Document ID: EPA-R04-OAR-2018-0018-0001
Agency: epa
Document Type: Proposed Rule
Title: Air Quality State Implementation Plans; Approvals and Promulgations: Kentucky: Jefferson County Prevention of Significant Deterioration
Posted Date: 2019-02-01T05:00Z

[Federal Register Volume 84, Number 22 (Friday, February 1, 2019)]
[Proposed Rules]
[Pages 1016-1021]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-00781]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R04-OAR-2018-0018; FRL-9988-82-Region 4]

Air Plan Approval; Kentucky: Jefferson County Prevention of 
Significant Deterioration

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing to 
approve two revisions to the Jefferson County portion of the Kentucky 
State Implementation Plan (SIP), submitted by the Commonwealth of 
Kentucky, through the Energy and Environment Cabinet (Cabinet), with 
letters dated August 25, 2017, and March 15, 2018. The proposed SIP 
revisions were submitted by the Cabinet on behalf of the Louisville 
Metro Air Pollution Control District (District) and make amendments to 
Jefferson County's regulation regarding the prevention of significant 
deterioration (PSD) permitting program. This action is being proposed 
pursuant to the Clean Air Act (CAA or Act).

DATES: Comments must be received on or before March 4, 2019.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R04-
OAR-2018-0018 at http://www.regulations.gov. Follow the online 
instructions for submitting comments. Once submitted, comments cannot 
be edited or removed from Regulations.gov. EPA may publish any comment 
received to its public docket. Do not submit electronically any 
information you consider to be Confidential Business Information (CBI) 
or other information whose disclosure is restricted by statute. 
Multimedia submissions (audio, video, etc.) must be accompanied by a 
written comment. The written comment is

[[Page 1017]]

considered the official comment and should include discussion of all 
points you wish to make. EPA will generally not consider comments or 
comment contents located outside of the primary submission (i.e. on the 
web, cloud, or other file sharing system). For additional submission 
methods, the full EPA public comment policy, information about CBI or 
multimedia submissions, and general guidance on making effective 
comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Andres Febres, Air Regulatory 
Management Section, Air Planning and Implementation Branch, Air, 
Pesticides and Toxics Management Division, U.S. Environmental 
Protection Agency, Region 4, 61 Forsyth Street SW, Atlanta, Georgia 
30303-8960. The telephone number is (404) 562-8966. Mr. Febres can also 
be reached via electronic mail at febres-martinez.andres@epa.gov.

SUPPLEMENTARY INFORMATION:

I. What action is EPA proposing?

    EPA is proposing to approve changes to the Jefferson County portion 
of the Kentucky SIP that were provided to EPA through two letters dated 
August 25, 2017, and March 15, 2018.\1\ EPA is proposing to approve 
portions of these SIP revisions that make changes to the District's 
Regulation 2.05--Prevention of Significant Deterioration of Air 
Quality, which applies to the construction and modification of any 
major stationary source in areas designated as attainment or 
unclassifiable as required by part C of title I of the CAA. These 
revisions are intended to make the Jefferson County PSD permitting 
regulation consistent with the federal requirements, as promulgated by 
EPA.\2\ The August 25, 2017, and March 15, 2018, SIP revisions update 
the incorporation by reference (IBR) date found at Regulation 2.05 from 
July 1, 2010, to July 15, 2017, for the federal PSD permitting 
regulations at 40 CFR 52.21. By updating the IBR date for 40 CFR 52.21, 
Jefferson County is making the following changes to their PSD 
regulations: (1) Adopting ``increments'' for the PM2.5 
National Ambient Air Quality Standard (NAAQS); (2) adopting updated 
greenhouse gases (GHGs) provisions; (3) incorporating grandfathering 
provisions for the 2012 primary annual PM2.5 NAAQS and the 
2015 8-hour ozone NAAQS, as well as adopting the repeal of 
grandfathering provisions for the old PM2.5 NAAQS; and (4) 
incorporating a correction to the definition of ``regulated NSR 
pollutant'' for PSD. These changes are discussed in more detail in the 
following sections.\3\
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    \1\ EPA notes that the Agency received the SIP revisions on 
August 29, 2017, and March 18, 2018.
    \2\ EPA's regulations governing the implementation of New Source 
Review (NSR) permitting programs are contained in 40 CFR 51.160--
51.166; 52.21, 52.24; and part 51, Appendix S. The CAA NSR program 
is composed of three separate programs: PSD, nonattainment NSR 
(NNSR), and Minor NSR. The PSD program is established in part C of 
title I of the CAA and applies in areas that meet the National 
Ambient Air Quality Standards (NAAQS)--``attainment areas''--as well 
as areas where there is insufficient information to determine if the 
area meets the NAAQS--``unclassifiable areas.'' The NNSR program is 
established in part D of title I of the CAA and applies in areas 
that are not in attainment of the NAAQS--``nonattainment areas.'' 
The Minor NSR program addresses construction or modification 
activities that do not qualify as ``major'' and applies regardless 
of the designation of the area in which a source is located. 
Together, these programs are referred to as the NSR programs.
    \3\ EPA has not approved, and is not currently proposing to 
approve into the Jefferson County portion of the Kentucky SIP, the 
provisions of the Ethanol Rule (May 1, 2007; 72 FR 24060), that seek 
to exclude facilities that produce ethanol through a natural 
fermentation process, from the definition of ``chemical process 
plants'' in the major NSR source permitting program found at 40 CFR 
52.21(b)(1)(i)(a) and (b)(1)(iii)(t). Additionally, EPA notes that 
the PSD provisions found at 40 CFR 52.21(b)(2)(v) and 
(b)(3)(iii)(c), regarding the Fugitive Emissions Rule (December 19, 
2008; 73 FR 77882), were initially stayed for an 18-month period on 
March 31, 2010, and subsequently stayed indefinitely by the Fugitive 
Emissions Interim Rule, on March 30, 2011 (76 FR 17548). These 
fugitive emissions provisions are automatically stayed in the 
Jefferson County portion of the Kentucky SIP, under the SIP-approved 
``automatic rescission clause'' at Regulation 2.05, which provides 
that in the event that EPA or a federal court stays, vacates, or 
withdraws any section or subsection of 40 CFR 52.21, that section or 
subsection shall automatically be deemed stayed, vacated or 
withdrawn.
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II. Background

