-------
REFERENCES FOR SECTION 3.8
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
DATE: SEP 1 1981
SUBJECT: Ambient Monitoring Networks for Model Evaluations
PROM: Richard G. Rhoads, Director
Monitoring and Data Analysis Division
TO: Ronald C. Campbell, Assistant Director
for Program Operations, OAQPS
Under favorable conditions our available air quality models can
provide errors of from ±10 to ±40 percent. Under unfavorable conditions
the errors can be much worse. For these reasons, we have been consi-
dering how to use ambient monitoring data to supplement or improve
model estimates on a case-by-case basis.
It is generally not feasible to establish emission limits for
point sources based solely on monitoring data. Thfs is because current
programs require that emission limits be based upon a fairly rare event
(i.e., the second maximum concentration anywhere in the area, at anytime,
and with the facility operating at full capacity) and to capture that
event on a monitor would normally require a prohibitively large and
expensive network.
An alternative approach is to establish a monitoring network of
reasonable size, use the resulting monitored data to evaluate the models
for applicability to those particular conditions, and then use the result-
ing "best available" model to establish the emission limitation.
One problem with this approach is defining the "network of reasonable
size" which would be used to evaluate the models. If the network is too
small, the data would be inadequate to distinguish between models and the
evaluation would have no validity. If the network is too large, the cost
would be excessive.
Although our experience with evaluations of this nature is very limited,
I have recently recommended to Region V that, for a variety of power plants
in the Midwest, networks consisting of approximately 15 monitors each should
be considered. This recommendation was based upon the following knowledge:
• My staff and the technical modeling staff of Region V estimate
that, in-moderate terrain, a network of 25-30 monitors would be desirable
to obtain "reasonable scientific credibility."
* The Electric Power Research Institute has conducted one phase of
a major model evaluation study (called Plume Model Validation) around the
Kincaid Power Plant. The PMV network consisted of 30 ambient monitors
supplemented by several hundred tracer monitors for special stud1'**.
"> 1320-4 (R.». 3-76)
-------
' The model evaluation program around the Westvaco Luke Mill in
Maryland is using nine monitors. The issue at Luke Mill involves on1yJ|
one wind direction (quadrant): If all wind directions were pertinent,™
a larger network would have been necessary.
• The model evaluation program around the Ashland Oil facility in
Kentucky used a network consisting of 18 monitors. The issue involved
complex terrain in a valley situation.
• The model evaluation program around the Simplot acid plant in
Idaho used a network consisting of five monitors. The issue at Simplot
involved only one wind direction and one set of meteorological conditions.
* The model evaluation program around the Big Bend Power Plant on
the coast of Florida used a network consisting of eight monitors supple-
mented by sophisticated plume measurements. The issue at Big Bend
involved only a single wind direction.
Based on our experien" with these programs (all of .-which were reasonably
successful but, with the e option of EPRI, none of which were "data rich"), I
believe that approximately 15 monitors operating for one year is probably the
minimum network size to obtain a valid data base under normal circumstances.
Fifteen would probably be too few in rugged, complex terrain; fifteen would
probably be too many if the issue involved only a single specific location
(e.g. a single isolated hilltop) or single meteorological condition.
It is necessary to minimize the number of monitors because the cost of
network of 15 monitors, plus an adequate meteorological station, plus emiss
monitoring, could range from S300K to over $1 million. The wide range in costs
is influenced primarily by the availability of power at the monitoring sites, b
the ease of servicing the monitors, and by the complexity of both the terrain
and the meteorological conditions. Based on preliminary discussions between
Region V staff and electric utility r presentatives, I believe that most large
utilities would be willing and able to bear this cost if they perceive that me
evaluation would result in a relaxation of stringent emission limitations.
In the past many utility representatives held a strong opinion that the
CRSTER model (most commonly used to evaluate power plants in level to moderate
terrain) tended to overestimate the magnitude of concentrations, i.e. that the
model had a strong conservative bias. The preliminary data from the EPRI
model evaluation disprove that opinion: the EPRI results indicate no signi-
ficant bias (at least in level terrain).
Also the preliminary data from Westvaco (involving the SHORTZ model),
the results from-Ashland Oil (involving the VALLEY model), and the results
from Big Bend (involving the CRSTER model), all tend to confirm the model
predictions, although Ashland Oil showed VALLEY to be somewhat conservative
as expected. I would classify the Simplot results as "inconclusive."
-------
I believe that it is to everyone's advantage to hive ai"east a few sci^n'
tifically valid model evaluation programs so that we can either
accuracy of the models or establish 'reasonable "edfbi9!^ w th
cc: »
-------
£ . •*:•» _ i UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
$ Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
DATE: AUG 7 1981
SUBJECT: Monitoring Around Mid-Western Power Plants
FROM: Richard G. Rhoads, Director/d-^ r
Monitoring and Data Analysis Division (MD-14)
10: David Kee, Director
Air and Hazardous Materials Division, Region V
We have previously discussed the requests of several utilities to
conduct air quality monitoring around their power plants located in
Illinois, Indiana and Ohio. The purpose of the monitoring would be to
provide a data base suitable for evaluating air quality models and to
select the most reliable model for setting emission limits.
No widely accepted performance standards are available with which
to judge the acceptability of a single model. Thus, to determine the
best model for a specific application, we must rely on a comparison of
the relative performance of two or more models using a variety of
statistical tests. Such an approach has been recommended by the American
Meteorological Society and is incorporated in an OAQPS report entitled
"Interim Procedures for Evaluating Air Quality Models" that was provided
to your staff last week (see attached memorandum).
These interim procedures are the best available basis for discussions
with the utilities on the monitoring programs and subsequent analyses.
The procedures involve (1) identification of applicable models; (2) selection
and weighting of statistical performance measures; and (3) determination of
an appropriate ambient monitoring program. I suggest that you forward this
information to the utilities and set up meetings where these issues can
be discussed.
At such meetings it will be necessary for the utility representatives
to propose alternative models that they believe to be more reliable than
the standard EPA models. Statistical tests and performance measures must
be agreed upon to determine the relative performance of the models under
consideration. These performance measures must be adequate to evaluate
the entire range of meteorological conditions which affect the source
area, as well as appropriate averaging times. While these meetings will
involve highly technical issues, management personnel may be required to
make decisions relative to the most important evaluation tests and the
best measures of uncertainty.
-------
It will be necessary to agree on an adequate air quality monitoring
network composed of continuous monitors with quality assurance meeting
the requirements of 40 CFR 58. Although our experience with networks
for this purpose is limited, we believe that an appropriate balance
between the technical requirements of the analyses and the costs would
result in approximately 15 monitors, depending upon the type of terrain,
meteorological conditions, prior knowledge of air quality in the area,
etc. For the specific case of the Baldwin plant which you mentioned,
it is likely that 11 monitors would be adequate if the monitors were
carefully located at predicted points of maximum impact under the full
range of meteorological conditions. (Location of the monitors at points
of maximum impact only under unstable conditions would not provide
adequate coverage.)
It will be necessary to agree on an adequate on-site meteorological
data collection program. As a minimum, these measurements should be
similar to those available from National Weather Service Stations and
should be consistent with the PSD Monitoring Guideline requiremerts.
It may be necessary to collect additional data in order to satisfy
the input requirements of proposed alternative models.
It will be necessary to agree on an adequate program to collect
plant operating data. Ideally, this would consist of continuous in-stack
emission monitors supplemented by routine operating characteristics. Many
plants'are willing to install emission monitors for a variety of purposes.
However, if continuous emission monitors are considered to be too exoensive,
it is usually possible to construct adequate emissions data from a carefully
planned as-fired fuel sampling program.
We assume that the utility will be responsible for all data collection,
data reduction, ana quality assurance. Once a protocol for the specific
statistical performance measures and their weighting are established,
we further assume that the utility will also be responsible for all calcu-
lations and model evaluations. Once the analysis is complete, we can joint:;
review the results with the utility and come to a reasoned decision as to
the most appropriate model for setting emission limits for that source.
Thus, the crucial part of this exercise is establishing in a written
protocol the data to be collected, the procedures to be followed, and the
basis for judging the relative performance of the models being considered.
-------
We must emphasize that the general procedures which are proposed
are interim. They will evolve in future applications as we gain
experience with developing protocols. We expect, though, that useful
and meaningful protocols can result at this time from good faith
negotiations between EPA and the utility and its consultants. My
staff will be happy to provide you with technical support in developing
protocols and in analyzing the model comparisons. Please contact
Joe Tikvart or me if you desire further assistance.
Attachment
cc: W. Barber
T. Oevine
R. Smith
E. Tuerk
S. Wassersug
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
DATE: 7/30/81
SUBJECT: Interim Procedures for Evaluating Air Quality Models
FROM: Joseph A. Tikvart, ChiefQ _
Source Receptor Analysis Branch"
TO: Chief, Air Programs Branch, Regions I - X
Attached is a report entitled "Interim Procedures for Evaluating
Air Quality Models." The purpose of the report is to provide a general
framework for the quantitative evaluation and comparison of air quality
models. It is intended to help you decide whether a proposed model, not
specifically recommended in the Guideline on Air Quality Models, is
acceptable on a case-by-case basis for specific regulatory application.
The need for such a report is identified in Section 7 of "Regional
Workshops on Air Quality Modeling: A Summary Report."
An earlier draft (Guideline for Evaluation of Air Quality Models)
was provided to you for comment in January 1981. We received comments
from four Regional Offices and have incorporated many of the suggestions.
These comments reflected a diversity of opinion on how rigid the pro-
cedures and criteria should be for demonstrating the acceptability of a
nonguideline model. One Region maintained that EPA should establish
minimum acceptable requirements on data bases, decision rationale, etc.
Others felt that we should be more flexible in our approach. This
report defines the steps that should be followed in evaluating a model
but leaves room for considerable flexibility in details for each step.
The procedures and criteria presented in this new report are con-
sidered interim. They are an extension of recommendations resulting
from the Woods Hole Workshop in Dispersion Model Performance held in
Setpember 1980. That workshop was sponsored under a cooperative agree-
ment between EPA and. the American Meteorological Society. Thus, ^.hile
some of the performance evaluation procedures may be resource intensive,
they reflect most of the requirements identified by an appropriate
scientific peer group. However, since the concepts are relatively new
and untested, problems may be encountered in their' initial application.
Thus, the report provides suggested procedures; it is not a "guideline."
i-.'e "recommend that you begin using the procedures on actual situations
within the context of the caveats expressed in the Preface and in Section
5.2. Where suggestions are inappropriate, the use of alternative techniques
to accomplish the desired goals is encouraged. Feedback on your experience
and problems are important to us. After a period of time during which
experience is gained and problems are identified, the report will be
-orm T37C S 'fl»v 3 761
-------
2
Attachment
cc:
D. Fox
T. Helms
W. Keith
M. Muirhead
L. Niemeyer
R. Smith
F. White
-------
EPA-450/4-84-023
Interim Procedures for Evaluating Air
Quality Models (Revised)
U.S. ENVIRONMENTAL PROTECTION AGENCY
Monitoring and Data Analysis Division
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
September 1984
-------
REFERENCES FOR SECTIONS 4.1 AND 4.2
-------
2138
Federal Register / Vol. 54, No. 12 / Thursday. January 19. 1989 / Proposed Rules
Authority: Sees. 1-19. 48 Slat. 31. as
d 7 L'.S C 601-674
2. Section 959.229 is added to read as
follows:
$ 959.229 Expenses «nd assessment rat*.
Expenses of $379.675 by the South
Texas Onion Committee are authorized
=?nd an assessment rate of $0.055 per 50-
pound container or equivalent quantity
of regulated onions is established for the
Fiscal period ending July 31. 1989.
Unexpended funds may be carried over
ds a reserve.
Patcd |a:v>a"y 13. 1989.
William I. On I*.
' vi :•- £>-!*'•• B,Trr:nr. Trait cri.'
'. • -:;» D, s.". n.
' * Uoc aS-'.JSO Filed 1-1&-69: 8:45 am)
PILING cooe vi«o-ua-«
DCPADTMENT OF THE TREASURY
3< CFH Part 103
Extension of Time for Comment* on
Pioposed Bank Secrecy Act
Regulations
AQBNCV: Departmental Offices.
ACTION: Advance notice of proposed
•.IsiimRinjz. extension of comment
SUMMAMV: Notice is hereby given that
:rv Department of the Treasury is
• • v 'ending the comment period on the
-1 tvance Notice of Proposed
> ;emaking Relating to Identification
.•quirements Required to Purchase
1 r.iv Checks. Cashier's Checks.
i: eler s Checks and Money Orders.
_ ,':,ished in the Federal Register on
' )-<.pmber 23 1988 (53 FR 51846). The
; 'udsury Department has determined
in it more time is needed for the public
'.i review and comment on the proposal.
DATE: Comments now will be accepted
rr-rough February 15.1989.
ADDRESS: Comments should be
•tiuressed to Amy G. Rudnick. Director.
Office of Financial Enforcement.
'^rtpdrtment of the Treasury. Room 4320.
1 '00 Pennsylvania Avenue. NW..
Washington. DC 20220.
FOR FURTHER INFORMATION CONTACT:
Knthleen A. Scott. Attorney Advisor.
Office of the Assistant General Counsel
(Enforcement). (202) 566-9947.
Dated. January 13. 1989.
i R. MwtodM.
n: Secretary {Enforcement/.
KR Doc. 89-1204 Filfd 1-16-49: &45 am)
a :fc;iugh Friday.
The EPA may chsr;j- a :t^;onHSIe fe^
for copying
FOB FUKTM6P INFORMATION CONTACT:
Mr lames VVeig^i.. Off.ce of A:r
Quality P!;,nry.n2 «r,c S^r.dards (MD-
11). U.S. Env.rcn.T.i.-io! Protection
Agencx. Resea:cri Triangle Park. North
Carolina 27711: Telephone (919) 541-
5642 or (FTS) 629-5642.
INFORMATION:
Background
The 1970 Clean Air Act (CAA)
established the air quality management
process as a basic philosophy for air
pollution control in this country. Under
this system. EPA establishes air quality
goals (National Ambient Air Quality
Standards — N'AAQS) for common
pollutants. There are now standards for
6 pollutants: ozone, carbon monoxide.
sulfur dioxide, nitrogen dioxide.
paniculate matter fPM,o. and lead.
States then develop control programs to
attain and maintain these NAAQS
These programs are defined by State
Implementation Pliins (SIPs) which are
approved formally by EPA and are
legally enforceable by the Agency.
Under section noU)(2). a SIP must
demonstrate at!di-.mem. deic.-.be d
control strategv contain legally
enforceable regulations, include an
emission inventor; and procedures for
new source rev inw. ou'.lire a program
for monitoring jnJ shov. adequate
resources. In ddJi'.ion there can be
many other requirements specific to the
pollutan: being ccns.Jered. Under
section Il0!a,i3; re\ isiur.b to a SIP must
not interfere with the SIPs abilit\ to
meet these retirements. The
consequence* of Stdic failure to get SIP
approval ;TM\ • se.nojs: they include
Federa: promu.j.ition of control
regulations art! economic sjncfons.
Affirrndtr. e action is required by EPA
on essentiully all aspects of every SIP
and SIP revision. Since EPA's final
decision comes after a regulation
already is adopted and implemented at
the State level, excessive delay in the
review process often is a major source
of friction in EPA s relations with State
-------
Federal Register / Vol. 54. No. 12 / Thursday. January 19. 1989 / Proposed Rules
2139
and local agencies. SIP processing at
EPA has a schedule goal of 5/2-5/2 for
final action. That is. the Regions
nominally have 5 months to review
submittais in both the proposal and
promulgation phases: Headquarters
nominally has 2 months in each phase.
However. SIP actions often take
considerably longer than the total 14
months allocated to publish a final
decision.1
The lengthy decision process has
resulted in strong criticism from sources
both inside and outside the EPA. In
response, the Deputy Administrator
commissioned in |uly 1987 a senior level
task group to assess the problems
inherent in the process and to
recommend solutions. The task group
conducted its assessment and presented
recommendations to the Deputy
Administrator. The recommendations
were approved fully and are described
in a companion notice in today's Federal
Register. One of these recommendations
concerns a procedure and criteria for
identifying a "complete" SIP package,
thereby providing States with guidance
on preparing adequate SIP revisions and
EPA with a clearly defined mechanism
to keep essentially unreviewable SIP
revisions out of the review process.
This is important because if a State
submits a SIP change without properly
staled emission limits, legal authority'or
compliance schedules, or which
contains other obvious deficiencies, it
can enter the full EPA review system.
Such a SIP either will be eventually
aisaoproved. or languish while the State
;s required (perhaps months later) to
suppiv essential data. Heretofore. EPA's
procedures did not provide in any
comprehensive way prompt rejection for
incompleteness. Independently,
nowever. some Regional Offices have
tried to deal with this problem, and have
developed procedures wherein SIP
submittais are judged against a set of
completeness criteria. The purpose of
these procedures has been to keep
incomplete packages out of the more
extensive review system, thereby saving
Doth EPA and the State valuable time
and resources. Today, EPA is proposing
to institute an EPA-wioe procedure for
uU' tnai section iKXjii:! of the Clean Air At t
es ihai The Admmistraior snau wiinm four
« diier the dale required for suummi.on of H
.I'-reve or disdpprove such IS1PI for each
>n -hereof" Unaer me Agency s prwrnt
ssms workload, sucn * time limit is liierallv
ne 10 meet for »U but me rooit trivial of
ru I.H mamutns thai thu deadline does not
v •'•> SIP revisions but rather only to 'he initul
•. 'mined after EPA promulgates a NAAQS
• -Jurti have supported EPA i potmon other
- nave rind inji a 4-monin review penou
»s 'o o SIP -evuion
completeness review of all SIP
submittais.
Completeness Review
In order to free EPA resources that
would otherwise be consumed in
processing incomplete and inherently
unapprovable SIPs, EPA hat created a
completeness review process. Under this
process. EPA will review a SIP for
completeness when it is initially
submitted to determine if all the
necessary components have been
included to allow the agency to properly
review and act on the substance of the
SIP revision. This will be a quick screen
that will assess the reviewability of a
SIP submittal. not its ultimate
approvability. EPA will then promptly
inform the submitting State whether the
agency will proceed to process the SIP
revision or if it must be modified by the
State because it is incomplete.
There are several benefits to an early
determination of completeness. First, the
State is informed promptly as to the
reviewability of the submittal. a current
source of uncertainty in the SIP process.
Second. SIP submittais that are
inadequate for processing are returned
to the State to be corrected, rather than
going through the review process only to
be disapproved because of a lack of
information. Third, unreviewable SIPs
are removed from the process early so
that resources at the Federal level are
allocated to processing only SIPs that
are adequate for review. Finally, the
completeness criteria! provide the States
with guidelines on how to prepare
reviewable SIPs. It is expected that once
the agencies involved (State and local
EPA) become accustomed to the
completeness review process, the
number of unreviewable submittais will
diminish sharply.
Screening cntena have been
developed that define the essential
elements of an acceptable package, that
will avoid obvious inadequacies, and
that can be applied uniformly with
limited subjective judgement and
review. The cntena were developed by
EPA Regional Offices already using a
list of cntena to determine completeness
of SIP packages in an informal way. On
March 18.1988 a policy for determining
completeness of SIP submittais was
issued by Gerald A. Emison. Director.
Office of Air Quality Planning and
Standards (OAQPS). to the Regional
Offices (a copy has been placed in the
docket as item IMM). The policy
includes basic cntena for determining
completeness, and sample letters for
accepting and rejecting SIP submittais.
This policy will be followed by EPA
until today's proposed regulation is
made final.
As part of this action, the
Administrator is proposing to add these
criteria for determining the
completeness of State submittais to 40
CFR Part 51 as Appendix V. In addition.
EPA proposes to modify { 51.103(a) such
that State submissions that do not meet
the criteria are not considered official
plan submissions for purposes of
meeting the requirements of Part 51. In
order to be considered as a complete SIP
submission or an official submission for
Part 51. each plan must meet the cntena
descnbed below and in Appendix V.
The basic criteria are adaptable for use
in parallel processing of State
regulations by EPA.2
EPA is creating this completeness
review process under the authority of
Section 301 of the Clean Air Act. which
authorizes the Administrator to
prescribe such regulations as are
necessary to carry out his functions
under the Act. EPA is interpreting the
terms "plan" in section 110(a)(l) and (2)
and "revision" in Section 110(a)(3) to be
only those plans and revisions that
contain all of the components necessary
to allow EPA to a adequately review
and take action on such plan or revision
under section 110 (and. where
applicable. Part D). EPA believes rhat
Congress would not have intended to
require EPA to review and take action
on SIP submittais that were simply not
reviewable because they were lacking
important components. Therefore, the
Administrator concludes that Section
110(a) requires him to act only on
complete State submittais.
Completeness Criteria
The cntena for determining whether a
submittal by the State is complete have
been separated into two categories: (a)
Administrative information and (b)
technical support information.
Administrative information includes the
documentation necessary' to
demonstrate that the basic
administrative procedures have been
adhered to by the Stale during the
adoption process. Technical support
information includes the documentation
that adequately identifies all of the
required technical components of tnp
plan submission.
Administrative Information
The administrative information
required by the cntena are those basic
i
1 Parallel processing is * procedure bv which EPA
processes as a propose Suie ruies which nave noi
yet Oeen fuiiv adouieo D% ihe Slate in order 10
expedite 'Jie final review proces*.
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2140
Federal Register / Vol. 54. No. 12 / Thursday, January 19, 1989 / Proposed Rules
documents that demonstrate that the
State has properly followed the
administrative requirements called for
b> the Clean Air Act for the adoption of
State implementation plans. These
include a letter from the Governor or his
dcsignee requesting that EPA approve
the SIP revision, and evidence that the
revision has been adopted by the State
in final form, either as part of the State
code if the revision is a regulation, or as
appropriate source specific
documentation in the form of a permit.
order, or a consent agreement. The State
also must provide documentation that
the necessary legal authority exists
within the State to adopt and implement
the plan revision, must include the
requisite copies of the actual revision
(regulation, permit, order, etc.). and must
indicate that the revision is enforceable
by the State. Finally, the State must
submit information indicating that the
program administrative procedures have
been followed, including evidence of
public notice and hearings, a
compilation of the public comments, and
the State 3 response to these comments.
Technical Support
The purpose of the technical support
information is to identify the State's
view of the impact of the revision on the
environment. The components are
intended to demonstrate that the
applicable requirements, such as those
for attainment and maintenance of
ambient standards, increment
consumption, and control technology,
are in conformance with basic statutory
and EPA requirements. In order for EPA
to make a reasonable decision
concerning the adequacy of a proposed
SIP revision, certain information at a
minimum must be included in each
submittal. Therefore, for purposes of
determining the completeness of a SIP
. submission the implementation plan
revision must include an adequate
description of the:
|a| Pollutants involved:
(b) Source location and attainment
status of the area:
(c) Emissions chances:
(d) Demonstration that standards/
increments are protected:
(c) Information used for any modeling
demonstration:
If) Evidence of continuous emissions
controls;
[g) Evidence of emissions limitations
ana other restrictions necessary to
en«ure emission levels:
(h) Compliance strategies: and
(ij Technological and economic
justification for the change where
applicable.
Upon rece'pt of the pian revision, the
Regional Office wili obiectively examine
the revision for inclusion of the
administrative and technical support
information. When the revision is
determined complete, the formal review
of the adequacy of the information and
the approvability of the revision will
proceed. In those situations where the
submission does not meet the basic
criteria as discussed above and set forth
in Part 51. Appendix V, the submission
will be returned to the State with a letter
indicating the deficiencies found. In
accordance with the change proposed in
40 CFR 51.103(a). any submission that
does not meet the criteria of Appendix V
will not be considered an official
submission triggering the Act's
requirements for EPA review and action.
The basic requirements are similar for
sequential and parallel processing.
varying only in form dictated by the
method of processing. In order to be
effective, the determination of
completeness should be made
expeditiously. The Regional Office
generally will make a determination of
completeness within 45 days of
receiving a SIP revision, using the
criteria to make an objective decision.
After the decision has been made on
completeness, the Regional Offices will
process the SIP revision if the
submission is complete, or return the SIP
revision to the State if it is incomplete.
A letter will be sent to the State.
informing the State of the completeness
status of the SIP revision. If a SIP
submittal is incomplete, the deficiencies
will be detailed in the letter to the State.
If a SIP submittal is complete, the
Regional Office will include EPA's
expected processing schedule in the
letter to the State.
Administrative Requirements
The docket is an organized and
complete file of all the information
considered by EPA in the development
of these SIP processing changes. The
docket is a dynamic file because
material is added throughout the notice
preparation and comment process. The
docketing system is intended to allow
members of the public and industries
involved to identify and locate
documents so that they can effectively
participate in the process. Along with
the statement of b isis and purpose of
the SIP processing changes and EPA
responses to significant comments, the
contents of the docket, except for
mteragency review materials, will serve
as the record in case of judicial review
(see Clean Air Act. section 307(d)(7)(A).
42 U.S.C. 7607(d)(7)(A).
Section 317(a) of the Clean Air Act. 42
U.S.C. 7617(a), states that economic
impact assessments are required for
revisions to standards or regulations
when the Administrator determines such
revisions to be substantial. The changes
described today do not change the
substantive requirements for preparing
and submitting an adequate SIP
package. No increase in cost as a result
of complying with the changes described
today is expected: moreover, the
monitoring, recordkeeping. and reporting
requirements have been determined to
be insubstantial. Because the expected
economic effect of the changes is not
substantial, no detailed economic
impact assessment has been prepared.
The information collection
requirements of these changes are
considered to be no different than those
currently required by the Clean Air Act
and EPA procedures. Thus, the public
reporting burden resulting from today's
notice is estimated to be unchanged
from existing requirements. The public
is invited to send comments regarding
the burden estimate or other aspect of
information collection, including
suggestions for reducing any burden, to
the docket and the following: Chief.
Information Policy Branch. PM-223. U.S.
Environmental Protection Agency. 401 M
Street SW.. Washington. DC 20460: and
to the Office of Information and
Regulatory Affairs. Office of
Management and Budget. Washington.
DC 20503. marked "Attention: Desk
Officer for EPA."
Under Executive Order 12291. EPA is
required to judge whether an action is
"major" and therefore subject to the
requirement of a regulatory impact
analysis (RIA). The Agency has
determined that the SIP processing
changes announced today would result
in none of the-significant adverse
economic effects set forth in section l(b)
of the Order as grounds for a finding of
"major." The Agency has. therefore.
concluded that this action is not a
"major" action under Executive Order
12291.
This rule was submitted to OMB for
review consistent with section 307(d) of
the Clean Air Act. A copy of the draft
rule as submitted to OMB. any
documents accompanying the draft, any
written comment received from other
agencies (including OMB), and any
written responses to those comments
have been included in the docket.
The Regulatory Flexibility Act of 1980.
5 U.S.C. 601-612." requires the
identification of potentially adverse
impacts of Federal actions upon small
business entities. The Act requires the
completion of a regulatory flexibility
analysis for every action unless the
Administrator certifies that the action
will not have a significant economic
impact on a s-bstanuai number of small
-------
Federal Register / Vol. 54. No. 12 / Thursday. January 19. 1989 / Proposed Rules 21 ?1
entities. For reasons described above. I
hereby certify that the final rule will not
have a significant impact on a
substantial number of small entities.
DJte jdnuary 9.1989
Lee M. Thomas.
Administrator
For the reasons set out in the
preamble. 40 CFR Part 51 is proposed to
be amended as follows:
PART 51—(AMENDED]
1. The authority citation for Part Si
continues to read as follows:
Authority: Thu rulemaking it promulgated
under authority of Section* 101(b)(1). 110.
160-69. 171-178. and 30l(aj of the Clean Air
Act. 42 U-S.C. 7401fb)(l), 7410. 7420-7429.
7501-7506, and 7601(a).
2. Section 51.103 is proposed to be
amended by revising paragraph (a)
introductory text to read as follows:
§ 51.103 SubmiMton of ptan*. prtttmtiwry
review of plan*.
(a) The State makes an official plan
submission to EPA when the plan
conforms to the requirements of
Appendix V to this part, and the State
delivers five copies of the plan to the
appropriate Regional office, with a letter
giving notice of such acnon. The State
must adopt the plan and the Governor or
his designee must submit it to EPA as
follows:
• « t • »
3. Part 51 is proposed to be amended
by adding Appendix V to read as
follows:
Appendix V—Criteria for Determining
the Completeness of Plan Submissions.
1 0 Purpose
This Appendix V Beit forth the minimum
criteria for determining whetner a State
imolementanon pian submitted for
consideration by EPA is an official
submission for purpose of review under
{ 51.103.
1 1 The EPA shall return to tne submitting
official any plan or revision thereof which
fans to meet the criteria set forth vn this
Appendix V. or otherwise request corrective
af.ion identifying the component!?! anseni
or insui'f.cient to perform a review of the
submitted plan.
1.2 The EPA shall mi'orm the submitting
official when a plan suomission meets the
requirements of this Appendix V. sucn
ijc'ermmation resulting in the plan beins an
nf'"i..,dl submission for purposes of } 51 103.
Jf C.-nena
The following shall be included in pian
'...^missions for review by EPA
-1 Administrative Materials
'a' A formal letter of submntal from the
Governor or his designee. requesting EPA
approval of tne plan or revision thereof
-. L'jfter "the p.an ')
(b) Evidence that the Stale has adopted the
plan in the State code or body of regulations:
or issued the permit, order, consent
agreement (hereafter document) in final form.
That evidence shall include the date of
adoption or final issuance as well as the
effective date of the plan if different from the
adoptmn/nsuonce date.
(c) Evidence that the State has the
necessary legal authority under Stale law to
adopt and implement the plan.
(d) A copy of the actual regulation, or
document submitted for approval and
incorporation by reference into the plan.
including indication of the changes made to
the existing approved plan, where applicable.
The submittal shall be a copy of the official
State regulation/document signed, stamped.
dated by the appropriate State official
indicating that it is fully enforceable by the
State. The effective date of the regulation/
document shall, whenever possible, be
indicated in the document itself.
(e) Evidence that the State followed all of
the procedural requirements of the State's
laws and constitution in conducting and
completing *' r adoption/issuance of the plan.
(0 Evider that public notice was given of
the proposed change consistent with
procedures approved by EPA. including the
date of publication of such notice.
(g) Certification that public heanngfs) were
held ID accordance with the information
provided in the public notice and the State's
Laws and constitution, if applicable.
(h) Compilation of public comments and
the State's response thereto.
12. Technical Support
(a) Identification of all regulated pollutants
affected by the plan.
(bj Identification of the locations of
affected sources including the EPA
attainment/nonattainment designation of the
locations and the status of the attainment
pian for the affected areas(s).
(c) Quantification of the change* in plan
aliowaoie emissions from the affected
sources; estimates of changes in current
actual emissions from affected sources or.
where appropriate, quantification of changes
in actual emissions from affected sources
through calculations of the differences
between certain baseline levels and
allowable emissions anticipated as a result of
the revision.
(d) The State's demonstration that the
National Ambient Air Quality Standards.
prevention of significant deterioration
increments, reasonable further progress
demonstration, and visibility, are protected if
the pian is approved and implemented.
(ej Modeling information required to
support the proposed revision, including input
data, output data, models used, justification
of model selections, ambient monitoring data
uses, meteorological datd used, justification
for use of offsite date (where used), modes of
models used, assumptions, and other
information relevant to the determination of
adequacy' of the modeling analysis.
(f) Evidence, where necessary, that
emission limitations are based on continuous
emission reduction technology.
(g) Evidence that the plan contains
emission limitations, work practice standards
and recordkeeping; reporting requirements.
where necessarv to ersure emission levels.
(h) Compliance/enforcement strategies
including how compliance will be determine
in practice.
(i) Special economic and technological
justifications required by any applicable EP\
policies.
2.3. Exceptions
2.3.1. The EPA. for the purposes of
expediting the review of the plan, has
adopted a procedure referred to as "parole!
processing." Parallel processing allows a
State to submit the plan prior to actual
adoption by the State and provides an
opportunity for the State to consider EPA
comments pnor to submission of a final pun
for final review and action. Under these
circumstances the plan submitted will n"t be
able 10 meet all of the requirements of
paragraph 2.1 (all requirements of pdraer :oh
2.2 will apply). As a result, the followi-.i
exceptions apply to plans submitted
explicitly for parallel processing:
(a) The letter required by paragraph 2.1'*)
shall request that EPA propose approval of
the proposed plan by parallel processing
(b) In lieu of paragraph 2.1(b) the State
shall submit a schedule for final adoption or
issuance of the plan.
(c) In lieu of paragraph Zl(d) the plan *.-.„:!
include a copy of the proposed /draft
regulation or document.
(d) The requirements of paragraphs 2 1!H-
2.1(h) shall not apply to pian* submitted for
parallel processing.
2-3.2. The exceptions granted in paragrnph
2-3-1 snail apply only to EPA s determindtiun
of proposed action and all requirements of
paragraph 2.1 shall be met pnor to
publication of EPA's final determination of
plan approvability.
(FR Doc 89-1001 Filed 1-18-89: 8:45 am]
•4UJMO COOT «SSO-iO-«l
FEDERAL EMERGENCY
MANAGEMENT AGENCY
Federal Insurance Administration
44 CFR Part 67
[Docket No. FEMA-0946]
Proposed Rood Elevation
Determinations
AGENCY: Federal Emergency
Management Agency.
ACTION: Fronted rule.
SUMMARY: Technical information or
comments are solicited on the proposed
base (lOO-year) flood elevations and
proposed base flood elevation
modifications listed below for selected
locations in the nation. These base (100-
yearl flood elevations are the basis for
the floodplam management measures
that the community is required to eithe--
adopt or show evidence of being alrebc v
in effect in order to qualify or remain
qualified for participation in the
-------
EPA-450/2-78-027R
Guideline On Air Quality Models
(Revised)
U.S. ENVIRONMENTAL PROTECTION AGENCY
Office of Air and Radiation
Office of Air Quality Planning and Standards
Research Triangle Park, NC 27711
July 1986
-------
c/EPA
United States
Environmental Protection
Agency
EPA-600/8-81-009
April 1981
Research and
Development
Guideline for
Fluid Modeling of
Atmospheric Diffusion
ENV«ONM£NTAl PROTECTION
AGENCY
OCT 3u 1981
UMARY SERVICES OFFICE
Prepared for
Office of Air Quality
Planning and Standards
Prepared by
Environmental Sciences Research
Laboratory
Research Triangle Park NC 27711
-------
NC 27711
Fluid Modeling
Demonstration of
Good-Engineering-
Practice Stack
Height in Complex
-------
REFERENCES FOR SECTION 5.7
-------
PN 123-85-10-28-008
-NrtO ST4,
0 - * UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
OCT Z S J985
MEMORANDUM
SUBJECT: Implementation of Stack He 1gj>.f)Regulates - Exceptions From
Restrictions on Credit for
FROM: Darryl D. Tyler, Director/ ^^_
Control Programs Development Dlyrslon (MD-15)
TO: Director, A1r Management Division
Regions I-X
This guidance has been prep -ed to address two Issues pertaining to
credit for merged stacks prior to July 8, 1985. It establishes a procedure
that should be used to prepare and to review justifications for merging gas
streams for economic or engineering reasons, and to address the presumption
that merging was significantly motivated by an Intent to gain credit for
Increased dispersion. Please note that this 1s guidance; States may submit
alternative demonstrations 1n support of merged stack exemptions 1f they
feel the Individual circumstances warrant.
Background
Recent revisions to EPA's stack height regulations place certain
restrictions on the degree to which stationary sources may rely on the
effects of dispersion techniques when calculating allowable emissions.
One such restriction 1s provided for the merging of gas streams, or
combining of stacks. Several exemptions have been provided 1n the regula-
tion, however. More specifically, 40 CFR Part 5l.l(hh)(2)(11) allows
credit under circumstances where:
A. The source owner or operator demonstrates that the facility was
originally designed and constructed with such merged gas streams;
B. After July 8, 1985, such merging 1s part of a change 1n operation
at the facility that Includes the Installation of pollution controls and 1s
accompanied by a net reduction 1n the allowable emissions of a pollutant.
This exclusion from the definition of "dispersion techniques" shall apply
only to the emission limitation for the pollutant affected by such change
1n operation; or
C. Before July 8, 1985, such merging was part of a change 1n operation
at the facility that Included the Installation of emissions control equip-
ment or was carried out for sound economic or engineering reasons. Where
there was an Increase 1n the federally-approved emission limitation for any
-------
pollutant or, 1n the event that no emission limitation was 1n existence
prior to the merging, an Increase 1n the quantity of any pollutants actually
emitted from existing units prior to the merging, the reviewing agency
shall presume that merging was significantly motivated by an Intent to gain
emissions credit for greater dispersion. Absent a demonstration by the
source owner or operator that merging was not significantly motivated by
such an Intent, the reviewing agency shall deny credit for the effects of
such merging 1n calculating the allowable emissions for the source.
General Requirements
Figure 1 Illustrates a framework for evaluating claims for merged
stack credit. Because merged gas streams are generally regarded as prohibited
dispersion techniques under the regulations, 1t 1s Incumbent on the State
or the source owner or operator to demonstrate that such merging was conducted
for sound economic or engineering reasons, and was not significantly motivated
by an Intent to avoid emission controls. Consequently, the first step
should entail a review of State and EPA files to determine the existence of
any evidence of Intent on the part of the source owner or operator.
Information showing that merging was conducted specifically to Increase
final exhaust gas plume rise serves as a demonstration of dispersion Intent
that justifies a denial of credit for merged gas streams. Demonstrations that
merging was carried out for sound economic or engineering reasons are
expected to show that either the benefits of merging due to reduced
construction and maintenance costs outweigh the benefits relating to lower
emission control costs or that relevant engineering considerations showed
the merging to be clearly superior to other*conf1gurat1ons.
Demonstration Requirements
Several exemptions from prohibitions on gas stream merging are provided
for existing sources 1n the stack height regulations:
1- where sources constructed their stacks before December 31, 1970,
2- where the total facility-wide emissions from the source do not
exceed 5,000 tons per year,
3- where the facility was originally designed and constructed
with merged gas streams, and
4- where the aerglng was part of a change 1n facility operation that
Included the Installation of pollution control equipment and resulted 1n
no Increase 1n the allowable emissions of any pollutant.* Where there
was an Increase in emissions 1n conjunction with the nerglng and Installation
of control equipment, the regulations require that source owners also make
an affirmative demonstration that the merging was not motivated by dispersive
Intent.
*Where there was no federally-approved emission Hm1t prior to merging
gas streams, there must be no Increase 1n the actual emissions of any
pollutant. Moreover, U 1s Incumbent on the State to demonstrate that there
was a logical relationship between the merging of existing gas streams and
the Installation of controls.
-------
Sources that are not covered under these criteria may still qualify for
exemption 1f they can show that merging was conducted for sound economic
or engineering reasons. Such demonstrations should Include justifications
for having replaced existing stacks. This may be done, for Instance, by
documenting through maintenance records, correspondence, or other
contemporaneous evidence, that the existing stacks had reached the end of
their useful life, were prematurely corroded, had sustained other damage
making them unservlcable, were of a height less than that regarded as
good engineering practice, thereby causing downwash problems, or that the
addition of new units at the facility necessitated additional stacks and
Insufficient land was available. The absence of any evidence supporting
the need for stack replacement creates a strong presumption that merging
was carried out specifically to avoid the Installation of pollution
controls, I.e., was "significantly motivated by an Intent to gain emissions
credit for Increased dispersion."
No Increase 1n Allowable Emissions
Once this Initial criterion 1s satisfied, demonstrations may show
that merging was based either on sound economic or sound engineering
reasons. Claims based on strict engineering justifications nay be more
difficult to show, since the existence of more than one reasonable
engineering solution generally leads to a decision based on economics.
However, 1f1t can be documented that the merged stack configuration was
clearly superior to other stack configurations for purely engineering
reasons, without consideration of cost, then credit for merging may be
granted.
In order to most reliably Implement the provisions of the regulations
regarding the merging of gas streams for sound economic reasons, It would
be necessary to ascertain the actual Intent of the source owner or operator
at the time the decision was made to merge gas streams. Recognizing that
the difficulty of doing so was the basis for EPA's rejection of an "Intent
test" 1n the rule, the following approach provides a surrogate demonstration
of Intent. This approach 1s summarized 1n Figure 2.
Because the potential savings attributable to the avoidance of
pollution controls can significantly Influence decisions to Merge stacks,
one way to show the absence of dispersion Intent 1s to conduct an analysis
of the annual1zed capital and maintenance costs for merged stacks and for
Individual stacks, and compare the results to the compliance costs (fuel
and operation and maintenance of any control equipment) calculated based on
the emission limitations derived with and without merged stack credit. If,
when the difference 1n capital and maintenance costs 1s compared with the
difference 1n compliance costs over the period of capital amortization, the
capital and maintenance cost saving 1s greater than the compliance cost
saving, then merging can be accepted as having a sound economic basis.
In establishing this rule of thumb, we are aware that a benefit of as
little as 10-20 percent could be considered "significant* 1n the context of
the court's holding on this matter—I.e., such a benefit could have been
considered to be a relevant factor 1n decisions to construct merged stacks.
-------
However, recognizing that documentation of cost analyses after an extended
period of time--up to 15 years— 1s likely to be limited, we believe that
the 50 percent test articulated above would constitute a more reasonable
basis for initial determinations (that 1s, a level at which we believe that
there was likely a significant Incentive to merge stacks to avoid control
requirements).
Affirmative Demonstrations of Nond1spers1on Intent
In some Instances, a State or emission source owner may not be able to
make a demonstration as described above, or believe that sound economic
reasons existed for merging stacks, regardless of the relationship between
financial savings attributable to reduced emission control requirements
versus lower stack construction cost. In such cases, an opportunity should
be provided to affirmatively demonstrate that merged stacks were not
"significantly motivated by an Intent to obtain emissions credit for
increased dispersion." The burden of proof rests solely with source owners
or operators attempting to make this showing.
Demonstrations may rely on any relevant evidence, Including but not
limited to the following:
- construction permits, or permits to operate from pollution control
agencies
- correspondence between the source owner or operator and government
agencies
- engineering reports relating to the facility
- facility records
- affidavits
- any other relevant materials
For Instance, such a demonstration could be made by submitting
documentary or other evidence (e.g., Internal company memoranda presenting
the alternative construction opportunities available to the company) that
indicates the Intent of the source owner or operator and shows that
consideration of dispersion advantages was conspicuously absent.
Alternatively, 1t night be shown that either action by the State 1n
approving a revised emission limit followed actual Merging sufficiently
later 1n time to suggest that dispersion credit was not considered by the
source at the time of merging or the State approved 11n1t was unrelated to
the merging.
In attempting to make demonstrations, source owners or operators
should present as much evidence as can be located, with the understanding
that demonstrations based on any single category of evidence (such as
affidavits) presented 1n Isolation are less likely to constitute acceptable
showings than demonstrations based on cumulative bodies of evidence.
discussed below, affirmative showings will be required of sources
whose merged stacks were associated with an Increase 1n allowable emissions
as well as some sources whose mergers were not associated with such
-------
Increases. However, EPA expects sources whose emission limits Increased
subsequent to the merging to present stronger showings than those with no
Increase, since the regulatory definition of "dispersion technique" views
such Increases as an explicit Indication that the merged stacks were
significantly motivated by an Intent to gain credit for Increased disper-
sion. Sources who do not Increase their emissions, but who have difficulty
making other demonstrations, such as the Installation of pollution controls,
or merging for sound economic or engineering reasons convey a more Implicit
Indication of dispersion Intent that must be rebutted; for such sources,
however, the presumption of Intent 1s not as compelling.
Increases 1n Allowable Emissions
As stated above, 1n cases where the allowable emissions of any
pollutant Increased In conjunction with the merging of gas streams, such
an Increase provides even stronger circumstantial evidence that merging
was not carried out for sound economic or engineering reasons, but was
"significantly motivated by an Intent to gain emissions credit for greater
dispersion." This presumption may be rebutted by making one of the
following demonstrations.
1- by showing that the cost savings associated with reduced compliance
costs for merged stacks are less than 50 percent of the total savings due to
merged stacks (I.e., annual compliance savings plus annual 1 zed capital
and maintenance savings), and by making an affirmative showing, as described
above, that there was no significant motivation to gain credit for the
Increased dispersion provided by merged stacks; or
2- by showing that alternatives to stack merging were reasonably
precluded strictly for engineering reasons, and by affirmatively demon-
strating the absence of significant dispersion Intent, as noted above.
In the absence of such a showing, 1t should be presumed that avoidance
of emissions control was a significant factor 1n the decision to merge gas
streams, and credit should be denied.
If you or your staff have any questions regarding the application of
this guidance 1n specific Instances, please contact Eric Glnsburg at
(FTS) 629-5540 or Sharon Relnders at (FTS) 629-5526.
Attachments
-------
FIGURE 1
NO
Credit
Granted
Credit
Granted
Pre- 7/8/85
Retrofit Merged Stacks
Record of Intent
for Dispersion
Purposes
res
res
No
Credit
Installed
Pollution Controls
Increased
Emissions
Yes
Affirmative
Showing
No
Reason to
Replace Stacks
Credit E
R
nm
Engineering
Reasons make
No Merging Clearly
Credit No | Superior
nglneerlng
easons for
Merging
Increased
Emissions
fTe
run
Tes
Economic
Reasons for
Merging
See
Figure 2
Engineering Reasons
to Preclude Alternatives
Credit
Granted
fYes I
Credit
Granted
Yes
|NpJ
Affirmative
Showinq
No
Credit
No
No
Credit
-------
Figure 2
Economic Justification
for Merged Stacks
Savings due to Avoidance
of More Stringent
Emission Limit
No Increase
In Emissions
Increase
In Emissions
Less than 50* of Total
Savings due to Merged
Stack Construction
Credit
Granted
Affirmative
Showing
Exceed 50* of Total
Savings due to Merged
Stack Construction
Affirmative
Showlng
No
Credit
-------
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-------
REFERENCES FOR SECTION 5.8
-------
WORKSHOP ON IMPLEMENTING THE STACK
HEIGHT REGULATIONS
(REVISED)
OC 3ER 29 TO 30, 1985
by
PEI Associates, Inc.
505 South Duke Street, Suite 503
Durham, North Carolina 27701-3196
CONTROL PROGRAMS DEVELOPMENT DIVISION
OFFICE OF AIR QUALITY PLANNING AND STANDARDS
U.S. ENVIRONMENTAL PROTECTION AGENCY
RESEARCH TRIANGLE PARK, NORTH CAROLINA 27711
October 1985
-------
PN 123-87-10-09-01-
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standaras
Research Triangle Park, North Carolina 27711
9 OCT 1987
MEMORANDUM
SUBJECT: Processing of Stack Height Negative Declarations
FROM: G. T. Helms, Chief /I ^ \^Jit^<^/
Control Programs Operations Branch
TO: Chief, Air Branch
Regions I-X
The purpose of this memorandum is to clarify and revise some points
in my September 3, 1987, memorandum entitled "Technical Support for Stack
Height Negative Declarations." That memorandum included a list of minimum
requirements for determining adequate documentation with three additional
guidance documents attached. One of the attachments was the August 28,
1987, memorandum from Charles Carter of the Office of General Counsel (OGC)
and me to Bruce Miller of Region IV, entitled "Documentary Support for
Deficiencies in Stack Height Review Packages." Because several actions
are being delayed by inadequate documentation, we sent copies of the
August 28 memorandum to all ten Regions as examples to alert them to
these problems.
The Tennessee State implementation plan (SIP) was used as an example
because we believed it had deficiencies that were common to other negative
declaration packages. The use of the Tennessee evaluation as an example
was not intended to single out Region IV as having more problems with
documentation than other Regions, although the tone of the memorandum
might have given-this impression. I am sorry for this misrepresentation.
In a recent conference call with OGC and Region IV, Region IV
suggested three clarifications and revisions to the guidance that we
included in the August 28, 1987, and September 3, 1987, memorandums. We
believe these should be incorporated. They are as follows:
1. The requirement for a list of sources evaluated for
negative declarations applies only to sources greater
than 65 meters.
2. For grandfathering documentation, the date the
source was built is not essential, but the type and
date of the documentation that the source was built
prior to December 31, 1970, must be listed. However,
whenever the actual construction date is submitted
by the State, it should be included.
NOTE: Attachments 1 and 2 are not
included in the Policy and
Guidance Notebook.
-------
3. It is not necessary that a Region give assurances that
they ars confident the documentation is adequate; however,
regional management should be satisfied that the State
submission meets the requirements of the stack height
regulation.
We also agreed during the conference call that the Delaware negative
declaration (#3356) (See Attachment 1) includes a good tabular form to
present the good engineering practice (GEP) review in a Federal Register
notice or the accompanying technical support document (TSD). Attachments
2 and 3 present expanded tables for stacks over 65 meters and for sources
over 5000 tons per year. The notice does not have to include tables in
these formats, but the information required in them should be discernable
from the notice and/or TSD. For example, the Delaware table in Attachment
is a shortened version of Attachment 2, since no stacks exceeded GEP.
I hope this memorandum clarifies my past correspondence and gives
you a better understanding of the documentation necessary for processing
stack height negative declarations. If you have any questions, please
call Ted Creekmore (629-5699) or me (629-5526). Thank you for your
patience during the processing of these complex SIP revisions.
Attachments
cc: Charles Carter
Pat Efflbrey
Sharon Reinders
Richard Rocs-Collins
Ted Creekmore
Dave Stonefield
'Eric Ginsberg
John Silvasi
-------
//' 777?
Table 1
A surjnary of applicable sources and the States review.
^* ^ ^i*»«^ a f*i* _
Grancfather
•"•iir.ir.ff ten "inishing Company
C-elrr.arva Power & Light
(idge.T.oor)
Unit 13
unit M
Ur.it *5
Delaware City
Indian River
Unit *1
Unit *2
Unit f3
Unit *4
?u?ont Seaford
Texaco
Sulfur Recovery Unit
~luid Ccker
Crude Unit
Catalytic Cracker
Sun Olin Chemical Co.
Seller Stack
Allied Corporation
Boiler StacJf East
Delaware Trust Building
American International' Building
X
X
X
X
X
X
X
X
X
X
X
FERC report 195
;ERC r«Port 196
State Air Fermi
report 195
j[£RC report 195'
££RC report 195;
JrRC reP°rt 1S7C
State Air Permit
Craving dated
1939
State Air Perr.it
Drawing dated
12/2/55
Drawing dated
5/28/55
Drawing dated
5/10/60
Purchase order
4/6/61
Drawing dated
9/28/59
Drawing dated
1/12/59
"Drawing da,ted
10/8/65
«
- Stack was in place or binding contract before 12/31/70.
- Source Follows Good E.-.c ir.eeri
vi-..i -.h. July 8, ises
a ?-.r«-^« ,•
L!:"::c:j?.;ccordt""
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-------
PN 123-86-02-11-012
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
MEMORANDUM
SUBJECT: Clarification of Existing Guidance on Dispersion
Modeling Requirements for Plapts With "Tall Stacks"
and Other Prohibited Disper/fon Techo/ques
FROM: Darryl D. Tyler. Director&<&%{
Control Programs Development Dynsion (MD-15)
TO: Director, Air Division, Regions I-X
The purpose of this memo is to clarify EPA's guidance on the dispersion
analysis requirements that are necessary to implement the revised stack
r.eignt regulations (see EPA's Stack Height Workshop Manual dated October
1985) and, second, to respond to questions on whether dispersion modeling
is required in the context of checking for prohibited dispersion credit
if a source's emission limitation was not developed by means of a case-
specific dispersion analysis.
In cases where stac'k height credit and/or dispersion credit changes
and a dispersion analysis has been performed in any context, that
analysis must to be reviewed to determine if the model inputs reflect
credit for stack heignt(s) above good engineering practice (GEP) or any
otner prohibited dispersion tecnmque(s). (Review of the model inputs
applies to botn tne> specific source(s) for which the analysis is conducted
and nearby point sources as performed for a new or renewed-permit, a new
source review/ prevention of significant deterioration national ambient
air quality standard attainment or increment analysis, a State plan to
propose revision of its federally approved State implementation plan
(SIP) emission limitations, justification of the current SIP limitations,
or any attainment/nonattainment redesignation(s), etc.)
If the analysis reflects credit for prohibited dispersion techniques,
tnen the source(s) need to be remodeled without the prohibited credit(s)
and revised emission limitation established in tne event that the analysis
snows an attainment or increment problem. If a source's emission limit
was established by ambient air quality considerations such as rollback,
mooeling is required to demonstrate consistency with the stack height
-------
-2-
regulation because credit for prohibited dispersion techniques is reflected
in the monitored value. If a source has never been analyzed for dispersion,
then it is' not necessary to conduct a dispersion analysis now.
It is a State responsibility to demonstrate (1) that the SI? limit
does not consider the results of dispersion analyses, (2) that the source
has never been evaluated for dispersion credit, or (3) that existing or new
analyses are consistent with guidance. Regions are encouraged to provide
assistance to States in this endeavor if the impacted agency so desires.
It is always appropriate for an individual State or Region to request or
initiate a modeling analysis where one does not exist if there is reason
to believe that a source's emission limitation is inconsistent with the
stack height regulations. However, EPA is not calling for an across the
board modeling analysis from every source.
Please pass this information along to your States. If you have any
questions on implementing this guidance, please call Sharon Reinders at
FTS 529-5525 or Eric Ginsourg at FTS 629-5540.
cc: Regional Ad-inistrator, Regions I-X
Chief, Air Branch, Region I-X
Regional Stack Height Contact, Regions I-X
R. Brenner
R. Campbell
C. Carter
C. Elkins
G. Emison
T. Helms
D. Rhoads
B. J. Steigerwald
J. Tikvart
P. Wyckoff
-------
REFERENCES FOR SECTION 5.9
-------
480 Federal Register / Vol 53. No. 4. / Thursday. January 7. 1988 / Rules and Regulationi
ENVIRONMENTAL PROTECTION
AGENCY
40CFRP»rt51
Stock He4gh1 Emissions Balancing:
FmaiPoNcy
AOIMCV: Environmcaul Protection
Agency (EPA).
ACTION: Final policy statement
r. Reproduced below is a
memorandum which «eu forth EPA'*
national policy authorizing use of
"emissions balancing" (EB) for
compliance with the Agency'* revised
•tack height regulation profflulgated July
B. IMS (50 FR 27882). Thia policy
provide* aa alternative compliance
option which can reeult in substantial
coat savings to electric utility or other
source* affected by these regulation* or
to their customers. while aaauring
equivalent or greater environmental
benefit*. It makes final and responds to
major comment* on a policy proposed
December 23. 1885 (SO FR 52418). .
WPtcnvi DATE This policy is effective
on January 7. 1988.
POM PUMTHCBJ MPOHMATIOM CONTACT:
For information concerning the policy
issues addressed herein, contact J.
David Foster. Office of Air and
Radiation, (202) 475-4580. For
information concerning implementation
and processing of emission* balancing
state implementation plan revisions,
contact C.T. Helm*. Office of Air
Quality Planning and Standard*. (919)
541-5527.
Docket Statement
Pertinent information concerning this
policy Is included in Docket Number A-
85-05 which ha* been established as the
record of these proceedings. This Docket
is maintained in EPA's Central Docket
Section. South Conference Center. Room
•4. 401 M Street SW. Washington. DC
and may be inspected between 840 a.m.
and 4:00 p.m. on weekdays, A
reasonable fee may be charged for
copying materials in this Docket
L Introduction and Summary
The stack height regulation revisions
promulgated on July 8. 1985 (50 FR
r*8S:; implement the previsions of
itci.on 123 of the Clean Air Act which
reevires that the degree of emission
Limitation required for control of any air
b poilutant under an applicable state
;Tp'»ment»tior> plan (STP] shali not be
ted by (1) ttadc heigr.u in excess of
engineering practice (CEP1,, or (2)
any other dispersion technique. For
more detailed discussion, see the July 8.
1985 notice.
Stationary sources of sir pollution are
subject to emission limitations to assure
attainment of the national ambient air
quality standards (NAAQS) and to
protect prevention of significant
deterioration (PSD) increments. These
limitations are derived from prediction*
of ground-level pollutant concentrations
that will occur in the area of maximum
impact a* a result of pollutant emissions
from one or more sources. Dispersion-
enhancing practices, including
excessively tall stacks, lower the
predicted ground-level concentrstiona
and may result la emission limitations
which allow sources to emit greater
total amounts of pollution thin If such
practices wen not employed
Under th« revised stack height
regulation *me sources »ay be swbfsct
to emission .jnitations which are more
stringent than those which currently
apply. Today's final policy has been
developed in consideration of the fact
that emission reductions mandated by
the stack height regulation may be
obtained more cost-effectively by
allowing such a source to secure these
reductions et (another sourcefs). la lieu
of reducing emissions at it* own facility.
For purposes of this policy, the source
which is subject to more stringent
emission limits is called the "affected
source"; the source which provides the
emission reductions needed to satisfy
such limits is called the "providing
source1*. This joint satisfaction of aa
emission reduction obligation is referred
to as aa "emissions balance."
Under dean Air Act section 110 and
40 CJH Part 5L a SIP revision
establishing emission limits for affected
sources must provide for full
implementation of (Le. ultimate
compliance with) any required emission
reduction as expeditiously as
practicable but not later than 3 years
from the date EPA approves the SIP
revision.
Emission* balances will also be
approved through this SIP revision
process. To allow sufficient time for
arranging balances while assuring
prompt ultimate compliance, the final
policy requires EB SIP revisions to be
submitted to EPA within 9 months after
EPA final approval of the stack height
SIP revision for the relevant affected
source. Use of an emission balance will
not be permitted to delay compliance
beyond 3 years from the date EPA
approves the relevant (tack height sip
revision.
The EPA is limiting the period during
which emission balances can be
submitted to avoid delays in compliance
with CEP emission limitations.
Depending on the extent of required
emission reductions, significant lead
time may be necessary before actual
compliance can be achieved If a source
sought to apply for an emission balance
later than 9 months after receiving a
revised emission limitation, it might not
be possible for the balance SIP revision
to be approved and for the providing
source to reduce it* emission* within the
time required for ultimate compliance
with the CEP emission limitation.
To ensure that balance* will have
environmental effect* equivalent to
stack-by-suck compliance with the July
8 refutation. EPA has concluded that in
light of potential complexities involved
la the stack height regulation, the
emission reductions from the providing
source must be greater than the
reduction* required of the affected
source by the stack height regulation. In
order to facilitate prompt approval of
sound application* for emission
without the potential delay
that might otherwise result from
intensive verification of baseline and
other factors bearing on equivalent
emission reductions, the final policy
requires 20 percent more emission
reductions from the providing source
than would have been required from the
originally affected source (La. a
"balancing ratio" of 1 to 1.2). on an
annual avenge basis.
The proposal would have barred
balance credit from shutdowns or
production curtailments. The final policy
similarly does not allow general use in
balances of emission reductions from
plant shutdowns or operation
curtailments, but authorizes their
consideration in individual cases
employing "lower emissions dispatch"
(LED) where stated criteria are met The
concept of LEO. which explicitly couples
the curtailment of operations at high
emitting facilities with the increased use
of well-controlled facilities, is currently
being analyzed by various state* under
EPA's State Add Rein (STAR) grant
program, in part to determine whether
that approach could be generally
authorized in future Agency actions.
However, because EPA does not yet
know how reductions from LED could be
adequately calculated, monitored, and
enforced, this epproach can only be
considered on a ease-by
-------
Federal Register / Vol. 53. No. 4. / Thursday. January 7. 1988 / Rules and Regulations
that inquiries needed to satisfy such
concern* may add delays to an already
tight timetable, aad that in no case will
these delays be considered a
(unification for extending the 3-year
ultimate compliance deadline.
EPA's December 23.1965 proposal
considered placing limits on the relative
difference in stack heights of the
providing and affected sources. The
Agency has subsequently determined
that any such limit would both
unnecessarily increase the policy's
complexity and decrease the
effectiveness of the program. The final
policy therefore imposes no constraints
based on actual or effective suck height
differences.
Becauae of potential administrative
and en/oresjmeat difficulties with
balances that transcend a single state's
jurisdiction, today's policy generally
limits balances to facilities within state
boundaries. However, this policy
recognizes a specific exception in the
case of interstate air quality control
regions (AQCR's). In such interstate
areas, states nave already developed
enforceable interstate processes for
attaining and maintaining ambient air
quality standards. Therefore, this policy
also allows the baJanong of eolation
reductions among source* within aa
interstate air quality control region.
In brief, today's policy allows aa
affected source to meet more stringent
emission limitations required by the
revised stack height regulation by
securing emission reductions from
another source or sources within the
same state or interstate AQCR. subject
to a "balancing ratio" of 1 to U and
other safeguards (see sections A and B
of the policy] designed to assure that
reductions at least equivalent to those
expected from stack-by-etack
compliance will be obtained.
Analyses of the likely effects of such
•missions h»i»"^^g have consistent})'
indicated that it will produce equal or
greater emission reductions at
substantial* leas coet than conventional
compliance without *"ta>i^»«
EPA receded 24 comments addressing
the proposed policy. Minor comments
have beesi uasiiklsie-iJ accerdaag to me
issue* raised and are summaRzed along
with EPA's responses in a detailed
revponve to i j ipiiMj»u>« document
incradetf B ne deckel Comments which
edcrceevu huraea rsnds^DeDtBJ to
demlapuaeut of the final policy are
briefly summarized and responded to
below.
A. Legality
Three commenters asserted that use
of emissions balancing would not square
with the statute, claiming that section
123't bar on crediting "excess" stack
height (Le. suck height exceeding CEP)
when developing applicable SIP
emission limits also requires compliance
with those limits at the specific tuck.
They additionally cited 5/esre Qub v.
EPA. 718 FJd 436 (D.C Or. 1983). which
did not addreaa the issue* ben but
generally cautioned EPA to interpret
section 123 in a manner which cm on
the aide of prottctiai public health.
EPA disagrees with that«
commenters. It is quite true that excess
•tack height may aot be taken into
account whan developing SIP fnfM>**i
limits: these limits must treat such
sucks exactly as though they wan not
excessively "talL" However, these
comments ignore the fact that once such
limits art properly developed, the
requirements of section 123 an fulfilled.
Resulting emisaion limits art thereafter
no different than any other SIP emission
limitation under dean Air Act section
110. and may generally be satisfied in
the same broad range of way*.* That is
particularly true where, at here,
balances may only be used in areas
which have either attained and art
maintaining the relevant NAAQS and
PSD increments, or are "pp|eiPa**tf*if
EPA-approved plans for doing to (t*e
today's policy section AJ). Section 123
was not written or intended to
physically eliminate all dispersion of
pollutants, but rathar to eliminate
reliance on undue dispersion whan
calculating nec**tary levels of •"»«•««"
control Thus, beyond the need to assure
the protection of public health and
welfare from actual air quality levels In
excns of the NAAQS or PSD
increments, there it no need to require
sits'Specific control tinea. ID conjunction
with the ruck height regulation, the
policy enure* that BO none reliance on
dispersion exist*.
No different mult to amiiied by tone
comjneoters' rebence OB statutory and
regulatory language prohibiting emission
limitations that are •affected m any
manner" by "so much of the stack height
of any source" tnal exceed* CEP.
Section 123 rtvetf refers to "the degree of
emission InnrtatJoa* required for control
of any air poQutnt andier an applicable
Implementation plan." not for control of
any sir pollutant emitted by a specific
source under such a plan. Moreover, the
cited passages uniformly refer to the
process by which initial SIP limitation
mutt be developed under section 123—
process which is necessanly source-
specific. since it turns on such factors a
the individual source's stack height.
plume rise, and interplcy with emission
from other nearby sources. See. e.g.. 40
CPR 51.120) (IMS). These previsions
•imply dp not reach the question of ho*
such limits, once properly set. may be
satisfied Once those limits are properly
act. •minion balance* change neither
the overall degree of emission lisritatioc
nor the amount of total reduction
required under the applicable plan.
other than to provide greater reduction,
Nor is a different resuh required by
comments that "grandfatfaered" tuckf
not subject to aeetion 123 should aot tx
allowed to provide reductions for
emissions balances. That Congress
refused to mandate further restriction!
OB sucks constructed before 1871 say*
nothing about their abQttjr to voluntarily
reduce emissions further aa part of an
emisaion balance. Indeed, securing
further, coal-effective reductions from
exempted stacks constituus an
additional fusntification for allowing
these source* to be providing sources in
balance.
Wta v* Wraa*Cjnn**m
. bK. AufnM 1MB. Doowi hrw «|V-A
' Com»«« 14. Fts
11 TO 4U14 (Owe. i. 1MB).
B. £ma*ja0* SoJeocing Ratio
Toe) propoeajd policy reqvefted
comment on a rang* of ratios between l
to 1-2 and 1 to 2, noting without
explanation that EPA -piefeiieu*" the
higher ratio. Two comments supported
this 1 to 2 ratio. Ten comments
supported a 1 to l ratio, asserting that
EPA iecked authority to require more
than equivalent emission reductions.
Three cocDDentert supported 1 to 1^.
suting that this ratio should provide
more than adequate ausiiuysu*ataJ
equivalence end that any higher ratio
would dcMcnarage balances and could
therefore recult m lee* owrall
environmeBlaJ benefit Seven
eoameater* auggevtad other ratios or
ratioing techniques.
Providing *e*eree
-------
462
Federal Register / Vol. S3. No. 4. / Thursday. January 7. 1988 / Rules and Regulations
1.2 ratio it needed to help ensure overall
em ironmental results at least
equivalent to those which would result if
all emission reductions had occurred at
the affected source. Given that NAAQS
and PSD increments are required to be
attained, that real reductions from a
lower-of-actuals-or-SIP-allowables (or
remodeled SIP allowables, if remodeling
is required) emissions baseline are
required from each providing source.
and that the policy contains other
safeguards. EPA believes that a 1 to 1.2
ratio provides adequate assurance of
equivalence and that no higher ratio is
required The 1 to 1.2 ratio would also
yield the least costly reductions from the
range of ratios evaluated.
C. Credit for Shutdown* Curtailments
or Lower Emissions Dispatch (LED)
The proposed policy would have
barred balancing credit for these
possible emission-reducing actions at
providing sources, noting potential
monitoring and enforcement problems. It
further noted that, assuming constant
demand, reduced electricity production
at one providing facility could result in
parallel increases elsewhere.
Eleven of thirteen cotnmenters of this
issue recommended that emissions
balance credit be given for reductions
derived from lower emissions dispatch
or some other form of enforceable
curtailment of operations at high
emitting facilities. One commenter
suggested that such credit be given on a
case-by-case basis, and one commenter
f upported the proposed policy.
"Lower emissions dispatch" is the
term used in this policy to describe a
utility company, holding company, or
powerpool management strategy to
control emissions by decreasing.
electricity production at higher emitting
(e.g~ higher Ibs/10 • Btu) power plants.
and increasing electricity production at.
lower emitting (cleaner) power plants.
rather than distributing (dispatching]
electricity production solely oa the basis
of least cost.
Creditable emission reductions In this
section 123 context depend not so much
on the production level at a given
facility as on a detailed analysis of the
change in emissions resulting from the
transfer of production from one facility
with one set of controls to another
facility with another set of controls.
Without detailed enforceable provisions
relating not only to the curtailment of
production at a h'gh emitting facility, but
I also to the transfer of production to and
emission limits at an identified second
facility, reductions claimed from UT>
would not in general. b» sufficiently
reliable.
None of the commenter*
demonstrated how these emission
reductions could be reliably enforced.
Without assurance that emission
reductions derived from curtailments at
high emitting facilities would be
enforceably coupled with increased
production at low emitting facilities, or
would otherwise assure equivalent or
lower emissions. EPA cannot generally
authorize emissions balances relying
upon curtailment EPA presently does
not know how to calculate reduction*
from or how to adequately enforce LED.
However. EPA will review such
proposed methods of achieving
reductions for aa emissions balance on
a case-by-case basis, where applicants
fully document and commit to use
enforceable, easily monitored
procedures for assuring equivalent
emission reductions. Applicants should
be aware that they bear die burden of
proof on such showings, which will not
constitute grounds for extending the
three-year ultimate compliance date
described above and in more detail at
subsections F and G below.
D. Relative Stock Hfight Umitt
The proposed policy requested
comments on four possible options for
relative stack height limitations, ranging
from no additional restrictions to •
requirement that the effective height
(i.e.. physical stack height plus plume
rise) of the providing source be at least
equal to that of the affected source.
Eighteen comments supported no stack
height restriction. One commenter
advocated the most stringent option
requiring equal or greater effective stack
height, citing concerns that balancing
might otherwise increase long range
transport
The final policy does not restrict the
relative stack heights of affected and
providing sources. The thrust of section
123 is to limit reliance oa undue
dispersion when calculating appropriate
levels of emissions control No
restriction en relative stack height
appears necessary to effectuate mat
purpose, and such restrictions would
likely result in fewer and more costly
emission reductions that balances could
otherwise secure. EPA analyses suggest
that emissions balancing without
additional stack height restrictions
could secure up to 30.000 tpy more SO*
reduction (with savings up to $50 million
per year more) than balancing with
additional stack height restrictions.1
EPA concludes that balances with no
restrictions on relative stack height are
likely to provide greater emission
reductions and cost savings, ss well as
being easiest to implement and enforce
compared to the other alternatives
evaluated.
£ Geographical Boundaries
The proposed policy would have
limited balances to sources within the
same state or same interstate AQCR.
Twelve comments were received
discussing the geographical boundaries
app'ropnate for emissions balancing.
Five urged interstate balances with few.
if any restrictions. Three favored
allowing balances in bordering states as
well as within the same state. One
favored the EPA proposal Others
suggested limiting balances to a single
state, or to a geographic area defined to
assure that benefits were obtained in
the airshed of the affected source.
Several of these comments were based
oa assumptions regarding localized
ambient concerns or specialized
transport concerns which are not
relevant hen.
Hie final policy allows balancing as
propoaed. The language of section 123
refers to "Jtjhe degree of emission
limitation required * * * under an
applicable implementation plan * * *."
(underlining added). EPA believes that
authorizing emissions balancing within
a single state or within a single
interstate AQCR will appropriately
maintain the policy's environmental and
compliance usefulness without
sacrificing administrative feasibility.
More than half the potentially affected
sources are located within interstate
AQCR's and many others offer potential
balances within single states. Allowing
full interstate balancing with no
restrictions aa to state lines could result
in undue administrative and
enforcement problems because many
state* may not be able to enforce and
implement aa Interstate balance in a
timely manner. Conversely, limiting
balances to a single AQCR or part of a
state could severely limit the use and
environmental benefits of the policy.
That approach would sharply reduce the
number of potential providing sources.
and could therefore limit the speed and
ease with which an affected source
could meet the conditions of this policy
and of the revised stack height
regulation.
F. Emissions Balancing SIP Revision
Deadline
The proposal requested comment on
the appropriateness of an October 1
I960 proposed deadline for submittal of
emission balancing (EBj SIP revisions as
well as alternative approaches. Eleven
comments were received on this topic
Ten asserted that the October B. 19M
deadline for suomittal 10 EPA of EB SI?
-------
Federal Register / Vol. 53. No. 4. / Thursday. January 7. 1988 / Rules and Regulations
revisions w«« too «hort to be met in light
of past experience with the SIP revision
process. One commenter supported th*
proposed deadline. Several of these
comments supported • deadline of nine
months after final policy promulgation.
They further requested clarification that
balances ne«d not be submitted with the
initial stack height SIP revisions and
that this deadline was not for actual
source compliance, but only for SIP
submittal.
EPA has concluded that sufficient
time for development of balances can be
accommodated without delaying
compliance, in a manner different than
that suggested in the proposal To
provide adequate time for development.
approval and implementation of
emission balances, states will be
allowed nine months from the date of
EPA final approval of the relevant suck
height SIP revision to submit the
emissions balancing SIP revision. EB SIP
revisions need not be submitted with the
stack height SIP revisions. However, in
order to assure that required emission
reductions are known, a stack height SIP
revision for an affected source most be
submitted prior to or coincident with an
EB SIP revision for that source. EPA
agrees that the nine month deadline
only applies to submittal of an EB SIP
revision, not to actual scarce
compliance, which is not later than three
years from the date that EPA approve*
the affected source's stack height SIP
revision.
This approach will not delay ultimate
compliance, since the date by which an
affected source must meet its rtviaad
emission limits will aot change a< a
result of emissions balancing- EPA
encourages stale* to submit EB SIP
revisions expeditiously. to proviaV
affected source* sufficient time to
comply with these requirements.
C. Source Compliance Date
Two commenters generally slated that
the compliance rlaadtine (of a source
should be determined on a ca**>by<«*M
basis. One also indicated that case-by-
case compliance date determinations
were evpeciaihy appropriate for sources
proposing to QM innovative technologies
as part of balances.
Under the final policy, the compliance
date for an emissions balance hi the
same as provided by 40 CFR SUlO(b}—•
as expeditious as practicable, but aot
more than three years from EPA
approve] of the relevant stack height SI?
revision.
Date. December 23. ipar
UvM.Tfcomas.
Ai1rr>tm*tretor.
Memorandum
Sub/ect: Stack Height Emissions
Balancing Policy
from: The Administrator (A-100)
To: Regional Administrator. Regions I-X
/. Background
On July 8.1965 the Environmental
Protection Agency (EPA) promulgated
the revised stack height regulation
required to implement section 123 of the
Clean Air Act 90 FR 27882. The
regulation principally affects sources
emitting SOi and limits the credit these
and certain other sources can receive for
the height of their stack* and the u*e of
other dispersion techniques in
calculating emission limits.
Consequently, some of these sources
will be required to secure emission
reductions in order to comply with the
stack height regulation.
The likelihood that some required
emission reductions could be obtained
in a more coat-effective manner from
other sources has given rise to the
concept known as "emissions
balancing" (EB). This concept would
allow sources subject to the stack height
regulation to comply in a more cost-
effective manner while achieving an
equal or greater overall environmental
result
//. Policy Difotuion
This policy authorizes a source
directly affected by the stack height
regulation ("affected source") to obtain
any required emission reduction from
another source or sources ("providing
source"). However, any source which
must reduce Its emissions becauae of
reliance on a prohibited suppiemanul or
intermittent control strategy cannot
meet its requirements by obtaining
reductions from (an) other sonnets).
Providing sources) must reduce
emissions of the same pollutant.
calculated on en annual average basts,
to an extent 12 times (La. twenty
percent more than) the emission
reduction required of the affected source
(or 1.2 tines that portion of the required
reduction for which the affected source
is seeking an emiaaions balance). This
balance factor hn been chosen because
of the difficulty of ensuring equivalent
emission reduction*, given the very
short time available for affected sources
to submit receive approval of. and
implement indrvdiual balances.
Partial balancing and balancing with
more than one source are also
suthonzed. This means that an affected
source may combine emission
in^"
reductions at its own facilities with
emission reductions from (a) provid
source(s) lu secure the total reduction
required. For example, if an affected
source is required to reduce its
emissions by 10.000 tons per year, it
reduce its own emissions by S.OOO tons
per year and develop an emissions
balance providing for an addition*!
6.000 (5.000 limes 1.2) tons per year from
^another source, or it may establish a
'balance with more than one source to
secure the entire reduction.
This policy applies to sources affected
by the revised stack height regulation
promulgated at SO FR 27882 (July &.
1985). which sources were in operation
aa of that dote or for which permits to
construct or operate had been issued as
of that date.
Ill Detoi/t of Policy
A. General Conditions for Approvabit
Emission* Balances
1. Emission* beJaneing may be
permanent or may be need to comply
with the regulation* temporarily until
permanent compliance can be achieved.
With respect to temporary balancing.
the requiresumU of this policy would
apply for the duration of the temporary
balance. ^^
2. An approveble emissions balanct^H
must require that the providing source(!V
reduce emission* of the same pollutant
calculated on an annual average basis.
to an extent 1.2 tines the emission
reduction required of the affected source
by application of the stack height
regulation (or 1.2 time* that portion of
the required reduction for which the
affected source is seeking an emissions
balance).
3. An emissions balance most take
place entirely within the boundaries of s
•ingle state or singJe interstate AQCR.
With respect to the latter, interstate
balance* within the same air quality
control region: will be acceptable if an
enforceable mteragency agreement or
equivalent provision is incorporated into
the SIP*s of both States end is approved
by EPA. Howtver. the appropriate
Regional Office may limit balances to
•mailer area* on a case-by-case basis if
necessary to assure protection of the
national ambient air quality standard
(NAAQS) or the prevention of
significant deterioration (PSD)
increments.
4. Emission reductions from tie
providing source(s) mu*t be suck
emission*, not fugitive emissions
5. Other eordition* of sn approvsoie
emissions balance are:
• Both the affected and providing
sources must be in compliance or on ar.
-------
4&4 Federal Register / Vol. S3. No- •»• / Thursday. January 7. 1908 / Rules and Regulations
enforceable schedule for compliance
*v.:.*i nil applicable federally-approved
SIP requirements:
• Ail NAAQS for the pollutants
>m oK ed in the balance must either be
attained and maintained within the area
of the emissions balance, or that area
must be implementing an EPA-approved
SIP providing for such attainment and
maintenance:
• PSD increments must be protected:
• Any applicable SIP requirements for
visibility protection must be met: and
• Slates and/or EPA must assure the
adequacy of emission limitations for the
affected and/or providing source(s).
This may necessitate ease-by-ease re-
evaluation of emission limitation* to
protect NAAQS or PSD increments. If
any remodeling is required to ensure
protection of NAAQS or PSD
increments, as part of this re-evaluation.
it must conform with EPA's current
modeling guidelines '. except that the
affected source shall be remodeled using
its actuaJ stack height and current SIP
(not new CEP) limits. This remodeling is
not intended to allow relaxation of the
affected source's allowable SIP limits.
6. In addition to any emissions limits
needed to ensure protection of NAAQS
and PSO increments, sources must
demonstrate the following. If the
providing source is used to cover the full
emission reduction required by
application of the stack height
regulation to the affected source, that
reduction must equal 1.2 times the tons
per year of reduction required at the
affected source absent the emissions
balance.1 Possible ways to achieve this
are by placing an enforceable annual
"cap" on the production level of the
affected souws. together with a "floor"
on the production level (i.e., a minimum
production level) on the providing
source: or by use of a weighted rolling
annual average emission limit for the
affected aad providing sources
combined, etc. Because of the long
averaging time (anflual) involved in
emissions balancing. spetiaJ care should
be taken to assure that enforceable
means of monitoring compliance are
included in the EE SIP revision.
7. The emissions balance must not
cause or contribute to adverse impacts
on the air quality-related values of any
1 Cuidttint en Air Quality Moetlt fK
EPA/490/Z-rs-CSrX. U.S. EPA. R»»«.rc* Tn*n*M
Ptn. North Giroltiu. July 1986 lor Uwr rdmontl
1 TtXM «ft rtdurtieiu »v»r »na bryond tny
reauirei lor the purpoM of praitetinf S'AAQS or
PSO ;ncr*menu. SM Section U Policy DiteuMion in
the fiiwl EB policy nwenorudum (or th« neutrni
toni per year tmuiton reduction for I pc'iii
b*.«nc« Cuidtne* which ie pubuui.on 01' th i pci
class 1 area. The Federal Land Manager
of the class ( area shall receive timely
formal notification of any emissions
change that may affect management of
such lands.
8. Sources involved in an emissions
balance, like all other sources, may later
be required to make further emission
reductions as a result of future SIP
revisions determined necessary to attain
or maintain NAAQS or PSO increments.
