$3,060 $3,372 +$312 10%

(**) Note: In the current fee regulation, the fees under 18 AAC 50.400(g)(1)) and 18 AAC 50.400(g)(2) are charged on an asneeded basis.

New Category: Coal-Fired Plants

(Currently included with Large Power Plant, PTE > 250 TPY)

The analysis indicated that one category, large power plants (current regulations 

18 AAC 50.400(a)(2)(A) &(2)(B)) should be separated into two separate fee categories, one for 

the large power plants and another for large coal-fired plants. The current large power plants 

category had significant increases in costs due to one sub-group, the large coal-fired plants. In 

this reporting period, the large coal-fired plants were approximately 75% of the total large 

power plants expense. However, the large coal-fired plants comprise only approximately 35% 

of the total population of this category.

The total five year cost to issue a Title V permit in this category is now $52,835. Annually, a 

permittee in this category can expect to pay $17,304 for their permit renewal and routine 

compliance requirements. This represents an annual permitting and compliance cost increase

of $10,719 or 163%.
2014 Fee Study Report Page 12

May 2015

Contributing factors associated with cost of coal-fired plant operating permit renewal are as 

follows:

• Complex and evolving federal coal boiler emission standards required additional staff 

time to draft and re-draft permit provisions.

• Coal-fired plant permits receive more 3rd party interest and adverse comments 

regarding proposed permit decisions. This increases staff and contractor costs to 

prepare responses to comments, final permits, and responses to permit appeals.

Contributing factors associated with cost of coal-fired plant routine compliance work are as 

follows:

• Complex and evolving federal emission standards specific to coal-fired boilers require 

additional staff time to determine compliance status and interpret changes to applicable 

requirements.

• Coal-fired boilers have additional periodic monitoring, record keeping, and reporting 

requirements than do power plants using other fuels such as fuel oil or natural gas.

• Emission source testing costs have now been added to the annual routine compliance 

fees. Coal-fired boilers are required to conduct emission source tests on a more 

frequent basis than other electric generating equipment.

Therefore, the Department recommends a new category for coal-fired plants with a separate 

annual permit fee and annual compliance review fee. This differentiation results in an overall 

cost reduction for large power plants (excluding coal-fired plants) and a cost increase for coalfired plants.

Annual Permit Renewal Fee

Table 8 – Coal-Fired Plants Annual Renewal Fee

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015 (*)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(a)(2)(A) $3,080

18 AAC 50.400(f)(2) $225

18 AAC 50.400(f)(3) $220

Proposed Combined 

Services Fee

$3,525 $10,567 +$7,042 200%

(*) Note: In the current fee regulation, the fees under 18 AAC 50.400(f)(2) and 18 AAC 50.400(f)(3) are charged on an asneeded basis.

Annual Routine Compliance Fee

Table 9 – Coal-Fired Plants Annual Compliance Fee

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015 (**)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(a)(2)(B) $1,735

18 AAC 50.400(g)(1) $665

18 AAC 50.400(g)(2) $660

Proposed Combined 

Services Fee

$3,060 $6,737 +$3,677 120%

(**) Note: In the current fee regulation, the fees under 18 AAC 50.400(g)(1)) and 18 AAC 50.400(g)(2) are charged on an asneeded basis.
2014 Fee Study Report Page 13

May 2015

Small Power Plant, PTE > 250 TPY

The total five year cost to issue a Title V permit in this category is now $8,600. 

Annually, a permittee in this category can expect to pay $4,211 for their permit renewal and 

routine compliance requirements. This represents an annual permitting and compliance 

costdecrease of $434 or 9%.

Annual Permit Renewal Fee

Table 10 – Small Power Plant, PTE > 250 TPY Annual Renewal Fee

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015 (*)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(a)(3)(A) $1,390

18 AAC 50.400(f)(2) $225

18 AAC 50.400(f)(3) $220

Proposed Combined 

Services Fee

$1,835 $1,720 -$115 -6%

(*) Note: In the current fee regulation, the fees under 18 AAC 50.400(f)(2) and 18 AAC 50.400(f)(3) are charged on an asneeded basis.

Annual Routine Compliance Fee

Table 11 – Small Power Plant, PTE > 250 TPY Annual Compliance Fee

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015 (**)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(a)(3)(B) $1,485

18 AAC 50.400(g)(1) $665

18 AAC 50.400(g)(2) $660

Proposed Combined 

Services Fee

$2,810 $2,491 -$319 -11%

(**) Note: In the current fee regulation, the fees under 18 AAC 50.400(g)(1)) and 18 AAC 50.400(g)(2) are charged on an asneeded basis.

Oil & Gas or Soil Remediation Unit (SRU), PTE > 100 TPY and < 250 TPY

The total five year cost to issue a Title V permit in this category is now $6,515. Annually, a 

permittee in this category can expect to pay $4,644 for their permit renewal and routine 

compliance requirements. This represents an annual permitting and compliance cost decrease

of $521 or 10%.

Annual Permit Renewal Fee

Table 12 – Oil & Gas or SRU, PTE > 100 TPY and < 250 TPY Annual Renewal Fee

Current Fee as of 

February 2015 (*)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(a)(4)(A) $2,045

18 AAC 50.400(f)(2) $225

18 AAC 50.400(f)(3) $220

Proposed Combined 

Services Fee

$2,490 $1,303 -$1,187 -48%

(*) Note: In the current fee regulation, the fees under 18 AAC 50.400(f)(2) and 18 AAC 50.400(f)(3) are charged on an asneeded basis.