A. 1997 PM2.5 NAAQS Implementation

1. Implementation of NSR for the PM2.5 NAAQS and 
Grandfathering Provisions
    On May 16, 2008 (73 FR 28321), EPA published the ``Implementation 
of the New Source Review (NSR) Program for Particulate Matter Less than 
2.5 Micrometers (PM2.5)'' Final Rule (hereinafter referred 
to as the NSR PM2.5 Rule). The 2008 NSR PM2.5 
Rule revised the NSR program requirements to establish the framework 
for implementing preconstruction permit review for the PM2.5 
NAAQS in both attainment and nonattainment areas. As indicated in the 
2008 NSR PM2.5 Rule, major stationary sources seeking 
permits must begin directly satisfying the PM2.5 
requirements, as of the effective date of the rule, rather than relying 
on PM10 as a surrogate, with two exceptions. The first 
exception was a ``grandfathering'' provision in the federal PSD program 
at 40 CFR 52.21(i)(1)(xi). This grandfathering provision applied to 
sources that had applied for, but had not yet received, a final and 
effective PSD permit before the July 15, 2008, effective date of the 
May 2008 final rule. The second exception was that states with SIP-
approved PSD programs could continue to implement a policy in which 
PM10 served as a surrogate for PM2.5 for up to 
three years (until May 2011) or until the individual revised state PSD 
programs for PM2.5 were approved by EPA, whichever came 
first.\4\
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    \4\ After EPA promulgated the NAAQS for PM2.5 in 
1997, the Agency issued a guidance document entitled ``Interim 
Implementation of New Source Review Requirements for 
PM2.5,'' which allows for the regulation of 
PM10 as a surrogate for PM2.5 until 
significant technical issues were resolved (the ``PM10 
Surrogate Policy''). John S. Seitz, EPA, October 23, 1997.
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    On May 18, 2011 (76 FR 28646), EPA took final action to repeal the 
PM2.5 grandfathering provision contained in the federal PSD 
program at 40 CFR 52.21(i)(1)(xi). This final action also ended the use 
of the 1997 PM10 Surrogate Policy for PSD permits under the 
federal PSD program at 40 CFR 52.21. In effect, any PSD permit 
applicant previously covered by the grandfathering provision (for 
sources that completed and submitted a permit application before July 
15, 2008) \5\ that did not have a final and effective PSD permit before 
the effective date of the repeal will not be able to rely on the 1997 
PM10 Surrogate Policy to satisfy the PSD requirements for 
PM2.5.
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    \5\ Sources that applied for a PSD permit under the federal PSD 
program on or after July 15, 2008, are already excluded from using 
the 1997 PM10 Surrogate Policy as a means of satisfying 
the PSD requirements for PM2.5. See 73 FR 28321.
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    The NSR PM2.5 Rule also established the following NSR 
requirements to implement the PM2.5 NAAQS: (1) Required NSR 
permits to address directly emitted PM2.5 and precursor 
pollutants; (2) established significant emission rates for direct 
PM2.5 and precursor pollutants (including sulfur dioxide and 
oxides of nitrogen); (3) established PM2.5 emission offsets; 
and (4) required states to account for gases that condense to form 
particles (``condensables'') in PM2.5 and PM10 
emission limits in PSD or NNSR permits. In addition, the NSR 
PM2.5 Rule gives states the option of allowing 
interpollutant trading for the purpose of precursor offsets under the 
PM2.5 NNSR program.\6\
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    \6\ On July 21, 2011, as a result of reconsidering the 
interpollutant trading (IPT) policy, EPA issued a memorandum 
indicating that the existing preferred precursor offset ratios 
associated with the IPT policy and promulgated in the NSR 
PM2.5 Rule were no longer considered approvable. The 
memorandum stated that any PM2.5 precursor offset ratio 
submitted as part of the NSR SIP for PM2.5 nonattainment 
areas would need to be accompanied by a technical demonstration 
exhibiting how the ratios are suitable for that particular 
nonattainment area. See Memorandum from Gina McCarthy to Regional 
Air Division Directors, ``Revised Policy to Address Reconsideration 
of Interpollutant Trading Provisions for Fine Particles 
(PM2.5)'' (July 21, 2011) (available at https://www3.epa.gov/scram001/guidance/clarification/pm25trade.pdf).