B. Calculation of Emissions Balances
1. The baseline from which emission
reductions may be credited at the
providing source must be the lowest of
actual current SIP allowable or
remodeled SIP allowable emissions, if
remodeling is needed, and shell be
determined using procedures consistent
with those in the EPA Emissions Trading
Policy (51 FR 43814. Dec 4. IMS). Actual
emissions are determined by averaging
the emissions of the providing source
over the most recent representative two
calendar years * unless circumstances
(e.g.. the recent installation of a
permanent control device) warrant a
different period of record. Allowable
emissions are those emissions allowed
by a federally enforceable SIP limit
preconstruction permit or other
equivalent document which la currently
approved by EPA as sufficient to
provide for attainment and maintenance
of NAAQS and PSO increments.
2. Reductions from the providing
source(s) must be obtained through use
of control equipment lower-emitting
process changes, or cleaner fuels.
Emission reductions from intermittent or
supplemental control strategies, or any
other strategy inconsistent with the
stack height regulation are not
acceptable for emissions balances.
3. If at some later date, (a) providing
source(s) shuts down or curtails its
operations in ways which breach the
terms of an emissions balance, the
emissions balance will be totally or
partially negated, and the affected
source must make up the difference by
reducing its own emissions and/or by
arranging an emissions balance w.th
another source, as explained in C3
below.
4. The emission reductions from (a)
providing source(s) in an emissions
balance may not be derived from a
control measure: (1) Which is already an
approved part of a SEP. (2) for which a
commitment for reductions has been
approved as a pan of a SIP. (3) which
' The final polio- cftingvi the •clutl cmnfiotu
•vtnfinf period from thrt* rein 10 two >ein 10 tw
continent with the EPA Modeling Guideline! ind
the Emittioiu Tr.a.rvd Policy 31 FR 4M14 Om. 4
18*6
h4S been proposed and is currently
under consideration for adoption as a
pan of a SIP. or (4) which has been
adopted at the state or local level as *
necessary SIP contro' measure. As
explained in item C2. below, however.
any new emission limitations needed to
ensure protection of NAAQS and PSO
increments or limitations needed to
'ensure that the required tons/year
emission reduction is achieved by the
souree(s) as a result of an approved
balance will become an enforceable pan
of the SIP. These provisions arc
necessary to assure that an emission
reduction made for and credited in an
emission* balance ia not used for other
purpose* (Le~ is not double-counted).
5. Because of concerns related to
potential delay in processing
applications and the poaaibHiry that
emisaions night increase elsewhere
within the same utility system, emission
reduction* from shutdown* or load
shifting (including lower emissions
dispatch (LED), by which ntility sources
enforceabJy direct production to better
controlled facilities rather than
dispatching solely on the basis of least
cost) eanaoi generally be authorized for
balance credit et this time (see Preamble
Section ILC above). EPA will consider
propoead emissions balances involving
credit for LED or other load shifting
technique* only on a ea*e-by-case basis
in which individual applicants
demonstrate how and by what
procedure* the** concerns will be
satisfied or do not epply. The burden of
justifying such proposals by complete.
adequate aad coherent documentation
rest* on individual applicants, who
should be aware that additional delays
in processing balances may result from
such proposals and will not be
considered grounds for extending the 3-
year compliance deadline. Because of
this, and other reason* stated at C4. any
affected source must submit a
contingency plan that would take effect
and be enforceable if the t-En proposal
is disapproved.
C. Procedural Requirements
1. An emissions balance must be
approved through the SIP revision
process. Any new emission limitations
needed to ensure protection of NAAQS
and PSD increments, or limitations
needed to ensure that the required tons/
year emission reduction ia achieved by
the sources in an emission balance mutt
be submitted to EPA as a SIP revision
within 9 months o! approval of the SIP
revision required by the revised stack
height regulation. This provision in no
way extends the requirement to compiy
with the suck heifr.t repuianor, not later
-------
Federal Register / Vol. 53. No. 4. / Thursd.iv. )jnuar\ 7. 1'Jbti / Rulus .md Rt?»ul«jiion»
-.^—^^^^^^^^^^^^^^^^^—..—^^—-.^^^^^^^^^^^^^^^M^^^^^HB^—^^^^MBMfMIBBBHBHBIIia^Bail^^^^^^^^^M^B^BaHMMM^B^B^BHmHiaiMaa^BMM^^^^^M^^^^^^^^^^^
th.in 3 years 4,'ter approval of the sU'.k
h.nght SIP revision. Emission* bal.ini.u'v
proposals must t>e open to public
scrutiny. *nd ihe proi.css must pron'i*
for full public participation «is p*rt of
normal SIP revision procedures. To
expedite EB SIP approval, states ar*
encouraged to use the SIP p;irjIJr-l
processing procedures explained at p..-,-'
27073 of th« June 23.1082 Federal
Regisur.
2, Any new emission limitations
needed to ensure protection of NA.AQS
and PSD increments or limiUMuns
needed to ensure that th? required tors/
yenr emission reduction is achieved by
the source in an emissions balance will
be enforceable SIP limiu. The balance
must be incorporated into the StP with
an explanation of the interrelationship
of these emission limitations. The
providing source muy not be rclicv^ of
its obligations under the emission
balance except through the prnr»« »r *
subsequent SIP revision.'
if ti»» EB SJP Pfrrtwwi *»<
tllow th* pTWHlmt taurrf , fir. mat •m«*..in
limiif Ki b*h«M tfloclrv* «p
fUM «nd t^A if IK*
down, or th* IwUnat n lrm>i»«!i*
tuh> (ml r>A ilwwifHi rtuii no NAACJh »• PSO
J. The SIP ••mwH'un limits r»»jtm>>".
soun t if thit
shuts liuvtn i>r ihi
l>y the soun.c* <>•• !r. >'
« SI?
fur ..'
to
Thi*
is i.-.:T!.n. «:.
.* its cmJMtdns :o the limits
by th« tMc*> h««ight Sil' revision
rd unt:! such js thi> substitution of
lownr rjlf-j* fut>!.
4. Umission n»dui:tions by * priividing
sour;e which are currently used to meet
uny other ntfiuireni^nts 01* the Act shall
not b<* crrUitiibli* for *n emissions
hwUnce.
5. Emission reductions fiom «
providing nource will not be c
against HSO increments or PSD
ft. Neither this policy nor individual
applications under it shall in any K«y
delay compliance with the revised stack
height SIP limitations. In particular, this
poliry shall not create independent
grounds for postponing the ultimate
compliance date b?. which the emission
reductions required bv the vt.icl hmsht
on .ire to be
I'tfnipor.nx i)<«!.ini'.i>s m;iv be usod u
i..)rr>'r»l\, with t^r ileHjIine for cmijMv
ri>d:n .'S'jn* .11 thr jfi.;; ted SOurc» uPi'
p.'rni.iai-;it miMp.i of romplunce L.IT.
*..hi.iv.i-d: hi)M**vi!r. the tenpor.irj
h.il.mrx vv.>i>ld h^vi* to be fullv
l .ind impI.'.Tienied tjy in*
ij»fiipli.i.»('e iUi» for in« j.*''-.
0. FJT;!..I .if fill* PollCV
rhi- emissions balancing pol:i:> »*u
out general principles for approving
individual balance* affording affected
•miroe mot* flexible. cost-eflec:ive
tx aj s to meet the retirements of EPA
revised stack height regulation. As A
policy' statement, it neither alters
applicable lef al requirements nor
i*nublisn
-------
REFERENCE? rOR SECTIONS 6.1 AND 6.2
-------
EPA-450/2-89-014
Analysis of State and Federal
Sulfur Dioxide Emission Regulations
for Combustion Sources (Revised)
by
Jill B. Vitas (EPA)
Richard F. Pandullo (Radian)
Dorothy Picket! (Radian)
Contract No. 68-02-4392
Work Assignment No. 43
Radian Corporation
P.O. Box13000
Research Triangle Park, North Carolina 27709
U.S. Environmental Protection Agency
Office of Air Quality Planning and Standards
Air Quality Management Division
Research Triangle Park, North Carolina 27711
September 1989
-------
EPA-450/2-78-027R
Guideline On Air Quality Models
(Revised)
U.S. ENVIRONMENTAL PROTECTION AGENCY
Office of Air and Radiation
Office of Air Quality Planning and Standards
Research Triangle Park, NC 27711
July 1986
-------
PN
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
ttAJHINGTON.D.C. 20460
OFFICE OF
AIR
Ms.. Nancy Maloley
Commissioner, Department
Environmental Management
Suite 319
311 west Washington Street
Indianapolis, Indiana 46204
Dear Ms
I enjoyed our recent meeting and I have received your
followup letter of April 28, 1986 requesting clarification of
the Environmental Protection Agency's policy on use of 30-day
averaging as a compliance method for the Indiana State
Implementation Plan (SIP) for sulfur dioxide (S02). In this
connection, you raised the question of the use of a statistically-
based method such as the one approved by EPA in the Arizona
SC'2 SI? for smelters and upheld in Kamo v. Hernandez, 752 ?.2d
1444 (?th Cir. 1985) .
I understand the importance of this issue to th-e coal
industry in your state, and of the concern that the significance
of coal variability be factored into the establishment of emission
limitations and appropriate compliance methods.
As you know, the current National Ambient Air Quality
Standard (NAAQS) for SC>2 has both short term (i.e. 3-hour and
24-hour averages) as well as annual average components. Because,
under the Clean Air Act, State Implementation Plans (SIPs) must
demonstrate-attainment of these short-term standards, EPA has
had a long-standing policy to require emission limitations to be
enforceable on a short-term basis to protect the short-term
NAAQS. In recent years, EPA has not approved SC'2 30-day averaging
as a compliance method, unless accompanied by a short-term SC>2
limit established by a reference dispersion modeling analysis.
The Agency cur~ently is in the process of reviewing the
NAAQS for SC>2, incl-ding consideration of a statistical .revised
standard. As part of thai review, EPA also is reviewing the
feasibility of using alternative, statistically-based demon-
strations related to any such, revised SC>2 standard. Because
ury change in our policy on methodology would have nationwide
-------
- 2 -
implications for NAAQS attainment, we do not expect to change
the current position, if at all, prior to our completion cf"
the SAACS review.
You specifically have asked for our position on whether
multipoint rollback or other statistical techniques cou-ld be
used to justify approval of 30-day averaging. As a general
matter, we require analytical techniques that are technically
ans scientifically sound and that are practical and consistently
applied in similar circumstances. Based on my current under-
standing, it appears that multipoint rollback itself would
not be applicable for the type of situation presented by the
Indiana SIP. You should be aware that EPA approved the
multipoint rollback SIP in Arizona several years ago only
after expending considerable time and effort on the particulars
of each Arizona smelter. Although in most circumstances EPA
considers the rollback approach to be technically less sound
than approved modeling methods, the Agency finally approved
that approach for Arizona as a result of a wide range of
factors stemming, from the very unusual nature of the smelter
emission problems. As you know, the problems of smelters
have proven particularly difficult, as demonstrated by
Congress' own special treatment of smelters in section 119
:: the Clear. Air Act.
The Arizona shelters are isolated and are characterized
2y extrer.e variations in emission levels, resulting from tne
particular characteristic of the smelting process, tr.e chemical
composition cf the ores, and other factors. Use of traditional
modeling methods for these sources was complicated by the
presence of associated fugitive emission sources and complex'or
mountainous terrain. Due to these limitations on the use of
ssancarc modeling techniques, the State turned to the Arizona
rrlloack approach, which included, for example, collection cf
additional monitoring -and emission data, additions to the
existing monitoring network, study and commitment to a State
fugitive emission control program, 80-90 percent emission
control, and running 3-hour average compliance determined by
continuous emission monitors (CEMs).
My understanding is that the Indiana SIP for SC>21 in
contrast, is .dominated by utility power plants and large
industrial boilers, whose emissions do'not vary nearly so
much as smelters and which do not have large associated
fugitive emissions sources or complex terrain. Approved models
already exist and have been used nationally to account for
multiple source interactions and stack height adjustments
(where stack heights greater than GEP must be discounted).
The existing air quality modelling methods for establishing
err.ission limitations have been used successfully in different
state SI?s wnich have sources similar to Indiana.
-------
At this point, I cannot give you much encouragement on
trying to use the multipoint rollback approach or a similar
method for the Indiana SIP. Any attempt to develop a statistical
approach, as demonstrated by the Arizona experience, would
require significant time and resource commitments from both
the state and EPA for activities such as data development
and analysis &nd program review. However, extensive attempts
in the past to develop ar. alternative- statistical approach
to-utility power plant attainment demonstrations did not
produce an acceptable technique, so success is unlikely.
The end result of any analysis still must be a successful
demonstration of compliance with short-term standards vhfr.
coal sulfur coru^-it er^ceecs th*» average limit. We pr*fsr
that develop^--*=:••:. of a possible statistical approach not be
attempted on an ad hoc basis because of the significant
nationv.-i.1-* Implications and the possible r«?lct:•.•-•-.s'nij) with
the SC>2 standard review. We also are concerned that there
not be further delay in the time when Indiana will have a
federally approved SIP.
The most straightforward way of resolving this issue
weal-* i>e for the state to remove the 30-day averaging irrethod
from the state SC>2 rule. Any subsequent ly developed compliance
srrr-.ac'" •-:'1." '•:•* ii'.:i-.i tted as a source specific SI? revision
--.ier the alternative compliance method provision of the
spplica-le Indiana regulation. Short-term SI? limitations
fsr each source should be consistent with methods contained
in EPA reference guidelines, using source test methods to
-easjre cur-.pliance as specified in 40 CFR Part 60 Method 6.
The IPA's policy and modeling guidance with regard to the
requirements for approvable attainment demonstrations is
contained in its Guideline on Air Quality Models.
As a final note, I want to point out a factor which,
although unrelated to'the merits of the methodology questions,
is of concern tc me and also should be o? csncsrn to your
state. A new bill to establish acid rain control plans, H.R.
4567, was recently introduced in Congress with 150 co-sponsors.
The Administrator t«sT-: * •'•=••! 7.1 the bill, opposing its passage,
while arguing a restrained approach to controls, based on the
present uncertainties in our knowledge of acid precipitation.
One of the principal reasons advanced by the Administrator
for deferring action is that current evidence suggests that
SC'2 emissions in the midwest *r<5 staMe. Thus, we have
t\ne for the required further research without the need for
r'citional SO? controls at this time. It would be unfor-
tun«r.ri ;-, Because of methodology changes or other reasons,
-------
- 4 -
sone states were perceived to significantly increase SO-.
emissions sc thai overall SC>2 emissions in tn* *!:»..vst
were to begin to trend upward, since su«~h a trend would
support those in Congress who are pressing for additional
S02 controls before the facts are in. I am "sure you are
as concerned aioct :Vls as I am.
I stand ready to discuss these matters further, or to
assist you in any way I can to resolv* the Indiana SC>2 SIP
:ssue. I am sorry that I cannot be no.-:* encouraging on the
particular approach used for Arizona smelters, but I hope
:;.st at least I have clarified EPA's current policy. ?lease
*. •> not hesitate to call on ne if I can u.<-- ci z»-;..^r *orvicc
Sincerely,
A/
J. Craig Potter
Assistant Administrator
for Air and Radiation
i
-------
PN 165-86-11-24-015
NOV241S66
MEMORANDUM
SUBJECT: Need for A Short-term Best Available Control Technology (BACT)
Analysis for the Proposed William A. Zimmer Power Plant
FROM: Gerald A. Emison, Director
Office of Air Quality Planning and Standards (MD-10)
TO: David Kee, Director
Air Management Division, Region V (5AR-26)
This is in response to your November 17, 1986, memorandum, in which
you requested comment on Region V's belief that prevention of significant
deterioration (PSD) permits must contain short-term emission limits to
ensure protection of the applicable national ambient air quality standards
(NAAQS) and PSD increments. I concur with your position and emphasize to
you that this position reflects our current national policy. Consequently,
I recommend that you continue to identify this apparent deficiency to the
Ohio Environmental Protection Agency and seek correction of the draft
permit for the William A. Zimmer Power Plant.
The PSD regulations clearly require that the application of BACT
conform with any applicable standard of performance under 40 CFR Part 60
at a minimum. However, this should not be taken to supersede any additional
limitations as needed to enable the source to demonstrate compliance with
the NAAQS and PSD increments. In the case of sulfur dioxide (SOg), source
compliance with the 30-day rolling average emission limit under subpart Da
does not adequately demonstrate compliance with the short-term NAAQS and
PSD increments. Consequently, enforceable limits pertaining to the
performance of the flue gas desulfurization system on a short-term basis
must also be established. Note, however, that the short-term limits can
result from either BACT analyses or the need to protect air quality.
Therefore, the short-term limit could be more stringent than the BACT
limit.
-------
I recognize that the sulfur variability issue tends to complicate
the setting of short-term $63 emission limits, but such limits must be
defined nevertheless. Continuous emission monitoring data from comparable
sources can be used in order to estimate worst-case short-term SO?
emissions that could occur at the plant. The modeling techniques used to
determine compliance with the short-term NAAQS and increments should
employ the enforceable short-term 503 emission limits which the permitting
agency establishes.
-------
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L u - O / - U I ~
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
JUL 2 9 1987
MEMORANDUM
SUBJECT: State Implementation PI ans for Sulfur Dioxide
FROM: Gerald A. Enrfson, D1rec1
Office of A1r Quality pfannfng and'Standards (MD-10)
TO: Director, A1r Management Division
Regions I, III, V, IX
Director, Air and Waste Management Division
Region II
Director, Air, Pesticides, and Toxics Division
Regions IV, VI
Director, Air and Toxics Division
Regions VII, VIII, X
A number of sulfur dioxide (SOg) State implementation plan (SIP)
revision rulemaking actions with potential problems have recently been
submitted for SIP processing. Several of these rulemaklng actions
establish $03 emission limitations but lack enforceable S0£ compliance
test methods and procedures.
The Environmental Protection Agency (EPA) requires that $03 SIP
emission limitations be established consistent with the short-term 3-hour
and 24-hour S02 national ambient air quality standards (NAAQS). When a
State adopts an SOg emission limitation for"its SIP without a stated
averaging period associated with it, EPA has accepted a Method 6 stack
gas test as the SIP compliance test method. The EPA also accepts continuous
emissions monitoring and short-tern fueling sampling and analysis (3-hour
and 24-hour) as S0£ SIP test methods. The EPA will accept separate
emission limitations with approved test methods associated with each
limitation.
As a minimum, make sure that there 1s a stack gas compliance test in
the State's plan when you review and forward $03 ruleroaking packages for
Headquarters approval. If the action 1s an S02 SIP revision, 1t may
reference the underlying EPA approved SIP for compliance test methods.
If so, make sure the underlying SIP contains acceptable test methods and
that the methods have been approved by EPA In the SIP.
cc: Air Branch Chief, Regions I-X
John Seitz, SSCD
Darryl Tyler, CPDD
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REFE^NCES FOR SECTION 6.3
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PN 113-88-03-31-049
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C 20460
MAR 3 I 1988
A1E AND BAMAT1OII
MEMORANDUM
SUBJECT: Implementation of Rule Effectiveness Studies
FROM: John S. Seitz, Director
Stationary Source Compliarfoi"7Division
Office of Air Quality Planning and Standards
TO: Air Management Division Directors
Regions I, III and IX
Air and Waste Management Division Director
Region II
Air, Pesticides, and Toxics Management Division
Directors
Regions IV and VI
Air and Radiation Division Director
Region V
Air and Toxics Division Directors
Regions VII, VIII and X
This memorandum transmits the final rule effectiveness
protocol and requests that you implement the protocol beginning
in FY 89 in your region.
The protocol is the result of several months of development
through discussions with many regional, state and local air
pollution control personnel and incorporates the study concepts
and procedures that are being used successfully in Region IX
and California.
As many of you are aware, we initially proposed this
procedure as a part of the ozone strategy and it-was to be
used in large part as the rebuttal for an eighty percent
effectiveness for all new ozone SIPs. However, we have made
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-2-
the decision to implement this protocol independent of the
ozone strategy because of the general applicability of the
procedural "And the protocol's usefulness as a logical follow
on to tMRltfanning and implementation process of any SIP.
I am requesting that each region commit to at least one
rule effectiveness evaluation in an ozone non-attainment area
for FY 89. The FY 89 regional stationary source budget
allocates 15 FTE for 12 evaluations. In addition we earmarked
Section 105 monies for the state's use in participation of
these studies.
We have not identified a rule or category of sources for
evaluation, however, we do recommend that you select a part
of the SIP in the nonattainment area that either has suspected
problems or contributes at least 5% of the emission reductions
of the SIP strategy. I urge you to work closely with your
states to identify that part of the program with the highest
potential payback.
Lastly, I direct your attention to the national overview
section on page three of the protocol. Please forward your
proposed final protocol to the national overview manager for
comment before going final with a specific study and feel
free to consult the manager as questions or issues arise
during development of a final study.
Attachment
cc: Jerry Emison
John Calcagni
Air Branch Chiefs
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March 24, 1988
Rule Effectiveness Study Protocol
(1) Purpose and Goals
The purpose of thl» protocol is to provide the State* and EPA with criteria
and proc«dur«« for conducting a rule effectiveness study. In the context of
this protocol, "rule effectiveness" means the extent to which a rule actually
achievee (or haa the capability of achieving) desired emission reductions, both
in tezna of the reductions projected for that rule, as well as the reductions
that would ordinarily be achieved if the rule were properly implemented.
Principal goals of a rale effectiveness study conducted according to this
protocol are: (1) to determine the effectiveness of rules for a specific source
category in a specific nonattainment area according to the quantitative criteria
set forth in this protocol, and (2) to identify specific implementation problems
that should be addressed by the State and EPA to achieve greater rule effective-
ness in the future.
(2) Application
A State or EPA may use this protocol at its own initiative to evaluate a
rule, and to take or require corrective action based on that evaluation. Zf a
State wishes to claim new emissions reduction credits in its SIP based upon
corrective action in response to a rule effectiveness study, these credits must
first be verified in a subsequent study.
This protocol may not be used to justify a relaxation of plniBMB program
implementation requirements (including, for example, the frequency and quality
of inspections, timely enforcement, and the correct application of rules through
testing, permitting and other source specific determinations).
(3) General Approach
Any rule effectiveness study conducted by the State or EPA must be conduct-
ed in accordance with the provisions of this protocol.
Each studywill occur in two phases: a field inspection phase, in which
inspections are* conducted (after a selective file review) and compliance deter-
minations are made (to the extent possible) for a representative sample of
sources in a nonattainment area; and an office investigation phase, in which
further analysis is undertaken of program implementation elements that are not
susceptible to comprehensive evaluation in a field inspection study.
Field inspections will be used to calculate or measure emissions at sources
included in the sample, and to determine the percentage effectiveness of the
regulations involved by comparing the actual to the allowable emissions at each
source. A separate program effectiveness determination will also be made by
comparing the State's projected reductions for'the source category to the
reductions actually achieved.
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Effectiveness Study Prote
March 24, 1988
Page 2
A follow-up office investigation will supplement field inspections for the ™
purpose of identifying specific program implementation problems that should be
addressed by the State and/or EPA. The following potential program problem
areas will be evaluated in both phases of the study: regulatory standards,
regulation enforceability, permits, variances, inspection procedures, compliance
determinations, enforcement procedures, source and emissions inventories, source
files and data management, training, and agency resources management.
This protocol requires that detailed criteria and procedures be developed
for conducting each area of evaluation. Example checklists and guidelines for
developing these criteria and procedures are included as attachments to the
protocol. All detailed criteria and procedures developed as a part of a speci-
fic study will be incorporated in the protocol.
(4) Coordination between the State and EPA
Whenever the State or EPA has decided to conduct a rule effectiveness
study, the following coordination shall occur.
(a) Opportunity to Participate
An opportunity to participate in the study shall be given to all non-
initiating agencies with jurisdiction over the nonattainmeat area.
(b) Preliminary Notice and Meeting
The initiating agency shall notify other affected agencies of the decision
to conduct the study and identify the purpose of the study, the source cate-
gory (s) and rule(s) affected, and the anticipated study schedule. At the
election of any affected agency, a preliminary management level meeting may be
called to discuss the study.
(c) Final Protocol Preparation and Review
1. Preparation of Proposed Final Protocol
Whenever a rule effectiveness study will be conducted by the State or EPA,
the initiating ageacy shall prepare and submit to the other agency(s) for prior
review a propoavft final protocol including the detailed procedures and criteria
that will be faCooed when conducting the study. These criteria and procedures
shall address each element of this protocol and shall incorporate, at a minimum,
the criteria and procedures included in Attachments A-G, which may be modified
as necessary to incorporate unique considerations that apply to 'the specific
State.
The reviewing agency shall review and respond to the proposed final proto-
col within two weeks of its receipt. In the response, the reviewing agency
shall indicate all areas of disagreement or areas warranting clarification and
specify areas where the proposed criteria and procedures are considered defec-
tive. The initiating agency should then confer with the reviewing agency to
resolve all areas of potential disagreement and take appropriate corrective
steps to ensure the validity of the study.
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Rule Effectiveness Study Proto
March 24, 1988
Pag* 3
2. National Overview
Rule effectiveness study overview will be conducted by the Compliance
Monitoring Branch of EPA's Stationary Source Compliance Division. The overview
objective will be to promote rule effectiveness study quality and consistency on
a national level through protocol review and comment.
Following the completion of a proposed final protocol (including all
revisions resulting from prior review), the initiating agency shall forward the
protocol to the National Rule Effectiveness Study Overview Manager. The Over-
view Manager will provide written comments, if any, within two weeks of receipt
of the proposed final protocol. He will also forward the protocol to selected
State and EPA reviewers, who based on their experience and knowledge may also
provide additional verbal or written comments.
Correspondence concerning national overview should be addressed to the
National Rule Effectiveness Stud- overview Manager, Stationary Source Compliance
Division (EN-341), U.S. Environmental Protection Agency, 401 M Street, S.W.,
Washington, D.C., 20460.
3. Final Protocol
The initiating agency is responsible for the development of a final proto-
col that ensures the validity of a rule effectiveness study.
A State's failure to correct protocol deficiencies identified during
protocol review may restrict the use of study results as support for emission
reduction credits. Likewise, EPA's failure to correct protocol deficiencies may
restrict the use of study results as a justification for requiring corrective
action by the State.
A protocol may be revised or amended during a study by agreement of the
initiating and reviewing agencies. Following adoption by the initiating agency,
a copy of the final protocol, and any revisions or amendments, shall be for-
warded to the National Rule Effectiveness Study Overview Manager.
(d) Additional Areas Requiring Prior Coordination and Review
•
The following areas, in addition to those indicated in subparagraph 4(c),
require coordiasition and review prior to initiating the study.
1. Study Team Identified. The initiating agency shall identify its
study team, and provide a description of the background and qualifications of
the lead investigator; the specific inspectors included in the study shall also
be identified.
2. All Regulations and Policies Identified. All regulations and
policies affecting the study should be identified and clearly defined in terms
of their applicability to sources included in the study. For example, all
express or implied exemptions should be specifically indicated} compliance test
procedures should also be specified, along with applicable averaging tines, and
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Rule Effectiveness Study Prot:
March 24, 1988
Page 4
all limitation* affecting source compliance. In addition, all legal require-
ments limiting iaapection and enforcement activities should be specified.
3. Sources Identified. Sources selected for the field study shall
be named, and the reviewing agency shall be) given an opportunity to propose
further sample stratification to ensure that the sample is representative.
(e) Conflict Resolution
1. During the Investigation
If a conflict occurs during the study regarding the interpretation of
agency policies, regulation requirements, inspection procedures, compliance
determination criteria, file data, and similar matters, the issue shall be
immediately raised to EPA and State managers for resolution. If the conflict
must be resolved to complete a specific investigation, the specific investiga-
tion shall stop until agreement between the State and EPA is reached. In such a
case EPA and State managers shali •aeet to resolve the conflict within 48 hours.
If after 48 hours the conflict is still unresolved, the conflict shall be
presented for resolution to the highest level agency managers with direct
program implementation responsibility (the EPA Regional Administrator and the
State Department Director).
2. After the Investigation
If an unresolvable study team conflict occurs after completion of the
investigation phase regarding specific findings and conclusions, and the con-
flict affects the final percentage effectiveness determination, the conflict
shall b* resolved in one of two manners: (1) EPA and State managers may resolve
the is£ ay agreement, without further evaluationt or (2) the study team may
conduce .. additional evaluation to resolve the conflict.
(5) Study Teaa Selection
The study team may include members of the local. State and Regional agen-
cies with jurisdiction over the specific nonattainment area. However, the team
shall include a lead technical investigator, who will be responsible for all
technical findings. To the extent possible, the lead technical investigator
should have no osrrent responsibility for inspecting sources included in the
study.
The lead investigator shall be highly skilled and experienced in the imple-
mentation of the rule selected for study. Qualifications shall include the
capability to conduct all levels of inspection and compliance analysis, includ-
ing the ability to conduct emissions testing. Qualifications shall also include
significant, recent field inspection experience for all or most types of facili-
ties subject to the regulation, and should include enforcement case development
experience.
To ensure an effective evaluation of the State's field inspection proce-
dures , the study team .should include the inspector normally responsible for ii
specting each source selected as a part of the field study.
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Kale Effectiveness Study Protoec
March 24, 1988
Pag* S
(6) Source Category Selection
An agency may select any source category for a rule effectiveness evalua-
tion using this protocol. If an agency wishes to study a limited number of
source categories to support a.SIP call, SIP revision, or other agency action
related to a need for additional VOC reductions, the selection of these cate-
gories should be based on the following criteria:
o Categories representing the largest quantities of emission credits in
the existing SIP.
o Categories where known or suspected implementation deficiencies are
correctable and will provide significant emission reductions.
o Categories where implementation deficiencies are identifiable and
measurable with a reasonable commitment of agency resources based on
the study approach selected.
o Categories where study findings will be transferable to other similar
categories.
(7) Source Selection
The following source selection procedure is intended to ensure that a
representative sample of sources is selected for the purpose of quantifying the
percentage effectiveness of specific regulations.
(a) Sample Selection
Utilizing the best available source inventory for the selected category,
select a sample of sources that is representative for the category, unless a
representative sample cannot be obtained. In the latter case, select all
sources in the inventory. See Attachment A. This selection will be used for
the purpose of quantifying emissions and calculating a percentage effectiveness.
(b) Sample Review
Review the>'source sample prior to initiation of the study to determine
whether major problems throughout the source category have been excluded from
consideration. It so, redesign the sampling procedure to include the additional
stratification required to ensure appropriate consideration of major problem
areas. In such a case, the initiating and reviewing agencies should agree on
the modified selection procedure. See Attachment A.
(8) Preliminary File Review
The study team should collect and review all relevant State and EPA regula-
tory information relating to sources included in the sample. This includes all
regulations, permits, variances, enforcement agreements, etc., that establish
specific requirements.- The study team should also collect and review all State
and EPA regulation interpretation guidelines that apply to each source, as well
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Rule Effectiveness Study Proto-
March 24, 1988
Page 6
as procedural aafcpolicies governing inspections, compliance testing, and
enforcement.
(9) Field Inspection Phase
Each source included in the saaple will be inspected by the Study Team. If
conditions at the source prevent an inspection during normal operating conditions,
this should be noted in the inspection report, but the best inspection that is
reasonable under the circumstances should occur in any case.
All inspections should be unannounced and designed to apprehend ongoing viola-
tions (especially those susceptible to operator control during an inspection).
Exceptions may be justified to ensure that a source is operating, to allow for
necessary preparation at the source, to ensure that key plant personnel or records
will be available, etc. Zn such a case, prior communication with the source should
be made as close in time as possible to the actual inspection.
During the field inspections, the study team shall conduct the following
evaluations.
(a) Rule Application Evaluation
1. Deviations from State Requirements
The team shall determine whether the State regulatory requirements that
apply to a facility do in fact apply, or whether they have been applied in a
that results in less or greater than the anticipated control.
2. Deviations from Federal Guidelines
Where the State requirement is different from the Federal guideline (where,
for example, the State requirement is more stringent, or the State interprets its
requirement so that it is less stringent than EPA's interpretation), the team shall
also determine the extent to which the State requirement, as applied, results in
less or greater than th« control that would be achieved if the Federal guideline
applied.
(b) State. Inspection Procedures Evaluation
Inspector* abould be asked to conduct a normal inspection, or if * normal
inspection would not be adequate for the study, to describe how the inspection is
normally conducted at each facility. The lead investigator will observe the
inspection, but take the necessary steps to ensure that the inspection is adequate
to achieve the field inspection study objectives.
The team shall determine whether the normal State inspection procedures are
adequate to identify actual or potential violations. Specific failures should be
documented and evaluated in terms of potential excess emissions. Failures related
to faulty agency guidelines or policies, faulty rules, or faulty procedures con-
ducted at a specific site should be clearly differentiated.
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Rule Effectiveness study Protoc
March 24, 1988
Pag* 7
(c) Complias>ce) Determinations
The study team shall determine the compliance status of the facility with the
SIP, differentiating between procedural requirements and emission requirements. If
the SZP is inconsistent with Federal policy on SZP content, the study team shall
also determine whether the facility would be in compliance if the SZP were consis-
tent with Federal policy.
Each SZP violation shall be separately identified and documented. The study
team may use its discretion in conducting or requiring stack testing; however, a
decision not to require stack testing (where relevant) shall be clearly supported
in each inspection report.
(d) Emissions Quantification
The actual and allowable emissions shall be calculated (to the extent pos-
sible) for all sources inspected during the study, according to the detail-
ed criteria and procedures reflected in the final study protocol. Allowable
emissions shall be defined by the SZP. Zf the SZP is inconsistent with Federal
policy on SZP content, the study team shall also calculate the emissions that would
be allowable if the SZP were consistent with Federal policy.
Zf the study team wishes to identify other reducible emissions for the purpose
of documenting potential additional emission reduction credit*, these emissions
shall also be calculated according to the procedures reflected in the final study
protocol, and shall be clearly supported by field inspection results.
(e) Quality Assurance
Effective quality assurance procedures shall be observed in all emissions
calculation and measurement related activities and shall be included as a part of
the detailed criteria and procedures included in the final protocol.
(f) Znventory Evaluation
Operating and emissions data in the EPA and State source/emission inventories
shall be verified by an actual, on-site investigation, and discrepancies shall be
clearly identified. Discrepancies affecting the State's attainment strategy shall
also be clearly indicated.
(10) Office Investigation Phase
(a) Follow-up to Field Znvestigations
Deficiencies identified in the field that are related to agency procedures and
policies should be confirmed by an office review of the appropriate written docu-
ments and by interviews with agency managers responsible for the development and
implementation of the procedures and policies.
(b) Minimum Program Implementation Requirements
The detailed criteria and procedures included in the final protocol shall
address EPA's minimum program implementation requirements. Where continuing
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Rule Effectiveness Study Protc
March 24, 1988
e
deficiencies areridentified, specific corrective measures shall be proposed in the
final study report.
Zf EPA initiates the study, EPA may elect to rely on the most recent National
Air Audit as a basis for identifying program implementation deficiencies. Zf the
State conducts the study, the State may propose to rely on the most recent National
Air Audit. However, EPA may elect, instead, to conduct a new audit; and if EPA so
elects, the latter audit will be controlling.
The State may use this study, if the results so indicate, as- support for
proposing the modification of EPA minimum program implementation requirements
applicable to that State and submit a proposal to that effect as a part of the
study report.
Zt is essential that a State meet minimum EPA program implementation require-
ments whether or not additional emission reduction credits are justified based on
the results of a field study conducted pursuant to this protocol.
(11) Inventory Accuracy Demonstration
An inventory accuracy demonstration for the selected source category shall be
conducted as a part of the rule effectiveness study. This demonstration shall
include the following elements:
(a) Field Investigation Follow-up
where the field investigation resulted in inventory discrepancies, the State
shall take the following actions.
1. Reconciliation
Reconcile the individual discrepancies and, if appropriate, revise the emis-
sions inventory to reflect this reconciliation.
2. Representativeness Evaluation
Determine whether the discrepancies represent a more extensive problem with
the inventory fee other sources not included in the sample. Zf so, taXe one of the
following corrective actions:
o identify and resolve each individual source discrepancy * or
o adjust the inventory baseline and revise the SZP in accordance with EPA
guidelines to reflect the reconciliation, assuming that the discrepancies
are representative of the entire source category.
(b) Search for Potentially Omitted Sources
1. Survey of Exempt Sources
Conduct a letter survey of exempt sources to determine whether the grounds for
exemption still apply. For a large source category, an initial survey may be
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Rule Effectiveness Study Protect
March 24, 1986
Page 9
conducted for a SMll sample of the sources. Zf the response indicates a need for
general agency follow-up (i.e., exemptions are unwarranted in other than an un-
usual, isolated case), a complete survey of all exempt sources shall be undertaken.
2. Ground Survey
Conduct a ground survey in a sample grid of the study area to determine
whether unregistered sources exist.
3. Other Measures
Conduct a comparison of alternative source lists and take other appropriate
steps to determine whether unidentified sources or emissions exist.
4. Results
Zf the ground survey sample i. *icatas that one percent or more of the real
emissions have been omitted from the inventory base for that area, the State shall
increase the entire inventory baseline by the percentage identified and revise the
SIP in accordance with EPA guidelines. All new emissions identified by the letter
survey of exempt sources, the ground survey, and other measures shall be included
in the State's emissions inventory.
(12) Corrective Action
(a) Minimum Program Implementation Requirements
where the study identifies implementation problems that are inconsistent with
EPA minimum program implementation requirements, the problems shall be corrected
whether or not they may result in additional emission reductions.
(b) Correctable Problems
The study team should determine and identify which problems are clearly
correctable, and propose; feasible corrective action options, with comments on the
advantages and disadvantages of each option. Specific consideration should be
given to the relative/ costs and benefits of each option to the agency. Specific
consideration shmilil also be given to options requiring the adoption of more
effective control requirements, and to regulation changes that will alleviate
compliance monitoring and enforcement constraints (for example, improved record
keeping and reporting requirements).
The study team should calculate the emissions reduction that can be achieved
by the recommended corrective action, if possible, and state the assumptions upon
which this calculation is based.
(c) Uneorreetable Problems/Correctability Unknown
Zf problems are known not to be correctable, or if the correctability of a
problem cannot be determined, this should be clearly indicated along with the basis
for that determination.
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Rule Effectiveness study Protoco
March 24, 1988
Page 10
(d) Study
The study shall include a planned follow-up audit within one year after its
completion to determine if corrective action* were implemented and whether the
actions resulted in the improvements anticipated.
(13) Reports
(a) Inspection Summary Report
A separate summary report shall be completed for each source inspection. This
report should include a summary of specific findings and recommendations, and all
compliance or emissions calculations with supporting data. See Attachment P..
(b) Final Study Report
A final study report shall be completed which identifies the percentage
effectiveness of each regulation evaluated in the study, and which describes all
source compliance and agency implementation problems that were identified, whether
they are correctable or not, the proposed corrective action, any other required or
proposed program implementation improvements, a summary of reasons for why other
problems are not (or may not) be correctable, and a summary of reducible emissions
associated with specific corrective action and other implementation improvements.
The final study report shall also include the schedule for a planned follow-up
audit. See Attachment G.
Any deviations from the study protocol should be identified and explained in
the final study report.
Members ?f the study team may provide nonconcuring opinions which will b«
included as - attachment to the report.
Attachments
Attachment A:
Attachment B:
Attachment C:
Attachment D:
Attachment E:
Attachment F:
Attachment G:
Source Inspection Selection Procedures
Field Inspection Procedure Checklists — Graphic Arts
Compliance Determination and Emissions Calculation
Checklists — Graphic Arts
Percentage Effectiveness Calculation Guideline
Minimum Program Implementation Requirements
Example Inspection Summary Report Checklist — Graphic Arts
Example Final Study Report Outline
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March 24, 1988
Rule Effectiveness Study Protocol
SUMMARY OF ATTACHMENTS
Attachment At Sourc« Inspection Selection Procedures
This attachment describes procedures for selecting, a statistically repre-
sentative sample of sources in each category. Zt is expected as a part of the
final protocol development and review process that the initiating and reviewing
agencies will agree on the final selection as "representative"' for the purposes
of each study.
Attachment Bi Example Field Inspection Procedure Checklists — Graphic Arts
This attachment provides checklists for use by a lead investigator in
evaluating the adequacy of inspection procedures at facilities covered by CTG's.
In addition to outlining compliance evaluation checks, the checklists also
provide for an evaluation of agency source files* previous regulation applica-
bility determinations, exemption status, inventory adequacy, and other deter-
atinationa useful to the overall study.
Attachment C: Example Compliance Determination and Emissions Calculation
Checklists — Graphic Ares
This attachment summarizes accepted EPA methods for measuring emissions and
determining compliance for the graphic arts CTG categories as an example to be
followed in protocols for other source categories. Only compliance test methods
approved as part of a SIP .or promulgated by EPA may be used to measure emissions
and determine compliance status as part of a rule effectiveness study. These
methods should be clearly identified prior to initiating any field investiga-
tions and should be incorporated within the final study protocol.
Attachment Pi tsaccentage Effectiveness Calculation Guideline
This attao^ssnt outlines the procedure and assumptions for calculating the
overall percentage effectiveness of a rule as a result of a rule effectiveness
study conducted pursuant to this protocol.
Attachment E; Minimum Program Implementation Requirements
This attachment provides guidance on how to identify relevant EPA minimum
program implementation requirements for purposes of a rule effectiveness study.
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of Attachments
March 24, 1988
Page 2
Attachment Ti BsslPle Inspection Summary Report Checklist — Graphic Arts
This attachment provides an outline of the report for each inspection
conducted during th« study. Th« graphic arts category is used for illustration,
Attachment C: Exaaple Final Study Report Outline
This attachment provides a generic outline of a final rule effectiveness
study report.
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REFERENCES FOR SECTION 6.4
-------
Wednesday
November 2, 1983
Part V
Environmental
Protection Agency
Compliance With the Statutory Provisions
of Part D of the Clean Air Act, Final
Rule
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50686 Federal Register / Vol. 48. No. 213 / Wednesday. November 2.1963 / Rules and Regulations
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Parts 51 and 52
[AD-FRU 2432-3, Doctctt A-tS-01 1
Compliance With the Statutory
Provisions of Part D of the Clean Air
Act
AGENCY: Environmental Protection
Agency.
ACTION: Final action on rulemaking
proposals and announcement of policy.
SUMMARY: On February 3. 1983 (48 FR
4972 and 48 FR 5022) the Environmental
Protection Agency (EPA) published two
rulemaking proposals relating to
implementation of the primary national
ambient air quality standards under the
Clean Air Act. The first package
proposed to disapprove State
implementation plans and impose
construction bans in nonattamment
aruas that were required to attain the
standards by December 31, 1982. but
were still experiencing violations. This
package also proposed to disapprove
plans and impose bans in nonattainment
areas that had not received full EPA
approval for plan revisions due in 1979.
The second package proposed action
on implementation plans submitted in
1982 by nonattainment areas that had
obtained extensions of the 1982 deadline
for the carbon monoxide or ozone
standards. EPA proposed to impose
bans in all areas where it was proposing
to disapprove 1982 plans.
After evaluating the comments
submitted in response to its proposal.
KPA has reused its views as to the legal
i n:)s"q-.:pnc,fcs of a failure to meet the
!9bJ deadline. Today's notice contains
two final actions reflecting these
rhdneed views. In addition, in Section
IV of this notice EPA sets out a general
policy for correcting a!l of the problems
identified in both of the proposals
published on February 3.
EFFECTIVE DATE: November 2. 1983.
ADDRESSES: Background matenal for
this jction is located in Docket Xo. A-
f.3-01. West Tower Lobby. Gallery 1.
I' S. Envi-or.niental Protection Agency.
C""Tdl Dorke' Section. 401 M Strent."
s U . Wrfshinston. n.C. 20460. The
i'. ' h f! "MV bi- examined bp'wppp. H 00
.; -• H<.i'4iw;p-" on weekdn\s. A
:i ••" ::.''>'•• fee rmv UP ch-wci fur
•: \ iJu1 '. ' uV cnp\ of the do' '»ri
.- ,ii,tn i'.,i- ir, rarh EPA
FOR FURTHER INFORMATION CONTACT
U,:\:,iS',.>npf>': i-.ihlf rruMSures needed tn HSSJM
a:'rttPTpp.t no hiti»r than December V
3. l-'u::,liii>. Hi .-,;." , •• >;•> ..-4 /;..- r ••:<-'
Plar. Rp\ ;.s'/i/,"i
As a furthpr incentive to the revision
of nians for nonattginment areas.
Ccngress provided funding restrictions
in Section 176(a) and 316(b). Under
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Fedeial Register / Vol. 4& No. 213 / Wednesday. November 2. 1983 / Rules end Regulations 50687
Section 176(a). EPA and the Department
of Transportation must restrict funding
n arn area where transportation
(.ontrols are needed to provide for
attainment by the applicable deadline
and a State fails to submit or make
rpesondbie efforts to submit a plan thai
considers" each of the Part D
requirements Under Section 316(b). EPA
h«s discretion to limit funds for
construction of sewage treatment
facilities in any area where a State does
not have in effect a plan that
accommodates emissions associated
with sewage treatment facilities.
4 Restrictions as Incentives for
Implementation
Congress also sought to ensure that
SIPs for nonattamment areas, once
revised, would be implemented, ty added
two construction bans and two hmdmy
restrictions that apply in areas where
State or local agencies have failed to
r drry out the SIP Section 173(4) requires
each SIP for a nonattamment area to
contain regulations that prohibit new
source construction and modification in
arn area where a State or local agency
has failed to carry out its SIP. In
addition. Section 113(a)(95) authorizes
EPA to prohibit the construction of any
rr.a|or stationary source in any such
area Section 17B(b) prohibits EPA from
awarding any grants under the Gean
Air Act to any such area. EPA may also
apply Sectron 316(b) in such areas.
5 Cay/5 for Plan Revisions
Finally. Congress retained Section
no(a)(2j(H). the remedial mechanism
F.PA used in 1976. Section 110(a)(2HH)
1.: i reu;.irps each SIP to require its own
rpi :s.or. if EPA finds that a plan is
substantially inadequate" to achieve
tmieK attainment of the national
ooibier.! air quality standard that it
implements. In 1977 Congress addH
new language allowing EPA to call for a
revision when a plan fails to comply
with any requirement of the 19T7
amendments
B. Implementation of the 1977
•\trenaements
\ Drs'Auction;
IT. March 1978. EPA designated over
400 areas as nonattamment for one or
rrore primary or secondary NAAQS. 43
FR 8 1.1979 almost none of the
-onattdinment areas had in effect an SIP
proM»ion that met the requirement! of
Sections llOiaK2)(I) and 173(4). As a
result, on July 2.1979 (44 FR 39471). EPA
published a regulation that inserted the
Section 110(a)(2)(l) and Section 173(4)
construction bans into SIPs that lacked
them and clarified the scope of bans in
SIPs that had them. EPA described the
regulation as an "interpretive rule" that
merely implemented the requirements of
Section 110
specific deadlines. Some of these
deadlines have not been met. either
because the States have not submitted
the necessary corrections, or because
EPA has not yet determined whether the
submitted material meets the relevant
Part D requirements
The approval status of the
nonattainment areas that received
attainment date extensions parallel?
roughly the approval status of the
nonextension areas. As noted abo\e
these areas had to submit Part D
revisions m 1979 and supplemental
revisions in 1982. In a very few areas tne
section 110(a)(2)(I) moratorium remains
in effect because EPA disapproved a
portion of a 1979 submission. In most
cases. EPA approved fully or
conditionally the 1979 submissions :
Each of the States with extension
areas has submitted at least a draft of
its supplemental revision, and EPA has
proposed action on each submittal. Or.
February 3. EPA proposed to disapprove
plans for 17 States. See 48 5022-5148
EPA has proposed to approve the
remaining 14 submissions.
4. Funding Restrictions
(a) Section 176faJ. On April 10.^.980
(45 FR 24692). EPA and the Department
of Transportation published a joint
policy for the implementation of the
Section 176{a) funding restrictions. In
this policy, the two agencies took the
position that the restrictions would
apply only in regions that had not
submitted (or made reasonable efforts to
submit) Part D SIPs for rransporTation-
related pollutants. The policy stated that
EPA would judge each region's efforts
on a case-by-case basis
The policy gives EPA discretion u
determine whether funding re«!nc::i. --
should applv throughout an entire 3.:
'EPA • authority to punt condition*! app-mals
has, been upheld although the US Court of Appeals
for th« Second Circuit h»» ruled that EPA mm noi
[•ft the Section llCXalllllll Construction bun upon H
conditional appnnal. Connecticut Fund lor tt>r
En\ irormeni \ £. n.-i>< n.v
implemented th(-r 19T- p!.-n< O-AUBUS! 3 ^s*1 <>)
FR 35311] EPA proppse-d "0 find lhat 11 Siites »::"
ev'fns'on «re«t »ere not implementing \ernue
inj"peonon.ni»irj*r.ance pronmnj EPA propose r
impose contraction moratoriums under Secuo"
1"3|4| and fnndinf nmnctions n«o>: Sectior
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50668 Federal Register / Vol. 48. No. 213 / Wednesday. November 2. 1983 / Rules and Regulations
quality control region, or only in those
portions of the region designated
nonattamment for a transpoTlation-
reidted pollutant. If restrictions are
imposed. EPA has discretion to continue
'o award air pollution control funds to
agencies not directly responsible for the
failure to submit a plan. The Department
of Transportation has discretion to fund
proiects meeting the exemptions listed
in Section I76(a). The policy provides
additional criteria for determining which
projects should be exempt.
The policy also sets out procedures
for imposing the restrictions, including
notice and opportunity to comment. The
policy suggests, but does not require.
that removal of the restrictions should
wait until EPA approves a revised SIP
as meeting the Part D requirements. The
policy notes that, since Section 176(a)
requires action by the State. Federal
promulgation of a Part D SIP would not
justify removal of the restrictions.
(b) Section I76(b). EPA has not issued
•A formal policy for Section 176(b), which
applies when State or local agencies fail
to carry out a SIP. However. EPA has
taken positions on some issues in its
proposals to use Section 176(b). For
example, where different levels of
government share SIP responsibilities,
EPA has stated that it may continue to
fund agencies in the level of government
that is not responsible for the
implementation problem. See 47 FR 9477
(March 5,1982) and 48 FR 35312 (August
3.1983). EPA has requested comment on
alternative formulas for computing the
amount of funding that is intended for
use in the area where the SIP is not
being carried out. Under one of these
formulas. EPA would withhold the
amount of funds EPA needs to
implement the program that the State
has not implemented. See 48 FR 35312.
Proceduraily, EPA has determined
that it should provide notice and an
opportunity to comment on both the
factual basis of its finding and the
amount of funding to be withheld. See 47
FR 9477 and 48 FR 35312. EPA will also
provide an opportunity for a hearing as
required under Section 105(e).
(c) Section 3l6(b). EPA published a
policy for Section 3l6(b) on August 11.
1980 (45 FR 53382). The Policy adopts a
•'reasonable efforts" approach to judging
St.itp efforts to submit and implement
Pd;t D plans. It aiso exempts from any
:'istr:ftions projncts needed lo mee!
• •• >-.::ng hiMlth needs thai will not
evpand capacity by more than 1 million
Sol-ins per day. and projects that would
ir prove treatment, but not expand
Lunacity The policy adopts the
p::cedures developed for imposing and
removing Sr ction 176(a) restrictions.
C. EPA s February 3 Proposals for
Nonattainment. Nonextension Areas
1. Proposals to Disapprove and Impose
the Section 110(a)(2)(l) Construction
Ban
On February 3.1983, EPA proposed
two sets of findings for SIPs for
nonattainment. nonextension areas.
First. EPA proposed to find as a factual
matter that many of these SIPs had
failed to meet one or more Part 0
requirements. Second, EPA proposed
that the legal consequences of such
failures should be disapproval and the
imposition of a construction ban under
Section 110(a)(2)(I). EPA also solicited
comment on applying funding
restrictions.
EPA's factual proposals addressed
three Part D planning problems.
(a) Failure To Attain by December 31,
1982. First. EPA proposed to find that
SIPs for 111 areas, many of which had
received approval or conditional
approval of their Part D SIP revisions.
had failed to bring about attainment by
the end of 1982.' For a list of these areas.
see the first column in "Appendix D" to
the proposal. 48 FR 5005-5021. EPA took
the position that any area that failed to
attain by 1982 could not be said \o
satisfy Section 172(a)(l), which requires
the plan for any nonextension area to
"provide for" attainment by the end of
1982. Consequently. EPA proposed to
disapprove these SIPs and impose the
ban under Section 110(a)(2)(I).
Following this logic, EPA also
proposed to disapprove plans for
nonattainment areas that it had
designated nonattainment after the first
round of designations in 1978 and that it
thought would continue to experience
violations after 1982. EPA announced
that the 1982 attainment deadline would
apply even to areas it designated as
nonattainment after 1982. EPA also
stated that the Section 110(a)(2)(I) ban
would apply immediately in areas
designated nonattainment after 1982,
since the designation itself would show
that the plan had failed to assure timely
attainment and. therefore, was not
meeting the requirements of Part D.
EPA earlier had interpreted the Act to
allow areas designated nonattainment
after July 1,1979 one year to develop a
Part D plan and six months to obtain
EPA approval before a construction ban
'EPA based us prrlim-nnn i omlusmn thui !
urc.1;. h.iri fatlrj lu dtt.iin hv th« end
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Federal Register / Vol. 48. No. 213 / Wednesday. November 2. 1983 / Rules and Regulations 50689
2 Funding Restrictions and Other
Construction Bans
In the February 3 nohce. EPA solicited
comment on whether the funding
reMncuons of Sections 176(a), 176(b)
dr.d 316 of the Act should apply in any
ci'ra \\here EPA disapproved a plan for
fri..jre to attain or failure to meet the
Port D planning requirements EPA also
reo/.iPaied comment on whether there
might be circumstances justifying the
application of these restrictions without
prior notice and opportunity to
comment. EPA did not however.
propose to restnct funds in any area.
Similanly. EPA did not propose to
impose either the Section 173(4) ban or
the Section 113(a)(5) ban.
3 Other Issues
(a) Requests for Attainment Date
E\:ensions. EPA also announced that it
would disapprove any new request for
an extension of the attainment date for
tne ozone or carbon monoxide
stdnda.-ds for either an "original" or a
newly-designated nonattainment area.
EPA explained that Section 172(a)(2)
requires all extension requests to have
been submitted on or before January 1,
1979. EPA acknowledged that it had
approved extension requests submitted
after that date when they accompanied
an areas s ongmal Part D submittaL but
asserted that Section 172(a)(2) could not
be read to permit extensions any later in
the planning process.
(b) Pending Revisions to NAAQS.
EPA also announced that it could
provide no exemptions from
construction or funding restrictions for
any nonattainment area based or.
possible changes to any of the NAAQS.
|cl Arecs Expected to Attain bv
December 31. 1982. EPA's February 3
proposal also listed all nonattainment.
nonextension areas that EPA expected
to meet the December 31.1982
attainment deadline. To confirm that
these areas had in fact attained. EPA
proposed to require each area to submit
by July 1.1964. a request for
redesignation to attainment. EPA
implied that it would disapprove the
plan for any area that could not
demonstrate that it had attained the
standards by that time. For a list of
a'eas that EPA expected to meet the
19R2 attainment deadline, see
Arrcnd:* C" of the Feoruarv 3 notice
46 FK 49*9-5002
C Cc—.Ter.ts on February 3 Proposals
• • \cr.attair.ment. .\onexiension Areas
; Proposed Disapprovals and
Construction Moratoriums
(ct) Failure to Attain by December 31.
198:
• General Legal Issues. Nearly all of
the commenters that addressed these
proposals protested EPA's proposal to
disapprove already approved plans and
reimpose the construction ban for failure
to attain by the end of 1982. The
commenters asserted that the purpose of
Section nO(a)(2)(I) and Part 0 was not
to ensure attainment by the end of 1982,
but to induce States that had missed the
attainment dates set by the 1970
amendments to the Clean Air Act to
revise their plans.
Some commenters. focusing on the
language and history of Section
110(a)(2)(I) and Part D. pointed out that
Part D merely requires plans to "provide
for" attainment by the end of 1982. See
Section 172(a)(l). They argued that
Congress easily could have chosen a
stronger word, such as "achieve" or
"assure." if it had meant Part D to
require actual attainment
One commenter used legislative
history to show that Congress chose to
use "provide for" precisely because it is
less demanding. As originally drafted.
the provision that became Section
172(a)(l) required Part D plans to
"assure" attainment. The sponsor of the
amendment that replaced "assure" with
"provided for" stated that he wanted to
ensure that States would not have to
guarantee that their revised plans would
actually bring about attainment
(Transcript of Senate Clean Air Act
Mark-up. May 4.1977. pages 13-14.)
Other commenters noted that Section
110(a)(2)(I) only requires areas to "plan"
for attainment to escape the
construction ban They asserted that the
legislative history describes the ban as
an inducement to timely planning, rather
than a penalty for unsuccessful
planning.
Still other commenters. focusing on
prior EPA action, reminded EPA that.
when SIPs submitted under the 1970
amendments failed to bring about
attainment EPA called for SIP revisions
under Section 110(a)(2)(H) instead of
disapproving plans for failure to
"provide for" attainment under Section
110(a)(l). Moreover, at that time. EPA
interpreted the Act as prohibiting new
source construction only in areas that
failed to submit revised SIPs within the
deadlines established by EPA. These
commenters argued that EPA should
follow the same process for plans that
failed to "provide for" attainment under
Section 172(a)(l). They felt that the
existence of this alternative remedy
made it unnecessary to adopt what they
regarded as strained interpretations of
Sections 110(a)(2)(I) and 172(a)(l).
Most commenters that urged EPA to
use Section HO(a)(2)(H) conceded that a
construction ban should apply if an area
failed to revise its plan in response to a
notice of inadequacy A few. however
argued that EPA should promulgate
revisions under Section liO(c|(l")(C)
instead of imposing a ban.
• General factual issues Mam
commenters protested EPA s use" of
projections based on monitoring data
from 1981 and 1982 They urged EPA •_•
wait until 1933 data becomes avaiiab -
One commenter supported the propos-:
procedure, but argued that EPA had r, •
made sufficient allowance for unusua
meteorological conditions that might
have caused violations. A few
commenters argued that EPA had not
given enough information on its
selection of data to provide a
meaningful opportunity to comment.
• Ozone transport issues. Many
commenters supported the proposal to
exempt ozone areas that can
demonstrate that their continued
violations are caused by transported
pollution. Four commenters. however
felt that it was impossible to make sucr.
demonstrations using current data and
modeling techniques. Others wanted to
expand the exemption to other
pollutants.
• Compliance date extension issues
All of the comments on this issue
supported the idea of exempting areas
that could demonstrate that they would
have attained but for a source that
received a compliance date extension
beyond 1982. Many commenters urgec
EPA to expand the exemptions to other
situations. One commenter felt EPA's
two-pronged test was too burdensome
This commenter favored relaxing the
requirement that all other sources in the
area must be in compliance and
eliminating the requirement for a
demonstration that the area would have
attained but for the compliance date
extension.
• Removal of construction ban.
Commenters responded variously to
EPA's request for comment on when to
remove construction bans. The most
common suggestion was that EPA
should remove the ban as soon as it
approved a revised SIP curing the
deficiency that caused EPA to
disapprove the plan. Other suggestions
included removal upon mere submittai
or a revised plan, removal upon
commencement of good faith efforts
toward submitting a revised pian. ar.c
removal upon submittai of a request for
redesignation to attainment One
commenter also suggested that the Dd^
could be lifted when a source obtained
sufficient offsets to show a net reduction
in emissions.
These comments addressed not or.iy
disapprovals for failure to attain, but
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50690 Federal Register / Vol. 4& No. 213 / Wednesday. November 2, 1983 / Rules and Regulations
also disapprovals for failure to fulfill
conditions and disapprovals for failure
to have in effect by now a-fully or
conditionally approved plan.
b. Failure to Fulfill Conditions. No
comment addressed this issue directly.
Several commenters. however, argued
that EPA should not disapprove a plan
in an area that probably attained in
1982. even if the plan failed to meet
some of the other Part D Requirements.
Since the construction ban and the Part
D requirements do not apply in areas
designated attainment under Section
107(d), the commenters argued that EPA
should not apply them in areas where
attainment is considered likely.
c. Failure to Have in Effect an
Approved or Conditionally Approved
SIP. Commenters generally agreed that
th'e construction ban should apply in
areas that apparently failed to attain
and that lack fully or conditionally
approved Part D plans. Some
commenters argued however, that the
ban should not apply in areas which
probably attained the standards in 1982.
d. Proposals for Newly-Designated
Nonattainment Areas. All of the
commenters that addressed this issue
objected to EPA's proposals to revoke 40
C.F.R. 52.24{k) and require areas
designated nonattainment after the first
round of designations to meet the 1982
deadline for attainment. They felt that
the proposals would produce absurd
results, especially in areas designated
nonattainment after December 31.1982.
Many of the commenters argued that
Section 107(d) and Part D do not apply
to these areas. They suggested that EPA
should issue a notice of deficiency under
Section HO(a)(2)(H) if it discovers
violations in an area designated
attainment or unclassified. A few
commenters suggested that EPA should
continue to use the time intervals
between the specific dates in Section
107(d) and Part D.
2. Funding Restrictions
(a) General legal issues. Ail
commenters on this issue opposed the
use of funding restrictions in areas with
approved Part 0 plans that apparently
failed to attain by December 31.1982.
unless EPA could show that a State had
failed to carry out its plan. These
commenters argued that there was no
ci;pport in the language of Sections
:T6(a). lT6(bl. or 316 for applying the
restr.c;,ons in an area lhat had
".p. •r-.t.r.'ed an approved plan but had
ic.ijj t:i ar.din. Tne comnenters also
asserted that the legislative history
showed that Conaress intended EPA to
impose Section 176(a) only where a
State failed to suomit a plan, not where
a State failed to bring about attainment.
(b) Procedural issues. Many
commenters argued that EPA had no
authority to impose funding restrictions
without providing prior notice and
opportunity to comment. Some
commenters added that Section 105(e)
requires EPA to provide an opportunity
for a hearing before it withholds any
grants for air pollution control programs.
Others urged EPA to follow the special
policy and procedures developed by
EPA and the Department of
Transportation for Section 176(a).
3. Other issues
(a) Attainment date extensions for
carbon monoxide and ozone. All but one
of the commenters addressing this
provision opposed EPA's proposal to
interpret Section 172(a)(2) as prohibiting
extensions unless requests were
submitted with 1979 plan revisions.
Most of these commenters cited a 1979
policy memorandum which stated that
EPA wou!~ sTant extensions later in the
planning • :ess. They also argued that
it would be unfair to penalize areas that
had carried out approved plans in good
faith.
The commenter that did not favor
extensions suggested that areas that
failed to attain should be given an
opportunity to revise their plans before
any restrictions were imposed.
(b) Effect of pending revisions to
standards. All comments on this issue
urged EPA to refrain from disapproving
plans and imposing restrictions in
particulate matter nonattainment areas.
One commenter suggested that EPA
disapprove plans only in those areas
that would be nonattainment under a
revised particulate matter standard.
(c) Areas expected to attain by
December 31,1982. Several commenters
supported EPA's proposal to presume
nonattainment for any area listed in
Appendix C of the February 3 notice
that failed to submit a request for
redesignation by July 1.1984. One
commenter asked EPA to relax the
deadline to October 1984.
A fairly large number of commenters
asked EPA. to clarify its policy on the
data needed to support a redesignation
request.
E. Congressional Action
In June 1983 Congress added to the
HUD-Independent Agencies
Appropnations Bill for fiscal year 1984 a
provision which provides:
None of the funds provided in this Act may
be obligated or expended to impose lanctions
under the Clean Air Act with respect to any
area for failure to attain any national
ambient air quality standard established
under Section 109 of such Act (42 U.S.C 7409)
by the applicable dates set forth in Section
172(a) of such Act (42 U.S.C. 7S02(aJ).
Pub. L 98-45. 97 Stat. 226 (July 12,
1983J. The bill, including this measure.
was passed by both houses and signed
on July 12,1983. It will limit EPA's
ability to impose construction and
funding restrictions during fiscal year
1984.
The legislative history shows that
Congress enacted this measure largely
as a response to EPA's February 3
proposal to disapprove approved and
implemented plans that failed to bring
about attainment by the end of 1982.
See. e.g., 129 Cong. Rec. S8818 (daily ed..
June 21.1983 (remarks of Senator
Randolph): 129 Cong. Rec. H3506 (daily)
ed. June 2,1983) (remarks of
Representative Dingell). It also shows
that Congpess intended to prohibit only
those "sanctions" imposed for failures to
attain. Construction bans and funding
restrictions for failures to submit plans
or carry out plans are still authorized.
See 129 Cong. Rec. S8816 (remarks of
Senator Randolph): 129 Cong. Rec.
H3503-3504, (daily ed. June 2.1983)
(remarks of. Representative Waxman):
129 Cong. Rec. H3513 (remarks of
Representative Broyhill). In fact, one of
the chief spokesmen for the Senate
amendment made it clear that EPA
could still limit construction and funding
in an area with an approved and
implemented Part D plan that failed to
bring about attainment if the State failed
to revise the plan within a reasonable
time. See 129 Cong. Rec. S8817 (daily ed.
June 21,1983) (remarks of Senator
Stafford).
ID. Response to Comments
This section provides EPA's response
to the major comments on legal and
policy issues. EPA will respond to
comments on factual issues in the final
notices of inadequacy and final
disapprovals that it will publish in the
near future.
A. Proposed Disapprovals and
Construction Bans
1. Failure to Attain by December 31,
1982
EPA has been persuaded to change its
view on the legal consequences of
finding that a nonattainment,
nonextension area with a fully approved
and implemented Part D plan failed to
atto.n by Decemoer 31 l^.- EPA nou
agrees that tne better interpretation of
the Act is that Section llO(a)(2)(I) and
Part D were intended to produce revised
plans that appeared to "provide for"
attainment by the~l982 or 1987
deadlines. EPA agrees thai the language
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Federal Register / Vol. 48. No. 213 / Wednesday. November 2. 1983 / Rules and Regulations 50691
and legislative history of Section
172(a)[l) suggest that SIPsjwere only
expected to "provide for" attainment in
a prospective or planning sense.
Furthermore. EPA agrees that its
decision not to apply bans immediately
in areas that missed the original
attainment deadlines is a significant
precedent. In fact. EPA has determined
that Congress quite probably endorsed
this approach in enacting the 1977
amendments.
Moreover. EPA believes that the
legislative history of the construction
ban. while not conclusive, suggests that
the primary purpose of the ban was to
provide an incentive for submitting
revised plans that met the Part D
requirements. Imposing bans in areas
with approved plans that missed the
1982 attainment deadline would do little
to further this goal, because these areas
have already met the requirements of
Part D. This reasoning is set out at
greater length in an opinion of the
General Counsel dated July 12.1983.
which has been included in the docket
for this rulemaking.
EPA is withdrawing its proposals to
disapprove plans and impose Sectior.
llO(a)(2)(I) bans in areas with approved
and implemented Pan D plans.
Moreover. EPA is promulgating an
addition to 40 CFR 52.24(a) that will
prevent the Section 110(a)(2)(I) ban from
applying in such areas.
EPA. however, will find that approved
Part D plans that failed to bring about
attainment by 1982 are inadequate
under Section 110(a)(2)(H). EPA will call
for plan revisions, and impose bans
under Section 173(4) and funding
restrictions under Section 176fb) in any
area that fails to submit a revision in a
timely manner.
EPA is retaining the exemptions for
ozone transport and compliance date
extensions that commenters favored
EPA will not issue findings of
inadequacy for areas that can
demonstrate that they would have
attained but for ozone transport or
extended compliance schedule. EPA.
however, is eliminating from both
exemptions the requirements relating to
compliance by other sources These
other requirements are not relevant to
the purpose of the exemptions. Where
otner sources are not in compliance
because pians are not D»mg carried ou;.
EPA may impose restr.ctions for failure
'o implement under tne poiicv outlined
m Section IV of this notice
2 Failure to Fulfill Conditions
EPA is not changing its views on the
legal consequences of a failure to fulfil!
a condition of approval, even for areas
tf>at may have attained by 1982. So long
as an area is designated nonattainment
under Section 107(d). the Act requires
compliance with all of the Part D
requirements. EPA believes the States
should bear the burden of demonstrating
attainment. Furthermore, so long as any
doubt exists, it better serves the Act's
health protection purposes to continue
to require compliance with Part D.
3. Failure to Have in Effect an Approved
or Conditionally Approved Part D SIP
Commenters generally supported
EPA's proposal to retain existing
disapprovals and bans in these areas.
As explained in Section IV of this
notice. EPA has decided to retain this
proposal.
4. Newly-Designated Nonattainment
Areas
EPA has been persuaded to retain 40
CFR 52.24(k) and allow newly-
designated nonattainment areas a
reasonable time to submit Part D plans
and provide for attainment. EPA is
convinced that Congress could not have
intended the 1979 and 1982 dates to
apply to areas designated attainment
long after the original designations in
1978. Moreover. EPA has concluded that
the best way to provide sufficient time is
to retain the approach long established
by Section 52.24(k) and use the time
intervals suggested by Section
I10(a)(2)(i) and Part D to establish dates
for plan submittal and attainment.
B. Funding Restrictions
After reviewing the comments. EPA
agrees that none of the funding
restnctions in the Act apply to areas
with approved and implemented Part D
plans that only missed the 1982
attainment date. Furthermore, if EPA
imposes restnctions for other reasons, it
will first provide notice and opportunity
to comment. EPA will not restrict any
Clean Air Act funds under Sections
176(a) or 176(b) without also providing
an opportunity for a hearing as required
by Section 105(e).
C. Other Issues
1. Attainment Date Extensions
EPA is modifying the interpretation of
Section 172(a}(2) that it proposed on
February 3 to allow newly-designated
ncnattammen: areas for carbon
monoxide and ozone to obtain
extensions if they submit their requests
with the..- first Part D submissions
Allowing them to request extensions at
this time will be more consistent with
the practice EPA established for the
"ong nal" nonattainment areas.
Furthermore, it is consistent with the
general approach to dates in Part D that
EPA is adopting for newly-designated
areas.
FPA did not find that any commenter
presented a sound rationale for
expanding Section 172(a](2) to permit
areas to request extensions later in the
process. Although the legislative historx
does not explain why Congress imposed
a January 1,1979 deadline on extension
requests, it seems likely that Congress
wanted to force States to make
decisions on extensions early in the
planning process, to ensure that there
would be sufficient time to implement
the stringent controls needed for an area
where "reasonable measures" would no!
provide for attainment. This purpose
would not be nerved by allowing areas
to obtain extensions after they submit
their initial Pan D plans.
2. Pending Revisions to Standards
No commenter offered a convincing
legal rationale that would allow' EPA to
stay implementation of the existing
particulate matter standard. EPA is
considering the possibility of focusing
the paniculate matter standard on small
panicles. In an attempt to accommodate
the commenters' equitable concerns
EPA intends to allow States to structure
their paniculate matter revisions so they
will concentrate on smaller particulates
first.
3. Areas Expected to Attain bv
December 31. 1982
Although the comments generally
supported the proposal to require
redesignation requests from all areas
considered likely to attain. EPA has-
decided to withdraw the proposal. Some
States might wish to retain the stricter
Part D regime even in areas that come
into attainment. Section 116 of the Act
makes it clear that States are always
entitled to regulate more stnctly than
the. Act requires. Consequently. EPA
has no clear authority to require a State
to redesignate and give up its Part D
program.
IV. Policy for Correction of Part D SIPs
for Nonattainment Areas
A. Introductory Comments
This section describes the approach
EPA wants States to take to remedy SIP
deficiencies in nonattainment areas, li
addresses both the specific deficiencies
indentified in the February 3 proposals
and deficiencies mat may be identified
in the future Also i: describes EPA s
revised view of the legal consequence:
of a failure to correct a deficiency.
In most cases. EPA wants to give
States an opponunity either to show-
that their SIPs are not deficient or to
remedv their deficiencies before
-------
50692 Federal Register / Vol. 48. No. 213 / Wednesday. November 2. 1983 / Rules and Regulations
construction and funding restrictions
apply. States may show thaj SIPs are
not deficient by requesting
redesignation to attainment under
Section 107(d). States may remedy
deficiencies by either implementing or
revising their existing SIPs. EPA is
preparing comprehensive guidance for
areas that need to implement or revise
their plans. EPA expects this guidance
to be available later this fall.
If a State neither submits a
redesignation request nor cures its SIP
deficiencies. EPA will propose
construction and funding restrictions. If
a State commits to remedy its deficiency
by a specific date and, at the same time,
shows that it cannot possibly move any
more quickly. EPA may defer final
action until that date, unless it learns
later that the State will not meet its
commitment. EPA does not anticipate
that any State will need more than one
year to correct any of the SIP
deficiencies identified in the February 3
proposal.
If a State fails to redesignate or solve
its problems within the time limits
described beiow. EPA will publish a
notice in the Federal Register
announcing that appropriate
construction and funding restrictions
apply.
If EPA imposes construction and
funding restrictions, it will remove them
when it approves a redesignation
request or finds that the State has cured
its deficiency. If the State must submit a
plan revision. EPA will remove
restrictions only when it approves the
State's revision or promulgates a
Federal revision. If the State must
implement an approved plan. EPA will
remove restrictions only when it finds
that the State has completed all actions
needed to carry out the plan.
Where a SIP is deficient because it
lacks needed control measures, EPA will
consider promulgating the measures.
Resource constraints will almost
certainly make it impossible for EPA to
promulgate Federal plan revisions
immediately in all areas where they
might be needed. Consequently, EPA
will promulgate first in those areas
where air grant funds have been
restricted and where it believes that
Federal action w.li be most effective.
EPA will remove construction bans if it
promulgates a plan re%ision that brings
t^p area into full compliance with Part
D Promuijiatior however, will not
rt>mo\e funding restrictions. To remove
t.T".e restrictions States will have to
submit or implement their OVMI clans or
1.,-r...|1> adopt tr-.e F.PA plans as their
uu - Sop e g.. 46 FR 2465*2 (April 10
19i"l (Section 176(a) policy).
EPA will administer this policy in
accordance with the objectives that the
Administrator announced in his June 23.
1983 speech to the Air Pollution Control
Association. These objectives are:
(1) Carry out the Clean Air Act.
(2) Move the nation closer to the
health goals of the Act.
(3) Strengthen Federal. State, and
local air pollution control programs.
(4) Treat all parties fairly.
(5) Provide incentives for States to
fulfill their planning and implementation
obligations rather than punishments for
failures.
(6) Avoid unnecessary economic
disruption.
B. Policy
EPA has classified SIP deficiencies for
nonattainment areas into the following
categories:
1. Nonattainment areas without
attainment date extensions.
(a) Areas with fully approved 1979
plans or portions of plans.
(i) Areas that failed to implement.
(ii) Areas that failed to attain by the
end of 198Z
(b) Areas that failed to fullfill
conditions of approval on 1979 plans.
(c) Areas lacking approved or
conditionally approved 1979 plans.
(i) Areas that failed to submit plans.
(ii) Areas that received disapprovals.
(iii) Areas that submitted plans that
EPA has not acted upon.
(d) Areas with approved and
implemented plans that are expected to
attain.
2. Nonattainment areas with
attainment date extensions.
(a) 1979 plans.
(b) 1982 plans.
(i) Plans proposed for approval.
(ii) Plans proposed for disapproval.
(iii) Plans not submitted.
(iv) Areas that do not implement
plans.
3. Newly-designated nonattainment
areas with and without extensions.
Each nonattainment area must correct
each deficiency that applies to it. Some
areas will need to correct more than one
deficiency for the same plan. Also, since
some areas are nonattainment for more
than one pollutant, they may need to
revise more than one plan.
1. Noncttainment Areas Without
Attainment Date Extensions
(a) Areas With Approved 19T9 Part D
Plans or Portions of Plans.
(i) Areas that did not implement
approved plan provisions. EPA did not
propose on February 3,1983 to find that
any nonattainment. nonextension area
had failed to carry out an approved Part
D plan provision. EPA. however, may
discover that some areas failed to carry
out their plans. If EPA discovers such
problems, it will propose to find that the
area is not implementing its plan and
propose to limit construction and
funding under Sections 173(4) and
176(b). The timing of restrictions and the
remedy will vary with the type of
provision that is not being implemented
• Schedules for adoption of
additional control measures. EPA
approved some Part D plans containing
schedules that required areas to adopt
additional control measures needed to
assure attainment. For example, some
paniculate matter nonattainment plans
require areas to study nontraditional
sources of particulate matter and adopt
additional controls.
If IPA learns that an area has not
carried out such a schedule, EPA
promptly will propose to find that the
area is not implementing its approved
Part D SIP. Simultaneously. EPA will
propose to limit construction under
Section 173(4) and air pollution control
funding under Section 176(b). EPA will
provide an opportunity to comment and
an opportunity to request a hearing.
If. during the comment period, an area
commits to a new deadline for adopting
the necessary control measures as
quickly as possible. EPA will defer its
final action until that deadline. To
ensure that areas implement their plans
expeditiously. EPA will not accept
deadlines more than one year from the
date of the proposed nonimplementation
finding.
If an area misses its deadline for
submitting new control measures. EPA
will take final action to find that the
area has failed to implement and impose
the construction and funding
restrictions. If. however, an area submits
new control measures within its
deadlines. EPA may continue to defer
action while it evaluates the new
measures. If EPA approves the new
measures as revisions to the Part D plan.
EPA will withdraw the proposed non-
implementation finding, construction
limitations, and funding restrictions. If
EPA disapproves the measures. EPA
will impose the restrictions immediately.
• Implementation or enforcement of
existing measures. AH approved Part D
plans require areas to implement or
enforce adopted control measures. For
example, a plan for an ozone area rn.iv
require a State or local government to
construct high-occupar,c% \ehtcie lane<-
Other plan provisions may require t.s,e
State or local government to enforce
emission limitations for stationary
sources. EPA wilLpropose
nonimplementation findings and
construction and funding restrictions for
-------
Federal Register / Vol. 48. No. 213 / Wednesday. November 2. 1983 / Rules and Regulations 50693
any area that has failed to carry out
either type of requirement EPA will
proceed generally as described above in
the discussion of plans requiring the
adoption of control measures EPA
experts however, that areas would
nef-d much less than one >edr to adopt
ne\\ policies or procedures or commit
nrv\ resources to implement existing
mt dsures. consequently, it does not
anticipate that it will defer final action
onf lo cornpk with certai" fontr'aitr.
rec.uinr.8 Suit'! 10 me«t new source rt\ ir-» run -
EPA promulgated on August ~ 1980 U5 FR Sib'O
February 19tC EPA signea a settlemen' as'remrr
in which n agre«d to propose to revise »e\p-ai i/
lhe»e rules CtifmicolManu'aauf'.« ».«s>vie<1"-
£TA. D.C Or. No 7&-1V.2. Because of this
aperment. EPA conditional!) apprcueo ic\ern:
Stale programs which jenerall\ met EPA s 19«0
regulation*, but which did not meet some of if
rule* covered by the »eltlement agreement The
conditions requirr the St*ie« to revts* thei-
nonconforming. rule* within one vear umess
channel its own rules to that the Stale rules «.ot
bf acceptable See. e.f.. « FR 9859 (March 9. 19K<
I Alabama new source rwiew regulations I EPA tu
further conditioned approval of these resuidtioii< l .
requiring interim implementation in cor.lormanrt •
the Agenc> s current rules
The uncertainty crested b\ the s*ttlem*n!
agreement still emsts EPA did promulgate * rn,,r.t-
lo it* deHnnion of "Source' lot nonatidinmrn: d-r->
but th'S revision was surc^sfulU choiic-et-n ir •"•
L' S Court of Appeals for the Dis'nc' (if CULT'. .