Annual Routine Compliance Fee

Table 13 – Oil & Gas or SRU, PTE > 100 TPY and < 250 TPY Annual Compliance Fee

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015 (**)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(a)(4)(B) $1,350
2014 Fee Study Report Page 14

May 2015

18 AAC 50.400(g)(1) $665

18 AAC 50.400(g)(2) $660

Proposed Combined 

Services Fee

$2,675 $3,341 +$666 25%

(**) Note: In the current fee regulation, the fees under 18 AAC 50.400(g)(1)) and 18 AAC 50.400(g)(2) are charged on an asneeded basis.

Small Power Plant, PTE > 100 TPY and < 250 TPY

The total five year cost to issue a Title V permit in this category is now $10,335. 

Annually, a permittee in this category can expect to pay $5,056 for their permit renewal and 

routine compliance requirements. This represents an annual permitting and compliance cost 

increase of $606 or 14%.

Annual Permit Renewal Fee

Table 14 – Small Power Plant, PTE > 100 PTY and < 250 TPY Annual Renewal Fee

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015 (*)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(a)(5)(A) $1,565

18 AAC 50.400(f)(2) $225

18 AAC 50.400(f)(3) $220

Proposed Combined 

Services Fee

$2,010 $2,067 +$56 3%

(*) Note: In the current fee regulation, the fees under 18 AAC 50.400(f)(2) and 18 AAC 50.400(f)(3) are charged on an asneeded basis.

Annual Routine Compliance Fee

Table 15 – Small Power Plant, PTE > 100 PTY and < 250 TPY Annual Compliance Fee

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015 (**)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(a)(5)(B) $1,115

18 AAC 50.400(g)(1) $665

18 AAC 50.400(g)(2) $660

Proposed Combined 

Services Fee

$2,440 $2,989 +549 23%

(**) Note: In the current fee regulation, the fees under 18 AAC 50.400(g)(1)) and 18 AAC 50.400(g)(2) are charged on an asneeded basis.

Title V Sources, other than described under (1) – (6) of this section and < 250 TPY

The total five year cost to issue a Title V permit in this category is now $4,220. 

Annually, a permittee in this category can expect to pay $4,003 for their permit renewal and 

routine compliance requirements. This represents an annual permitting and compliance cost 

decrease of $1,202 or 23%.

Annual Permit Renewal Fee

Table 16 – Title V Sources, other than described under 18 AAC 50.400(a)(1) – (6), PTE < 250 TPY 

Annual Renewal Fee

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015 (*)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(a)(7)(A) $2,090

18 AAC 50.400(f)(2) $225

18 AAC 50.400(f)(3) $220

Proposed Combined 

Services Fee

$2,535 $844 -$1,691 -67%
2014 Fee Study Report Page 15

May 2015

(*) Note: In the current fee regulation, the fees under 18 AAC 50.400(f)(2) and 18 AAC 50.400(f)(3) are charged on an asneeded basis.

Annual Routine Compliance Fee

Table 17 – Title V Sources, other than described under 18 AAC 50.400(a)(1) – (6), PTE < 250 TPY 

Annual Compliance Fee

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015 (**)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(a)(7)(B) $1,345

18 AAC 50.400(g)(1) $665

18 AAC 50.400(g)(2) $660

Proposed Combined 

Services Fee

$2,670 $3,159 +489 18%

(**) Note: In the current fee regulation, the fees under 18 AAC 50.400(g)(1)) and 18 AAC 50.400(g)(2) are charged on an asneeded basis.

Title V General Permits – Operating 

Regulation Citation as of February 2015 – 18 AAC 50.400(d) & 18 AAC 50.400(a)

Permit administration fees in this section pay for the services related to the issuance of an 

authorization to operate under the requirements of a state-developed General Operating Permit

(GP).

This report moves the source test plan reviews (STPs, February 2015 citation of 18 AAC 

50.400(g)(1)) and source test result reviews (STRs, February 2015 citation of 18 AAC 

50.400(g)(2)) costs into the annual compliance review fee. Although not every permittee will 

require a STP or STR each year, eventually most permittees will require these services. 

Tracking the time spent specifically on STRs and STPs separately from other compliance work 

is difficult. Combining the STPs and STRs into the annual compliance review will ultimately 

reduce overall cost for accounting tracking for both the Department and industry. 

 

Non-routine compliance services are not included in the fixed fee, and the direct cost of nonroutine compliance services is computed on a time-and-expense basis.

Title V Sources Operating Under GP3

Annual Permit Renewal Fee

The permit application fee is determined by multiplying the number of hours the Department 

spent to develop the permit by the hourly rate of salary and benefits of the Department 

employees who developed the permit. This cost will be divided by the number of permittees 

who receive or are expected to receive the permit to determine the permit administration fee. 
2014 Fee Study Report Page 16

May 2015

Annual Routine Compliance Fee

Table 18 – GP3 Annual Compliance Fee

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015 (**)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(e) $325

18 AAC 50.400(g)(1) $665

18 AAC 50.400(g)(2) $660

Proposed Combined 

Services Fee

$1,650 $2,091 +$441 27%

(**) Note: In the current fee regulation, the fees under 18 AAC 50.400(g)(1)) and 18 AAC 50.400(g)(2) are charged on an as-

– needed basis.