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[[Page 1018]]

    By revising the IBR date of 40 CFR 52.21 to July 15, 2017, 
Jefferson County's August 25, 2017, and March 15, 2018, SIP revisions 
capture the repeal of this grandfathering provision as promulgated by 
EPA on May 18, 2011 (76 FR 28646). However, this grandfathering 
provision was never incorporated into the Jefferson County portion of 
the Kentucky SIP, and so this action does not change the SIP for this 
grandfathering provision. Further details can be found in Section III 
below, under our analysis of the Commonwealth's submittal.
2. PM2.5 Condensables Correction Rule
    Among the changes included in the 2008 NSR PM2.5 Rule 
mentioned in Section II.A.1 above, EPA revised the definition of 
``regulated NSR pollutant'' for PSD and NNSR to add a paragraph 
providing that ``particulate matter (PM) emissions, PM2.5 
emissions and PM10 emissions shall include gaseous emissions 
from a source or activity which condense to form particulate matter at 
ambient temperatures'' and that on or after January 1, 2011, ``such 
condensable particulate matter shall be accounted for in applicability 
determinations and in establishing emissions limitations for PM, 
PM2.5 and PM10 in permits.'' See 73 FR 28321 at 
28348 (May 16, 2008). A similar paragraph added to the NNSR rule did 
not include ``particulate matter (PM) emissions.'' See 40 CFR 
51.165(a)(1)(xxxvii)(D).
    On October 25, 2012 (77 FR 65107), EPA took final action to amend 
the definition, promulgated in the 2008 NSR PM2.5 Rule, of 
``regulated NSR pollutant'' contained in the PM condensable provision 
at 40 CFR 51.166(b)(49)(vi), 52.21(b)(50)(i) and Appendix S to 40 CFR 
51 (hereinafter referred to as the PM2.5 Condensables 
Correction Rule). The PM2.5 Condensables Correction Rule 
removed the inadvertent requirement in the 2008 NSR PM2.5 
Rule that the measurement of condensable particulate matter be included 
as part of the measurement and regulation of ``particulate matter 
emissions'' under the PSD program. The term ``particulate matter 
emissions'' includes only filterable particles that are larger than 
PM2.5 and larger than PM10.
    By revising the IBR date of 40 CFR 52.21 to July 15, 2017, 
Jefferson County's August 25, 2017, and March 15, 2018, SIP revisions 
capture the PM2.5 Condensables Correction Rule promulgated 
by EPA on October 25, 2012 (77 FR 65107).
3. PM2.5 PSD-Increment-SILs-SMC Rule
    On October 20, 2010 (75 FR 64863), EPA published a final rulemaking 
entitled ``Prevention of Significant Deterioration (PSD) for 
Particulate Matter Less than 2.5 Micrometers (PM2.5),'' 
amending the requirements for PM2.5 under the federal PSD 
program (also referred to as the PM2.5 PSD-Increments-SILs-
SMC Rule). The October 20, 2010, final rulemaking established the 
following: (1) PM2.5 increments pursuant to section 166(a) 
of the CAA to prevent significant deterioration of air quality in areas 
meeting the NAAQS; (2) PM2.5 Significant Impact Levels 
(SILs) for PSD and NNSR; and (3) Significant Monitoring Concentration 
(SMC) for PSD purposes.
    Subsequently, in response to a challenge to the PM2.5 
SILs and SMC provisions of the PM2.5 PSD-Increment-SILs-SMC 
Rule, the D.C. Circuit vacated and remanded to EPA the portions of the 
rule addressing PM2.5 SILs, except for the PM2.5 
SILs promulgated in EPA's NNSR rules at 40 CFR 51.165(b)(2). See Sierra 
Club v. EPA, 705 F.3d 458, 469 (D.C. Cir. 2013). The D.C. Circuit also 
vacated the parts of the rule establishing a PM2.5 SMC for 
PSD purposes. Id. EPA removed these vacated provisions in a December 9, 
2013 (78 FR 73698), final rule.
    The PM2.5 SILs promulgated in EPA's NNSR regulations at 
40 CFR 51.165(b)(2) were not vacated by the D.C. Circuit because unlike 
the SILs promulgated in the PSD regulations (40 CFR 51.166, 52.21), the 
SILs promulgated in the NNSR regulations at 40 CFR 51.165(b)(2) do not 
serve to exempt a source from conducting a cumulative air quality 
analysis. Rather, the SILs promulgated at 40 CFR 51.165(b)(2) establish 
levels at which a proposed new major source or major modification 
located in an area designated as attainment or unclassifiable for any 
NAAQS would be considered to cause or contribute to a violation of a 
NAAQS in any area. For this reason, the D.C. Circuit left the 
PM2.5 SILs at 40 CFR 51.165(b)(2) in place.
    By revising the IBR date of 40 CFR 52.21 to July 15, 2017, 
Jefferson County's August 25, 2017, and March 15, 2018, SIP revisions 
incorporate the PM2.5 increment and do not incorporate the 
PM2.5 SILs and SMC provisions for PSD permitting that were 
vacated and remanded elements of the PM2.5 PSD-Increment-
SILs-SMC Rule.