Circu,; Vfi/JCi Conucr.. 6&S F 2d '18 IOC C-
196:! The Supreme Court has accepted EPA s
petition for cernoran to review this aension In
add»ipn on August Z! 1963 l«* FR .W4", Ft'-\
propcwed to m.ikf several other rumont
coniemplxted In the agreement Accoromiirk KI'-\
finds it •ppropriate to postpone cillir.s fnr
regulatory changes lo compK with these condu.i.r^
Howner Statifs mutt continue to meet «!!
conditions concerning requirement* fnr intcnni
implementation
EPA does nci intend lo pottpont c*!!in: fur
cntr.pluncf »nh earlier condition* imposed un
*:eks th«: h»a not >et begun to arinpt r*Buidi.o'i>.
me*:in|! FPA t IWnn* source r»\'ev» ruii-% \----
Swbie'.' 'o thwe enrlier condi'ion« m^si mrv
e\i«t].-,a di-.iriiinc« for adopting renu.t' i "« 'i«'
u,-< ._ i,, fj.\ s |usc ruifi I: ir.- >i »-i..- nu , •
ri..' ' ' .'i irf. — !'• •>' t" " ••!"'' F.' ^ - •.u>f '
r! -\
'!"'* ni rn»-«*
aS'ti '.:• -.'• El' A vT... issue n*» cura..ion«i
«p:>-o\.1i«. ~h:;h deal with th» CM A poriiun
-------
50694 Federal Register / Volr 48. No. 213 / Wednesday. November 2. 1983 / Rules and Regulations
notify the area and proceed as described
below,
EPA intends to complete its review of
conditions by the end of 1983. As part of
the review. EPA will consider all
comments on particular conditions
submitted in response to the February 3
proposed.
• Consequences of not meeting
germane conditions.
—Disapprovals and Section
:w(a)(2)'(l) bans. EPA expects that it
will find that many areas proposed for
disapproval on February 3 will still need
to meet their conditions.
Where the condition involves a
serious plan deficiency and is long
overdue. EPA may issue a final
disapproval and impose a Section
110(a)(2)(I) construction ban
immediately after it completes its
review of conditions. If the deficiency is
less serious, and if the area commits to
meet the condition by a new date. EPA
may defer final action until that date.
Areas that want to commit to new dates
may submit their commitments while
EPA is reviewing the conditions. In no
case does EPA expect to defer action for
more than one year after the completion
of its review of conditions.
If a State makes a submittal intended
to satisfy the condition before EPA
disapproves the plan. EPA will continue
to defer action while it reviews the
submittal. If EPA approves the
submittal. it will withdraw the proposed
restrictions. If EPA disapproves the
submittal. it will disapprove the plan
and proceed with the appropriate
funding restriction.
Where a ban is imposed. EPA will
remove it only when it takes final action
findina that the condition has been met
or redosignates the area to attainment.
—Funding restrictions for ozone,
carbon monoxide and nitrogen dioxide
plans. Where an area has failed to meet
a condition for a Part D plan for ozone,
carbon monoxide, or nitrogen dioxide,
EPA will consider restricting highway
and air pollution control funds under
Section 176(a). EPA will propose to
impose Section 176(3) restrictions where
areas have not made reasonable efforts
to fulfil! their conditions. EPA will
provide opportunity to comment and an
opportunity for a hearing before i( takes
final action. As described above for the
( orstrurt-on ban. EPA ma;, defer final
tf'-t-.-n for up to one year if an area
i.'mrrus to a nex date for nesting its
condition. EPA will remove restrictions
in accordance with its April 1980 policy.
—Fur.dmg restrictions for other
Dolhitcms Sect-.on 176(al does not apply
to plans for non-transportation related "
pollutants. Because EPA believes it is
essential to have all areas to meet
necessary conditions, it intends to
propose funding restrictions under
Section I76(bj and a construction ban
under Section 173(4) where areas have
not met conditions for other pollutants.
More specifically. EPA will consider its
conditional approval as the equivalent
of a finding of inadequacy and a call for
a SIP revision under Section
110(a](2)(H). Any area which has failed
to meet the condition has failed to carry
out the provision in its SIP that requires
a revision when EPA makes a finding of
inadequacy. Accordingly. EPA will be
able to use Section 176(b) and 173(4),
which apply in areas that have not
carried out approved plans. EPA will
propose to impose these
nonimplementation restrictions at the
same time it disapproves or proposes to
disapprove a plan. As described above
for the Section 110(a)(2)(I) construction
ban. EPA may defer action if an area
commits to a new date for meeting its
condition. EPA will review new
submittals. impose restrictions and
remove restrictions as described above
for the construction ban.
(c) Areas Lacking Approved or
Conditionally Approved 1979 Plans.
(i) Plan not submitted.
• Requirements for plan approval. All
areas designated as nonattaimnent in
1978 were required to have in effect by
July 1.1979 plan* that met the Part D
requirements. EPA wants areas that
have not obtained approval or
conditional approval fo their Part D
plans to do whatever is necessary to
obtain approval. In most cases, this will
require new plan revisions.
Although it will no longer be possible
for these areas to submit plans that
"provide for" attainment by the end of
1982. EPA has concluded that it may
approve plans that "provide for"
attainment as expeditiously as
practicable while meeting all other Part
D requirements. Upon approving such-a
plan. EPA will remove the existing
Section 110(a)(2)(I) ban and withdraw
any proposed or final funding
restrictions.
• Consequences of failing to submit
plans
—Section 110(a)(2)(I) construction
ban. In each nonattainment.
nonextension area that has failed to
submit all or part of a 1979 Part D plan.
the Section 110(a)(2)(I) ban went into
effect on July 2.1979 and remains in
effect today. As EPA proposed on
February 3. it will leave this ban in
effect until it approves or promulgates a
plan for the area as meeting the
requirements of Part D.
—Funding restrictions for ozone.
carbon monoxide and nitrogen dioxide
plans. Where an area has not made
reasonable efforts to submit a Part 0
plan for an ozone, carbon monoxide or
nitrogen dioxide nonattainment area.
EPA will propose in the near future to
restrict highway and air pollution
control funding under Section 176fa). If
an area commits to submit a Part D plan
at the earliest possible date. EPA will
defer action on the proposal until that
date so long as the area makes
measureable progress. In no case will
EPA defer final action for more than one
year from the date it proposes to impose
funding restrictions. If. however, a State
submits a plan to EPA within one year.
EPA will continue to postpone final
action on the restrictions until it takes
final action on the plan. If EPA approves
the plan, it will withdraw the proposed
funding restrictions. EPA will impose the
restrictions if it disapproves the plan.
—Funding restrictions for plans for
other pollutants. EPA intends to use the
Section 176(b) funding restrictions for
areas that are nonattainment for other
pollutants. For these areas. EPA will
treat the February 3 notice as a
proposed finding of inadequacy under
Section 110(a)(2)(H). As soon as possible
after issuing this policy, EPA will
publish final findings of inadequacy and
call for plan revisions. EPA intends to
set a deadline for tubmittal of these
revisions within 60 days from the date of
the final finding. These plans were
originally due over four years ago:
consequently. EPA if providing the
shortest deadline suggested by Section
If an area does not submit a Part D
plan within this 60 days. EPA will
promptly publish a propose finding of
nonimplementation. propose to restrict
funds under Section 176(b), and propose
a limit construction under Section 173(4).
If an area commits to a schedule for
submitting a revised plan, EPA will
postpone final action on the funding
restrictions for up to one year after the
date of its final finding of inadequacy. If
an area submits a plan revision on time.
EPA will defer action on the funding
restrictions as described above in the
discussion of 176(a).
(ii) Plan disapproved. In virtually all
areas that received disapprovals on
their 1979 plans, the Section 110(a)C!(l!
ban remains in effect.* As proposed or
February 3. these bans will remain ;.-
effect until EPA approves a plan d<
meetiny the requirements of Part D
EPA irtends to follow the same p« :•
for usinji funding restrictions to obt*:n
'•EPA h«s J.tcowvd d few «re«« w^-* :\
J'sHppro< *d a M.iri D oUn bui neg;ected 10 ruTuo-.
ihe Section HOUJUiiT; ban EFA mieids to pub'nh
nonces imposing the bin in tf.pte irem •« soon -is
possible after it IUUM this policy
-------
Federal Register / Vol. 48. No. 213 / Wednesday. November 2. 1963 / Rules and Regulations 50695
new plans that is outlined above for
nrens that did not sub nut Part 0 plans
The rationale for approving revised
plans described in that section will also
cirply to these areas.
(in) Plar submitted but no rina! action
s\ £/M For these areas, too the Section
llO(a)(2)(I) moratorium is in effect and
w:i! remain in effect until EPA approves
a plan as meeting the Part D
requirements.
Before EPA and the States can take
further action on these plans. EPA must
complete its review of the submitted
revisions. EPA has proposed action on
all of these plans. It currently intends to
take final action or. if necessary, to
propose different action no later than
December 31.1983. If EPA approves a
plan, it will remove the Section
nO(a)(2)(I) ban. If EPA disapproves a
plan, it will propose funding restrictions
dS described above in the Section on
areas that did not submit Part D plans
If a State chooses to withdraw a plan
before EPA takes final action. EPA will
return the plan and proceed under the
policy described above for areas that
did not submit Part D plans
(d) Areas With Approved and
Implemented 1979 Plans That Probably-
Attained. EPA did not propose to
disapprove plans or impose restrictions
for these areas on February 3. EPA.
however, will continue to monitor air
quality data for these areas to determine
whetner they did attain the standards. If
EPA discovers a violation of the
standard for which the area is
designated nonattamment. EPA will
propose to find the plan to be
inadequate and call for a plan revision
as described above for areas which
foi'ed to ettam.
These areas may request
redesignation to attainment any time
that they can submit data meeting EPA's
policy requirements. For more
information on these requirements, see
the April 21.1983 memorandum "Section
107 Designation Policy Summary", from
Sheldon Meyers to EPA Regional Air
Directors.
2 \onartainment Areas Wi/h
•\::c!nr^er,t Date Extensions
Part D required areas with attainment
Qntp extensions for ozone or carbon
•-oroxide to submit plan revisions in
" "n anc again in 196.1. Ei'.her or both of
•~--,e p:an revisions rr.riv be def cieni
: .' 7.*'" P!:r, Rc.-iujns. None nf
-'••\ s F-e:irua:v 3 proposals aad'ebbPd
.it- I9"9 plans for extension areas
Nevertheless, these plans may suffer
frnrn some of the deficiencies described
above An area may have fjiled to fulfill
a condition of approval or may have
to submit a portion of a plan. EPA
may have disapproved a portion of a
19"9 submittal. If EPA finds such
deficiencies, it will follow the polities
outlined above for nonextension areas
Extension areas ma\ also have failed
to carry out approved portions of their
19'9 plans. On August 3 1983 (48 FR
35312). EPA proposed IP find that eleven
areas were not irr.pleTicnting approved
schedules for motor vehicle inspection/
maintenance programs. EPA proposed to
restrict construction and funding under
Sections 173(4) and l?6(b). EPA will
publish similar proposals if it finds other
implementation failures.
(b) 1982 Plan Revisions. EPA has
proposed action on all 1962 plans for
extension areas. The second set of
notices published on February 3
contained EPA's proposals for 27 of the
31 States that have areas with
attainment date extensions.
(i) Plans submitted and proposed for
approval. EPA did not propose any
construction or funding restrictions for
plans which it proposed to approve. EPA
currently intends to consider all
comments and publish final approvals
by March 1.1984.
In some areas. EPA may find it
necessary to change its course and
disapprove a plan. Where disapproval
will require a reproposal. EPA plans to
publish the new proposal by March l.
EPA expects to take final action on any
reproposal by September 30,1984. If
EPA disapproves the plan, it will
proceed as described below.
(ii) Plans submitted and proposed for
disapproval. EPA intends to take final
action on all proposed disapprovals
early next year. Where circumstances
warrant. EPA will issue a new proposal
and complete its action before the end
of next year. Disapproval of a 1982 plan
will tngger a construction ban under
Section 110(a)(2)(I).
EPA wants to encourage areas where
plans are disapproved to submit revised
plans meeting the Part D requirements
Accordingly. EPA will consider
restricting highway and air grant
funding under Section 176(a). EPA will
propose restrictions where it finds that
an area has not made reasonable efforts
to submit an approvable plan. If EPA
proposes restrictions, it may defer
art;on for up to one year if an area
commits to an expeditious .schedule fir
the submittal of new revisions.
Once EPA :mposes construction and
funding restrictions, it will lift them on'v
vvnen it approves or promulgates a ui?r.
as meeting the Part D requirements for
extension areas.
(in) Plans not submitted. In many
coses EPA evaluated and proposed
action on draft plans. Some States have
not yet submitted final plans containing
adopted control measures and office
commitments EPA cannot approve
plans that do not contain adopirc
enforceable measures anfl commitnip
If an area fails to submit its final plan
before EPA's internal deadline for ;>,•
action. EPA will disapprove or. tnt
ground thai the area failed to mee' t-
Pan D requirements for 198^ pliin* T- -
disapproval v.ill trwutr a construc'.'o-
moratonum under Section llOlaltClI!1 I
may also lead to funding restrictions
under Section !T6(a) as described
above.
EPA will remove anv construction or
funding restrictions when it approves a
final submittal as meeting the applicabi<-
Part D requirements
(iv) Areas that do not implement
approved plans or portions of plans
Areas with approved plans or portior<
of plans will be subject to restriction
for failure to implement if thrv '«.• tr.
carry out their plans. EPA v\.!! monuo-
closely all approved schedules f"- 'h<
submittal of additional cor.tro;
measures EPA will also monitor
compliance by stationary sources. It *.!.
propose findings of nommplernentatic-
and construction and funding
restrictions under Sections 173(4) anc
176(b) as soon as it sees significant
slippage.
3. Newly-DiscoveredNonattamment
Areas With and Without Extensions
(a) Deadlines for pJans and
attainment. EPA has concluded thai
Congress intended that newly-
discovered nonattamment areas shoulc
meet the Part D requirements, but have
a reasonable amount of time to do so
According;;,. EPA intends to requ,-e
newly discovered nonattainrr.ent ared:
to follow the time periods, but not the
dates, from Section 110(a)(2)(I) andean
D Any nev\ nonattamment area will
have one year to develop a Part D pisr
To obtain approval, that plan must
"provide for" attainment as
expeditiously as practicable, but no
later than five years after the date of the
nonattamment designation.
Althougn EPA does not expect a
significant number of new ozone and
carbon monoxide nonattamment areas
which will be unable to attain s:anca-cb
ir f.'.e vesrs _.-. attainment dote
i veis'cr. or. be g-a.-.ted provisos '-. '
or. fca c?.~ s-n: v\ teat " is irr.posc.n.r •-
sf-:r c.-'1?' " nrncxiof or czone
al- reasur.cL H ^.InOJfc control
measures 1 hr extension is not
a-tor.iitir ,t ":•>' be requested and it
must De act.u-:-p«nied b> a
demonstration of need that is forward
with the initial Pan D submittal Tne
-------
50696 Federal Register / Vol. 48. No. 213 / Wednesday. November 2. 1983 / Rules and Regulations
extension may provide up to five
additional years to provide-for
attainment. Areas that receive
extensions will have to submit
supplemental SIP revisions no later than
four and one-half years from the date of
the designation.
(b) Consequences of failures to submit
plans.
• Construction ban. Under 40 CFR
52.241k). a Section 110(a)(2)(l) ban will
apply eighteen months after the date of
the designation in any area designated
nonattainment after July 1.1979. unless
the area has in effect an approved or
conditionally approved Part D plan. This
ban will apply automatically, but EPA
intends to publish in the Federal
Register a notice advising the area that
the ban has come into effect
Approval of an initial plan as meeting
the Part D requirements will lift the ban.
Disapproval will maintain or impose the
ban. Disapproval of a supplemental
submittal for an extension area will also
maintain the ban (or impose it. if EPA
approved the initial submittal).
• Funding restrictions for ozone,
carbon monoxide and nitrogen dioxide
plans. If an ozone, carbon monoxide or
nitrogen dioxide area fails to make
reasonable efforts to submit either an
original or supplemental Part D revision,
EPA will propose funding restrictions
under Section 176(a). It the area commits
to a schedule for submitting a plan
revision. EPA may postpone action on
final restrictions for as much as one
year.
• Funding restrictions for plans for
other pollutants. To ensure timely
submittal of plans for newly-designated
nonattainment areas for other
pollutants. EPA will issue a notice of
inadequacy and call for a plan revision
under Section 110(a)(2)(H) at the time it
redesignates the area as nonattainment.
If the area fails to submit an approvable
Part D plan. EPA will be in a position to
find that the area is not implementing its
SIP and to propose funding restrictions
under Section 176(b) and construction
restrictions under Section 173(4).
(c) Consequences of not implementing
approved plans or not attaining. If EPA
approves the Part D plan for a newly
discovered nonattainment area, but the
area subsequently fails to implement its
plan. EPA will propose a finding of
ror.implementation as described above
in the discussion of 1979 plans that fails
to implement. Similarly, if an approved
\>"tn lulls to bring about attainment by
the applicable deadline. EPA will
propose a finding of inadequacy under
Section 110(a)|2)(H).
(d) Remedial actions for areas
des/qrated nonc'.tainment after July 1.
197V. but before the publication of this
policy. A few areas were designated
nonattainment after July 1.1979, but
before the publication of this policy.
EPA intends, to the extent possible, to
put these areas on equal footing with
areas designated nonattainment in the
future. For example. EPA will approve
qualifying extension requests that
accompanied an area's first Part D
submittal. Also, where uncertainty
about this policy caused a construction
ban to come into effect because EPA
failed to act on a Part D plan submittal,
EPA will move as quickly as possible to
act on the plan. If EPA approves the
plan, it will remove the moratorium. If
the plan is disapproved, the moratorium
will continue.
At the same time. EPA wants these
newly-discovered nonattainment areas
to face the same consequences for
failing to submit plans. Accordingly, for
nonattai-~;ent areas for non-
transpc ' on related pollutants. EPA
will trea une February 3 proposed
disapprovals as proposed findings of
inadequacy. This will allow EPA to
issue a final finding of inadequacy and
propose construction and funding
restrictions under Sections 173(4) and
178(b) if an area misses its deadline for
submittal of a Part D plan.
C. Other Issues
1. Definition of "Reasonable Efforts " in
Section 176fa)
EPA's April 1980 policy states that
EPA will determine whether a State is
making "reasonable efforts" to submit a
Part D plan on a case-by-case basis. In
making such decisions, EPA will
consider the legislative history of
Section 178(a). This history suggests that
Congress did not intend the funding
restrictions to apply in areas unable to
meet the 1982 or 1987 attainment
deadlines, if those areas make
reasonable attempts to provide for
attainment See 123 Cong. Rec. S9437-
S9439 (June 10,1977).
2. Scope of Restrictions on Clean Air
Act Funding under Sections 17S(a) and
(b)
As mentioned in Section II of this
notice, on August 3.1983 EPA asked for
comment on the idea of using funds
withheld under Section 176(b) to
implement the part of a plan that a State
is not implementing. CPA cannot take a
final position on this issue until it
reviews all comments. If EPA decides
that this approach is feasible under
Section 176(b). it may use a similar
approach under Section 176(a), using
funds withheld for EPA promulgation.
3. Section 316(b) Funding Restrictions
EPA has discretionary authority under
Section 316(b) to restrict sewage
treatment funding where an area does
not have a Part D plan in effect or is
failing to carry out its SIP. EPA may
propose to add Section 316 restrictions
in areas where further inducements to
action are needed. EPA is currently
reviewing its August 11.1980 policy (45
FR 53382) regarding implementation of
Section 316. The 1980 policy, however.
will remain in effect until revised or
rescinded. The revised policy will reflect
the current construction grants programs
and identify those types of situations
where sanctions could be imposed. Any
revision will be proposed and will seek
public comment by notice in the Federal
Register.
4. Section 113(a)(S) Construction Ban
Section 113(a)(5) gives EPA discretion
to impose a construction ban for
nonimplementation. EPA intends
generally not to exercise this authority.
Section 173(4) covers most of the cases
that Section 113(a)(5) covers. In
addition, imposition of a ban in the
remaining cases, where the company
has received a construction permit
already, would be unnecessarily unfair.
except in extreme cases of
nonimplementation. For example. EPA
might consider using this section where
a State issues a permit in violation of a
construction ban.
5. Emissions Trading
Current EPA policy allows existing-
source emissions trades in
nonattainment areas lacking adequate
attainment demonstrations 47 FR 15076
(April 7,1982), EPA, however, is re-
examining that policy. On August 31.
1983 (48 FR 39580). EPA requested
further comment on several issues
concerning this interim emissions
trading policy, including whether, and
under what circumstances. EPA should
approve existing-source trades in
nonattainment areas that lack fully or
conditionally approved Part D plans or
in areas with approved plans that
missed the 1982 deadline.
EPA invited all interested persons to
submit comments before October 31.
1983. in response to the August 31.1983
emissions trading notice. EPA will
evaluate all comments en this issue as
quirkly as possible after the close of
that comment period. EPA eve:'.* f<>
announce its position on this issue in
both the guidance for correction of Part
D SIP's and the final emissions trading
policy. »
In the interim, existing sources
considering trades in sucn areas shouid
-------
Federal Register / Vol. 4fl. No. 213 / Wednesday. November 2. 1983 / Rules and Regulations
5069:
be aware that EPA has requested
comment on grand-fathering issues.
However, sources that traded might
eventually be subject to additional
emission reduction requirements needed
to bruna an area into attainment.
depending upon the control strategy
v.nr.h the State selects.
b Pending Review of Standards
EPA must enforce all existing
standards unless and until they are
revised. However, to accommodate
concerns about the pending review of
the paniculate matter standard. EPA
will consider approving revised plans
that consist of enforceable schedules
that phase in the adoption and
implementation of controls for
paniculate matter sources. States will
be able to address sources of smaller
particles first. EPA. however, does not
intend to allow any paniculate matter
nor.attamment area to relax existing
requirements under this policy
V. Final Actions
EPA is taking only two final actions
today. First. EPA is promulgating a rule
that sets out the Agency's new view of
the legal consequences of a failure to
attain by the deadlines in Part D.
Specifically. EPA is amending 40 CFR
52.24(a) to clarify that the Section
I10(a)!2)(l) ban does not apply in
nonattamment. nonextension areas with
full) approved Part D plans that failed
to attain by December 31.1982. This
amendment also provides that the
moratorium will not apply in extension
areas with fully approved 1979 and 1982
Pa't D submittais.
Second. EPA is withdrawing its
P'ooo'd! to amend 40 CFR 52.24(k). This
i\:'l continue to postpone construction
!)«ns for eighteen months in areas
designated nonattainment after July 1.
1979.
EPA regards these actions as
interpretive rules of nationwide scope
and applicability that restate some of
the Act's requirements for all
nonattainment areas. Consequently.
they are effective upon publication.
Under Section 307(b). any petition for
review of these actions must be filed in
the U.S. Court of Appeals for the District
of Columbia Circuit within 60 days of
the date this notice appears in the
Federal Register.
VI. Miscellaneous
A. Executive Order 12291 and
Regulatory Flexibility Act
Under Executive Order 12291. the
final actions EPA is taking today are not
"Major" because they have no
immediate impact in any area. In
addition, they limit the scope of the
construction ban under the Clean Air
Act. T - actions have been submitted to
the O. .e of Management and Budget
(OMB) lor review. Any comments from
OMB to EPA and any response are
available for public inspection in the
docket.
Under the Regulatory Flexibility Act. 5
U.S.C. 600 et seq.. EPA must prepare a
regulatory flexibility analysis unless the
Agency certifies that the rule will not
have a significant economic impact on a
substantial number of small entities. As
noted above, today's final actions do not
impose construction bans or have any
other impacts on any small entities.
Consequently, the Agency certifies that
today's action has no significant
impacts.
List of Subjects in 40 CFR Part 52
Air pollution control. Ozone. Sulfur
oxides. Nitrogen dioxide. Lead.
Paniculate matter. Carbon monoxide
Hydrocarbons.
Authority: Sections 101. 1(T 110. m
ITS. 301|») and 316 of the Clean Air Ac:
amended 142 U.S C. 7401. 7407. 7410 Nib
7501-08. 7601 [a), and 7616). Section i:o'ni • •
the Clean Air Act Amendments of IP" 'I'.
L No 95-95 91 St_at 685 (August ~ 19"
Dated Octobc-r27. 1983
William D. Ruckelshaus.
Administrator
PART 52— {AMENDED]
Part 52 of Title 40 of the Code of
Federal Regulations is amended as
follows:
1. Section 52.24 is amended b>
revising paragraph (a) to read as
follows:
f S2.24 Statutory restriction on new
sources.
(a) After June 30. 1979. no major
stationary source shall be constructeo c>-
modified in any nonattainment area as
designated in 40 CFR Part 81. Subpart C
("nonattainment area") to which any
State implementation plan applies, if tne
emissions from such facility will cause
or contribute to concentrations of any
pollutant for which a national ambient
air quality standard is exceeded in sue:
area, unless, as of the time of
application for a permit for such
construction, such plan meets the
requirements of Part D, Title I, of the
Clean Air Act as amended (42 U.S.C
7501 et set}.) ("Part D"). This section
shall not apply to any nonattainment
area once EPA has fully approved the
State implementation plan for the area
as meeting the requirements of Par! D
MLLIMG cooc
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REFEFrNCES FOR SECTION 7.2
-------
3
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EPA-450/2-78-027R
Guideline On Air Quality Models
(Revised)
U.S. ENVIRONMENTAL PROTECTION AGENCY
Office of Air and Radiation
Office of Air Quality Planning and Standards
Research Triangle Park, NC 27711
July 1986
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REFER^CES FOR SECTION 7.3
-------
2138 Federal Register / Vol. 54. No. 12 / Thursday. January 19. 1989 / Proposed Rules
Authority Sec* 1-19. 48 SlitSL M
d mended. 7 U S C. 801-874
2. Section 959-228 it added to read as
follows:
§ B5S.229 Expenaes and stssesment rat*.
Expenses of (378.675 by the South
Texas Oaion Commute* are authorised
and an assessment rate of »UOS6 per 50-
pound container or equivalent quantity
of regulated onions is established for the
fiscal penod ending July 31. I960.
Unexpended funda may be carriad over
as a reserve.
Dated. Mo»ry li MSB.
WUliaai |. Doyle,
Associate Deputy Oaeetar. Frail and
V fiietabte Division.
[KR Doc. a»-12SO FiM MS-a* MS tn|
DEPARTMENT OF THE TREASURY
31CFRPe«1«
Extension «l Tkne tar
te en
RegulaUeea
AOCMCV: Departmental Office*.
Treasury.
ACTION: Advance notice of proposed
rulemaktng. extenajta of cmesnmt
penod.
SUMMARY: Notice it hereby given that
the Department of the Treasury is
extending the comment period on the
Advance Notice of Proposed
Fiilemaktng Relating to Identification
Requirements Required to Purchase
R-ink Checks. Cashier's Checks.
r-aveler's Checks and Money Orders.
o jDtished in the Federal Remitter on
December 23. 1988 (53 PR 51848). The
Treasury Department has determined
that more time i» needed for the pubKc
iu review and comment on the proposal.
DATt Comments now will be accepted
through February IS. 1989.
ADOflCM: Comments should be
addressed u> Amy C. BiH"iir1' Director.
Office of Financial Enforcement.
Department of the Treasury. Room 4320.
1500 Penntytvenia Avenue. NW..
Washington. DC *»»
POM njMTMCIt IMFOMMTtOH CONTACT:
Kathleen A. Scott. Attorney Advisor.
Office of the Assistant General Counsel
(Enforcement). (202) 6«e-B947.
Daied: (aouary 13. 1H8.
Salvalor* R. MaHsuei,
Awitont Secretary (Enforcement).
|FR Doe. S»-1XM Ellad l-ia-a* Mi sa»|
ENVIRONMENTAL PROTECTION
AGENCY
40CFRP»rt51
Coii
T. Environmental Protection
Agency (EPA).
ACnoit Notice of Proposed Rulemaking.
IUSJSJAHV. Tim notice describe* the
procedure for esscsehig whether e Stete
implementetiett pran fSIFI nbmiOel it
adequate to Brigjti flie Oeen AJr Act
requirement (bet 8PA review end take
action the eelMHillel. *Rie notice
describes, among ofeertUag*. the
crtterie far detemuMreg tke
"comBietRwse" of Ike eebatttel. HPA it
concerne
excessiv
fruttnts the devessenssM ef aa
State/Federal pertncrarup. caese
coofosion fsr saevces (Sfeidiag
applicable rftgrnkation*. and generairjr
dampen inilieiiu m Stsst regaiesory
programs, rmanilaxl oy this otsMsm.
EP A is isBtrtultng e wide range at3B>
processBQg reforat) es oesccsoeai
elsewhere in this MscsiftafiBlsi. The
proposed nseaesoag iescribeal faeiew fc
one of these vefonnsv.
EPA's pwvion SSf 1
procedtfcs psotrieM ae i
reject er otherwise eiieainete mtemtatilj
unrevieweUe SIP enbeiitts** (t*-. I
missing infomuuon nenaeterylo make
a reasonable decaion es to their
procedure! end eavtronnenul
adequacy). Heretofore. SIP sebnituis
that lacked required basic information
such as evidence of legal authority or of
properly conducted public hearings, or
technical support ioiomatton sufficient
to describe a proposed change, generally
went through full notice andoonunent
rulemaking (proposed and final) before
being rejected. Today's proposal
provides a procedure and acreeuag
criteria to enable States to prepare
adequate SIP submittala. end to enable
EPA reviewers to promptly screen SIP
submuula. identify those that are
incomplete, and return them to the State
for corrective action without having to
go through rulemalung.
EPA believes that this change,
together with those described elsewhere
in this Federal Xegieter. should enable
SIP sebaituls to be prepared and
processed more efficiently sad, overall.
should inarove
-------
/ Vol K No.
end local agencies. SIP processing at
EPA ha* a schedule goal of 5/2-5/2 for
final action. That is, the Regions
nominally have 5 months to review
lubmittala in both the proposal and
promulgation phases: Headquarter*
nominally ^*f 2 month* m each phase.
However. SIP action* often take
considerably longer than the total U
month* allocated to publish a final
decision.1
The lengthy decision process ha*
resulted in strong criaoam from source*
both inside and oatside the EPA. m
response, the Deputy Admiaistretor
comrniMMoed ia )uly Ma7 a senior
task groap to issues the problems
inherent in the process aad to
recommend solution*. The task group
conducted it* *ssessment aad presented
recommendation* to the Deputy
Administrator. The rnromsnemiaftons
wen approved fully aad are rtrerrihed
in • companion notice ia today's Federal
Register. One of these nnmamoTviatinn*
coacemi a procedure aad criteria for
identifying a "compiet*" SIP pertaji
thereby pcovidiag Stales wtthgwiaace
on preparing adequate SIP revision* aad
EPA with a dearly defined mechaottm
to keep eaaenaaily uanweweble SIP
revisions out of the review proceea.
Thi* i* important because if a State
lubmit* a SIP change without preoerty
•tsted emission limit*, legal authority or
compliance schedules, or which
contains; other obvious deficiencies, it
can enter the full EPA review system.
Such a BP either will be eventually
disapproved, or languish while the State
i* required (peril*ps month* later) to
supply ettenoaJ data. Heretofore, EPA'*
procedure* did not provide ia any
comprehensive wsy prompt rejection for
incompleteness. Independently.
however, some Regional Office* have
tried to deal with thi* problem, end hcve
developed procedure* wherein SIP
submittai* are judged against a set of
completeness en ten*. The purpose of
these procedure* has been to keep
incomplete packages out of the more
extensive review system, thereby saving
both EPA and the State valuable time
and resource*. Today. EPA is proposing
to institute an EPA-wioe procedure for
complete
i of all SD?
1 Now tfMt MCM IMfiKZI tl Iht OMB Air A«
!«*••*• Uwt Tfta AdBMMHter rittU. mi*u tar
•oaitu *fur tfct *•«• ra«nnd far •»!•>••*» tl»
|S^P^ tpwv*t*or diMeprow weh fSIP) for MCti
•anon (karaaf." ttadw e« Aenqr • •
Ia order to free EPA
tCMMflmd aftftmmMtmmt mm*
UBepprovebtoSfft.EPAha*cfvatad
EPA win review a 8*7 for
thi*
•ubmtttad to
If aV me
incraded to aflow thai _
SIPreviesoaTTJae" wff We aakk eereez
that will esses* the nuiewaifflrj of a
on* eabmtttaL not itoi aNanate
approvaWHy. EPA wB meet promptly
inform me sobmttttag Slate whether the
egency WAI OTBoasB to proosee tae 8*7
revision orff nan*4 ovfltodbied by toe
State-Decease It ft incomplete.
detexminatioa. trfouspletaaeee. Ptmt the
State istatemad promatry a* to the
reviewabfflty of tha eahaiMal, a canat
source of tocextamiy. m I ,
Secoad. SIP eubmfimlf thai ass
Inarietniate %*r psooeasiBa vn ai
to the State to aeoaenctasi rather than
gesng t*ir**iTgh the laiioti procees only to
be disapproved beeauea eta lack ef
mfoTOetiOB.Thtra\aafevtg»abkSIPi
an OBmovad nom tha pioaass aany so
that reeoojces at tha Federal leeai an
allocated to jimi teaiet. oalyftIP* that
an adequate for laviaw. Fawlly. the
completeness critaeial provide the Slate*
with gmdeonaa oa how to prepare
reviewabie SIP*. It isexpeoted met once
the agencies involved (State aad local.
EPA) become accustomed to the
completeness review process, the
number of onreviewebie sabmittals will
j44iviiniAh •!••—ilii
Screeniag criteria have been
developed that define the essential
elements of an acceptable package, that
will avoid obvioas inadequacies, aad
that can be applied uniformly with
limited subjective fadgemoBt aad
review. The criteria wen developed by
EPA Regional Offices already using a
li*t of criteria to determine compUtenes*
of SIP packages in an informal way. On
March 18.1988 a policy for determining
completeness of SIP submittai* was
issued by Gerald A. Emisoa, Director.
Office of Air Quality Plaamag and
Standard* (OAQPSJ. to the BegioaaJ
Offices (a copy ha* been placed m the
docket et item D-»-4J. The poficy
iadudes basic criteria for determining
completeness, end sample laden for
jpfl^ftftM §juj raiactiag SIP *ubmittal*»
Thi* policy wiH be followed by EPA
until today'* proposed regulation U
made ft»**i
A* part of tate action, the
Admima&atori* propoeiag to add these
criteria for determining the
tempi et«neei of State Mbmittali to 40
C» Pert 81 M Appendix V. la addition.
EPA pjBtiuee* to modify i gUOWa) rach
that Kate whailaeiniii that do not meet
the criteria are not considered official
pian nbmiaeiaee) for purposes of
meeting the najmimmeati of Part 31. In
order tDtaamm*stada* a complete SIP
eeonieaioo *YaMgBcb*l lubiRiesion for
Put a. ea^imsjHBBtt meet the crttene
deecrtbed helesiumd ia Appeadoc V.
ere adapteble for uee
m peraH*l •tooeaeipg of Slate
regabitiOMbyEPA.*
BTA to-creating this completeness
review process under me authority of
Section 3M of the Oeea Air Act which
•ottaonm BC AHaTOniMfitof to
to CaUry oot on n&iCuOiu
uoderthe Act aTA ie mrnrprettag the
tra "plan" m section nefaXl) aad (2)
end "nviaoB* m Section 110(e)f3) to be
only those piemr ead reiii*sne» nWt
tvcfiowEPA to a adeaaately review
and take ectioa eocacb plan or revuion
under aecoon 110 (and. where
applicable. Part D), EPA believe* tact
Congrea* would not have intended to
reooire EPA to review and take action
on SIP submittals that were simply not
(•viewable tnrentt they were lacking
important component*. Therefore, the
Administrator conchidei that Section
nO(e) remiire* him to act only on
complete State subminal*.
The criteria for determining whether a
submittai by the State i* complete beve
been separated into two categories; (•)
Administrative information and (b)
technical support information.
Administrative information include* the
documentation necessary to
demonstrate that the basic
administrative procedure* have been
adhered to by the State during the
adoption process. Technical support
information include* the documentation
that adequately identifies all of the
required technical component* of the
plan submission.
Admmistratfve mfcrmatfoo
information
are those basic
pn*«Mi. Surt nita* -tee* tow M
-------
Moral Register / Vol. "54. -Nor"» /••fagaday. frmigry 19. 1989 / Proposed Rules
documents that demonstrate that the
State hat properly fallowed the
administrative requirements called for
by the Dean Air Act for the adoption of
State implementation plan*. These
include a letter from the Governor or hi*
designee requesting that EPA approve
the SIP revision, and evidence that the
revision has been adopted by the State
in final form, either as part of the State
code if the revision is a regulation, or as
appropriate source specific
documentation in the form of a permit.
order, or a consent agreement The State
also must provide documentation that
the necessary legal authority exists
within the State to adopt and implement
the plan revision, must include the
requisite copies of the actual revision
(regulation, permit, order, etc.). and must
indicate that the revision is enforceable
by the State. Finally, the State must
submit information indicating that the
program administrative procedures have
been followed, including evidence of
public notice and hearings, a
compilation of the public comments, and
the State's response to these comments.
The purpose of the technical support
information is to identify the State's
view of the impact of the revision on the
environment The components are
intended to demonstrate that the
applicable requirements, such as those
for attainment and maintenance of
ambient standards, increment
consumption, and control technology,
are in confonnance with basic statutory
and EPA requirements. In order for EPA
to make a reasonable decision
concerning the adequacy of a proposed
SIP revision, certain information at a
minimum must be included in each
submittaL Therefore, for purposes of
determining the completeness of a SIP
submission the implementation plan
revision must include an adequate
description of the:
(a) Pollutants involved;
(b) Source location and attainment
status of the area:
(c) Emissions changes:
(d) Demonstration that standards/
increments are protected
(e) Information used for any modeling
demonstration:
(0 Evidence of continuous emissions
limitations
the revision for inclusion of the
administrative and technical support
information. When the revision is
determined complete, the formal review
of the adequacy of die information and
die approvability of the revision will
proceed, to those situations where the
submission does not meet the basic
criteria es discussed above and set forth
in Part 51, Appendix V. the submission
will be returned to the State with a letter
indicating the deficiencies found. In
accordance with the change proposed la
40 CFR S1.10J(a). any submission that
does not meet the criteria of Appendix V
will not be coejieered aa official
submission MgeeriBg the Act's
requirements for EPA review and action.
The basic requirements are similar tor
sequential and parallel processing.
varying only in form dictated by the
method of processing. IB order to be
effective, the determination of
completeness should be made
expeditiously. The Regional Office
generally will make a determination of
completeness within 45 days of
receiving a SIP revision, using the
crttaeie to make an objective decision.
After the decision has been made on
i nepli iiiness the Regional Offices will
process the SIP revision tf the
submission is complete, or return the SIP
revision to the State if it is incomplete.
A letter will be sent-to the State.
informing the State of the oceapletenese
status of the SIP revision, ff a SIP
submtttal is incomplete, the deficiencies
will be detailed in the letter to the Sate.
If a SIP aaeoittai is complete, the
Regional Office will include EPA's
expected processing schedule in the
letter to the State.
Administrative Requirements
The docket is an organized and
complete file of all the information
considered by EPA in the development
of these SIP processing changes. The
docket is a dynamic file because
material is added throughout the notice
preparation and comment process. The
docketing system is intended to allow
members of the public and industries
involved to identify and locate
documents so that they can effectively
participate in the process. Along with
the statement of basis and purpose of
the SIP processing changes and EPA
responses to significant comments, the
contents of the docket except for
interagency review materials, will serve
as the record in case of judicial review
(see dean Air Act section 307(d)(7)(A).
42 U.S.C. 7807(d)(7)(A).
Section M7(a) of the dean Air Act 42
"-S-C. mr(a). states that economic
"*•«« eawssments are required for
••*»«eea «o standards or regulations
when the Administrator determines such
revisions to be substantial The changes
described today do not change the
substantive requirements for preparing
and submitting an adequate SIP
package. No increase in cost as a result
of complying with the changes described
today is expected: moreover, the
monitoring, ncordkeeping. and reporting
requirements have been determined to
be insubstantial Because the expected
economic effect cftbe changes is not
f t»«»"^MH a»*ieaiiled economic
impact sjeeaaeaeat has been prepared.
The infill sealUs! rnllection
ieejtdreejMSjta>dP*Jfeee changes are
eoasidend to be BO different than those
currently required by the Clean Air Act
and EPA procedures. Thus, the public
reporting burden resulting from today's
notice is estimated to be unchanged
from existing requirements. The public
is invited to send comments regarding
the burden estimate or other aspect of
information collection, including
suggestions for reducing any burden, to
the docket aad the following: Chief.
Information Policy Branch. PM-223, U.S.
Environmental Protection Agency, 401 M
Street SW* Washington. DC 20460; and
to the Office of Information and
Regulatory Affairs. Office of
Management end Budget Washington.
DC 20803. marked "Attention: Desk
Officer for EPA."
Under Executive Order 12291. EPA Is
required to judge whether an action is
"major" and therefore subject to the
requirement of a regulatory impact
analysis (RIA). The Agency has
determined that the SIP processing
changes announced today would result
in none of the significant adverse
economic effects set forth in section l(b)
of the Order es grounds for a finding of
"major." The Agency has. therefore,
concluded that this action is not a
"major" action under Executive Order
12291.
This rule was submitted to OMB for
review consistent with section 307{d) of
the Clean Air Act A copy of the draft
rule as submitted to OMB. any
documents accompanying the draft any
written comment received from other
agencies (including OMB), and any
written responses to those comments
have been included in the docket.
The Regulatory Flexibility Act of 1980.
5 U.S.C. 001-412, requires the
identification of potentially adverse
impacts of Federal actions upon smsli
business entities. The Act requires the
completion of a regulatory flexibility
analysis for every action unless the
Administrator certifies that the action
will not have a significant economic
impact on a substantial number of small
-------
Fodenl
/ VoL S4. No. 12 / Thmtdiy. Mumry 19. MM / Proposed Rolas
entities. For reasons described above. I
hereby certify that the final rale will not
have • significant impact on a
substantial number of small entities.
Date: January 9.1989.
UeM. Thomas.
Administrator
For the reasons set out in the
preamble. 40 CFR Part 51 is propoaed to
be amended as follows:
PART S1-* AMENDED]
1. The authority dtation for Part 51
centimes to read aa follows;
Aumoriny: Thi* rulemalring is promulgated
under authority of Sections lOlfbKl), 110.
160-ee, in-iTS, and m(a) of the dean Air
ACL 4z U.S.C. TamfbRi). mo. wjo-wm
noi-noo, utd nous).
2. Section 51.103 is proposed to be
amended by reviling paragraph (a)
introductory text to read as foUowr
111.109
of plane.
(a) The State makes an official plan
submission to EPA whaa the plan
conforms to the requirements of
Appendix V10 this part aad the State
delivers five copies of the plan to the
appropriate Bssjiosial office, wtth a letter
giving notice of such action. The State
must adopt the plan and the COM rear or
his deeisnee must submit it to EPA as
follows:
3. Part 51 is proposed to be amended
by adding Appendix V to reed as
follows:
Appendix V—Criteria for Dotarmiais*
thi rnmplstenees nf Tlsn "iuhmieainiis
1.0. Purpate
This Appendix V set* forth th* •>'"'•"•"•
criteria for determining whether a SUM
implementation plan submitted for
conitderanon by EPA u an official
•ubmiasion for purpoM of levww under
I 51.103.
1.1. The ETA thai] return to the submitting
official any plan or tension thereof which
fail* to meet th* critena act forth in mi*
Appendix V. or otherwiae request umectlve
action, identifying the eoraponent(t) absent
or insufficient to perform a review of the
aubmittad plan.
1.2. The EPA shall inform the submitting
official when a plan submission meet* the
requirement* of this ArTtitf1" V, such
determination resulting»the plan beinf en
official submission for purpose* of | 51.109.
2.0. Crruna
The following shaD be included in plan
submiMion* for review by EPA:
2.1. AdminiJtrative Meiehai*
(a) A forma) letter of submittal from the
Governor er hia eawgnea, meeertint EPA
approval of the piae or revwen meraof
(hereafter the plan").
fb) Evidence mat the State has adopted the
plan m the State code or body of regulations:
or issued the permit order, coasent
agreement (hereafter document) in final form.
That evidence ahaO mctede the dele of
edoptiasj or fisjai ieeuaaee as weO ee me
effective date of the plan if different from the
odoption/issusnos date.
(c) Evidence ms* the Stale has me
aeceesary legal authority under State lew to
(h) CompKnnne/enfarcement ttrateaie*.
inrinHi^j bow compliance will be determined
in practice.
(i) Special economic and technolocicaJ
fustincstions required by any applicable EPA
(d) A oopy of me actual regulation, or
it submitted tor approval aad
rtion by lefsvaaosinterne plan,
mdicattou of me change* awde to
The eabattteJ shall be e copy of the official
13. Exception*
24.1. The EPA. far the purposes of
expediting the review of the plan, ha*
adopted e procedure referred to a* "parallel
Drooesemg.** Parallel processing allows s
SUM to submit the plan prior to actual
adoptiusi by me fleets and provides en
ey tor me State to consider EPA
i prior to submission of s final plan
dated be ate i
todicatma that it ia fatty enforceable by the
Sate. The efleotrte dele of eta leevhrtton/
docnsent shaB. whenever poadbla. be
Indicated m the docament itselt
|e) jvideoce met the State followed ell of
lot pfootdunl rvi^viiietMBaai of tkbt Statei't
IsW^ UM OOMtttettOB IB OODafsMtlnf BBQ
ee »«anstbeedopttaa/iaaaaaceofmepian.
it Blri •!•••• -1--- *^"
(ii BBTMeelBlBir DaeWI ^ele^Bs?
the proposed ehaaae enaesssant with
far final revww and action. Uader these
ormimetsanes me plan submitted will not be
able to meet ai-of the requirements of
parearaph 11 (aD requirements of paragraph
11 wtt apply). As a result the fbUowmg
exospbons apply to plans submitted
exaMtiy far parallel proceeam*:
(a) The letter reoutoed by parsanph il(t)
t that EPA pnpoea approvaJ of
(I)
heldi
ad by EPAjBcMmt the
Is) wen
1 me Bute's
date of |
) Certification that |
liai
provided m the pubBci
tsmendotsksMOjaashlfi
(h)CeesBUe«JB»>of|
me Siete'si
li Technical 1
(s)Ueatificaooaaf.slii
affected by the plea.
(b) Identification of the location* of
affected sources including the EPA
eminment/nonattaiameat designatioa of the
location* and the stetus of the attainment
pUn for the affected areas(s).
(c) Quantification of the changes as plan
allowable emission* bom the affected
sources: eetimatse of chenges m cwent
actual emissions from effected source* or.
where appropriate, quantification of change*
id plan by parallel processing.
(b) fti lieu of paragraph 2J(b) the State
shall submit e schedule far final adoption or
Issnsnce of the plan.
(cj in UCB of paiagrapb 2.tfd) the plan shaQ
mdude a copy of the proposed/draft
regulation or document
(d) The ssHUMS menu of paragraphs llfe)-
2.1(h) ehasl net apply to pan aaceettted for
fferalssi arBsaesssei
1X2. The exoaptieaa punted ia parearepb
24.1 shall apply only to EPA'* detemunMon
of proposed action ead ell saquuemeais of
paregreph 2.1 shall be met prior to
publication of EPA's final determination of
ptaaapprovebuiy.
(FR Doc. ss-iom Piled l-le-aB-. fctt am]
PFPfBAL FiffRflPMCY
MANAGEMENT AOENCY
rhere snproprieti
i actual aauaioi
through calculations of ittf dimwssneo
betwsen certem besenne levels end
allowable emissions anticipated as e result of
the revision.
(d) The State's demonstrstion that the
National Ambient Air Quality Standards.
prevention of "g-1**"' delsnorettosi
increments, reasonable further progress
demonstration, and visibility, are protected if
the plan ia approved end implemented.
(e) Modeling infnrmsnon required to
support the proposed revision, indodmg input
data, output data, models need. Justification
of model (election*. "»trfi*'t stonitohng data
used, meteorological data used. ("***«f'^
for use of offsitc date (where used), modes of
models used. saiunipOous. ead other
mfonneooc relevant to the determination of
adequacy of the modeling analysis.
(f) Evidence, when necessary, that
emission limitations ere based on continuous
*»*""» reduction technology.
(gj Evidence mat me plan contains
emission limitations, work piaithje standards
and reeoidfceeptng/repartiag requiremenu.
where accessary, to ensure emiseioa leveia.
[Docket No. »«U-a»4«l
Propoejotf Hootf dovvOon
: Federal Emergency
Agency.
Acnose ProixMed rale.
r. TeiJinicaJ information or
comments are solicited on the proposed
base (100-year) flood elevations and
proposed basw flood elevation
modifications listed below for selected
locations in the nation. These base (100-
year) flood eeveations are the basis for
the floodplaae management measure*
that the comaeantty to reajoired to either
adopt or show evidence of being already
in effect in order to qualify or remain
qualified for purttcipatfon to the
-------
2214
Federal Refrstor / Vet. 54. Na. 12 / Tharaday. fannary 19. Mt» / Notice!
Ctrtri-ett*
dock«i No
O87-22
CW7-23
O87-2*
C187-2S
CW'-W
C187-27
C 187-261
CI87-261
CI87-261
CW7-261
Q87-261
CW7-M1
Q87-261
CH7-Z61
do_ „.,, __.,,.. „ , „—,.,.
40 _L ., ,. .,__.
do .. .«•_ i ii
00 -. _...._.,_... . ..__ ._ ..„,,„ ••« i
0Q •. HI !• ...•••
40. ..... „.._- , .
flO - — . -r. -. • PMHBBIIH
» - _. ..
no
00 , _ . — ^••.,•..•1 .. ...
40 ,, , - ,, -
do ... .... • in - -
tha notice have
been piaoad ia Docket No. A-66-16 by
EPA and are available for inspection at
the above address between 8:00 a.m.
aad 130 pja.. Monday through Friday
The EPA may charge a reasonable fee
for copying.
•on mmm mmu,itoM COHTACT
Mr. >ajses Weigeld. Office of Air
Quality Plaanng and Standards (MD-
11), U. S. Eovironmentai Protection
Agency. Research Triangle Park. North
Carolina 27711; Telephone (919) 541-
5642 or (FTS) 029-5642.
•AUT WFOMMATION:
Dottet
j, N«. A-W-W atCentrei
4;Urfi:
Background
The 1970 Clean Air Act (CAA|
established the air quality management
process as a basic philosophy for air
pollution control in this country. Under
this system. EPA establishes air quality
goals (National Ambient Air Quality
Standards—NAAQS) for common
pollutants. There a re now standards fa
A pollutants: ozone (CM. carbon
monoxide (CO), sulfur dioxide (SO:).
nitrogen dioxide, paniculate matter
(PMie). and lead. Stares then develop
control programs to attain and matntan
these NAAQS. These programs are
defined by State Implementation Plans
(SiPs) which are approved or
disapproved formally by EPA and. to tt
extent (hey are approved, are legally
enforceable by EPA. A SIP mast
demonstrate attainment and
RMtfrienenee of iheeppncable NAAQS
describe a control strategy, contain
-legvtryenrbrcMbte regulations, me luck
en eniseron •raocy and procedures
lot the pacoaearac*ie»rev«*« of new
pollution eeoees. wrtrnw* •program foi
-------
Fed.**!
/ V«L *4. No. 12 / Thursday. |«auary 18. i9» / Nonces
2215
resources for the State to implement the
SIP. In additioa. there can be many
other requirements specific to the
pollutant being considered. The
consequences of State failure to get SIP
approval may be serious, including
Federal promulgation of control
regulations and sanctions.
Affirmative action is required by EPA
on essentially all aspects of every SIP
action. Since EPA's final decision comes
after a regulation already is adopted
and implemented at the State level
excessive delay in the review process
often is a major source of frlnctton in
EPA's relations with State and local
agencies.
There can also be differences of
opinion between EPA's Regionai Offices
and Headquarters. Regions provide
guidance and support to States in
writing SIPs and then must review them
and recommend approval or
disapproval. The need for flexibility in
dealing with each State and situation is
important to the Regions. On the other
bend. Headquarters' offices have a
maior responsibility to ensmre basic
national consistency on legal policy,
and technical Is eats. Tims. SIP ddtisons
are under constant pressure bacene
they ass vnabte and quantitative teats of
the elusive hslamt sanghl between
State flexibility aad me flmmass and
consistency provided by national
directives.
More man 1600 SIP i stated actions
hsve been processed from UB to the
present, sveragmg almost 3at) par year.
Many of these involved multiple issaes.
About 75 percent of the actions fall into
three categories: attainment
demonstrations, single source actions,
snd (although technically not SIP
revisions) actions interring
redesignstion of attainment status. Most
of the remainder involved new sonroe
review actions aad emission trades.
A rough assessment has bean awda «f
the future SIP load. With the
promulgation of a nstiimal aaebiont air
quality standard for PMi» and the
proposed post-1967 ozone and CO
attainment policy, the number of SIP
submittals will increase significantly
over the next few years. About 100
attainment SIPs and more than 160
-committal" type actions for PM* will
have to be reviewed. Shortly thereafter.
attainment SIPs for ozone (60-70 areas)
and for CO (mother 50-60 areas) will be
sumitted. Potential revisions.to-HW»
1985«teck height regulations reearhng
from me court decision ai NJtDC v.
Thomo*. at T. 24.1221 (DiC-Cu. 1MB).
couldao.il
limits far as
sources. IB
abouOB
of municipal waste imaWsiois will be
developed daring tsde parted. The
preceding are t» addition to the average
load of 360 eubanttais par year.
The Cunent Review Pr
is at EPA
i has been eel
Acompn
up for processing SIPs at EPA, involving
fall notice and comment msmaknig.
The major steps are summarized below.
(1) State prepares the SIP. gets
necessary approval under State law.
provides justification aad
documentation, and submits it to the
Regional Office for the Governor or his
rlssignse The SIP can range in size from
s few to hundreds of pages
(2) EPA Raglans oaasprahansivaiy
evaluate the swbmittal far policy, legal
and technical adequacy, prepare a
Technical SuoaartDecasneat (TSD). and
prepare a proposed final mm mdicerlng
The rule is atgvad by the Regional
AdmimetBster, if it is a proposal and
sent on for review by EPA
Headquartan. The-Haadaaarten' efflces
thereapon vviertaiBean evaloation of
the Regionai Ofllo* package, regardless
of the sranrflranos of the SV acton.
(3) Tfct Office of AfrQnmtity Planning
and Standard) (OAQPS) m Durham.
North Carolina manages the
Headquarters' review, coordinating the
*i*^hnir*^ policy and ^*gn! evaluation
with aD rmlavaat Headquartan offices.
These may include the Office of General
Counsel and the Office of Policy.
Planning and Evaluation, as wall as
several groups within the Office of Air
and Radiation (OAR).
Each group, concurs with comment, or
nonconcurs. Negotiation with the
Regions over SIP issues or interpretation
frequently is a part of Headquarters'
review.
(4) Proposals are sent to the Assistant
Administrator for Air and Radiation for
commence. Disapprovals and partial
approvals of SIPs must undergo Office
of Management and Budget review
(under Executive Order 12281) before
being sent to the Office of the Federal
Register (OFR) for publication.
(S) Altar review by the Assistant
Administrator for OAR. all final actions
go to the Administrator for signature
and then are sent to the OFR.
SlPpcoceeeinf atEPAhaae
scheduled goal of t/2-*/3 far fiswl
action. That is. the Pegian i
haveCmeadavtoi
both tin purpose! and <
than the total 14 months allocated to
publish a final decision.1
The lengthy decision process has
resulted in strong criticism from sources
bora inside and outside the EPA. In
response, the Deputy Administrator
commissioned in July. 1987 a senior level
task group to assess the problems
inherent in the process and to
recommend solutions. The task group
conducted its assessment and presented
recommendations to the Deputy
Administrator* The recommendations
ware approved fifty and are described
herein, tlowevsi. before discussing the
steps batef tafan by EPA to reform its
SIP prucrssiinj procedures, it is useful to
examine (be approach taken by the task
p. and the problems uncovered.
Thai
The project involved e three-level
approach, h included (1) formation of a
senior-level task group on SIP
Processing which met throughout the
four-month project (2) direct
discussions with staff intimately
involved in SIP processing, both
individually (or in small groups) and at a
day-long Headquarters/Regional Office
workshop, and (3) interviews with
senior executives (Deputy Regionai
Administrator!. Office Directors) now at
EPA. and former policy makers with
EPA and State air agencies. In addition.
a few limited analytical assessments
(e.g. historical SIP activity, number and
distribution of SIPs currently st EPA)
were done to better characterize the
issue.
The task group consisted of senior
officials from EPA's Regional Office*.
Headquarters' groups associated with
SIP processing, and State air agencies.
The group met: three times, first to
discuss the general probiem to be
addressed, agree on a course of action.
and assign special short-term protects.
The second meeting was primarily
concerned with process updsie and with
presentations by Regional Office and
State agency representative* to give
their unique prespectives on the issues.
> Molt *M MCtta no)iHZI of the dun Air Ad
l«qinr»« ttwt ~nm MMUttrawr «h»1l. within four
•OB4S*«fMr th*** raqwnd lot OTkmuwon at •
(SIPV »pprov«. •rdiuppfov* Mick |SU>] for wch
portion ibtraaf.- Undtr th< Asncy t prtMni
ridMd Mth • MM hmt a UtrrttU
10 «M tor »H b* tm nor mvwl of
. EPA MMUBH Hwi tfan dnAkw^M* m*
•ppr> to SIP nrnMii, b»t tmO»r o«iy Ic ih« muml
SIP. wbmiittd tfitr C* pnMiuls*iu • NAAQS.
VMM count fc»w mffonvt EPA'i ponltoo: olhtr
Rtport of Ik* T«k Ofmfm. SIP
eaiU.locii
i«d la On d*c±« M
-------
2216
Federal RegUter / Vol. 54. No. 12 / Thursday. January 18. 198B / Notice*
Finally, at the third meeting, result! of
analytic studies were presented, and the
range of options for improving the
process was discussed. These meetings
led to the SIP processing changes that
are being announced today.
The work of the task group was
reinforced by discussions with people
directly involved with SIP review in
order to get an operations view of the
issues. This included a comprehensive
one-day workshop attended by
approximately SO EPA staff personnel.
This group, intimately familiar with the
processing and review of SIP packages.
exchanged ideas on both issues and
potential solutions during the workshop.
To gain yet another perspective, a
series of interviews was conducted with
persons currently or recently involved
with SIP processing from a broader
policy sense. For example, the persons
interviewed included a former EPA
Deputy Administrator, the former heads
of State and local air programs, senior
industry officials, several past EPA
Assistant Administrators, and four
current Deputy Regional Administrators.
(The complete list of persons
interviewed and their summarized views
are contained in an appendix to the task
group report.)
Significantly, there was a noticeable
degree of consistency among those
interviewed both in terms of their
perception of major problems and in
terms of the general thrust of solutions
to be pursued. Almost all believed that
EPA is too cautious in making SIP
decisions, that SIPs vary widely in
importance and EPA should tailor its
review accordingly, and that the current
SIP review system is operated too
informally. They also believed that the
"moving target" problem (a change in
the technical or policy basis for EPA
decisions after a SIP has been
submitted) needed to be addressed.
Problems Identified
It is clear that the process of
reviewing and judging SIPs has been a
constant struggle for EPA and the State*
and is a source of increasing tension.
Concerns voiced by participants during
the assessment indicated problems at
each level of SIP preparation and
review. Some cited abuse of the system
by the States to relax source limits.
Others believed EPA was too inflexible
and overzealou*. resulting in major
processing delays for minor benefits.
It n likely that present problems, if
left unattended, will become worse
because of continuing resource
constraints and plans that call for
significant increases in SIP activity over
the next few years, particularly in the
complex areas of ozone. CO, and PMt*.
In a relatively recent development, some
enforcement actions have been affected
by courts which have ruled that EPA
cannot enforce the current federally
approved SIP against a source for
violations occurring more than four
months after a SIP revision affecting the
source has been submitted to EPA,
unless EPA has finally acted on the
submittal.
As a result of the discussions and
projects described earlier, it was
possible to identify a number of
fundamental problems that appear to be
associated with SIP processing. Some of
these problems are concerned primarily
with the procedural aspects of SIP
review, while others relate more to the
underlying philosophy of the SIP review
process (i.e.. what is the process
supposed to accomplish), and the
attitudes of the SIP reviewers. For
example, there is within EPA a strong
concern for consistency in SIP decisions,
and a fear that each decision may have
important consequences in terms of
establishing national precedent
However, such concern may be
appropriate for only a small percentage
of actions reviewed. Moreover, it
appears that the SIP process has been
depended upon as a vehicle to identify,
resolve, and articulate national policy
issue*, often at the expense of timely
decision malting.
The issues identified fall into three
buic categories: inordinate concern for
the consequence* of individual
decisions; excessive EPA review,
including full review for minor or clearly
deficient actions; and uncertainty
concerning the outcome of review.
These problem categories are discussed
briefly below.
A. Inordinate Concern for Individual
Action*
As noted, the current process place* a
premium on consistency, stemming in
large part from a fear that a decision
statement or explanation concerning a
specific State or source may force
«iirrii«r decisions in other State* for
similar source*. Although there is a need
for consistency at some level (e.g-
concerning the basic components of an
ozone attainment program or a new
PMw SIP), it may not be necessary for
the result* of all decisions to be similar
State to State and source to source. It
must be remembered that SiPs are
intended to be tailored by the States to
their specific air quality problem*, and
the mix of sources from which emission*
reduction* can be obtained, within the
constraints of the dean Air Act (such as
the requirement for reasonably
available control technology in
nonattainment areas). Although it i*
important for policy and broad technical
requirement* to be applied consistently,
it is not necessary that the result of their
application to localized problems turn
out the tame.
Because of the emphasis on
consistency and the fear of setting
precedent with individual decision*. SIP
reviewers have been reluctant to nsk
making mistakes on any SIP change:
this, considering the number of actions
EPA muat review, inhibit* rapid review
and decision making. There needs to be
a greater wiUingne** on the part of all
concerned with the process to nsk an
occasional noncritieal mistake in return
for more rapid processing and earlier
Identification of the outcome of the
review.
B. Exeeuivt Review
Some SIP package* deserve the full
attention of EPA staff and management
a* noted certainly the basic State
programs for post-1987 ozone attainment
and program* to achieve the newly
promulgated PM« ambient air quality
standard will need such review.
Similarly. SO* revision* for new
program* that dictate consistent
national implementation, or that involve
complex and evolving policy issues.
such a* generic bubble regulation*.
ahouid receive review and sign-off by
EPA Headquarters. But the same cannot
be said for change* to an emission limit
on a local printing plant composition of
State board*, or negative declaration*
under section lll(d). Under EPA'*
current approach to SIP review, all
change* receive Regional Office and
Headquarter*' review prior to both
proposal and final approval (except for
those SIPs, aobut 20 percent of the total,
processed as direct final *). All final
action*, no matter how trivial, currently
are signed by the Administrator.
There are several problem* with this
multiple review for all action*: it
inherently take* longer than processing
only at the Regional Office level: It ties
up the scarce Headquarters' resource*
available for SIP review (thus making a
long process even longer); and by
introducing more reviewers into the
process, it increase* the chance of
rejection for procedural or other reasons
which have no impact on air quality.
There are other aspect* to the
ex'cenive review problem. If a State
• Under th» praoMhm. *TA publMha i nn*i«
r«tanl bffMv DOOM ivUch ladieiMt that uw SIP
•ebon will tat (teal to « **y* uniw u
to pnmdt advi
. V •••wqrtatMMfc i» pram* *dvm*
— *— T — *~il nhmiVfca
-------
/ Vot 54. No. 12 / Tbuodajr. )
19. 108* / Notice*
submits a SEP change without pnspedy
stated emrssaia Imtts, legal aatauerty or
compliance schedules, or which
contains other obvious dancieaciee, U
can enter the system end be subject to
complete EPA review and disapproval
EPA's procedure* did net provide m any
comprehensive way for immediate
rejections for incompleteness.
Independently, however, some Bapooal
Offices have tried to deal with this
problem. For example. Region I has
developed e set el completeness criteria
their Sutes must follow, Irraine VQ
provides States with aa exteaeive
checklist descsjtaag the arfiiiiaetrffs ate
Region will leak for ia a wide range of
SIP actions. The purpose U to keep
incomplete neckaget out of the more
extensive review system.
On the other hand, even if the
suhmittal is prepared unrecuy. i
ection* seem uannlerl for full i
Examples lachide ample recodification
of regiristtnae. addrees changes, or
changing modeung er sssck test rarthodi
to conform te nwieed SPA guideline*. In
such ectione, the State is doing exactly
what is reqand and appropnala.
Although such changes- caa be
processed as direct final even that is
probably sear* resource tateasive the*
they are worth, llawerat. there is
presently no better wey to Beet each
changes adauaMtretively. er beep them
out of the system entirely.
Finally, several members of the Task
Croup beeeved that in addition to being
concerned with Sff processing, EPA
•noaiOtfSuso exaauns the SsT process ai e
more basic wey. Specifically, there was
debate and interest expressed by eosae
in promoting direct acceptance of
operating permits er other State amek
source emauaoa lank*. The* would be
conditioned oa EPA approval ef the
State'* overall framework eod strategy
for achieving an ambient air quality
standard. EPA's ""•* «*•"""§ rat* would
be to track s State'a everaU progress
and periodically audit the State's
implementation of the permit-process.
takiag cerrackee eca
Someii
direction. For example, ia
the -federal easbraanthty
system owohriM sanrm aooapsaace ef
Slate penabts i
much coaceptael i
State/EPA regutatiBiis east faadamental
changes to ether pans of the-aeoeaal air
program, aad may raausmrhanpee to
the dean Air Act
C. Unctrtuinly Concerning the Oatcomt
Mgl
Itaughtbeexsi
reviaioo to a SIP. given the EPA's yean
of experience, would be a midy routine
precea* However, that often is not the
case. The fate of a given SIP revision, in
terms of both the nabjre and timing of
the ultimate decision, can be uncertain
for a number of ieasons> Important
information necessary lor decision
making may be left out oi a SIP package.
or the focmat and.hiatificamaa.fac the
change may be deficient This caa result
not only from inexperience and lack of
training at the State and local level but
also from a lack of dear policy fiiHtrrr
from EPA and timely issue resolution.
Policies important to SIP preparation
and approval may be »"»«»«t««t or poorly
documented. IB some cases, there may
be no policy st«D te address a specific
SIP issue, aad te 9P process itself.
through the aggregation of • series of
similar action*, to used to evolve a
policy. This situation, in part derives
from sporadic management nrrorrement
in tht OPprocew. Constant ituwtion hi
needed to assure that package* are
moved tfamgh the system, that
problem* are promptly identified, end
that policy issues are flu, uses d aad
imty
An overt maniiestetion ef
in the eutceme of SV review is the
moving target *yodiums. Under cnrrev
practice, a 8IP may be under review at
EPA for months and eveatoelly be
steps are bang taken m this
deemed tattppropnarte beceflse it doeen't
conform te a newly s-»u»vul policy, even
though it confecned te fee policy hj
place wheu H was sebmMrted Tms net
only frotrate* me Stnte but reevhs m
confusioa for the souree because until
the State ectaaUy change* its submitrel
it often oonttooes toimpteBsent the
regulations disapproved by EPA.
Another factor oaatribuoag to
chslkaga* to BPA'4 new
raguishsai. EPA »oaBssdemg the
lr hi
informal (
SIP*. Tbe system I
characterised by mmsaVBa, net
judgment*! mteracnaas. Hsadanartar*
and Basnoasl Office persoaaei are
reluctant to formaiy reject packages.
but rather try to work with safe
rcaainb*
permMi
into the SIP aad aapiovsaUry H>A.
However, httt avniemeatan'on of a
phonei
nsapuatioa.Th»»j
reluctance te oacaraaee* aanse* that
may have acted iageed tanh, Also, the
documentation needed to support •
more forma) pruoess oa s iarge number
of SIP actions can become an excessive
burden. Unfarauenely. in many cases
the informal process prolong* the review
tune substantially and results in poor
documentation for use m similar
situation*. In addition, the informal
process fieoueuUy is cnncned by Stites
and sources because they can't
adeouefely tMck the profres* of the
change once M gets into EPA review.
li^^
group assessment
and me praHmwUmrrfied. EPA has
devised * nuabet ef etienge* to the SIP
sing system which it win bcpn
- today. The changes are
deilgusd to tailor SfP review to the
significance of the action involved, and
to improve the cerrarnty of tire SIP
review proem. The changes, including
the legal retromle supporting them, are
descrrbetl briefly below and in depth in
the next section of this notice.
A. Tailor A*vjiew to Signtficaace of
Action
EPA has devised a SIP review system
under which increesingly intense review
procedure* wfO be epplied to
increasingly significant actions. Mm
actions will undergo relatively little
review while major actions will conti
to receive fuD Regional Office and
Headquarters review. By tailoring the
intensity of review to the significance of
the sctioiL tail hierarchy of procedures
will generally decrease SIP procesiiag
times by dramatically shortening review
periods for minor SIPs and freeing EPA
resource* to enable major SIP
processing to proceed without existing
delays.
1. Compteteness Criteria
EPA found that many SIP revision
submittals ware processed through full
EPA review despite the fact that they
were missing major component* which
effectively prevented EPA approval. For
example, a State might *ubnit an
emission limitation without compliance
testing procedures. To free EPA
resource* met would otherwise be
consumed processing such deficient
SIP*. EPA ha* created a completeness
review process which is being proposed
for public comment in sn accompanying
notice in todey's Federal Register. Under
this procsmv a SB^ will be reviewed fw
cc«pleteuauB«fBiam certain basic
criteaa whsmichnaitaUy submitted te
deterrsansUi a*tt» iseueasary
tn
allow proper
decision on the
tie
i of the Sff
-------
2218
FsjdejeJ RegUtar / Vol «. No. 12 / Thmxky. |«nuary 19. 1969 / Notices
revision. This will be • quick process
that will look at the reviewabllity of an
SIP submittaL not iU approvability. EPA
will then promptly inform the submitting
State by letter whether EPA will
proceed to process the SIP revision or
whether it must be returned to the State
because it is incomplete.
EPA is creating this completeness
review process under the authority of
Section 301 of the Clean Air Act which
authorizes the Administrator to
prescribe such regulations as are
necessary to carry out his functions
under the Act EPA is interpreting the
terms "plan" in section H0(a) (l) and (2)
and "revision" in section U0(a)(3) to be
only those plans and revisions mat
contaia all of the components necessary
to allow EPA to adequately review and
take action on such plan or revision.
EPA believes that Congress would not
have intended to require EPA to review
and take action on SIP submittala that
were simply not renewable because
they were lacking important
components. Therefore, the
Administrator oaodudes that section
110(a) requires him to act only on
complete State submittals.
EPA recently issued a guidance
memorandum to the Regional Offices
establishing this completeness review
procedure, including a list of
completeness criteria, on an interim
basis pending notice and comment
rulemaking. See Memorandum. Gerald
A. Emison. Director. Office of Air
Quality Planning and Standards, to
Regional Office Air Division Directors.
March 18.1988 (a copy is included in the
docket as item U-B-4). The Regional
Offices are currently using this guidance
to conduct completeness reviews.
However, elsewhere in today's Federal
Register. EPA is proposing to codify
these criteria in regulatory form to
provide clear benchmarks for States in
preparing complete SIP submittals.
Specifically. EPA proposes to add the
completeness criteria to 40 CFR Part 51
as Appendix V. EPA also proposes to
amend 5 51.103(a) to specify that State
submissions will not be considered
official SIP submissions upon which
EPA is required to act under section
llO(a) unless they meet the requirements
of Appendix V. The details of the
completeness criteria are described fully
in the accompanying notice.
2. Letter Notice
EPA is creating a new SIP processing
procedure for relatively insignificant SIP
revisions that the EPA believes are of
essentially no interest to the general
public. Historically EPA has processed
all SIP revisions through full notice and
comment rulemaking in the Federal
Register. For Insignificant actions of no
public interest, this has been costly and
tune """fuming with no apparent
benefit. Under the new tetter notice
procedure for such insignificant
revisions. EPA will simply inform the
State and directly affected parties by
letter that the submitted SIP revision has
been approved. The EPA may not
publish a notice of proposed rulemaking
and opportunity for public comment or
an individual notice of final rulemaking
in the Federal Register.
EPA's duties to publish, proposed and
final rulemaking notices and provide
opportunity for public comment stem
from the Administrative Procedures'Act
(APA). However, the APA specifically
provides that an agency need not
provide notice of proposed rulemaking
or opportunity for public comment when
the agency for good cause finds that it is
impracticable, unnecessary, or contrary
to the public intent See S V3.C. section
653(b). EPA concludes that it is
unnecessary to provide for comment on
insignificant SIP revisions because they
are of no interest to the general public.
Further, m such cases, the delays
associated with providing for comment
where none would be forthcoming
would be contrary to the public interest
in *<|||*fl Sir processing.
The legUlatfve history of section 5S3
indicates that the good cease exemption
from notice and comment requirements
appropriately applies to insignificant SIP
revisions. See Senate Comm. on the.
Judiciary. Administrative Procedure Act
Legislative History. S. Doc. No. 246.78th
Cong.. 2dSess. 200 (1M6)
("Unnecessary" means unnecessary so
far aa the public is concerned, as would
be the case if a minor or merely
technical amendment in which the
public is not particularly interested were
involved. "Public interest" supplements
the terms "impracticable" or
"unnecessary"; it requires that public
rulemaking procedures shall not prevent'
an agency from operating and that on
the other hand, lack of public interest in
rulemaking warrants an agency to
dispense with public procedure). A
number of courts have also held that
notice and comment procedures are not
required in analagoua circumstances.
See. «.£, National Nutritional Food*
Auociation v. Kennedy, 572 F.2d 377.
385 (2d Or. 1978); Texaco. Inc. v. FPC,
412 ?2d 740,743 (3d Or. 1979): United
States v. US. Trucking Co* 317 F. Supp.
69, 71 (SJ).N.Y. 1970).
Although EPA will not seek comment
on letter notice actions or publish
individual notices of final rulemaking. in
order to keep the general public
informed of all SIP actions EPA will
publish periodically in the Federal
Register a summary list of all actions
taken under the letter notice procedure.
The effective date of all letter notice
actions will however, be the date of the
letter itself rather than that of the
subsequent summary Federal Register
notice.
EPA will only use the letter notice
procedure for insignificant SIP actions
such as recodifications or minor
technical amendments that EPA feels
confident are of no interest to the
general oubttft Further discussion of the
SIP cateeeria* •» be processed under
letter netice eja> be found below in the
implementation section of this notice.
8. increased Use of Direct Final
For some time EPA has used a SIP
processing procedure referred to as
direct final nuemaiang. In the past EPA
has generally used this procedure
mostly for ImignifkfT't actions that it
considered noncontroversial and on
which EPA did not anticipate receiving
any adverse comment EPA is now
expanding the use of this historically
effective direct final procedure to speed
processing for a wider range of such
minor SIP actions.
Under the direct final procedure EPA
still continues to offer the opportunity
for public comment as required by the
APA. As before, the procedure merely
provides a shortcut for final action
when no comment is expected.
Moreover, those insignificant SIP
actions which are truly of no interest to
the public will now be processed under
the letter notice procedure described
immediately above. Further discussion
of the potential categories of SIPs to be
processed under the expanded use of
direct final procedures is included
below in the implementation section.
4. SIP Decision Authority
Historically, all SIP revision actions
have been thoroughly reviewed at both
the Regional Offices and Headquarters.
whether or not the action involved was
truly of national significance. This has
led to the greatest delays in the SIP
processing system, and the task group
assessment indicated that overall such
duplicative review did not appear to
contribute substantially to improved SIP
content in many cases. The EPA has
concluded that all SIP actions that are
not nationally significant and for which
Headquarters has prepared guidance for
SIP processing, will now be reviewed
only at the Regional Offices.
Consequently, the Administrator is
delegating his authority under section
110(a) of the Clean Air Act to act on
such SIP submittals to the Regional
-------
Federal RayUter / Vol M. No. U / Tbimday. January It. UtO / Notice*
Administrator*. Both propoaed and final
Federal Register notices for these
actions will henceforth be signed by the
Regional Administrators.
Section 301(a)(l) of the Act authorize!
the Administrator to delegate any of bii
powen and duties under the Act to
other EPA employees except "the
making of regulations." In an early
interpretation of this statutory provision
EPA concluded that while proposed SIP
rulemaking did not constitute "the
making of regulations", any final action
on a SIP would fall within this
prohibition. Upon further reflection. EPA
now concludes that the prohibition on
delegation applies only to regulation*
initially promulgated by EPA, not to
plans prepared by State* that EPA
merely approves or disapproves.
The natural reading of the statutory
phrase "the making of regulations"
extends only to regulations that the
Administrator himself promulgates.
Although in approving a SIP revision the
Administrator does incorporate State
promulgated regulations into the
federally enforceable SIP. he still cannot
properly be said to be "making"
regulations within the «"Mt""g of the
section 301(a) prohibition on delegation.
As a practical matter. EPA has
acquiesced in thoae judicial decisions
holding that EPA must follow the
rulemaking procedures of the
Administrative Procedures Act (APAJ, 5
U.S.C 553, when it-approves or
disapproves State implementation plans.
However, even if SIP review is
"rulemaking" under the APA, EPA
believes these actions do not constitute
"the making of regulations • • •" Thus.
while section 301(t)(l) of the Clean Air
Act prohibits the Administrator from
delegating his authority to make federal
regulations, it does not prohibit
delegation of his authority to act upon
regulations made at the State level.
The implementation section of thit
notice contains a detailed listing of
those categories of SIP actions that the
Administrator currently is delegating to
the Regional Administrators, those
categories the Administrator is
delegating but which should still receive
some input from Headquarter* at this
time, and those categories that will
continue to receive full Headquarters
review for the time being. These
categories may change over time as
Headquarters prepares additional
guidance and Regional Offices become
more familiar with new issues.
B. Improve Certainty of Process
The second major focus of EPA's
changes in the SIP processing system is
to improve processing; procedure* so
that individual actions can be handled
with greater certainty. These changes
involve increased management control
and clarified processing guidelines.
1. Adherence to Formal Procedures
EPA has fat some rime had detailed
procedures for processing SIPi through
the existing SIP review system. These
procedures include time schedule*.
default provisions, and issue resolution
mechanisms. However, for a number of
reasons these procedures have often not
been followed precisely in the paat
With the adoption of the processing
reforms described herein. EPA will be
revising its procedures to establish
guideline* for each type of SIP review
mechanism. When the new guideline*
are iseued. senior management will
make dear that in the future they are to
be adhered to more rigorously. This will
ensure that State submittals move
quickly through EPA'* review procea*,
with any major iasuee being raised
promptly tor resolution.
