Document ID: EPA-HQ-OAR-2013-0495-11823
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2015-10-23T04:00Z

Chapter 9
Title V Permit Fees
Comment 9.1-1: Commenter 0267 suggested that EPA exclude GHGs from fee calculations entirely because permitting costs are covered by existing fees. To date, there are a minimal number of GHG permit terms for incorporation in Title V permits. Facilities with GHG PSD permits may have terms included in a Title V permit, but all of the GHG Emission Reporting (40 CFR. Part 98) terms are excluded. In addition, there are no current GHG technology standards. Consequently, the somewhat limited costs associated with including GHG requirements in permit terms do not currently warrant any increased Title V permit fees. Given that GHG emissions are several orders of magnitude greater than emissions of traditional pollutants, there would be a disproportionate increase in fees relative to the actions necessary to incorporate and maintain Title V permits that include GHG terms. The fees would be burdensome, excessive, and unnecessary. The fundamental requirement is to collect fees sufficient to cover program costs. To the extent the EPA decides to finalize a GHG cost adjustment, it cannot be structured in a way to overstate the costs necessary to run the program. 
Commenter 0267 stated the EPA should prepare an analysis of how various state and local agencies set their Title V permit fees to eliminate uncertainty as to whether the final rule will impact state permitting fees. As with the potential for PSD-related SIP changes and EPA approval, EPA should not finalize the proposal until the necessary SIP changes are in place. 
Commenter 0267 stated that if EPA adopts option 1 (the activity-based adjustment option), the EPA should clarify how many activities can be associated with the processing of a single permit, recommending that the EPA set a maximum number of annual hours that can be used to set a fee under option 1. If the EPA does not clarify this, the option 1 approach would be unrealistic as to the actual costs of the program, which will lead to states conducting comprehensive demonstrations of program costs to justify lower fees than the presumptive minimum, nullifying the benefit of the presumptive fee calculation. Such an approach would be arbitrary and capricious because it would eliminate the streamlining effect of the presumptive fee approach. 
Commenter 0267 said if option 1 is selected for the final rule, the allocation of fees would need to be "annualized," since most of the activities do not occur on an annual basis. Part 70.9(b)(2)(v) does not provide that the adjustment is "annual." If intended to be an annual fee, it is important that the basis of the calculated fee be clarified. The "activities" are not annually recurring activities, but rather periodic.
Response 9.1-1: The commenter supports the January 8, 2014 proposal to exempt GHGs from the emissions-based fee calculations of 40 CFR 70 and 71 and seems to support an alternative GHG cost adjustment if it is reasonable and based on actual costs, but does not directly support any of the proposed GHG adjustment options specifically. The final rule exempts GHGs from emissions-based calculations and finalizes GHG adjustment option 1, the adjustment based on recovering the costs to permitting authorities of conducting certain analyses to determine if GHGs are addressed appropriately in permit applications and permits. See the more detailed background discussion concerning title V fees in the preamble to the final rule and the separate response to comments (RTC) related to the new source requirements under section 111(b). 
The commenter also expresses concern that the costs of GHG permitted are limited, citing the low number of GHG emissions standards and permit terms and the exclusion of the GHG Mandatory Reporting Rule. The EPA responds that the cost of GHG permitting that we discussed in the proposed and final preambles are not related to the source type, it's emissions, or the number of applicable requirements that apply to it, but rather, are related to the costs for permitting authorities to determine if GHGs are adequately addressed in the applications and permits, considering the novel nature of GHGs and the inexperience of permitting authorities with addressing them in the permitting context. The EPA based the costs of the GHG adjustments on analyses that it conducted with respect to the costs of implementing permit programs by state and local agencies, we discussed this information in the preamble for the proposed and final rules, and we have placed this information in the docket for this rulemaking. For more on this fee-related issue and the other issues raised in this section of the RTC, please see the preamble to the final rule and the separate the separate response to comments (RTC) related to the new source requirements under section 111(b).
The commenter asked the EPA to not finalize the proposal until after an analysis is conducted of how state agencies set their fees and after necessary SIP changes are in place. The EPA disagrees with the suggestion, as we do not believe such an analysis is required to be conducted or otherwise needed by the EPA prior to finalizing the GHG cost adjustments of the final part 70 rule. Also, the EPA does not believe we are required or need to wait until states revise their SIPs prior to finalizing the GHG adjustments of part 70. The EPA notes that changes to a state's operating permit program are not required to occur through a SIP revision and do not generally occur through a SIP revision. Certain states may need to revise their part 70 permit programs in response to the final rule but it is not necessary for the EPA to determine which states will need to do this prior to finalizing the revised fee rules. The implementation of the GHG adjustment for states that implement the presumptive minimum will be straightforward. A bigger concern for states would be cases where the revised cost formula would lead to the need to change the rules concerning fee payment by sources, but this is an area where the EPA has given states discretion and such considerations are beyond the scope of this rulemaking action.
The commenter asked that if we finalize GHG adjustment option 1, we clarify how many activities are associated with the processing of a single permit and that we set a maximum number of hours that can be used to set a fee to avoid overestimation of costs. The EPA responds that we have made certain clarifications with respect to the wording of the activities under the option 1 approach of the final rule that should address many of the concerns of the commenter. The EPA is finalizing the list of activities used to calculate the GHG adjustment to include a minor regulatory revision and we make certain clarifications in the preamble to the final rule to ensure consistent implementation of the activities. For example, for the first activity, "GHG completeness determination (for initial permit or updated application)," we clarify that the cost for this activity is a one-time charge that covers the review of the initial application and any supplements or updates. Thus, any updates to an initial application are included in a single "GHG completeness determination," rather than as a separate activity for which the source would be charged in addition to the completeness determination for the initial application.
The commenter suggested that revising the presumptive minimum approach through the final rule might be unlawful because it would cause states to have to switch from the presumptive minimum approach to the detailed accounting approach of part 70. As described above, we disagree that the option 1 approach of the final rule would lead to overestimation of costs. On the second part of the argument, CAA section 502(b)(3) and 40 CFR 70.9(a) requires states to charge fees that are sufficient to cover the permit program costs and the EPA has determined that the revised fee provisions (which includes GHG adjustment option 1) will ensure that the presumptive minimum approach will continue to meet the statutory requirements for program funding. A state that wishes to charge less than the presumptive minimum amount be are finalizing would be required to switch to the detailed accounting approach based on a demonstration "that collecting an amount less than the [presumptive minimum amount] will" result on funds sufficient to cover the program costs. Such a switch would be consistent with CAA section 503(b)(3)(B)(iv) and 40 CFR 70.9(b)(5).
The commenter also asked that if an activity-based approach is used that it be imposed annually, rather than periodically. The preamble to the final rule and the final rule clearly provide that the GHG adjustment would be an annual adjustment. The GHG adjustment would be added to the presumptive minimum calculation performed by the state for part 70 purposes, which is an annual calculation of the state's minimum fee revenue target. See 40 CFR 70.9(b)(2)(i).