B. Greenhouse Gases and Plantwide Applicability Limits

    On January 2, 2011, emissions of GHGs were, for the first time, 
covered by the PSD and title V operating permit programs.\7\ To 
establish a process for phasing in the permitting requirements for 
stationary sources of GHGs under the CAA PSD and title V programs, on 
June 3, 2010 (75 FR 31514), EPA published a final rule entitled 
``Prevention of Significant Deterioration and Title V Greenhouse Gas 
Tailoring Rule'' (hereinafter referred to as the GHG Tailoring Rule). 
In Step 1 of the GHG Tailoring Rule, which began on January 2, 2011, 
EPA limited application of PSD and title V requirements to sources of 
GHG emissions only if they were subject to PSD or title V ``anyway'' 
due to their emissions of pollutants other than GHGs. These sources are 
referred to as ``anyway sources.''
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    \7\ See the rule entitled ``Reconsideration of Interpretation of 
Regulations that Determine Pollutants Covered by Clean Air Act 
Permitting Programs,'' Final Rule, 75 FR 17004 (April 2, 2010).
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    In Step 2 of the GHG Tailoring Rule, which applied as of July 1, 
2011, the PSD and title V permitting requirements applied to some 
sources that were classified as major sources based solely on their GHG 
emissions or potential to emit GHGs. Step 2 also applied PSD permitting 
requirements to modifications of otherwise major sources that would 
increase only GHG emissions above the level in EPA regulations. EPA 
generally described the sources covered by PSD during Step 2 of the GHG 
Tailoring Rule as ``Step 2 sources'' or ``GHG-only sources.''
    Subsequently, EPA published the GHG Step 3 Rule on July 12, 2012 
(77 FR 41051). In this rule, EPA decided against further phase-in of 
the PSD and title V requirements for sources emitting lower levels of 
GHG emissions. Thus, the thresholds for determining PSD applicability 
based on emissions of GHGs remained the same as established in Step 2 
of the Tailoring Rule.
    In addition, the July 12, 2012 (77 FR 41051), final rule revised 
EPA regulations under 40 CFR part 52 for establishing plant-wide 
applicability limits (PALs) for GHG emissions. A PAL establishes a 
site-specific plantwide emission level for a pollutant that allows the 
source to make changes at the facility without triggering the 
requirements of the PSD program, provided that emissions do not exceed 
the PAL level. Under EPA's interpretation of the federal PAL