This routine compliance for General Permits – Asphalt Plants (GP3s) has been isolated into its 

own regulation citation through this study. A new segregated fee for annual compliance 

review of GP3s was needed for two reasons. The first is to ensure proper segregation of 

expenses and revenue between the Title I and Title V programs. The second is the compliance 

cost for this category of permits was included in existing regulation 18 AAC 50.400(e), but the 

costs of the activities for these facilities far exceeded the average costs in the category to which 

they were assigned. The CAA requires that the funding for the Title V program be generated 

from and used for only Title V work. A separate fee will ensure accounting compliance with 

this federal requirement and better reflect the difference in costs for annual compliance work 

for this sub-group of sources, providing better equity across permits. 

Title V Sources Operating Under GPA, PTE > 100 TPY and < 250 TPY

Annual Permit Renewal Fee

The permit application fee is determined by multiplying the number of hours the Department 

spent to develop the permit by the hourly rate of salary and benefits of the Department 

employees who developed the permit. This cost will be divided by the number of permittees 

who receive or are expected to receive the permit to determine the permit administration fee. 

Annual Routine Compliance Fee

Table 19 – GPA, PTE > 100 TPY and < 250 TPY Annual Compliance Fee

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015 (**)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(a)(6) $730

18 AAC 50.400(g)(1) $665

18 AAC 50.400(g)(2) $660

Proposed Combined 

Services Fee

$2,055 $1,554 -$501 -24%

(**) Note: In the current fee regulation, the fees under 18 AAC 50.400(g)(1)) and 18 AAC 50.400(g)(2) are charged on an asneeded basis.

The proposed fee would include source test costs in the compliance fee and not as a separate 

charge. During this study period, no permits within this category submitted source test plans or 

reports, however, should these permittees submit in the future, those costs would be already 

covered through this combined service fee.
2014 Fee Study Report Page 17

May 2015

Other Title V Permit Services

One time permit administration fees in this section pay for the services related to the issuance 

of an owner requested limit (ORL) or a pre-approved emission limit (PAEL) operating under 

18 AAC 50.225 – 230. 

Owner Requested Limit (ORL), associated with a Title V Source

Regulation Citation as of February 2015 – 18 AAC 50.400(h)

One-Time Administrative Fee

Table 20 – ORL Administrative Fee

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015

(Per Year)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(h)(1)(A) $2,290 $2,168 -$122 -5%

Annual Routine Compliance Fee

Table 21 – ORL Annual Compliance Fee

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015

(Per Year)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(h)(1)(B) $235 $319 +$84 +36%

Under existing regulations, ORL permit administration fees were charged at the same rate for 

both 18 AAC 50.225 and 18 AAC 50.508(5) permits. 

The Department determined in the 2010 Report that 18 AAC 50.225 ORLs (Title V) should 

continue to be charged on a fixed fee basis and that the 18 AAC 50.508(5) ORLs (Title I)

should be modified to a time-and-expense based fee structure. Unfortunately, the regulations 

were not updated to reflect this recommendation due to an administrative oversight. The 

correction will be made in the proposed regulations. This allows for the streamlined billing of 

activities associated with minor source permits being categorized primarily as time-andexpense and allows this category of permittees to pay rates much more in-line with the level of 

service they are requiring.

The recommended fee will include services associated with source test plan reviews (STPs, 

February 2015 citation of 18 AAC 50.400(g)(1)) and source test result reviews (STRs, 

February 2015 citation of 18 AAC 50.400(g)(2)) which may be requested infrequently.

Please see the Title I section of this report for more information on ORLs associated with a 

Title I source.
2014 Fee Study Report Page 18

May 2015

Combined Category – PAEL for Diesel Engines & Gasoline Distribution Facilities

Regulation Citation as of February 2015 – 18 AAC 50.400(h)

One-Time Administrative Fee

Table 22 – PAEL Administrative Fee

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015

(Per Year)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(h)(2)(A) & 

18 AAC 50.400(h)(3)(A)

$85 / $65 $88 Varies Varies

Annual Routine Compliance Fee

Table 23 – PAEL Annual Compliance Fee

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015

(Per Year)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(h)(2)(B) & 

18 AAC 50.400(h)(3)(B)

$45 / $60 $95 Varies Varies

The existing regulations segregated out PAEL fixed fees for two categories: (1) diesel engines 

under 18 AAC 50.230(c), and (2) gasoline distribution facility considered under 18 AAC 

50.230(d) to be a bulk gasoline plant. The permit and compliance review fees for the two 

PAEL categories will be combined into one permit administration fee which will continue to 

be charged one-time when the applicant submits an application. The annual compliance 

review fees will also be combined for these two categories and will continue to be billed 

annually. The effort required to issue the preapproved emission limits and the compliance 

work is similar for permits issued under 18 AAC 50.230(c) and (d). Both are preapproved if 

pre-determined operational criteria are met. Both track fuel usage and/or throughput for 

compliance. Over the course of the last four years there was only one application for a 

gasoline distribution facility under 18 AAC 50.230(d), so setting a fee based on one set of 

expenses conflicts with the direction in Alaska Statue 37.10.052 which seeks to allocate 

average costs. In order to reduce administrative burden, they are being combined into the same 

category. 

Excess Emissions 

Regulation Citation as of February 2015 – 18 AAC 50.400(g) 

The permit administration fees associated with excess emissions (EE) pay for services to 

record, enter, and review notifications sent to the Department by clients. Excess emission

report/permit deviation report services are technical administrative work actions. Not all 

sources/facilities have excess emission reporting. These actions are limited to specific 

sources/facilities, and therefore they are not a routine compliance service. To ensure fairness 

in setting fee rates, EEs will continue to be a fixed rate fee charged directly to the permit that is 

out of compliance. This fee will continue to be billed upon receipt of the report.