Z. Grandfathering Policy
In the paat. a mtmber of State* have
submitted SIP revisions that wan
consistent with EPA requirementi
(regulations, policies, legal
interpretation*, etc.) in affect at the tune
of State adoption «f the revision.
However, in somecaje*. because of
proonetaf delays and policy evolution,
the applicable rao^mmant* would
change before the revision* received
EPA approval The EPA'* vest
procedure waa to return the plan to the
State for revision or disapprove the
action. Not only did thi* add more time
to an already lengthy procea*. it also
•trained EPA/State/lccal agency
relations. Moreover, there was the basic
question of fairness involved. In such
cases, the Stale submitted the revision
in good faith and in accordance with the
rules and policies in effect at the time of
submission, only to see months go by
and find out the change was rejected
due to factor* totally beyond it* control
EPA has determined that in general it
would better serve the States and the
interests of the SIP processing system to
continue to process most State
submittals based on the requirementi in
effect at the time the State adopted the
change to the SIP. To thi* end. EPA
recently issued guidance on
grandfathering entitled "Grand/athenng
of Requirements for Pending SIP
Revisions", eent from Gerald Emisoa
Director. OAQPS. to EPA Regional
Office Air Oiviaion Directors, June V.
1966 (a copy is included in the docket a*
item O-B-6).
The guidance provide* a structure for
grandfalbering pending SIP actions to
the extent allowed by law. The law in
thi* area indicates that whenever a new
requirement i* created by Congre** (via
Statute) or by EPA (via regulation or
policy), it becomes generally applicable
uniett the authority establishing the
requirement provides otherwise. When
Congress enact* a new atatute. it applies
to all matter* then pending before an
agency uniett Congress specifically
provide* otherwise in the statute. The
EPA ha* no authority to grandfather any
matter from tin new statutory
requirement* Without explicit provisions
in the atatvta.'
Whan EPA kwue* new regulation*.
they arc also generally applicable unless
the regulations themselves include
grandfathering provisions. If
grandfathering provisions are not
explicit in the regulations, courts will
apply the new rules to matter* pending
before EPA. Thorpe v. Housing
Authority of Durham. 393 U.S. 288
(1980). However, an agency does have
some flexibility to provide
grandfathering provision* in new
regulations. Such provision an eaually
appropriate where they meet a four-pan
tact First the new rule represent* an
abrupt departure from weil-estabhaaed
practice. Second, affected parties have
relied on the old rule. Third, the new
rule* fanpoee a large burden on those
affected. Fourth, there U no strong
statutory interest in applying the new
rule generally. Sierra Club v. EPA. no
F.2d 430 (D.C. Or 1982). cert den. 468
US. 1204 (19841. In the pa*t EPA ha*
included explicit grandfathering
provision* in new regulation* where
appropriate.
An agency hit* broad authority to
decide how and when to i**ue new
guidance, cine* a* a purely legal matter
guidance i* not absolutely binding on
subsequent proceedings. Pacific Gas
and Electric Co. v. FPC S06 F.2d 33 (D.C
Or. 1974). Historically, however. EPA
ha* provided only limited
grandfathering from significant guidance
primarily due to the importance of the
new guidance to EPA's control
program*.
EPA's expanded grandfathenng
guidance state* that complete pending
SIP action* generally should be subject
only to the requirements in effect at the
time the Slate submittal was prepared.
However, the guidance includes a
number of exception* to the general
rule. The EPA would not grandfather a
pending acnon_where a court ruling has
changed a requirement where a court
ha* convinced EPA that a requirement U
no longer supportable, where the
Administrator determine* that
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2220
Fadatal R«g»t«r / VoL 54. No. 11 / Thursday, frnuary 18. 1MB / Nottets
grandfathering is not appropriate, where
an imminent and substantial adverse
environmental impact would result
where grandfathenng would foreclose
EPA'* ability to exercise its authority
under the Clean Air Act or where the
State has not acted in good faith in
submitting a plan.
The guidance also state* the EPA will
analyze the need for grandfathering
provisions in all new EPA requirements.
and will include such provisions in all
cases to the extent appropriate.
3. Improved Guidance and
Communication
In order to facilitate implementation
of the various SIP processing changes
EPA is instituting, existing guidance wiH
be upgraded and new guidance prepared
wherever needed. Headquarters offices
have committed to provide adequate
guidance to Regional Office* and to be
available for consultation to assist the
Regions in implementing the new
programs.
EPA will also be improving
communication* between Headquarter*
and Regional Offices, and among
different Regmwl Office*, to effectively
implement the decefttrenaed SP
processing system, improved
communication technique*, described in
the implementation section, blende
identifying regional SIP contact*, the
"regional staff expert" concept a SIP
clearinghouse, a computerized tracking
system, periodic conference calls, and
national meeting*.
4. SIP Processing Management System
The final change EPA is instituting in
the SIP processing system is a new SIP
processing management system. Under
this system EPA managers will maintain
close supervision over the SIP
processing system to ensure that SIP*
move smoothly through the new
procedures. The new management
system, described in full in the final
section of today's notice, includes both
an internal and external audit system.
an expanded computerized tracking
system, and a SIP processing deviation
review system.
ImptameBtekkM of the Changes
The following discussion focuses on
the more significant aspect* of the
implementation of the SIP processing
changes announced today; the .final
portion addresses improvements in the
m*Mj»m»nt .system which ate being
instituted to assure the ""Mn1""'4
changes are property inplencated.
A. Tartar Review to Significance of
Action
1. Completeness Criteria
Screening criteria have been
developed that define the essential
elements of an acceptable SIP package,
that win avoid obvious inadequacies.
and that can be applied uniformly with
limited subjective judgment and review.
The criteria were developed by EPA
Regional Office* already using a lilt of
criteria to determine completeness of
SIP packages in an informal way. The
benefits of using completeness criteria
to reject deficient package* include
impioved consistency and quality in the
State snbmtttaJ* received for processing.
fewer SIP* disapproved for fundamental
inadequacies, more effective use of
limited resources at both the Federal
and State level and improved guidelines
for T -w State personnel on how to
pre. .'* adequate SIP*. A* noted earlier.
an interim pobcy for determining
completeness of SIP snbmrMals was
issued to the EPA Regional Offices. The
policy include* basic criteria for
determining completeness, and cample
lettem for acoapttag and »»jetting SIP
•ubmitaaia.
Register, the AdminlsUaisi ia propoaing
to add thane criteria and atoosdor* for
determining the oomph tain is of State
•ubmitteia 0 4DCPK Part M. EPA will
cootinoe to «*e the interim policy to
asses* SB> submituis until final
rulemaking action is taken oa today's
accompanying propoaaL
The. criteria for determining whether a
submittal by the State i* complete have
been separated into two categories: (a)
Administrative information and (b)
technical support information.
Administrative information include* the
documentation necessary to
demonstrate that the ba*ic
administrative procedure* have been
adhered to by the State during the
adoption process. Technical support
information include* the documentation
that adequately identifies the technical
components of the plan submission.
2. Letter Notice
Using a letter notice for noo-
substantial actions, which EPA will
begin doing after today, ia a new
process where EPA will merely inform a
State and directly affected parties by
letter that EPA has approved a given SIP
revision. The objective of the letter
notice approach is to achieve prompt
action by EPA on non-subataotial
action* what* the pablic interest ia not
served by full notice and comment
processing. By using letter notices.
EPA"* limned resources can b* ahocated
to the expeditious processing of more
significant SIP actions.
Under letter notice, as soon as a
revision has been deemed approvable.
the Regional Administrator or his
designe* will send a letter to the State
and affected parties, informing them of
the approval The EPA may not publish
a notice of proposal and provide an
opportunity for public comment beyond
that already provided for by the State.
In order to keep me public informed of
these actions. KPA will publish
periodically (aaaBually at a minimum) in
the FadMat sBBjJatar a summary list of
all tetter naonacAons recently taken.
with mfbnMta concerning the change
and the sources affected, as appropriate.
These aetioaw will be effective from the
date of the letter notice, rather than the
eventual summary publication date. The
Regional Offices will make the decision
whether to process a SIP revision as a
letter notice.
EPA intends to use discretion in the
application of letter notice processing to
insignificant SIP revision*. The
following are examples of such
revisions. Frequency. States/local
agencies will recodlfy existing
regvntkuis teto amew structure or to
improve the understanding of the
program. These change* are superficial
from the penpaUlva of the air quality
management program and are of little
interest to the general public. Other
revisions to implementation plans
incorporate amended or revised national
guidance documents pursuant to EPA
directive* and an made merely to
conform to revised requirements, in
other cases, many States have programs
using renewable operating permits for
the purpose of source regulation.
Usually, the permit is renewed without
change and the permit action is of little
public interest
Technical amendments,
administrative actions, and minor
wording changes are further examples of
SIP revisions that are suitable for
processing by letter notice. It is
expected that the list of SIP revisions
that can be processed by letter notice
will be expanded as experience is
gained with the process. EPA
specifically request* comment on the
appropriateness of using letter notice
processing for these and other potential
categories.
3. Increased Uae of Direct Final
On June 23.1W2 (47 PR 27073). EPA
announced procedures to shorten and
streamline the 9P review process. One
of these pmcadwee was the direct final
ruiemaazBg approach. This program ha*
been shewn toteatuce the SIP processing
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/ VoL M. No. 12 / Thondty. )uuuy 18. 1888 / Nottem
2221
review time by about M percent Since
it* inception, many revisions have been
published M dtncl ftnei rates with very
few receiving notice from the public of
the desire to comment Hie following
•re tome type* of SPi that have been
proceiMd successfully as direct finale
to definitions to conform
end. thr ***•*••
to EPA requirement*
• Changes in monitoring/ mod^ting
procedure* to reference aew EPA
guidelines
• Revision* to Inrmrnutate new teat
methods by reference
• Single source SB> revision* that make
a State's rBojuicenMntB moco
stringent
• Public availability of emiaeioas data
• Permit fees
• Compliance schedule* for section
lllfD) plan*
• Visibility plans
• Volatile organic compound (VOC)
consent orders
• Prevention of significant deterioration
(PSD) modeling regulations
• Minor changes to Inspection and
maintenance (1/M) program*
• New opacity regumtioos
• Variances
• Operating permits far lead SPs-
Of 114 SIP reviaiow^Moeaeed i
recently a* dim* finals, only two
required mpabluaeag. a* |
because of public QoeamenL Thtf hiatory
of very little public rmaanenl mi dicect
final rules suggested the* EPA could use
thi* effective tool me*e often to speed op-
the SIP process.
For this reason. EPA iseced •
memorandum dated Deceaiber 21. 18*7
entitled "Expanded Use of Direct Final
SIP Processing." from Gerald A. Emison.
Director. OAQPS. te EPA'* Regional
Office* (a copy is \p~^*~* in the docket
as item Q-B-2). For the-feaaons stated
above, this TnriPTsiMfin recomaaeaded
that the direct final nilintetiiiu
approach could be uaed more frequently
by the Regional Office*. It is possible
that EPA'* plan to expand the
application of to* direct final rulemakiag
approach may result in an inoreaae in
the number of SIPs being withdrawn
and subjected to full nance a*d
comment fulamaking becauee of the
desire by the public to comment
However, any increase in the number of
direct final action* withdrawn and
converted to proposal* should be
dekgatag sigMlen authority fethoee
SIPreviiiens lh*l •* not of notional
Eliminating the serial review by th*
Regional and Headajwrters eAeea for
selected categonavof SIPi to potranctty
the moat ajfoar** recommendation
mad* by the task group. This
recommendation ia designed to delegate
approval/dliapnm*! artnortty for the
majority of 8nH«» to lUgional
AdminiatntoM. A* noted earfter, •& SIP
Office and ll**d»jia«liiii mtaw m the
DMLTheRagteawlOtBoewaeMi
thaftMti
EPA Us a*a»»>aim far eaothat romeVef
technieaitagai end peiiaT review.
Except fart ~
direct finat i
rule* i siaiei
and!
thai
.attpropoeeaUadftaot
rarely changed lav iaml
than offset by th* overail improvement
in omeiy procesauig 0f total SIP actions.
4. SIP Decisiev AtalbevUr
A oonwrvtofle oi'ne
recommendations of me SEP processing.
have a i
implemenmtieai of «*noa«i 4
such aa baeic atnlegiee for
demonatntoag^altaflBVjeot vin ejajoiejit
standard*. In addtlieawthefe ate
prognaH when a high ami «f national
consistency la-impertant or wfaefa
involve eaHcgmg proarams what a BM>OT
issue* on progfan imptementation may
as yet be iiaweeelveii SWOB aotie**
should reoeive beea a ReaooaJ Office
and -a Headquartera review, the latter
will ensure imnsistern poMcir aaplifieliaa
for these nationally -jg-ifi~a< SIP*. SIP
action* which ininaly will oomiaue to
be decided by the Adaiaistatar ate
listed in Table 1. This list and the ether
lists deaedbed below m not intended
to be permamem thst ia. SIP eatagoriaa
may be shifted among them over time:.
For example, M to EPA'a-faMenttoa to
delegate some of the SIP cstegehes ea
Table 1 to the Ragioaal AdauBiMnton
as experience with the aawnrocaaa i*
gained and aoliae* atatur*. Canvareajy,
if the Regional Office* haw difficulty
with a delegated category. MCB SIP
actions may be withdraws bom
delegation and be subject ta- Ui
Headquartan review.
TABLE 1
1DB TDMrWlVR Mr •dHfH MVi faVfliTpD Dlu
R^onalOtBeseed
• Oi rertsslpislimis «nd Ob attainment pltni
(indudinf laM programs)
• CO attainment plans desDng with irta-
wMfcproM***.
• CO nrl««ipiiTinni •nccpt MOM rtUung 10
pamt-eoatc* only prabieau or hoi t pou
• Creep I P>4* piaan (eUBinaMnt
BsanMii ittoaa) ialiaitin those resulting
horn commit*! SIP*
• New sees with VOC nftbtior* 1*4. ptr
• CTC NawraeMeu. or PoM-*7
• VOC ie
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2222
Federal Register / Vol. 84. No. 12 / Thunday. January 19. 19M / Notice*
opportunity to provide comment! to
Regional Office decistonmaken.
TABLE 2
The following SIP tctiont are delegated for
Regional Admmtitrator decuior. and signoff
(proposed and fintllbut require a 30-day
opportunity for Heaa'Juerten review before
ngnoff.
• Paniculate matter emieaioni relaxation*
• VOC revinoni with extended compliance
schedules affecting nonattainraent areas
• CO attainment plans dealing with botspots
• CO redeatgnation* relating to point-source
only problem* and hot spot*
• SOi area-wide and source-specific SIP
revisions and redesignationa. where the
source(s) or background source* in the
aggregate have allowable emission* of
25.000 TPY or more (except primary
nonferroua smelters or emission trading)
• SOi reviiion* with (a) averaging times
greater than the short-term SOt-NAAQS;
(b) reviled emi**ion limit* due to
change* in slack height credits
• Visibility SIP* involving regional haze
• Direct final rulemaking in categories
identified for Administrator sigaoff (eee
Table 1)
• Any other action not liated elsewhere
Decision authority for all remaining
SIPs is being delegated to the Regional
Administrators, with no requirement for
consultation with Headquarter* prior to
signoff. The primary criterion used to
judge whicti SIPs could be delegated to
the Regional Administrator for decision
was the significance of the action.
Another criterion was the availability of
appropriate policy memoranda/
guidance to the Regions for making
decisions on the approvability of a SEP.
The categories of SIPs initially to be
delegated to the Regional Administrator
for final approval authority are listed in
Table 3. Although these revisions are
being delegated for the Regional
Administrator's signature, the
Headquarters SIP reviewers will be
available for discussions with the
Regional Offices on any of the
categories of SIP revisions. The Regional
Offices also have the option of sending
SIP submissions which come under any
of these categories to Headquarters for
the full review, especially where the
Regional Office reviews indicate that
national issues may be of concern.
TABLES
The following SIP action* are delegated for
Regional Administrator decision sad signoff
(proposed and final). Headquarter* review is
not required but may be requested by the
Regional Office.
• AU other bubbles and all other singk-
•oureereg*.
• VOC extended compliance scbeatalM
(except those effecting aonattalnmeot
anas)
• PMM Group n and IH STPi TSP
redeeujnattona
• Lead attainment plans and revision*
• All other SOi SIPs. mdudmg
radesignationi: ambient monitoring
plans: malfunction rules: State AAQS
• State stack height regulation* and negative
declaration*
• AU other PSD/NSR SIP*
• AU other nubility plan*
• lll(d) plane/negative declaration*
• AU other direct final rulemaking
• All letter notice action*
SIP issues (and revisions) in
categories of potential national
significance) will continue to be
reviewed in Headquarters and signed by
the Administrator. The categories, of
SIPs delegated to the Regional
Administrator for decision and sign-off
are inherently localised in scope and do
not have potential for national impact
(Obviously, an unusual SIP revision in a
delegated category could involve broad
issues; the changes in procedure
announced today provide for full
consultation between the Regional
Office and Headquarter*, and even for
the forwarding of such an unusual
action for full Headquarter* review.)
Thus, except for. unusual cases,
decisions made by a Regional
Administrator will be baaed on local
factor*, reflect local iseoee, and may
indeed yield varying raaiuhs. although
Regional Offices will apply poUdea
consistently. Such «*-^«i«-« are,
therefore, intended to be non-
transferable, La~ do not set precedents
for other Regions. For example, an
emission limit tor a paniculate matter
source in a State may require a specific
value to-conform to. the State's
demonstration of attainment The same
type of plant in another State, however.
might have a different limit imposed
based on its location and site-specific
factors. In short it is expected that the
outcome of the decision process for
similar SIP actions can vary from Region
to Region. Each such local action must
be judged on its own merits. This is
acceptable, provided that national
policy and guidance applicable to such
actions are applied consistently by ail
Regions involved.
To provide the Regional Office with
the necessary support EPA is
completing a comprehensive
compilation of policy statements.
guidance, and memoranda applicable to
those actions where significant
Headquarter* review is being
eliminated. Moreover, to mimtiin
oversight of this decentralized process,
EPA will institute more intensive
management systems, designed to
ensure national consistency in policy
application (see discussion on
Management Systems later in this
notice).
B. Improve Certainty of the Process
1. Adherence of Formal Procedure*
Detailed procedures exist for
processing and reviewing SIP revisions.
Among other thing*, the procedures
provide for firm schedules, default
provisions, and mechanisms for issue
resolution. The procedures frequently
are not following for a variety of
reasons. In some cases, a Regional
Office may believe that infernally
working/negotiating with the State
would provide mtomation or result in
change* tathesotttission that would
enable EPA ID apffrove the plan
revisions. This caa occur because there
is an inherent reluctance by reviewers
to disapprove a plan into which a State
or local agency has put considerable
effort The goal of this informal
approach was to enhance the
relationship with the State, although the
ultimate effect may have been the
opposite.
The current guidance and procedures
for SIP processing an being reviewed.
modified as necessary to stress the need
for more formal implementation, and
will be republished with a dear senior
management directive on their
importance. Further, the management
system decrioed below will help ensure
that the reviewing offices follow the
formal procedures. This, along with
increased management attention to the
SIP process, should enable those
interested in the results of the SIP
review process, internally and
externally to EPA, to follow more
effectively the progress of individual
actions.
2. Grandfathering Guidance
EPA issued grandfsthering guidance
to the Regional Offices as described
earlier. The guidance is to be considered
in each rulemaking action on a SIP
revision and in all new or revised
requirements for SIP* issued by EPA.
EPA believes that it deals with the
fairness issue, will not have noticeable
environmental impact and will
strengthen EPA'* working relationships
with the States and local agencies.
Under the guidance, a SIP revision may
remain subject to the requirements in
effect generally on the date of State
adoption of the change. The decision to
grandfather will be made by either the
Administrator or the appropriate
Regional Administrator where decision
authority has boa* delegated.
All SIP revisions potentially subject to
grandfatherinj ^B be reviewed to
determine to whet extent the submission
complies with the new and revised
requirements. For each revisions. EPA
-------
wall address, tat isipect ef the
grandiatBMUg eiaetaei (peer* v« or
negative) • me SIP i
In eddition. the betes far i
future submriiaU wiU be described in all
new requiramemn iaeaed by EPA.
addressing the impact on prevtoesty
approved pending, aad newly submitted
SIPs. Such grandUtheriag provisions
generally will haw effective dates
which are BO days frear the date of
signature to allow states to have e
reasonable time to complete precaasing
and submit revisions to£PA that may
be subject to grandfathering.
Although graartfaflMriaa. will be
considered whenever possible, naming
equity considaranans and short term
environmental impacts, it is not
automatic aad may not be appropriate
in all circumstances. These include
situetions where:
1. The State has not acted m good faith
in submitting a plan;
2. A court ruling has changed e federal
requirement or beaaoovinead EPA
that a previous requiraaaant is no
longer supportable;
3. The Administrator aatenrews that it
is not appnpaate to gondfathar
under a new EPA pouay:
4. A deosioo tograadathai madd haw
an tnyiiinMTt a*?d aaaanusnai
adverse imnnmasenlsj aapact or
foreclose the ability of EPA te
exerose in amoonty andar the
QeaavAir Act (a*, apply sanctions
undarPartD).
This guidance builds on existing
grandfa thering guidance (e>g_ air quality
dispersion modeling] to T«*"Hif>' the
general concept of (
equity dtctstes each i
Where grandfr tbsong would render
the SIP as a wbokt sobataanoHy
inadequate to protect the NAAQS or
otberwtse to comaty-wito the Act.
grandfa thenng may be auawoa onty if
justified by an *"^«iA"' analysis uanar
the four-part Sierra dub test described
earlier, and the grandfathanng action
would have only a limited Hfe (generally
two years). Within that time, the
grandfathered revision must terminate
vVnVt* HfVVM*
4H»(KlUK BBO
alternatives fee
systeauthrnnaV
fnmnWrte*
trsditMaoiteenvof-<
between EPA ltesfts.iianeie i
Regional'
effective CBomusuaaacsrwill-!
more intpoctaot wilh
of the SIP pncesstna j
today, net oob>i
snr> the Baginaal Ofaraa.1
between the Aagj
themaaliosa.Jtiaj
i-aoaeUiee,
• a
problems andncoU
shared paonndy by
theRegi
application olp
(fcg_ expinttOB of a temporar
•anance). or the State must rafamh-a
complete, ssasnisbls remaon to the SIP
to bring it into ni oatnpnnnce sMA nil
statutory)
1 Improved Cuidarrot aad
hnprnirsd fnalsain and
be assured Several-L___
underwayin this roaacd
The existing 9V toaoking system, "SIP
TRAX" wfaic&pioianHii only follows
SIP submifoos from aairraraast at
Headquarters, is boma aatBaniiafV to
track a Sff eubmittnl torn ascaipt by the
Regional OtBot to uttuuUa dispoaioao
(see furtaat iftomssinn under the
"Managsauant System' below). Date
contained In the system wfll be rafiaael
and adjusted as experience is gained
under me new procedures. In parallel
with this treckmg system change.
greaterenrphe»i»wiU be placed on the
key SBT contact persons in the
Regional Officsa. Ataaady to piece, these
persons w4H have expended
•MAvw^MtfajBi^w ^^ tk^ B^^^^M! ^%CM.^KA jt.»
ivsponei^niiy ar me itamooai uzoces 00
more of ttwoaciaionBHOchnjoirSIP
subniNate. R is ejipaaeil thai men
frequent uee of conference caBs,
between some or afi ftegiom. wfll be
made, and a workshop on SJP
prooeaalBgj sasaae wui be tastHnteQ in
RegionalOHloe afr orognnt ttoff
txafuianun HiM asareefly m f»nrth
Caronaa.
eetablishmeiii of a Regional Office SIP
Council. Such a Council would be
composed of Regional Office SIP review
staft chaired on a rotating basis by one
of the offices. The chair would establish
a meeting frmqoencyTlsmMeJeconfereace)
which could be monthly or at some
similar regular period The purpose of
the meetings would be for each Region
to discuss SO* processing activities for
the period, to fctgfciigfc* unusual issues
mat arose, and to identify/resolve
points of contention between Regions.
Headquarters staff-would participate in
"•—' ''Tiiiffcp ir itl i J
to panvkks*s^[»jBmaical expertise.
_^—. »*f seen meetings
wauld*be pM«ed en an electronic
bulletin boam" lor future reference and
guidance.
Other imitatives an being considered
These sneluda cranOon of "policy
hotnnes" astnhtlshrmg Heedouarten
experts in vanoee acogram areas to
provide quick response to Regional
Office imnnrien. As an extension of this
concept. Regional Office "experts" are
expoctad to emerge over time who
would serve the sane fraction for their
colleagues. Alftoean •* f*H scope of
improved conmMcneaOons technkraes
harapt been Myoefmedat this time
{laMnmVBi IDWid anWflaTvC OBttltCCQ §1OCC
commumenaons How julieteTilly shonid
be dyBamse), &PA is aware of the
importance «f Ms hnction and is giving
it high priority.
4. SIP Precaaamg Management System
at of the SIP
r EPA. mcrading
review by both the R«gtan*l Offices and
Hendqenners. is vital to ensure that
implementation plans suLuuiUeil by
State* are pioc essed txpeditiously. As
part of this action to improve SIP
pieueaaiBg wtthin tfA. the management
system-is being revised to monitor the
processing of implementation plan
revisions under the changes described
today. A basic goal of mis revised
management system is to ensure an
appropriate degree of consistency
between all reviewers in interpreting
and tmplemeni:nnj the SIP processing
guidance and nir quality management
program policy. The management
system wiB aiio evaluate the reviewers'
confonnance to established review
procedures, IB addition, an outgrowth of
the managemeiR syetom will be the
identification of Issues and problems in
unplemeraatianpbouiidance, policies.
and procedure* Bt&Pt& Headquarters
and Regional OOeM. WKb such
information. EMI can ansuze the timely
update of pottcy and processing
guidance.
-------
2224
Federal Ihejielnr / VoL 54. Fte. 12 / Thanday. January It. M» / Notices
The management program is designed
to eniure the adequacy of the processing
procedure! and to facilitate the review
of implementation plans. Identification
of program deficiencies is not intended
to result in recrimuiations but to
improve the process. The effect of the
improved management program should
be increased public confidence in the air
quality management program, and more
certainty on the part of States and
industry regarding the operation of the
SIP review process.
Audits
A key feature of the management
system is the development of an audit
program. The audit piugran to designed
to review actions, generally after
processing is complete and final action
is taken, to determine whether
processing procedures and program
policy have been adhered to during the
review of the implementation plan. It is
not the intent of the management
program to review, or second-guess,
every SIP action that is processed within
EPA.
The frequency of program audits will
be based upon several factors. One
factor is the total number of
implementation plan revisions
processed by a particular office. This is
important because significant processing
deviations are more likety to result
when the number of actions is high. A
second factor to be considered in
determining the frequency of the audit
cycle Is the type of actions processed—
newly implemented programs with a
significant level of complexity should
receive greater attention than programs
which are well established. Another
element in determining the frequency of
audits will be the prior performance o
the reviewing office. Those that have
demonstrated problems should receive
greater attention and thus more frequent
audit than areas with demonstrated
capabilities. As a corollary, in addition
to examining performance of specific
organizations, the audit program will
identify program areas where several
organizations are demonstrating a lack
of understanding, indicating the possible
need for unproved guidance.
The audit program must be designed
such that the interval between audits is
not too lengthy. With reasonable
frequency, the management system must
be able to obtain an overview of the
basic program and the personnel
responsible for implementing the
program. Such a -review is necessary to
ensure that the skills and knowledge to
effectively process all types of plan
revisions are maintained: this is
necessary even where few and/or
routine plan revisions are received.
The audit program will employ two
basic sources of information: (1) Records
and documents submitted or prepared
as part of the formal submittaJ and
review process: and (2) discussions with
the individuals in Headquarters and/or
Regional Offices involved with
processing of plans in general and
associated with specific SIP actions.
Through review of the processing
documentation and the implementation
plan submittaL the auditor can
determine independently the procedures
followed, how specific policies wen
applied ooofdnaaoce to national policy
and guidance, etc. Dbcnssiene with the
individual raeponslbiefgr the processing
and review of SIP actions wJB provide
information related to deflctoiUes that
exist in the processing guidance.
difficulties in conforming to program
policy for specific actions, and elements
misaiag from EPA guidance that should
receive attention at the national level
The Regional Offices wfll need to
maintain-the hill documentation and
history of each SIP action processed. In
the majority of cases this will not result
in any extra work load since moat of
this information is contained in the files
already maintained by the appropriate
Regional Office. In addition to the
currently maintained manual records.
EPA intends to expand, aa operational
microoomputer-based system for
maintaining the status of currently
active implementation plan*. The
current system tracks SIP revisions for
maint^tpiM (QQ status of SIP actions
upon receipt of the package by
Headquarters and contains no
information on plan revisions at the
Regional Office: the system will be
expanded to maintain information on
the status of SIP actions under review
by any EPA organizational element This
will permit the rapid transfer of
information between Regional Offices
and Headquarters on the status of all
actions which are active within EPA.
There are two types of audit functions
anticipated by this program—internal
and external. An internal program audit
involves the routine audit of the SIP
review process by those individuals
within the reviewing organization who
are directly responsible for the review of
the SIP. This internal audit will occur at
both Headquarters and the Regional
Offices on an ongoing basis. Rather than
mandate the procedures to be used by
each Regional Office and appropriate
Headquarters office for the internal
audit, each office will establish audit
procedures that are appropriate based
upon resources, capabilities, and the
nature of SB? revisions processed. For
example, it may consist of senior staff
familiar with the program requirements
reviewing a selected-portion of the
revisions processed try the SIP review
staff. The Regional Offices will focus
their internal audit efforts on those
actions to be signed by the Regional
Administrators.
The external audit is designed to
obtain an independent overview of the
program. This audit will be conducted
by Headquarters individuals with
experience ia SIP review but who do not
take aa acttMjeia ia the process. The
external aae»*jB address all facets of
the pnigiasi lertBilliiu adherence to
IMHI eising pserttfiirsi interpretation of
EPA policy, tist tatpact of air quality
management aad the effectiveness of
the revised procedures in expediting the
prenesalnf of'State submissions. In
addition. Headquarters offices will be
audited oa how well new policy is
distributed and explained to the
Regional Offices. Audit guidelines will
be developed aad distributed to all
offices responsible for SIP review,
identifying in advance the ma for points
of emphasis ia the audit program. The
external audit will examine not only
program deficiencies but also the
positive-aspects of implementation of
the program, providing a report both on
how program deficiencies can be
improved aad aa bow maovative
soiutioas have increased the efficiency
of the SIP review process. An important
output of the audit prugiem is the
identification of training needs for those
individuals responsible for SIP review.
Reoordkeepiag System
As previously mentioned. EPA has
implemented a microcomputer-based
data system for tracking toe progress of
SIPs during Headquarters review. This
system. "SIP TRAX" currently tracks
specific milestones of the Headquarters
review process. These include:
(1) When the revision was received in
Headquarters;
(2) Date of staff concurrence:
(3) Date of approval by the Assistant
Administrator/ Administrator;
(4) Date published in the Federal
Register.
The system is accessible by the
Regional Offices through a
microcomputer-based bulletin board
system and is updated on a weekly
basis. SIP TRAX will be expanded to
incorporate the initial phases of SIP
review that occur in the Regional
Offices before eke implementation plan
is forwarded to-Keadquarten for
review. This i» imports*! since the
process el tianelai uf nfTilai liiim
responsibilities wifl result ia many SIP
-------
Neticet
S25
action* not coming to Headquarter* «nd
thus would.mt.be entered in • system
tracking only Headquarter* review.
There are several reasons for
maintaining such a system. IB ofdtr for
the various Headquartaca- office*
responsible for program development to
mainuin a sense of the major SIP issue*
being addressed, a method of
summarizing SIP action* processed It
neceeaary. The devalopment of a data
bate lyatem that can provide such
information will reduce the resource
burden of soliciting input from Regional
Office*. In addition. EPA I* frequently
atked about the specific itatu* of
implementation plan revision* In
proce** by the public. Industries, and
member* of Congress. Since the system
will be regularly updated to contain
information on all SIP action*, the data
ba*e will be more complete and
accurate than one *olely relying on
Regional Office*' response* to periodic
inquiries. Overall an integrated system
will allow EPA to determine sure
accurately the atatu* of. and Urn* and
resource commitment* allocated to. SIP
review wherever it ocean.
In addition to the basic program
overaight an important function of the
audit will be to identify f
cira
iti
ng guide
i hi
ittonstn
Tbeee processing deitaUnee will be
CXJUDBMd (TOO to*} pCHpvKtl W OI tsM
potential impact of the action. The
identification of processing deviation*
could result in varying response*.
ranging from simple improvement* in
the review proce** to tho*e few ca*e*
expected where the State may be
required to submit a corrective SIP
action to resolve a deficiency. The
specific corrective action to be taken
will be determined on a ca*e-by-ca*e
basis.
The majority of implementation plan
revisions submitted by State* are
associated with source specific action*.
are administrative in nature, or are in
direct response to EPA mandate* to
incorporate explicit regulatory
provisions or language. In most case*.
the environmental effect of SIP
processing deviation* are expected to be
insignificant, and thus there •hould'be
no need to require the State to tubmit
additional information or to make
further revision* to a ipecific rubmittaL
However, for recurring problem*, the
State will be notified that a particular
aipect of submitting implementation
plan revision* ahould be •»~<<*~< to
avoid the problem* lilsnfiisrl
Mere important devi an en* may
include action* where the potential
exist* for mtftOttamt environmental
impact At parrioualy stated. SIP
actions that are Ukaty to effect the
program OB • national basi* will receive
full EPA review and decision by the
Administrator. Asa result the actual
number iifainiimiimilallj •*••«'•••*
deviation* *hould be ttmited.
adit proceed
' such sitaetii
desigMd to *eanlh>aach situations so
that appropeiato aottons to limit the
impact can be taken promptly, n theee
cese*. corrective action will depead on
the problem. For proposed action*. EPA
may need to withdraw the proposal and
reverse the propoeed approval/
disapproval action. Alternatively, when
EPA ha» folly prooaeeed and approved •
rirlilnn tn tai ImplsaainTattin plan It •
may be necessary to iaaoe a aotic* of
SIP daficiency requiring the State to
submit a revision to correct the
identi* A problem. The response to each
ease * ,* be deaded based moon the
specific merits of me ptaa MviaioB
involved and the potential
environmental impact
Admittistrattve
the docket la an i
oompietafikofalU ._
oonaidand by EPA in the development
of tbttet 8V. BPeMflMteM cbgMLflg«% TlM
docket la a dynanaa Sfe *eeaoae .. .
material la added throughout the notice
preparation afta :ceajMneBt piooa**. Tjks>
docketing ijalaa • Intended te^afiew
member* of the public and mduatrtaa
tavohred to tdanttfy and locale
document* so that they can effectively
participate in the process. Along with
the itatement of ba*i* and purpose of
the SIP processing change* and EPA
responses to mjntflMm comments, the
contents of the docket except for
interegency review materials, will serve
a* the record in case of Judicial review
(see dean Air Act section 307(dX7XA).
42 U.S.C TBOndUTM A)).
The effective date of these changes is
January 16.1900-
Section 317(a) of the dean Air Act 42
U5.C 78l7(a). states that economic
impact assessment* an required for
revisions to atandard* or regulation*
when the Administrator determine* *uch
revision* to be substantial. The change*
described today do not change the
substantive requirement* for preparing
and lubmitting an adequate SIP
package. No increase in the cost a* a
result of complying with the changes
described today 1* expected; moreover.
the monitoring, racordkaeping. and
reporting requirement* have bean
determined to be insubstantial Because
the expected economic effect of the
change* is not substantial, no detailed
Mot has been
The information collection
requirements of these change* are
considered to be no different than those
currently required by the dean Air Act
and EPA procedure*. Thu*. the public
reporting burden resulting from today'*
notice is estimated to be unchanged
from existing requirements. The public
is invited to send comments regarding
the burden estimate or other aspect of
~ . including
any burden, to
rthe following: Chief.
Branch. PM-223. U.S
Buvfceamautal Protection Agency. 401 M
Stteat SW, Washington. DC 20400; and
to (he Office of Information and
Regulatory Affairs, Office of
Management and Budget Washington.
DC aoatt. marked "Attention: Desk
Officer for EPA.-
Undar Executive Order 12291. EPA i*
required to judge whether an action is
"major" and therefore subject to the
requirement of a regulatory impact
anaryaia (RIA). The Agency ha*
determined that me SIP processing
change* anaounosd today would result
in none of tne •»!-<**-•» advene
economic effect* sat forth in section l(b)
of the Order eagreund* tor a finding of
"major." DM Asjeney has. therefore,
concluded that thia action i* not a
"makW acttoa-inder Executive Order
Thw-notioewaJi submitted to OMB for
review ormslstmt with section 9O7(d) of
the dean Air Act A copy of the draft
notice a* submitted to OMB. any
document* eccompaayiag the draft any
written comment received from other
agencies (including OMB), and any
written response* to those comment*
have been included in the docket
The Regulatory Flexibility Act of 1980.
S US.C 601-612. require* the
identification of potentially adverse
impact* of Federal action* upon small
business entities. The act require* the
completion of a regulatory flexibility
analysis for every action unless the
Administrator certifies that the action
will not have a aignificant economic
impact on a substantial number of small
entitle*. For reasons described above. I
hereby certify that the final rule will not
have a significant economic impact on a
•ubitantial naaaber of small entitle*.
LesM.
IPK Doe. ana»TPH»di-u-ta: «««•}
-------
Environmental Impact Statement*;
Availability
ResfKHatble Agency: Office of Federal
Activities. General InforaMboa (202)
382-5076 or (202) 382-5075.
Availability of Environmental Impact
Statements Filed January B. 1989
Through January 13. U8B Pursuant to 40
CFR 1506.8.
OS No. OBOQM. Final. COE. TK
Applewhite Dem/Reservoir and Leon
Creek Diversion Den/Lake Water
Supply Project Penoit Application.
bnpknentatioB. Section «B4 and M
Permits. Bexmr County. TX. Doe:
Febraory 21. 1988, Contact Timothy L
Tandy (U7) 39+4086.
EIS No. 890005. HMet. ATS. CA.
EMocado Netwnol Ferest Land end
Resoajce VUnwfemem Plan. AMOOOC,
Alpine. Eldorado and Placer Couufes.
CA. Due: FeeraenrZL 1MB. Contact:
jeraM R Hutekins
7565. AoantionBi vsBTSBjaavB eai B^A a
Regulatory f4e((Btnrtio8t.BBBJBOt can be
Kiru ar;
address a«si
Thomas K*Uy,
Director. Office of SOnOiiifc m«/
Regulation*.
|FR Doe. 8B-12at Pllad l-lC-Ok 8:45 am|
FE00UL4
REVIEW
: Federal Mine5alety and
Herbh Review CbmmUsioB.
Commraeioti has adopted
a new method for talndatirn tbe rate of
interest spyrnabte to •monettry vwvrda
in dncnminatjon and compensation
cases.
Dims: This action is effective for
Commission cases in which decisions
are rawed after November 28. 19B8.
AOOWSSCK Requests tor copies of the
Commission'* decision stoowld be
addressed to Richard L Baker,
Executive Director, Federal Mine Safety
and Health Review Commissian. 1730 K
Street NW.. Bth Floor. Washington. DC
20000.
KM WMTMBft USFOSJaUTlOU CONTACT:
L Joseph Feirara. General CouaseL
Office of the General Counsel 1730 X
Street TTW. 6fh Floor. Washington. DC
20000. telephone; 202-053-8610 (202-466-
2673 for TDD Relay). These aw not toll-
free numbers.
rur wrmmfmnn Tin
Federal fcfcae Saiaty Md Health SUview
Commtssum aai adopted a new malhod
for calculatiag toe rale of interest
applicable to noaetaqr awards to
prevailing cnrnplaiBants in
discrimination endtiompenaaUon cases
•mini oder seatens tQ«e) and 111
re»pect:-«ly of the Federal Mine Safety
and Heaioi Act of MT7. This action was
taken Oiiac.il. ZZJ<. UMWA v.
Chnchheld Cool Co.. 10 FMSHRC 1493
(November 28. ISOi). pet for review
filed. No. 0B-4e73 {DC. Gr. Dec. M.
1988).
Section JTJB|d»f the Mine Act 30
U.S.C nri[iTmis>ni1i discrimination
against ntaeinfr engaging in protected
si Iliiiliin •irieafaii Mine Act Under
sections 10((e) {£) and (3). a siiner who
haa beea {onod M nave bean
discruHMted againat is statutorily
en«iad-«a» approeriete nalieL iaxduding
back pay and imarnsl 30 U££, _
and (3). Section 111 of Ike Mine Act 30
U.S.C. 821. leajeiras an operator to pay
cerieiB anoesiBS ex conpeneaAon to
miners wtwhea* beat idled by a
withdrawal order isee*4 by 1be
Secretary «f Labor, te •^•fioatiow
arising under seUEuit Itl. the
Commission also awaMb ialereat OB
back pay awards. CkacttfieJd Coal Co.
supra.
In the past laa CasBauaion!* ca4e of
intecaal DA aaeoolavy •Awards in
discriniaatieai jwaceediaga. aa
annouocae) in ffufirtoij «e behoifof
Bailer^- Avluitmm rmtmma Co, *
FMSHRC 20»Z(Bwaesaber tBBSi was
based om she "•atHMed piisa* »se"
announced aeasvaniaejsy by Bta
Internal Rewme Service rUc?1 aoder
formeriy appliceMe wevsiona of 28 U.S.C
6821 for parpens ef fixing interest on
overpayment and wndcrpgymwrt of
taxes. However, as trf January 1, 1987. as
a result of fne Tax Reform Act of 190B*
Pub. L 99-514. lOOStat 2005 (1908). the
IRS discontinued Its use of the "adjusted
prime rate" and now uses the "short-
term Federal rate" as the rate of interest
on overpayment and underpayment of
taxes. 26 U-S.C-A. 8821 (Supp. 1S68).1
i Mm! IM ' u 4MimM4 by
MM S»dTHr> «rf aw Tnuvy k>Md a* tb« average
a*riw' ytrU on ouidtndinf narfcet»W« obligations
of MIC UmM 9IM« mfh ranmim( pmwJs to
maturity oT rtMtjnra or IM
' le intimmtri far Ik* bet
teok ealendtr gwMrud epplie* dunaf the Hni
rale |peid by ll
as uicx eta M is**.
-------
>*
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
M 27 IQoq PN HO-88-06-27-095
MEMORANDUM
SUBJECT: "Grandfatherlng" of Requirements Jjor Pending SIP Revisions
FROM: Gerald A. Emison, Direct
Office of A1r Quality ?Ttnni ng~and Standards (MO-10)
TO: Director, Air Management Division
Regions I. Ill, IX
Director, Air and Waste Management Division
Region II
Director, Air, Pesticides and Toxics Division
Region IV, VI
Director, Air and Radiation Division
Region V
Director, Air and Toxics Division
Region VII, VIII, X
Recommendations for Improving SIP processing generally at EPA were
presented to the Deputy Administrator and approved fully. It is the
Intention of the Agency's management that the recommendations be imple-
mented promptly. This is being done by an Intra-Agency Work Group
composed of Headquarters and Regional Office persons. This memorandum
provides guidance on applying previously applicable standards to pending
SIP revisions where the relevant requirements have changed since the
state prepared the SIP submittal (i.e., "grandfathering").
In a number of cases, States have submitted SIP packages that were
consistent with the EPA "requirements" (i.e., standards, regulations,
policies, legal interpretations, guidances, and clarifications) in effect
at the time. As a result of processing delays and policy evolution, the
applicable requirements were revised before the proposed SIP change
received EPA approval. When the revised requirements did not contain an
appropriate grandfathering provision (e.g., a provision allowing SIP
packages to be acted upon based on the requirements, in effect at the time
of State adoption), SIP reviewers assumed that the appropriate action was
to disapprove the SIP revision and/or return it to the State for changes.
Not only can this delay rulemaking, but It also may be inequitable
and serve as an irritant to effective EPA/State/local agency cooperation.
Moreover, such action usually results in an ineffective use of resources
by the State and EPA. Consequently, we are today extending the concept
-------
of grandfathering contained in existing guidance (e.g., for modeling), as
described in the enclosure. It is the intent of EPA management that
grandfather!ng be applied where it is warranted and appropriate. Today's
guidance was developed in conjunction with the Regional Offices and the
Office of General Counsel. We believe that it deals with the equity
issue, will not have a noticeable environmental Impact overall, will
strengthen the Agency's working relationship with its State and local
partners, and does not conflict with either the Clean Air Act or the
Administrative Procedures Act.
Attachment
cc: Air Branch Chiefs, Regions I-X
Regional Counsel (Air Branch Chiefs), Regions I-X
Don Clay
Alan Eckert
Mike Alushin
John Seitz
Robert Cahill
John Calcagni
Bob Wayland
Oick Wilson
Bill Laxton
Charles Gray
-------
bcc: Work Group Members
Jack Farmer
Rich Osslas
Peter Wyckoff
Bern Steigerwald
-------
GUIDANCE ON GRANDFATHER ING OF
REQUIREMENTS FOR PENDING SIP REVISIONS
June 1988
Introduction
EPA is expanding its guidance on how to apply previously
applicable requirements in two general situations where the issue may
arise: (1) when new or newly revised "requirements" (i.e., standards,
regulations, policies, legal interpretations, guidances, or clarifications)
for SIPs are issued by the Agency and (2) when rulemaking action is taken on
a "SIP revision" (i.e., a State-specific EPA rulemaking under
the Clean Air Act). This guidance will be in effect for complete SIP
revisions submitted to EPA and for requirements issued and/or revised by
EPA after today. In general, s 1 SIP revisions submitted before today
will continue to be reviewed ba=>ed on EPA's current policy, which is to
decide each SIP revision based on the requirements in existence at the
time of EPA's rulemaking.
Grandfathering is not to be considered mandatory or automatic.
In determining whether grandfathering should apply, and what the appropriate
date should be, the decision maker should keep in mind the thrust of this
guidance, i.e., to' honor good faith effort on the part of the State/local
agency submitting the revision, balancing equity with other considerations.
This guidance expressly is not intended as a vehicle to allow circumvention
of tighter requirements or to facilitate the-avoidance of difficult
decisions.
Legal Background
Whenever a new requirement is established by Congress (via statute)
or by EPA (via regulation or policy), it becomes generally applicable
unless the authority establishing the requirement provides otherwise.
When Congress enacts a new statute, it applies to all matters then pending
before an agency unless Congress specifically provides otherwise in the
statute. The Agency has no authority to grandfather any matter from the
new statutory requirements without explicit provisions in the statute.
i
When EPA issues new regulations, they are also generally applicable
unless the regulations themselves include grandfathering provisions. If
grandfathering provisions are not explicit in the regulations and absent
a contrary interpretation by the Agency, courts will apply the new rules
to matters pending before the Agency. Thorpe v. Housing Authority of
-------
Durham. 393 U.S. 268 (1969). However, an agency does have some
flexibility to provide grandfathering provisions in new regulations.
Generally, such provisions are appropriate where they meet a four-part
test. First, the new rule represents an abrupt departure from well-
established practice. Second, affected parties have relied on the
old rule. Third, the new rule Imposes a large burden on those affected.
Fourth, there 1s no strong statutory Interest 1n applying the new rule
generally. Sierra Club v. EPA. 719 F.2d 436 (D.C. C1r. 1982), cert. den.
468 U.S. 1204 (1984).In the past, EPA has generally Included explicit
grandfathering provisions in new regulations where appropriate. Under
this guidance, EPA will affirmatively consider the need for grandfathering
provisions in all new regulations.
An agency has very broad authority to decide how and when to issue
new guidance, since as a purely legal matter guidance is not absolutely
binding on subsequent proceedings. Pacific Gas and Electric Co. v. FPC,
506 F.2d 33 (D.C. C1r. 1974). Historically, EPA has provided "only limited
grandfathering from revised guidance. This document establishes a detailed
framework for grandfathering pending SIP revisions from all future EPA
requirements.
The Guidance
The following will be considered 1n deciding whether to apply grand-
fathering to an Individual SIP revision and in developing appropriate
grandfathering provisions for each 'EPA SIP requirement:
A. General Guidance: A SIP revision generally will remain subject to the
requirements in effect either (a) on the date that the State adopts the
SIP revision (provided a complete, fully adopted revision is submitted
promptly, generally within 60 days of the adoption), or (b) on the date
that the USEPA proposes the SIP revision under the parallel processing
procedure. However, in specific cases, EPA will apply different dates as
appropriate (e.g., see memorandum, J. TUvart to Regional Modeling
Contacts, January 2, 1985, concerning grandfathering modeling requirements).
A discussion of what constitutes a complete, fully adopted SIP revision is
found in the memorandum, G. Enrison to Regional Air Directors, March 18,
1988.
B. There are certain exceptions to the general grandfathering guidance:
1. Grandfathering should not be considered if the State has not acted
in good faith in preparing and submitting a SIP revision. For example,
an incomplete revision hurriedly submitted to avoid coverage under a new or
revised EPA requirement should not be grandfathered. Similarly, grand-
fathering should not be considered when a SIP revision is submitted
-------
substantially in excess of 60 days after State adoption as specified in
paragrapn A.
2. Grandfathering of SIP revisions may not be appropriate or possible
when a court ruling has explicitly changed a current federal requirement
or has convinced EPA that a previous requirement Is no longer supportable.
Under these circumstances, the Office of General Counsel (OGC), in consul-
tation with the Office of Enforcement and Compliance Monitoring (OECM)
and the Office of Air and Radiation (OAR), will define the limits of
the court's decision and how It may affect EPA's requirements and SIP
revisions, Including previously approved SIP revisions, pending SIP
revisions, and SIP revisions which are to be submitted in the future.
OGC will make Its best effort to issue such an opinion within 60 days
from the date of the court's decision.
Based on this analysis, OAR will Issue a decision on the appropri-
ateness of grandfather!ng and the continued use of the pre-court ruling
requirement on pending and future SIP revisions. This decision will
generally be issued within 90 days from the date of the court's decision.
OAR will also issue a decision on the appropriate action to take, e.g.,
notice of SIP deficiency or "no action" needed at this time, on previously
approved SIP revisions.
3. The Administrator may determine that grandfathering is not
appropriate under a certain new policy. He could conclude that the old
policy was ill-founded, or simply not wish to grandfather due to the importance
of the new policy to EPA's programs. Where a new policy issued by
the Administrator specifically states that grandfathering is not appro-
priate or establishes a particular grandfathering provision that differs
from this guidance, such provisions would of course supersede this guidance.
4. Grandfathering of a particular SIP revision or requirement is
not appropriate if a decision to grandfather it would have an imminent
and substantial adverse environmental impact or could permanently foreclose
the continued use of the provisions and/or sanctions of Part 0 of the
Clean Air Act, e.g., changes in Section 107 designations or the full
approval of Part 0 plans, both of which may foreclose the future use of
sanctions to assure the correction of any deficiency arising from the
change in EPA requirements.
5. Action on a SIP revision which comports with the revised require-
ments but not the original requirements may be based on the revised
requirements.
-------
6. If a SIP revision compiles with the original but not the
revised requirements, and such lack of compliance renders the SIP as a
whole substantially inadequate to assure the attainment and maintenance
of the National Ambient Air Quality Standards (NAAQS) under the revised
requirements, an Individual analysis of the appropriateness of grand-
fathering under the four-part test established 1n the Sierra Club case
discussed above under Legal Background oust be conducted. If the analysis
concludes that grandfathering of the particular SIP revision 1s appropriate,
action may be based on the original requirements. In such an event,
however, additional actions may be necessary depending upon the nature of
the SIP revision being considered.
a. For SIP revisions (e.g., variances and Interim emission
limits) which would have an effective lifetime of 2 years or less from
the date of EPA final rulemaking, no additional action will generally be
taken, because of the length of time 1t would take for the State and EPA
to change the action to comport with the revised requirements. Any
subsequent requests for the continuation of grandfathering (i.e., beyond
the effective lifetime of the original SIP revision) should be rejected.
b. For SIP revisions which would otherwise have an effective
lifetime of greater than 2 years, other rulemaking actions will be necessary
to assure that the SIP ultimately comports with the revised requirements.
(1) Elements 1n plans that have been "conditionally"
approved will be approved subject to the further condition that the
plan as a whole be corrected as necessary to assure full compliance with
all requirements of the Clean Air Act. For a discussion of EPA's original
policy on conditional approval, see 44 FR 20372 (April 4, 1979), 44 FR
38583 (July 2, 1979) and 44 FR 67182 (November 23, 1979).
(11) Elements in fully approved plans will be approved with
the simultaneous issuance of a CAA Section 110(a)(2)(H) notice of deficiency.
Under either of these circumstances, the approval of the particular SIP
revision should contain a sunset provision that terminates the effectiveness
of the approval within a predetermined period, generally 2 years. In addi-
tion, the Region should make an affirmative effort to assure that the
timeframe (generally 2 years) for complete, fully adopted State rulemaking
action involved with either the notice of SIP deficiency or conditional
approval is strictly adhered to. If a State does not adhere to this
schedule, the Region will initiate appropriate steps to ensure ultimate
compliance, e.g., performance-based grant actions, sanctions, and EPA
promulgations.
-------
7. Certain classes of changes are only indirectly related to
attainment and maintenance of national ambient air quality standards.
Such changes may involve PSD/NSR rules, stack height provisions, permit
fees and similar generic requirements which are clearly not intended to
be permanently grandfathered. Changes of this type are to be handled as
described in paragraph 6 above.
C. All new requirements issued by OAR or OGC will address their impact
on SIP revisions previously approved or pending, and SIP revisions to be
submitted in the future. New requirements will contain provisions incor-
porating the general grandfathering guidance (paragraph A above) whenever
appropriate and possible. Generally, changes In EPA's requirements will
have effective dates which are 60 days from the date of signature to allow
States to adjust their pending rulemaking actions before they are finally
adopted and submitted. Longer effective dates should be used when the
changed requirements affect fundamental, long-term air quality strategy
development tools and the requirements of the change are resource inten-
sive.
D. SIP revisions framed to meet major requirements currently being recon-
sidered by EPA or currently under litigation should proceed and will not
be held back from rulemaking until the issues are decided. SIP revisions
approved under these circumstances will be addressed, if necessary, as
described in paragraph B(6)(b) above for revised EPA SIP requirements and
by paragraph 8(2) for requirements being changed because of court decisions,
E. Staff personnel making grandfathering decisions should coordinate with
Offices of Regional Counsel or OGC on application of this guidance as appro-
priate, especially in connection with the analysis required under paragraph
8(6) above.
F. Each Federal Register notice for action on a SIP revision will state
the rationale for wnich requirements were applied.
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
DATE
JMN12 '380
SUBJECT: Information Required in Federal Register Packages
FROM: Richard G. Rhoads, Director.
Control Programs Development Division (MD-15)
TO; Director, Air and Hazardous Materials Division, Regions I-V, and VII
An April 29, 1980 memo from Halt Barber asked that all SIP
revisions dealing with SO- relaxations be submitted through the "special
action" procedures. " e purpose of that request was to allow the Agency
to more carefully scrutinize the nature of each relaxation and its
multi-regional impact. A copy of this memo is attached.
In order to allow us to assess the relative impact of each S0?
relaxation more accurately, I ask that the following information be
included in each action memo.
1. Plant name and location.
2. Size of the facility (including the number of boilers) expressed
in megawatts or Btu/hour firing capacity (design).
3. Amount, type, and sulfur content of actual fuel combusted
during the previous year.
4. The revised SOp emission limit, the existing SIP limit,
and the corresponding averaging times for these limits.
5.
The "paper" as well as actual increase or decrease in emissions,
The calculations involved in determining the increase of emissions
should assume status quo operating conditions of the source. There is
no need to consider increased or decreased utilization of the source's
capacity.
In addition, because of the ongoing development of policy on the
issue of good engineering practice (GEP) stack height, all Federal
Register packages addressing the stack height issue should be suomitted
through the "special action" procedures. Furthermore, I ask that
your staff infonn Bob Schell (629-5365) of my staff of any Federal
Register packages involving stack -height increases which are currently
under development and projected to be forwarded for 14-day review
within the next few weeks.
-------
The following information should be included in each action memo
which involves increased stack height.
1. Height of the old stack as well as that of the new.
2. If GEP stack height is determined, the methodo.logy used to
determine it, and the stack height considered to be GEP.
Your cooperation and assistance in dealing with these sensitive
issues are greatly appreciated.
Attachment
cc: David Hawkins
Walt Barber
Mike Oames
Ed Reich
-------
REFERENCES FOR SECTION 7.4
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'^>-
r - UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
' ' USHINGTON.D.C. 20*60
OFF1CI OF
A.KD I
SUBJECT: Improving New Source Review (NSR) Implementation
FRC*: J. Craig Potter
Assistant Administrator
for Air and Radiation (ANR-443).
TO: Recio.-cl Administrator
Recicns I-X
1956, ; established a special task force to address
growing concerns about the consistency and certainty of permits issued
_-.ier tr.e Clear. Air Act's prevention of significant deterioration and
r.cnsttainment area NSR programs. Sased on the findings and reccnnnen cat ions
cf tne tas* force, I am today establishing certain program initiatives
ces:cr;ec zc irprove the timeliness, 'certainty, and effectiveness of these
A crest ceal of effort will be required to overcome the probleros
-T.icr. have developed, cot it is my belief that these problems", with your
f.ll cooperation anc" assistance, can be resolved so that these essential
=1: management procrajts can fulfill their intended roles. Therefore, I
_rce eecr. cf you to provide the maximum priority and resource cosTraitroents
svaiiarle to tne tas<.
The o.tstar.cinc concern we now face in these programs is inaoecuate
irplementaticn. l^ne Office cf Air and Radiation intends to apply its
resource ccroiimer.ts so as to enhance its ability to provide technical
support a,nd gjicance, training, workshops, auditing, and enforcement
s.ppcrt to the Regions and delegated programs. The Regional Offices roast
~.s
-------
- 2 -
The fcLlo-inc is £ list cf the specific program initiatives I am
-.ererv institutinc re enne aocct improvements in NS?. implementation:
Tracnnc Perr.it Actions—Initially and until sue.-, time as permit
quality car. D* ess.red, : a.7. requiring that-eecr. Regional Office establish
("if net already in place) a program to ensure a timely and comprehensive
review cf all State and local agency-issued major source permits and
certain rinor source perr^s. implementation cf the program will be made
pert of the Regional Office ^ansgsnent System and will require the "real
time" exchange and"review of ir.formation oetween the Regional Off ice'and
the State and local agencies when a key milestone is reached during the
permitting process.
Effective communication between the permitting agency and the Regional
Office is essential to improving program implementation. Therefore, the
Regional Offices •-•in need tc ensure'that State and local permitting
agencies fellow certain notification procedures such as:
- Notify the Regional Office and other affected parties (e.g., the
Federal land ranager if Class I areas are ;jsactec), within a reasonable
time, of tne receipt cf a new major source penrdt application. This can
ts
-------
Planr.inc zz£ Star.dares (CAT: PS) tc start »cr< en tne development cf a
~er~.it review checklist fcr use cy tne Regional Office curing the public
ccmmer.t t>erio-d. 7r>e cnecvlist will alsc be useful tc State and local
acencies" as a tocl for self-audit and to understand what the Environmental
Protection £oe-.cv (EPA) emcnasnes when reviewing a proposed permit.
- Review any response tc comments and the final permit to ensure
t.-.at any outstanding concerns have been resolved satisfactorily.
- Review tne-permit to operate to ensure that it is consistent with
the preconstruction permit.
- Take prompt and appropriate action to deter the issuance or use of
permits wnich fail to meet minimal Federal requirements. I have directed
OAD.PS to work with tne Office of General Counsel and the Office of Enforce-
Tent and Compliance Monitoring to develop guidance for the Regional
C-ffices on the appropriate legal 'mechanisms and procedures for ha,nciing
fi-ficisnt permit actions.
- Tc the extent practicable, prior to permit issuance, review
potential minor permit actions which exempt an otherwise major source or
-edification from a major review (e.g.,"synthetic" minor sources, major
sources netting out cf review, and 99.9 or 249.9 tons per year sources).
Tne rest critical element of these initiatives is the Regional Office
review cf proposed permit actions during the public comment period. The
"":' 1=35 national air audit showed widespread serious permit deficiencies,
many ef which could have oeen corrected without interfering with State
and local agency processing if dealt with by E?A during the public
ccmrent period. By uniformly reviewing all major source permit actions
during the comment period, EPA is able to address deficient reviews or
permits oefcre tne final permit is issued. This net only promotes more
ccnsistency in tne permitting process among the States, but also provides
tne .-.igr.est degree cf certainty to the applicant that the permit will not
-* cnallengec by EPA at a later date. Moreover, if the permit is not
reviewed and comnsnted en prior to issuance, the possibility of successfully
challenging the action is greatly diminished, as is the opportunity to
improve the enforceability cf the permit.
5ACT Determinaticns—Cf all tne KSR processes, BACT (and LAER)
determinations are pernaps the most misunderstood'and the least correctly
appii'.4,. The BACT alternatives, if presented by the applicant at all,
are often poorly documented or biased to achieve the decision the applicant
desires.
To bring consistency to the BACT process, I have authorized OAQPS to
proceed with developing specific guidance on the use cf the "top-down'
accroach to 5ACT. The fi
fcr a similar or icentica
t-.at t.-.is level of centre
st step in this approach is to Determine/ for
the emission source in cu stion, the most stringent control available
source or source category. If it can be shown
is technically or economically infeasible for
-------
- 4 -
t~.e source :.r. question, tner. the next mast stringent level cf control is
•determined and sizu.larly evaluated. This pro-cess continues until tne
S-.rr level under consideration cannot be eliminated by ary substantial or
u-.ique technical, envircn.-e-.tal, or econo-r.ic objections. Tnus, tne
"tsp—CD-T." apprcecr. sr.if ts.tne burden cf proof to the applicant, to justify
w.-.y tne proposed source is unable to apply the oest technology available."
:: also differs frcr. ctner processes in that it requires the applicant to
analyze a control technology only if the applicant 'opposes that level of
control; the other processes required a full analysis of all possible
types and levels of. control above the baseline case.
The "top-down" approach is essentially already required for municipal
waste combustors pursuant to the June 22, 1987, Administrator's reraand to
Region IX of the S-Power S.J-.CT decision and the OA3PS June 26, 1967,
"Operational Guidance on Control Technology for New end Modified Municipal
waste Ccrruxstors (MWC's)." It is also currently being successfully
i~le,Tier.ted by rany perr.it ting agencies and some cf tne Regional Offices
for all sources. I rave therefore determined that it should be adopted
across tne board.
In tne interrr., wr.il e OAQPS develops specific guidance on the
"top-dovr." process, I a,- requesting the Regional Office .to apply it to
t.-.eir 5AOT ceterr.inations and to strongly encourage State and local
agencies to do likewise. Moreover, when a State agency proposes as 3ACT
a level cf control tnst appears to be inconsistent with the "tec—cown"
concept, such as failure to adequately consider the more stringent control
options, tne Regional Office is to provide comment to that agency, x
final =\CT deterTsination -r.icn still fails to reflect adequate consideration
:£ tne factors that would have been relevant using a "top^dovn" type cf
analysis snail be considered deficient by EPA.
Trair.inc—Nc ferial training workshops specific to NSH have been
-eld since IrEO. flany State and local agencies, as well as tne Regional
::::ces, nave experienced c nigh rate of~NSS personnel turnover since.
t.-.en. Many cf the casic proclere that are occurring in NSR inpieirentation
car. b-e tracec tc the lac*, r: comprehensive, continuing training for new
Recicnal -Office and State agency*personnel.
To rectify this situation, in ry 1988, OAQPS will work-on developing
-atenals for a ccr.prenensive training program in the form cf. Regional
wcr-o' .j*- State agencies. The NSR experts from
Headquarters or KS?. e>o • •.- from other Regions will be available to assist.
-------
In addition, Regional Offices snocic reserve tne funds necessary* tc
send at least one EPA staff representative to the KSR workshops (for ZPA
rr.ly; neld semiannually at Denver, Colorado (February), and Soutnern Pines,
Ncrtr Caroline (July). Attendance at tnese wcrnsncps plays a viral rcle
in
-------
VvEPA
United States Office of Air Quality
tEnvironmental Protection Planning and Standards
Agency Researcn Triangle Park NC 27711
EPA-450 4-87-007
May 1987
Air
Ambient Monitoring
Guidelines for
Prevention of
Significant
Deterioration (PSD)
RADIAN LIBRARY
RESEARCH TRIANGLE PARK, NC
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NOV 24 TS56
MEMORANDUM
SUBJECT: Need for A Short-term Best Available Control Technology (BACT)
Analysis for the Proposed William A. Zimmer Power Plant
FROM: Gerald A. Emison, Director Original Signed By
Office of Air Quality Planning and Standards (MD-10)
TO: David Kee, Director
Air Management Division, Region V (5AR-26)
This is in response to your November 17, 1986, memorandum, in which
you requested comment on Region V's belief that prevention of significant
deterioration (PSD) permits must contain short-term emission limits to
ensure protection of the applicable national ambient air quality standards
(NAAQS) and PSD increments. I concur with your position and emphasize to
you that this position reflects our current national policy. Consequently,
I recommend that you continue to identify this apparent deficiency to the
Ohio Environmental Protection Agency and seek correction of the draft
permit for the William A. Zimmer Power Plant.
The PSD regulations clearly require that the application of BACT
conform with any applicable standard of performance under 40 CFR Part 60
at a minimum. However, this should not be taken to supersede any additional
limitations as needed to enable the source to demonstrate compliance with
the NAAQS and PSD Increments. In the case of sulfur dioxide (SO?), source
compliance with the 30-day rolling average emission limit under subpart Da
does not adequately demonstrate compliance with the short-term NAAQS and
PSD increments. Consequently, enforceable limits pertaining to the
performance of the flue gas desulfurization system on a short-term basis
must also be established. Note, however, that the short-term limits can
result from either BACT analyses or the need to protect air quality.
Therefore, the short-term Unit could be more stringent than the BACT
limit.
-------
I recognize that the sulfur variability issue tends to complicate
tne setting of short-term SOj emission limits, but such limits must be
defined nevertheless. Continuous emission monitoring data from comparable
sources can be used in order to estimate worst-case short-term $03
emissions that could occur at the plant. The modeling techniques used to
determine compliance with the short-term NAAQS and increments should
employ the enforceable short-term SO? emission limits which the permitting
agency establishes.
i
-------
United States
Environmental Protection
Agency
Office of Air Quality
Planning and Standards
Research Triangle Park NC 27711
EPA-450 4-80-031
November 1 980
Air
r/EPA
Workbook for Estimating
Visibility Impairment
ENVIRONMENTAL PROTECTION
AGENCY
FEB 13 1981
UBRMtt SERVES OffiCE
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park. North Carolina 27711
JUL 5 1988
MEMORANDUM
Subject: Alp Quality Analysis for Prevention of
Significant Deterioration (PSD]
From: Gerald A. Emlson, Dlrectc _
Office of Air Quality PTanning and Standards (MD-10)
To: Thomas J. Maslany, Director
Air Management Division (3AMOO)
Your memorandum of May 9, 1988, pointed out that two different procedures
are currently being used by the Regional Offices In certain PSD permit analyses.
The Inconsistency Involves the question of how to Interpret dispersion modeling
results to determine whether a source will cause -or contribute to a new or
existing violation of a national ambient air quality standard (NAAQS) or PSD
Increment. This memorandum serves to resolve the Inconsistency by reaffirming
previous Office of A1r Quality Planning and Standards guidance provided 1n a
December 1980 policy memorandum (attached).
As you know, the regulations for PSD stipulate that approval to construct
cannot be granted to a proposed new major source or major modification 1f 1t
would cause or contribute to a NAAQS or Increment violation. Historically, the
Environmental Protection Agency's (EPA's) position has been that a PSD source
will not be considered to cause or contribute to a predicted NAAQS or Increment
violation 1f the source's estimated air quality Impact Is Insignificant (I.e.,
at or below defined de mlnlmls levels). In recent years, two approaches have
been used to determine 1f a source would "significantly" (40 CFR 51.165(b)
defines significant) cause or contribute to a violation. The first 1s where a
proposed source would automatically be considered to cause or contribute to any
modeled violation that would occur within Its Impact area. In this approach,
the source's Impact 1s modeled and a closed circle Is drawn around the source,
with a radius equal to the farthest distance from the source at which a
significant Impact 1s projected. If, upon consideration of both proposed and
existing emissions contributions, modeling predicts a violation of either a
NAAQS or an Increment anywhere within this Impact area, the source (as proposed)
would not be granted a permit. The permit would be denied, even If the source's
1mpa<** was not significant at the predicted site of the violation during the
violation period. You have Indicated that this Is the approach you currently
use.
-------
-2-
The second approach similarly projects air quality concentrations
throughout the proposed source's Impact area, but does not automatically
assume that the proposed source would cause.or contribute to a predicted NAAQS
or Increment violation. Instead, the analysis 1s carried one step further in
the event that a modeled violation 1s predicted. The additional step deter-
mines whether the emissions from the proposed source will have a significant
ambient Impact at the point of the modeled NAAQS or Increment violation when
the violation Is predicted to occur.? If It can be demonstrated that the
proposed source's Impact Is not "significant" In a spatial and temporal sense,
then the source may receive a PSO permit. This approach 1s currently being
used by Region V and several other Regional Offices, and 1s the approach that
you recomnend as the standard approach for completing the PSO air quality
analysis.
In discussing this matter with members of my staff from the Source
Receptor Analysis Branch (SRAB) and the Noncrlterla Pollutant Programs Branch
(NPPB), 1t appears that different guidance has been provided, resulting 1n the
two separate approaches Just summarized. He have examined the history and
precedents which have been set concerning this Issue. I also understand that
this Issue was discussed extensively at the Nay 17-20, 1988 Regional Office/
State Modelers Workshop, and that a consensus favored the approach being used
by Region V and several other Regions. Based on this Input, as well as your
own recommendation, I believe the most appropriate course of action to follow
1s the second approach which considers the significant Impact of the source 1n
a way that Is spatially and temporally consistent with the predicted violations.
By following the second approach, three possible outcomes could occur:
(a) First, dispersion modeling may show that no violation of a NAAQS or
PSO Increment will occur In the Impact area of the proposed source. In this
case, a permit may be Issued and no further action 1s required.
(b) Second, a modeled violation of a NAAQS or PSO Increment may be
predicted within the Impact area, but, upon further analysis, It 1s determined
that the proposed source will not have a significant Impact (I.e., will not be
above de minlmis levels) at the point and time of the modeled violation.
When this occurs, the proposed source may be Issued a permit (even when a new
violation would result from Its Insignificant Impact), but the State must
also take the appropriate steps to substantiate the NAAQS or Increment viola-
tion and begin to correct It through the State Implementation plan (SIP).
The EPA Regional Offices' role In this process should be to establish with
the State agency a timetable for further analysis and/or corrective action
leading to a SIP revision, where necessary. Additionally, the Regional
Office should seriously consider a notice of SIP deficiency, especially If
the State does not provide a schedule 1n a timely manner.
(c) Finally, the analysis may predict that a NAAQS or Increment
violation will occur In the Impact area and that the proposed source will
have a significant Impact on the violation. Accordingly, the proposed source
1s considered to cause, or contribute to, the violation and cannot be Issued
a permit without further control or offsets. For a new or existing NAAQS
-------
-3-
vlolation, offsets sufficient to compensate for the source's significant
impact musfoe obtained pursuant to an approved State offset program consis-
tent with SIP requirements under 40 CFR 51.165(b). Where the source is
contributing to an existing violation, the required offsets may not correct
the violation. Such existing violations must be addressed in the same manner
as described in (b) above. However, for any Increment violation (new or
existing) for which the proposed source has a significant impact, the permit
should not be approved unless the .Increment violation is corrected prior
to operation of the proposed source (see 43 FR p.26401, June 19, 1978; and
45 FR p.52678, August 7, 1980).
Your memorandum also states that other air quality analysis issues exist
within the NSR program which need consistent national guidance. You recom-
mend a more coordinated effort between SRAB and NPPB to review outstanding NSR
issues. We agree; however, rather than establishing a formal work group as you
propose, we are optimistic that the formal participation of representatives
of the NSR program in the Modeling Clearinghouse will help resolve coordination
problems. Earlier In the year, the Modeling Clearinghouse was officially
expanded to Include representation from the NPPB to coordinate PSD/NSR Issues
which have a modeling component.
I trust that this is responsive to the concerns which you have raised.
By copy of this memorandum, we are also responding to a Region V request
for clarification on the same Issue (memorandum from Steve Rothblatt to
Joe Tikvart/Ed Li 111s, dated February 18, 1988).
Should you have any further questions concerning this response, please
feel free to contact Gary McCutchen, Chief, New Source Review Section, at
FTS 629-5592.
Attachment
cc: Air Division Directors, Regions I-X
Air Branch Chiefs, Regions I-X
0. Clay
J. Calcagnl
J. Tikvart
E. Lillis
G. McCutchen
0. deRoeck
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REFER:NCES FOR SECTION 7.5
-------
43814
Padua! Rayatat / VoL 51. No. 233 / Thursday. December 4. 198ft / Notices
ENVIRONMENTAL PROTECTION
AGENCY
(FRL-30H-ar
Emission* Trading PoNcy Statement;
General Principles for Creation,
Banking and Use of Emiaalon
Reduction Credits
AGENCY: Environmental Protection
Agency.
ACTION: Final policy statement and
accompanying technical issues
document.
SUMMANV: This Policy Statement
replaces the original bubble policy (44
FR 71779. December 11.1979) and makes
final revisions in an Interim Emissions
Trading Policy which was published
April 7.1982 (47 FR 15076) and on which
further comments were requested
August 31.1983 (48 FR 39580).
The policy describes emissions
trading and sets out general principles
EPA will use to evaluate emission*
trades under the Clean Air Act and
applicable federal regulations.
Emissions trading includes bubbles;
netting, and offsets, as well as banking.
(storage) oiamitsian redaction- eredHe>
(ERCs) for future-use. These alternatives:
do not alter overall air quality
requirements: they give states and
industry more flexibility to-meet those*
requirements. EPA endorses emissions
trading and encourage* its seund use by
states and industry to BBS*meet tto •
goals of the Clean Air Act more quickly
and inexpensively.
However. EPA also racegpsses tftat -
without strict accounting practices and
other safeguards-, emissions tradesjaey
cause poieetiaf eitvirenmealaihern. _
Accordingly, this pottcy provide* ant*-
explicit fjidaana on baselines aaeV
raUudtesUiQceaviroameiital ..
equivalence and environmental
progress. It includes numerous
tightening* and clarifications meant to
assure the future environmental integrity
of bubbles and other trading
transactions.
Among other general steps, the pottey
states that the lower of actual or
allowable emissions must usually be
used as the baseline for emissions
trades. Divergences from this baseline
will be allowed only where the state or
applicant shows that any potential
increase in actual emissions will not
jeopardize National Ambient Air
Quality Standards (NAAQS). PSD
increments or visibility protection
General showings to this effect way
be made only by establishing tha*
allowable values were dearly
incorporated in or assumed by an
approved demonstration of eJUinaea*'
or maintenance. Specific shovaagcat
this effect may be made only in n*nvw
circumstance* described- in the .
accompanying Technical Issues
Document.
Other general matter* addressed' a**
siguifiiaady Uglified by this poliejr
•'ir'nrlr mniirtmaatt for ail i|imlsai
mod*a%aada»p*3vable state
bubble rates, additional enJoreegaant
safeguards; and additional safeguards
related to bubbles involving pollutants-
u'sfed* regulated1 ea> proposed to- bar _
lavsiasaoVMndar Section MZof thesAe* -
This policy aiso-sate forta new* tfgfecer
reajhsossass fits babbles in primes^
nsanffciasMnliirHss wnica-requJee aa<
lack approved demonstrations that
national ambient standards for healthy
aJtawable-or-RACT-allawaDle emusiom
baselines in these areas, use of put
siMsdowns, curtailments or other
redactions which occurred before
application for credit it essentially
eliminated, and a further reduction of at
least 20 percent beyond the baseline is
required. Broadly speaking, sources may
seeare bubble credit in these areas only
if claimed reductions meet these
baseline and further reduction
requirements: were reasonably,
objectively elicited by the oppor'unny to
trade; and are accompanied by state
assurances that the trade is consistent
with the state's efforts to attain the
ambient air quality standard. EPA will
approve bubbles which meet these
requirements because they are
consistent with the attainment needs of
these areas and will yield a net air
quality benefit Such bubbles can
produce economic savings and
environmental improvement at the same
DIM.
Tfte policy announced today does not
coastitute final action of the Agency
within the meaning of section 307(b) of
&• Clean Air Act and therefore is not
fudtaaily reviewable. Rather, it
establishes general guidance «n
aoarovabi* voluntary trades. EPA will
implement this guidance in later
rulemakmg actions that will be judically
reviewable. Applicants for emissions
finds* ranain free, following publication
of today* notice, to advance the
appropriateness of different trading
(aajLurementa in the context of
nawnaking actions on their individual
trades.
Kmiaal el ectual-StP
I OATH This Policy Statement
L effective December 4.1988.
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Federal Register / Vol. 51. No. 233 / Thursday. December 4. 1966 / Notices
43815
PON FUMTHf* Wf ONMAWON CONTACT:
Inquiries regarding the general
implementation of this policy may be
directed to: Barry Gilbert. Office of Air
Quality Planning' and Standards |MD-
15). Research Triangle Park. NC 27711.
(919) 541-5516.
Inquiries regarding specific
applications to use this policy may be
directed to the appropriate EPA
Regional Office (see Appendix A of the
Technical Issues Document)
Inquiries regarding the development
and basis of this policy may be directed
to: Barry Elman. Regulatory Reform
Staff (PM-223). U.S. Environmental
Protection Agency. 401 M Street SW .
Washington. DC 20480. (202) 382-2727
•MMUMIMTAHY mPOftMATttN: Under
Executive Order 12291. EPA must judge
whether this action is "major" and
therefore subject to the requirement of a
Regulatory Impact Analysis. This action
is not major because it establishes
policies, as opposed to regulations, and
can substantially reduce the costs of
complying with the Clean Air Act
This Policy Statement was submitted
to the Office of Management and Budget
for review. Any comments from OMB to
EPA are available for public inspection
in Docket G-B1-2. Pursuant to U.S.C
605(b). I hereby certify that this action
will not have a significant economic
impact on a substantial number of small
entities. As a policy designed to allow
firms flexibility to meet previously
established regulatory requirements, it
will impose no burdens on either smalt
or large entities.
The contents of today's preamble are
indicated in the following outline. The
outline is followed by the preamble
itself, and then by the Policy Statement
dnd accompanying Technical Issues
Document.