[[Page 1019]]

provisions, such PALs are already available under PSD for non-GHG 
pollutants and for GHGs on a mass basis. EPA revised the PAL 
regulations to allow for GHG PALs to be established on a carbon dioxide 
equivalent (CO2e) \8\ basis as well. EPA finalized these 
changes in an effort to streamline federal and SIP PSD permitting 
programs by allowing sources and permitting authorities to address GHGs 
using PALs in a manner similar to the use of PALs for non-GHG 
pollutants.
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    \8\ CO2 equivalent (CO2e) emissions refers 
to emissions of six recognized GHGs other than CO2 which 
are scaled to equivalent CO2 emissions by relative global 
warming potential values, then summed with CO2 to 
determine a total equivalent emissions value. See 40 CFR 
51.166(48)(ii) and 52.21(49)(ii).
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    On June 23, 2014, the U.S. Supreme Court addressed the application 
of stationary source permitting requirements to GHG emissions in 
Utility Air Regulatory Group (UARG) v. EPA, 134 S. Ct. 2427 (2014). The 
Supreme Court upheld EPA's regulation of Step 1--or ``anyway'' 
sources--but held that EPA may not treat GHGs as air pollutants for the 
purposes of determining whether a source is a major source (or a 
modification thereof) and thus require the source to obtain a PSD or 
title V permit. Therefore, the Court invalidated PSD and title V 
permitting requirements for Step 2 sources.
    In accordance with the Supreme Court decision, on April 10, 2015, 
the D.C. Circuit issued an Amended Judgment vacating the regulations 
that implemented Step 2 of the GHG Tailoring Rule, but not the 
regulations that implement Step 1 of the GHG Tailoring Rule. Coalition 
for Responsible Regulation, Inc. v. EPA, 606 Fed. Appx. 6, 7 (D.C. Cir. 
2015). With respect to Step 2 sources, the D.C. Circuit's Judgment 
vacated EPA regulations under review (including 40 CFR 51.166(b)(48)(v) 
and 40 CFR 52.21(b)(49)(v)) ``to the extent they require a stationary 
source to obtain a PSD permit if greenhouse gases are the only 
pollutant, (i) that the source emits or has the potential to emit above 
the applicable major source thresholds, or (ii) for which there is a 
significant emissions increase from a modification.'' Id. at 7-8.
    EPA promulgated a final rule on August 19, 2015, entitled 
``Prevention of Significant Deterioration and Title V Permitting for 
Greenhouse Gases: Removal of Certain Vacated Elements.'' See 80 FR 
50199 (August 19, 2015). The rule removed from the federal regulations 
the portions of the PSD permitting provisions for Step 2 sources that 
were vacated by the D.C. Circuit (i.e., 40 CFR 51.166(b)(48)(v) and 
52.21(b)(49)(v)). EPA therefore no longer has the authority to conduct 
PSD permitting for Step 2 sources, nor can EPA approve provisions 
submitted by a state for inclusion in its SIP providing this authority. 
In addition, on October 3, 2016 (81 FR 68110), EPA proposed to revise 
provisions in the PSD permitting regulations applicable to GHGs to 
fully conform with UARG and the Amended Judgment, but those revisions 
have not been finalized.
    By revising the IBR date of 40 CFR 52.21, Jefferson County's August 
25, 2017, and March 15, 2018, SIP revisions capture the GHG Tailoring 
Rule as of the updated effective date of July 15, 2017.\9\
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    \9\ As noted earlier in footnote #3, Jefferson County has an 
``automatic rescission clause'' approved into the SIP at Regulation 
2.05, which provides that in the event that EPA or a federal court 
stays, vacates, or withdraws any section or subsection of 40 CFR 
52.21, that section or subsection shall automatically be deemed 
stayed, vacated or withdrawn from Jefferson County's SIP-approved 
PSD program at Regulation 2.05.
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C. Grandfathering Provisions for the 2012 Primary Annual PM2.5 and 2015 
Ozone NAAQS

    Pursuant to section 165(a)(3)(B) of the CAA and the implementing 
PSD regulations at 40 CFR 52.21(k)(1) and 51.166(k)(1), EPA requires 
that PSD permit applications include a demonstration that emissions 
from the proposed facility will not cause or contribute to a violation 
of any NAAQS that is in effect on the date the PSD permit is issued. On 
January 15, 2013 (78 FR 3086), and October 26, 2015 (80 FR 65292), EPA 
published new primary annual PM2.5 NAAQS and 8-hour ozone 
NAAQS, respectively. In these two revisions to the NAAQS, EPA 
established limited grandfathering provisions for certain PSD permit 
applications pending on the effective date of these revised NAAQS. 
Additionally, the revisions to both standards included the option to 
allow states and other air agencies that issue PSD permits under SIP-
approved PSD programs to adopt a comparable grandfathering provision, 
as long as the provision is at least as stringent as that added to 40 
CFR 51.166.
    For the 2012 primary annual PM2.5 NAAQS, sources with 
PSD permit applications that meet one of the following conditions would 
be allowed to give a demonstration that the source requesting the 
permit does not cause or contribute to a violation of the NAAQS based 
on the previous 1997 primary annual PM2.5 standard instead 
of the revised 2012 standard: (1) Applications that have been 
determined to be complete on or before December 14, 2012; or (2) 
applications for which public notice of a draft permit or preliminary 
determination has been published as of the effective date of the 
revised 2012 PM2.5 NAAQS (March 18, 2013).
    For the 2015 8-hour ozone NAAQS revision, sources with PSD permit 
applications that meet one of the following conditions would be allowed 
to give a demonstration that the source requesting the permit does not 
cause or contribute to a violation of the NAAQS based on the previous 
2008 8-hour ozone standard, instead of the revised 2015 standard: (1) 
Applications for which the reviewing authority has formally determined 
that the application is complete on or before October 1, 2015; or (2) 
applications for which the reviewing authority has first published a 
public notice of the draft permit or preliminary determination before 
the effective date of the revised 2015 8-hour ozone NAAQS (December 28, 
2015).
    By revising the IBR date of 40 CFR 52.21 to July 15, 2017, 
Jefferson County's August 25, 2017, and March 15, 2018, SIP revisions 
incorporate both the 2012 annual PM2.5 and 2015 8-hour ozone 
grandfathering provisions for the PSD program.