Sources subject to 18 AAC 50.326 or 18 AAC 50.502 will be invoiced for these nonrefundable 

one-time, per report fees. These sources may be Title V or Title I. The fee is the same for both 

categories.
2014 Fee Study Report Page 19

May 2015

Per Report Administrative Fee

Table 24 – Excess Emissions Report Fee

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015

(Per Year)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(g)(3) $15 $20 +$5 +33%

Fee Appeals

Regulation Citation as of February 2015 – 18 AAC 50.400(g) 

For a fee review under 18 AAC 15.190, sources subject to 18 AAC 50.326 or 18 AAC 50.502 

will be invoiced for this one-time, per appeal fee. These sources may be Title V or Title I. The 

fee is the same for both categories.

Per Report Administrative Fee

Table 25 – Fee Appeal Fee

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015

(Per Year)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(g)(4) $210 $110 -$100 -48%

Title I Permit Administration Fees

The following are the recommended permit administration fees for each regulatory service 

listed in 18 AAC 50.400. The Department is proposing to repeal and readopt this entire section 

for consistency. Based on Department of Law (DOL) guidelines, it’s recommended that an 

agency repeal and readopt an entire section when it needs to extensively reorganize or revise the 

section, and in doing so "moves" material around within the section. 

Title I Permit Amendments

Regulation Citation as of February 2015 – 18 AAC 50.400(f) 

Administrative Permit Amendments are minor changes in a permit document that do not result 

in material changes in permit terms or conditions.

Annual Routine Compliance Fee

Table 26 – Administrative Permit Amendments 

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015

(Per Year)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(f)(1)

$465 

time-and-expense 

(T/E) N/A N/A

For Title I sources, these were included in the regulation citations as of February 2015 at 18 

AAC 50.400(f)(1). The Department finds that the fee structure for administrative permit 

amendments should be changed to reflect the cost associated with the applicable permit 
2014 Fee Study Report Page 20

May 2015

classification. The Department had difficulty isolating the BillQuick data for the original 

permit from amendments to the permit. Also, the costs varied significantly between permit 

amendment actions, making establishment of an equitable fixed fee challenging. Finally, Title 

I permits are often incorporated into Title V permits as an administrative amendment. The 

funding for Title I and Title V activities must remain separate under federal rules. The need to 

track the fees separately increased the costs for accounting tracking and permit processing 

time. Both industry and staff have expressed concerns that these crossover actions are 

confusing and have resulted in project delays while billing issues were pending resolution. 

Modifying the fee structure will align costs to the direct use of the permit service, eliminate 

confusion, and allow for seamless transition among the various permitting elements. 

Title I Routine Compliance 

Regulation Citation as of February 2015 – 18 AAC 50.400(e) 

Permit administration fees in this section pay for the routine compliance services related to 

Title I Minor Permits for sources not required to get a Title V Permit or General Permit. These 

are sources not classified as needing a Title V Permit and are subject to a minor permit under 

18 AAC 50.502 or are required to have a minor permit under 18 AAC 50.502(b) that is 

operating under an operating or general permit issued before October 2004.

Routine compliance includes facility compliance evaluations (FCEs), annual compliance 

certifications (ACCs), facility operating reports (FORs), and other routine report reviews. 

BillQuick data supports the continuation of a fixed fee rate. Compliance for the following 

permit types were included in this fee category: 

• Sources operating under a Minor Permit without a Title V permit; 

• MG1 permits; 

• MG3 permits; 

• MG9 permits; and 

• GP3 and GP4 permits for Title I sources. 

The fees in this subsection also include the annual fixed fees for routine compliance. They pay 

for the routine compliance services related to Title V permits, including routine reviews of 

FCEs, ACCs, FORs, and other routine reports. 

This report moves the source test plan reviews (STPs, February 2015 citation of 18 AAC 

50.400(g)(1)) and source test result reviews (STRs, February 2015 citation of 18 AAC 

50.400(g)(2)) costs into the annual compliance review fee. Although not every permittee will 

require a STP or STR each year, eventually most permittees will require these services. 

Tracking the time spent specifically on STR and STP separate from other compliance work is 

difficult. Combining the STPs and STRs into the annual compliance review will ultimately 

reduce overall cost for accounting tracking for both the Department and industry. 

 

Non-routine compliance services are not included in the fixed fee, and the direct cost of nonroutine compliance services is computed on a time-and-expense (T/E) basis.
2014 Fee Study Report Page 21

May 2015

Annual Routine Compliance Fee

Table 27 – Title I Minor Permits not classified as needing a Title V Permit Annual Compliance Fee

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015 (**)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(e) $325

18 AAC 50.400(g)(1) $665

18 AAC 50.400(g)(2) $660

Proposed Combined 

Services Fee 

$1,650 $750 -$900 -55%

(**) Note: In the current fee regulation, the fees under 18 AAC 50.400(g)(1)) and 18 AAC 50.400(g)(2) are charged on an asneeded basis.

Compliance services and associated administration fees for the GP3 permits for Title V sources 

have been moved to the Title V annual fixed fee (please reference Title V fee section earlier in 

the report). Those GP3 permits are for sources classified as needing a Title V permit, and 

federal rules require that the revenue and costs for them be tracked and deposited into CAPF. 