Table of Contents: Preamble
I. Introduction
II. Major Issues
A. Baselines
t. Determining Baseline*— General
Guidance
2. Comments on B«»eliiM* in
Nonattamment Areas with Approved
Demonstrations of Attainment
3. EPA's Resolutions on Baseline* in
Nonattainment Areas with Approved
Demonstrations of Attainment
B. Baseline and Other Requirements for
Bubbles in Primary Nonattainment Areas
Which Require But Lack Approved
Demonstrations of Attainment
1. EPA s Resolutions Regarding Saseiin*
and Other Requirements
a. Specific "Progress ' Requirements
b. Additional "Progress" Requirement:
State Assurances
2. Basic Rationale
J. Additional Consideration* Retarding
the Benefits of Bubbles
lit Additional Policy Changes and
Clarifications
A. Cenenc Bubble Rules
1 Substantive Progress Requirements
2. Procedural Requirements
B Bubbles Involving Hazardous or Toxic
Air Pollutants
C Banking Emission Reduction Credits
(ERCsl
0 OBCRS Protection* and Double-Counting
E Improved Modeling and Of Minima
Requirements
\.DtMinimit Levels
2. Modeling Requirements
F Enforcement laaues
PREAMBLE—EMISSIONS TRADING
POLICY STATEMENT
I. Introduction
Today's policy makes final the
Agency's prior guidance on general
principles lot creating, storing (banking)
and using emission reduction credits in
trading action* under the Clean Air Act
This preamble responds to written
commer' - EPA received on major iaaue*
raised b> us proposed emission trading.
policy statement (47 FR15076. April?.
1982) and subsequent request for further
comment (48 FY 39580. August 31.1983).
It also explain* the Agency's principal
decisions on these issue*.
Today's notice ia the primacy *oaceei
of EPA guidance on existingfSourca
bubbles, stale generic bubble rule*, and
emission reduction banking. It replaces..
the original bubble policy (44 FR 71779.
December 11.1979) aa well a* the
proposed emissions trading policy
statement which was effective April 7.
1982 as interim guidance. The notice
addresses how emission reduction
credits (ERCs)—the currency of
trading—may be used for bubble*, aa
well aa for netting or offsets. Netting
and offsets are part of emission* trading.
but are governed by EPA and state
regulations for new source review.1
Nothmg in today's notice alters EPA
new source review requirements or
exempts owners or operator* of
stationary source* from compliance with
applicable preconstruction permit
regulation* in accord with 40 CFR 31.18.
51.24. 31.307. 52.21. 3X24. 5Z27 and 52.28.
Interested parties should however. b*
aware that bubble trades an not subject
to preconstruction review or regulation*
1 SM. *.f- 40 CFR SI IS. 31.24. S1JO7.1121. f 1V,
U.Z7 ind U.3S.
On November T.1988. EPA rectructund CFR Pen
SI and renumbered nuay of that Pairs MCMM (91
FR 4O8MU Becauea matt readen will be more
familiar with pnor deiignanona. today'i nottce
contain* attnon* tMMd on the orianaanoa of Part
Si •• it (aiaied before thi* rtttraetunna. Intaneied
ptrtiit may u*a Appendix F o( today'* Teduucat
IIIUM Document to convert today'i Pin SI cHetioa*
10 ih« comipondmf new onat.
where the** trade* do not involve
construction, reconstruction, or
modification or a source within the
meaning of those term* in the
regulations listed above.
The policy announced today does
constitute final action of the Agency
within the meaning of section 307{b) of
the Clean Air Act and therefore i* not
(udidally reviewable. Rather, it
establishes general guidance for
reviewing and approving voluntarily
submitted trade*. EPA will implement
this guidance in later rulemalung actions
that will be judicially reviewable.
Applicants for emissions trades remain
free, following publication of today's
notice, to advance the appropriateness
of different trading requirements in the
context of rulemaking actions on their
individual trade*.
Under today'* notice. EPA continues
to authorize use of bubble*, hanks, and
generic bubble rule* in all areas of the
country, and provides for the fair and
prompt processing of bubble
application* which have been pending
before EPA under the 1982 policy.
However, baaed on experience under
the 1982 policy, and in order to ensure
the environmental integrity of future-
emnsion* trade*, today'* notice
significantly ttjhrame. requirement*
applicable to certain trading actions.
particularly exi*ting-*ourc* bubbles in
primary netuttainment area* which
require but lack demonstrations of
attainment It also clarifies approval
criteria in waya which- should make
review end approval of
ravironmentaily-souad trades more
rapid and predictable. Among other
safeguard* or safeguarding
clarification*, it requires that:
• Bubble* may no longer result in any
increase in applicable net baseline
amiaaion* in any are*, whether
attainment or nonattainment except
under stringent condition* which assure
that ambient equivalence will
neverthelee* be achieved:*
• Baseline* for source* participating
in a bubble in any area must take into
account all time factors relevant to
total emiaaiona (i.*» emission rat*.
capacity utilization, and hours of
operation) in order to provide an
accurate accounting of emissions before
and after the trade;
* This chanfe ooatttute* • neniflcantly more
Mra*BK definition of what may be canadend *
bubble under the BBIMHB* Tradln* Policy. Specific
ambient tetu wiuca anal be BMt to qualify for tn
ticapoon from due netncooa can t* found in iht
Teohiucai lawea Document. Secnon 1-fl.l.c Action*
wmcfc may no looter be Meted M bubble* uoccr
today * neoce mmt be precMaed under general EPA
criteria applicable to SIP ravuran*.
-------
4MCW
/ Vol. ».-l%«»-A-TfafiJhr. December 4\ T9W/ Notice*
• Bnitfcetf »
aims needtaf but iado*f spnremd
demonstrmtioae of ana*wnen< meet use
the lowest^-ectoeu^Sa^eitaevsWe-or-
RACT-aliowable emission* baseline. a«
described below. Tor each source
involved in the trade
• Bubbles in primary nonaltainment
are** needing but lacking approved
demonstration* must contribute to
progress toward attainment by
providing a 20% net reduction in
emission* remaining after application of
the baseline above to all sources
involved in toe trade or. if the bubble is
being processed under a state generic
rule, the greater of a 20% aet reduction
or toe percent reduction which would be
required from all controllable stationary
sources in that area (e-g., taking into
account expected mobile source
reductions and disregarding area-source
contributions) in order to achieve
attainment
• Bubbles in attainment areas and
nonattainrnent areas with approved
demonstrations must us* the lower of
actual or allowable values for each of
the three basetine components, unless
allowable values higher than
corresponding actual values are dearly
used or reflected in the demonstration or
otherwise shown not to jeopardize
ambient standards. PSD increments or
visibility;
•lam areas, emission reductions
must be made state-enforeeaWe in order
to qualify as ERCs and be deposited m>
an EPA-spprevebfe be trie
• In aft area* bubbles- masf meet
more stringent tests for ambient
equivalence, incndfnf additional
ambient significance levels, more
protective air quality nodding
requirements, and mote conserve live-
definitions of de arin/aus trade*
• In all anas, the total of any
incidental emissions of hazardous or
potentially hazardous air pottntauits
associated with a criteria. potinUnt in a
bubble trade roust remain eqael or be
decreased, whether suefe hazardous
pollutants have been regulated.
proposed for regulation, listed, or the
subject of a notice-of-ioaaat-lD-uat under
Clean Air Act 112;
• States must provide assurances to
EPA that bubbles submitted for EPA
approval in primary nonattainment
areas needing but lacking approved
demonstrations are consistent with the
state's SIP-planning and attainment
objectives. For generic rules, the state
must make certain assurances in
conjunction wUh its subtnittai of th»
generic rule to EPA. and certain
additional assurances with the state's
proposed and final approval of each
individual bubble under that rule:
• Bobbles in- such primary
nonattainrnent areas may not use credit.
from reductions made before application
to bank or trade such credit:
• Where- sources m such- areas seek to
bank credits in the future, "application
to bank." for purpose* of evaluating
credit* for use in bubbles, means the
time of filing an application to make the
proposed credits state-enforceable
through or concurrent with us* of- a
formal or informal banking mechanism;
• Bubbles must not impede
compliance or enforcement (e.g., the
policy states that compliance extensions
may no longer be granted1 under generic
rules in any nonattainmsnt area, and
that bubble applications do not perse
suspend underlying SIP limits or defer
source obligations te achieve those
limits )t
• Generic rules' in aft areas wiH be
subject to increased EPA oversight;
including EM participation in the
state's public notice and comment
process prior to state approve! of*
indhrfcfcai trabbfes. subsequent revfew*
of individual generic approvals, and
isviews or uregenetBr HBpv0mentBoeii'
of the rules msunehea. in order to
assure (feat approved rate* are beanj.
properly implemented! and
* EPA uv state nooces or \
and final bubble approvals, in a/Fanes,
mast dearfy indicate any changes" in
actual as well as aJnwa&fe emissions.at
all sources involved in. the bobble. SQ
the ambient effects of these trades may.;
be known.
These and.other changes announced
today will generally be applied to all SV
revision bubble* and state generic
bubble rules, that have not been
approved by EPA as of this date.*
Oe, Juris 25. ISM the Supreme Conit
unanimously ruled that EPA may allow
states to use a single. plaAtwida
definrtioQ of "staHoaary source" lot new
source review (NSR) purposes in
nonattainment areas as well as
attainment areas, provided use of that
definition would not interfere witk
attainment and maintenance of national
ambient air quality standards
(NAACJSJ.4 Under the "plentwide."
definition, increases and decieases
occurring anywhere on plant property
from emission units within the same
two-digit SIC code are generally eligible
for netting.* and may be »Md to
each ether wi
' Sac hon»r«r. dtoout»o»o»-p«nd»nt bubafcr
in S*caoa LC. af today's Policy SIMWMIM tub
Section LAJ.W4J at totteyt T«c*nfc*i IWM*
DOCUOM*
• Oiffmn USA. lint ». ffotanfflffoum*
precoasiructiM peotit reqiureaenu fc<
major oew sources «r modifications, so.
long as. actual plantwide emissions,
would not significantly increase.
States and sources considering the us
of netting should, however, be aware
that applicable New Source
Performance Standards (NSPSJ.
preconstruction review requirements
under 40 CFR 51.18 faHh) and (1).
NESHAPS. and SIP limits continue to
apply to such modifications. EPA is
currently developing guidance for states
that wish to adopt a plant-wide
definition of "source" for none ttainmenf
areas into their new source review
regulations.*
Pending or future litigation or
rufemaking, particularly final resolution
of the settlement agreement arising from
the industry challenge to ERA'S 1980
promnigatfoo of revised NSR rules
(Chemfcal Manufacturers Association v
EfA. Nb. 79-1112. D.C Or, February
1962); may alter aspects of this policy.
especially regarding certain transactions
under EPA new source review
rsprialtoija See 4ft FR 2»4Z f Augttst 22.
1963) (JSTI ueeaii revnioea ). However.
unease aoatonti EBA finally revises the
mln snf ntpdiBnee die current
The besettne for a gfven source is tha t
level of emissions below which any
additional reductions may be counted
(credited] for use in trades. Questions
remtfng to appropriate bubble baselines
for particular enrittfng. sources or types
of sources urnonattamment areas
generated the principal fssues reserved
by today's notice. EPA's resolutions
strengthen SIP integrity and states'
ability to make progress toward
attainment by (a) identifying more
' SIC Codt mtina codu descnb*d m the
Stindint toriutml C'mifttjnon Manual. 1972.
•Btndid 1977 (U.S. Government Pnncm» Off.ee
flock number* «ISVCDee«iid 003-005-00178-0.
* Many tutm cumaity eapJoy the totalled
"duel ileiiillea' at *ji«iu»ory loaccr* under wbi -
both *• pU« mad e«c» tnuiBnf piece ol squtpmo"1
wifhm il an "(lauaoacy aaaccea. ' Under tni*
defimtKiBL when any individual piece of equiproe-n
i* largt enougtl in termi of potential emmions 10 br
d(AM*Tta
liliii ml imperial in' lifinniim tndead. where -o
overruling Natural fttsotrcer DcfHot Conned, fnc.
v. Comic/i. M5P.2471SL 12 ELR 2OM2 fOC Or.
1MZ).
stationary «ource. ' the 'dual definition ' ellow> ihr
>ema>opporturuty to 'net" is the 'pianiwiae
definmoa
-------
Federal Register / Vol 51. No. 233 / Thursday. Decapber 4. l«a / Notice*
precisely the three factors which nuat
be addressed in calculating baseline
emissions; (b) reaffirming dial lor
bubbles in nonattainment areas with
demonstrations of attainment thai have
been approved and not subsequently
found by EPA to be substantially
inadequate to attain ambient standards.
the baseline must be consistent with
assumptions used to develop the area's
demonstration or must otherwise be
shown by appropriate ambient
dispersion modeling to protect air
quality standards: and (c) specifying a
number of special "progress"
requirements for bubbles in primary-
nonattainment areas needing but lacking
approved demonstrations of attainment
including stringent new baseline
requirements, a ban on the use of
reductions produced before application
to bank or trade, and a mandatory extra
reduction of at least 20% beyond
applicable baseline emissions. Together
with tightened criteria for modeled
demonstrations of ambient equivalence,
a well as other new requirements for
bubbles, banks, and generic rules, these
resolutions will ass ire contioaed
environmental progress through trades.
1. Determining Baselines—General
Guidance
A source's baseline emissions an
calculated by multiplying three factors;
the source's emission rate (usually
expressed as emissions per quantity of
production or throughput); its ho*n of
operations or hourly usage over tome
representative time period: and its
capacity utilization (e.g., the units of
production per hour of use).' All three
factors must be addressed, since a
source's emissions for a given period
may vary widely despite a constant
emission rate, depending, for example.
on whether it is operated at low
capacity for a small number of hours or
utilized near full capacity for a large
number of hours. The product of this
baseline calculation is generally
expressed in pounds of emissions per
day or tons of emissions per year (TPY).
or both.
Today's policy clarifies EFA's original
intent regarding appropriate methods for
determining these three baseline factors.
In general, in nonattainment areas with
approved demonstrations, a source's
baseline emissions for bubble purposes
must be calculated using the lower of it
actual emission rate or allowable
emission Ifanit. phis the lower of its
actual or allowable capacity utilization
and hours of operation. That is, baseline
emission* hi that* area* amst generally
be calculated ueinv, lewer of actual or
allowable vaJuee lot ati three huaiaae
factors.*
Actual values for these factors are
based on some representative historical
time period (generally the avenge of ma
two yean preceding the source's
application to bank or trade).
Howenr. whan the state or applicant
shows that the SIP. a source-specific
precoosuuction permit, or an equivalent
document dearly aasumes or specifies)
allowable values which an higher than
corresponding actual values for on* or
more baseline factors, and that
document post-dates the baseline
inventory year for a SVs attainsBent
demonstration, thesa values may
replace actual values) for calculating the
bubble haaeiiae. When only oa* vatae
(typically the emission rate) is specified,
the other two baseline factors must
generally be based on actual larrela.*
Such showings must be baaed oa
either data from the SIP or data used ta
SIP preparation, " Applicants any
alternatively perform appropriate
modeling to deaonatnte that UM of
allowable values which an higher the*
actual values will aot dalay or
jeopardize attainment and majstenanre
of ambieat standards, protectien of PSO
increments, or visibility. Upea either
type of showing, tbeae allowable value*
may be used11
EPA1 usahHiiM it«) CFB M14. tut; SI JOT.
sin. SIM. iur M^saja /tonpttae*'. «•»»
diacnaaioo of baMiuu appliM aoiy to bubbUa.
• Sut SactfcM LA.1 and Apfandia B of today's
Ttduucal IUUJM Decant for tardur d*toil* on
bM*U0* cakaitatta*.
"Thai emJd mcluda amaaaaailaa am*•» •»
aeeompaayMi autaruU. or Mdma baa* ifeM
who eotuoocMd tb« danonatraiia*.
» UM of nek Mghir aflowabte »»lu«. which
mini b« patOMd by Bodaik*j
•bvMi i> to dMriy ne«c»d ta «r
dMMMtnUoa or a* aquralaM doawMM. wwU
nqiun Mwh bobbin ID tuxMtuuuncnl UMI with
approvad dmnnatrMoM to b* proe*M*d M SV
modalini *crtan. m addition *• SVt i
further progrtaa (RFPJ oikulaUoaa would gumtltf
ha^» to b« twviMd.
Tho fntafml difhranca b*f»Mn BM of aaoh
' For dvtrtltd dtocuulon of tuMUat emuiou
and OBWliiM factor*. M< Tachnical IMUM
Oocmtnmt. Appendix B.
arm* aad ta atta«uMM <
arM*. Mibimi tvaJiMtlou i
HI modallaj nwy imUfy UM of aack aflowaki*
valuca. Hoa»a»ar. tar bvbbita pumaMii a* can by-
caM SIP rrvuioRa in analnnwnl
ratatnj diaeranoo to rtquirt additiniual tarhii
tupport whan liamad air quaiiqr rfliparimn
modaliBf *Uow«a^
OBMcaM (L«. tha "want caao°'V in oidcr to u*ura
Hut aoy aa«a*4ai IBOMM « actual imiiiinn* an
fdanbflad aaa) IBM ika» adacta ara coMwttni wit*
apoiiecbl* OaMi Air Act rwjynawMa. SM unayj
Tachuui IMM* Qacitmaat. Swooa IA.1^.
-------
43813
Federal Register A Vol 81. No. 233 / Thursday. December 4. 1986 / Notices
The great majority-of eommenters
supported this 51? foundation for trading
baselines, noting that SZP» are the
cornerstone of the Actl approach to air
quality management These commenters
also asserted that regardless of sources'
actual emissions, measuring reductions
from allowable levels assumed in a
valid SIP demonstration was entirely
appropriate for use in trading, since the
area would still attain ambient
standards in a timely manner. See. e.g..
48 FR 39582 (August 31.1983).
However, other commenters asserted
this approach was either "too loose" or
"too tight" The first group stated that
credit should only be granted for
reductions below current actual
emissions, provided actual emissions
met applicable SIP limits.1* They
advanced various reasons for this
position, including assertions that
reliance on past reductions, while
consistent with approved plans for
attainment might not comport with
"broader" clean air goals. Some felt that
SIPs wen insufflcenUy precise to serve
as a basis for trading.
A second group of comments went in
the opposite direction, asserting dial
baselines should always be i
allowable source emissions, regardless
of assumptions used* in SIP
development These commenters noted
that emission rota* (e.s> emissions par
volume of throughput or unit of
production) specified in SIP emission
limits are generally the only enforceable
limits applicable to existing sources.
Since existing sources can legally emit
up to annual levels equivalent to
maximum output and round-the-clock
operations so long aa they meet these
SIP emission-rate limitations, these
commenters reasoned companies
should receive credit for agreeing to
binding limits on output or hours of .
operations which forgo such production
flexibility.
Today's notice responds in two
principal ways to these concerns. First
it clarifies the components of baselines.
how these are to be determined, and
who bears the burden oldmonatrating
that a proposed basettnrni consistent
with a particular SIP. Several comments
indicated that confusion related to the
determination of baselines may have
generated unnecessary concern over use
of allowables baselines under approved
SIPs. Second, it reiterates and further
supports EPA's position that when SIP
demonstrations an approved as
adequate, the Clean Afr Act simply
requires trading to be consistent with
assumptions used to develop the area's
SIP.
3. EPA's Resolutions on Baselines in
Nonattainment Areas With Approved
Demonstrations of Attainment
Where a state has demonstrated it
will attain an ambient standard, and
EPA has approved the demonstration
and not subsequently found it
substantially inadequate to assure
attainment bubbles relying on baseline
levels used or reflected in that
demonstration amount to routine SIP
revisions. The state then has discretion
to maintain its demonstration through
any alternative combination of emission
reductions, so long as these are
adequate for attainment and
maintenance of the ambient standards.
Sincr EPA cannot require states to do
mot> Shan demonstrate timely
attainment and maintain ambient
standard*. EPA will approve such trades
as long as they are enforceable and do
not undermine the demonstration; See.
e.g. Train v. NRDC. 421UA aa TWO
(1975): Union Electric Co. v. EPA. 427
US. 24fr(1978f. This means that credits
must not be doubled-counted, that they
must be calculated from a baseline
consistent with the approved
demonstration, and that tests of air
quality equivalence to die original SIP
emission limits must be met
In short under the Clean Air Act an
approved attainment demonstration
creates a legal and logical boundary.
The state has met its statutory
responsibility and can substitute
reductions not relied on in the SIP for
those assumed by the SIP, so long aa air
quality impacts are equivalent This
holds true for all types of emission
reductions—whether derived from
process changes, extra pollution control
equipment improved operating or
maintenance procedures, or other
actions—as long as the substitute
reductions have not been relied on in
the approved SIP.14
EPA accordingly reaffirms the general
principle that states may grant sources
credit for reductions below levels
assumed by approved demonstrations.
This generally means that where actual
values for emission rate, capacity
" The 198Z policy aeaumed. but did not rpectfy.
the component! of "Kraal" arafaaioaa. such »*
capraty usaga or numbcrof houn o( optniioa~of •
particular source, ft abo eseumed. but did not
expreeeiy reqtrtre. that actual emission leveia araat
be reduced to compliance lento-baton further
reducliooa -were eligible for credit.
14 H alao hold* trua whan tha Agency may
Mupact but ha* not formally Indicated, that a
previously appravad SIP damoaatntton ia no longer
adaquata to aaaun timaly atlaimnaBt for rtaaona
of policy continuity, regulatory predictability and'
fair notice, until EPA makaa a formal fading of SIP
inadequacy, tha appravad demonstration controls,
Saa Clean Air Act (action !10(a)(2)(H). 110(c)(l(. 4S
FR 38S8Z (August 31. 1963).
utilization and hours of operation form
the basis for an approved
demonstration, sources proposing a
bubble must use the Tower of actual or
allowable values for those factcrs in
calculating baseline emissions, and that
where an approved demonstration was
based on allowable values which are
higher than corresponding actual values
for any of these baseline factors, those
allowable values may be used for such
factors in calculating the baseline.
B. Baseline and Other Requirements for
Bubbles in Primary Nonattainment
Anas Which Require But Lack
Approved Demonstrations of
Attainment
EPA's 1982 policy proposed two
baseline mechanisms for bubbles in
primary nonattainment areas needing
but lacking approved demonstrations of
attainment These areas needed
additional emission reductions to attain
national ambient health standards, but
had not yet fully determined what
amount of reductions would be
necessary for attainment or which.
sources would be required to produce
them. Nevertheless, that policy said.
states could allow existing sources in
these areas to trade on an interim basis.
eidter (I) by using baselines reflecting
Reasonably Available Control
Technology (RACT) provisions which
EPA had already approved, or (2) where
EPA had not yet approved general state
RACT provisions, by using "negotiated
RACT" baselines agreed to between the
source, the state and EPA.1* Both the
1982 policy and subsequent notices
advanced detailed programmatic and
environmental rationales for this
approach, including the fact that RACT
was the Act's most stringent general
requirement for existing sources in
nonattainment areas: that appropriately
determined RACT baselines were
consistent with current attainment
needs: and that trades using such
baselines could produce faster interim
progress by providing incentives for
sources voluntarily to define RACT.
disclose better emissions or ambient
data, or take other steps to do more than
the minimum required. See. e.g.. 47 FR
15078,15080-81: 48 FR 39582-83. 39585.
Many commentea on the 1982 policy
approved this "negotiated RACT'
'• Tha 198Z policy alao authorized limited use al
higher actual (rather than RACT-allowable)
baaetinaa in certain nonaltauunant "extension'
areaa whfeh did not than have complete approved
SDH. Saa 47 FR 1SOJ7.1SOSO (April 7.1982).
Expiration of tha fuly.lMZ statutory deadline for
submitting *udi SSPt vitiated this third baseline
option. See. t-f- «S Fft at 39SW and n.2. 3SMZ and
n.7. 39SM-43 (August 31.1963).
-------
Federal Register / VoL St. No. 233 / Thursday. December 4. 1986 / Notices
4381 <
approach, finding it innovative and
acceptable. However, two groupa of
commenters again asserted that it was
either "too restrictive" or "insufficiently
constrained." The first group maintained
that for reasons of administrative
efficiency, bubbles should be based
either on existing SIP reduction
requirements or on actual emissions.
without the need to negotiate new
source-specific RACT baselines. Since
trading sources in these areas would
eventually be subject to RACT
requirements in any ease, they
reasoned, no new interim baseline
should be required. la partial support of
this position some alluded to the one
instance in which Congress has
explicitly addressed such baseline
issues—its 1977 declaration that in
nonattainment areas without adequate
demonstrations, existing SIP limits
would for the next several yean be the
baseline for offset transactions, which
were then the only types of emissions
trades.1*
The second group asserted that no
bubbles should be allowed in such
areas, since regulators could not know
which reductions were surplus until
demonstrations were completed and
approved.
In August 1983. "in light of formal
comments on the (1982) Policy, the
NRDC v. Gorruch decision [since
reversed). . . and the need to further
articulate the Policy's approach in this
area." EPA requested further comment
on certain issues relating to credit from
plant shutdowns or production
curtailments for use in existing-source
bubbles, particularly bubbles in primary
nonattainment areas requiring but
lacking demonstration*. 48 FR 39530.
While most comments on the 1982 policy
supported continued use of such credits
without further restrictions, some
commenters had special concerns about
shutdowns in these areas. These
commenters stated that shutdowns can
hasten attainment, and suggested that
granting credit for shutdowns that 'might
have happened anyway' might not be
consistent with the Act's requirement
for attainment "as expedtttsHiely as
practicable."
'• See. e.g. Dean Afr Act ABiendmems of 1877.
faction I2SL codified at 42 U S.C 7302 note: 3
ifyalalnt Hilary of Me Clean Air Act
Aaiendinenu of 1977. pp. 537. 711 44 FR 2174-79
(|inu»ry 18,1979). Thu Congressional mandate WM
largely superseded by eventual stats idopnoa of
luperveninf SIP limit*. Und*r current EPA
refutations tuch SIP allowable emission ram nay
ordinarily b* used lo compute the baaeltna for
offMta onty where an approved SIP demonstratton
uaed inventoried allowable enuaaiona in ita
demonatration of reasonable farther progress. See
CJe»n Air Act 173(1)(A). 42 U.S.C. 7S03|l)|A).
la the August 1969 notice SPA
addressed these concerns in detail
noting that:
. . . Unlike surplus reductions from
additional pollution control or less-polluting
process changes, shutdowns produce a total
reduction of emissions. 100* of which might
benefit air quality if credit were not allowed.
Granting full ar partial credit for their use in
exisung-source bubbles might reduce that
benefit... at least where the source would
have shut down anyway This reasoning
(reflecting a desire to avwd granting credit
for reductions that may not be "surplus''
because they would have occurred ia any
event) underlies some commenten1
suggestions mat credit be allowed only if
credit wars a sole or principal reason for die
shutdown .. .
Uolortmiately the issue is not this simple.
So long as it has not been double-counted
and a proper RACT baseline is applied the
shutdown does contribute to air quality
progress, since much less than 100% credit
will be granted. Moreover, the opportunity for
credit may improve air quality by
encouraging early shutdown of high-polluting
facilities that might otherwise be kept
running, either because replacement ia too
expensive or to preserve credit for further
plant expansion.
In addition, thew comnwnters' smjgestioa
of a test baaed oa subjective motive appeal*
administratively unworkable. EPA and states
would fled it syreafiingly difficult to evahtsxa
or rebut source evidence that a shutdown
was motivated by credit and that the
shutdown facility would odurwise have
operated [. e-g_| far twenty or tarty years.
Thus this approach would likely result in
either dtfacte approval of all such- cradtta
(undermining the) reasoa for the test), or a
burden of proof so stringent that aooa would
be approved (peneHnng sources whose
shutdowns were elicited by trading). More
straightforward approaches might either baa
shutdown bubbles until a damoaslration of
attainment, or acknowledge thair uncertain
nature by applying a margin of safety—e.g. a
requirement that such bubbles produce
substantial air quality improvement—
sufficient to compensate for any uncertainties)
aad protect the integrity of current or future
SIPs. 48 PR at 38583-44 (footnotes omitted.)
EPA-then suggested seven specific
alternatives to the 1982 policy for
bubbles in these areas, including: a
prohibition on bubble credit from
shutdowns: a requirement of substantial
air quality benefit from babble* .
proposing to use shutdown credit or a
requirement of substantial air quality
benefit from ail bubbles, with no special
restrictions on shutdown credit Ia
partial support of this last proposed
alternative, EPA indicated the
administrative benefits of avoiding
special definition or treatment of
"shutdowns" and "curtailments," and
stated that
. . . Requiring substantial progress from
each bubble. . . could accelerate momentum
toward attainment directly improve air
quality through ssah trade, and provide an
objective margin of safety agsinst
uncertainties essociatad with some
individual shutdowns, while leaving to
state the task of final SIP development It
would also maintain the incentive within the
(1982) Policy for industry to shut down high-
polluting, economically-marginal sources
.... The more each existing-source bubble
contributes directly to accelerated air quality
progress, the stronger the justification for use
of surplus reductions for such bubbles in the
absence of a demonstration. Moreover.
requiring all bubbles to produce a substantial
air quality improvement beyond RACT
baselines snd RACT equivalence, could
provide a margin of safety sufficient to make
special treatment of shutdowns unnecessary
... 48 FR at 38685-88 (footnotes omitted).
Thus, while the issue explicitly raised
by the August 1989 notice was use of
bubble credit from shutdowns in
primary nonattainment areas which lack
approved demonstrations, the
underlying issue was use of any type of
bubble credit in these areas. Since
emission reductions have the same
effect oa air quality whether produced
by less-polluting process changes, more
efficient operation of installed control
equipment, additional pollution controls,
or shutdowns or production
curtailments, the fundamental question ^^
waa whether ail such reductions or nonaal
of them should be prohibited or subjecflH|
to special requirements when used for
babbles in these areas. That question
reflected-a further choice. Should EPA
defer bubble* in these areas until a
compete demonstration was finally
approved? Or should EPA authorize
continued use of bobbles, ia order to
secure interim endasioa reductions?
Comments responding to the August
1983 notice were essentially the same as
earlier ones. A large majority of
Industries and state pollution control
agencies commenting at that time
supported continued opportunity for
bubbles (including those using credit
from shutdowns) in nonattainment areas
with or without approved
demonstrations. Virtually all industries
and-states) commentiog with respect to
anas that Aovw approved
demonstrations supported continued use
of the 1982 policy, without change." Of
n state agencies commenting with
respect to areas that do not have
approved demonstrations, ten urged that
shutdown credits be retained for these
eghany Coenty (PA) Health Department
Bum* of Air PeUutlon Cootrot Air PoBuUon
Control District at Jefferson Couaty (Uiuavtllal. KY
Ct Dayton (OKI Raajonei Air Poflultea Control
Agency. See also, a i_ eosMwnt* of Chevron USA.
-------
/ Vol. Wt. N» 2»» f Ttaredarjv Dteoaber 4. J9W / Woftce*-
At ule
CvAfllVTaHr* nTev OB
comments alsv suuuMfcd or
acknowledged the asjpropriatenew of a
reqniremant for a not erraaairry
benefit—in the range of »» extra
reduction* in emission* remaining
beyond a baseline reflecting RACT
eminion limits—from each bobble, so
long aa that requirement was objective
and easily administered.'*To the extent
they addressed this issue, these
comments generally opposed efforts to
test bubbles by examining the subjective
motives underlying reductions."Two
state of local agencies asked that
bubbles be prohibited in these areas
until complete demonstrations were
approved by EPA.
Seven! commenting environmental
gimps aMcrted that EPA should not
permit any bubble* io nonattainmeat
areas lacking adequate, demonstrations.
On* argued that EPA cannot dateimiaa
that emission reduction*, are "surplus."
aid therefore creditable, in theaa ana*.
because to do so would violate the
statutory requirement to attain
standards "as expedftiousfy ae
practicable." Moreover, thia group
churned using RACT aa a basefiae
wotdd not solve this problem because
KA^7 limits are ntfDnmnff nteesurew no?
a substitute fora STP^runttihgtnngfy
atietmient. Ton? groop* also avecrtso/
thsrt crediting sintdawns Mvulii eonuTet
wife stale*' daty te met air qmbtf
standard* "as expedftfovsty a*
practicable," becauaa. by ->emnecdiig~
emntaxDna due bava> already- ceased, H
would accosapiiss) tea* aaaaaaca.
reducBoai than is pneficabtc «atha a
given, period of Urn*. Another groap
asserted- that allowing armtdowa end**
in these Afeuwoaldatren •Sects to
progresa toward attainoient Ona>
enviranmanui group, went a step- farther
and urged that opportunity for bubble*
be restricted soieiy to atUiajaeai i
which hava already mat "qti*niit air
quality standards.1'
"E.J.. MaaapfaUt
Dept. of Health. Air PoUuSSB Cbocrai Dfanaioo. O.
commtmt of Ulinoie EPA.
Mafty rnduin wl ccanaBeHan ejao aeeenvd the*
in these nonattammeiH •»••* Se» *.*. Chevm
USA; Cbaaiplin Petroleum.
»E*. Bay Ana (CM Air Quality MaoagameM
Dltmct. Se» afov Sovthcm Calrfont* G«* Co.
"Eg.. U»i«t>iiiim QetartiMW at
Environmemat Qoeiay Eagmeaan; South COM*
' ' In ant oe wntun tubniMUMa ta th»
Admimiirator made in earty 1980 while final
deciuona on today'* policy were Mill pendinv
repre»ntaur«*of ieven ttxej. and, th* SUle aad
TeirflonaH Aic Pollution Profram .•Umimatratoiw
and the Aaeociatum ot Local AirPWIuiion ConlroJ
Officer* (SrAPPAv/ALAPCOlftmilarJy urged'tfiar
bubble* no ton*tr b* ainfiorned>or ptmmj
nuaattammeiii am» onfrt a eomffUff vfTammwil
individual bubbles a» SIP revmen*
under that IMSLpBtg.? " raiaeaV oeiatfid
issne*. Sevtcai oi these proposed
bubbles wet* a)so located in pnnary
nona-ttainment area* which- required bnt
lacked approved ueniunsBratforiv* Tstt*
issue raised related to bubbles of two
types: (I J Those which relied on
reductions from shutdown* that
occurred long before- any application to
bank or trade; and (2) thoa* which retied
on extra reductions produced by routine
installation of required control
equipment long before application to
bank or trade. Beth types of bubbles
raised the larger question of whether SIP
integrity and enwonraerUat progress.
might better be assured in pnokary
nonattainment areas which requica baJ
lack approved aeBweasratkms at
attainment by allowiay no taubala credit
or allowing bubble credit onff fatr
redncttons- beyond acnul amiseioR
levels, already achieved asaft&s. tiam
aouicat oppVMta book or tekfk.
The final policy strikes wfaeUfiPA
beUeva*to-b*ai
newiequaeuiaiHa tttnnpfcga«t tet
balance. These «*••«/« andtha
rationaiea ttipfinrtirig. tfirai are eat fbtsnc
below.
1. EFA's RaauniduuaT Kagai iDng; BaaefioaT
and Other JteqinremenJa .
require) but d*> not; a* th* taw of •
bubble appfTcanon* haw BRft*
demonstTatluua* that ambient health
standards wiD DC aXtaiaedvbttbblaaVwilL
generally be approved if they da oat zaly
on reductions which- ocoured bafersr
appiicatioai fee credit; af taayavat othor
cntenai fop oMainsaTiv aaaeaeaiT
eqanrahmee. and eonsrateney wMr
future phuiaiagaffortKandtf may
produce at least a 20% oat reductaosi iat
emissionav remaining aftea appBapfiasai
baselines have beea applied, Taaaa
objective tests both respond, to piaviaua
comments on certain mdlvidtBii bobbia
apaiicationa. and go awbataauiafly
beyond aitaraativaa riiacuaand kk EPA'a-
August 1983 uoticB, At the same ttaaa
they asaure greater pradktabiUty *•>•
Tkk
demommtioit waa e»hautante>
petition •>•» seeMeaaty aclaaaat by •
environmental groupe. Sum thia. aaeaaaa and
related underlyiof IUUM harf been caned and-
ArtlOlratVu it IfW^TtT u^CVffliV CQVIfntirTlti\ ff far*
addrnaed aa pert of tb* Asency't Anaiaaavaaaa)
beh>«.
" Cf.. e.g.. Union Caraid* Corp. fTexacQtyf. 47
FK 21539 (May T» I98D: B.F- CoodKch (Avon Late).
49 FR 4798 (Febroery a. •
amliieut oruyi nt, vrithoct- tnrpasrny
heavy * burtfen- on vohmtary bobtrfe
ti juisacfiuus that the envi/uiiiiimhi?
benefits of- srreh tndtfan forgone. 1
fB fleet tin? general principle tfiat bm
such properfy-strucfored Gobbles
provide continnmg incentives for
sources to- deliberately ovennoot
reguhtfery marks (rather than plan
merely to meet them), bubble trade? i
these areas can produce interim
progress beyond current SIP
requirements, and should be approve
a. Specific "Progress" fte^uiremen
Applications for existing-source bubt
in primary nonattainment areas whic
require- but lack approved
demonstrations of attainment will be
deemed to produce a net air quality
benefit and wiA be processed for
approval if they;
(ij Use"Iow*»t-af-sctual-SZP-
ena'eeion«> baaeflnes. Such baselines
must be eaJcdated using
• Either the actual emission rate, rt
SIP or other federally enforceable
emission* toft or a RACT emieeion
limit whichever is toweac for eedi
source mvotod in the trade. Tats
baMatoe RHtoarshen) be- deteiiiiiiMii f.
the tima of the source's appiicaffon to
bank ar tad*, wtwhavet is earner.
• Thatfcnwrof acfoal orailowab4*
capacrty atthltaEadan and hour* of
opetatsaai for each soarca involved m
tha trade-, Thaaa-oasetiBa factors sbsti
geaavatty be based on th* two years c
oparBtim prgcadmf the apaJicaQon tc
bank or tradtv uoJasa aaotbar two yea
period ia shown to be mow.
itatxm otnotmai comes
operationK
(ii>Maat tha-general omtorenf
aojakvalance testa oolhaed in today's
paiicy (saa-StcaoB IJ.1.O of the
Technicai hwuee Document) using the
baaahaea deacobad abova and. for ttv
post-bubbia casat enisKon levels thai
reflact overall tmittioaa eomvaleuce:
and
tfii? Produce a substantial net
redoctioii at actual emissions—i e.. a
redaetteai oi at least 20% in Ihe
emisssons rtmaining after apoitcation
the stringent new baselines described
above. (A reduction of greater than 20
may ba-teauired for bubbles approver
under generic rule* in some oi these
nonattainment areas. See discussion i
Section HLA.L(dI of this Preamble.
below.)
With issaect to source* which seek
bank ennssion-redocn'orrs after
publication of today's notice.
"application to bank." for purpose of
ev*featiN9 credit for us« IR btrbbter
mean* the rime of fiifng of an
-------
Fedtnl Rpgiatar / Vol. 51. No. 233 / Thursday December 4. 1986 / Notices
4382
application to make such reductions
state-enforceable through or concurrent
with use of a formal or informal banking
mechanism. However, in order to avoid
needless disruption and inequitable
retroactivity. this definition does not
apply to reductions which sources have
previously applied to bank. See Section
l.A.l.b.(l) of the Technical Issues
Document.
b. Additional "Progress"
Requirement: State Assurances. In
concluding that properly-structured
bubbles as defined above can produce
valuable interim progress in primary
nonattainmenl areas which require but
lack approved demonstrations. EPA also
considered whether other showings
might be necessary to assure that
individual bubbles do produce such
progress. The Agency has concluded
that few such showings, whether
bubble-related or otherwise, are
practicable or workable. It did. however.
conclude that certain representations
meant to assure each bubble's
consistency with SIP planning goals, by
requiring states to take a meaningful
look at such consistency in each bubble
approval would help assure that
progress is achieved.
Under circumstances detailed in the
final Policy and Technical Issues
Document today's notice therefore
requires the appropriate state authority
to provide the following written
assurances to accompany each bubble
which is approved (either directly by
EPA as a case-by-case SIP revision, or
by states under an EPA-approved
generic rule) in these areas:
1. The resulting emission limits are
consistent with EPA requirements for
ambient air quality progress, as
specified in today's notice.
2. The bubble emission limits will be
included in any new SIP and associated
control strategy demonstration.
3. The bubble will not constrain the
state or local agency's ability to obtain
any traditional emission reductions
needed to expeditiously attain and
maintain ambient air quality standards.
4. The state or local agency is making
reasonable efforts to develop a complete
approval SIP and intends to adhere to
the schedule for such development
(including dates for completion of
emissions inventory and subsequent
increments of progress) stated in the
letter accompanying the bubble
approval or in previous such letters.
S. The baseline used to calculate the
bubble emission limits is consistent with
the baseline requirements in the
Emissions Trading Policy Statement and
Technical Issues Document.
Such assurances need not be verified
by, e.g.. detailed quantifications.
comparison with year-by-year progress
projections, or showings that ill
reductions needed for area-wide
progress or attainment have been
identified and targeted for regulation.
They are. however, expected to be
based upon meaningful review by the
state and to be consistent with the
documentation supporting the bubble.
EPA will not second-fuess such state
representations, provided they are a
suostannal test applied by the state to
each bubble and the state has explained
how the proposed bubble is consistent
with the area's projected attainment
strategy. Nor will EPA examine, or
expect states to examine in making such
representations, any specific soyru's
subjective motivation in making claimed
reductions. The combined effect of these
requirements will be (a) to deny bubble
credit for reductions which occurred
before application for credit in
recognition of the fact that reductions
produced before any application to bank
or trade are unlikely to have been
elicited in any way whatsoever by the
opportunity to trade: (b) to help assure
that only actual reductions in current
emissions are relied upon to satisfy
pending control requirements in these
areas: (c) to more systematically
encourage efforts by sources to produce
and permanently maintain these
additional reductions, by granting them
predictable bubble credit when
specified baseline and other testa have
been applied and (d) to assure that
these bubbles will not interfere with
these areas' attainment effort*. Any
other approach would enmesh EPA and
state agencies in lengthy, resource-
intensive, and uncertain efforts to
determine subjective company motives
for making particular claimed
reductions—efforts which appear
unlikely to provide greater
environmental protection than the
criteria articulated here. Cf. e.g.. 46 FR at
39584 and n. 15.39585-46.
2. Basic Rationale
EPA believes that Congress would
clearly have intended the Agency to
approve bubbles that despite the lack of
a complete attainment demonstration
for the affected areas, nevertheless
produce progress toward attainment in
those areas. Section 172(b) of the Clean
Air Act does require states to formulate
complete control strategies to attain the
standards in these areas aa
expeditiously as practicable and in the
case of primary standards, by certain
fixed dates. It also requires these areas
to demonstrate reasonable further
progress toward attainment in the
interim. However. SIPs and attainment
demonstrations are composed of dozens.
if not hundreds, of regulations and
commitments adopted at the state i
local level following proceedings '
often arc time-consuming and 01
sequence. If EPA were to wait until
every such provision were adopted and
submitted by the state before acting on
any of them, substantial environmental
benefits th*t would otherwise accrue
from having each available requiremen
promptly incorporated in a binding
manner into the SIP and made federally
enforceable would be forgone. Such an
"all or nothing" approach would
produce less expeditious progress
toward attainment than a combination
of (a) EPA approvals of state provisions
submitted sequentially and (b)
appropriate use of sanctions authorized
by the statute to effect the adoption and
submittal of remaining necessary
provisions. Given the strong emphases
in the statute as enacted it is doubtful
that Congress would have intended the
former, less progressive approach.23
For these reasons. EPA has decided t<
approve in these areas bubbles which
individually produce progress, both
beyond preexisting plan requirements
and in the air itself, and which do not
interfere with these areas' efforts to
construct complete strategies that
provide for attainment as expeditiously
aa practicable. ^j
Today's notice accordingly disall^J
use in bubbles of reductions made pno.
to any application to bank or trade, but
allows appropriate use of reduction!
made after such application. Where a
source voluntarily proposes to make
creditable reductions as part of and
following a banking or trading
application, the stringent lowest-of-
acrual-SIP-allowable-or-RACT-
allowabie baselines must be applied if a
bubble ia involved and that bubble
must meet appropriate ambient tests,
using emission levels that produce
overall equivalence to the emissions
baseline. The "net 20%" discount in
rtmftirMng emissions then applies to all
sources in the bubble, and provides an
additional safety margin to assure
ambient progress from bubbles in these
areas.*4 Finally, the state assurances
'•SJM. t.f_ Ct*mn USA v. NRDC. supra n 4
'* Thto "ntt 2M" nqotrtfflcnt n aito supported
by twdanc* indicating that for moat txttntion drta
SlPt •ddrtMins OMM pollution—
-------
FgfarsJ Renter / Vol. SI. No. 293 / Thursday Pecambgy fc 1S88
will indfc«ewfce*«rappiOTal of the
bubbw is HlBry to mraw cuiner ffmt
enhance any unpui bMt opportunities to
cofistrocf uunpiete
strategies.
EPA believes (ha! babble* meeting the
special progress requirements described
above will prodnce both progress
beyond preexisting plan requirements
and progress in the air. First with
respect tit preexisting plan
requirements, each bubble would
achieve a net tightening of al least 20
percent Trades that result in a
permanent 20 percent reduction beyond'
actual emission levels (wtoca are
already below what the plan allows).
would produce eve» greater progress
beyond preexisting requirements.
Moreover, stale assurances tact suist
accompany each bubble will help ensure
that aperov«l does not represent a step
backward ia the process of devdopjag a
plan providing for timely attainment
Each such bubble would also produce
net progress in theorr. since each
increment of required control foigone as
a resuli of the trade would be more than
compensated by a greater redaction.
which was aot required, and whian may.
reasonably be presumed to have bean.
elicited by. the trading opportunity.
Neither EPA nor anyone else can prove
that aQ reductions which occur.afler
filing of an application for credit were
elicited in whofe or in part by the
trading opportunity. Decisions in the
real world, whether corporate or
otherwise, always arise from mnftiph
motives wfu'cn are not eastrj
discntangfeti. any strand or wnrcn may
have "tipped" the balance toward or
precipitated a particular action-.
However, the Agency has concfuded1
that this presumption is reasonable.
First, it is plausible thet svefc reductions
were elicited at least in part by tfrat
opportunity, especially where, as here.
sources must affirmatively decide- to
surrender something of value and*
constrain purely private decMionmakiitg-
(e.g.. enforceably cuumil to change-
production processeaHB>order to create
a cognizable reductthSecemi. thie
presumption is the ssatpiai afi al
alternative to the adaBMsawtiveiy
difficult and uncertain approach of
attempting to determine the intent and
motives of source owners making these
reductions.
EPA has also concluded that bubbles
meeting these new requiceaienu wtQ oat
interfere wttfc the statutory eiaodate that
state* attain standards at expedftfoomrf
as practicable. Each such boobfc woofcf
produce progress in the air that for the
reasons jnsr described would fficely not
have been achieved absent the trading*
opportunity.1*
3. Additional Consideration* Regarding
the Benefits of Bubbtet
Individual bubbles approved under
toda/s special progress requirements
for primary noneltamment areas which
lack demonstrations will produce
progress in the SIP and in the air.
Moreover, the mere existence of the
opportunity to trade has independent
progressive effects.
As some commenter* suggested fact
of such demonstrations usually results
from one of two general causes: Either
the state does not know where or BOW to
obtain sufficient further emission
reductions* or it has, identified sources of
such reductions but is unabfe to
implement new regulatory requirement!
because of their cost Moreover.
regulated ffrma may often be reluctant to
disclose information-that may be used fo.
require further retrofits against tfienu
Even where such information is '.' .
obtained, it may not be sufficient^
precise to allow EPA aadthatitaieta ^,
resolve n»"i»>««'«a gxnofent ncohlenis. •'
While a vigorous regulatory rupnnae .
remains critical in these ateaa, tfial
response ia-Iikely te. be aamneteti by the
very "ifTflT*""* harriers
discouraged a damonatnnoa el
attainment in the fits! place. Sea. e4» 4ft
FR 39582 tAugust 31.1984).
Bubbles can, help break suck
deadlocks over the feasibility of
obtaining further reductions^ bu>
providing an inrrntivs foe plan^
managezs ta find ««*yt««t~i ways ta go*-
beyond current regulatory rs^uOTamrnav
The oppoctunity to traoa may alsa
encourage sources ta> come forward ia
order to establish the quantifiable aad
enforceable emission limits on which
credit must be based.
" TV Aatncy hat dsjtwmuied ttMt tht*»
eoacfcuBom «!M 4ppiy/ what* tr» pne*-«w>llaaiea
reducuoai oa whtca the appbcinl t (•* CMdM
h«op«n* to be a shutdown or pmfacHoft-
eurtulnrant BecauM multiph modvit (imihrty.
ComroT (Fth. 1964lt Um*. Ucbard A-Urafl. Tha
ConaHvatira Fannrialma, MJ Moo. LM M.TkooMV
March 12.19V fTh« trill ealcutenoa... indiuwi !b«
staff j attnunenu* to tiw Iimit«d caatral
poisibilitim available, and appwr* to tuppart their
conclusion about the contribution RACT piua 20
perernt can mate to anammenl ').
clos* • facistfy 01 reunct its. productive*
sruiidown* the t occur after tM save* «e»ncr
for credit, no leu the* oiber typu al poat-
applicanon reductions, may be preiumed
reasonably elicited by the opportunity to> tndfc. Tnrr
is pswtiaiitriy true beaaeae- ilM saaw ujeiaU*.
whatever ite,antecedent nettwe. ene*iMk«a
deliberate decisua ta forgo aa ieun •/ miis>f»iim
velue—eithei by surrendering its operating pemut
or by accepting binding production Ifnnfi— eeteftuetrsjeMs'
difRcuU. if oot iinuusMUte. to prap* os dutnne/ UiK
opportutBiy to u*a* woe, the. dn>n>s fere* at ft
jubiecttve motne behind the shutdown, such a
prRstimpnnn is «mpiy justified
Bu&6faa maj-acfrfav* subsTantial
reductfoOAT even wflnout special
"prugress'requirements, since sources
not otherwise subject to or not yet
meeting BACT requirements with future
effective dates ia such noaattainmcni
areas must fkst ceduce emissions ta
RACT-aflowabh levels before they can
begin to accrue credit.2* Where.modeled
showings of ambient equivalence are
required bubbles may also help identify
and correct remaining nonattauunent
problems. In addition, bubbles may help
produce (a) faster compliance with
RACT limits already defined in
partially-approved SIPs. (b) faster RACT
defmitioas f01 saurees not subject to
currently ay proved portion* of SIPs. (c)
incentives foe plant aunagers to
disclose uacotitralafd or tuunventoned
sources, and (d) incentives for such
managers ta> conttot emissions eerlter
than- required, ferhapa most important.
because of (aeirpotentiai to eiktt better
information oa sources, emissions.
coaKral patiormaace and ambient
effect*, babbies may enhance states
abatiry, to sacare htlaee reductioim. if and
when sucatreatacnona are requicsd. For
example. EPA experience has
doeuKemleal eases in which bubble or
similar tnriang applications have
miproveat1e ambient impact?, and
unrafajaled- er unfnrentoried sources XT
"See. etg. «TFR ISOn-.arjtW 48 FR 39580 and i
1 3SSSZ enetit r.
RACT levels are-femnlTf »> least »o« ••* man
below taLSsiliuitliJesseanoei lereti. oeoendma on
the paisBUati. Wiase psei iresle acMa* emwtiom nt
hiehier then RACT baseline leveb Uus rec^oiremeni
directly ecceterefes sirquanry progress, since no
credit can be secured fcr ttie> difference-
*TT tell sp»rite»lmiei mhmfttd over the taut
jossai r»e> eanc imOBg edset tkuvi. aeloeo
establish and venfy ese«eau*a facMn ior
noniraeatioiial souicea. aa, well as pir-"c.> a^»»^^
emission* prafiTes of such sources '»« eg
appBeHiew qfSWiienya Iron ana Steef Ca
spprov«at4*n»aMBIfOe«smib«T2ft l9Bllkh..«
providedcwree* eane*SMia>det»no*oiber»ise
av«ieibiei to EPA tfaeaugli UB Aococy s Naucr ^
Emissions Data System (SO FR ZS093 [une '.' .4RS
sn»tNe»»ifl»rtoe*itrt»«rsrence of sources eae«ssD» iiassse end attainmcni
demonitnnoiB: ana hsiesrt uBprove iniorcer.en i
procedures to ortem stele programs. In aoai;.un • j
such cin>sp«a{Ii. exirnpiet. apperrunrn -o TIC?
appeefi !• reduce VresUrmret reesons ior s»-ir'e« to
inveatory aad>piaonMS *e*e. For example.
^4assachuMtta require*.firaM to prov>4e ddta :n
tn*tr two years of higfcett emissions unce the Jtima
yeer of the SIP. i» evder to eeMonsn. a a<»iv
emsssraniaa* under lea sane s VOCbubwe rule.
This requtreeiee*hsM pradaced baselme aa'* 'or
previously un<»uantifie<3 emission vears :nr ,.<~?
sounee.
-------
Ferf»r*r RetK**r / Vol. 51. No. 233 / Thursday. December 4. 198* f Notice*
43023
Through all th*** m*ch**t*m*. bubble*
CM achieve substantial minion
reduction* and m quahty planning
benefits, even inillsaMl special
"progress' reqmresBsjBtB.
Nowithstanding the** independent
progressive effects. EPA believes that it
may approve bubbles in these
nonattainment areas only if they meet
the specific progress requirements
described above and do not interfere
with the affected areas' efforts to
develop and implement complete
attainment strategies. Such babbles can
help adjust existing inadequate
regulations on a source-specific basts.
help make progress toward a full
approved demonstration, and help
improve air quality, without "franing"
inadequate SIP requirements that are
currently in place.
Accordingly. EPA h*» decided to
approve "progress" bubbles which are
consistent with the attainment needs of
these areas, which produce a net air
quality benefit and which may therefore
secure faster interim progress toward
attainment and more rapid development
of complete attainment plans.
HL AfMHssaal Pafcy OMB*** and
Clariflcatieaa
Today's notice makes numerous-
additional changes ia response, to
comments on and following me 19B2
policy. The most important of these
changes or clarifications are discussed
below.
A. Genmc Bubo* Rut*
Today's notice recognizes the special
position of EPA-approved state generic
bubble rates. Such rates may provide-
clearer approval criteria and may result
in more rapid bubble approvals wttft
reduced expenditure of EPA and state
resources, by eliminating the need for
case-by-case Federal rutemaJring on
each bubble as an individual SIP
revision.
Today's policy affirms mar state* may
continue to use generic rales to approve
bubbles within the scope of such rales ia
all areas of the coontrj;mehnflag
primary nonattainment area* needing
but lacking approved demonstrations of
Attainment. It also establishes specific
procedures to ensure opportunity for
public comment on individual generic
actions and for regular EPA oversight of
state administration of all such-rates*.
Finally, it speits out additional
"progress" requirements that new
genenc rules must satisfy to be
approvable for primary nonattainment
areas needing but lacking
demonstrations of attainment.
State genenc bubble rules approved
hv EPA as SIP revisions have
independent force of law a*d farther
Congress* intent thai "ftr prevention
and control of air pollution at ft* sourc*
(remaiiul the primary responsibility of
Stales and local govemnaitsv" Cte*»
Air Act. 1101(aM3). EPA has approved
or proposed to approve 10 such rales for
9 different state*, end ar lent 12 other*
are being developed Pew approved
rules currently apply to primary
nonattainnwnt Areas which require but
lack approved demonstration*.
However, today's notice requires thai all
generic rule* meet certain addition*!
procedural requirementa in order to
assure effective EPA oversight of their
administraboe, and to identify aay
derktenciea in individual approval* or
state unpkoMntation procedure* before
substantial amber* of state-approved
bubble* may be pet at risk To tb»
extent the** requirements require
modification- of existing generic rule*
they may apply to rule* affecting aay
area, not just primary nonattainment
areas which need bat lack
demoBatretton*.
Today's policy is meaat to i
the** rule*
both now and throuab any 1
transition: period*, without u
the conaidmU* investment
already mad* iat
th»*aoH tea* tb* pattcw if
i. end will
fee»idenfffyinf
odrffeatfon.
^Bj
9
wtit m**4 the p*bcy'a.aisba«aA(rs«
procedural ob|*ctiv**»
Basicatfy. bobUe, IM^UJJBI/ ay
under siiKiij fTfil iifyieimfjjsa
ruin befor9tttmtffeane:dat»afltm
EPA*
due to today's cneagej.
inritpearisnt validity odmgr i by BPA a* meeting the rule
wilial*o>**tiafy apaticabie ambient
ecutvaJaac* teal* (•** Technical
Document Secnaa IKift and
(d) Produca aaaweraU emission
reduction at least equal to a net 20%
reduction in emissions remaining after
application of tb* above basah'rtM. or at
least equal (in percentage terms} to the
overall amMssaa naucoon (in
percentage term*} needed to attain in
the area (i.e.. at least equal to the
source-by-sowe» wnMsron reductions
that would be required for a full
demonstration of attainment, taking into
account "uncontrollable'* stationary
(04. an*4 source* and expecud
einis»io« reduction* from mobile
sources), whichever i* larger." This last
i MI*quality anaiy*u
ba*»-yc«r
»by <•• to altrai dM ntrm* NAAQS
Ibl For ikt «nNct»d •IUKMMM i'*t (Man ida>-
tffliMloni
-------
43824 Federal Register / Vol. 51. No. 233 / Thursday, December 4. 1986 / Noticea
determination must be submitted with
the rule, and must use the same type and
quality of analysis required for an EPA-
approvable SIP. In no event may the
overall emission reduction required of
generic bubbles in such areas be less
than 20% of the emissions remaining
after application of the baselines
specified above: and
(e) provide assurances, in conjunction
with the state's submittal of the genenc
rule to EPA. that the state (i) is making
reasonable efforts to develop a complete
approvable SIP that will achieve the
percent emission reduction from
controllable sources described in the
previous paragraph and (ii) intends to
adhere to the schedule for development
of such a SIP (including dates for
completion of emissions inventory and
subsequent increments of progress), as
stated in the letter accompanying the
submittal or in previous letters. EPA
believes that the numerical
determination and progress requirement
discussed in the previous paragraph it
the functional equivalent of the
additional assurances described earlier
in this notice (see Section Q.B.Lb above)
for bubble* needing case-by-case EPA
approval since bubbles meeting this-.
requirement will produce attainment-
level reductions. For that reason. EPA
does not believe that it must require the
state to make those additional
assurances when it submits the generic
Therefore tlw ndueaoiu needed from
controllable stationary sources art
a.«o-sjoo« J.MO tm/yr.
And the percent tminton reduction required from
controllable stationary source* to nun la
HMO)
(4200)
x 100-***
Thui the MI ovtnll reduction required from eacn
generic bubble would be 94% (Le_ the reductions
produced by applicable baxeJhm (e.g» application
of a RACT emiaaion rate) pha whatever percent
reduction in entntiona remaining after Una RACT
limit ia sufficient to yield the 94% Uriel).
Slatea that wiah 10 avoid eite-be-caee SIP
reviaiona for lourcef for wlnck RACT haw not yet
been defined in an approved SIP proviso* may
incorporate "presumptive RACT" viiuea (e.a>. 30%
reduction for VOC1 m their generic rule*. Source*
would than have the option of accepting these
RACT veluea for genenc bubble purposes, or
negotiating different RACT value* through the case-
by-case SIP reviaon process. However, wnere a
source involved in e trade is one for which EPA has
issued a CTC. but the state has not yet adopted the
CTC-specifled emission rate as RACT and no RACT
has yet been specified by the jiaie for thai source.
the presumptive or negotiated RACT values for the
trade must be ai leasi as restrictive as the CTG-
ipecined emission rate for mat source.
rule. However, to assure that genetic
approvals continue to complement and
do not interfere with attainment
planning. EPA will require the state to
include all of those assurances in or
with its notices of proposed and final
approval of each bubble issued under
the rule in such a nonattainment area.
Generic rules meeting these
requirements will assure that each state-
approved bubble produces reductions at
least equal to those which would be
required under an approved
demonstration of attainment Their
availability can also encourage states
and sources to take significant further
steps towards such demonstrations.
S ice reductions sufficient for timely
a .sinment are all EPA can require for
approval of State Implementation Plans
under section 110 and Part D of the
Clean Air Act Train v. NRDC. supra.
further Agency scrutiny of individual
bubble reductions is not required.
2. Procedural Requirements
Today's notice includes tightened
requirements designed to assure, with
minimal burdens on states, that EPA'c-
responsibiiity to monitor the
implementation of all generic rule*
incorporated in SLPs (see section-
110(aHZNA)(H)) is more efficiently an*
effectively carried out EPA will fulfill
this responsibility by fa) examining and-
commenting on. together with any other
public commenter under applicable state
law, the information-provided for
individual trades subject to-proposed
action under generic rules, (b)
conducting reviews of individual trades
approved under such rules; and (c)
periodically auditing implementation oi
the rule itself as part of its National Air
Audit System investigations of state air
pollution control programs, including
indepth file audits of actions under such
generic rules. These activities will cover
state actions of disapproval as well as
approval, and will examine whether
rules are being interpreted or applied
within the scope of their approval by
EPA.
To be considered valid by EPA. a
trade approved under a generic rule
must (l) be one of a class of trades
authorized by the rule. (2) be approved
by the state after the rule has been
approved by EPA. and (3) meet all the
provisions of the EPA-approved rule.
State approvals which do not meet these
requirements are not considered part of
the SIP and do not replace pnor valid
SIP limits, which remain enforceable
and may make such trades the subjec
remedial action after due notice by £1
to the state and source*
In addition to requiring that genenc
rules or other state provisions assure
meaningful notice to EPA by the first
day of the public comment penod on
proposed generic actions, and
immediately upon find generic action
today's policy also requires that state
generic rules or other state provisions
provide the general public adequate
notice and opportunity to comment.
including opportunity for judicial revt<
sufficient to make comment effective.
Existing state generic rules, statutes o
regulations will generally satisfy this
requirement. However, some
jurisdictions, for example, deny judici
review to commenters who do not
possess a direct financial stake in
individual permits. Such jurisdictions
will have to modify their genenc rule.
other provisions, to meet this
requirement.
B. Bubbles Involving Hazardous or
Toxic Air Pollutants
EPA reaffirms and extends its 1982
determination that bubbler in any an
must not increase emissions of
hazardous or toxic air pollutants.
Bubbles cannot be used to meet or av
National Emission Standards for
Hazardous Air Pollutants (NESHAPs
that have been finally promulgated
under Section 112 of the Act. Where
NESHAPs have been proposed but nc
promulgated for emitting sources whi
are the subject of a bubble applicatio
the proposed NESHAP will generally
serve as the baseline for determining
creditable bubble reductions, and the
trade must produce reductions at lea:
as great as those which the proposed
NESHAP would produce, if
promulgated. Moreover, no source
emitting a pollutant subject to such a
proposed NESHAP may exceed
emissions allowed under the propose
NESHAP as a result of the trade. Wh
a bubble involves a pollutant which
fisted under Section 112, but no
NESHAP has yet been proposed for'
relevant source category, or a pollute
for which EPA has issued a Notice-o
Intent-to-List. there must be no net
increase in actual emissions of the
noticed or listed pollutant.2* In gene
" In some limited circumstances additional
pollutant! may be treated as iuted pollutants :
Tecnnicai Issues Document. Section I 8 1 d.
-------
FKfcref Rayjeier / Vol 51. No; 239 f Thunder. December 4. i§g*>/
496
•U bubble* ieroWmg mlatiuiu of
pollutants described above moat nee
Jower-o^acruaJ^-NESHAPt-eilowaWe
•missions baselines, and must take
place within a single plant or contiguous
plants.'0
Coounenters who addressed this issue
divided into two general groepe. One
group asserted that hazardous/ toxic
restrictions should extend beyond
pollutants currently regulated, proposed
to be regulated, or listed under Section
112. These comments generally
maintained that restrictions should also
appiy to all pollutants the Agency is
"actively considering" tor listing, A
second group asserted that neither
volatile organic compound (VOC) i
paniculate entaaiom should be traded
unless there is deer evidence that
specific substances present is such VOC
or particolat* enuasrans are "relatively
in
EPA haa determined that for reas
of policy and administrative practicality
these suggestions, while laudable ia
latent should not be adopted. Bubble*
are alternative "«*•"• «f r-nnt^itmnr*
which should g«"«»-ny be treated no
differently than other comnCanca
strategies, provided basic SIP
requirments of consistency with ambient
needs, PSD f»m*«fi««tf
progress are met EPA'i statutory
authority to farther restrict trade* oa the
basis of hazardous substance* which
may be present in a pastfcular criteria
pollutant stream (e.g~ VOCi) and which
may be subject to a Bating, notice-of-
intent-to-U*t or proposed NESHAP. but
are not as yet regulated under f 11X Is
limited. Generalized attempts- 1»
exercise soch rataorrty based" OB mv
presence of substances on. which ma
r baa *»l"Mi m> fiifBAt actian
itevsr wotdd be still aora tesnsooK
Agvncyl
whetew
Moreover, the inherent enrbfgorrjrof
such terms as "actively considering" or
"relatively inaocaous" aufctaJaeaaau**
such testa. State* remain free teadoe*
further resliicliuus oonetatenf wtth (BOB)
laws and needs. However, with respect
to national requiremaatt EPA haa
concluded that dear deeMea pointa
based on actions puneenfto tfer
deliberative process and record
"Tot on* etCToOon lamtrwt MMm a «Mek
torpln roducrtooa at (ho tatmtora at potintara
tablet to rifvtodon. piupupn] rtjoiiaon. IMnc, or
uoaipotiMlo for \aautm
mutton*. (&(. »(i«n t tow
Munroni botow *» bMcttno ip»uffrt ibovt. ia
cxdians* (or eomoooBdlnvtoerTCior t too* •• nicfe « (ndi
MOVJO not roMJt ui M to^nvoi in filiui octiiii or
•UowibU tmiMMM of« poihiunt tubioct to thu
•pvenl nnneMow dtoooMd tbun it «ny «oufco.
U wouM nordlffir ia M«B» of rao.anmmu hooi •
evidence uiiJeif/ lng> secrjbif tit
detennoitfoM arv ta be prewmeL
Inhireetod parties fhouW b* awn*.
however, thai ondw todafs p*U*y *•
Administraaji reserve* dttqitfon te>
consider on « case-by-case bute
whether 1
pol
list
prep
invohw
llutaau which, while ne4 refulated
ted or otherwise noticed under section
112. an regulated aa toxic under other
federal health-based statute*, and te
require further analysis before
approving such proposals.
One coounantar expressed concern
over the 1982 policy's use of the term
"reasonably close** to indicate the
distance which may be covered by
bubbles involving pollutants listed or
proposed to be regulated under section
112. EPA agree* this term Is anbiguoua.
and with the exception of bubbles which
afEraetfveiy uteueuj» such pefclaalr
below the lower-o£act«al-or-NHSHAP»-
allowable baseline, ha* sebetir****) tfc»
more protective and
thMsacktrmdaaoccacwfthiaa
piaalarcQntifuoa*piaat*.ta
a
sdveoebjeaithar
effects, tndfey't
they rely o«ry e*>
curreei acatai ot- sectteo U&
emiecMos aa ef th*
which**** iariowec, ia
noticed. liateeL at pmenaad ta be*
reguialad under aacna»UL
Seveceiof the*epteyiiinn* notehTj
the propoaed NSSHAPs bua
•missions cap, the- inclusion ot
poButantt subject to No0ce*-o*-aiteai>
to-Ust end tne f*Mnt Unn^ttartB-
contiguoB*> pnstv aneMDwejr*or-a)ii mars*
or-| tl2-afiowcbles baaetoes
represent subeBtaUw Qgntenteej*
the 1982 policy.
C Bankiof Emotion Rttt
/SRCf/
i-can ecse plan*
modmdxetfon* orexpansioni. r.e
source siting; orrJditJhg-sonrTe
compflaoc*. Preperff-strnctaRd ba?
may ndnec incentive* for sources to
delay, conceal or hoard actual cr
potential reductions until an irvsedfa:.
use arise*. Banks may also pro* ce
other, interim environmentalv ^ifHtx
since beaked ERCs remain ou: jt tht *
(althougo they mutt be treated for 51?
planning purposes as "to the air '• ofltiJ
used, la addition, banks can he.? stale
agencies manage their permit workioac
more efficiently, because poru-nt of
. new souce or •xisting-sourca
compttsnca ttaaaactiona may DB pre-
permitxad oc reviewed in advaaoe.
Banks may also help state*
syetaamticftUy asaen that all uoused
surplus Mductiee* an treetad a* "in th-
eir" for SIP pianainff purpose*, svoidin;
potential inrnneiitsnri*s which sight
(redaction* lob* bat
\ insltatad soeie eor.hmow
over whethei. ht eddHlee» to- nee ting
other ERC requirement*, reduction*
mu*tb*aeedvfedenffrenloReao*t lo
be frmalfr credRed far faenkmy Tbe
anewer ie*A*« rTOwevef, e> order* fee
rfsetaa redaetna credit*
:-*pprovwWr
xnnreD redeetion* must b*
made*enforBnble" of on state.
Redvetknemevtb* ontde enforceab
by the enrv by their tfmv of deposit in
order. **. IB better ensan the integrity
of the safe's air eua&f} planning
process by preventing, *onrce* ttuiu
banking reduction* of emission*, which
their pemuts do aai preclude them from
ine; to ami. Tai» reqiirement wiL
prerwnt undue reliance by pvtiei
or potential partie* oa ffeuseioq
reductioaie. wkica nav* not actually
occurred.1* However, becaos* tha*e
EPA-appeevebie *e»a*iaa.
bane* m*i> eUew- seureee te
for their ewo fiMwe o*e ot uee by
Today's aotic* reiteratee tkel stelae ace
by no maaa* required t» adopt beeJdeei
, but note* thaH>aa\k»aM|
impertant planning anolanftsmnentai
benefits. Jr Banks may ancounajV-flsaev
to create inexpensive extcs reddctiona
at earfier. optimal time* (14*. worn
replacing outworn control equfpment or
deciding how to meet new reouinmental
end disclose such Information te state
agencies. They may help ueete a oauual
pool of identifiable, readirjr-avaiixbie
»»tfB«ffwittm>fb« credited for
T«ihninl IHM§ DocwnoBl). Feilawinf puon
«ttottir'lB0«e*.**'6«d ttuo«gh
othtr formal or infenMl baakuti mtdiiiuimi wruch
•PP*
* -n future
oro mod*
of u*»«nd'«ff
of *• ngatetory;
"orrrnit.
1 SM t*. t7 PR 1SOS1-M (AprU7.1SBSI.
-------
43826
Federal Regbtef / Vok 51. No. 233 / Thursday. December 4. 1986 / Notices
actions merely create extra reduction*
in actual or allowable emissions which
cannot by themselves produce any
adverse effects on air quality, they need
not be made federally enforceable until
used*3 Where states wish to make
banked emission reductions federally
enforceable at the time they are banked,
several mechanisms may be available
for doing so without case-by-case SIP
revisions. States with EPA-approved
PSD. NSR, visibility and preconstruction
review programs can issue permits to
credit reductions from emission units
currently subject to these
preconstruction permits.14 States with
EPA-approved generic rules may also be
able to use those rules' procedures to
make reductions at existing sources
federally enforceable. Since only
reductions in applicable emission limits
are involved at the banking stage,
modeling should not be required.
Moreover, these reductions should
automatically meet the requirement that
changes in emission limits under generic
rules not jeopardize ambient standards
or PSD increments.
Since some trades have special
requirements, banks do not guarantee
the validity of particular banked ERCs
for all potential uses or for all time. For
example, because only actual reductions
occurring at the same major stationary
source are eligible for netting, banked
reductions created at other stationary
sources cannot be used for netting
transactions. However, banked credits
resulting from reductions at other
stationary sources may be used as
offsets or in bubbles, so long as this
notice's other requirements for
appropriate use of credits are observed
and applicable offset requirements are
satisfied.
Because of differing regulatory
requirements, the amount of credit
actually derived from particular
emission reductions may also differ
from one regulatory program to another.
For example, in primary nonattainment
areas needing but lacking approved
demonstrations, the amount of credit
Sine* ititt* may have to reviae thaw regulation*
or permit procedural in order to implement thl* new
siate-enforceability requirement full
implementation will not be expected until one year
after publication of today'* notice. However, all
credit! not made enforceable when banked during
this interim period, together with afl credit*
deposited pnor to today'* notice, thould be nude
Hate-enforceable within eighteen month* from the
date of thli policy.
" a. 47 FR MOTS. 15011 at coL 1
14 Some jurisdiction* may aleo BM general state
preconitruction review program* that neve received
EPA approval to credit reduction* a4 axxung
source* if men reduction! are covered undet the
program, tince nequiremente under the** program*
are federally enforceable.
available from a given reduction for
bubble purposes may be less than that
available from the same reduction for
netting or offset purposes, since special
progress requirements apply to bubbles
in these anas.
Because the use of credits will change
(rather than merely reduce) emission
levels if approved, such proposals
should be carefully evaluated to assure
they meet all of today's criteria for
appropriate use. For similar reasons
proposals to UM banked credits will
usually require additional approval
procedures (e.g.. additional modeling for
certain TSP or SO* trades), whether
such proposals are evaluated as case-
by-case SIP revisions, under EPA-
approved generic rules, or under EPA-
approved new source review programs.
One commenter asked how banked
ERCs would be treated if a
nonattainment area is being
redesignated to attainment
Redesignation will have no effect on the
banked ERCs. so long as state planning
considered those ERCs to be in the air
(i.e., in me inventory) at the site of their
creation. Because local recessions or
shifts in industrial patterns can
temporarily affect air quality without
regard to the adequacy of state
emission-control efforts, EPA guidance
requires that redesignatioa not be based
solely on monitored air quality. In
addition to considering factors such aa
the state of the particular economy and
its effect on emissions, EPA may
consider the number, type, and state
inventory treatment of banked credits.
Such procedures will help assure that
reliably banked reductions are not
reduced or otherwise adversely affected
by shifts in an area's designated
attainment status.
Some commenten asserted it ia overly
cautious to require that all banked
emissions be considered as "in the air."
One commenter asked that state
planning be required to include as "In
the air" only a portion of banked
emissions analogous to a "reserve
requirement" This comment drew
parallels with financial banking to
assume that given withdrawals and
deposits, a certain "float" quantity of
ERCs would always remain in the bank
and out of the air. EPA recognizes that
reductions placed in banks may tend to
keep the air cleaner through a relatively
constant level of deposits. However,
EPA cannot allow statea to consider less
than their full amount of banked
deposits as "in the air." To do so could
jeopardize air quality planning and
attainment1*
D. OBERS Projections and Double-
Counting
In its August 1983 notice EPA asked
for further comment on whether some
SIPs' translation of general economic
growth projections provided by OBERS
(Department of Commerce) directly into
projected emissions growth, left "no
straightforward way to disaggregate the
projections into shutdowns and new
plant openings." Whether such SIP
demonstrations were fully or only partly
approved, the notice continued, such use
of OBERS might make it impossible to
distinguish which shutdowns were
already relied on in, the demonstration.
Therefore, it might be "difficult or
impossible for states whose SIPs rest on
OBERS projections to grant credit from
shutdowns for use in existing source
bubble trades, consistent with the Clean
Air Act" 48 FR 39581.
Most industry and several state
commenters asserted that where OBERS
data were used to project needed SIP
reductions, us* of shutdown credits in
bubbles was not a problem, since
OBERS figures substantially
overestimate the total amount of
emission reduction needed to attain. For
example, one industry commenter noted
that "emissions growth will not be
directly proportional to economic
growth because of the installation of
new environmentally efficient
technologies. Therefore. SIPs which
used "OBERS" projections already have
" In order not to defeat banking i purpow of
encouraging the earliest poinbte disclosure and
production of potential extra emiaaion reduction!.
a** of banked credit* for bubble purpoaea m
primary acaattauuntnt ana* whicfi locJt approved
oeoKMittratuuu will continue to be allowed.
provided the** credit* meet all baaeline and other
applicable requirement* of today'* notic* for these
area*. This generally include* the lowe*t-of-«ctual-
StP-aoowabU or RACT-allowable eminion*
batata*, applied aa of the date of written
application to the itate to bank *uch reduction*
through • formal bank or informal banking
mechanise! for uae in future trade*. It alio memoes
that m net reduction requirement and net*
auuranca* «pedned above, at the tune such c.-«aits
an approved for uae in bubble*. Banked crecus
resulting boo float iAutdown or production
curtailments may be uaed for bubble* in these areas
on the tame term* a* ute of other banked cretjits.
provided their uee i* subject to stringent qualitative
review to amura legal technical and programmatic
conautancy with SIP planning goal* (e.g.. avoidance
of "shifting demand"). See today's Policy at n. 24
and Section LA.1.43) of the Technical Issues
Document. (Banked credit* resulting from certain
shutdown* or production curtailments may
however, be lubiect to special restrictions for offset
purpote*. See today'* Technical Issues Document it
n.14).
Th* (pedal restriction* discussed above do not
apply under today'* notice '* ua* of benxed credit
for bubble purpoee* in other areas.
-------
Federal Register / Vol. 51. No. 233 / Thursday. December 4. 1986 / Notices
^3827
an inherent growth potential built into
them, and allowing ERCs for shutdowns
in these areas will not jeopardize a
state's ability to demonstrate
attainment." A local agency agreed that
"demonstrations. . . based on such
emission projections would over-
estimate attainment because some
growth will occur from [whoiiyj new
sources, new sources replacing existing
sources, or modified existing sc-.rces.
(all of] which would be subject co. . .
New Source Review rules, rather than
the less stringent [SIP] requirements
assumed in the emission projections."
Several state commenters also
stressed that while use of OBERS
projections ia not widespread, the
underlying question is whether the
area's SIP process incorporates
conditions sufficient to prevent double-
counting of shutdown credits. One local
agency recommended that shutdown
credits be prohibited where the source
involved is within an industrial category
projected to go through an economic
downturn, asserting that in such cases
the SIP implicitly relies on the expected
shutdowns. An environmental group
went a step further, and urged that all
shutdown credits for bubbles in areas
using OBERS projections be completely
prohibited.
EPA has concluded that the
requirements of the 1982 policy are
sufficient to prevent double-counting of
shutdown credits, and should be
retained without further special
restrictions. First use of OBERS or any
other projection is relevant only where
an area has an approved attainment
demonstration. Today's notice generally
disallows bubble credit for pre-
application reductions (including
reductions from shutdowns or
curtailments) in primary nonattainment
areas which require but lack such
demonstrations. Thus today's notice
largely moots any issue of double-
counting for past shutdowns, in the
areas for which this issue has been
raised with the greatest concern.
Second, use of OBERS projections in
areas with approved demonstrations
does not appear nearly so common as
was assumed in EPA's 1983 request for
further comment* Even where such
projections were used in approved
demonstrations, they generally
overestimate the amount of emissions
forecast to exist in the year of protected
attainment. They therefore tend to
assume substantially less overall
reductions from source turnover than
will actually occur."
Finally, even if such projections did
not overestimate emissions, under
today's notice the state must show that
use in bubbles of any reductions created
by shutdowns is consistent with its
attainment demonstration and that
those reductions were not already
assumed in its SIP. For example, the
state must show that it did not implicitly
or explicitly rely on a "turnover rate"
from the difference in emissions
between existing sources and better-
controlled new sources for part of the
reductions required in its SIP from that
industrial category. Alternatively, it
must show that if a -turnover rate" was
assumed, the shutdown credits used in
an individual trade result from
reduction* in excess of that turnover
rate. When a state regulated the
sources in a standard industrial
classification (SIC) without explicitly
relying on turnovers, then bubble credit
for a si- udown within that SCI category
would not in general be double-
counted.*''
These requirements should fully
protect states and sources against
adverse environmental or SIP effects.