III. Analysis of State Submittal

    Jefferson County currently has a SIP-approved NSR program for PSD 
under Regulation 2.05 of the Louisville Metro Air Pollution Control 
District regulations, which adopts the necessary provisions by way of 
an IBR of the federal PSD regulations found at 40 CFR 52.21. The 
current SIP-approved version of Regulation 2.05 is version 10, which 
contains an IBR date of July 1, 2010. The August 25, 2017, SIP revision 
requests for EPA to adopt version 12 of Regulation 2.05 into the SIP, 
which updates the IBR date to July 15, 2016.\10\

[[Page 1020]]

Subsequently, the March 15, 2018, SIP revision requests for EPA to 
adopt version 13 of Regulation 2.05 into the SIP, which updates the IBR 
date to July 15, 2017.
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    \10\ There is a redline-strikeout for version 11 of Regulation 
2.05 in the Docket for this proposed rulemaking. EPA never adopted 
version 11 of Regulation 2.05 into the SIP. However, version 11 was 
previously submitted to EPA for adoption on December 21, 2016. In 
version 11 of Regulation 2.05, Jefferson County proposed to 
eliminate the IBR date for 40 CFR 52.21, and substitute it with a 
reference to the specified version of 52.21 found in Regulation 1.15 
of the Louisville Metro Air Pollution Control District regulations. 
However, Regulation 1.15 is not a SIP-approved regulation. To 
prevent this gap, Jefferson County withdrew version 11 of Regulation 
2.05 from EPA consideration. In the cover letter for the August 25, 
2017, SIP revision being proposed for approval in this notice, 
Jefferson County withdrew the request to adopt version 11 from their 
December 21, 2016, submittal, but specified that the redline 
strikeout for that version would remain in the submittal for 
reference purposes.
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    As mentioned in Section I, the effects of changing the IBR date for 
40 CFR 52.21, include the following changes: (1) Adopting 
``increments'' for the PM2.5 NAAQS; (2) adopting updated 
GHGs provisions; (3) incorporating grandfathering provisions for the 
2012 primary annual PM2.5 NAAQS and the 2015 8-hour ozone 
NAAQS, as well as adopting the repealed grandfathering provisions for 
the old PM2.5 NAAQS; and (4) incorporating a correction to 
the definition of ``regulated NSR pollutant'' for PSD. These changes 
are discussed in more detail below.
    First, Jefferson County's IBR update adopts PSD provisions 
promulgated in the PM2.5 PSD Increment-SILs-SMC Rule, in 
particular the PSD increments for PM2.5 annual and 24-hour 
NAAQS. These provisions include: (1) The PM2.5 increments as 
promulgated at 40 CFR 52.21(c)(1) and (p)(5) (for Class I Variances); 
and (2) amendments to the terms ``major source baseline date'' (at 40 
CFR 52.21(b)(14)(i)(c)), ``minor source baseline date'' (including 
establishment of the ``trigger date'') (at section 52.21(b)(14)(ii)(c)) 
and ``baseline area'' (as amended at 52.21(b)(15)(i)). These changes 
provide for the implementation of the PM2.5 PSD increments 
for the PM2.5 NAAQS in Jefferson County's PSD program.
    As mentioned above in Section II.A.3, the PM2.5 SILs and 
SMC portion of the PM2.5 PSD-Increment-SILs-SMC Rule has 
since been vacated by the D.C. Circuit's January 22, 2013, decision 
(Sierra Club v. EPA, 705 F.3d 458), and EPA subsequently removed the 
vacated provisions from 40 CFR 52.21 (78 FR 73698). For this reason, 
Jefferson County's IBR updates simply adopt the increments portion of 
the PM2.5 PSD-Increment-SILs-SMC Rule. EPA has made the 
preliminary determination to approve the aforementioned PSD permitting 
provisions promulgated in the PM2.5 PSD Increment-SILs-SMC 
Rule into the Jefferson County portion of the Kentucky SIP.
    Second, Jefferson County's IBR update adds updated PSD permitting 
requirements for GHGs. This includes the incorporation of the GHG Step 
3 Rule provisions, which will allow GHG-emitting sources to obtain PALs 
for their GHG emissions on a CO2e basis. As explained in 
Section II.B above, a PAL establishes a site-specific plantwide 
emission level for a pollutant, which allows the source to make changes 
to individual units at the facility without triggering the requirements 
of the PSD program, provided that facility-wide emissions do not exceed 
the PAL.
    Additionally, the federal GHG PAL regulations include provisions 
that apply solely to GHG-only, or Step 2, sources. Some of these 
provisions may no longer be applicable in light of the Supreme Court's 
decision in UARG and the D.C. Circuit's Amended Judgment. Since the 