Other Title I Permits

Regulation Citation as of February 2015 – 18 AAC 50.400(h) 

One time permit administration fees in this section pay for the services related to the issuance 

of an owner requested limit (ORL) associated with a Title I source.

Owner Requested Limit (ORL), associated with a Title I Source

One-Time Administrative Fee

Table 28 – ORL associated with at Title I Source Administrative Fee

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015

(Per Year)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(h)(1)(A) $2,290 T/E N/A N/A

Annual Routine Compliance Fee

Annual routine compliance fees are the same as listed in Table 27.

Under existing regulations, ORL permit administration fees were charged at the same rate for 

both 18 AAC 50.225 and 18 AAC 50.508(5) permits. 

The Department determined in the 2010 Report that ORLs associated with a Title I Source 

Administrative Fee should be charged on a time-and-expense basis, rather than a fixed fee 

structure. However, the regulations were not updated to reflect this recommendation due to an 

administrative oversight, and the old fixed fee remained in place. The correction will be made 

in the proposed regulations. This allows for the streamlined billing of activities associated with 

minor source permits being categorized primarily as time-and-expense and allows this category 

of permittees to pay rates much more in-line with the level of service they are requiring. In 

addition, the administrative permit amendments associated with a Title I permit will be moved 

to their own fee category. The Annual Routine Compliance Fee, however, remains as a fixed 

fee.
2014 Fee Study Report Page 22

May 2015

Please see the Title V section of this report for more information on ORLs associated with a 

Title V source.

Fast Track Requests

Regulation Citation as of February 2015 – 18 AAC 50.400(c) 

This administration fee pays for the direct costs of service to issue a “fast track” (FTN) permit 

under 18 AAC 50.508(b) – (c). 

The Department finds that the non-fast track permits continue to be best suited for fees based 

on a time-and-expense basis under the current regulation citation 18 AAC 50.400(j) subsection. 

The variability in these permits prevents the Department from establishing a fixed fee.

One-Time Administrative Fee

Table 29 – Fast Track Permit Fee

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015

(Per Year)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(c) $2,665 T/E N/A N/A

During FY10 through FY13, very few applicants for fast-track permits actually qualified for 

fast-tracking under 18 AAC 50.508(b) – (c). To reduce the administrative burden to the 

Department of tracking fast track qualifying and requesting permits separately for a rarely-used 

fee category, the fast-track billing fixed fee will be billed on a time-and-expense basis.

Open Burns

Regulation Citation as of February 2015 – 18 AAC 50.400(i) 

The current permit administration fee is for the services to process the review of a request for 

open burning approval (OBA). If the request is denied, any re-submittal will require an 

additional one-time fee payment. 

Per Application Fee, All Open Burns

Table 30 – Open Burn Application Fee

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015

(Per Year)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(i) $200 $230 +$30 +15%

The current fee does not cover any follow-up activities such as compliance. Under existing 

regulations, if there are compliance issues related to the operation of an open burn, any 

associated costs are charged as non-routine compliance and fall under time-and-expense fees 

(under current regulations 18 AAC 50.400(j)). However, the historical cost study determined 

that there are routine compliance costs for OBAs that are not fully recovered. There is no 

current fee for routine or follow-up compliance for OBAs, which has caused confusion for staff 

on how to record services and labor cost. The OBA routine compliance costs are generally 

small and do not justify increased accounting costs for tracking and billing separately and are 

therefore recommended to be included in this application fee moving forward.
2014 Fee Study Report Page 23

May 2015

For open burns that are determined to have a smoke incursion, costs incurred after such a 

determination is made will continue to be billed as time and expense costs.

Excess Emissions 

Regulation Citation as of February 2015 – 18 AAC 50.400(g) 

The permit administration fees associated with excess emissions (EE) pay for services to 

record, enter, and review notifications sent to the Department by clients. Excess emission

report/permit deviation report services are technical administrative work actions. Not all 

sources/facilities have excess emission reporting; they are limited to specific sources/facilities, 

and therefore they are not a routine compliance service. To ensure fairness in setting fee rates, 

EEs will continue to be a fixed rate fee charged directly to the permit that is out of compliance. 

This fee will continue to be billed upon receipt of the report.

Per Report Administrative Fee

Table 31 – Excess Emissions Administrative Fee

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015

(Per Year)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(g)(3) $15 $20 +$5 +33%

Sources subject to 18 AAC 50.326 or 18 AAC 50.502 will be invoiced for these nonrefundable 

one-time, per report fees. These sources may be Title V or Title I. The fee is the same for both 

categories.

Fee Appeals

Regulation Citation as of February 2015 – 18 AAC 50.400(g) 

For a fee review under 18 AAC 15.190, sources subject to 18 AAC 50.326 or 18 AAC 50.502 

will be invoiced for this one-time, per appeal fee. These sources may be Title V or Title I. The 

fee is the same for both categories.

Per Report Administrative Fee

Table 32 – Fee Appeal Fee

Regulation Citation as of 

February 2015

Current Fee as of 

February 2015

(Per Year)

Recommended Fee 

(Per Year)

Change in Fee 

(Per Year) Percent 

Change

18 AAC 50.400(g)(4) $210 $110 -$100 -48%

Activities Charged Time & Expenses

Regulation Citation as of February 2015 – 18 AAC 50.400(j) 

Permit administration fees in the time-and-expense section include those regulatory services 

for which no fixed fee is established. These services are billed monthly in accordance with 

AS 37.10.054. The cost recovery, work level, and service actions in current regulation 

18 AAC 50.400(j) were reviewed to determine if a fixed fee could be established for any of the 

services. Data did not support the establishment of new fixed fees. Existing categories remain 

billed on a time-and-expense basis. As noted in previous sections, the Department 
2014 Fee Study Report Page 24

May 2015

recommends that some services currently covered under fixed fees should be changed to the

time-and-expense fee structure. 