£ Itnpnnd Modeling and dg Minimia
Rtquinonnts
Bubble applicants must show that
their proposed trades are at least
equivalent in ambient effect to the SIP
(or other) emission limits the bubble
would replace. For some criteria
pollutants (e.g., VOC or NOJ this test
may generally be met by showing equal
>• Thii ii to JMCIUM OBEKS-4a*ed SIP
proitciiont aiiume thai uniti of production (and
hence tmiMionil in particular SIC Code* will keep
pad with projected Mad* IB earning* and/or
employment in thoee SIC code*, without regard to
changing dlitribution* between MW and existing
•ource*. See. e.g. USD OBEX& BEA A*mm/
Protfcvons. Voluam I: MecAMfo/ogr. Cancepej and
Siot*Data. p. (xi). US. Department of Gnnerce
(July IStl).
" Such credit* must of coon* ant ill other
requirement* of today'* nonce, including application
of appropriate buebne* and othir cnMfU defuung
eurplu* reduction*, before they may \t» mod ia •
bubble trade.
SUM which expreuly relied on OBCRS
protection* may aUo show that no double-own ting
occurred by demonilnnag that they did aot
impHtitly rely on any turnover credit*. Tni* ahowtnf
ihould not be difficult to auk* became OBERS
auume that eirriaaiona will evenly increaae u each
plant and production line, proportionate to growth
in earning* and employment potential Cor that SIC
code. Ct a. 38 above, Thti aMumptioa neither
anticipate* nor relit* on the fact that any ihuldown
will occur.
The one exception to theee feneral principles
could occur where a SIP relied oa OBERS
protection* for aa SIC category predicted to undergo
a quontifitd future economic downturn, wnheul
taking explicit affirmative itepe to preclude reuaace
on thet downturn, la theee cireunMtance* the itate
would either have to (how that a propoaad
thuidown credit from a aovrce within that SIC
category waa not double-counted (14. by ahowtag
that more shutdown reduction* than protected for
the SIC category had already occurred), or deny
credit.
reductions in emissions. "For otrcr
pollutants (e.g.. SO,. TSP or CO) ii
traditionally met prior to the 1982
policy, through ambient dispersion
modeling.
The 1982 policy made available
several alternatives to the use of ruil-
scale dispersion modeling whet* »-jcn
modeling was not needed to orcisc: air
quality. These alternatives coulu.. t
appropriate, carefully-limited
circumstances, be used to demonstrate
ambient equivalence for bubbles
involving particulate matter or other
pollutants whose ambient effects were
not linearly related to emissions. They
included d» minimia levels and the use
of other screening criteria to identify
circumstances in which full-scale
modeling was unnecessary, either for
bubbles processed as SIP revisions or
those approved under generic rules.
Today's notice both tightens some of
these screening criteria and expands the
circumstances in which such criteria can
be used.
Today's notice also specifies certain
conditions and types of case-by-case
SEP-revision bubbles for which EPA
Regional Offices may require additional
technical support beyond basic
modeling requirements, deemed
necessary to protect NAAQS. PSD
increments or visibility where
values used to calculate baseline
emissions an not clearly used or
reflected in an approved demonstration.
or may not reasonably be assumed
consistent with the need to protect PSD
increments or visibility. See Technical
Issues Document Section I.A.I.a.
1. De Minimis Levels
Under the 1982 policy, trades in which
net baseline emissions did not increase
and in which the sum of emission
increases, looking only at the increasing
sources, totaled less than 100 tons per
year (TPYJ after applicable control
requirements, could be exempted from
SIP revisions under an approved generic
rule. The rationale for this approach was
that EPA regulations implementing the
Clean Air Act already allow some
exemptions from NSR requirements for
new sources which are not defined as
"major"—Le., which do not have
potential emissions greater than 100
TPY. See e.g.. CAA section 302(j) and 40
CFR SZ21(b|(l) and 51.18(j)(l)(v). Thus
trades which merely shift lesser
amounts of emissions, and which are
•• latereeted partiea thoold. however, be ewer*
met aatbtenteaulvaleKeoBrundentron* which
apply to SO*. IV end CO. a* deecnbed below. at*
apply to NO, trade* involving nubility impact]
from elevated plume*. See SectHM La I b of toda*
Technical Uaue* document.
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4368S
Regirter / Vol. 81. No. Z33 / Thurntay. December 4. M6S / Notices
accompanied by compensating
decresws, should not •• subject to:
stringent requirement*. A* the 1982
notice put it "Such trad* will hive at
most a de minimis impact on local air
quality because only minor Quantities of
emissions are involved ... the Federal
resources required to evaluate these
trades could best be used to evaluate
actions that have a potential impact on
air quality." 47 FR at 15065."
One commenter asserted that this 100
TPY limitation was unnecessary, since
the trades to which it applied were
already required to produce no net
increase in emissions. However, four
state and environmental commenters
urged that de minimis levels for such
trades be the same as those triggering
federally-mandated review of emissions
increases in PSD areas. These comments
primarily noted that EPA had already
defined more relevant "cutoff' levels in
its regulations for PSD, for NSR
preconstruction permits in
nonattainment areas, and La visibility
permit regulations, and that emisaioo
shifts of 100 TPY from one source te>
another might still be too large to go
unexamined for certain types of
emissions and situanoas.
In order to ensure prosecution of
ambient air quality, today's notice
adopts more protective de minimis
levels—derived from those for PSD; NSR
permits in nonattainment areas: and the
visibility permit regulations—of MO TPY
for CO,« TPY for SO», 25 TPY for
participate matter, and 0.6 TPY for lead.
Because of this action, state ambient
evaluation of de minima trade* wttl no
longer be required foe generic bubble
rules to be approvable by EPA.44 Trades
involving sources of substantial size
may still be implemented as de minima
under today's provisions, as long as the
quality of ERCs traded by these sources
is below the levels specified above.
2. Modeling Requirements41
Numerous comments were received
on the 1982 policy's ttese-tevel approach
" The 19*2 document did. however, note that
such "(general trades are stifl siaTseil 10 sssbisnt
tests |st the slat* level andj . . . should
accordingly be evalusted by the state under the
modeling screen . . or an equivalent approach."
47 FR1SOSS at aJ.
•• This shoeki not be coastraed to onpty that new
sources aadawelificsaaas need not meet el
applicable requirements, including those specified
under 40 CFR 51.18 or parallel EPA-approved stale
rules.
*' The foBowiiig Jtsueseiuii summer lias both
interlss improvements made m the 198! modeling
screen (eee Technical Issues Document. Appendix
Cl and BPA's re»a«aees >o metar uemmenls on
moaeling issues.
to deiMiutnung aabwat tq*ntnu*.
The vast majority taught adtitd
clarification, stating, for exaopk. that
the 1962 policy did "nex adequately Sf
delineate the level of modeling
necessary in each instance." Today's
notice tightens and clarifies the
conditions under which ambient
equivalence may be demonstrated wtth
less than full-scale modeling.
a. Level I Criteria. Under the 1982
document no modeling was generally
required of SO*. TSP. or similar trades
where applicable net baseline emissions
did not increase, sources were located
in the same immediate vicinity
(generally within 250 meters of each
other), and the taller suck was the one
which increased its emissions. These
conditions were believed sufficient to
assure that local ambient concentrations
of the relevant criteria pollutants would
not increase as a result of the trade,
EPA has added two criteria to those
specified in 1982. in order to provide
additional assurance that trades
approved under Level I wHl have no
adverse ambient effect First there most
be no complex (e.g., monntahiona)
terrain within 50 kilometers of the
trading sources or within the trade's
area of significant impact whichever is
less. (For simplified methods of
determining "area of significant impact"
see today's Technical Issues Document
Appendix E). Second, stacks with
increasing baseline emissions must be
sufficiently tall to avoid downwash.
Some industry commenters objected
to the 250-meter limitation, advocating
use of either trade ratios for sources
beyond that distance, or an 800-meter
limit extrapolated from unrelated EPA
regulations.4* EPA has retained the 290-
meter limit as substantially more
consistent with the modeling screen's
original intent of simplifying modeling
requirements for trades which eonid not
jeopardize ambient equivalence.*"
«• See «.». 47 FK M84. MM (Peoraary 8. ISett.
41 Trade ratloe may already be neat ander
general provwtoaa In vital* Malm to design other
equivalent approaches which adequately eddrasa
ambient concerns. See. a*. V FR at \tarr end «U.
WOTS. However, to be approved by tff> each ratios
would taMraUy beve to bedeAMd Uwovak era*.
wide advance modeling of att i saris*, ao well «a
theee likely to trade.
Several comments also objected to the
requirement that level I trade* not
emiurana from the coerce wtth the lower effective
prams height. Theee comments noted mot under
venous conditions mailer Mack* coaM so very in
sBsetivs prame height that iieulm wu«M
coneutencly be "higher" or "tower." One era*
auggeated tMa mnttartoa might eucu siege eee eftrt
•tacks to core loco) exceedonses.
Today') nonce retsrns this Level 1 requirement
unchanged. That two loorocs may be virtually
Induiingutthable in effective stack height should
not delay approval of Lavel I trades, since the
0. !«"»/ ff Criteria Trades of 9O».
TSP. OX Ffc and NO, {far visibility
purpose*) ane- «bo b* approved throoga
limited Level B Mdettaeg erf the ambtmt
efbcts teUy of seuresat involved in the
trade, when applicable net baseline
emissions de oot tncreaM and
designated ambient significance levels
are not exceeded.
Today's notice confirms, clarifies, and
in certain cases extends various 1983
improvements made to increase
certainty and better assure that such
Level D trades result in ambient
equivalence. In particular, "significant
ambient impacr may no longer be
measured solely by changes at the
"receptor of m«*«minTi predicted
impact" before and after the trade.
Instead such changes must be measured
at every affected receptor for every
averaging period relevant to the
particular pollutant throughout the year.
Under this approach no Level II trades
will be approved without further
scrutiny, involving full or limited Level
ID modeling, if they result in a
significant net ambient effect at any
modeling point for any such avenging
period during a modeled year.
Today's notice also specifies Level II
significance levels for all averaging
periods conaiatesU with all current
national aasUeat air quality standards.
not juat the) M aout averaging periods
for SO* aad PM or tike 8-hour averaging
period for CO.44 Refined models such as
MPTER and ISC must generally be used
to rasasam change* resulting from the
trade at e*eh receptor, using the most
recent foil year of meteorological
data.4*
These Bodeling requirements assure
that bubbles which pass applkable
Level Q tests and meet all other
requirements of today's policy will
result to air quality equal to or better
Umitstton's parpi
significant tnerei
nttng potentially
i m ground-level ambient
concentnttaeM dea • shafts of muuwm from
-higher" «• "lower" stacks wiH still be satisfied.
i such trades cannot increase net
baseline emissions, this limitation merely ensures
they wtttnot create /tew ambient violations.
Dacsisse ether SPA regnlstions address the me of
excessively tatt sSschs to ran existing ambient
violations. •• farther raeencuon 10 Uxs Level 1
requirement appeen esquired.
on of these significance
I aseuisucs of
i they provide m
conjunctlesi vote) today's mare sophisticated Uvei 1]
modeling apejcaach. see Pleckanstein. "Modeling
Criteria: The Key to Major Reforms For Emissions
Trader," AKA Paper S4-au (Sen Francisco.
CaiifomU.June2S.l9e4).
*• Under some limited conditions, conservative
screening modah may be substituted for these
refined models, and IB these cases a full year of
meteorologKal data nay aot be necesury See
Technical taaues Document. Secnon 1B i b.(3l.
-------
RigatBr / Vof. St. Nor. 239 / Thursday. Dtcemfaar 4.1986 / Ptotlc**
•2829
than that produced by pre>tnde
emission limits, and may b* approved.
Because refined models have now been
approved by EPA andtheir parameters
may be specified with greater certainty
and confidence, these requirements also
provide a firmer basis for approving
state generic rules incorporating Level
c. LmA III Cfiterta. Trades which are
not dt minimi* and do not satisfy Level
I or Level Q above must generally be
evaluated by full-scale ambient
dispersion modeling. Two air pollution
control agencies recommended fixed
trading ratios in lieu of such modeling
asserting this would reduce cost and
uncertainty while «»mim4«y to meet the
goals of the d*a» Air Act EPA
recognizes the legitimacy of the**
concerns but has concluded that trade*
which do not satisfy Level I or D raise
the kind* of sir quality issues which
appropriately require full-scare
modeling, unless such trading ratios
have been Justified by similar ana-wide
modeling conducted in advance of the
trade.
Today's notice does, however, modify
Level ID to provide stales and sourae*-
more flexibiaUTi io this regard. Whet*, a.
tndameetaaiiothazcritariaofLesaia.
but Level D modeling has shows
significant potential increases at
particular recantoca> «"«<^faH "**^YMS
under Laval 01 may under appropriate
circumstance* be limited to a ceceptor
area smatUer than tha trade's entire are*
of impact so bog as i* incradn
emissions from all souross whick
contribute to ambient concentrations in
that limited geographic area. Because of
the unique nature of each situation, tlse
appropriate limited geognphic are*.
must be detamiiMd in accord with-EPA-
guideline* on modeling and cue-by-
case evaluation. This "hasted Leva! IE:
approach may conserve lapiftrsnt
resources, while aUossing states and
«• (nitrated parties
that becaiue ot rtpll
ipptkatioa of any suprnaa*
specific aeWiietii dispeniea:
generic ruk» may be am* difBi
sources to focus on specific geographic
anas of concern.4*
F. Enforceawit taut*
Several commenters noted that while-
sources should as provided in the 1982
policy, be allowed to use bubbles to
come into compliance, bubble
applications might also be used to delay
compliance or enforcement without
compensating environmental benefits.
Some of these commenters alluded to
language in the 1982 notice which, while
not authorizing or intended to authorize
such results, could have been
interpreted to allow them. Such
unacceptable delay might for example.
arise where a source facing an imminent
compliance «ia««iHiM suddenly advances
a bubble application and asserts that
more time is needed to develop and
evaluate that application before
compliance with original SIP limits
should be required
Both bubbles and generic rule* can be
important means of allowing
environmentally-sound compliance.
Generic rule* may b* more expeditious
than case-by-case- SIP revision bubbles.
They may also pieserve the very
opportunity to bubWe when the timer
needed to process a eass>by-oas* SB*
revision might extend beyond th»
source's origin*! SIP compliance da*
implement than mil* incorporatnfOBiy-de auiumit
«nd Level I approaches for SOi. TSP. CO or Hn
Dunn) «nd after inuanca ef tne 1H2 tatans» pvtcy
EPA f taff dtaftaal aad informally oreuktaa. at (fee
request of ssate and local air agency dinctan.
modal fenene rulim which pnvidad oar* datail to
help imausud natea acceptably addrvn theea
coocama. Th« Agave? plan* to epdane. anaV-
mcuculata tboM model ruin aa quickly aa powbte
after pubbcation of today's aouca. EPA aoeourmfn
partln wish** to de»efap lenerlc rain to oat then
new models ana* wuck cloMly with ralcvim
Reftoml rtaff. to Hmt polanttal probftm mry ba
promptly idantifitd and motvtd
shovid not become a sUeU against
enforcement action* for sources which-
have failed to take neceeaaty step* to
meet required control obligation* oa>
time; Babbhw are simply atteraatir*-
meanrof complying at less cost They
should be treated neither more nor him
stringently than other, more traditional
mefhoda of compliance. DubUet offer
innovative ways tomeetendaaioir
reduction obligations. They should oat
become devices to avoid such
obligations.
Today's notice substantially clarifies
and tightens the 1902 policy to better
implement these principles. Among
other steps, compliance extension* wiff
no longer be granted under generic miee
in any oonattainment area, and may be
" Today't aodca alao raquirt* bubbat I
eaftata primary Boaattamiiiaui ama i
lackiai approwd daMMamaaM la pradMa • *«M
air quaflty baotflt" whicn ahatt omaui at a^oaviai
of a JB* nducnoa in tnuMtona iiiiiiuag aAar
tppocauoa of tfaa lowarof-aCTuMg altonabU at
RACT-ailovabla nmaaioiu banliM* to aU inairia
involvtd in taa bnboia. Saa. *>. SaoanB. Babooa.
Thil rtquinmaiit don aotaMait
difftranl tha»o» IB addition la those which do not4'
Emission* Trading Policy Statement
Tabla of ConlaoU; Policy Statement
L bMroducttOK Basic BeatanU of Emi*»u>na
Tradia*
A, What is Eauaaions Trading?
& The Bubble
C Netting
D. Emission Offsets
E. Emission Redaction Banking
F. Generic Trading Rules
C. Effect of This Policy Statement
0. Requirements for Creating. Using, or
BaakiBf Fmiiti-rn Raducbon Credits
A. Creating c~i*"«" Reduction Credits
l. Surplus
i Eniorceable
3. Peroianeot
4. QuantrRable
** Sleln and tourcaa tbouid> however be aware
that under current EPA fMdanca. inch discretion i«
moat Hkal* to be nnoaed wnare a SlP-nntran
baoWe bea on»fomaay pnposed (or upproval it
the ttate bveiaad EPA staff kava concludtd thai n
apfaanapprovabl«uadercamni EPA poiicy In
then orennwraneee imUalton o/ action to enforce
pn-trad* Hmts *al wo»W MM ba unlaced by •
v»M bueoatmxBAvanOoa wojd likeiy consume
Hmiiaa DA ea*nsan»a«M raaovren to uula
enviponmemil end.
-------
43830
Federal Register / Vol. 51, No. 233 / Thursday. December 4. 1980 / NoticM
B. Using Emiaiion Reduction Credit!
1. EmiMiont Tradei Mu»t Involve the
Same Criteria Pollutant
2. All Uses of ERCs Must Satisfy
Applicable Ambient Test*
3. Bubbles Must Not Increase Hazardous
Pollutants
4. ERCs From Existing Sources Cannot
Be Used to Meet Technology-Based
Requirements Applicable to New
Sources
5. States May Approve Bubbles in
Primary Nonattainment Areas Which
Require But Lack Approved
Demonstrations of Attainment
6. Sources Need Not Be Subject to
Binding Compliance Schedules Based on
Current SIP Requirements
7. States May Extend Certain
Compliance Schedules
a. States May Approve Bubbles Involving
Open Dust Sources of Paniculate
Emissions
9. Trades Involving Lead
10. Trades Involving ERCs From Mobile
Source Measures
11. Interstate Trades
12. Bubbles Must Not Impede
Enforcement
C Banking Emission Reduction Credits
III. State Generic Trading Rules
IV. Bubbles Which Require Case-by-Case SIP
Revision*
V. Conclusion
EMISSIONS TRADING POLICY
STATEMENT
L Introductioav Bajic Elements of
Emissions Trading
This statement details EPA policy on
emissions trading. It sets out condition*
EPA considers necessary for emissions
trades to satisfy the Clean Air Act It
also clarifies and otherwise makes final
the Interim Policy proposed on April 7,
1982 (47 FR15076). It is accompanied by
a Technical Issues Document which
elaborates and provides greater detail
on pnnciples set forth below. Finally, it
addresses new issues, and incorporates
certain additional safeguards a* a result
of past trading experience, to better
assure the environmental integrity of
future trades.
A. What is Emission* Trading?
Emissions trading consist* of bubbles,
netting, emission offsets, and emission
reduction banking. These steps involve
creation of surplus emission reductions
at certain stacks, vents or similar
sources of emissions and use of these
emission reductions to meet or redefine
pollution control requirements
applicable to other emission sources.
Such emissions trades can provide more
flexibility to meet environmental
requirements, and may therefore be
used to reduce control costs and
encourage faster compliance. Moreover.
by developing "generic" trading rules
(see Section 12 below] states1 may be
able to expedite bubble approval! by
eliminating the need for case-by-case
SIP revisions* and by providing more
predictable approval criteria.
8. The Bubblt
EPA's bubble lets ousting plant* (or
groups of plants) increase emissions at
one or more emission sources in
exchange for compensating extra
decreases in emissions at other emission
sources. Approved bubbles give plant
managers the ability to implement less
costly ways of meeting air quality
requirements. To be approvable, each
bubble must produce results which are
equivalent to or better than the baseline
emission levels in terms of ambient
impact and enforceability. Thus.
bubbles should jeopardize neither
ambient standards nor applicable PSD
increments and visibility requirements.
Under EF' « bubble, emission
reductions irom existing sources can not
be used to meet technology-based
requirements applicable to new or
modified stationary sources.
This Policy Statement replaces EPA's
original bubble policy (December 11.
1979:44 FR 71779) and* Interim Emissions
Trading Policy (47 JR13078K It tighten*
general bobble principles, a* well as>
requirement* for bubbles in primary
nonattainment areas which require but
lack demonstrations- of attainment, and
requires bubbles in these areas to-
prodnce progress towards attainment
beyond equivalence to stringent
emission limits. By specifying EPA1*-
requirements for bubbles in all areas,
this Policy Statement should make the
development review and approval of
environmentally-sound bubbles more -
rapid and predictable.
C Netting
Netting may exempt "modifications"
of existing major source* from certain
preconstruction permit requirements
under New Source Review (NSR). so
long as there is no net emissions
increase within the major source or any
such increase falls below significance
levels.* By "netting out" the
1 ~SUtM" IndudM any enttry property dMefatod
authority to adnunitMr relevant pert* of • SUM
Implementation Plan (SIP) under the OMB A* Act
• "Caae-fey-caae SIP revuton" oweaa uaa by-
eaae approval by EPA aa a SlPrevtaJon. TWa la the
traditional mechanum by which babbie* aod other
SIP chanae* hava ba«n approved by EPA.
> See. a.«, 10 CFR SVUUHtMx). JIMftXm
3121(bH»|. Saa aiao today « Tadmical laauaa
Document n. 47 and acepmpanytnf taut
On November 7.18SS. EPA natnietund CFR Put
51 and renumbered many of that Part'i aacOon»(51
FR 40S9S). Baeaiua moat raadara wiO ba men
familiar with prior designation*, today'i notice
contain* citation* baaad on tha organization of Part
modification is not considered "major"
and is therefore not subject to
associated preconstruction permit
requirements for major modification*
under 40 CFR 51.18,51.24.5&21, 52.24.
S&27, or 5L28. The modification must
nevertheless meet applicable new
source performance standards (NSPS).
national emissions standards for
hazardous air pollutants (NESHAPs),
preconstruction applicability review
requirements under 40 CFR 51.18(a)-(h)
and (1), and SIP requirements.
Netting's scope is determined by the
definition of "source" for review of
major modifications. In general. PSD
areas use a single, plantwide definition.
allowing actual emission reductions
anywhere in a contiguous plant to
compensate for potential emission
increases at individual emitting units
within the plant Nonattainment areas
can choose either this single, plantwide
definition or a dual definition, so long as
the definition selected does not interfere
with attainment and maintenance of
NAAQS and is consistent with progress
towards attainment Under the
plantwide definition, significant net
actual increases at tha plant as a whole
will trigger new source review. Under
the dual definition, significant increases
at either the plant as a whole or
individual emitting units will trigger new
source review.
In addition to these federal definitions
for majornew sources and
modifications, state preconstruction
permits for major or minor new sources
and modifications may be required
under 40 CFR 51.18{a), and some states
preclude netting.
D. Emission Offsets
In nonattainment areas, major new
stationary source* and major
modifications are subject to a
praaconatructian permit requirement
that they secure-sufficient surplus
emission reductions to more than
"offset" their emissions. This
requirement is designed to allow
industrial growth in nonattainment
areas without interfering with
attainment and maintenance of ambient
air quality standards. It is currently
implemented through SIP regulations
adopted by states to meet the
requirements of 40 CFR 51.18(j).
In attainment areas, some new
sources and modifications might not
otherwise be able to be constructed
because their emissions would result in
SI aa It exiated before thla rainctunne. Interacted
part** may uae Appendix F of today'i Technical
Mauaa Document to convert today'i Part 51 citation*
to the correipondina, new one*.
-------
Federal Register / Vol. 51. No. 233 / Thursday. December 4. 19W / Notices
438:
an euceedenca of Hie apefecabie PSX>
incroMH at ambient ear qaakity
standard, would signifteanHy contribute
to a viobOoa of IB !•*•'*•* air quality
standard in a designated primary
nonattauunent area, or would
significaady contribute to viaibiiity
impairment in a Federal Clasa I area.
Torn* aourcea may iwe emissions offsets
to allow desired growth while protecting
that increment, standard, or visibility.
£ Emission Reduction Banking
Finns may store qualified emission
reduction credits (ERCs) in EPA-
approvable banks for later use in
bubble, offset or netting transactions.
Depending on the bank's rules, banked
ERCs may also be sold or transferred to
other firms which seek to meet certain
regulatory requirements by use of
emissions trades.
BPA's revised Offset Ruling (40 CFR
Part SI. Appendix S] allow* states to
establish banking rules as part of their
SIPs. This Policy Statement and
accompanying Technical Issues
Document detail the necessary
components of a complete state banking
rule approrable under the Clean Air
Act WWe many areas also allow
baaJtiag of enmsten redaction* for
vejioe* pefpoeea thcougB various formal
or informal banking mechanism*, banks-
whkfe do not meet today's criteria (e.g.,
by not BMudna^ banked emission
reduction! enforceable by the state by
the ttBM the redactions are actually
banked, er by not aeeering that deeoeft*
are taken exptidtry into accoaat for SB?
ptemiiug* perpoeesf cannot o^eiify>
emtsaion reductions as ERCs. and may
offer substantially las* protection in the
event ef future SIP corrections or
change* in ambient attainment i
F. Generic Trading Rule*
Generic rules adopted aa part of the
SIP can authorise states to approve
certain types of individual tranaactione
without the need for case-by-caaa SIP
revisions or associated federal review
prior to approval The first state generic
bubble rule was approved by EPA April
8.1981 (46 FR 20551). Far she current
scope of permissiba* mine, see Section
in below.
C. Effect of Thit Policy Statement
Emissions trading is largely voluntary:
no source is required to trade, and no
state is required by EPA to approve a
particular trade or to adopt a generic
rule. Trading merely offers slates and
stationary sources alternative ways to
meet regulatory requirements. For
example, states are free to adopt generic
rules or continue to implement trades as
individual SIP revisions. They may
adopt rule* whicn Incorporate eft or any
combination of the above trading
approaches.*
Thit Policy Statement is accompanied
by a Technical Issues Document for use
by states and industry in further
understanding emissions trading. The
Document offers elaboration and
important detail on requirements and
available options under the Clean Air
Act
This notice reflect! the current Clean
Air Act and existing EPA regulations. A
policy statement cannot legally alter
such requirements. However, this notice
establishes EPA policy in areas not
governed by applicable regulations and
sets out general principles which may
help states and industry apply those
regulations in individual caeca. Federal
or state raienaking la response to. e.g~
future litigation or changes in ambient
standards, attainment status, or SIP
validity, may affect states or firms that
plan to engage or have engaged in
emissions trading activities.
Nothing in today's notice alter* EPA
new source review requirement* or
exempts- owner* or operators of
stationery sourcee from compliance wrtfc
applicable precomtruettoa permit
reguladone- to accord with 49 CFR 51.»
51.24,51 JOT. SL21.SIM. S2JT, and
S2JSL btereeted partfee should.
however, be aware met bubble trade*
are not subject to preconstructfen
review or regulations where these trades
do not involve coejumtluu.
reconsuBUhm. or modlffcattoe? of a
source.
EPA intends to apply changes made
by today's policy proepeettvery (e.g» not
to actions which have already been
approved a* cese by-cese SIP revisions
or tinder generic rates). IF. however.
ambient vtoietione eve diecevereti in an
aree where EPA has approved' a trade.
or if other violations of Qeen Air Act
requirements are discovered in that
area, soercea involved In the trade
should be aware thet they are
potentially subject to requirements, for
additional emission reductions. Just aa
are all other source* in the area.
This policy requires that substantial
additional reductions (at least 20%) is
trading tra net voluntary, for example; <
at e BINT oew KOTO* arneter •wdlflaMlM ta •
MMtta
proffeaa tewevd attejnaeoT <
emiMMna (4S<7lt n.l*ffti *wt 31. AfpeadU SI
HOWVWI** VNMP|T tnaY 4WN natal en) MlatQeBMMO
"trowtb Mrs*" el e*tra redaclfaM hi a S*» wttlea
i* currently aparevad by SPA. fee »te*t ewy provide
the offaeta tarn tfcat grow* awrfoi ratfier tfee*
the nurtiH eceordincly. SeeOeenAir Adeeettoa
173(1 MAI end (Bl
S whi^M
Howe^^
euilssiuiis remeaong beyond applies^
baseline* be produced by future bub
ffl primary nonattilnmeof areas whij
require but lade approved
demonstrations of attainment.
applications for bubbles in such areas
which are still pending at EPA without
formal action under the 1982 policy, or
which were previously subneitted to EF.-
Regions under the 1982 policy but not
accepted for evaluation, will be
reexamiaed and processed for approval
if they meet the requirements of the 19&2
policy and contribute to progress
towards attainment "Progre** towards
attainment" means some extra reduction
beyond equivalence to a iowest-of-
actual-SIP-ailowable-or-RACT-
ailowahle emisaion* baseline, with this
baseline applied as of the time
applicants originally sought credit
Pending bubbles in attainment areas
and nonattainBwat areas with approved
demonstrations of attainment will be
processed for approval if they meet the
requirementa of die. 1963 policy and
show that ambient standards. PSD
increments aod> visibility will not be
jeopardised.
For further discussion on pendfeig .
bubbles see Section l.A.l.b.(4) of the
Technical bane* Document. *-
0. RequiiesMOts for Craatug, Using, or
nanirii^i»ieaieegednctu»oCredks*
A. Creating Emission Reduction Credit
Emia
daction credits (ERCs) are
the common currency of ail trading
activity. ERCs may be created by
redaction* from either stationary, ares.
or mobile source*. To enure that
emissions trades do not contravene
relevant requirsssenls of the Clean Air
Act only redMCtioas which arc surplus.
enfoeaobie, permanent, and
quantifiable can qualify as ERCs and be
banked or used in ae emusions trade.
•EM aonnfaeea etaiee or aeurcei whtch
(ubeutted hfihhlea that were relumed without
rrahuttod by EPA to reenboot them under ih»«
erilene. provided they can dooiajem (ai lomiL
ttaeiy Nbmttal of ea applicauoa to EPA m iczora
w«a aomai EPA procedure* and fb) thai tne
eppJksifae wee rtormd vMtbout evaiua lion, ra ther
ttua re»ected fbrftihire to meet the terma of the
19*2 pottcy. Bubble appctcatloaa whtch wen
leeefted tar evateedoa bu« relected for {aOun to
meet *• 1SBS poHey wffl be treated aa new
appticatfaaB onder today't notice.
•Secaoae tola Potter Statement and
accaopeoyini Tedweal Uaue* Oocument rcilect
taaenl Cken Ak Actpnnctple*.date*, individual
aource*. or cpraneaten OB tpeciflc rulemakm;
ecttona ire free to ahow dial a eeoeral prtnc:ple
doea ne4 epply to particular drcunuunctJ or :ouid
be aeHefleet urine, appneeha etker than iho*«
deeertbeet 3Mtee. tourcee and eoaunenten h* k t
Hue opfto* nader carrent lew. and nothing m thi«
Potlcy StatetMHt or t»» TechnieeJ taauee Doeumetx
reetrtcn Aeir opponenity to make luch showings
-------
43632
Ftxkral RagUUt /. VoL-Sl.-No. 233. / Thuraday. December^ 1966 / Noticsx
1. Surplus. At mraianinvaiily emission
reductions-not required by current
regulations in the SIP. not already relied
on for SIP planning purposes, and not
used by the source to meet any other
regulatory requirement can be
considered surplus. To determine the
quantity of emission reductions that are
surplus, the state must first establish an
appropriate emissions baseline from
which surplus reductions can be
calculated. Baseline emissions for any
source are the product of three factors-
emission rate, capacity utilization, and
hours of operation.7
In attainment areas, the lower of
actual or allowable values must
generally be used for each of these
baseline factors. However, allowable
values for one or more of these factors,
when higher than actual values, may be
used in calculating the baseline
emissions, provided those values are
shown to be used or reflected in an
approved demonstration.* The burden of
meeting this test by written evidence
rests with the state or applicant which
seeks to use an allowable value.
When allowable values for one or
more baseline factors are not used or
reflected in an approved demonstration.
such values may still be used in
calculating baseline emissions.
However, in such cases applicants must
perform appropriate modeling to
demonstrate that allowable values
which are higher than actual values will
not delay or jeopardize attainment and
maintenance of ambient standards.*
'For further diacusston of these Melon a* they
rel*le lo b**eiine calculation*. IM Appendix B of
the Technical Issues Document
•Thit statement don not apply to netting. where
"contetnportneout" actual emission* are alway* the
baseline. See, t*. 40 CFR 51J446H3).
Dubbin in araai with dcmonctranana beead eniy
on qualitative ludgnwnta («+. the "example regtoo"
approach or no technical support) ordinarily may
not rely, without appropriate modeling, on
allowable value* in calculating baaeuae emisnone.
However, bubble* in areas with denonitratrana
baaed on rollback or dupenion modeling may UM
allowable values that are reflected in the
demonstration. In certain cvcuauiancai an
allowable baseline value specified in a
preconstrufTtinn permit may ba deemed equivalent
to one uicd or --fleeted in *a approved
demonstration. S*e Technical m*M* Document a. 7.
For further definition of 'actual" and "allowable"
see today » Technical Issue* Document Sectua
I.A.I.*, and Appendix B.
• This demonstration would require a Laval II
modeling analysis. 10 accord with the aodetiog
screen discussed below, using actual emissions for
the pre-bubbte case, unless, for 6uW>/es processed
as coit-by-cose SIP revmons. the Region
determines that additional technical support is
needed to protect applicable standard* or
increment*. For discussion of Level U modeling, see
Technical Issues Document section I.B-l.b,(3(- For
lurther discussion of additional technical support
which Regions may require in these circumstance*.
see Technical Issues Document Section 1-A.l.a. For
a discussion of parallel modeling requirement* for
In attainment area* where the PSD
baseline has been triggered, credit may
be granted consistent with the PSD
baseline concentration as specified in 40
CFR 5U4{b)(13} and 5i21(b){13). This
will generally require use of actual
values for each of the baseline factors.
However, states may use allowable
values if they show through appropriate
modeling I0 that attainment and
maintenance of neither the ambient
standards nor applicable PSD
increments will be jeopardized, and
quantify the amount of increment
consumed.
In nonattainment areas with approved
demonstration* of attainment, the
baseline must be consistent with
assumptions used to develop the ana's
demonstration. This generally means
that actual values must be used for each
baseline factor where actual values
were used for such demonstrations, and
that higher allowable values for these
factors may be used where allowable
values were used for such
demonstrations.11 The burden of
showing that an allowable value was
used or reflected in the approved
demonstration rests, with the state or
applicant which seeks to use an
allowable value. In the absence of
written evidence to that effect full Level
HI modeling would be required to make
use of an allowable value in baseline
calculation*.11
hi primary nonattainatent areas
which need but lack approved •
demonstrations of attainment. stater
must show that bubbles meet special
"progress'' requirements designed tt> -
produce a net air quality benefit This-
must be demonstrated by (1) osing the
lowest-of-actual-SIP-allowable-or-
RACT-allowable emissions baseline for
each source involved in the trade; " (2)
meeting the ambient equivalence testa
outlined in sections ILB.2 of this Policy
and LB.l.b. of the Technical Issues
Document: and then (3) producing a
substantial net reduction in actual
emissions (I.e, a reduction of at least
use of such higher allowable values in attainment
area* under generic ru/e*. see Technical lamaa
Document. nJl.
'• See nJ above.
1 ' For netting, "contemporaneous" aetasU •
tan serous are always the baseline. See. e^. 40-GFlt
Sl-latJMIMvl).
'•Foth»rtJ»dl*cu**io*io«Uve*aJmo«ieu«a>see
Technical Issues Document, secti
" For purpose* of today'* nonce, the "lowest of
sctual-SIP-aUowable-or-RACT-alkmabk-
emissions besehne means the product of (1) the
lowest of the actual eimsswe rate, the SIP or other
federally enforceable e*us*ion unit or a RACT
emission limit and (2) the lower of actual or
allowable capacity utilisation and hours of
operation. For further discussion of this baseline.
see Appendix B of today's Technical Issue*.
Document
20*in the emission*) remaining aft«r
application of the baseline specified
aboveVThe state muet also pnvide
assurances that the bubble is consistent
with ambient progress1 and future air
quality planning goals.14
2. Enforceable. To assure-that Clean
Air Act requirements- are met each
transaction which revises any emission
limit upward must be approved by the
state and be federally enforceable.
Means of making emission limits
federally enforceable include SIP
revisions (see section IV below). EPA-
approved generic bubble rules (see
Section HI below), and new source
preconstrucfion permits issued by states
under EPA-approved SIP regulations
pursuant to provisions of 40 CFR 51.18.
51.24. or 51.307, as well as construction
permits issued by EPA or delegated
states under 52£1. »• Bubbles should be
incorporated in an enforceable
compliance instrument which requires
recordkeeping based on the averaging
period over which the bubble is
operating, so it may easily be
determined over any single averaging
period that bubble limits are being met.
3. Permanent Only permanent
reductions in emissions can qualify for
credit Permanence may generally be
assured by requiring federally
enforceable changes in source permits
or applicable, state regulations to reflect
a reduced level of allowable emissions.
41 Quantifiable. Emission reductions
must be quantifiable both in terms of
estimating the amount of the reduction
and cAavoctemuig that reduction for
future use. Quantification may be based
on emission factors, stack tests.
monitored values, operating rates and
averaging times, process or production
inputs, modeling, or other reasonable
measurement practices. The same
method of calculating emissions should
generally be used to quantify emission
levels both before and after the
reduction.
& Using Emission Reduction Credits
ERCa may be used by sources in
bubble, offset or netting transactions.
The general principles below will assure
•Thai
I may be found in the
Techneal laeuee Decumant it LA.l.b.0). EPA will
not isBoadgasss neb state ***uranc**> provided
they am(t) A tabataaaal let* applied by the stst*
lo each bubble, and (21 the state ha* explained how
the pTBPCMd bubble I* consistent with the are* s
preiected attainment strategy. This authority has
not been delegated wttb ff A. See Clean Air Act
section Wlle)tU*2 US.C T801(*)(l|.
" EPA la alao considering generis step* which
weald make state operating permit* federally
enforceable. Prior to IBM. benJad credit* need not
be made federally enforce**-. See Section II.C.
below.
-------
Federal Regular / Vol. 51. No. 233 / Thuraday, December 4. 1986 / Notices
4383'
that all uses of ERG* are-consistent with
ambient attainment and maintenance
considerations undar tha Clean Air Act
They are further articulated in the
accompanying Technical Issues
Document
1. Emissions trades must involve the
same criteria pollutant. An emission
reduction may only be traded against an
increase in the same criteria pollutant
For example, only reductions of SOi can
be substituted for increases of SO».
Z. All uses ofERCs must satisfy
applicable ambient tests. The Clean Air
Act requires that all areas throughout
the country attain and maintain national
ambient air quality standards and meet
applicable ambient requirements
relating to PSD increments and Class I
protection, including visibility. The
ambient effect of a trade depends on the
dispersion characteristics of the
pollutant involved. With the exception
of visibility for NO* dispersion
considerations will generally not affect
trades involving VOC or NO,, whose
impacts occur across broad geographic
areas. For these pollutants "pound for
pound" trades may be treated as equal
in ambient effect where all sources
involved in the trade era located in the
same control strategy demonstration
area, or where the state otherwise
shows such sources to be sufficiently
close, that a "pound for pound" trade
can be justified However, dispersion
characteristics are important for bubble
and offset trades of SOi, particulates.
CO. or lead, whose ambient impact may
vary with where the emission increase*
and decreases occur. To assure ambient
equivalence, such trades of these
pollutants must satisfy ambient tests
under the modeling screen discussed in
the Technical Isiut* Document or under
a similar, equally effective approach."
'• for simitar reasons, bobbin of the** polluunu
mutt involve source* which ere in thesame or
•djacrat control strategy damonatnuos) areas
within dw MOM general air bum.
See section O.A.I. *bov* ud Technical Ueue*
Documtat Section LA. La regarding additional
technical lupport required for certain trade* IB
attainment artai.
Whilt bubble* in primary oenattiuuMnt anca
which need but lack approved ilaamnsiniiiini of
attainment nuat product a MI aw quality benefit.
thii don not entail additional ambient tests. Such
bubble* muat first meet the general taeta under the
modeling screen showing ambient equivaienca for
bubbles, prior to producing the required additional
reductions. They must then produce additional
reductions of at level 20* beyond the applicable
baseline emisaiona used to demonstrate ambient
equivelence. Since these additional reductions mil
necessarily reduce ambient concentrations below
equivalence M some receptor*, while aonluiumf t*
meet the tests for ambient equivalence at all others.
a net air quality benefit should occur and no •
additional ambient showing*, beyond those
generally required for all bubbles, are required.
3. Bubbles must not increase
hazardous pollutants. Bubbles may not
be used to meet applicable requirements
of National Emissions Standards for
Hazardous Air PoUutanta (NESHAPs)
promulgated under section 112 of tha
Qean Air Act to increase emissions at
any source beyond the level* applicable
NESHAPs prescribe, or to create any net
increase in baseline emissions of a
pollutant regulated under section 112.
The applicable baseline for regulated
sources is the lower of actual or
NESHAPs-allowable emissions of the
hazardous pollutant
Where a NESHAP has been proposed
but not yet promulgated for a source
category which emits a pollutant listed
under section 112. the proposal will
serve as aa interim guideline for
evaluating the effects of any proposed
emissions trade involving a source that
would be subject to the proposed
standard. In general such trades will be
epprovable with respect to the
emissions component of the trade
subject to the proposal so long aa they
result in emission limits at each source
emitting the relevant pollutant which are
equivalent to or lower than those the
proposed NESHAP would have required
if already promulgated.'T
Where a pollutant has been listed
under section 112 or where EPA has
published a Notice-of-mtenJ-to-Liat but
no regulations for the source category
involved in the trade have yet been
proposed or promulgated, me trad* will-
generally be acceptable with respect to
the emissions component of dw trade
subject to notice or listing, if then is no
net increase in actual emissions of that
pollutant as a result of die trade.'•
Any trade involving source* or source
categories subject to the preceding
subparagrapha must take place within a
single plant or contiguous plants, and
nrast credit only reductions below
current actual or NESHAPs—allowable
emissions, whichever is lower. Bat d
generally n. 8 above and today's
Technical Issues Document section
I.B.L<±
Trades which do not meet the special
restrictions discussed in this section
may also be approved when surplus
reductions in the pollutant* addressed
" The allowable emission rate for a source
•ubiecf to e proposed NESHAP (s the limM
stipulated In the proposal.
>• Where EPA h*a issued e -Nortce-oMntenl-Ne*-
te-Regulate" one at more source categories for a
listed polloJant. emission* o/ that poUotant (ran the
unregvlaied sonic*; caiefory will ismiTheeise fee
treated the same a* etmsion* of any other listed
pollutant Under limited circumstance*, simlar
treatment will be given- to pollutants for which a
"Nolice-of-lmeiH-Woi.lo.Uar ha* been pnbnsfted.
See the Technical Issues Document section Lfl-l.d. -
above compensate for increases in r.cr.-
hazardous emissions of the same enter,.-
pollutant (e.g. benzene, a hazardous ••
VOC It reduced to create credits for JV
increase in non-hazardous VOC
emissions.) A* long as such a trade
would not result in an increase in either
actual or allowable emissions of a
pollutant subject to the preceding
paragraphs at any source, it would not
differ in nature or requirements from a
trade involving only nonhazardous VOC
emissions.
* ERCsfnm existing sources cannot
be used to meet technology-based
requirements applicable to new sources.
Under Clean Air Act section 111 and
ating regulations, new
EPA impli
affected fi
I facilities must satisfy
technology-based New Source
Performance Standards (NSPS).
regardless of the attainment status of
the ana in which they an located.
Under section* 189 and 173 and EPA
implementing regulations, new or
modified major stationary sources must
also satisfy technology-based control
obligation* associated with pre-
construction permit*. These
requirements prohibit use of credits
from existing sources to meet or avoid
applicable NSPS. and bar use of such
credits to meet applicable new source
review requirements for best available
control technology (BACT) in PSD areal
or lowest achievable emission rate
control technology (LAER) in
nonattainment anas.1*
3. States may approve bubbles in
primary nonattainment areas which
require but lack approved
demonstrations of attainment, provided
such trades meet requirements designed
to produce a net air quality benefit and
the state provides certain assurances.
See section ILA.1. above and the
Technical Issue* Document section
LAJ.b. Bubble* which meet these
objective requirements will be
processed for approval by EPA.
A Sources need not be subject to
binding compliance schedules based on
current SIP requirements before they
can apply for a bubble which would
supersede those requirements. Sources
that an already subject to binding
dbmpiiance schedules should be aware.
however, that such schedules remain
fully enforceable until a bubble affecting
the schedule has been approved by EPA
or under a state generic rule and the
•• But cl section* 1C and LD.etov*.
Today's node* do*» not address whether or unaer
what eUcanuancM todllbee subfect to NSPS.
•ACT or LABI may svrp*** applicable permit
limits reflecting nidi requirementa In order to create
credits for exiaong-souree trade*.
i
-------
PaefaMi Raajatar / Vol. 51. No> 233 ( Thorniay. Dacemfcer 4. itm [ Notices
schtdok ku bees oadifi«d MMMbofiy.
Some* subject to campliimc* schadaks
in adBriaiatrativ* ord*rs.or jadkiai
decree* nu*t obtaia prior aaeroval from
EPA or the relevant cowl M
appropriate, to be relieved from the
schedule contained in the order or
decree. Sources that are subject to SIP
requirements remain responsible for
meeting those requirements unless and
until a bubble has become effective
under Federal law. See section ILB.12
below.
7. States may extend certain
compliance schedule*. States may no
longer grant compliance extensions
under new or revised generic rules in
nonattawment anai. whether or not
such areas have demonstrations.10
However, states may continue to gnat
compliance date extensions under
generic rules in attainment areas,
provided EPA has approved tie
extension provisions of the generic rule
as being adequate to comply with the
Clean Air Act including requirement*
for attainment and maintenance of
ambient air quality standards.
States that wish to give sources in
nonattaimnnt areas, and sources ia
attainment areas far which there ia no
applicable generic SIP provision, moea
time to implement bubble* bjr granting
compliance extensions. Bat receive
EPA approval of the extensions through
case-by-case SIP revision. Requests for
such compliance date extension*.
whether in attainment or nonattainmant
areas, may be submitted to EPA together
with bubbles, as part of a single SIP
revision package. EPA will separately
evaluate the time extension portion of
these SIP revision package* in accord
with the Agency's normal criteria for
review of time extensions, including
consistency with the Act's requirement*
for expeditiousness. reasonable further
progress, and attainment and
maintenance. Sources should be aware
that disapproval of *ach time extension
requests may result ia disapproval of the
entire package (i.e., both pact-trade
limits and the time extension) or only
part of it, depending OB whether the.
10 ExMtins generic ruJ« a*»oEobei to thn* eraej
must bo revieed to comport MI* tiue enoapet
where they contain men generic exlovton
provision*. SPA *rtll puoliift Federal Reciter
noeiooa loarmfytiif any-generic ntat-wMdi reqwrr
form! modificaiiuii Fadwe ID roolve rliflnoWloi
identified la wcfe a notice witJua the preecribod
time period may mull in EPA retcmdmf, approve]
of the uiiting generic rule or timing • 1101101 of 84P
deficiency. EPA. enpocu attlts to«
utttnok «o for M teiotbic iho( <
txtenetona under Hiving j
gnnled to KMreoa located IB i
See icctMn UI below tod MCUOO ILE.4. at the
Technical U>uei OoataeM.
state view naae C9*nanieateef'8w
prapeeed &Q> rtvifssjia* seaarafcra.
A States WHJ opn
invotviot opan duet were** of
particuJate emmiem. baaed on
modeling demoasmbens. Open dwt
trades may be approved through
individnal SIP revisions based oa
acceptable modeling and/or monitoring
demonstrations, provided source* agree
to post-approval monitoring to
determine if predicted air quality results
have bean resumed and make an
enforceable commitment to achieve
necessary additional reductions if
predicted results do not materialize.
A Trade involving lead. Unlike other
criteria pollutants. EPA doe* not
designate nonattainmcnt anas for lead.
However, the Regional Administrator
will review lead trade*, as all other
trade*, to assure that they do not
interfere with attainment and
maintenance of NAAQS.
10. Trade* tnvofring ERCa from
mobile source measure*. ERCa from
mobile source measure* may b* used la
meet SIP requirement* applicable to
•Dieting stationary soorces. so long a*
such reduction* are- earpras, pemaaeat
quantifiable, and enforceable.
source measures (e.g.
in typeat
ma***™.
cai
conversion ef existing vehicle Heat* t»
cleaner fuels saca a* methanol) may
satisfy these criteria awn nadfly man
those from other tnmport-niatad
meaaan*» nowevar* doe to poeaiUa
difflcultie* in determining whether
specific anbiie-souiea redaction* Mly
meet these criteria, all saca trade* BM*t
be implemented a* case-by-case SIP
revision*.
11. Interstate trade*. Trade* involving
source* located in neighboring state*
may be approved, provided they meat
all other requirement* of today's ootie*.
However, in order, to avoid complex StP
accounting isswe*. where stale tradfaig
requirements differ EPA will reejaira that
such trade* meet the svostanttva
requirements of the more stringent state.
In general EPA will deem ERCs created
in one state to contribute to piugies* in
the stata when used to the extant of
that use, provided mat applicable
ambient tests (section U.BL2 above) an
met Interstate trades must be
implemented through case-bycaaa SB*
revisions.
12. Bubbles must not impede
enforcement In general, bubble* art a
form of SIP revision which should be
treated neither men aor lea* sttssajoatrjr
than other SIP levisiuiis. Duoole* snowd
not become a shield against
enforcement actions far SOOMM whioa
have faded to take aecasaary step* ta
tram-
Source* saaifag trade* sfaooid icte
that Qtay remajsi SBnyect to enrs^i^cjvii!
of existing (pn-trade) SB* Hants until toe
bubble 1* approved EPA will BM ae
same ptinciptas and procedwn 1-*
deciding whether to initiate enfereeaegt
action in these cJrcnmatancas as *he
Agency applie* to any other scarce
which is subject to a proposed or final
SIP revision.
Under established EPA policy.
regulated sources mast be subject to an
applicable, enforceable emission limit at
ail times. Accordingly, sources which
have approved bubbles with emission
limits effective at a future date, and
which an not in compliance with their
pre-trade limits prior to that effective
data, may be subject to enforcement
action, which could include penalties
baaed on a faihin to meat the pre-trade
limit*. Source* in these situations may
wish to mjMriiM the chance that capital
expenditure* may be required to meet
pre-trade limit*, either by (a) agreeing to
post-trade compliance date* which are
•abstantiaily similar to (heir pre-trade
compliaaca date*, or (bj accelerating
their compliaaca with Bost-trade-linut*.
laaaoard with the general principle
that bubble* should be treated neither
mon nor lea* stringently than other SIP
action*, implementation of this Policy
Statement will be neatral with respect to
EPA anJofcamaat of pea-trade emission
limit*. This mean* that EPA will not
•pacifically select far enforcement
•man mmfimapJiaat sources seeking to
u*a • babel* either to come into
compliance or ta restructure traditional
compiianoa. However, it *l*o means that
EPA will not withhold or defer
enfftrrtmem simply because a source is
seeking alternative emission limits
through • bubble. In exercising its
enfoBcemeat discretion. EPA will apply
the same coaaideratien* to
nnnnamplisnt sources which seek to
comply through bubbles as to those
wnten do not*
C Banking Emission Reduction Credits
Only eaitSMa reductions that are
surpro*. permanent quantifiable, and
enforceable can qualify as ERCs and be
depoaitad in EPA-approvable banks.11
Such bank* offer source* legal
leuognUKjnjyt qualifying reductions
meet mesa ERG requirements. However.
** UMar lotrfi notice anMon reductions mutt
b* BMdi OBjoBBB»Ue,«y tflo jtaar In order 10 quahry
a*BVCo tat boJiauilteJ tai EPA^ppreveble
I mere dcpotit of a
I at enriaeton tncreaie*
nebena need not be made
fedeiejr?
-------
FedereJ Retiatar / Vol. si. No. 233 / Thursday. December 4. Me* /
tht fact thM aa ERC IMS been beaked
doM not ratev* it fromlh* nMd to Mtt
ail criteria of the specific regulaJofy
program under whfch it it to bt used."
Because Mine trade* hive special
limitation* (e.$. only reductions.
occurring at the same major stationary
source can be used for netting), banks
do not guarantee the validity or specific
amount of particular banked ERCs for
all potential uses or for all time. To
provide maximun protection for the
environment and sources and to avoid
potential legal problems, state banking
rules may specify the types of sources
eligible to bank ERCs and any
additional conditions placed on
certifying, holding or using banked
ERCs.
State banking rales may establish
ownership rights. However, any such
rights must be consistent with dean Air
Act requirements, mending the
requirement that SIPs provide for
expendittons attainment and
maintenance of ambientair quality
standards and protect PSD increments
and visibility. To be approvable by EPA.
such banking rules must also treat
banked reductions as current actual
emiseians "In the air" at the source of
their creetfoa. in order to protect the
integrity ox future air quality planning.
Failure to track the ambient effects of
such beaked redactions (04. by not
including "***ff m a new or updated
inventory used for SIP planning
purposes, or by relying on thoea
reductions to secure attainment
redesigns Dons) would ordinarily
preclude their ese as ERCs, due to
double-coating. Nevertheless, states
have coasiderabie latitude in meeting
these requirements, and may guarantee
banked ERCs •faint fufl orpertieJ
reduction in quantity, so long ae that
guarantee does not undermine
attainment redesignetions or interfere
with progress sod attainment should
ambient standards change or additional
emission reductions be required. Tne
Technical Issues Document* section
LC9. outlines ways each-guarantees
may be made effective/ ceiisistem with
these requirements.
In many states, banking souk) be an
extension of oegoiiig-preconetRMtiea •
permit ectWtiea. The statewiss • •
designs* could accept and evaluate
requests to certify an ERC maintain a
publicly-available ERC registry or
similar muniment describing the
ttoraomaoj.br i
IO aolAvOOBM tBO bOOOUM aOttl MOO>Of
uodtta. for approval M SIP r
quantity and
and track transfers aad wrtadnwats of
ERCs. . .
Because banked redactioas da not
increase emissions at ear saarea. they
need not be made federally enforceable
until used. For administrative or otisar
reasons states may. however, choeee to
make them federally enforceable upon
deposit How the state makee a
reduction federally enforceebie for
banking will depend oa the type of
source at which the reduction occurs. la
some states, reductions associated with
other modifications at a source caa be
included in federally-enforceebie
preconstniction permits issued *nnfr*r
rules approved pursuant to 40 CPR 5118,
31.34 or 51J07. States with E3PA-
approved generic rales on use their
rules' procedures to make redurtionr
occurring st existing sources federally
enforceable. See Section 01 below. Since
these tnasactions involve oar?
reductions, air quality modeling is
generally not required to assure diet
new emission limits do not iiilaifaia
with attainment and maintenance of
ambient standards, protection of
applicable PSD increments, or
impairment of visibility m mandatory
federal class 1 areas. Such redactkn
wtfautoaostfcaliyaaofttaeeaaaric-
rule's test of whether a particmar limit»
withia EPA's prsappro»ed array of
acceptable emissioa limits.**
States without EPA-epproved L
rales caa adopt miss llmiaul In tieiiklag
transacHoiiai or eaa use tae stajedard
SIP revisioa process to maiso reoacfiBBe
federally enforceable et exstmag
sourcea. Geaerai state preoaeetracboa
permit or review prognsas that have
received EPA approval may also be
used for this purpose, since permits
issued through such programs are
federally enforceable. See 40 CPU 81.1*
S1.24: 51J07.M
BUG la lotor moaotad far ooo la o trodo. to tfco
txtont •odooovj w sonoroUjr
particular typo of
•« to prfcoorr MwootouuMM arm ivftico
IMH fact opejiiW oaoioo»ti»lrtna. ooa I
i of boakod anoMi proeoood by
toraM 00*00 of
tfWtf VM tO OQwfOCt tO
UM of cmissioa reduction
EPA as generic far kiaotified dasael
trades will net require individual SIP
revisions for those trades. The Technics
Issues Document explains acceptable
generic procedures which suie» may
adopt to reduce toe need for lacuviauai
SIP revisions.
Emissions trades can be approved
without case-by-case SIP reviswoa if
evaluated by the state under EPA-
approved procedures which assure that
ao trade which meets their terms will
interfere with timely attainment a ad
maintenance of ambient standards.
protection of applicable PSD increments
or visibility provisions. State generic
rales are approvable only if their
procedures an sufficiently replicable in
operation to meet this test By approving
the generic rule, EPA approves in
advaaca an array of SIP-compatible
emission limits, and no further case-by-
case Federal review or approval is
required for individual trades which
meet tha terms of the rule.
In cedar to ensure that generic rules
an proaariy ''"f »•"•"»«< EPA intends
to (a) examine, aad caauMnt oa
together with eay other public
comnsmter. the tetanaation which o>u»<
be araeicMnxiadrvidaal trades
proposed by states uader a generic
(b) conduct reviews of individual
bubbles approved under a generic rule,
aad (e) iriritriiffVr audit the genera!
Baotattoa of geaeric rukts. M part
itnpla
of its Nattaael Air Audit System review*
of state air programa.**
Any trade under a generic rule will
involve emission increases at some
sourcea and extra emission decreases at
others. For tradea to be approvable
under a generic rule, the sum of these
increases and decreases (beyond
bt pnrvMhd •*•*••; otkv *•! ui apBHanon to
dtpMil UM«nttlU IB t farmaJ bank w««
to Ik* MM* pnor to *• om* tha •Butdow
. or thai KM Mat*
OB*» oooUNre*oJtiB(cneliii»o&innmo«.For
flaT CBrtaWBrlUHWI Ifl TnttVt Ol
of dOMbioeooafint or *iWmn«
(WooobOBkod
wntoai appUeadoa waa *Bbout»ol «•
lor PY ISSt. Offlaa of Ao?Quality PUnn.nj? and
•1963L
_i_i w | (hat do »o« mew t*
I Of (10
uumauiont mtb ooo of • trrmtl
kprtortotfto
i uuLoiio*. POT
ill
enruiioMOA
pufaiieoUoo of loday'i
bKhrwuinruJly
anforeoobloc Conorte niiao finno^e be sencrinr
-------
43836
Federal Register / Vol. 51. No. 233 / Thursday. December 4. 1966 / Notice*
applicable net baseline emissions} must
be zero or ItM. Sutyect to this
requirement states may adopt generic
rules which exempt from individual SIP
revisions: (1) De minimis trades when
total increases in emissions from ait
increasing sources (which must be
balanced by equal or greater emissions
decreases from other sources! are less
than 25 tons per year (TPY) of
participates. 40 TPY of SOi, 100 TPY of
CO. or 0.6 TPY of lead, after applicable
control requirements: (2) large classes of
trades involving VOC or NO,
emissions:*' (3) trades between certain
types of SOi sources, between certain
types of CO sources, between certain
types of stationary lead sources, or
between certain types of participate
sources, for which it can reasonably be
assumed that "pound for pound" trades
will produce ambient effects equivalent
to those which approved air quality
models would predict: and (4) other SOi.
CO. Pb or paniculate trades which do
not increase baseline emissions and for
which carefully defined modeling
predicts no significant increase in
ambient concentrations.
States and sources should, however,
be aware that because of replicability
problems inherent in modeling, generic
rules which rely on preapproved
procedures for modeled demonstrations
of ambient equivalence may be difficult
to draft or implement and many trade*
may not be approvable under such rules.
For these reasons generic rules covering
only the first three classes of trades
above will often prove easiest to secure.
EPA encourages states to work closely
with EPA Regional Offices to formulate
and adopt approvable rules or develop
alternative approaches that equally
assure attainment and maintenance of
ambient standards and protection of
PSD increments and visibility. See
Section II of the Technical Issues
Document, which details criteria under
which such generic rules may be
approved.
To the extent general state procedures
for rulemaking or permit changes do not
assure reasonable puheJe notice of
proposed and final limftror effective
opportunity for comment on proposed
trades, states must incorporate such
provisions in their generic rule*.
In primary nonattainment areas
which need but lack approved
demonstrations, new generic rules must
require, and existing generic rules must.
as requested by EPA. be revised to
require bubbles to use lowest-of actnai-'
SIP-allowable-or-RACT-allowabie
emissions baselines, and produce a net
air quality benefit (as described below.).
New or revised generic rules in these
nonattainment areas must be
accompanied by certain assurances of
consistency with air quality planning
goals as weU as a commitment to make
certain additional assurances when the
state approves individual bubbles under
the rule. Bubble* approved under
existing generic bubble rule* before die
effective date of this policy will not be
affected by these requirements. Because
EPA-approved state regulations have
independent legal force, future bubblea
submitted under existing generic rules
may also be approved by states in
accord with those rule*, until such rules
are modified to meet the criteria
below."
Existing generic rules in these area*
must be modified to assure that bubble*
prod'j $ an overall emission reduction at
least -jual (in percentage terms) to die
overati emission reduction from
controllable sources (in percentage
terms) needed to attain in the are*.
Criteria for modifying generic rales are.
set forth in Section H.D. of the Techaieai
Issues Document including a
requirement for a reduction equal to the
greater of either the percentage?
reduction required for attainment, or •
20% reduction in emissions rem*Mof>
after application of appropriate
baseline*. New and pending
application* for generic bubble rule*
which meet these criteria will be
processed for approval
EPA will publish Federal Regie***
notices identifying any generic rule*
applicable to these areas which require
formal modification in order to meet die
progress requirements above or other
requirement* of EPA's current Emissions
Trading Policy. These notices will
identify specific deficiences and mean*
for correcting them, and will specify s>
schedule for submittal and review or
modified rules. Failure to resolve
deficiencies identified in these notice*
within the prescribed time period may
result in EPA rescinding its- previous •
approval or issuing a notice of SIP
deficiency.**
IV. BMbUee Which Require C*e*-1
" In the interim. EPA expecta state* la i
fir u feasible. Uul future bubbieo iparavi
dud*
" Where visibility impairment due to eleveled
NO. emissions it • concern, generic trades
im niving NO, mu»t ordinarily be subject to imbient
requirements similar to thoee appUceble to generic
irades involving TSP SOi. CO or Pb.
euaiina; genera rule* en eonaietem with tale policy
is well aa the term* of their EPA-approved i
Sletee should be twere that without due or i
precaution*, continued approve! of bubbaaa i
emetine, generic rule* coaieimof ideatnJIad
deficiencies may create or accentuate plea
deficiencies (hat may have to be ueatumi at • later
data or compensated for by other meant See-
section I1.E.4. of the Technical leeua* Doctonent
*• Such notlcee may alao be laeuad (or enattif
generic ruiee in ettainment area* and noaatummaat
State* and source* must use the i-a.-'-
by-case SIP revision process to
implement bubble* which are nor
covered by a generic rule. Because -Jie
case-by-case SIP revision process can
take account of many more individual
variation*, numerous trades which could
not be accomplished through gener.c
rules or similar means may still be
approvable a* case-by-case SIP
revisions.
EPA will take action on generic rules
and individual trades submitted as SIP
revisions as quickly as circumstances
permit after a state has adopted a SIP
revision and submitted the action to
EPA. EPA encourages "parallel
processing" of such SIP revisions, with
EPA and the state conducting
concurrent review so that both agencies
can propose and take final action at
roughly the same time. EPA will also
publish noncontroversial SIP revisions
as immediate final actions, converting
them to proposals only if requests to
submit advene comments are received
within 30 days (see 46 FR 44477,
September 4.19BI). hi all bubble actions
EPA will dearly identify (or require
state* to identify, a* appropriate) both
pre- and poet-trade actual and allowable
emission* tot each source involved in
the trade, so that the. ambient effects of
each bubble may be known.
V. GMduatea
This Policy Statement sets out basic
principle* for approving individual
trades and generic trading rules. It
tighten* many requirements in order to
better ensure SIP integrity and
environmental progress, while offering
ample opportunities for use of
approvable. environmentally-sound
trades. EPA encourage* states and
sources to u*e these principles as a
framework and refer to the
accompanying Technical Issues
Document for further discussion and
examples. EPA also encourages states to
develop other approaches which satisfy
these principles while meeting their
specific needs.
atrana. if theee
generic rulae an found to require procedural
revision la order to salca than comment with the
current Bmiaatona Tradiaf Policy. See Technical
lacuee Document section ILK,*.
EPA recognise* the additional ttmnnj burden-
which may be Impnaart on bubble applicants m
tree* where new generic rule* cannot be or have
net been developed to new the specific air quality
benefit requirement! deecrtbed abort, and will
attempt so far aa feasible, to eneilorats that burden
In lopiaaantiBS this policy. See. e.g. n.i and section
0-8-12. above and related Preamble discussion, at
n.4S and accompanying tsaa.
-------
Federal Regbter / Vok 81. No. 233 / Thursday. December 4. 1966 f Noticw
4383:
At-a policy etirlMMBt* this MiUu dotM
not establish coneh*Ne*y how EPA wHI
resolve IMUM to indMdMi oeaet EPA
Will aCCCpt publlC CMBMRt OO IpeClnC
SIP change* submitted udtr it and will
review individually each generic rule
and thote emission* trade* •ubmitted at
SIP revision* to determine their
acceptability under the Clean Air Act.
Interested parties will have foil
opportunity to scrutinize application of
these prindplaa in specific case*, and to
teak subsequent judicial review of tucb
catet after EPA hat taken final action
on particular trades or generic rule*.
Dated: November IB, MB*.
LsefeTBeaaaa,
Adminiitrotor.
Emission* of Hasardaas or Teaae Air
Table of ContcBti
LEtemenU of BmiMtooe Trading
A. Creating BmiMioa Reduction CrediU
1. All Reduction* Mu*t Be Surplu*
a. U*e of Actual or ATloweble
Eounion* a* the BaieUar AttaimiMnt
Area* end Noaattatanent Anaa wtn
Appiuwu DeaMne%atidM of AetainsM&t
(incfedtog Raral done Nonartatounem
AIM*)
Bubble* la Primary Nonattammant ATM*
Which Need Bat Laok Approve*
OeaxmMraboo* of Attainment
(1) Objective Te*U For Ail
Applications
(2) Whan Thea* Special Progress
Requirements Wlfl Apply
(3) State Asevanee*
(4) Treetmeat of Pending Babble
Application*
c No Doubie-Coenling of Redaction*
(1) Crediting Pr*-exa»ting BOUMKM
Redaction*
(2) Crediting Reductions Fran
Shutdown!
(3) U*e of Banked Credit* from
Shutdown* or Other Action* for Bubble
Purpo*e*
d. Multiple U*e of ERC*
t. Reduction* from Uninventoried
Source*
2. Altem*tiv* BmiMioa Limit* Mn*t Be
Enforceable
3. All Reduction* Matt Be Permanent
4. All Reduction* Meat Be Quantifiable
*. Calculating the Reduction
b. Detcnbirn the Reduction
B. Using Emusion Reduction Credit*
1. Substantive Principle* for Urine. ERC*
*. EmiMion* Trade* Mu*t Involve the
Sam* Pollutant
b. All U*e* of ERC* Mu*i Senary
Ambient Test*
(1)0* Minimi*
(2) Level 1
(3) Level D.
(4| Level ID
c Bubble* Should Not IDOCIM
Applicable Net B**elin* EmiMion*
a. Bxiatiaf-Soana CrediU Canaot Be.
Uaed to Meet Applicable Tecaaology-
Bated Requirement* far New Source*
f. Trade* Involving Open Dual
EmiiBton*
g. mtentate Trade*
h. Trade* near PSD dan I Area*
I. BfSaMt on TMQttC Ol DVOOTQ^Mlnl^* *
OiMOvered dean Air Act Problem*:
RevtaHation Comiderationa
I Procedural Step* for U*ing ERC*
a. Effect of Bxiating Compoance
Schedule*
Appeadh ft DefiaHtew ef-Aetna!.*
"Aianveaee" end "Ba**lia
For ftafpeeae af Amaaioae Trading
Appoadu Q Approvabai Modeling
c PvnoiAf EiuorcaUMnt Actions
C* Miucfai^ Enisfftofl RraucUon Cno$ts
t. Banking Rule* Mu»t DevigBate en
AdaMatarinf Agency
1 Only ERC* May be Banked
i PoeetWe Umitatioaa oo UM of ERC*
for New Soarce Peraitting
4. Soarcea Should Apply to Bank Surplaa
Reduction* A* Soon A* They Decide to
Make Them
S. Procedure* for Banking Sorphu
EmiMioa Reduction* Should B* Defiaad
ft. Banking Rule* May Ettafaiicn
Ownership Right*
7. Banking Rule* Mo* Eirebkefa n ERC
Regfenry or tt* BoatvaleM
8. PoMibk Adhtttmanla to ERCa Baaed
on Enlbroement Conatderanona
«. PoMibie Adfnaaawnu io
on Ambient AUatnaaeatt Coaaid
a. ERC* Generated Prior la the I
or BaaaliM Year Could Be BOmtaated*
b. ERC* Could Be Caarantaad Agktoat
AdtaaOBent
t Uce or Depoett of ERC* Coaid Be
Temporarily Suspended
d. AeroaMhe Boerd Diacoeatfag
IL Tradee Covend by StaarGeaevia R«*a*
A. General Prtndpie* for BvaaaoBg
Generic Rule*
a Scope of Generic Rule*
1. VOC or NO, Trade*
2. Perncolate, SO.. CO or Pb Trade*
3. Limit* oa Trade* Exempt Prom SIP
Reviiioo* Under Generic Rule*
4. Other Geoenc Mechanism* for
Exempting Pertculate. SO*, CO or Pb
Trade* From Caee-by-Ceee SIP Riviitoaa
C Enforcing Em**eion Umft* Unrier
Generic Rule*
0. Generic Bubble Rule* In Primary
Nonattalnment Area* Which Lack
Approved Demon*tratton* of Attainment
E. EPA Oventght of Generic Ruiea
1. EPA Comment on Trade* Proposed
Under Generic Rule*
2. Review* of Individual Bubbtee
Approved Under Gcnenc Ruler
3. EPA Audit* of the Implemeaiathm of
Generic Rule*
4. Deficient Generic Trade*
S. Deficient Generic Rule*
P. Public Comment
G- EPA Notification
H. Rulenuking on Generic Rulee
in. Trade* Not Covered by Stele Generic
Rule*
Appendix A: Regional EPA EmiMion*
Trading Coordinator*
Appendix D: Approvable Averaging Til
for VOC Trades
Appendix ft Radii of Significant Impact for
Approving -Complex Terrain" PM. SO,
aad CO Trades Under Level I Modeling
Approaches
Appendix P: CFR Part 51 Conversion Table
EMISSIONS TRADING: TECHNICAL
ISSUES DOCUMENT
This Document offers more detail on
technical issues for firms and pollution
control agencies seeking to implement
mdlviduea emisvions trade* or generic
trading nrie* that meet the principles in
EPA's final Emissions Trading Policy
Statement It describes both the legal
requirements for emissions trades under
the Clean Air Act and a range of legal
option* which state* ' and sources may
consider. States and firms may pursue
•other approach** consistent with those
discussed bete.
Section I of this Document explains
general principles governing all
Trsnismni trading. Section 11 explains
priaeapk* goveaniog state genenc rules.
Section m diacuaaat apeoai
considaretioaa for emission* trades
which anas* be implemented as case-b
case SIP revisions.
Becauee these sections reflect yenl
Qeen Air Art principles, states.
individual source* or public commenters
remain free to show that a general
principle doe* not apply to particular
circumstances or can be satisfied using
another approach. States, sources and
commerrters have this option under
current law. and nothing in the Policy
Statement or this Document restricts
their opportunity to make such
showing*.
Nothing in today's notice alters EPA
new source review requirements or
exempts owners or operators of
stationary source* from compliance with
applicable precanatruction permit
regulations in accordance with 40 CFR
51.18. 51.24. S1J07. 5Z21. 52J4. S2.27.
and 5SL28. Interested parties should.
however, be aware that bubble trades
are not subject to preconstruction
review or regulations where these trades
do not involve construction.
reconstruction or modification of a
source within the meaning of those
term* in the regulations listed above.
1 "Stiter" tnctodH «ny tnttty property delegated
authority to itatnffter rHtvint pani of a State
taiRlaoMiualion Plan (SIP! under the Clean Air A
-------
43838
Federal Register / VoL 51. No. 233 / Thursday.. December 4. 1986 / Notict«
I. Elements Qt Emissions Trading.
The basic dement* of any emissions
trade are the creation of an emission
reduction credit (ERG), its use in a trade
and its possible storage in a bank prior
to use.
A. Creating Emission Reduction Credit*
States may grant credit only for those
emission reductions that are surplus.
enforceable, permanent, and
quantifiable. Otherwise use of ERCs
might degrade air quality, threaten the
viability of the area's SIP. and make
more stringent control requirements
necessary.
1. All Reductions Must Be Surplus
At minimum, only emission reductions
not required by current regulations in
the SIP. not already relied on for SIP
planning purposes, and not used by the
source to meet any other regulatory
requirement can be considered surplus
and substituted for required reductions
as part of an emissions trade.
The first step in qualifying a reduction
as "surplus" is to establish a level of
baseline emissions. This baseline
represents the level of required
emissions beyond which reductions
must occur for a source to be eligible for
credit Three baseline factors—emission
rate, capacity utilization, and hours of
operation—must be used to compute
and compare pre-tnde and post-trade
emission levels.*
The baseline for each source must be
established both on an annual basis and
for all other averaging periods
consistent with the relevant NAAQS
and PSD increments. This approach is
necessary to protect the ambient
standards and PSD increments on a
short term as well as an annual basis.
The baseline will generally be
determined by. the attainment status of
the area.3 by the way the state
developed its SIP. and by whether the.
area is subject to PSD requirements.
a. Use of Actual or Allowable
Emissions as the Baseline: Attainment
Areas and Nonattainment Areas With
Approved Demonstrations of
Attainment (including rural ozone
nonattainment areas), fn attainment
areas, baseline emissions must
generally be calculated using the lower
* For furthtr discussion of these factors aa they
relate to the calculation of baseline emissions, see
Appendix B.
' Unclassified areas are treated aa attainment
areas for permitting and emissions trading purposes.
Unlike other criteria pollutants. EPA does not
designate nonattainment areas for lead. However.
the Regional Administrator will review lead trades.
as all other trades, to assure that they do not
interfere with attainment and maintenance of the
NAAQS.
of actual or allowable values.4 few all
three baseline factors. However,
allowable values corresponding to one
or more of these- factors, when higher
than corresponding actual values, may
be used in calculating baseline
emissions, provided those values are
shown to be used or reflected in an
approved demonstration.' The burden of
meeting this test rests with the state or
applicant Where the State or applicant
cannot show by written evidence ' that
the demonstration assumed an
allowable value for a given baseline
factor, appropriate modeling would be
required in order to use an allowable
value for that factor in calculating
baseline emissions for the source.7 This
will require a Level II modeling analysis
as specified in the modeling screen
described below, using actual emissions
for the pro-trade case, unless the
appropriate EPA Regional Office ("the
Region") determines that additional
technical support is necessary to protect
the NAAQS. PSD increments or
visibility. Additional technical support
may be necessary because crediting the
difference between actual and
allowable values for even one of these
factors may produce a post-trade
increase in actual emissions sufficient to
jeopardize applicable standards?
increments or visibility.
Additional technical support is not
necessarily limited to determining the
impact of the increases from the trade.
The Region may require such additional
• For the definition of-ect**r tat "a
value*, and further discuanoo on calculation of
baseline eontetott. see Appendix B.
• This italement does not apply to setting, when
"contetnporanaoue" actual emissions an always
the baseline. See. *4-«CFRJ1.24(bX3(.
Bubble* in areas with <
solely oa qualitative judgements (*.*, the'
region" approach or no technical support! ordinarily
may not rely, without appropriate modeling, on
allowable value* in calculating beJtUne smissiona
However, bubble* in anas with demonetretloBe
baaed on rollbacks or dispersion modeling may use
allowable value* that an reflected in the
demonstration.
• For example, the demonstration calculation*
themselves, accompanying matenala. or affidavit*
from those who constructed the demonstration.
* In certain circumstances an allowable baseline.
value specified In a pnconattuctton permit will be
deemed equivalent to on* used or reflected in aa
approved demonstration. For exempts), a sotttcs) HI
an attainmnl area when a PSD baeeune ha* been
triggered may us* allowable rallies consistent with
its ^reconstruction permit if thai source s. •missions
an not reflected in the PSD ambiesu beeeiin*
concentration. (However, if modeling using
allowable, emission* predict* • PSD increment
violation, than additional analyses must be done t»
assure that the PSD increment is protected.) A
source in * nonattatnmtnt are* may us* aUowebt*
value* consistent with its pneonstnicrJoo permit I*
calculate it* baseline, provided thM permit poet-
dates the nonattainment designation. SIP eaU.
design year, or baeline inventory year, whichever is
applicable.
technics! support up to aad i
full Level HI modeling, as is aec«s»«n to
assure that applicable- NAAQS. PSi
increments and visibility requirements
will be protected. It may require the
determination of background
concentrations to which the imoacti of
possible emissions increases- that would
otherwise fall below Level II
significance values must be added.
Background concentrations should be
determined in a manner consistent with
EPA's Guidelines on Air Quality
Models.
In attainment areas where the PSD
baseline has been triggered, the trading
baseline for a source must generally be
computed using actual values for all
three baseline factors (ie~ only
reductions below a source's actual
emissions can be considered surplus).
Because 40 CFR 51.24 and 5&21 specify
that increses in actual emissions
occurring after the PSD baseline date
consume PSD increment any trades
based on allowable emissions which
would potentially increase actual
emissions must perform at least a Level
II modeling analysis using actual
emissions for the pre-tnde case, and
provide additional technical support If
deemed necessary by the Region, to
demonstrate that they protect the
relevant increment ceiling. NAAQS, and
visibility.
la nonattainment anas with approved
demonstrations, baseline emissions for a
source may be calculated using either
allowable values or actual values for the
three baseline factors, depending on the
assumptions used in developing the
area's demonstration^*
Some states relied on allowable
values for certain sources in developing
their SOi and TSP attainment plans. In
these nonattainment areas, sources may
use allowable values in calculating
baseline emissions, to the extent the
state used or assumed those allowable
values as the basis for its
demonstration. The burden of showing
that an allowable value was used or
reflected in an approved demonstration
rests with the state or applicant which
seeks to use an allowable value.9
Other nonattainment areas either
used inventories based on actual
emissions, or relied on measured (and
therefore "actual"] ambient air quality
values, as the primary basis for
determining SIP emission limits needed
• This statement doe* not apply to netting, where
"contemporaneous' actual emission* are always (As
baseline. See. e.g, 40CFR 31.1»|)(l)(vi). See slso
Appendix B far detailed discussion ol "actual"and
"allowable," emleemn*
• See n. 6 and. 7 above.