Supreme Court has determined that sources and modifications may not be 
defined as ``major'' solely on the basis of GHGs emitted or increased, 
PALs for GHGs may no longer have value in some situations where a 
source might have triggered PSD based on GHG emissions alone. EPA has 
proposed action in an October 3, 2016 (81 FR 68110), proposed rule to 
clarify the GHG PAL rules. However, PALs for GHGs may still have a role 
to play in determining whether a source that is already subject to PSD 
for a pollutant other than GHGs should also be subject to PSD for GHGs.
    The existing GHG PALs regulations do not add new requirements for 
sources or modifications that only emit or increase greenhouse gases 
above the major source threshold or the 75,000 ton per year GHG level 
in 40 CFR 52.21(b)(49)(iv). Rather, the PAL provisions provide 
increased flexibility to sources that wish to address their GHG 
emissions in a PAL.
    EPA discussed the effects of PALs in the Supplemental Environmental 
Analysis of the Impact of the 2002 Final NSR Improvement Rules 
(November 21, 2002) (Supplemental Analysis). The Supplemental Analysis 
explained, ``[t]he EPA expects that the adoption of PAL provisions will 
result in a net environmental benefit. Our experience to date is that 
the emissions caps found in PAL-type permits result in real emissions 
reductions, as well as other benefits.'' Supplemental Analysis at 6; 
see also 76 FR 49313, 49315 (August 10, 2011). Since this flexibility 
may still be valuable to sources in at least one context described 
above, EPA believes that it is appropriate to propose approval of these 
provisions into the Jefferson County portion of the Kentucky SIP.
    Moreover, Jefferson County's IBR update incorporates the Federal 
PSD provisions as of July 15, 2017, which is after the UARG decision, 
the D.C. Circuit's Amended Judgment, and EPA's August 19, 2015, Good 
Cause GHG Rule. Therefore, Jefferson County's incorporation includes 
fixes to the Federal rules to discontinue regulation of GHG-only, or 
Step 2, sources. EPA has preliminarily concluded that approving the 
updated effective date into the Jefferson County portion of the 
Kentucky SIP will not interfere with any applicable requirement 
concerning attainment and reasonable further progress (as defined in 
section 171), or any other applicable requirement of the CAA.
    Third, Jefferson County's IBR update incorporates revisions to the 
PSD permitting requirements for both the 2012 primary annual 
PM2.5 NAAQS, as promulgated on January 15, 2013 (78 FR 
3086), and the 2015 ozone 8-hour NAAQS, as promulgated on October 26, 
2015 (80 FR 65292). The new incorporation by reference date adds 
limited grandfathering provisions for both standards that allows 
sources who are eligible to meet the previous standard for these NAAQS 
instead of the newly promulgated standards. EPA is proposing to approve 
these grandfathering provisions of the 2012 primary annual 
PM2.5 and the 2015 8-hour ozone NAAQS, as incorporated by 
reference. EPA has preliminarily concluded that this change will not 
interfere with any applicable requirement concerning attainment and 
reasonable further progress (as defined in section 171), or any other 
applicable requirement of the CAA. The rationale for allowing states to 
include these grandfathering provisions into their SIPs is discussed in 
detail at 78 FR 3086 (January 15, 2013) (2012 primary annual 
PM2.5 NAAQS) and 80 FR 65292 (October 26, 2015) (2015 8-hour 
ozone NAAQS).
    In addition, the IBR date change captures the removal of the 
PM2.5 grandfathering provision contained in the federal PSD 
program at 40 CFR 52.21(i)(1)(xi), as promulgated by EPA on May 18, 
2011 (76 FR 28646), which ended the use of the 1997 PM10 
Surrogate Policy for PSD permits. Although the July 1, 2010, effective 
date in Jefferson County's current SIP-approved version of Regulation 
2.05 (version 10) did capture the original incorporation of this 
grandfathering provision, EPA's approval of this version was done after 
the May 18, 2011 repeal of the 1997 PM10 Surrogate Policy. 
See 77 FR 62150 (October 12, 2012). Because of this, EPA specified in 
the October 12, 2012 final rulemaking that it was not taking action to 
approve this provision. With the IBR date change proposed for approval 
now, this provision would now be removed from the Jefferson County PSD 
programs, but because EPA never approved this change into the Jefferson 
County portion of the Kentucky SIP, no action is needed to remove it 
from the SIP.
    Lastly, Jefferson County's IBR update adopts changes made by EPA in 
the