In fee workshops conducted prior to the 2010 Report, both industry and the Department 

were interested in establishing a wider range of fixed permit administration fees. The existing 

regulation in 18 AAC 50.400(j) listed any administration fees that might be amended or 

transferred to the fixed fees. Based on 12 years of fee studies and improvements in accounting 

and data collection, the time-and-expense fee structure remains the most appropriate method to 

collect fees for numerous permit and non-routine compliance services. The data collection 

demonstrates that the necessary adjustments to the fee structure are toward time-and-expense

based fees and not toward fixed fees. The list currently found in 18 AAC 50.400(j) will be 

removed from the proposed regulations, as it no longer serves its original purpose, The 

authority for charging time-and-expense based fees still exists in the proposed regulations 

under the readopted section 18 AAC 50.400 in proposed 18 AAC 50.400(h). Additionally, this

will simplify and streamline the regulations and reduce administrative cost. The list is 

provided in the appendix to this report for convenience to the regulated community.
2014 Fee Study Report Page 25

May 2015

Emission Fees Evaluation

Regulation Citation as of February 2015 – 18 AAC 50.410

Table 33 – Emission Fee Rates

Category Current fee 

rate/ton

Proposed fee 

rate/ton

Change

Title V Emission $19.32 $33.16 +$13.84

Title I Emission $9.25 $9.79 +$0.54

Total $28.57 $42.95 +$14.38

In addition to the Title V and Title I permit and compliance workloads, the Program includes 

support work essential for the delivery of permit services. Program administration activities do 

not directly serve a permit client but are important support activities. These activities are 

charged to the emissions codes. Emission fees in each permit program pay for the cost of these 

indirect services. In many cases, these costs have gone up, and this has led to increased 

emission fee rates, which are explained later in this section. These program obligations 

include:

• Full Staffing for Permitting/Compliance Delivery

• Program Improvement/Technical Services

• Data Management Services

• Administrative Services

• Program Management

• Environmental Protection Agency (EPA) Requirements for State Regulatory Program

• Report Review

• Gap in statutory billing rate (149%) of personnel costs vs. full personnel cost

Setting of the Title V and Title I Emission Fees

The following methodology illustrates the formula and historical numbers used to set the 

emission fees for Title V and for Title I. The methodology was developed by the Department 

in conjunction with the Department’s Division of Administrative Services (DAS) to align with 

statutes. This is the same methodology used in the 2010 report.

The emission fee rate is calculated using the following steps:

1. Establish Historical Program Cost 

2. Adjust for Anticipated Administration Fee Program Receipts

3. Calculate Total Program Expenses to be Covered by Emission Fees

4. Identify Emission Tonnage 

5. Set Title V or Title I Emission Fee Rate

The years following the last fee study (FY10 – FY13) saw a general decline in emissions such 

that the average emissions were 14.3% lower than the 2010 Report had predicted. Because the 

fee rate was based on higher emissions, less revenue was generated than the 2010 Report had 

estimated. In the 2010 Report, the Department used a single year (FY09) to estimate 

assessable emissions for the following 4 years. This report uses a regression analysis to set the 

tonnage for the emission fee. (Please refer to Appendix.) 
2014 Fee Study Report Page 26

May 2015

The cause of this downward trend is a complex mix of factors, but seems to include:

• more accurate reporting of emissions by permittees;

• more permittees choosing to pay on actual emissions rather than allowable emissions;

• increased stringency of federal regulations leading to emission reductions;

• permitted facilities reducing their emissions to drop out of permitting; and

• economic factors leading to reduced operation of pollution causing equipment.

Interestingly, the reduction in emission fees in the 2010 Report did not appear to have a 

significant effect on slowing the downward trend in emissions. The average predicted 

emissions are approximately 5% lower than the actual FY15 billed emissions and 12% lower 

than the average billed emissions for the last 6 years. This is consistent with the Department’s 

experience following the last fee study.

Title V Emissions Fees

This report recommends the continuation of a four-year average rate for emission fees instead 

of a different rate for each fiscal year. The four-year average annual rate for Title V emission 

fees calculated in this report is $33.16 per ton. (Please refer to Appendix.)

From FY10 through FY13, the Department spent $13,645,461 delivering the Title V program. 

From FY10 to FY13, the Title V program saw an 11% increase in costs.