-------
Federal Register / Vok M. No. 233 / Thanday. December 4. 1966 / Notices
43839
to demonstrate attainment m some
area*. SIP demonstrations were based
merely on qualitative judgments (e.g«
"example region" approaches). Baseline
emissions for sources in all these other
areas must generally be calculated using
the lower of actual or allowable values
for each baseline factor. However.
state* may approve, on a case-by-case
basis, use of allowable values in
calculating baseline emissions, where
they explicitly demonstrate that such
use comports with reasonable further
progress and will neither create a new
ambient violation nor deley the planned
removal of an existing violation. Such
demonstrations require full Level HI
modeling and must be submitted to EPA
aa case-by-case SIP revision*.
EPA deem* designated Rural Ozone
Nonattainment Ana* to possess
acceptable demonstrations of
attainment provided they have an
approved new source review rule and
require RACT controls for all major
VOC sources for which EPA has issued
Control Technique Guidance (CTG)
documents. (See, e.g, 43 FR 21673 (May
19,1978)). Because these areas'
nonattainment is generally caused by
emissions from sources in a nearby
urban area, control of emission* from
that area is expected to bring the ratal
area into attainment Put diSezently,
EPA doe* not require rural areas to cure
problems due to transport from
pollution-generating areas which rural
area* cannot control However, EPA
believe* that further clarification* are
required for bubbles in these areas.
Sources involved in such bubbles
must use RACT emission limits in
calculating baseline emissions, if subject
to Group I or 0 CTGs under the EPA
approved SIP for these areas. Source*
subject to other SIP emission limits must
use those limits in calculating baseline
emissions. Other baseline factors muxt
also be consistent with the applicable
SIP requirements, and will generally be
actual historical values. Where a source
is not regulated by the EPArapproved
SIP its baseline will be acraal emission*
in the year EPA approved the Part D
plan for the affected rural area. In those
approvals. EPA pniiniieil that controls
for sources in the upwind urban areas,
as well as RACT on GTC sources In the
rural area, would bring about attainment
in the rural area, and that non-CTG
sources in the area, unless regulated by
the SIP. could continue to emit at actual
non-RACT levels without interfering
with attainment in those areas. See also
43 FR 21673 (May 19,1978).
6. Special Progress Requirements for
Bubbles In Primary Nonattainment
Areas Which Need But Lack Approved
OejMRttreiMfl* of Attaiaamtt. EPA wiR
approve babbie* which areconeutem
with the attainment need* of these
areas, which produce a net atr quality
benefit and which therefore secure
interim progress towards attainment10
(1) Obfatin Tut* For Ail
Application*. Bubble application* in
primary nonattainment areas which
require bat lack approved
demonstration* of attainment will be
deemed to produce a net air quality
benefit and will be processed for
approval tf they:
(a) Use lowest-of-actnal-SIP-allowable
or RACT-allowable emissions baselines.
Such baselines are calculated 'i**"g
either
(i) The actual emission rate, the SIP or
other federally enforceable emission
limit or the applicable RACT emission
limit • * whichever is lower, to compute
the baseline for each source involved in
the trade. This baseline factor shall be
deter aned as of the date of the source's
application to bank or trade, whichever
is earlier.
(11) The lower of actual or allowable
capacity utilization and hours of
operation to compute the baseline for
each source involved In the trade.
Aetna! value* shall generally be baaed
on the two yean of operation preceding.
the application, to bank on trade, unices
another two year period is shewn to be
more representative of actual
operations. Source* which chut down
prior to the application to bank or trade
have zero emissions, and therefore no
credit is available.
For source* which banked or sought
to bank credit in these nonattainment
areas prior to publication of today's
notice, the "date of application to bank"
is the date of written application to the
states to bank credit through e formal
bank or informal
use in future trades. For sources which
seek to bank credit in these anas
following publication of today's notice,
the date of application to bank will be
the date of written application to the-
state to maJu a reduction ttate-
enforceabl* through or concurrent with
use of a formal bank or informal
(b) Using baseline emissions defined
above, meet applicable de minimi*,
'• Whila not til of tod»y'« a«w riiuiifiuim\t far
bobbin alhn« MM »n Mncttjr "binMni-
wtttn. ill bMic nquiraaoiu for dMM babbitt
tra Mtout htri for simplicity. N«w rvqiaroMnt*
MM apply (o gttwrlc bubble nitt a thiw am*.
SmSKttoBllOteknr.
'' When u) tniMran limit far • mtcu Involved
la tin nd* kM net pmrioviy DMB «pmur»J by
EPA •« RACT. • btMlint raflKttoi • MfMUttd
RACT tmiHien nif RIUM b« *tn«d upon by the
•cure*. *<•(• Mid EPA for ih« toon* m qoMtton.
&OI
Level t Level 0 or Level 01 modeling
test* for ambient equivalence, as
appropriate.
(c) Produce a substantial net redu
in actual emissions (La., a reduction
at least 20% in the emissions remaining
after application of the baselines
specified above).
(d) Are accompanied by the
assurances of consistency with ambient
progress and air quality planning goals
specified in section LA.l.fa^3) below.
(2) When These Special Progress
Requirement* Will Apply. The following
primary nonattainment areas need but
lack approved demonstrations, and
bubbles within them are therefore
subject to the special progress
requirement* in section LA-l.b.(l)
above:
(a) Areas that are designated primary
non-attainment areas under section 107
for the pollutant involved in the trade
and which failed to submit a 1979 Pan D
attainment demonstration or which
submitted one that has not yet received
full EPA approval This includes primary
total suspended paniculate (TSPJ
nonattainment areas which submitted a
SIP that did not indnde an actual
demonstration of attainment but still
received EPA approval (Le~ a "RACT
plus studies" SIP).
(b) Extension nonattainment ar
which failed to submit a 1962 SIP
demonstration, or which submitted o:
that ha* not yet received EPA approval
Also included are those ozone
nonattainment areas that are unable to
demonstrate attainment by 1987, unless
a demonstration of attainment for the
area is subsequently approved by EPA.
(c). Areas that have received either, (l)
A section 110(*)(2)(H} notice of
deficiency based on failure to attain or
maintain the National Ambient Air
Quality Standards (NAAQS). in the form
of a SIP call or a new section 107 or
171(2) nonattainment designation: or (2)
a notice of failure to implement an
approved SIP.
(d) Areas which received notice from
EPA that they heve failed to meet
condition* in their EPA-approved SIPs.
including commitments to adopt
particular regulations by specified dates.
The one exception would occur where
the only portion of the SIP (including the
attainment demonstration) lacking full
approval is the inspection/maintenance
provision for mobile sources. In these
circumstance*, stationary-source
bubble* will be treated as if the area
bed a fatty approved SIP.
(e) Any area that does not have an
EPA-approved or EPA-promulgated
for lead.
-------
43848 FaoVaral Ragjatar / Vol SK Nft. 333 / Thnraday. December 4>>taa»V Karioaa
(31 State AMUTOUX*. EPA wiU not
approva a bubble in primary
nonattainmenl areas needing but lacking
approved demonstration* unless the
state provides assurances that the
proposed trade will be consistent with
its efforts to atta.n the ambient
standard. The state must make the
following representations to the EPA
Regional Office in or with the tetter
formally submitting the bubble as a
revision to the SIP:
(a) The resulting emission limits are
consistent with EPA requirements for
ambient air quality progress, as
specified in Section LAJ-b-(l) above.
(b) The bubble emission Units will be
included in any new SIP and associated
control strategy demonstration.
(c) The bubble will not constrain the
state or local agency's ability to obtain
any additional emission reductions
needed to expediiiously attain and
maintain aenbteat air quality standard*.
(d) The state or local agency is making
reasonable efforts to, develop a complete
approvable SIP and intends to adhere to
the schedule for such development
(including dates for TromfMfffn of
emissions inventory and subsequent
increments of progress^- staled in or with
the i*1*** formally
or previous suca lettaeu
(e) The baseline used-to qrinulafn the.
bubble emission limits is- consistent with
the baseline requirements in section
I.A.J.b.(l) above.
These state assurances must be made
in writing by th« appropriate state or ,
local authority (e.q.. State An- Director.
Air Pollution Control Board, or
Legislative- Committee). EPA will not
second-guess such state representations.
provided: ft} They are a substantial test
applied by tile state to each bubble. and
(2) the state has explained how the*
proposed babble is consistent wHfc law
area's projected attainment strategyr
Nor wiH EPA examine, or expect state*
to examine in making suck
representation*, any specific source's
subjective motivation in making claimed
reductions.
(4) Treatment ofPen&g Babbit
Applications. "Pendinf basMat" mean*
those which are curreauVpandiag at
EPA Regions or [fiisilipailnis as well
as any bubble application* which wsra-
formaily submitted to EPA Beaton*
under the 1082 policy but returned
without action, because final bubUe-
criteria had not ye« been issued. la
primary nonattainment area* needing
but lacking demonstrations. uWse
bubbles sJMuid contribute to progress -
towards attainment "Progress toward*
attainment" means s#m* extra reduction
beyond equivalence, with
actual-SIP-allowable-of-RACT-
of tha
credit. la other araas theae o«bbls*aust
show that ippiicihlt standardst
increments. and visibility requiremaoU
will not be jeopardized Pending bubblaa
which meet these tests and all other
applicable requirements of the 1882
policy will be processed tot approval.
Pending bubbles may undergo limited
modification by the states or sources
which submitted diem in order to meet
the new requirements outlined above
(e.g* it may be necessary to recalculate
the applicable- haittline fiitTf***?* of
certain bubbles in nonattainment areas
needing but lacking demonstrations and
to reconfigure those bubbles in response
to the reduced credit which may be
allowed under the new more stringent
requirements). However, p^dfag -
bubbles- which prior to final EPA
approval are changed to the extant that
they no longer reasonably resemble tfie
original proposal quafifying for pending
bubble status (e.g, those which an
substantially expanded: tn scope or
changed (• involve primarily dlfnwsaft
souree*of ftnrtrren redaction credit),
will be considered new bubbles subject
to *H of ia*Teqairaneat» of today's • .
notice. • ...
Bubble- appficaflona which weir
Mbmjtterf to EPAJUftens bf state* tat
whieh wamwtmdnwv (or r*t*rfsd|as
inadequate under the ifllg poflcy, ara.
not "pendtagi" .These
meet all requirements of-
appHcabl* to new bubble
[c4JVb DaubltrCoiuttng
/xetAn«£nuisv At ntiiiiiHtmu to
conskleied sutpma
redaction cannot already nave bean
Claimed as part of a demons tf slim or
updated emtestoa Inventory by say state
air quality plan or haw beat used by
uMSOucce1 to meet any otner regulatory
requirement Oouble-countlng of
reductions granting credit for th» same
estisswn radnction. e.s>. onev ta tfaa
state aa part of its mnaftaaBnent SB*
demonstration or PSD baseline; and r
second tia» to a source for us» at aar
enissioo* trade, nmst be addressed m>
the followtag sttuatraaa.
(1 ). Crediting Pre-Bxntmg flnmaAny
Rtdvcoom. In fwiwttajiiiuent OHMS-
credit generally cannot be gi en tad for
emission reductions made before.
manttoriag data is os waa ooliaotMrfor
use in current SIPptonnina. Oacaoas '
monitored ambient revets olrtoxff reflect
these emission decreases. iurh
deoeasee-may have been sssaassav>i
ralrdartag dw farmer redacttoaa- • -
neaded ta attam ambfent staadatd: ,
State* mostdeariy show mat me-
existsaca of mesa reductioas haa
OraW to sautODedtttat teaaarajcsctiora.
Tha eartaat accaBaahat HaeeUaa data
would nnnaalff be dia yeas- of Mte moat
recent esntaeians invaBtory aaed In
planning Part QSff raviatone under th«
Qean Air Act Amendments of 1877. '•
Whan emissiaaa inventories or other
data are updated for tracking RPP aad
corractfon of Pert D SIPs. the new
inveotorias awst treat banked emissions
reductions, as current actual emission*
"in the air" at the source where crested.
so that corrected SIPs do not
madvartaady niy on these prior
reductkna and cause them to be lost for
usa. If iavaalorles- da not treat these
banked sariahsas as- "ta ma air." or if
they an olhaiwlsa nUad upon for SIP
pi inn ing patvoaes. soak reductions can
no loagarba- created foe trading.1*
tpiiuiuay noMttainmat areas
dmwutiutAmt ofatta'aattnt. emission
achfcnedpiiui to application
to bank ortradafwtichcver is earite)
wiAnot ba ciedBnf for uawin bubbfcs.
Sea setu>iu'M.t.bLfty above. Regardless
' at whetfaar thay.maat other basetlna
reasmaHy eOtflBd of the opportunity to
tradrto rpndteai objective sense
flmtng; aad cannot be
raqoireaHBilr absent r demonstration. * «
hi atfauaeiUaftaii nductama at
major stationary foarcn which
commvacadTcanstractioa after January
1, 197»may 5V a&ot Of qualify for credit
wuetbar sucB radiiCBoas occurred
befon or after the PSD fiaaallne
triggering, data. See WCPR
SlMffypSJBR (V FX OT1»-20: August
7, 1980). Otter emission reductions (e.&.
at minor *ourcee) cannot qualify for
credit when uVe PSD >«*f«»Hn« date is of
hot beat trfggtmfutd such reductions
occurred prior to the trigger, date, unless
these reductions are aot assumed in the
PSD baselines. Since baakad emission
madbu* yuu dMu « runt
M»«KtMB LAX*.
-------
Federal Register / Vol. SI. No. 233 / Thursday. December 4. 1966 / Notices
436
reduction-credit* must be considered to
be •la »e sir" for ill planning purposes,
if the baseline date is triggered before
banked credits are actually used such
banked credits will be considered as
part of the baseline and will not •
consume increment when used in an
emissions trade.
in attainment anas when the PSD
baseline has not been triggered as of the
date EPA or the permitting authority
takes relevant final action on the trading
transaction, reductions below current
SIP or permit limits generally may be
used without special restrictions in
bubble or banking transactions,
provided they are otherwise creditable
and there is assurance that NAAOS will
not be violated due to any potential
increase in actual emissions."
(2) Crediting Reduction* From
Shutdowns. Shutdowns are generally
treated for purposes of emissions
trading like any other type of emissions
reduction.1* For example, the same
limitations on pre-existing reductions
(section LA.1.c.(l). above) apply to
shutdowns where they apply to any
other type of emissions reduction.
However, under current federal New
Source Review requirements for major
sources, shutdowns that occur prior to
application for a new source permit can
be used as offsets only for equipment
replacing on-site productive capacity
which was shut down.11
Shutdowns an of general concern
with respect to double-counting where a
state may have relied directly or
indirectly on shutdowns in a SIP
demonstration of attainment (Where a
primary nonattaimnent area needs but
lacks an approved demonstration of
attainment the progress requirements of
subsection LA-l-b. above apply to
bubbles involving shutdowns as- weH a*
to bubbles involving other types of
emission reductions. These requirements
generally bar use of reductions from
shutdowns which occurred before
application to bank or trade.)
In general a state may credit
reductions from shutdowns if the SIP
has not already atraned credit for these
reductions in its attainment strategy. So
long as reductions from shutdowns have
not already been counted in developing
an area's attainment strategy, they are a
potential source of surplus reductions.
" However, reductions «l toureee other than
iMior tunon«ry loureo* on which coeutrucuon
commenced Mori January 1.1«7S may not b» ueed
lo balance uicreaeei it wch pre-tsn nupr wuret*.
'• For uee of tanked ihaidow* crodlie.rar
bebbiea» primary nonmieinment ereei medial
but ledrinf approved demoni trelien*. tee McUoa
LA.1-4J) below.
"Seen. u»bo«e.
Some SIPs assumed a set quantify of
reduction! from the overall difference in
emissions due to new plant openings
and existing plant shutdowns. Hies*
SIPs incorporated into their attainment
strategy a net "turnover" reduction in
emissions because new sources are
generally cleaner than those that shut
down. Double-counting would occur if a
specific source received credit for
reductions from such a shutdown, since
that reduction was already assumed in
the SIP'S demonstration of attainment
These states have at least two options
for granting sources credit for
shutdowns without this kind of double-
counting. First they may reexamine any
"turnover" reductions relied on in their
SIP and decide not to take credit for
these reductions. This approach would
require EPA approval of a revised
demonstration of attainment or a SIP
revision showing consistency with the
existing demonstration. Such an action
can be processed by EPA concurrently
with a bubble or generic role.
Alternatively, these states may attow
credit only after the lotai quantity of
shutdown reductions relied on in the SIP
has occurred.
In all eases where net. turnover
reductions have been quantified and
relied on aa part ofattainmeaf
demonstrations, states whica seek to
grant shutdown credit for use in trading
must be prepared to show dearly and
unequivocally on the basis of SIP
documents or tracking that the credit
has not been double-counted or
otherwise relied on for SIP planning
purposes.
(3) Use of Banked Credit* From
Shutdowns or Other Action* for Bubble
Purposes. '• In primacy aonattainment
areas which need but lack approved.
demonstrations. ERCs intended for
bubble purposes may generally be
banked and used with the same lowest-
of-ectueJ-OT-ailowabJe-or-RACT.,.
allowable baseline used for othe*
bubble transactions.1' This baseline
should be applied as of the time banked
credit is or was initially sought, with the
20V reduction applied to both sources in
the trade if these credits are later used
for bubbles. The lowest-of-actual-SlP-
allowable-or-RACT-allowable baseline
plus the 20* discount will also apply to
the source using that credit in • bubble.
as of the time of such subsequent bubble
application.
Banked credits produced by
shutdowns and curtailment! may
used for babbles in these areas or
same terms as use of other banked
credits, provided their use is subject tc
stringent qualitative review to assure
technical legal and programmatic
consistency with SEP planning goals
(e.g.. avoidance of double-counting anc
"shifting demand"). This review will nc
examine any source's motivation in
shutting down a facility or curtailing
production. However, the source must
show that a written application was
submitted to make the shutdown/
curtailment state-enforceable through c
concurrent with use of a formal bank or
informal banking mechanism, pnor to
the time the shutdown/curtailment
occurred. Submittal of such an
application to make proposed reduction
from a shutdown or curtailment state-
enforceable will constitute the relevant
definition of "application to bank" for
timing purposes related to the
evaluation of bubble credits in these
nonattainment areas (see section
LA.l.b(l) above).*0 The shutdown/
curtailment must be made federally
enforcement when it ia used in a bubble
Use for bubble purposes of noabonkei.
credits-resulting from current shutdown:
or curtailaeata will be allowed in
areaa if the ioweet-of-actuai-SIP-
aUowable-or-RAGT-allowable bas
plus the 20% additional reduction are
applied to determine the amount of
credit
Na special baseline or additional
reduction requirements will apply to
these credits in other areas.
d. Multiple Use of ERCs. Once surplus
reductions are credited states must
prohibit their multiple use. The same
pound of reduction must not be
simultaneously banked by two different
entities or used to satisfy two different
regulatory requirements at the same
time. To-present these results, states
must adopt an ERC registry or
equivalent means of accounting for the
creation, banking, transfer, or use of
ERCs. See Section 1.C8 below. States
must also ensure that past reductions
used in bubble, netting or offset
transactions era not later credited in
newly-established banks.
11 ERG* uted far nMtuif and affitt
(tncJudim UMM derw»d from ba**a> mm* eaejpi*
wtUt relevant NSJt end PSD reataneMnB).
' • For further diacuiara* reialed »the UM of
beaked credHt in the*e noimunaent areea. we
Mcuon I.CA below.
*• For tource* whlefc banked or fought to b«nk
credlti (roB almidowm or curtailment* in these
iMHUlUUUMai we** fnor to publication of :oaay i
notice. wntteB evtdeme ami be provided §howm«,
either tfcel M explication to depoeif the crraiii m 4
formal beak wu •uoentttd to the itite pnor 'o ih«
tuM-tae faMtdewa/cwlattaaai occBrred. or thai tn*
Mate iitiniiilirtsart befare or it the time ifie
tlMldown/ciataUaMaf occurred, botfe the «xn
of taal rfieldown/curteitaeat tad the source i
intern to ue» *e reeelttne, aedtu in • future rr
-------
t Vofc SC-Kev«M
apply
SIswRjBs. St»rce* nor i
area's SIP eansaion m«
for emisasoai rvdi
apaHcationa aiay ec
quality pianmag caoebtttfcss. Where
such source* era already subject to SIP
emission limits, those emission limits
must be used as the basis for
determining emission reduction credit
unless a more stringent baseline would
normally be required (see sections
l.A.l.a. and LA.1.O. above)."
In atUnniatat area* state* may grant
bubble credit to sources regardless of
whether they have been included in an,
inventory, based on use of actual value*
for each of the three baseline factors, so
long as those sources an not subject to
lower allowable value* for those factors..
Allowable values, when higher than
actual values, may alternatively be used
in calculating the baseline, provided
sources show that any resulting
potential increase in actual emissions
does not jeopardize applicable ambient
standards. PSD increments, or visibility.
(See 40 CFR 51.24 and 5Z21 for spocinc.
requirements concerning PSD
increments and visibility.)
In nonattoinmentarsos witti oppnifstt
t/ffffNjjuCrulf0Jt* of Qitontitttftt, wnvtRvr
sources* not on die inventory can crests?
bubbte credR wiff tnm en how rav
approved demonstration of attainment
was designed. Some slates first
monitored ambient varae* to determine
required redactions for the SIP; then
required a proportionate reduction ia
emissions £ross certain gasHrai source
categories (i*, a "roiMniek") ia order to
attain. States may grant credit for-
reductions from onraventoned sources
in these area* ia at least two ways.
(1) They could require the average of
percentage reductions imposed on all
inventoried sources, and grant credit
only for reduction* in excess of that
amount. In thi* case, baseline »"'ifT'*"ii
should be based on the percentage
reduction in actual emi**i«ns for the
year in which the baseline data for the
rollback was gathered. Where such
sources are already subject to lower SIP
emisssion limits, those units must be
used to determine credit.
(2) They could require the source to
use n RACT emission rate and the lower
" Where agiv«r «,urte wai not subject to
mdndpwy RACT n-gutatton dtn to the f»ct tti«« It
was n
-------
Federal Register / Vol 31. No. 333 f Thuraday. December 4. 1988 f
43843
to (MI •tedtantotttiy evarjr tniMkm
souraa invohrad in • trade. HM
generally rtquirN io«fCB ipacific
emission limits. However, statts may
ust pre-specified combinations of
source-specific emiuion limits which
arc enforceable. States may also use an
overall limit that applies to a group of
emission sources which can be
evaluated simultaneously, where there
is a reliable and enforceable method of
determining compliance (e.g.. through
production records, input factors, or
other indirect means, or through use of a
continuous emissions monitor.) See. e*,
45 FR 80124. December 8,1900.
The compliance instrument should
also specify applicable restrictions on
hours of operation, production rates or
input rates: enforceable test methods for
determining compliance: and necessary
racordkeeping or reporting
requirements. To be enforceable, these
limits must state the minimum time
period orer which they will be avenged
(e.g.. Ibs/hour. Ibs/MBtu averaged over
24 hours, production rate/day).'* Unless
such enforceable restrictions are or have
been placed on capacity utitfntkra and
hours of operation, or on overall
emissions, maximum values for oapaerrjr
utilization and hours of operation outst
generally be used in "'"'ff^'ig post-
trade emission limits and in ambient
modeling of the post-trade <
3. All Reductions Must Be Permanent
All emission increases in a trade mutt
be ooiapeneated by eminion reductions
that are permanent fi.e- assured for the
life of the corresponding increase,
whether unlimited or liaritied in
duration).** This reeeiremeat may
generally be met by enforceable penult
limitations confirming the amount and
duration of the decrease. If reduction
with a limited life era used, the life of
the trade nraet be limited eccordingiy, so
that the trade will automatically
terminate with expiration of those
reductions. The date of termination may
be specified in th* notice of approval.
Alternatively. source(f}nay agree to
provide formal written nMacatton to
EPA and the state before such
reductions may be diseoatUMsd aad the)
trade terminated.
Permanence may pi esent special bnt
resolvable "shifting demand" problems
for reductions from small sourcaa not
subject to permits, offset requirements.
or enfeicnbwpraduetsaa i
States wttjoft grant credit frasji theer
source catagoriea atast addraas det
possibility that redacfjoasj from eoe
source may result <• •qua! or greatar
increases from similar nearby source*."
In order to ISM. tat a babble trad*.
emission reduction credits derived Iron
reductions in operations beyond thoee
consistent with the bsseiine (e.g., a
reduction from 3 to 2 workshifls). a
source must have its preconstruction
permit or other federally enforceable
compliance instrument altered to reflect
the curtailment in prodectkm records
reflecting such curtailment (see section
LA2 above).** Future increases In
production beyond the permit amount
may trigger new source review or
require approval of a new emiearaas
trading application which mdodea
compensating emission reductions. Aa
with other types of Donoompiiancax any
source which exceeds penaitted
production limits would be suhjairt to
potential nonrvxapliance panaitiee.
4. All Reductions Must be QoMflflabfo
Before an emissKwifeductiaa can be
credited it must be quantified. This
generally means the state must establish
a reliable basis-far caleolaflng the
amount and rate of the reduction-end
descriOHeg Ita CBaracteristics.
a. Caleulatiag th* Reduction. To
qoutiry the amount of t
redactMBSeiisjsbkaeBRCa.1
neat be ueJtaiasml both before and after
the prfectfon (Law «M«ateg the peat-
redoction Knits). Although many
different methods of ^ImlfH^f aie
avaiUbie (e^g« enusason feotora, Msjfik
testa, nenitored vasMe. production or
proeaaa arpwts). Ae sane ssethod aad
averaglBg time thoaW generally be used
to qmntify emisaions both balore aad
after the reductioa.**
" Mtny etaie aenuu or
need ravi
nerd only oeour on »
individual IHO«M *M
"Penmwor
luniifd-durition mdai am*!
limiu.
MJXJI. O. MCtraa LA-lA ibevt.
»• Utute EPA'» NSH rcfuUoau. prtar
eaiutlaMM* era «ab(«ct to UM wow rwaie(iea»far
ofliM pvpOOTt M prior ilwldownft SM & 14 cboM.
" la yuani. itftm tuj not ipprwM VOC t
ia COOM naauHtuutmt tnm wtan mdl trwte
Utncarpa»U (
dff. I him m
6. DescribiKftke Reduction. If an ERG
will be Med at *JM tint of cm Hon. o
charactartaKetuaeiMai'ji to evaluate
that proposed OM need be described.
Whew the ERC will be banked and Irs
evenfaal uee is not yet known, a more
detailed description should be provided
in order to facilitate its later evaluation
for a particular use.
B. Using Emission Reduction Credits
This section explains the substantive
and procedural principles applicable to
use of ERCs. primarily for existing-
sonrce bobbles. Meny of these
principles also apply to use of ERCs in
netting or offset transactions. However.
those transactions are governed by
EPA'a New Source Review regulations
(40 CFR Parts 51 and 52) or state rules
reflecting them.
1. Substantive Priaciplet for Uting ERCs
o. Emotions Trades Mast Involve the
Same Pollutant. The Clean Air Act
requires states to develop separate
plans to attam end maintain the
national ambient air qnallry standard
for each criteria poiratant. Thus, all
individual bubble, netting or offset
transacttont Brest involve the same
pollutant Onfy redactions of
particBfainrs can sabstitute for Increases
of parttralate*. redactions of SO> for
~ ,ett
6. All UMt of ERCs Must Satisfy
Ambient few**/Because the Clean Air
Act requires nar aD areaa throughout
the country attain anal maintain ambient
standards, protect applicable PSD
increments, and protect visibility in
mandatory Federal Class I (PSD) areas.
bubbles must generally be equivalent in
ambient efforts to the baseline- imi*aion
levels which they replace. *7 In
nonattainjneat onto, use of ERC*
cannot create a new violation of an
ambient standard or delay the planned
removal of an existing violation. In
attainment areaa. use of ERCs cannot
violate an inclement or ambient
standard. Use of ERCs in either typ« or
area cannot adversely aOsct visibility in
any nsamisluiy Federal Class I area.
The ambient effect of a trade
generally depeada on the dispersion
clkaraatertatica of the pollutant involved.
VOC or NO, Trades. Trades involving
VOC or NO, need consider only
emJaeiona. Since the ambient impact of
these poHaSana ia areawidv rather than
localised, one sound oHncnased
emisaions wiH be balanced io ambient
"tai
OB t
-------
43344
Fedewai Rv0»tar / VoL 51. No. 233 / Thursday. December 4. 1906 / Notion
effect by one pound of decreased
emissions within the same breed
geographic area, and the precise
location of those incrseees and
decreases ordinarily does not matter.
For VOC and NO, such "pound-for-
pound" trades may therefore be treated
as equal in ambient effect where all
sources involved in the trade are located
in the same control strategy
demonstration area or the state
otherwise shows such source to be
sufficiently close that a "pound-for-
pound" trade can be justified.**
Paniculate Matter. SOi, CO or Lead
Trades. Ambient considerations are
critical for trades involving emissions of
sulfur dioxide, participates, carbon
monoxide, or lead, whose air quality
impacts may vary with where the
emission increases and decreases occur.
For example, one hundred pounds of
ERCs for such a pollutant created at one
source may balance the ambient impact
of a 100-pound increase at a source
nearby, but may only balance the effect
of an 80-pound increase at a source
further away. In addition to distance
between sources, plume parameters.
pollutant characteristics, meteorology.
and topography will also affect the
ambient impact of such trades.2'
This Document authorizes the use of
four alternative methods of determining
ambient equivalence, with the degree of
required modeling linked to the likely
ambient impact of the proposed trade.
The following sections describe use of
these alternatives to evaluate for
approval many bubble or offset trades
without full scale ambient dispersion-
modeling.30 Use of these alternatives
under genenc rules is discussed in
section II below.
(1) De Minimis. In general no
modeling is needed to determine the
ambient equivalence of trades in which
applicable net baseline emissions do not
increase >l and in which the sum of the
'* The diiiusnon in thu paragraph doe* not
apply to NT. 'rades involving visibility impact* of
elevated plumes.
" The ambient equivalence aotmdentton*
elaborated in this and foUowiaarperaaTepa* aiio
ipply to NO, trades involving visibility impact* of
elevated plumes. See n. 2S above.
10 Modeling n generally not required for new
source netting, whole purpose it to avoid expending
resources where adverse emission or ambient
mpacii from changes at a source an extremely
unlikely See. e.g.. 45 FR 52877-78 (August 7.19WV
11 Interested parties should, however, be aware
that in some circunutancas modeling may be
required to tusufy using certain emissions baseline*.
pnor to the trade. Where a bubble in *
nonaitainmfnt area seek* to employ allowable
value* greater than corresponding actual values in
the calculation o( baseline emiMiona. and whan
such allowable values are not ihown to be used or
reflected 10 an approved demonstration, a lull Level
111 modeling analysis will be required. Where a
emissions increase*, looking only tt the
increasing sources, totals less than 25
tons per year (TPY) for pertculate
matter. 40 TPY for sulfur dioxide. 100
TPY for carbon monoxide. 40 TPY for
NO, (where visibility impacts are of
concern), or 0.6 TPY for lead, after
applicable control requirements. Such
trades will have at most a de minima
impacts on local air quality because no
net increase in emissions will be
produced and the amount of emissions
being shifted is less than designated
significance levels in associated EPA
regulations (see. e.g., 40 CFR
51.18(j)(l)(x) and 51.24(b)(23)(i))."
(2) Level I. In general no modeling to
determine ambient equivalence is
needed if;
(a) The trade does not result in an
increase in applicable net baseline
emissions:"
(b) The relevant sources are located in
the same immediate vicinity (within 250
meters of each other):
(c) No increase in baseline emissions
occurs at the source with the lower
effective plume height as determined
under EPA's Guidelines on Air Quality
Modeling-*
bubble In an attainmtat area seeks to employ
allowable value* greater than corresponding actu,
value* in the calculation of baseline emissiona. and
where such allowable values are net show* t« b*
used or reflected in an approved daraonatntlosi. a
Level U modeling-analysis (tee below) using actual
emismon* (or the pre-bubble case will be required
unless, for bubble* processed as ca*e-by-cas*-SIP
revision*, the Region determine* thai additional
technical support n necessary to protect applicable
standards or increments. Where allowable valuae
are used to calculate baseline emissions for such a
ca*e-by-ca*e-SlP revision bubble in an attainment
area where the PSD baseline baa been triggered, the
Region will require the technical support necessary
to protect PSD increments.
Where allowable values higher than actual values
are not shown to be used or reflected m an
approved demonstration, stales that wish to
authome their use in attainment areas under
genenc bubbl* ru/e« must either slat*, or develop
repHcable procedures addressing, background
value* and how they will be evaluated m
conjunction with the actual change* in ambient
concentration predicted by the Level II analyst*.
These step* must be sufficient to prated itandards
and increment* and must be approved by EPA as
part of a genenc rule.
For further discussion regarding calculation of
baseline emissions and related modeling,
requirements, see Section 1.A.L above and
Appendix a below.
"This paragraph should not be construed to
imply that new sources and modifications need not
meet all applicable requirement*, including those
specified under 40 CFR 51.18 or parallel EPA-
approved Mate rules.
"See n. 31 above
(d) No complex terrain»«is wirhm Jie
area of significant iapact of the tmie "
or SO kilometer*, whichever ri less:"
(e) Stacks with increasing baseline
emissions are sufficiently tall to avoid
possible downwash situations, as
determined by the formula described at
50 FR rS82 (July 8.1965) (to be codified
at 40 CFR Part SI): and
(f) The trade does not involve open
dust sources.
For such Level 1 trades it can
reasonably be assumed that "pound-for-
pound" trades will produce ambient
effects equivalent to those which EPA-
approved air quality models would
predict Therefore modeling »o
determine ambient equivalence is not
required.
Trades between fugitive process
sources and stack sources (i.e.. process-
for-procesa or process-for-stack) can
acceptably be evaluated and approved
under Level I as long as the maximum
distance between any emitting sources
in the trade is less than 250 meters and
all other Level I criteria are met
(3) Level 11. Bubble trades which are
neither de minimi* nor Level 1 may
nevertheless be evaluated for approval
based on modeling to determine ambient
equivalence limited solely to the impacts
of the specific emission sources
involved in the trade, if there is no
increase in applicable net baseline
emissions.'7 if the potential change in
emissions before and after the trade will
not cause a significant increase in
pollutant concentrations at any receptoi
for any averaging time specified in an
applicable ambient air quality
14 Complex terrain i* broadly defined by EPA as
terrain greater In height than the physical stack
height of a sourc*. For bubble purposes, thi*
definition i* applicable only to source* with
increaaing baseline emissions.
" For guidance on determining 'area of
significant Impact" see Appendix E below. The
graph in Appendix i or EPA-approved alternative
approaches, auy be incorporated in genenc rules to
make this aspect of Level I analyst* replicatale and
operational. See Section U below.
" Generally, trades involving complex terrain as
defined above may not be exempt from modeling
under a Level I analysis. However. EPA will
consider on a caaavby-case basis additional criteria
for determining whether a particular trade involving
complex terrain, but otherwise meeting the
requirements specified above, does not present a
problem of potential plume impaction and may be
approved under a Level I analysts. These additional
cnlena would include such factor* as source height
and emisaion rates, distance between stacks and
elevated feature*, rate of topographical rise, and
other coneiderettona which may be appropriate for
the particular geographic area. Slates are
encouraged to work with EPA to determine where
and how such additional criteria can be developed
and applied to individual trades.
" See n. 31 above.
-------
F«d«r»J Rejtater / Vd. n. No. 838 / Thumiay. December 4. 1988 / Notteet
4384F
standard." an* tf M«h M aosjtysJ* dots
not predict my increase in ambient
concentration* in • mandatory Fcdenl
Class I arm." Tht change in
concentration from the before-trad* ca««
to the after-trade case muat in general
be modeled using refined models such
as MPTER and ISC for each appropriate
averaging time for the relevant national
ambient air quality standards for each
receptor, using the most recent full year
of meteorological data.44
(4) Ltni 111. Full dispersion modeling
considering all sources affecting the
trade's area of impact is required to
determine ambient equivalence if
applicable net baseline emissions will
increase aa a result of the trade.4» or if
the trade cannot meet criteria for
approval under e% minimi*. Level I or
Level IL
However, a geographically limited
Level 01 analysis may be used in some
caaaa where a Level 11 analysis predicts
0ua0fc tredoa. ttatoe Buy MI tba foUewli*
iijnolnaajna loiaaa to jdOBufy tnoea wtaea
pottntial oatmai tapec* need oat be further
evaluated beforv. approvafc
10 m/m* fat any at-hour pcnod fbr pmrrteniate
matter
ao? ananal period for parttoaitto
U »•/•' tar eay M-bow panod (or SO*
4S *«/•• far uy 1-kaw panad far 9Ot
3 m/m' for to annual period lor SfX.
S7S pa/a* fbf tat ovhoor period for CO.
2MB Mfe* tar Miy 1-how parted For Ott
ai »«/•* tar •*• naoerth period tar 1%.
SM 4S PR seas (Aigwi r. isan Mr «>SM(
at with BPA'i i
Review refutation* la 40 CPU 31.18 or Pkrt SI.
Appondta S. or paralM SPA-epproved aMte
reruUttom. "Sigctflcaar i»pact under « am Pan
it. ApaaadU 31» dafiaaa aa 1 »»/•* »»»»H
average far paniculate*. SOi or NOt t MS/IB* 14-
homr avenge for pemcniaie* *nd SOi: 2S M/»* *
hoar averof* for SO,: end as mf/M* ft-hoar xaieia;
«nd Z Bg/n* ana-hour average far CO.
*• However, i bubble ordhienJy OMV MM a*
approved undtr Level II where other evidence
related la background—<••- formally voMotod
•motffit air quality momlorlni data or MU'luaa*)
atubilahod backireund TmJuaa daorly •utteato*
that tha bubble would craan • now vtaUcion of ••
afflbwrn xandard or PSD taoraoMat or «m«ld a«*ay
ib* plannad removal of OB i
•• Other technique! may b* apprgnx) wtor*
fouren ihow they equalrf wttt protect NAAQ8.
appHaWt PSD incremMMe. «Ml vMbUlrjr. Par
example, in limited i in iMnalaniaa laiiiiiiailn
(creemnf model* may be eoeaptaMa IN Hoo of
MPTER and ISC In »oen eaee*. oae of • fid ymr of
meieorolovxal data ma* not be nirauary. Sort
tereoninf model* may be acceptable onerr (a) Tha
fcreemni modal ihowi that all the emiiatont fro*
the *tac*(a| with tncreamf emiaaWHi mmU AM
produce cxceedtnce* of tn»U«ol U sv^leuce
value* daacnbul in a. IS above, orfb) the net*
pmoMteree) the «tadi|>! with toareaoing miMtorn
do not chanoe and the *creenfti« mood >h«wt tk*t
the rnereaae « enttoioM at the inereaani Mec«4«l
would not prudute emeedaneea of there
iifBiflemoce valuoa.
41 See ditcuuion in I.B.l.c. below
onror IMIW aamtduee* of KM Level 0
lipttAoMC* vataM. WWJetbU aulytar
will be Jtorfted «term* of geographic
scope. If BMt odMrwto* «eet KM
modeHng lequittiaena rora fWl Lerd
HI anaiysla. Indodinf consideration of
all sources affettuif the hnttad
geographkal area, in many situations
this approach may permit the receptor
area to be smaller than the trade's entire
area of impact Because cf the unique
nature of each situation, the appropriate
limited geographic area muat be
determined in accord with EPA
guidelines on •tH*llf>Bi «nd through
case-by-case evaluation.
Bubble trade* are approvabie under
either type of Level m anaJyeia if they
do not cause a new violation of NAAQS
or PSD increments, significantly
contribute to or delay the planned
removal of an existing violation, or
adversely affect visibility in mandatory
Federal Class I areae.4*
This three-tiered modeling approach is
both reasonable aad conservative. It
will assure that the ambient impact of
trade* is at leaat equivalent in effect to
original SIP aniseum limits, white
conserving government resource* and
shortening approval time* for many
individual trade*.
c. Bubbbt Should Net Inane*
AfpUcabh N*t JojeZtoe Rariuiom.
Ordinarily, bubble* may not remit to an
increase in applicable net baseline
emission. Such a babble would require
a case-by-case SIP revision, and may
only be approved based upon a
combined Level 01 and Level II
modeling analysis (l.«, aa analysis
sufficient to show that all applicable
requirement* of a full Level 01 analysts
(as described above) are met and that
the bubble would not result m any
exceedance of significance vetoes
specified fbr a Level U analyst* at any
receptor for any avenging time
specified in an applicable ambient air
quality standard.4*
•• Whom a Uv*l m modalhif analyn* aubauHod
to cooper* a rotatory tradiof evpllMBue. fndteato*
an eacaeoaaoi at •• amblax reguiremaat. PA «HU
renew tucn *ppilc*t>oa* oa • common aanet eaee.
by-eaa* ban*, teekinf to encouns* dladflomH of
«ue* exeMdMOM and naM undw* dttoy o/
daotton* on tba tfada. whOe aOeMmlo); anemia^
pratvcttoB of pVvUc tMwtB* OH t&M^Hy of nt 39
proeeaa (mdodtet the tuMe't pmofiBtta M
detarmuilnf hew to remedy eltilnmaalt. end tha
proiitpt UM effetHw ramoBy of aire oonttWoii or
oonattainmenL In Itt revnn*. the Aftncr wttt teJt»
into eocowt tuea factor* a* the a*|lea of
exceedanoa. the contnbatfoo, of UN mdUif eawva*
and the trade Haotf to the i nje*aanoa. and the
deeree to whteh aoch tovoM wooM be put of ay
•olution remadylnf tha e«caad*nei
••Whore a |
Whet»eoeli » babble It proposed in
iu tu the state must
denonatratv dMt At trade- it consiste
with tn*>pfogr*M denwnetmiofl under
an approved demmuttaHuii of
attainment. ravtM Ml BPA-eppraved
ptuyets deflranatratioa a* part of the
proposed SIP revision, or otherwise
•how (e.g» by modeling and any
necessary compensating emission
reductions) that the proposed trade
comports with the EPA-epproved
emissions and ambient progress
demonstration.
d Bobbles Should Not Increase
Eauaiont of Hazardous or Toxic Air
Pollutants. Under the Clean Air Act all
sources jnuat meet applicable section
112 (NESHAPi) requirements for control
of haxardons air pollutants. Sources may
neither use a bubble to meet these
requirements, nor increase emissions
beyond the levei* they prescribe. Where
a sewce wish** (o generate or use
emission reduction credit for a criteria
pollutant and where a NESHAPs
pollutant i* part of the criteria pollutant
stream, the enriaskna baseline for
emission* of the hazardous poUutant
from that source would be the fower-of-
eetual-or-NMHAPs^llowable
emissions of that pollutant, applied as of
the ttme of application for credit. Where
EPA haa pnpintd to regulate a source
category far emitsrons of a pollutant
under section ill but haa not yet ,
promulgated a NESHAP for that source
category, the proposal will serve as the
interim guideline for evaluating the
potential effects of any proposed
•mnaiotts trad* involving tources to
which the proposed standard would
apply. The emissions baseline for such a
pollutant emitted by a source subject to
the proposed NESHAP would be lower*
of-acta*J-or-propoaed-NESHAPs-
allowabfe emissions for that pollutant.
la genera/, such trading proposals will
be approved so long as they (1) result in
emission limits for eocA source emitting
the relevant poUutant which are
equivalent to or less than those that the
approved NESHAP requires or the
propoaed NESHAP would require if
promulgated (2) rely only on reductions
below actual or allowable levels
(whichever la less) of that pollutant, and
(3) take place within a single plant or
contiguous plants.
When a poUutant has been listed
under section 112 or EPA has published
a Notiee-of-lnteot-te-List but no
NESHAP has been promulgated or
proposed fbr a source which emits that
•* not
batettae ontiMMM cannot meet thia toot of amble*
equivaJeooe. it may not be approve** a* * babble
under the Emuiion* Trading Pottee. "
i BJO* *«i taomM rueh rxneed limit* for
approval under tba general requirement* applicable
10 SIP r i Tt HOB*.
-------
43846
F«4etal Itogbtor / VoL 51. No. 233 / Thursday. December 4. ia» / Notices
pollutant state* may generetly allaw
trades consisting of equivalent increase*
and decreases of actual missions of
that pollutant within a lingce plant or
contiguous piants. Once the relevant
NESHAP is promulgated, every source.
regardless of any previously approved
trade involving emissions of that
pollutant, must meet the requirements of
that promulgation.
Where EPA has decided that one or
more source categories which emit a
listed pollutant do not require regulation
solely because of limited national
exposure, emissions-of that pollutant
will continue to be treated the same aa
emissions of any other pollutant listed
under section 112.
Where EPA has issued a formal
Notice-of-Intent-Not-to-List a pollutant
under section 112. that pollutant will
ordinarily be treated as non-hazardous.
However, where the decision not to list
or not to regulate was based on limited
national exposure, but the individual
risk was sufficiently high that EPA
committed in the announcement of its
decision to support (through some
formal mechanism such as a
Memorandum of Understanding (MOU1)
state-level efforts to develop regulations.
the pollutant will be treated a* listed for
trading purposes in order to assure that
such state efforts are not compromised.
The model for the intended scope of this
classification is EPA's acrylonitrile
decision. (SO FR 24319; June 10.1985).
If a substance is neither listed nor
regulated as hazardous under section
112. nor meets any of the other
conditions specified above, but has been
formally listed or regulated as toxic
under any comparable health-based
federal statute, the Administrator may
consider this fact in evaluating trade*
which may increase emissions of that
substance. This authority has not been .
delegated within EPA by the
Administrator. See Clean Air Act
section 301(a)(l). 42 U.S.C. 7601(a)(l).4«
" Tradtf involving emiiMM streams putiilly or
wholly composed of any nUattnu tuoiect to
special considerations andartBH section muit meet
two separate and distinct MU-to be approved.
First, sach tndei must beeajejrniialjls under the
en ten* and principles which apply to all trades, t*
discussed throughout this policy (i.t.. such trades
mual mm baseline and other requirement* for the
^levant catena pollutant). Second, such trad**
mat be appravable with respect 10 the Kasardout
pollutant fraction of the criteria-pollutant emissrae)
stream. Thu meant that there mutt be no net
incrf ate in emiaaioni of the polhitarrts addressed in
ihit section, ai a reault of such trades. Wlnre a
NESHAP hai been promulgated or proposed, the
baaelme for determining whether such en increase
hat occurred is-the tower-of-actual-of-NESHAPt-
dllowabie emissions for the hazardous component
of the trade, for the source waish emits thai
component. The promulgated or propoaed NESHAP
limit not only la used to define the ailowaole
Exception. Trades which invoke the
pollutants addressed in this section, but
do not meet the special restrictions
discussed above, may also be approved •
where surplus reductions in those
pollutants compensate for increases in
non-hazardous emissions of the same
criteria pollutant For example, a source
emitting benzene may trade with a
source emitting a non-hazardous VOC
without meeting these special
restriction*, if the benzene emissions are
reduced as a result of the trade (i.e.,
"traded down"). As long as such a trade
would not result in an increase in either
actual or allowable emissions of a
pollutant subject to the preceding
paragraph! at any source, it would not
differ in nature or requirements from a
trade involving only non-hazardous
VOC emissions.
e. Existing-Soune Credits Cannot Be
Used to Meet Applicable Technology-
Based Requirements for New Soarces,
Under Clean Air Act section 111 and
EPA implementing regulations, new
affected facilities must satisfy
technology-based New Source
Performance Standards (NSPSJ.
regardless of the attainment status of
the area hi which they are located
Under sections 165 and 173 and EPA
implementing regulations, new or
modified major sources most also satisfy
technology-based control requirement*
associated with pnconstraction permits.
These requirements prohibit use of
credits from existing sources to meet or
avoid applicable NSPS. and bar use of
such credits to meet applicable new
source review requirements for beat
available control technology (BACT) In
PSD areas, or lowest achievable
emission rate control technology (LAER)
in nonartainment areas.4'
However, modifications of existing
major sources in PSD and
nonattainment areas with an EPA-
approved "plantwide" definition of
source can use "contemporaneous"
reductions in actual emissions from
within the same source to "net out of
New Source Review.4* Under such-
emiaaiona for thai source, but serves as.an absolute
ceiling on the source aa well Where a NESHA0 has
not yet been promulgated or proposed, the baaeiiae
for determining whether such so increase has
occurred is generally actual enuaatona for the,
hazardous pollutant component of lie trade. But cf.
today'! Policy Statement si a. &
*• Today t notice does not address whether or
under what circumstances facilities ntbtect to
NSPS, BACT or LAER may surpsss applicable
permit limits reflecting such requirements utoraW •
to create credits for existing-aource trade*
•• "Contemporaneous" mesns a reasonable
period for accumulating increases snd decreases in
emiitroru. aa specified by the tlale. See 40 OH
51.1ft||)(ll(vi| and SI 24(b|(3|(bl (ii|.
"netting." sourcewide increases m
potential emission* that do not exceed
designated levels of significance (see 40
CFR 51.18(j)fl)(x). 51 J4(b)(»). and
5X21(b)|23)) will not be considered
"major modifications" of the source
under 40 CFR 51.18.51.24.51.22.51.307.
52.28. or 52.27. Thus, while these source
changes must still meet applicable
NSPS. NESHAPs. preconstruction
applicability review requirements under
40 CFR 51.18 (aHh) and (1). and SIP
requirements, they are not subject to
new source review requirements for
major modification because they are not
considered "major." 4T
/. Trades Involving Open Dust
Emissions. Trades involving open dust
sources of participate emissions may be
approved, through case-by-case SIP
revisions based on modeled
demonstrations of ambient equivalence.
Sources proposing such trades must
commit a» part of the trade's approval.
to (i) undertake a post-approval
monitoring program to evaluate the
impact of their control efforts, and (ii)
make further enforceable reductions if
post-trade monitoring indicates initial
open dust controls do not produc* the
predicted air quality results.
g. Interstate Trades. EPA will approve
trade* which involve sources located in
neighboring states where such trades
meet the criteria below and all other
approval criteria applicable under
today's notice. Where state trading
requirements differ, EPA will require
that trade* with increasing and
decreasing sources indifferent states
meet the substantive requirements of the
more stringent state. In general, in order
to avoid complex accounting problems.
EPA will deem ERCs created in another
state to contribute to progress ia the
state where used, to the extent of that
use. Such trades must be accomplished
through case-by-case SIP revisions.
41 Netting also applies under the narrower "dual
definition' of "source" ut certain circumstances For
exaatpia, firms aay use reductions within the pUnt
lo compensate for increases at several emitting
unit* watch, while not individually significant.
might otherwise sdd up to a significant increase
pUntwide,
Under current EPA regulations, if a nonaitammem
area is subteet to e moratorium on new
preeonatrucuoo permits for maior tourcei or
modifications and the area does not have an
approved New Source Review program, then the
area automatically osea s planiwide definition See
40 CFR 52.24.
EPA's general expansion of opportunities for
stales to use the plantwide source definition for
certain nonauainmem areas |49 FR 50760. October
14,10S41 wee affirmed by the U.S. Supreme Court on
fun* 23. IBS* Ctitvnn U.S.A- Inc. v Natural
/fcsovrcw OefnirCounoJ. 104 S. Cl. Z77& u ELR
209O7. ovtrrulinf Natural ttttourcrs Offtnst
Council. Inc. v. Conner,. aeS F Zd 718.12 ELR 20942
(D.C Clr. 1982).
-------
Federal Register / Vol. SI. No. 233 / Thdfaday. December 4. 1986 / Notices
A. Trades Near PSD Cloat I Amu.
EPA or • ttatt operating under • generic
rule must notify the Federal Land
Manager if an emissions trade will take
place within 100 kilometers of a PSD
Class I area. Notification must-occur
early enough in the review process to
allow at least 30 days for the submittal
of comments before the trade will be
approved by the reviewing authority.
Where a bubble within SO kilometers
of a PSD Class I area is submitted to
EPA as a case-by-case SIP revision, the
Region may call for additional technical
support beyond the applicable
requirements of the modeling screen
described in section IJi.l.b. above, if
deemed necessary to protect air quality
in the Class I area.
/. Effect on Trades of Subsequently-
Discovered dean Air Act Problems;
Revisitation Considerations. If ambient
violations are discovered in an area
where EPA has approved a trade, or if
other violations of Clean Air Act
requirements are discovered in that
area, sources in the trade should be
aware that they are potentially subject
to requirements for additional emission
reductions, just as are all other sources
in the area.4*
«• Whii* More** involved to • trad*, like ail other
vrcav. aay b* Mbfrct to reoumaunt* far
tradaja approved by EPA or by Malct under BEA-
ipproved generic rulta. nor esuauon r*d*cttoB •
.credit* uMd •• (MR of i babbit, offtrl or netting
ecttoo, thould b* terminated.
Sucfc termination ooaid occur, far example, what*
two eourc** in i erven eourc* category wort mbuct
to pre-bnobl* BUM eminion limit* of 100 TPY each
ind poet-bubble limit* of 90 TFT tad ISO TPY
respectively. Aimao th* tut* impoHt • now
category-wide regulation which would normally
limit tboa* IODTCM to 40 TPY each. In ihia eaaa, the
ftrat soura* ahould b* required to m**t th* now 4*)
TPY limit (La- it ibould b* required to produo*
additional reduction* of 10 TPY). while tb* Mcood
Kmrc* ihould b* wbpct to • new limit of «»TPY
(La_ • lovtl reflKfinf th* continued euateac* of th*
X TPY tmixioo rcducnon credit). TernunatMe) of
(h* emiaaion reduction credit would occnr *ith*r by
requtrma, the fir*t tourc* to produo* addittonal
*au«Hm reduction* of 80 TPY (I.*, nor* Ilkaa it*
current Intel of emii*ioa»|. or that Hoond eowce to
m**t th* 40 TPY limit Bihar of th**e.r***ll* wo*id
undermine >h* purpoa* af today* notw* by
eliminating th* pradiaabteicy Marred for.
generation or UM of BUT*, They cootd tla*> ptMlui
trading eourc** for taking amiinaniinlally
beneficial meiium *oon*r than required, tow* il
would often b* more difficult to achieve tb* nrw
reduction* than had earlier voluntary itcpa not ban
liken.
For tnea* reaion*. EPA urea* »tat*i not to tafc*
•uch credit-terminating action* unlea* th*r* i* no
other practical way lo *au*fy the requirement* of
th* Clean Air Act
Today'* procedure* for depoeit and u** of banked
credit* already addraaa addrtiOMl Mat* rmiMton
reduction need* in the context of banking (*e*
•action LCS. betowl. Slain thould. however.
recount (or all prevtou* trad** and previouity
(ranted emtMion reduction credit* In eiiimating
emiuton reduction* mulling from new contml
t Procedural Steps for Using ERC*
Bubble trades may be implemented
through individual SIP revisions or state
generic-rules. This section describe*
principles applicable to either
procedure. General principles for
generic rules are addressed in Section 0
below. Special considerations for trades
which require individual SIP revisions
are addressed in Section UL
a. Effect of Existing Compliance
Schedule*. EPA's 1979 bubble policy
required that sources be subject to
binding compliance schedules based on
original SIP emission limits before being
eligible to apply for bubbles. Because of
the time required to process babble
applications as case-by-case SIP
revisions, this requirement tended either
(a) to discourage sources faced with
tight milestones for the installation of
conventional control equipment from
pursuing bubble applications, where-
they had agreed in good faith to SIP
compliance schedules before
discovering bubble opportunities, or (b)
to discourage sources from agreeing to
any compliance schedule until they had
fully examined bubble opportunities.
Today's policy allows an application
to be filed though the applicant ia not
subject to compiiaac* schedules based
on original SIP emission onto so long
as that applicant agree* to-eanssioD: • -
limits establishedarpaxt-of a coaapiete •
bubble application. Sources which an
already subject to binding compliance
schedules should however, be aware
that submittal or proposed approval of a
bubble application does not suspend
their obligation to comply with such
schedules. Such schedules and existing
SIP requirements remain applicable and
enforceable until the bubble is finally
approved and the schedule has been
modified accordingly.
Sources seeking trades should note
that they remain subject to enforcement
of existing (pre-trade) SIP limits until the
bubble is approved. EPA will UM the
same principles snd procedures for
deciding whether to initiate
enforcements actions in these
circumstances as the Agency applies to
any other source which is subject to e>
proposed SIP revision.
Under established EPA policy.
regulated sources must be subject to an
applicable enforceable emission limit at
all times. Accordingly, sources which'
have approved bubbles with emission'
limits effective at future date and which
are not in compliance with their pre-
trade limits, may be subject to
enforcement action, which could include
penalties baaed on a failure to meet the
pre-trad« limits. Sources in such
situations may wish to minimize i
chance that capital expenditures ^
required to meet pre-trade limits, either
by (a) agreeing to post-trade compiiancf
dates which are substantially similar to
their pretrade compliance dates, or (b!
accelerating their compliance with post-
trade limits.
In accord with the general principle
that bubbles should be treated neither
more nor less stringently than other SIP
actions, implementation of today's
policy will be neutral with respect to
EPA enforcement of pre-trade emission
limits. This means that EPA will not
specifically target for enforcement
action non-compliant sources seeking to
use a bubble either to come into
compliance or to restructure traditional
compliance. However, it also means that
EPA will not withhold or defer
enforcement simply because a source is
seeking alternative emission limits
through a bubble. In exercising its
enforcement discretion. EPA will apply
the same considerations to
noncompliant sources which seek to
comply through bubbles as to-thoee
which do not**
o. Extvaiora of Compliance
PMnVf'nsi States may modify or ex
compliance schedules or deadlines
individual sources on a case-by-cas^
basis in conjunction with bubble
approvals. Such modifications or
extensions must be consistent with the
requirements of 40 CFR 51.15.
Compliance schedules for sources in
nonattainment areas cannot be
extended beyond the statutory date for
attainment and applicable compliance
milestones must be specified and met
for each year of the revised or extended
compliance schedule. Because an
extension will usually require a revision
of the state's progress demonstration.
such approvals must ordinarily be
submitted as SIP revisions.
itrategiea. in order to avoid problem* do* to doMbl*-
eounting.
" Part** oontanplatinf bubble* involving the
trad* of anuuton reduction credit* from one firm to
anetbar ahouU b* awar* that when th*crediii
baukj provided by th* flr*t firm are the rwuii of
aramian limit* with a future compliance date, the
obiifitMO to meal prc-trade limit* remains with the
MCond Una (which may face enforcement action.
iadudtof caaii penaltiev forf*dure to comply wnn
the** prartnd* limit*) until the time jpeoliea for
th* flrat firm to achttv* th* reductions nece»ary for
compliance under (he bubble. The fird firm s iaiiure
to ackl*>* required bubble reduction* on scr.eame
nay thereafter reault In enforcement acnon
(Including ca*h pemaltin) agamit that firm
However, thii paragraph should b* rod m
cornuactioa with the general principle anic'jinird
abov* that EPA im»iam*rua«on of today 3 poncy^
will b» neutral with reaped to «nforcemrii of
pretrad* knit*.
-------
VdL SL N*. m /. Thursday. Dacejabar 4, Itttt / Notion
W*.
si*a»» which
wish to give ae«CJBS Bert, tineO-
implement bubbles by jjaaiiog
compliance extensions; aviat receive
EPA approval of the extension through
case-by-case SIP revisions, EPA will
evaluate the time extension portions of
these SIP revision packages in
accordance with the Agency's normal
procedures for review of time
extensions, including consistency with
the Act's requirements of
expeditiousness. reasonable further
progress, and attainment and
maintenance of ambient air quality
standards. Sources should be aware mat
disapproval of the. time extension
portion may result in disapproval of the
entire package (t.e« both post-trade
Hmits and the time extension) or only
part of it. depending on whether the
state 'view* theee component* of die.
prapoeed SIP revision ae separeoio*-
In attainment onto, states may
CORtDlM tO £pBB COTnpfraDC& QXTC
without case-by-case SIP revision*, am
p8ft Of DttOOM SppTOWlS QDQCT ft £0RVTG'
rule. Soch generic uiaip'lam.e date
extensions- may be granted in these-
areas only if EPA baa approved (be- •
extension pruittion of ttie generic- tits -
as adequate to comply- with, tie-dean-
Air Act
air.
e. feitdixg BHfrrvmuei* Acttumi. A
bubble cannotbe approved Kr eft
individual e«Maie«i seasrua which ie
presently the setyeet ef a federal""
enforcement ectfen-er eutstandtag;
enfmcemem order esaaea EPA (endi '
where neeeeeary -me eppiupriata seeH)
approves the proposal and say
rimplliiirniihiiiliiliiriiisj
"Federal eafareeaeat ecUesi
outstanding order" inchidas nottm sf>'~
violation cwti aettoe* Bied>«adee
Air Act section 113(b}, uhseual
filed under section 113(fl}, aetice*
imposing noncaeaplisnee paneMee
issued under sectieavMBL^daauBett
orders issued under aacttan 113(ajt or
citizen suits filed
whichEPAaasi
is subject to an i
judicial order.
This requirement neiaaat)
bubble approvals under-generic rates;
provided the nde specifies an
nri %\t occi
recosgbae-EBArer ew
Sowcershouid.
such approvaii_cannot'QB{^aaV
they remain subpct t««htuu^«
limits until sach approvaL
C Banking Eaianm Jttdaetion Owfrts
Emission reducttona that an surplus,
permanent quantifiable and enforceable
can qualify as emission reduction
credits (ERCs) and be deposited in EPA-
appnvable banks. States may establish
such banks by adopting appropriate
rules to govern whether and how
sources may own and hold surplus
emission reduction credits for future use
in bubble, offset or netting
transactions.11 Such banking rules may
encourage soorces to take measures to
reduce emieaiaM in advance of specific
need for ERCs. resulting in lower
transaction costs for those seeking
offsets; bubbles, or partners-for theee
transactions. Stales shooid however, bo
aware that because an area's air qmatiry
situa4ion or the status «f its Sff n«y-
chart * in the future. foMwo to aeooeal
Tor bueked credits in-emieetoai
inventories ased for planning pasyaeee
nay festsfe in-fas* oitboao HdssMt-
treated as> "in **»«<• (•«. not inebde4
account iai trssMfais anaV wlthdraMak.
by the suatss past o
Act's
state oy dm time they are banked.'
However, if a source commits to *
produce e^pecific reduction ara
SfinvftlBB fornn. s state may
,
a obadSooBal deposit to be made.
Prncsslaraa isrsoBh«andi
-------
Federal Register / Vol. Si. No. 233 / Thursday. December 4. 1966 / Notices
compromise tlw state's ability to MOU«
through further regulation any future
reduction! which may be needed.** In
all cases the reduction must be made
federally enforceable by the time the
emissions trade which relies upon it is
finally approved.
3. Possible Limitations on Use ofERCs
for New Source Permitting
Use of banked ERCs for new source
permitting must be consistent with
applicable regulations approved by EPA
under 40 CFR Parts 51 and 92. For
example, under 40 CFR 51.18(j)(3)(ii)(c)
shutdowns that occur prior to
applications for a new source permit
may ordinarily be used only as offsets
for replacement facilities, and then only
if the permit application was filed within
one year after the shutdown occurred or
if the reduction occurred after August 7,
1«77.*«
4. Sources Should Apply to Book
Surplus Reductions As Soon As They
Decide To Make Them
For administrative simplicity snd
accurate quantification, sources should
apply to bank reductions as soon as
possible after they decide to make them.
The administering agency should
formally note the source's intent to.
make a surplus reduction, as expressed
in the application. The state must then
verify whether and to what extent the
reduction actually occurred, and must
make the reduction enforceable by the
time it is accepted for deposit
5. Procedures for HanUng Surplus
Emission Reductions Should Be Defined
To speed approval of trades and
provide greater certainty for potential
ERC creators and users, state banking
rales should clearly specify which
proposed emission reductions can
qualify to be credited and banked, the
information required of sources to
substantiate their claim for credit ead
any required application forms. At
minimum, such rules must require firms
to maintain records (e^* production
records and recordrof pravtoua
•* Sum h«»e wvoral MfltMrovUomi (a
prwMf inch luanne*. HM» M«*for awBaio. bo*
eondlnonoi dopotifi fnm tomiM MWffonot wtaca
«n Mtyoa to pondlnt rofakfioa AJMmottvory.
tlwy m«y •Ikrw unmtneiod condltMMJ
ihele pemcuUr tituoUon,
" See n. 1* (bo**
emission tests) adequate to determine
the pre- and post-reduction actual and
allowable values for emission rate.
capacity utilization, and hours of
operation for the source generating the
&RC.
6. Banking Rules May Establish
Ownership Rights
To prevent two entities from claiming
or attempting to use the same ERCs et
the same one. stete banking rules may
specify who can own ERCs. For
example, while the source creating the
ERC will generally be its owner, the
state could, as part of its rule, reserve
ownership of certain classes of ERCs to.
itself or local governments. States
considering the latter course should
carefully weigh whether such
reservations are likely to increase or
diminish future (eductions and air
quality management capabilities.
7. Banking Rules Must Establish an ERC
Registry or Its Equivalent
An ERC registry or equivalent
instrument allows states to track
ownership, use. end transfer of ell
banked ERC*. Banking rules may
provide that no transfer of title to e
banked ERC will take effect until the
transaction is reflected in the registry- .
This rocking .system ca* nrirrimiea
potential disputes.and provide •central
list of certified ERCs which nay be -
available to potential purchasers. It can
also provide useful information for
quickly evaluating any proposed use of
a banked ERC
Information which may help evaluate
future propoeed uses of a banked ERC
should be recorded et the time of Ha
creation and entered es part of its
banking record. This information should
include the location of the sowce
creating the ERCa; whether the
reduction is due to e shutdown or
curtailment the date the /eduction
occurred or will occur (to allow future
determination of the timing of the
reduction with respect to (he apptteotten,
for credit or its contemporaneity for nee-
in netting or. if a shutdown, aa an
offset): the source's stack parameters;
the temperature and velocity of in
promr particle size; the existence of ajsy
hazardous pollutants: daily and
seasonal emission rates: and other data
which might reasonably be deemed
necessary under the requirements
described in sections LA. and LB. above
to evaluate future use.
To perform these tracking and
clearinghouse functions the ERC registry
must be accessible to the public Subject
to confidentiality considerations, states
should make copies of the ERC registry
svsilable at convenient locations and
1
sec
times, end mey went to publish or
otherwise issue a periodic summary
bsaJtedERC*.
8. Possible Adjustments to ERCs Base*
on Enforcement Considerations
Banking rules should state what, if
any. changes may occur to ERC» afrer
they have been banked. Once an ERC
has been used by another sourc? to met
a permit or other regulatory
requirement any violation of th»
conditions under which thai ERC was
created should result in enforcement
against the source producing that ERC
and not the source using it If a state
attempted to enforce against the source
using purchased ERCs. a complex set of
third-party lawsuits would likely
ensue.**
9. Possible Adjustments to ERCs Based
on Ambient Attainment Considerations
To assure the validity of its
demonstration(s) of progress or
attainment a state with a banking rule
must assume that all banked emissions
will ultimately be used. In evaluating
their ability to attain national standards.
such states must add to their emissions
inventory or measured ambient values
all unused banked reductions at the site
at which they were created This is
especially important for areas
requesting redassification from
nonettainment to attainment. Failure t
account for banked reductions as "in the
air" for SIP planning purposes would
ordinarily eliminate their use as ERCs
following a new SIP design or inventory
year, due to double-counting.
Additional emission reductions may
be required from sources because of
their area's failure to attain ambient
standards, because of an increment
violation, because of existing visibility
impairment, or because new RACT
requirements an being imposed under a
SIP schedule. The existence of banked
ERCa must not interfere with states
ability to obtain these additional
reductions, and a state's rules on
treatment of banked ERCs must provide
it the necessary flexibility to meet future
requirements. However, state banking
roles may address, within this criterion.
how banked ERCs will be treated if
'. oonflicnni pnv«t*-p*ny anempu to
vlliowit rmoonrtbilfry for required
ld nuko tfco purduiod ERCi
unonforenblo ond muA in rnionnon of 'he
CTMItnf toure* i on$0ul (hifh*r| cnuMion iirmu.
dw-ncUim* th*l nirphu roduccon* were produced
la roJtMic* on tovtnuMm ruto implying their
rMoonrtli nuithntlhlhry tnrl urt For these
UmUt >Hortd ••• result of the
«M of EBCi miui rwiuin find ino
mforetsblo •foliwlUt* cretlor of thoir ERC*. to is j
M EPA It eoncomod.
-------
434*1
/ VoL St. No. 232 / Thieasda*. DeMober 4.
t I
addit
uradtA
at»m ami a.a,ataii..MAAOjl paatect
PSD increment*, oc improve *ieitulkv.
Available options mciu4r -
a. EffCa Cenentetrmbr tt> tf>e Design
or Baseline Year Coukrbe SKminated.
The use of ERCs iteneraied pn« to tht
aestgn or baseline year is unlikely to be
consistent with the state s
(iemonktraiioa, uniess the slate included
«'ich FRCs as ":n the air" for planning
purposes at thai time.
':. EfiCj Cuuld be Guaranteed Against
\d:iuuaent. The state would determine
the necessary quantity of reduction*
from individual sources and source
categories aad require these reduction*
from actively emitting, sources. Beaked
credits previously creeleday sources
would be fully preserved. Emitting
sources could then satisfy new
requirement* for redactions either by
reducing emissions directly or by using
or purchasing equivalent ERG*.
In implementing thie option, it would
be particularly importasU. lot stales to
adjust downMacd the estimated total.
reductiona due ta these new regulatory
requirements, in order to reflect
reductions previously !f}*iqt/**k MB a
result of Ka^fctng ac&oasL. Alternatively,
state* could Bocase new coatraf
requtraraeais ia tarns of eqatvalaaaV-
reduction result! (eg* "RACT-
equivaient" cedaclioae in aon&ttaiaaant
areas) as well aa specified coaftei
techniques, or amiuion level*. Under
this approach, necessary adifioaaal.
control requirement* would fee expwsaijt
stated in terms of adcMooal redaction
responsibilities, ta be autt without:
regard to prior trades.**
c. Use or Deposit ofERCs Could be
Temporarily Suspended. Slates may
suspend either ERG use or future ERG
deposits until the state has cotnmitted a.
its SIP to secure redaction* sufficient to
reestablish progress or cure an
increment violation. Use ol either type .
of moratorium would be consistent with-
air qudlity objectives while allowing
sources to retain and aweatually use
their entire quantity axbanked ERCs.
However, these optioewHybe
undesirable because o£bacextainry
regarding the moratorium's start
duration, or potential interference with
user planning. This may be especially
true where a moratorium on use (rather
than deposit? is imposed after ERCs
have been hanked.
d. Acn*»-the~8oatdDacovatu>6.
Under tin* option the state caoM
discount all ERCs in the bank by the
same factor. For example, if a 10* .
addition*! reduction k required icam a
particular category at aaur
SiFs new denosBtniMav tba«Mt»
would diecottiil aU OURM*? aMkeat
ERCs from those type* of sources by.
10%. Although the quaotKy el EftCs held
by a firm will be reduced, the overall
supply of ERCs will decrease, while
demand will increase. Indeed, other
sources may seek to purchase banked
ERCs from cresting sources, in order to
meet the 10% redactions required of
them. Thus, the price per unit of
remaining ERCs is likely h* many case*
to increase.
This option ia relatively
straightforward far VOC or NO,. For
SO, or parhcatete matter mow detailed.
source-specific modeling woalaV
generally be required to aUacasa the
discount necessary to demonstrate
attainment
States may adopt any of thaav
methods of accommodating posoibia
additional reductions. They ouy atao-
adopt any equivalent method which. .
achieves the same objectives."
IL Trade* Covered by SUla
Rules
Th»!
develop £>Aoppiu»o»ta gaswite NB*»
unoeV'WflfCn cttaaesFOi eMMssasia c^visifl
may be exempt frooi ^e^gvfwtaA •" ;»•'
requiiuimm fus sobeoaotrt^ftP** *•••-'
-> -Ji>
A. GemeraJ£riacipJftferEvrd*ati«f, „ , .4
Generic Rule*
assures that emissions in
raqisiris« cmswoy-caee 99
under
the Ooa» Aar Art wiltoa- evafaale* •
under stata pioceiJajea !*•» ato*
guarantee that amiasioa I
under the rofe wtfl not mMfaie w4tt -'
timery ambieirt attmnnwRt and-
"•' Sr« fooinolr 55 abov*.
"The preceding cfiecuMion generally i
the bank h> kwnd T m attainment am
aautnioment am with en i|i»nj»a«i
deaKN Miration, hi pnma)ry i
which need but lack appro**:
for bubble purposes of bcoked shutdbwnor aUni,
crvoin wntcn ncvt RICWK rvQQficinv
notice well senitarry be aJtoiveai Sea •
LA.Lc.IU) rfbave. Bunbtoi in itweeiam
be subiect t« ipecuit pic
However, in order to accommodate poeaibaj
additional rednctton reqummenH m other em* hi'
a matuirr coaMeteM nllb han>» slalea as»»»
i nlunfirilir irtnet nun m ipsjrnerh (m a»ej»jl»ei .
prior te the IMWUICD t»y EPA of «ay Fiicmei oeuca ai
SIP deficiency maodating such reqiiueauMUa, Stale*
may alto choote (t» some hove eliinrir danet hr
specify yttift than hi Itabiaa] nejte»tar*«jMB**«.
ddmat tbs> tola i ejnouAl of erealU tvailahar iaav
bank, il can subitanttaUy enhance SIP ptenuif
erferla md provide a net eir quoiny Ueiiefil trj
reducwtj the ^ouram a/ eeueaioai thai CBO.
w rciurned 'rum liM bnk te, NM aat,.
g«aara%i
two*
agivni
coaehuaoaviaroaa iriasiipaa of a generic
rule incorporating a very stsapai ferautia
that meets teats of replicabilityrsee 46
FR 2CS51 (April 8.19B1J. In relation to
generic bubble rules, this-means that
specific modeling procedures or
surrogate* are prescribed and that
states have appropriately defined their
choice of models, model inputs, and
modeling techniques in applying these
procedures to specific trades. Thus these
trades should not create new ambient
violations of standards or increments.
delay the planned removal of existing
vfoiatfona, or degrade visibility in Class
I arees. ^r approving* such generic rules.
EPA approves in advance an array of
acceptable SIP emission limits, and no
further SJP revision ia required for
trade*-which meet the terms of the
state's approved rule.
EPA wi]} comment on. trades proposed
under generic rales, conduct reviews of
tradea-approved under those raieav and
audit (no inglaKntatian of these ruies
as-part aftts routine audits of otiiar state
air progftuaa. See Section E below*,
S)t>faa>aoBj uar a range of mechanisms
to exuBgd boabie ttudcs from individual
SIP leviftiaDe. WaSa sanral general
mecfianismaare explained below, states
may-submit other generic rules that
satisfy tamaa buafa principle*. See
saofloa I.O> Mow for specific
requireosanta lor generic rales ia
priawy' aoaaiawuaeai area* whwh
need* hul lackaf pmuad- demenslrauons.
1. VOC or MG,, Trade*
VOC or NOiteade* approved by
states uadar a generic rule that assures
no-oat incfaans in applicable boaeline
emissions may oacv without case-by-
caaa SO* revisions.
The ambtaat impacts of VOC and NO,
emission* ace araaunde rather than
source-specific. All such emissions
within a broad, area are conquered
comoacaBla. regardless ol plume height.
topography or related factors. Thus. th«
ambient Impact trf trades mvohrmg
emission* of VOC or NO, from different
source* within aach an area wdl by
definition ao eqaivaiaflt to that of the
sum of applicable baseline emission
limits for the sources involved in the
trad*
PorVOC end NO, such pound- for-
pouod trades may therefore be treated
under generic rules as equal in ambient
effect where all sources involved in the
-------
/ Voi n. No. 233 / Tbroday.
, Notices
trade are-
regulation*
1980).M
approved by EPA aajeBtoi the generic
raic fot dcteinuniiifviiaeB sources
outside the demonatranam ant are
efficiently close tbit apound-for-pound
trade can be justified.**
In general, generic VOC trading rulas
must require that surface coating
emission* be calculated on a solids-
applied basis. The rule should also
specify the maximum time period over
which emissions may be averaged in an
acceptable compliance demonstration.
For VOC that averaging time should not
exceed 24 bows anleaa the rule contains
language approved by EPA that
expressly aihma a loafer aveiagiag
period. Sea AppeiKlx D below.
2. Particuiate,SO. CO or Pb Tradaa
Qaaaea of pattJeuiate. SOn CO asid-
lead (Pb) trade* may also be exempt
frooj SIP reriaioa* if they ace approved
under a stategaaaticniie which sseisiea
(hat valid ERCnae* canamt reaaasubiy
interfere with aRammeiit and
meinleiioncet or air qvarrty standards or*
jeopardize PSD increments or
visibility.*1
Df Miatmu Trade*. Tradaa of
partculalaa. SO, CO«rteexMPb* ir*
which applicable! net baaafia*
emissions'* do not increase and in
which tha SOB of the emisainn increases.
loobing only at (be increasing source*
totals leaa than 23 tons per yeaz CTPYT
for particulars. 4ftTFY to culler
dioxide. 1<»TPY forcarbon monoxide.
or 06 TRY for lead (Pb). after applicable
control requiromenta. nay proceed1
without modeling and case-by-caaa Sf?
revisions.*3 Such trades will hava> at
most a de ana out uniwci oo lacaJ ear
quality because they will prodao*4ta> Be*
increase m emtsaaon* and -the •movnTaf
emissions bemg shifted is no* sigmfieajri
in ambient effect under associated EPA
»ppl> lu certain NO, <'»<*+
10 NO, trade* intnfiajtjnaiflfllr) tnpacuoa
On' IP elevated plumes 5e« n. BB above.
U'.ilike other critical pnDottmi. EPA don CKX
designate anmttammmi area* for lead. However.
•lairs muat n»\tm le«d rr«a>ee. at all «ttwr tratfw.
10 awort th»t they oo not interfere *>* attaytnnmt
«me gtnacai air *a«n. .
"S»»» 31 above.
" Tha de muuma kvai ta 4OT7Y fat NO. Mdm
- hrr« viubtlirjr uaiMCUoa du* lo ticvaMd ptamM ia>
particaiate. SC%. CO or Pb emMoa*
depends on ske sparifle owton such e»
topoyaphy and plume beiglit which ar»
ordinarily evahMted by embieiM
dispersion modeling. However, if
applicable beeeJioe esoieaioBtdo not
increase, sources are located in the
saae immediate vterrnty. and aO odwr
Uvet 1 reo^iheanent»dhwiuaed In
secdoa L&1.1M2) above are met M can
reasonably be aaaomed that Mpoond4or-
pound" trades wtii preduoe atnh*en«
effects equivaient to thoer wWoh
currendy approved air quaJay-saodara
would predict. A»a eeauh.
meeting the criteria in section
above may be treated in the
manner as generic VOC and NO, trades.
and exempted from modeling, and caae-
by-caae SIP revisaona.