[[Page 1021]]

PM2.5 Condensables Correction Rule as promulgated on October 
25, 2012 (77 FR 65107). As explained in Section II.A.2, the Federal 
rule corrected an inadvertent error in the definition of ``regulated 
NSR pollutant'' at 40 CFR 52.21(b)(50). In the Condensable Correction 
Rule, EPA explained that requiring inclusion of condensable PM in 
measurements of ``particulate matter emissions'' would have little (if 
any) effect on preventing significant air quality deterioration or on 
efforts to attain the primary and secondary PM NAAQS. Therefore, EPA 
has preliminarily concluded that this change to Jefferson County's 
portion of the Kentucky SIP is consistent with the current Federal 
rule, will not interfere with attainment or maintenance of the PM 
NAAQS, any applicable requirement concerning attainment and reasonable 
further progress (as defined in section 171), or any other applicable 
requirement of the CAA, and is proposing to approve these revisions 
into the Jefferson County portion of the Kentucky SIP.

IV. Incorporation by Reference

    In this document, EPA is proposing to include in a final EPA rule 
regulatory text that includes incorporation by reference. In accordance 
with requirements of 1 CFR 51.5, EPA is proposing to incorporate by 
reference Jefferson County's Regulation 2.05, Prevention of Significant 
Deterioration of Air Quality, version 13, which is intended to make the 
Jefferson County PSD permitting regulation consistent with the federal 
requirements and is state effective January 17, 2018. EPA has made, and 
will continue to make, these materials generally available through 
www.regulations.gov and at the EPA Region 4 office (please contact the 
person identified in the FOR FURTHER INFORMATION CONTACT section of 
this preamble for more information).

V. Proposed Action

    EPA is proposing to approve changes to the Jefferson County portion 
of the Kentucky SIP that were provided to EPA through two letters dated 
August 25, 2017, and March 15, 2018, to update the IBR date for the 
Federal requirements of the PSD program found at 40 CFR 52.21. This SIP 
revision is intended to make Jefferson County's PSD permitting rule 
consistent with the Federal requirements, as promulgated by EPA. The 
August 25, 2017, SIP revision updates the IBR date at Jefferson 
County's Regulation 2.05--Prevention of Significant Deterioration of 
Air Quality, to July 15, 2016, for the federal PSD permitting 
regulations at 40 CFR 52.21. Subsequently, the March 15, 2018, SIP 
revision updates the IBR date at Jefferson County's Regulation 2.05 to 
July 15, 2017.

VI. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP 
submission that complies with the provisions of the Act and applicable 
Federal regulations. See 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in 
reviewing SIP submissions, EPA's role is to approve state choices, 
provided that they meet the criteria of the CAA. This action merely 
proposes to approve state law as meeting Federal requirements and does 
not impose additional requirements beyond those imposed by state law. 
For that reason, this proposed action:
     Is not a significant regulatory action subject to review 
by the Office of Management and Budget under Executive Orders 12866 (58 
FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
     Is not an Executive Order 13771 (82 FR 9339, February 2, 
2017) regulatory action because SIP approvals are exempted under 
Executive Order 12866;
     Does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
     Is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the CAA; and
     Does not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human health or environmental 
effects, using practicable and legally permissible methods, under 
Executive Order 12898 (59 FR 7629, February 16, 1994).
    The SIP is not approved to apply on any Indian reservation land or 
in any other area where EPA or an Indian tribe has demonstrated that a 
tribe has jurisdiction. In those areas of Indian country, the rule does 
not have tribal implications as specified by Executive Order 13175 (65 
FR 67249, November 9, 2000), nor will it impose substantial direct 
costs on tribal governments or preempt tribal law.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide, 
Incorporation by reference, Lead, Nitrogen dioxide, Ozone, Particulate 
matter, Reporting and recordkeeping requirements, Sulfur oxides, 
Volatile organic compounds.

    Authority: 42 U.S.C. 7401 et seq.

    Dated: December 17, 2018.
Mary S. Walker,
Acting Regional Administrator, Region 4.
[FR Doc. 2019-00781 Filed 1-31-19; 8:45 am]
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