Figure 1 – Title V Prior Year's Costs – FY010 – FY13

The Title V program cost includes the amount spent by the Department to directly deliver the 

Title V program. These expenses include: direct costs by the Division, allocated costs (which 

include rent, utilities, and similar Department-wide expenses pro-rated by the amount of 

personal service expenses charged to a particular funding source), and a direct allocation from 

the CAPF to support the Department’s DAS. 
2014 Fee Study Report Page 27

May 2015

Explanation of Fee Change

Title V Unrealized Obligations for FY16 through FY19

o The unrealized obligations2 used to calculate the Title V emissions fees for this 

report were $1,600,000. These represent the additional costs to the CAPF 

anticipated beginning in FY16 due to a proportional re-alignment done by the 

DAS. DAS is an administrative support unit that provides the majority of the 

finance, procurement, human resources, information technology, and budget 

services to the Department. It also pays a portion of the overhead expenses, 

including shared lease costs and core service charges from the Department of 

Administration. DAS is intentionally funded in direct proportion to the funding 

source breakdown of the personal services costs in the Department. This 

method complies with an approved federal indirect cost allocation plan. An 

analysis of the Department’s personal services funding in comparison to the 

funding of DAS shows that the Air Division is overfunded by federal receipts 

and underfunded by the CAPF. In FY13, the CAPF accounted for 5.6% of the 

Department’s personal service costs, therefore it should proportionally cover 

5.6% of the DAS’s costs. However, in the FY14 budget, CAPF only accounted 

for 1.7% of those costs. Beginning in FY16, this gap of 3.9% proportionality 

will begin to be charged to the CAPF. This represents an increase of about 

$400,000 per year.

Emission Tonnage

o The emissions tonnage estimates used in this calculation were specific to Title 

V sources only. For fee assessment purposes, regulations allow permittees to 

report on actual tons emitted or on a source’s potential to emit. The historical 

record is based on the amount of emissions billed. Analysis of historical data 

indicates a declining trend in tons emitted. The Department used a linear leastsquares regression of the historical data to provide a reasonably accurate 

prediction of future emissions for new emission fee rates. Using the regression 

analysis, the average future emission tonnage is estimated to be 84,089 tons 

annually. This tonnage was used for the fee calculation for FY16 through 

FY19. Using an average rate based on regression analysis has the advantage of 

setting the emission fee rate to provide consistency for both industry and the 

Division to establish internal budgets based upon predictable rates. 

 2 Unrealized obligations means “Duty to make a future payment not already recorded in the accounting system.”
2014 Fee Study Report Page 28

May 2015

Title I Emissions Fees

This report recommends the continuation of a four-year average rate for emission fees instead 

of a different rate for each fiscal year. The four-year average annual rate for Title I emission 

fees is $9.79 per ton. (Please refer to Appendix.)

In summary, the Program spent $5,734,281 delivering the Title I program from FY10 through 

FY13. From FY10 to FY13, the Title I program saw a 13% increase in costs.

Figure 2 – Title I Prior Year's Costs – FY10 – FY13 

The Title I program cost includes the amount spent by the Department to directly deliver the 

Title I program. These expenses include: direct costs by the Division; allocated costs (which 

include rent, utilities, and similar Department-wide expenses pro-rated by the amount of 

personal service expenses charged to a particular funding source); and support for the 

Department’s DAS where the majority of the Department’s finance, procurement, human 

resources, information technology, and budget services are housed.

Explanation of Fee Change

Title I Unrealized Obligations for FY16 through FY19

o There are no unrealized obligations anticipated for the coming four years.
2014 Fee Study Report Page 29

May 2015

Emission Tonnage 

o The emissions tonnage estimates used in this calculation were specific to Title I 

sources only. For fee assessment purposes, regulations allow permittees to 

report on actual tons emitted or on a source’s potential to emit. The historical 

record is based on the actual amount of collected receipts from the emission fees 

divided by the rate in 18 AAC 50.410. Analysis of historical data indicates a 

declining trend in tons emitted. Based on the declining trend, this report used a 

regression analysis to provide the most accurate calculation figure for new 

emission fee rates. The regression analysis used is included in Section 3.4 of 

this document. Using the regression analysis, the average future emission 

tonnage is estimated to be 91,486 tons annually. This tonnage was used to 

calculate the fees for FY16 through FY19. Using an average rate based on 

regression analysis has the advantage of setting the emission fee rate to provide 

consistency for both industry and the Division to establish internal budgets 

based upon predictable rates.

Additional Revisions to Fee Regulations

Negotiated Service Agreements

Regulation Citation as of February 2015 – 18 AAC 50.403

If a fixed permit administration fee has not been set under 18 AAC 50.400(a) – (i) for a 

designated regulatory service, the permittee, owner, or operator of a stationary source may 

request a negotiated service agreement under AS 37.10.052(b) for that designated regulatory 

service. The current fee regulation states that a retainer must be submitted before the 

Department begins negotiation. This retainer was intended to ensure payment for services 

rendered in negotiating a service and reduce collection issues due to non-payment of fees. 

During this report period, it was determined that this section was rarely used, and there does 

not appear to be an issue overall with collection of fees for services rendered. Therefore, to 

reduce the administrative burden of tracking these pre-paid expenses, the retainer will be 

removed from the fee regulations; and the applicant will continue to be billed time-andexpenses. 

Transition Process for Permit Fees

Regulation Citation as of February 2015 – 18 AAC 50.405

The current regulation allowed permits for which an application was submitted before January 

29, 2005, to be billed in accordance with the provisions of 18 AAC 50.400 – 18 AAC 50.499 

in effect on January 29, 2005, including the application of any retainer submitted before that 

date to any fees effective after that date. There are no applications still pending under this 

section of the regulations; therefore this regulation section is no longer required. 
2014 Fee Study Report Page 30

May 2015

One-Time Emission Fees

Regulation Citation as of February 2015 – 18 AAC 50.410(f)

The Department is proposing to remove the language for assessable emissions under current 

regulation 18 AAC 50.410(f). This category was initially designated for minor sources 

considered to be “once and done” permits. Industry has increasingly used the minor source 

permits for adjustments and changes to their operations, and their permits have not remained 

“once and done.” As new Minor permits are issued for the same stationary source, it has 

become difficult to track and manage billing and invoicing. This has increased accounting 

costs for both industry and the Department. Continuance of this category is not recommended 

as it is difficult to predict and maintain Title I staffing levels dependent upon a variable, 

unpredictable, and hard to manage revenue source and because of the increase accounting cost

burden for this emission fee.

Billing Procedures

Regulation Citation as of February 2015 – 18 AAC 50.420

The Department will bill the current fees to maintain sufficient funds for permitting services.

Assuming the new regulations become effective, the new fees recommended in this report will 

require an adjusted billing. Amending the language in current regulation 18 AAC 50.420(a) is 

needed to explain how the additional billing will occur. The language includes information on 

supplemental billing procedures that will address the difference between billing for fees which 

occurs for FY16 based on current regulations and the updated fees which will be in effect for 

FY16 after the effective date of these regulations. Additional revisions will be made 

throughout current regulation 18 AAC 50.420 for clarity.

Other Fee Considerations

Previous sections of this report have presented the various effects of the emission fees by 

comparing previous fees; reviewing for fee inequities; and analyzing the cost and the effect on 

types, sizes, and categories of sources. This section provides an overall view and additional 

information relative to the emission fee.

 

Review of Fee Structure Alternatives 

Alternatives for various fee structure issues were fully addressed in the 2010 Report. The 2010 

Report reviewed and confirmed the alternatives for emission fees. This report reviews the 

2006 Report and the 2010 Report. No changes are recommended. The following items were 

analyzed to review emission fees from all sources and identify any alternatives:

• Emission fees for Small Sources

o Under 10 tons

o Title V Avoidance

• Funding (Legislative) options

o Changes to the 149% staff rate

o Increase in General funds

 
2014 Fee Study Report Page 31

May 2015

Emission fees for Small Sources 

The conclusions from the 2010 Report still hold true. The option to charge emission fees to 

these sources does not provide a viable alternative. Assessing the emission fee to this source 

group is not equitable to the associated level of work or the cost recovery of accounting 

services. In addition, assessing emission fees would require additional regulation changes. 

Funding (Legislative) Options

Adjust the 149% Staff Rate

The permit administration hourly fee rate is currently set at 149% of the hourly employee cost 

to the state for Air Permit Program employees under AS 37.10.058.

The recommendation in the 2006 Report and the 2010 Report to update the 149% hourly 

employee rate to reflect today’s costs is still valid. Changing the 149% rate would require

legislative action to amend AS 37.10.058(6). However, there have been no changes in statute 

to the employee hourly rate multiplier since the 2010 Report. The 2010 Report researched and 

recommended that the 149% hourly rate be adjusted to reflect the current actual cost for a DEC 

employee (Section 8.4.1, 2010 Report). This rate would have needed to have been 157% in 

FY13 to recover the costs through direct billing, resulting in the 8% gap being covered instead 

by Title I and Title V emissions fees.

As discussed in Part I of this report, Alaska Statutes allow permit administration fees to 

recover the direct costs of providing permit services. This has a greater effect on the Title I 

program, as the majority of Title I permit administration fees are billed based on a time-andexpense basis. The statute defines the direct cost as 149% of the hourly rate of salary and 

benefits for direct staff time, plus the full cost of any third-party goods or services used. This 

direct cost, however, does not cover the full cost of personnel services of staff providing permit 

services. Personnel service costs include salary and benefits, holidays, vacation, sick leave, 

training, and administrative time. Personnel service costs also include indirect and allocated 

costs, such as rent, utilities, equipment, and common supplies. Personnel service costs also 

need to account for increases to the general program costs due to increased supervisory, 

payroll, and personnel action work. Either the permit administration fee charged at 149% of 

the staff person’s hourly rate of salary and benefits would have to collect enough to cover all 

these costs, or some costs would have to be covered by other revenue sources, such as primary 

emission fees. 

Availability of General Funds

General Funds are projected to continue to decline or not be available in the future as the state 

projects declining oil revenue as of this report. 

Unlike other regulatory programs that receive up to 60% of their funding from federal or 

general funds, the Air Permits Program is designed to be entirely funded by permit fees. 

Federal law requires that the Title V permit program be 100% funded by permit fees.
2014 Fee Study Report Page 32

May 2015

Conclusions

• Permit administration fixed fees should be adjusted as described in this report. 

• The Title V emission fee rate should be set at $33.16 per ton allocated to the Clean Air 

Protection Fund (CAPF). 

• The Title I emission fee rate should be set at $9.79 per ton allocated to the Emission 

Control Permit Receipts Account (ECPRA) within designated General Fund Program

Receipts (GFPR) and continue to be authorized by the legislature to carry forward from one 

year to the next. 

• The fee structure and rate setting methodology is well established over 12 years and three

fee reports: 2006, 2010, and this report. 

• A regression analysis is best suited for estimates of emission tonnages. Emission fee rates 

should continue to be based on four-year averages of projected revenue and program costs.

• This report recommends the legislature review AS 37.10.058(6) for updates to reflect 

today’s cost of personnel staffing within the State of Alaska. 

• The current permit administration and emission fee rates do not cover the full costs of 

permit and compliance services. Failure to adopt the new permit administration and 

emission fees expeditiously will result in a funding shortfall which may disrupt permitting 

services.