EPA will nornulhjr appime genaaic
rules that ( ifine "same immediate
vicinity" as up to 250 meters betweenr
individual enussiaa soucae iavotvas> ta
a trade,
Level II Trada*. Other patttcahitav -
90, CO ansi Pb trmdm auvaaao W —
intsmptrri frnm
reviaioa* if they
criteria in sectio
prescribed meaner. The saanr> t
trading rule moat •p^nify tbe'paxticHUeS
refined model that wilLba eaDftajcedi»fe
giveii.siruaMoo. or cri tana, lee i
limit vahabiiity in iiirnialiim.ieeiialB ilia
rule muat alao require atleaata fuUyeac:
of meteorological data. »«*••«*% the sitea
for thai data, and specify ptoca4urea.faL.
selecting input data (a*, wipri speed.
stability class, source •misiion sate}-
which are sufficiently defined ta satisfy
replicabitity concerns.*' In somallmtted
circumstances, a sufficiently
conservative screening model could be
specified as part of the generic rule. See
section I.B.l.b(3) above.
Level 111 Trades. Because of the wide
variability in data input and use
inherent in full-scale dispersion
modeling. Level III trade* must be
"Thia p*rajri>pli *ouJ4 tun ba couviMd la
unplv that ntw tourcea «nd modiPc«lton» need not
meet ill .ppheable requirementa. including ttaa*
ipecified under 40 CFR 51.18 or parallel EPA-
approved Hate rjlea.
•Bvcauw today i nouce confirm ih« euibonty of
itaieato uaa auch EPA-«vproved rafioad audai* aft
MPTES. CRSTER or ISC M conduct tin "duly.
temporal ipattal «oaly»u" of po«-u»d* a«h«ant
impact* required under Laval II. l of f*Mnc
rule* tneorporaung Level U app«uch«« limn tit br
leti uncertain and burdenaonu ihan under Uta>
previoul l(kU approach- See. »4- AppaodtoC
btlo«.
Bvt«t enBtfaB* RR4 end a below.
dBfSgvnptfm
Un+rGtmiric Auae*
be eddmeed ta a rapBcable uaiiner. the
following may not in genera* be
exempted under generic mies from the
requirement for caae-by-ca»e SIP
re vision*;
a. Pardcnmte. SOi CO or Pb trades
requiring Mi-scale dispersion modeling
under Level m (see section I.B.l.b.(4)
above);
b. Paniculate. SO*. CO or Pb trades
where complex terrain **is within the
area of the source's significant impact or
50 km. whichever is leu. unless the
trade does not result in a modification of
effective stack heights and the trace
otherwise qualifies as da minimis or
Level L.The area of significant impact
can be determined aa noted in footnote
21 above and in Appendix E; *T
c. Open dust trades; and
d.CevelH trades involving process
fugitive parrtdilau. SOi. CO or Pb
f'TTn* not discharged throuBb
tucks.**
In addirinn to tha-above, in oarief to
protect the integrity oi vanaus 3aP
procaaaea. det tallowjag typea of trades
may/ net,im geaaaai. be exempted under
generin raiea front lh»requ«Tement for
raie by fjse SIP reviatonr (l) Trades
involving GRCs from mobile source
meaaurea. (ZJ. trades uvorving emission
sources which are.me subject of an
enforcement action manifested by
issuance of a notice of violation, an
adnunistraarae. order or section 120
•ctuTtt. or tha filing.of a judicial
cosKpiaant. oniaae the rule specifies an
•Cvvpin mr»m*»t>w«dt» drflwd trv FPA to
terrain greataviB hnjht tkan .FartaicaMiparpowe. (hit
^.R..n«» „ appiasabi* oa*> w wvcea with an
inerMM ev«r bia»»lin* enuaaioaa.
•'Cenerafly. aiidc from the e.Trrption stHird
above. Mata* m»ol»liB| iimiple* trmir a» drry oiai lo dvvc'op ana luamit
for EPA «ppnvai »ddiaaoaj ana-specific enteric
for dXvnUaung when tradca involving u>mpie\
t(tr«ndone4aRMMpreiM««iiof pvtential nume
imoKtwa and tkarvfae* nuy be approved i.nder
tenenc ruin M de mimmm. tev«i 1 or Level U
trade* uaun • Oat terrain a»deL ThMe aooitionai
cniitrla.«rould indude luch factors uurr.» bright
and emiaeton-riM. diaiance between fc.-n oil.
appraved tuck addilionai-cniene foe » ai««n
intttfbte aran
maat apply the general reatrretions «'ated ,ihov
when proceKlm <^dw in («•< area under -he -•...?
"SwApoewiiaC
-------
43852
Federal Regjalar / Vol. 51. No. 233 / Thuraday. December 4. 1988 / Notices
i for notifyinf
appropriate . _
EPA of the source's bubble application
prior to formal state proposal and for
securing and recording written EPA
concurrence that the bubble meets all
pertinent requirements of the generic
rule. (3) interstate trades. (4) VOC trades
with averaging times longer than 24
hours, unless a state generic rule
expressly providing for longer averaging
times has been approved by EPA. (5)
trades involving work practice and
equipment standards, unless a state
generic rule containing a provision
expressly providing for state evaluation
of such trades in a replicable manner
has been approved by EPA. and (6)
trades involving negotiated RACT
baselines. However, a state generic
trading rule could specify "presumptive
RACT* limits which acceptably define
generic trading baselines where RACT
has not otherwise been defined in the
SIP. While RACT baselines different
from this presumptive limit could still be
used for specific trades, they would
need to be approved as case-by-case SIP
revisions. Where there is no RACT m
the SIP. but EPA has issued a CTG for
sources of the type involved in the trade.
the CTG should be used as the
presumptive RACT-componenl of the
generic trading baseline.
To the extent necessary, EPA will
issue notices requiring that existing
generic rules be revised to reflect these
restrictions. See section ILE.4. below.
4. Other Generic Mechanism* for
Exempting Paniculate. SO». CO or Pb
Trades From Case-by-Case SIP
Revisions
EPA will approve other generic
techniques which are demonstrated to
equally protect ambient standards. PSD
increments. Class I areas, and visibility.
For example, a state could approve a
modeled formula for two or more
specific emission sources which would
satisfy ambient concerns while allowing
firms to define specific permit limits at
each covered emission source. Like
other generic provisions, such a formula
would have to be approved n part of
the SIP. EPA encourages states to work
with EPA Regional Offlen where they
seek to develop other generic
mechanisms which meet the tests of
replicability and ambient equivalence
described above.
C. Enforcing Emission Limits Under
Generic Rules
Alternative emission limits approved
under generic rules are considered by
EPA to be federally enforceable so long
as the generic rule specifies the
compliance instrument (permit limits.
etc.) under which the conditions of the
trade will be implemented and ail
substantive and procedural
requirements of the approved rule are
met Generic rules must specify that
such alternative limits become
applicable requirement* of the SIP under
S 110 for purposes of sections 113.120.
and 304 of the Clean Air Act and are-
enforceable in the same manner as other
SIP requirements. To assure that EPA
and citizens know what emission limits
apply, generic rules must also specify
that and in what manner. EPA will be
informed of emission limits applicable
before and after the trade. (For
additional issues related to
enforceability. see section I.A.2 above.
For requirements related to opportunity
for public comment see section ILF.
below).
D. Generic Bubble Rules in Primary
Nonattainment Anas Which Lack
Approved Demonstrations of
Attainment
Generic rules will continue to operate
in primary nonattainment areas which
require bat lack approved
demonstrations of attainment onder the
following conditions:
1. Bubble* approved under-existing
generic babbie- reiee prior to thr -
effective data of today's pottoy wntnot
be affected by today's requirements.
2. Bubbles submitted to states under
existing generic rules may continue to
be approved by state* in accord with
those rale*, until such rules are finally
changed, pursuant to specific formal
EPA request to meet the criteria listed
below. Such rules must however, as
requested by EPA. be modified to meet
the criteria below.**
X Applications for new generic bubble
rules applicable to the** areas, and
applications for generic rules now
pending before EPA. will b*j approved
provided they meet the criteria beta*
and all other applicable requirements of
today's policy.
Criteria for-Approvable Generic
Bubble Rules. New and revised generic
bubble rales applicable to primary
nonattainment areas which require but
lack approved demonstrations of
attainment must for bubbles in those
areas:
•• In the interim. EPA expect* ami** to enaur*. M
f*r •• featibi*. that bubble* approved under
(xttitng generic rulM «rt consistent with thta policy
M «*•!>» with tlM terra* of their ETA-approvad
rule*. Sum should b* aware that without thit or
similar precautions, continued appro**! of bubble*
urnfer existing genera rule* containing identified
deflcwnoM m*y create or accentual* plaa.
deficiencies which may have (o b* corractid al a
lattr data or compensated for by oihar meana. See
faction E.4. below.
a. U9elaw*e4-of-actuai-SIP-allowable-
or-RACT-allowabl* emissions baselines
for all source* involved in the trade:T0
b. Using baseline emissions defined
above, meet applicable de minima
Level I or Level IT modeling tests for
ambient equivalence, as appropriate:
c. Produce an overall emission
reduction from each bubble equal (in
percentage terms) to the larger of a 20%
reduction in emissions remaining after
applicable baselines, or to the overall
emission reduction from controllable
stationary sources (in percentage terms)
needed to attain in the area (i.e., at least
equal to the source-by-source emission
reductions that would be required for a
full demonstration of attainment, taking
into account "uncontrollable" area or
other stationary sources and expected
emission reductions from mobil
sources).7' This determination must be
'• Par detailed diacueewfi of the*e baselines. •«•>
sectto*) LA.lJx above and Appendix B.
rl Par exempt*. Mtum* air quality analyst!
indicate* the an* not decneae in base-year
tauaaiooa by *»%, I* attain the relevant NAAQS.
Further a**um*
Teal.
Therefor* the reduction* needed from
controtabia stationary source* *r* 3.4W-
SJOP-UMTFY
And the percent eayonon reduction requires from
cmtrolhM* stoUoaary aeurce* to attain i*
x too-***
The* the net overall reduction required from each
fcnenc bubble would be 94* (i.e~ the reductions
produced byippUcabie b***linca (e.g. application
of • RACT eauntail rate) phi* whatever percent
rwteeflMri* *Bj|aj|ojM remntng after this RACT
Halt to sufficientto yield the 94% total).
SIMM that wnb to avoid SIP revision* for sources
for which RACT ha* not yet been defined man
approved SIP provision nay incorporate
"presumptive RACT limits (e.g. 80* reduction for
VOC) in their generic rale*. Source* would then
have the option of accepting these RACT limits for
generic babble purpaia*. or negoualiRg different
RACT limit* through the SIP revision* process.
However, where • source Involved m a trsde is one
for which EPA ha* issued • CTG. but the state has
not yet adopted the CTG-*peafied limit as RACT
sod no RACT has yet been specified by the state for
lhal source, the presumptive or negotiated RACT
limit for the trade must b* at least a* protective as
the CTG for that source.
-------
Federal Register / VoL 51, No. 239 / Thursday. December 4. Met / Notice*
submitted with the rait. and muat UM
the seme type cod qnanty of analysis ••
that required for an EPA-approvable
SIP: and
d. Provide assurances, in conjunction
with the State's submitta! of the generic
rule to EPA. that the state (i) is making
reasonable efforts to develop a complete
approvable SIP that will achieve the
percent emission reduction from
controllable sources described in the
previous paragraph and (ii) intends to
adhere to the schedule for development
of such a SIP (including dates for
completion of emissions inventory and
subsequent increments of progress), as
stated.in the letter accompanying the
submittal or in previous letters. In
addition, to ensure that generic
approvals continue to complement and
do not interfere with attainment
planning. EPA will require the state to
include the specific assurances listed at
section I.A.l.b.(3) above in or with its
notices of proposed end-final approval
of each bubble issued under the generic
rule in such a nonettainment area.'*
£ EPA OvmishtofGwricRufor
In order to ensure proper
implementation-of EPA-epproved
generic trading rales. EPA Intends to («I
examine and comment on. together with
any other public comineiHer« the
information provided formdhrUhsai
trades proposed under a generic rale; fb)-
conduct reviews- of iadividoa4 trade*
approved under such a rale, and fc)
periodically audit the implementation of
the generic rule iteeff.
1. EPA Comment en Trades. Pro poea A
Under Generic Rules
When processing emissions trades
under generic rules, states are required
to provide EPA and the public with
adequate notice and opportunity to
comment See sections ILF. and ILG.
below. EPA will use state procedures far
notice and comment to oversee the
implementation of gaoencruiea without
delaying state processing of trading
applications.
The informatio* which a state must
provide to EPA by the first day of the
comment period (see section JLG.
below) is generally sufficient for EPA ta
'rThe*e (for raqnirvowala mat ttt inri«deda»«
contingent prornwn in all future »a«efic rvta. wrtfc
the cominpm.; ntgjiieO M apply to bubWaa to
pruna*y MMflimea* arm* w*HCh tx
loaSIPcaM<
determine (feat a trading application i* -
being proceeeed niupaily. Where this •
information is not sufficient SPA nay •
request the application Itfcetf. tad the
state noat provide M promptly.
When EPA elects to provide any
comments on die proposed approval, it
will do so in writing, by the doee of the
comment period specified in dw state's
notice. EPA may also testify at any
public hearing held pursuant to die
approval of a trading application under
a generic rule. Trading applicants and
state officials are strongly advised to
address EPA's comments, and when
necessary to incorporate an appropriate
response to the** comments in the final
approval document"
2. Reriewi of Individual Bubble*
Approved Under Generic Rule*
Reviews of Individual generic bubble
approvals, apart from the regularly
scheduled reviews associated with
activities under EPA's National An*
Audit System (see section "«-*- betow).
may be conducted at any time by EPA m
order to promptly address identified or
patterns of i
adverse effect* i
before met next bis
conducted
lEPAAedttsof Ae
i and to S7vuio>
Under tha.Itetia.il Alt Andli Spteav
EPA conducts a program audit oTeacb. ..
state agency responsible for.
implemenOBgu^SgsnndaligalaaV
federal program*.** Thee* audits are .
cunaatly caniad out on. a biaamial
baaia. As. part of the National Air Audit
System. EPA wifl conduct an in-depth
file audit of a reoreatntativ* ——r1- of
generic trading approvatt issued by. tit*.
relevant state.
4. Deficient Generic Trade*
As dtsoieeaOj abovov generic rasae* cam
expedite the approval precaaa lav-
certain classes of emissions tcade*.
because they anew such tradee-to be;
approved by states without undetgatoig
a subeeqtient federal rttssmeJdflg'
process. I lowever. to bo considoed -
"Uch of EPA coon
penad wit not bar httra-ap
enfofoenwnt «r miamaHns i
found lo to ineouailaaM
valid by EPA.»trade approved unaer
(1) Br on* of a dees of trades •
within tfao scope of the generc nid
(2) Be approved after the get:*-': 7
has been approved by EPA. w.t
(3) Meet ail the provisions ci 'he
generic rule as approved by ET1*
If a state-approved emiwic.".i ;T»ae
does not meet all these .-wair-Ten's it
cannot be considered pert of tee SI? a;
by defin't"?" cannot replace pnor valu
emission limits in the SIP. See 4fiFR
20954-55 (April ft. 1981). Should EPA
determine, aa a result of its oversight
activities, that a state-approved trade
inconsistent with the above
requirements, it will notifiy the state ai
source in writing and specify any
necessary remedial measures. In such
circumstances. EPA may take
appropriate »»-»^ut action to assure
attainment and maintenance, including
direct enforcement of the original SIP
limits."
5. Deficient Generic Rule*
Existing generic role* approved undt
previous EPA policy and guidance IMJ
require revis*oa> in order to maJei them
consistent with today's final policy. In
auej-llaa a-gsnerir ruJo approved by
rthminal polky may
subssajtssidy be ieund to be defiar
soms>sa*poot Becauee EPA-appro\
generic rute* hawetindependent fo
law. they ca« only bo amoaded
completiooef a fomul SIP eevwon
m afdvr nvenenre thai-generic role*
am consistent wim tile Agency's cttrre:
Emissi« Trading-Policy. EPA will
publiaa noticeein me Federal Register
whick ideBtify any generic rules
requiring formal modiflcaaon.7* These
notices will identify specific deficiency
end means for correcting them, and wi:
set forth a schedule' for submission anc
review of revised rates. These notices
will alert affected state* to the danger
that continued processing of trades
9ft 01*7 have approved tiat*
ek IMM (fet taettoact ORMTM I
iU«s w*»t«*t or not
"fcM
taicvmd tar tmane
vmttdKy of cadi prevnion*.
of »»ch noilm will not
for ca»«-t>y-
oin«f Unn
f • SM. e.s-NMMMl Mr AMM CtrfiMawAr rv
M. OHta of Air
frtmvf noaMtatooMat an» whic
-------
43854
Federal Register / Vol. 51. No. 233 / Thursday. December 4. 1986 / Notice*
under these rules may create or
accentuate plan deficiencies which may
have to be corrected at a later date or
compensated by other means. Where
states fail to remedy deficiencies
identified in the notice within the
prescribed period. EPA may either
rescind its previous approval of the rule.
or issue a notice of SIP deficiency under
section 110(a)(2)(H) of the Act.
F. Public Comment
For emissions trades processed under
generic rules, existing state statutes or
regulations will generally provide for
adequate public notice and opportunity
to comment, including opportunity for
judicial review sufficient, to make
comment effective. Under such statutes
or regulations, after the state has
reviewed a bubble application
submitted pursuant to an approved
generic rule, a newspaper or similar
notice is typically published providing a
comment period (usually thirty (30)
days) on the proposed decision to
approve or disapprove the application.
This notice generally informs the public
that the proposed approval document
(license, order, permit, consent
agreement, etc.). the-appiication itself
(with the exception of any portion-
entitled to confidentiality under state or
federal law", and the technical analysis
performed by the state- m making its
proposed determination, are available1
for review at specified times and
locations. The notice also offers the
opportunity for a public hearing.
Under today's policy, the state must
also notify the relevant Federal Land
Manager if an emissions trade will take
place within 100 kilometers of a PSD
Class I area. Notification most occur
early enough m the review process to
allow at least 30 days for the submittai
of comments before the trade will be*
approved by the state.
Where adequate procedures for public
notice and comment are not already
provided in existing state statutes or
regulations, such procedures must be
provided as part of an EPA-approved
generic rules. In all pragsMed and final
generic bubble actionstatate* must
clearly and publicly idMHf botrr the
pre- and post-trade actuaf and allowable
emissions of each source involved in the
trade, so that the ambient effects of each
bubble may be known.
To ensure adequate public awareness
consistent with { 304 of the Clean Air
Act. state generic rules or other existing
state laws or regulations must also make
publicly available any changes to
11 The specific poltuuntt emitted by the source.
ine amount of thoie polluunn. and their amoieni
air impvct may not be deemed confidential.
emission limits which mult from trades
approved under a genetic rale..
C. EPA .Verification
In addition to the above requirements
for public notice and comment the
generic rule or other state provisions
must require that states, by the first day
of the public comment period provide
the appropriate EPA Regional Office
(see addresses in Appendix A) with a
copy of the public notice, the proposed
approval document, and the technical
analyses performed in evaluating the
trading application, together with any
summary of those analyses which is
available for public review.
State provisions must also require that
immediately upon issuance of a final
generic trading, approval, the state will
forward two copies of that document to
the relevant EPA Regional Office, and
will also submit to EPA any additional
documentation which is included in
conuner * or the post-comment record
and supports-that final state approval.
Any notices issued by EPA to correct
notice and comment procedures which
do not meet these requirements under
current or future generic rules will not
trigger special progress requirements or.
otherwise affect the operation of those.
rules. Because of the Importance of
adequate public and EPA notice.
affected states should, however; correct
deficient notice procedures to the extant .
practicable, in the interim period before-
formal rule revisions are submitted and
approved.
H. Rulemaking on Generic Rultt
EPA will process acceptable generic
trading rules for approval as revisions to
SIPs as expeditiously as possible. In the
interim, states are encouraged to use
parallel-processing SIP revision
procedures (see 46 FR 44477; Sept. 4.
1981) wherever practical. Trades may
not be genetically approved by a stats
until EPA has published a notice of final
approval of the generic trading rule in
the Federal Register.
01. Trades Not Covered by State Generic
Rules
In the absence of a generic rule, states
and sources must use case-by-case SIP
revisions to effect bubble or external
offset trades. Individual trades may also
fall outside the scope of an approved*
genenc rule and still be implemented as
case-by-case SIP revisions. The
principles described in the Policy
Statement and this Document will be
used to evaluate these emission trades.
Because of the ability of the case-by-
case SIP revision process to take'
account of greater individual variations.
many trades which could not be
accomplished under a generic rule may
nevertheless fae approved- as case-by-
case SIP revisions. Through- this SIP
revision process, states and sources may
also demonstrate that a general
principle discussed in Section I above
does not apply to their particular
circumstances, or that such a principle
may be satisfied in other ways.
EPA will make reasonable efforts to
take prompt action on SIP trading
proposals after a state has ruled on an
individual application and submitted it
to the Agency. EPA encourages "parallel
processing" of such proposals, with EPA
and state officials conducting concurrent
review so that both agencies can give
public notice of proposed action at
roughly the same time. EPA can then
take final action after the state
completes its proceedings, provided the
state does not substantially alter the
proposal after public notice. EPA will
also publish noncontroversial SIP
revisions as direct final actions.
converting thenrto proposals only if
requests to submit adverse comments
are received within 30 days (see
generally 46 FR 44477, September 4.
1981). In all bubble actions EPA will
clearly identify (or require states fa
identify, as appropriate) both pre- and
poet-bade actual and allowable
emissions for each source involved in
the trade, so that the ambient effects of
each bubble ma; be known.
Appendix A—Regions! EPA Emissions
Trading Coordinator*
Region I. David Conroy (APS-2310).
State Air Programs Branch. U.S.
Environmental Protection Agency.
Region I. John F. Kennedy Federal
Building, Boston. Massachusetts
O2203.(817) 565-3252 FTS 835-3252
Region &• Betty Martinovich. Air Branch.
U.S. Environmental Protection
Agency. Region II. 28 Federal Plaza.
New York. New York 10007. (212) 264-
2517: FTS 284-2517
Region OL Cynthia Stahl. Air Programs
Branch. U.S. Environmental Protection
Agency, Region III. 841 Chestnut
Building. Philadelphia. Pennsylvania
19101. (215) 597-M37: FTS 597-9337
Region IV: Melvin Russell. Air Programs
Branca. U.S. Environmental Protection
Agency. Region IV. 345 Courtland
Street N.E.. Atlanta. Georgia 30308.
(404) 257-2864: FTS 257-2864
Region V: Joe Paisie. Air Compliance
Branch. U.S. Environmental Protection
Agency. Region V. 230 South
Dearborn Street. Chicago. Illinois
80604. (312) 886-5777; FTS 886-5777
Region Vt Bill Riddle. Air Program
Branch. U.S. Environmental
Protections Agency, Region VI. First
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Federal Register / Vot. 51. No. 233 / Thursday. December 4. 1986 / Notices
International Building. 1201 Elm
Street Dallas, Ttx«« 75270, (214) 767-
9670: FTS 729-9870
Region VIL Chart*1* Whitaore, Air
Support Branch. U.S. Environmental
Protection Agency. Region VII. 324
East llth Street. Kansas City.
Missouri 64108. (913) 236-2896: FTS
757-2896
Region VIII: Dale Wells. \a Programs
Branch. U.S. Environmental Protection
Agency. Region VIII. 1860 Lincoln
Street Denver. Colorado 8C36. (303)
293-1773: FTS 564-1773
Region IX Nancy Harney, Air
Management Division. U.S.
Environmental Protection Agency,
Region DC 215 Fremont Street San
Francisco. California 94105. (415) 974-
7658: FTS 454-7858
Region X: David Bray. Air Programs
Branch. ITS. Environmental Protection
Agency. Region X. 1200 6th Avenue,
Seattle. Washington 98101. (206) 442-
4253: FTS 398-1253
Appendix B—Definitions of "Actual"
"Allowable" and "Baseline" Emiaaioas
for Purpose* of Pm. this
require at least a Level H model:
analysis using-actual emissions for>L
pre-trade case.* Where such an a.ia!
is submitted to justify allowable vah.
fora case-by-case SlPVevisfon bubo.
the Region may require #• u'tional
technical suppor f deerr.»e necessar
to protect applicable Standards or
increments. See Section I.B.I.b above
• Where, in a non-attainment area
with an approved demonstration of
attainment the demonstration does nc
assume allowable value(s) for the
baseline factorfs) in question, but the
applicant demonstrates through a Lev
Q7 modeling analysis that the use of
such allowable value(s) will not
jeopardize attainment and maintenanc
of NAAQS or PSD increments.
• Where, in an attainment area or a
nonattainment area with an approved
demonstration, a source has a new
source preconstruction permit issued
after the PSD baseline date or the base
year of the attainment demonstration.
such cases, the applicant may use the
valuers) of ER. CU and H upon which
the new source permit was approved
While the Emissions Trading Policy
does permit sources to use allowable
values for ER. CU and H in determi;
baseline emissions for bubbles unc
certain carefully prescribed conditn
the approach taken recognizes that SIP
demonstrations are frequently based o
a "hybrid" of allowable and actual
values, and that bubble baselines in
these areas must accurately reflect SIP
assumptions for all three baseline
factors, or be justified by appropriate
modeling, to maintain SIP integrity.
In noaattainment areas needing but
lacking approved demonstrations of
attainment, sources involved in a bubbl
must use "lowest-of-actual-SIP-
allowable-or-RACT-allowable"
emissions baselines. The ER factor for
such baselines is based on the actual
emission rate, the SIP or other federally
enforceable emission limit, or a RACT
emission limit whichever is lower, as of
the time of the source's applicable to
bank or trade, whichever is earlier. The
CU and H factors for such baselines are
based on the lower of actual or
1 Where the PSD baseline has been rrtagt-ta arc
such emissions data is available;, the pre-buoble
situation for sources which were in existence or
commenced construction pnor to the PSO Daseime
data should be modeled-using emissions consister'
with the PSO baseline concentration as defined m
40CFH J1.2«(b|(13| and SUl(b)(13) However
tmisafona and associated parameters may be based
on more recent valuta where past emissions da
cannot readily be obtained. For related princiq
see section I .VI c.(l| above.
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4386ft
Federal RagJUsu / VoL 51. No, 333 V Thurtday. D»c*mbw 4. 1W8 / Notices
allowable vaiuM4ortiMtc factors;
Actual valuts for CU ml rtmest be
determined using the source/a avenge
historical values for the two year period
preceding th« source's application to
bank or trade, unless another two year
period is shown to be more
representative of typical operations.
For sources which banked or sought
to bank credit in these nonattainment
areas prior to publication of today's
notice, the "date of application to bank"
is the date of written application to the
state to bank credit through a formal
bank or informal banking mechanism for
use in future trades. For sources which
seek to bank credit in these areas
following publication of today's notice,
the date of application to bank will be
the date of written application to the
state to make a reduction state-
enforceable through or concurrent with
use of a formal bank or informal
banking mechanism.
Appendix C—Approrable Modeling
Approaches
UA Eavirasuaeaul Protection Agency
Office of Air. Noise; and Radiation
February 17.1883.
Memorandum
Subject Emissions Trading Policy—
Technical Clarifications
From: Sheldon Meyers, Director. Office
of Air Quality Planning and
Standards (ANR-443)
To: Director. Air and Waste
Management Division, Regions B-
IV, VI-VnL & Director. Air
Management Division, Regions L V,
IX
The proposed emission trading policy
was published on April 7,1903. is tfae
Federal Register. Duiring the initial
implementation of the proposal.
numerous emissions trading issues have
arisen including several relating to the
technical requirements of dispersion
modeling and control strategy
evaluations. To address these modeling
issues, a special workshop was held to
solicit recomendations from Regional
meteorologists/modelers as well as the
various Headquarters technical staff.
The Standing Committee on Emissions
Trading has also considered these issues
and the recommendations of the
workshop group.
This memo is intended to outline the
results of these meetings and to provide
interim guidance. It is effective
immediately and will be incorporated
into the final Agency policy when
promulgated. The following revisions or
clarifications on modeling for TSP, CO,
and SO,, are intended to supplement the
criterra included in lh« April 7.
emissions ending policy state-bent
Level I Anclysu
• To ensure air quality equivalence
under Level I analysis (modeling is not
required), trades cannot be approves)
where complex terrain (terrain greater
than any stack with increasing
emissions) is within the area of
significant impact of the source or 50
kilometers, whichever is less.
• Stacks with increasing emissions
must be at least good engineering,
practice (GEP) to prevent downwash.
• Fugitive process and stack sources
can be traded under Level I (La, process
for process, process for stack, sstd stack
for. stack) aa long as the maximum
distance between any emitting points is
less than 250 meters. (This is trust for
trades under generic rules as well as for
trades implemented by SIP revisions.
The effective atack height requirement
hi the April poiky remains.)
• Since trades involving open dm*
sources are very difficult to ssdruss in «
replicabis manner, they cannot (unsiilljr
be approved' tadar generic Level I
biAbieregu*a*om(IUUeratianol April -
7,1982 proposed policy.)
Le ve/ S Afodeifa*. Amtysa
• In order to satisfy the basic
requirement of the emissinas trading
policy (hat trade* "must desBonstnte
ambient equivalence," the •"•"*•*-•• • •
change ma« quality impact (delta) wist
be determined when performing a Level
n anayisis. Experience has shown the*
this requirement is not nscsssariiy met
when the April 7 policy says to analyse
only the "impact at die receptor e(
tnavimiiHt predicted impact after the
trade." Therefore, to assura that no
degradation of air quality greater then
the significance levels would occur at
any site, the method of findmf the
maximum deltas must be determined on
both a spatially and temporally
consistent basis. This menae that you
look at each receptor point and
determine the change in concentration
from the before trade case to the after
trade case sequentially for each time
period within a full year of
meteorological data (time period means
the appropriate ambient standard
avenging time e.s> 3-hour. Ze-bour.
etc.). This appears the most reasonable
method of determining ambient
equivalence at this time.
Other techniques may be approved
when they can be demonstrated to be
equally protective of the standards and
PSD increments. Also, a Level III
analysis may be used to supplement
those cases where Level II analysis
shows • few receptors registering deltas
greater then the siejriBtance vehm.
TMv tinttasl Level B afiaytrti woeid
involve only the geographical area
containing the hMt deltas and would
include aH eontributmg-soorces to that
area.
• Use of refined models (e.g.. MPTER.
ISC) with at least one year of
meteorological data is acceptable for a
Level 0 analysis.
• To ensure repllcability, only trades
involving process fugitive emission
sources vented through stacks can be
approved in generic Level II rules unless
the State rule specifically identifies
actual facilities between which process
fugitive trades would be permitted. In
such-cases, the State rale most specify
the emission points and all assotisted
and pertinent parameters needed to
ensure replicability of modeling results.
• Since trades involving open dust
•sources an very difficult to address in a
replicable manner, they cannot currently
be approved under generic Level II
bubble regulations. (Reiteration of April
7, IfH proposed pottcy.)
• Tiaeaa Invohrtegtamrplex temm
risnmrt he eppmseri onder Level II
generic rules; however, approval of such
trades through indrndoet SIP reviews
am pessshie eneer Level H> EPA's
experience hi pniinissiiiQ bubbles for
such eooroae nee shown that dwy are
exceedingly difficult to- address in a
repttcobio menner. They reouire a
i.niSEhislils iininhBT i if jmlpisnn mil
nenottetfons among Agency personnel
concerning the models, data bases, and
• Ail national amWent air quality
standards (NAAQS) avenging periods,
not jostle taVheer. mast be considered
ween penansung the air quality
equivalence analysis. This Is necessary
to eesem trades approved under Level Q
will not hstve any advene health and
wetfen impacts. Therefore, sll Level II
analyses must test the deha for each
receptor site against the following
levels: TSP— 10 pg/ma (24-
hour), 5 pg/m* (annual); SOr— 13
(24-hour). 48 u«/m» (3-hour). 3 fig/m*
(ansraal); CO— 87»p«/m' (o-hour) 2300
Implementation of Changes
Implementation of these changes by
the Regional Offices in their
negotiations wim States and individual
sources should begin immediately. If
then are any on-going* bubble activities
when the Regions or Slates and sources
have reached firm agreements which do
not comport with these changes, please
alert Tom Halms (FTS a20-&62B) of my
staff. Consideration will be given to
situations where the worce or State has
-------
Federal Register / Vol. 51. No. 233 / Thursday. December 4. I960 / Notices
already invested significant resources in
• good-faith analysis based on prior
methods of demonstrating ambient
equivalence. If you have specific
questions regarding implementation of
these policy changes, please call Tom
Helms.
cc: Chief. Air Branch. Regions I-X.
Meteorologist. Regions J-X. Mike
Levia Joe Tikvart. Oarryl Tyler
Appendix D— Approvabie Averaging
TimM for VOC Trade*
U.S. Environmental Protection Agency
Office of Air Quality Planning and
Standards. Research Triangle Park.
North Carolina 27711
Unitary 20.1984.
Memorandum
Subject: Averaging Tunes for
Compliance With VOC Emission
Limits—SIP Revision Policy
From: John R. O'Connor. Acting
Director. Office of Air Quality
Planning and Standards (MD-10)
To: Director. Air and Waste
Management Division. Regions U-
IV. VT-VUL X. Director. Air
Management Division. Regions L V,
IX.
The purpose of this memorandum is to
clarify the Agency's policy regarding
emission time averaging for existing
sources of volatile organic compounds
(VOCs). Numerous State
implementation Plan (SIP) revisions.
both broad regulations and source-
specific changes, have been submitted
which provide for compliance
determinations by "time averaging"
emissions of VOC for periods exceeding
24 hours. These requests and the
following policy on this subject were
discussed extensively at a recent
meeting attended by those Regional
Offices which have the most pending
actions (Regions I. ILL IV. V]: the Office
of Air Quality Planning and Standards:
and the Office of General Counsel. This
policy represents the consensus of the
meeting attendees.
The objective of EPA's national VOC
emissions control program is the timely
attainment and maintenance of the
national ambient air quality standard
(NAAQS) for ozone. SIP revisions and
other regulatory actions relating to VOC
control must maintain the integrity of
this basic objective. There should be
assurances that VOC emission control is
reasonably consistent with protecting
this short-term ozone standard. Further.
since SIFs and associated VOC control
programs contemplate the actual
application of reasonably available
control technology (RACT). regulatory
actions that incorporate longer term
averages to circumvent the installation
of overall RACT level controls cannot
be allowed
Current Agency guidance specifies the
use of a daily weighted average for VOC
regulations as the preferred alternative
where continuous compliance is not
feasible. An example might be where a
facility operate* in a batch manner with
multiple lines and various products.
Reference is made to the December 8.
1980. Federal Register (copy attached)
where can coating operators art
allowed to "bubble" several production
lines and average emissions over a 24-
hour time period.
The preferred daily weighted average
alternative may not be feasible in all
cases. Where the source operations an
such that daily VOC emissions cannot
be determined or where the application-
of RACT for each emission point (line.
machine, etc.) is not economically or
technically feasible on a daily basis,
longer averaging times can be permitted
under certain conditions. In determining
feasibility, consideration might be given.
for example, to the extent to which
modifications can be made to testing,
inventory, or recordkeeping practices in
order to quantify daily emissions. Also.
variability or lack of predictability in a
source's daily operation might be
considered as well as availability of
control technology or the physical
impediment or restriction to control
equipment installation. In order to allow
longer than daily averaging in SIP
regulations, the following conditions or
principles must be honored:
1. Real reductions ut actual emissions
must be achieved, consistent with the
RACT control levels specified in SIFs or
the control technique guideline* (CTC's).
These limits are typically expressed in
terms of VOC per unit of production (a
qualitative term such as Iba VOC/gal
coating). Where it is not feasible to
specify emission limits in such terms.
emission limits per unit of time can be
approved provided that
a. The emission limits reflect typical
(rather than potential or allowable)
production rate and operating hour*.
These emission limits must truly reflect
emissions reductions consistent with
RACT and are not simply an artificial
constraint on potential emissions. This
must be supported in the SIP revision by
historical production and operation
data.
b. Nonproduction or equipment
downtime credits are not allowed in the
emission limit calculation unless a
Federally enforceable document
specifically restricts operation during
these times. Such credit muat be b; ;*
on real historical emissions.
2. Avenging periods must be i
as practicable and in no case lor
than 30 days.
3. A demonstration must be made ;.-
the use of long-term averaging fgreare-
than 24-hour averaging) w»ll not
jeopardize either ambient standards
attainment or the reasonable further
progress (RFP) pun for the area. This
must oe accomplished by showing tha
the maximum daily increase in
emissions associated with long-term
averaging is consistent with the
approved ozone SIP for the area.
4. Sources in areas lacking approved
SIFs. or in areas with approved SIP s
but showing measured violations.
cannot be considered for longer term
averages until the SIP has been revised
demonstrating ambient standards
attainment and maintenance of RFP
(reflecting the maximum daily emission
from the source with long-term
averaging).
Meaningful short-term (i.e.. daily)
emission caps are desirable especially
for sources subject to large fluctuations
in emissions. The use of a daily cap
(equal to or less than current average
emissions on a daily basis) that limns
short-term emissions to RACT
equivalent levels would meet the above
objective of ensuring VOC control :t
is consistent with attaining the NAj
for ozone.
States have the primary responsible:
to show adherence to the above
principles and. to do so. must include
the following information (in detail) in
ail SIP revision requests that seek VCC
averaging times greater than 24 hours:
1. The VOC limits specified in an
enforceable form with appropriate
compliance dates.
2. A description of the affected
processes and associated historical
production and operating rates.
3. A description of the control
techniques to be applied to the affected
processes such as low solvent and
waterbome coating technology and/or
add-on controls.
4. The nature of the emission control
program whether a bubble, a regulation
change, a compliance schedule, or some
other form of alternative control
program.
S. The method of recordkeeping and
reporting to be employed to demonstrate
compliance with the new emission limit
requirement and to support the showing
that the emission limit is consistent with
RFP and the demonstration of
attainment.
Each EPA Regional Office shall ha*-^
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43S5I
Fedafal Register / VoL M. No. 233 / Thursday, December 4. 196P / Nottees
the primary rteponBibiiity far >
determining tht approvaMWy of
application requests. Hovnw, in order
to assure Regional conaisteacf;
coordination with the Office of Air
Quality Planning and Standards staff rs
encouraged during the initial
development of any single "time
average" SIP revision or regulation.
Also, all SIP revisions involving long-
term averaging must be proposed in the
Federal Register with an explanation of
how the principles listed above have
been satisfied.
Should there be any questions on this
policy, pledse call Tom Helms (FTS 629-
5526) or Brock Nicholson (FTS 629-
5516).
Attachment
cc:
Barbara Bank off
Ron Campbell
Jack Farmer
Mike Levin
Ed Reich
B.f. Steigerwald
Darryl Tyler
Peter Wyckoff
Chief. Air Branch. Regions I-X
Regional Administrator, Regions I-X.
Appendix B-IUt&i of Slpflksnl Impart
for Appnvia* -CMpta TamM' PM,
SOi and CO-ftate UMtarLMd I
Modeling Approach**
Appendix E indicates on its vertical
axis the post-trade emission rale for the
stack with Increasing emissions (E). and
on its horizontal axis the radius of
significant impact (R) within which level
I trades may be approved despite the
presence of complex terrain outside that
radius.
The curves in Appendix E have been
generated using a normally conservative
screening model. VALLEY, to estimate R
for each E. using the 24-hour and 3-hour
air quality impact significance level for
SOt and the 24-hour significance level
for paniculate matter (PM] which have
been established for level II modeling. It
was assumed that the short-term
standards would be controlling.
The P-stability class was assumed.
and wind speed was presumed to be oae
meter per second for estimating the
radius of significant impact for the
three-hour period, and Z5 maters per
second for the 24-hour case*, la.
developing the three-hour curve, it was
assumed that P-stability and a wind
speed of one meter per second would
persist for aa much aa fourteen
consecutive ham. la dewetaausj &• it-
hour curves, it was assumed that F-
stabiliry wttb a wind speed of 24 jneterc
per second would occur for six hours of
any 24-hour period *
Thn Appendix provides different
estimates for SOi and PM becaase the
significance levels for these pollutants
are different For CO, the R value for E
value may be determined by multiplying
the E for SOt by twenty (30). This ia a
conservative approach towards
determining radii of significant impact
for CO. Where the effective height of the
stack with increasing emissions is not
changed (e.g., where the only change is
in the sulfur content of fuel burned), the
change in the hourly emission rate (E)
may be used in lieu of E."
1 The eurvn in Appendix E wtr« derived uiing
tht iMunptkMU dtecnbad above «o thai they could
be uttd to dtitnuM radii of ttgnrnaat impact for
•ourcn in tny part of tht oooalry. However. It it
potaiblt thai tar torn* treat, local mtieorological
condition* will ht Mch (kal tJHraahTt. Int
conMrvativt iMttoraiagieal lanrnpiiont can be
employed la dMtmuuaf thtta radu. Watrt ittn*
can ihow thai tht u»e of nidi alternative
iiiumptlona ia appiuuMlt for t given area, rhey
dtveto» elmaatjmLmom* fam^te far
detamunmg radH •( Maai&ceait impaci tad Mbmft
tbtmftri«vit«r aodtgpavaJ by EPA. either in
oontencttoti wrtKao Individual bubble lubmiltal or
aa part of a gtntrte ruJt. Slitee tn adviitd lo work
clttalf wllk tea aBavoarlaet Rta>oiial Offict m MV
effort lo amtfap aMk arlanalivt approathte.
-------
/ VoLSL No. m / Thursday} December 4.198» / Notices 438:
-=.—
FIGURE I:
RadK of Significant Impact for PM & SO2 for Different Averaging Time^l
400
300
200
100
90
80
70
7 60
-f 50
S «°
&
g 30
J
I 2°
|
°x
10
9
8
7
6
5
4
Jill I III i I I I
4 5678910 20 3040 50607080901
Radius of Significant Impact (Km)
COOt «M
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43860 Federal Regular / Vol. 51. No. 233 / Thursday, December 4. 1966 / Notices
Appendix F— CFR Part 51 Conversion
Table
On November 7. 1986 (51 FR 40656)
EPA restructured CFR Part SI and
renumbered many of that part's
sections. Because most readers will be
more familiar with prior designations.
today's notice contains citations based
on Part 51 as it existed before this
restructuring. A detailed finding list of
the old versus new citations can be
found in Table 2 of the Preamble of the
November 7 notice. Today's readers
may also use the following table to
convert today's Part 51 citations to the
corresponding new ones.
CFR Part 51 Coavmioa Table
Old W CFR !1 Citation .Vtw « CFH SI
Citation
31.18 Subpart I
SI ISIll 31.1St|«|
51.1Stl)U)(vi) 3UMU|(l)(vi)
51.18! 5l.l6SUI(1Hxi|
51.18)1)11)1X11) Sl.iaSUKlWxiil
Sl.lSli)l3||>i)(c| S1.l«5l«M3KiWC]
Sl.lBlk) 51.18Kb)
31J2 S1.2SJ
51.24 51.18S
5U4(bH3)lbl(ii) 51.188«b)OI(b|(li)
51J4(b)(13) 51.1«8(b|(13)
51.24|bH13Iii) 31.18B
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REFERENCES FOR SECTION 8.2
-------
PN 113-37-09-23-
i
I
/
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
SEP 2 3 I98T
MEMORANDUM
SUBJECT:
FROM:
Review of State Implementation Plans and Revisions
for Enforceability and Legal Sufficiency
J. Craig Potter
Assistant Administrator
for Air and Radiation
Thomas L. Adams Jr.
Assistant Administrator for Enforcement
and Compliance Monitoring
TO:
Francis S. Blak<
General Counsel
Office of General Counsel
Addressees
One critical function that your offices perform is to
assure that regulations developed for stationary sources
by the States under the Clean Air Act are enforceable and
legally sufficient. Our regulations require that the state
implementation plans ("SIPs") must "be adopted as rules and
regulations enforceable (emphasis added) by the State agency"
(40 C.F.R. S51.281 (1987)). We are concerned that review of
SIPs for enforceability has not been receiving adequate atten-
tion. The Agency sometimes experiences difficulties in its
efforts to enforce the current rules because they are not
sufficiently clear. The Regional Offices are at the forefront
of the federal SIP approval process. The purpose of this
memorandum is to remind you of the importance of doing the
review necessary to assure that all SIP plans and revisions
are enforceable and in conformance with the Act. Please do not
forward for approval SIPs which fail to satisfy the enforce-
ability criteria in this memorandum.
Backaround
Recent information indicates that the attention being paid
to SIP approvals is declining, particularly for enforceability.
The Office of General Counsel reviews regulations as to their
adequacy under applicable law and Agency'policy, but. not for
enforceability. This void is not being filled by other offices
Often, the problems with enforcing the regulations are not
immediately obvious and only become known where a case or issue
focuses on the oarticular reauiation. Ac the October 1986
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-2-
Annapolis meeting of Air Program Directors and Regional Counsel
Air Branch Chiefs, a number of problems in recent enforcement
cases due to difficulty in interpreting and enforcing regula-
tions were discussed. With the recent werk being done to
address the nonattainment problem, it is even more critical
that regulations be clear and enforceable.
It is appropriate that the Regional air compliance staff
and the Regional counsel's Office have primary responsibility
for this enforceability review because they have the most direct
experience in compliance and rule interpretation. They also
have resources allocated through their workload models specifi-
cally for SIP review.
Timing of Review
The Regions should try to review developing State SIP
provisions prior to final approval by the State, when the
provisions are at their most malleable stage. In line with
this, each Region should provide its States with a copy of the
implementing guidance associated with this memorandum and a
briefing which outlines the enforceability requirements for new
SIP submittals. If we provide the States with more explicit
guidance and make earlier contacts to resolve problems, we can
avoid instances where EPA is pressured to settle for a flawed
regulation only because it is better than its predecessor.
Enforceabilitv Criteria
Your review should ensure that the rules in question are
clearly worded and explicit in their applicability to the
regulated sources. Vague, poorly defined rules must become a
thing of the past. SIP- regulations that deviate from this
policy are to be disapproved pursuant to Section 110(a) of the
Clean Air Act, with appropriate references in the C.P.R. Speci-
fically, we are concerned that the following issues be directly
addressed. 'The rule should be clear as to who must comply and
by what date. The effect, if any, of changed con 'itions (e.g.,
redesignation to attainment) should be set forth. The period
over which compliance is determined and the relevant test
method to be used should be explicitly noted. Provisions which
exempt facilities under certain sizes or emission levels must
identify explicitly how such size or level is determined.
Also, provisions which allow for "alternate equivalent techniques
or "bubbles" or any other sort of variation of the normal mod«
of compliance must be completely and explicitly defined and must
make clear whether or not EPA case-by-case approval is required
to make such a method of compliance federally effective.
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-3-
Conclusion
SIP revisions should be written clearly, with explicit
language to implement their intent. The plain lancuaae of all
rules, "as well as the related Federal Register notices, should
be complete, clear and consistent with the intended purpose of
tht rules. Specific review for enforceability will be a further
step in improving the overall SIP process and structure.
We have attached detailed guidance to assist you in
implementing this memorandum.
Attachment
Addressees:
Regional Administrators
Regions I-X
Regional Counsels
Regions I-X
Air Management Division Directors
Regions I, III and IX
Air and waste Management Division Director
Region II
Air, Pesticides, and Toxics Management Division
Directors
Regions 17 and VI
Air and Radiation Division Director
Region V
Air and Toxics Division Directors
Regions VII, VIII. and X
cc: Deputy Regional Administrators
Regions I-X
Regional Counsel
Air Contacts
Regions I-X
Air Compliance Branch Chiefs
Regions II, III, IV, V, VI, IX
Air Program Branch Chiefs
Regions I-X
Darryl Tyler, Director
Control Programs Development Division
Gerald Enuson, Director
Office of Air Quality Planning and Standards
-------
-4-
cc: John S. Seitz, Director
Stationary Source Compliance Division
Office of Air Quality Planning and Standards
Alan w. Eckert
Associate General Counsel
Air Division
Michael S. Alushin
Associate Enforcement Counsel
Air Enforcement Division
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
2 3
J987
MEMORANDUM
SUBJECT
FROM:
Review of State Implementation Plans and Revisions
for Enforceability and Legal Sufficiency
Michael S. Alushin
Associate Enforcement Counsel
for Air Enforcement
TO:
Alan W. Eckert __
Associate Genera*! CoTmsel
Air and Radiation Division
John S. Seitz, Director
Stationary Source Compliai
Office of Air.Quality PlaJ
Addressees
ring and Standards
This is to provide implementing guidance on the memorandum
issued by J. Craig Potter/ Thomas Adams and Francis Blake
on this date relating to review of SIP plans and revisions
for enforceability and legal sufficiency. We urge you to
provide copies of these memoranda to your State Agency Directors.
Applicability
This guidance applies to all SIP proposals which have
not completed the state or local agency legal and procedural
requirements for SIPs. For proposals that have not yet
been submitted to the Regional office for action, the state
and local agencies have forty-five (45) days from the date
of this guidance to submit such proposals for review in order
for the proposal to be considered under previous procedures.
SIP packages currently in Headquarters will undergo the usual
review but will be returned to'the Regions if they contain
deficiencies which raise significant questions as to whether
the regulation would be enforceable.
Enforceability, Criteria
The notion of enforceability encompasses several concepts.
At the most basic level, a regulation must be within the statutory
authority of the promulgating'agency. For example, some states
have statutory restrictions or prohibitions on the promulgation
of regulations more restrictive than the federal counterpart.
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-2-
Although we should generally defer to a State's interpretation of
the scope of its authority, when there is real doubt we
should, at a minimum, consult the responsible State Attorney to
be certain the issue has been considered and resolved. When
appropriate, an opinion letter should be obtained from the
State Attorney General.
Please ensure that the following additional issues are
directly addressed.
0 Applicability
It should be clear as to whom the regulation applies. The
SIP should include a description of the types of affected
facilities. The rule should also state in which areas the rule
applies (entire state, specific counties, nonattainment, etc.)
and advise the reader that State administrative changes require
a formal SIP revision. Also, some regulations might require a
certain percentage reduction from sources. The regulation
should be clear as to how the baseline from which such a reduction
is to be accomplished is set. In some cases it may be necessary
for enforcement purposes and independent of Clean Air Act
requirements for the SIP to include an inventory of allowable
and actual emissions from sources in the affected categories in
order to set the above baseline.
0 Time
The regulation should specify the recnjired date of
compliance. Is it upon promulgation, or approval by EPA, or a
future date certain? Future effective dates beyond the
approved or proposed attainment date should not be allowed
unless the related emissions reductions are not needed for
attainment. Also, the regulation should specify the important
dates required of any compliance schedule which is required to
be submitted by the source to the state.
0 Effect of Changed C-mditions
If changed circumstances effect an emission limit or other
requirement the effect of changed conditions should be clearly
specified. However, you should not approve state regulations
which tie the applicability of VOC control requirements to the
nonattainment status of the area and allow for automatic nullifi-
cation of the regulations if the area is redesignated to an
attainment status. Such regulations should continue to apply
if an area is redesignated from nonattainment to attainment
status unless a new maintenance demonstration supporting a chance
in the rule's applicability is submitted and approved by EPA.
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-3-
0 standard of Conduct
The regulation must be sufficiently specific so that a
source is fairly on notice as to the standard it must meet.
For example, "alternative equivalent technique" provisions
should not be approved without clarification concerning the
time period over which equivalency is measured as well as
whether the equivalency applies on a per source or per line
basis or is facility wide.
0 Incorporation by Reference
Some federal regulations are inappropriate for adoption
by reference. For example, a state intending to enforce PSD
regulations adopted by reference must adopt 40 C.F.R. S52.21,
not 40 C.F.R. S51.166, as only the former is written in a form
imposing obligations on permit applicants. Even then, changes
may have to be made to take into account the difference between
the State's situation and EPA's.
* Transfer Efficiency
Some states have attempted to provide particular VOC
sources with relaxations of compliance limits in return for
improvements in the efficiency with which the sources use the
pollutant producing material. Any rules allowing transfer
efficiency to be used in determining compliance must be explicit
as to when and under what circumstances a source may use improved
transfer efficiency as a substitute for meeting the SIP limit.
Such provisions must state whether EPA approval is required on
a case-by-case basis. Also, such provisions may not simply
reference the NSPS auto coating tables for the transfer
efficiency. The improvement should be demonstrated through
testing and an appropriate test method should be set forth.
Implied improvements noted by the NSPS auto coating TE
table are not to be accepted at face value.
• Compliance Periods
SIP rules should describe explicitly the compliance time
frame associated with each emission limit (e.g. instantaneous,
stack test, 3 hour average or daily). The Regions should not
assume that a lack of specificity implies instantaneous compliance
The time frame or method employed must be sufficient to protect
the standard involved.
0 Equivalency Provisions and Discretionary Emission Limits
Certain provisions allow sources to comply via "bubbles"
or "alternate equivalent techniaues" or through mechanisms
"as approved by the Director." These provisions must make it
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-4-
clear as to whether EPA approval of state granted alternative
compliance techniques is reouired on a case-by-case basis in
order for the changed mode of compliance to replace the existing
federally enforceable requirement. If EPA case-by-case approval
will not be required, then specific, objective and replicable
criteria must be set forth for determining whether the new
arrangement is truly equivalent in terms of emission rates and
ambient impact. Such procedures oust be consistent with the
control levels specified in the overall SIP control strategy
and must meet other EPA policy requirements, including the
"Emissions Trading Policy", 51 Fed. Reg. 43814 (1986), in
relevant instances.
4 Recordkeeping
The SIP must state explicitly those records which sources
are required to keep to assess compliance for the time frame
specified in the rule. Records must be commensurate with regula-
tory requirements, and must be available for examination on
request. The SIP must give reporting schedules and reporting
formats. For example, these rules must require daily records
if the SIP requires daily compliance. Additionally, the record-
keeping must be required such that failure to do so would be a
separate violation*in itself.
9 Test Methods
Each compliance provision must list how compliance is
to be determined and the appropriate test method to be used.
The allowable averaging times should be explicit. Both the
test method and averaging times employed must be sufficient
to protect the ambient standard involved.
0 Exemptions
If sources under a certain size are exempted from control
requirements, the regulation must identify how the size of a
particular source is to be determined.
0 Malfunction and Variance Provisions
Any malfunction or variance exemptions must be clear in
their substantive application and ii how they are triggered.
The rule must specify what exceedances may be excused^ how the
standard is to be applied, and who makes the determination.
Conclusion
We appreciate your attention to this matter and hope
that the specific review for enforceability will be a farther
step in improving the overall SI? process and structure.
To assist you, we have attached an enforceability checklist.
This checklist should be included as part of your technical
suooort cackaaes in all future SI? oackaaes.
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-5-
Please contact the appropriate staff attorney in the Office
of General Counsel or the Office of Enforcement and Compliance
Monitoring should you have any questions concerning issues of
enforceability in particular instances. Please contact Tom
Helms, OAQPS, PTS-629-5526, for other questions concerning
implementation of this guidance.
Attachment
Addressees:
Regional Administrators
Regions I-X
Regional Counsels
Regions I-X
Air Management Division Directors
Regions I, III and IX
Air and waste Management Division Director
Region II
Air, Pesticides, and Toxics Management Division
Directors
Regions IV and VI
Air and Radiation Division Director
Region V
Air and Toxics Division Directors
Regions VII, VIII and X
cc: Deputy Regional Administrators
Regions I-X
Regional Counsel
Air Contacts
Regions I-X
Air Compliance Branch Chiefs
Regions II, III, IV, V, VI, IX
Air Program Branch Chiefs
Regions I-X
Darryl Tyler, Director
Control Programs Development Division
Gerald Emison, Director
Office of Air Quality Planning
and Standards
-------
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-------
REFERENCES FOR SECTION 8.3
-------
J* ----- ''*„
' UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
_. WASHINGTON, O.C. !804«0
JM 2 I
OFFICE OF
AIR. NOI« AND RAOIATICV
MEMORANDUM
SUBJECT: Definition of "Continuous Compliance"
and Enforcement of O&M Violations
FSOMs Kathleen M. Bennett ;*
Assistant Adrainistra torpor' Air, Noise and Radiation
TOt Directors, Air and Wastt '•Tiagement Divisions
Regions I-IV, VI-VIII and X
Directors, Air Management Divisions
Regions V and IX
The purpose of this memo is to provide you with some general
programmatic guidance as to the meaning of the term "continuous
compliance" and the role of operation and maintenance (O&M)
requirements in assuring that continuous compliance is maintained.
Of course, source specific guidance on O&M measures which can
assure continuous compliance is an essential part of this program
and this memorandum is not intended to substitute for such
guidance. As you know, DSSE has undertaken a number of
initiatives related to the continuous compliance effort and we
hope to discuss the progress of those efforts with you at the
upcoming workshop at South«?£C ?lnee DSSE will be forwarding to
you an updated sunanify of th- .s ^.ctiviuies prior to the workshop.
However, given the cor.-incing ai_ir,iicn being given to
•continuous compliance," I think it would be helpful to have a
common understanding of what that concept entails.
In the strict legal sense, sources are required to meet,
without interruption, all applicable emission limitations and
other control requirements, unless such limitations specifically
provide otherwise. However, of primary concern to the Agency are
those violations that could have been prevented, through the
installation of proper control eq.1 ipir.ent aad the operation and
maintenance of that equipment in accordance with proper
procedures. We believe the concept of continuous compliance is
essentially the avoidance of preventable excess emissions over
time as a result of the proper design, operation and maintenance
of an air pollution source. .This includes avoidance of
preventable instances of excess emissions, minimization of
-------
-2-
emissions during such instances* and the expeditious termination'
of any instances which do occur.
In determining the appropriate enforcement responsjf to a
violation/ one factor the Regions should consider is whether the
source had in place an active program designed to maintain
continuous compliance.' Such a program would normally involve one
or more of the following elementst continuous or periodic
•elf-monitoring-of emissions; monitoring of operating parameters
such as scrubber pressure drop, incinerator combustion temperature
or flow rates; -lintenancr of a spare parts inventory; maintenance
of spare control '"-*vice modules; and procedures designed to
correct the types of violations that are most liXely to occur.
Evaluating a violator's O&M program is a necessary step in
determining the type and degree of relief that an enforcement
action could be expected to achieve.
Documentation of avoidible departures from proper procedures
as just discussed may b« «««d not on:? is supporting evidence in
cases involving emission limit violations, but as primary evidence
in cases involve.„ illations of O&M requirements specified in
permits and regulations. As the Agency continues to place more
emphasis on O&M requirements in the context of national standards,
and to encourage States to develop O&M requirements, the
enforcement program must be adapted to address violations of these
requirements. A violation of specified O&M requirements, even in
the absence of documented emission limit violations, can be an
appropriate trigger for EPA enforcement response.
In conclusion/ evaluation of a source's continuing compliance
program would be useful both in determining the appropriate Agency
response to an emission limit violation, and in assessing the
source's compliance with specified O&M requirements -
Zf my staff can be of assistance in evaluating specific cases,
please feel free to call John '?j»*nic e~ 382-2826.
-------
PN 113-83-02-15-011
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. O.C. 20460
FE3 I 5 1983
Of HCt Of
AIM. NOISE AND RADIATION
MEMORANDUM
SUBJECT: Policy on Excess Emissions During Startup, Shutdown,
Maintenance/ and Malfunctions
FROM: Kathleen M. Bennett, Assistant Administrator
for Air/ Noise and Radiation
TO: Regional Administrators, Regions I-X
I have been asked to clarify my memorandum of
September 28, 1982, concerning policy on excess emissions during
startup and shutdown.
Specifically, I stated that "startup and shutdown of
process equipment are part of the normal operation of a source
and should be accounted for in the design and implementation of
the operating procedure for the process and control equipment*
Accordingly, it is reasonable to expect that careful planning
will eliminate violations of emission limitations during such
periods." I further stated that "(i]f excess emissions occur
during routine startup and shutdown of such equipment, they
will be considered as having resulted from a malfunction only
if the source can demonstrate that such emissions were actually
caused by a sudden and unforeseeable breakdown in the equipment.*
A question has been posed as to whether there can be
situations in which it is unreasonable to expect that careful
planning can eliminate violations of emission limitations
during startup and shutdown. I believe that there can be such
situations. One such situation, which was already mentioned
in the policy, is a malfunction occurring during these periods.
A malfunction during startup or shutdown is to be handled as
any other malfunction in accordance with the policy as
presently written.
Another situation is one in which careful and prudent planning
and design will not totally eliminate infrequent short periods
of excesses auring startup and shutdown. An example of this
situation would be a source that starts up or shuts down once or
twice a year and during that period there are a few hours when
the temperature of the effluent gas is too low to prevent harmful
113
17-1
-------
formation of chemicals which would cause severe damage to
control equipment* -if the effluent were allowed to pass through
the control equipment.
Therefore, during this latter situation, if effluent gases
are bypassed which cause an emission limitation to be exceeded
this excess need not be treated as a violation if the source
can show that the excesses could not have been prevented through
careful and prudent planning and design and that bypassing was
unavoidable to prevent loss of life, personal injury, or severe
property damage.
I have clarified the policy concerning this issue. A coov
is attached. **
Attachment
i
17-2
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Attachment
POLICT ON EXCESS EMISSIONS DURING STARTUP, SHUTDOWN,
MAINTENANCE, AND MALFUNCTIONS
Introduction
Several of the existing State implementation plans (SIPs)
provide for an automatic emission limitation exemption during
periods of excess emission due to startup, shutdown, maintenance,
or malfunction.* Generally, EPA agrees that the imposition of
a penalty for sudden and unavoidable malfunctions caused by
circumstances entirely beyond the control of the owner and/or
operator is not appropriate. However, any activity which can
be foreseen and avoided, or planned is not within the definition
of a sudden and unavoidable breakdown. Since the SIPs must
provide for attainment and maintenance of the national ambient
air quality standards, SIP provisions on malfunctions must be
narrowly drawn. SIPs may, of course, omit any provisions on
malfunctions. [For more specific guidance on malfunction
provisions for RACT SIPs, see the April 1978 workshop manual
for preparing nonattainment plans].
I. EXCESS EMISSION FROM MALFUNCTIONS
A. AUTOMATIC EXEMPTION APPROACH
If a SIP contains a malfunction provision, it cannot be
the type that provides for automatic exemption where a malfunction
is alleged by a source. Automatic exemptions might aggravate
air quality so as not to provide for attainment of the ambient
air quality standards. Additional grounds for disapproving a
SIP that includes the automatic exemption approach are discussed
in more detail at 42 FR 58171 (November 8, 1977) and 42 FR
21372 (April 27, 1977). As a result, EPA cannot approve any
SIP revisions that provides automatic exemptions for malfunctions.
* The term "excess emission" means an air emission rate which
exceeds any applicable emission limitation, and "malfunction1
means a sudden and unavoidable breakdown of process or
control equipment.
113
17-3
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B. ENFORCEMENT DISCRETION APPROACH—SIP EMISSION
LIMITATION ADEQUATE TO ATTAIN AMBIENT STANDARDS
EPA can approve SIP revisions which incorporate the
"enforcement discretion approach". Such an approach can require
the source to demonstrate to the appropriate State agency that
the excess emissions, though constituting a violation, were due
to an unavoidable malfunction. Any malfunction provision must
provide for the commencement of a proceeding to notify the
source of its violation and to determine whether enforcement
action should be undertaken for any period of excess emissions.
In determining whether an enforcement action is appropriate,
satisfaction of the following criteria should be considered.
1. To the maximum extent practicable the air pollution
control equipment, process equipment, or processes were maintained
and operated in a manner consistent with good practice for
minimizing emissions;
2. Repairs were made in an expeditious fashion when the
operator knew or should have known that applicable emission
limitations were being exceeded. Off-shift labor and overtime
must have been utilized, to the extent practicable, to ensure
that such repairs were made as expeditiously as practicable;
3. The amount and duration of the excess emissions
(including any bypass) were minimized to the maximum extent
practicable during periods of such emissions;
4. All possible steps were taken to minimize the impact
of the excess emissions on ambient air quality; and
5. The excess emissions are not part of a recurring
pattern indicative of inadequate design, operation, or maintenance.
II. EXCESS EMISSIONS DURING STARTUP, SHUTDOWN, AND
MAINTENANCE
Any activity or event which can be foreseen and avoided,
or planned, falls outside of the definition of sudden and
unavoidable breakdown of equipment. For example, a sudden
breakdown which could have been avoided by better operation and
maintenance practice is not a malfunction. In such cases, the
control agency must enforce for violations of the emission
limitation. Other such common events are startup and shutdown
of equipment, and scheduled maintenance.
H3
17-4
-------
Startup and shutdown of process equipment are part of the
normal operation of a source and should be accounted for in the
planning, design and implementation of operating procedures for
the process and control equipment. Accordingly, it is reasonable
to expect that careful and prudent planning and design will
eliminate violations of emission limitations during such periods.
However, for a few sources there may exist infrequent short
periods of excess emissions during startup and shutdown which
cannot be avoided. Excess emissions during these infrequent
short periods need not be treated as violations providing that
the source adequately shows that the excess could not have been
prevented through careful planning and design and that bypassing
of control equipment was unavoidable to prevent loss of life,
personal injury/ or severe property damage.
If excess emissions occur during routine startup and
shutdown due to a malfunction, then those instances will be
treated as other malfunctions which are subject to the malfunction
provisions of this policy. (Reference Part I above).
Similarly, scheduled maintenance is a predictable event
which can be scheduled at the discretion of the operator, and
which can, therefore, be made to coincide with maintenance on
production equipment, or other source shutdowns. Consequently,
excess emissions during periods of scheduled maintenance should
be treated as a violation unless a source can demonstrate that
such emissions could have been avoided through better scheduling
for maintenance or through better operation and maintenance
practices.
113
17-5
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,rf<*0 *'*'•>
r> _UNITEO STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, O C. 20*60
S£P 28 193?
OFFICE OF
AIR. NOISE AND RADIATION
:\ANDUM
SU8J :JC'r: Policy on Excess Emissions Dm ing Si-./sctup, Shutdown,
Maintenance, and Malfunctions
FIVJM Kathleen M. Bennett
Assistant Administrator' 'for Air, Noise and Radiation
TO- Regional Administrators, Regions I-X
This memorandum is in response to a request for a
clarification of EPA's policy relating to excess emissions
during startup, shutdown, maintenance, and malfunctions.
Excess emission provisions for startup, shutdown,
maintenance, and malfunctions were often included as part of
the original SIPs approved in 1971 and 1972. Because the
Agency was inundated -with proposed SIPs and had limited
experience in processing them, not enough attention was given
to the adequacy, enforceability, and consistency of these
provisions. Consequently, many SIPs were approved with broad
and loosely-defined provisions to control excess emissions.
In 1978, EPA adopted an excess emissions policy after .
many, less effective attempts to rectify problems that existed
with these provisions. This policy disallowed automatic
exemptions by defining all periods of excess emissions as
violations of the applicable standard. States can, of course,
consider any demonstration by the source that the excess
emissions were due to an unavoidable occurrence in determining
whether any enforcement action is required.
The rationale for establishing these emissions as
violations, as opposed to granting automatic exemptions, is
that SIPs are ambient-based standards and any emissions above
the allowable may cause or contribute to violations of the
national ambient air quality standards. Without clear
definition and limitations, these automatic exemption
provisions could effectively shield excess emissions arising
from poor operation and maintenance or design, thus precluding
attainment. Additionally, by establishing an enforcement
discretion approach and by requiring the source to demonstrate
the existence of an unavoidable malfunction on the source, good
maintenance procedures are indirectly encouraged.
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-2 •
Mcriached is a document stating F.PA'''. tues^'ic policy on
excess smissions. This document basically reiterates the
earliev policy, with some refinement of the policy regard ing
exces? emissions during periods of scheduled maintsnance.
A question has also been raised as to *hdt extent
operating permits can be used to address excess emissions in
cases where the SIP is silent on this issue or where the SIP is
deficient. Where the SIP is silent on excess emissions, the
operating permit may contain excess emission provisions which
should be consistent with the attached policy. Where the SIP
is deficient, the SIP should be made to conform to the present
policy. Approval of the operating permit as part of the SIP
would accomplish that result.
If you have any questions concerning this policy, please
contact Ed Reich at (382-2807).
Attachment
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At t.^ohir.eii t
POLICY 0!. EXCESS LNlSSICNS Cl:R U-"3 bTAf'T U '• - S'f'l'Trc'..;, ,
ANn r,/. r.F'JN'C"1 TO?,1--. .
Several of the exir, tiro Si .--.;.« trp' "-'''er '.*': i on clans (ilFsi
preside for an autcratic erission Linitfit. j or. exemption ciurir.r
periods of excess emission due to stfirt-ur, shutdown,
maintenance, or ralfunction. * Generally, EFA agrees that the
imposition of a penalty for sudden and unavoidable
malfunctions caused by circunstances entirely beyond the
control of the owner and/or operator is not appropriate.
However, any activity which can be foreseen and avoided, or
planned is not within the definition of a sudden and
unavoidable breakdown. Since the SIPs must provide for
attainment and maintenance of the national ambient air quality
standards, SIP provisions on malfunctions must be narrowly
drawn. SIPs may, of course, cnit any provision on
malfunctions. [For more specific guidance on malfunction
provisions for PACT SIPs, see the April 1978 workshop manual
for preparing nonattainnent plans.]
I. AUTOMATIC EXEMPTION APPROACH
If a SIP contains a malfunction provision, it cannot be
the type that provides for automatic exemption where a
malfunction is alleged by a source. Automatic exemptions
might aggravate air quality so as not to provide for
attainment of the ambient air quality standards. Additional
grounds for disapproving a SIP that includes the automatic
exemption approach are discussed in more detail at 42 FR 58171
(November 8, 1977) and 42 FR 21372 (April 27, 1977). As a
result, EPA cannot approve any SIP revision that provides
automatic exemptions for malfunctions.
II. ENFORCEMENT DISCRETION APPROACH— SIP EMISSION LIMITATION
ADEQUATE TO ATTAIN AMBIENT STANDARDS
EPA can approve SIP revisions which incorporate the
"enforcement discretion approach". Such an approach can
require the source to demonstrate to the appropriate State
agency that the excess emissions, though constituting a
violation, were due to an unavoidable malfunction. Any
malfunction provision must provide for the commencement of a
proceeding to notify the source of its violation and to
determine whether enforcement action should be undertaken for
any period of excess emissions. In determining whether an
enforcement action is appropriate, satisfaction of the
following criteria should be considered:
* The term "excess emission" means an air emission rate which
exceeds any applicable emission limitation, and
"malfunction" means a sudden and unavoidable breakdown of
process or control equipment.
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i. To the maximum extent practicable livo .nic pollution
control equipment, process equipment, or processes were
maintained and operated .in a manner rons i. sf---»nt vilh good
ire for minimizing emissions:
/. Repairs were made in an expedition fashion when Uv-
opecator knew or should have known that applicable emission
limit- aliens were being exceeded. Off-shift labor and overtime
must have been utilized, to the extent practicable, to ensure
that- such repairs were made as expeditiously as practicable;
J. The amount and duration of the excess emissions
(including any bypass) were minimized to the maximum extent
practicable during periods of such emissions;'
4. All possible steps were taken to minimize the impact
of the excess emissions on ambient air quality; and
5. The excess emissions are not part of a recurring
pattern indicative of inadequate design, operation, or
maintenance.
III. EXCESS EMISSIONS DURING START-UP, SHUTDOWN, AND
MAINTENANCE
Any activity or event which can be foreseen and avoided,
or planned, falls outside of the definition of sudden and
unavoidable breakdown of equipment. Fpr example, a sudden
breakdown which could have been avoided by better operation
and maintenance practices is not a malfunction. In such
cases, the control agency must enforce for violations of the
emission limitation. Other such common events are start-up
and shutdown of equipment, and scheduled maintenance.
Start-up and shutdown of process equipment are part of
the normal operation of a source and should be accounted for
in the design and implementation of the operating procedure
for the process and control equipment. Accordingly, it is
reasonable to expect that careful planning will eliminate
violations of emission limitations during such periods.
If excess emissions occur during routine start-up and
shutdown of such equipment, they will be considered as having
resulted from a malfunction only if the source can demonstrate
that such emissions were actually caused by a sudden and
unforeseeable breakdown in the equipment.
Similarly, scheduled maintenance is a predictable event
which can be scheduled at the discretion of the operator, and
which can therefore be made to coincide with maintenance on
-------
production equipment, or oth^c soui'cr shutdowns.
Consequently, excess emissions during periods of: scheduled
maintenance should be treated as a violation unless a souv:^
can demonstrate that such emissions could not have been
avoided through better scheduling for maintenance or fchcou-jh
betf-.«» operation and maintenance practices-
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. O.C 2Q4«Q
Marcli 5, 197*
STT3J2C7: Energy Saergency Task Force? la^ieaentation of
Section 110 (f) of the Clean -Air Act
TION
F50X: Assistant Adaiaistratcr for S-if acc
Assistant Administrator for Air, JToiae
and Hadiitica
TOt Ti« Adainistrator
Suxsarisad b*low is bac.'csround infocsation and
guidance on responding to an energy ecsrgency ur.der
Section US (£) . 7« ara alsa initiating devclccts-f.t of an
esergenc? clan and iaples« station guidance- (as actrroociats)
to •aiaisiza adverse envir'.i.-.sftRtal effects which could
free a gasoline snortage. *Te will forward tne gasoline
eeergency ?lm to you la the future.
I. CQS/2?A ?or?gir.-ir Relations-
The Oeaartsent of Energy (DOS} has established an
Snergy Saergency Center to coordinate the federal government
response to crisis situations resulting froc energy ecergezc
Although the center vas initiated under the isnetus of the
R£7 strike, it weuld be the coordinating agent in any energy
emergency. S?A has also established an ad hoc tnergy
Saergency Task ?orc« to coordinate S?A's response to a
crisis. E?Afs* Offices of enforceaent, Air, Noise and
Radiation, General Counsel,, and Federal Activities are
represented, on the task force. S?A's contact with CCS '3
Snergy Ssergency Center is Mrs. Tvonns Allen, Director of
the Center (202-252-5155). COE's contact with SSA's Ssargy
Saergency Task Force is as..I-2artha Fcothro (alternate:
Hr. ^eldon 31aJce).-of the Division of Stationarv Source
2nf or cement (DSSS - FTS 755-2523).
-------
Msv Allen has advised that coal supply inforaation
(quantity, quality, and number of days of fuel supply) wjJ|
be available from DOB: (1) weekly for utilities on*a Staff
wide basis (approximately 10-day-old data)r (2) daily for
specific utilities that DOS has determined ta have a criti-
cally short coal supply; and (3) weeJcly for industrial coa
burners on a State-wide- basis. In addition, DOE can advise
EPA of State actions ta conserve and minimise- consumption c
the fuel in short supply and federal actions to provide fcr
interconnections to assure that electrical, power will be,
transferred to areas nest in need. Although this infcraa—
tion is specific for coal, this guidance is to be used in
any energy emergency. Coal availability indorsation would
be useful for sources presently burning oil or gas but wcic
have coal burning capability in the event of a shortage of
oil or gas.
DOC has established a formal day-to-day contact in. Jac
Watson's office during energy emergencies in. order to
expedite- the flow of information, between EPA, DOS, and the
White Souse. 008 and EPA have- also.agreed ta maintain. da.il
contact during such emergencies.
Petitions for gnercv Eaergencv Declarations under
Secz.iea 110 (f) of cne. Clean Axr Ace
Section 110(f) provides that emergency SI? suspension*
may be- granted in accordance with the- following;
(1) The owner or operator of fuel burning- anaticr.ary
source applies ta the state fcr relief.
(2) The Governor* gives no-tic* and ocuuctanitj- fcr
public hearing on- the proposed, petition.
(3) tt* Governor finds, thatu
(a) as emergency exists in the vicinity of the s
involving high levels of unemployment, or
loss- of necessary energy supplies for resi-
dential dwellings; and
(b) such unemployment or loss can be totally cr
partially alleviated by an emergency suspen-
sion, of State Implementation Plan requirsssr.
applicable ta that sourcs.
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-3-
(4} The Governor petitions the President to declare
that a national or regional energy emergency exists
of such severity that:
(a) a temporary suspension of any part of the
applicable implementation plan may be neces-
sary; and
(b) other meins of responding to the energy
emergency may be inadequate.
(5) Taa President deteraines that a national of recional
energy emergency exists. (This authority nay not be
redelegated.)
(6) Tie Governor may issue aa emergency suspension ta
tae source which stay take effect immediately, Hot
mere than cne such suspension say be issued to a.
source based on the same se.t of circumstances or en
the basis of the saae emergency. 'Suspensions are
limited in, duration by any time limit the President
places on his determination, and in any case"say
not. exceed four months.
(7) SPA Administrator may review the Governor's suspen-
sion and disapprove it if he determines that it
does not satisfy the criteria set'forth in (3)
above. Zf the SPA Administrator issues a disap-
proval order, ha will specify therein the date en
which the Governor's suspension shall no longer be
effective-.
*
(8) This procedure does not ap?ly ta a plan revision
prcaulcatad by the Administrator pursuant to
Section 110(c) (such as for'sulfur oxides in Ohio).
da President,, however, may grant up- ta a four
month suspension of a State Implementation Plan
promulgated by the Administrator if he makes the
findings in (3) and (4) above.
Whenever a Governor petitions the-President for a
declaration of an energy emergency under Section 110(f)/ "«
suggest that EPA maJce the following recommendations:
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-4-
Conservation measures;
is essential* that emphasis be placed on the need * __
energy conservation through means other than turning of*
pollution control*, which could involve violations of
health-protective regulations. CCS has determined that
there is no federal* authority to mandate conservation
measures and only a, few States have such authority. Since
Section 110 (f) includes a provision for consideration of the
adequacy of "other means" of responding to the emergency
(itea *4(b) above) r 2?A should recommend to the President
that his declaration of an energy emergency for purposes of
Section 110 (f) be conditioned on (1) the Governor's recoirint
that sources covered, by suspensions demonstrate they have
implemented or will implement all possible cons err at ion
measures, and (2) where the Governor can mandate cons erva tic:
measures, that ha do so in addition to granting relief under
Section 110 (f). If he cannot; mandat* conservation measures
he would be? required to asJc for voluntary conservation;
measures in the areas affected*. tf conservation measures
•would b« adecuata- by themselves, no declaration involving
110(f) would be appropriate.
H- Specific reference to Section 303 emergency severs r
EPA. should, reccansend that the President: specifically
mention the continued responsibility of the Z2A to taJce
action under Section 303 of the dean Air Act where air
pollution may result in an imminent: and substantial en dan-
gers en t. to human, health- Although Section 303 would not be
suspended in any event, a specific reference will help to
ensure that: States and sources- are on notice of £?A's
intention- to monitor the potentially severe health impacts
of any/ increases in emissions resulting from 513 suspension.
C. Hr-fgr^ncg to possible ease b? ease disrcorsval hr £?At
This, is. necessary to impress upon States the need ta
make- case- by case findings as repaired by Section 110(1) .
If this is not done at the State level, E?A should disapprove
wherever it determines that the Governor cauld not have made
the necessary findings for the sourca-.' (For example ,
suspensions of compliance schedules would generally be
inappropriate sines they would be ...unliJcaiy to allaviata any
unemployment °c residential energy loss.)
-------
-5-
0. Limitations on tiae and area covered av
declaration:
2?A should recommend that emergency declarations be as
precise as possible, especially as to the area affected, ta
allow both an adequate response to true emergencies ar.d an
adequate opportunity to reevaluate the situation as events
develop.
XXX. EPA Hesaonse to SI3 Suspensions Issued bv Governors
under Section 110 (c) of the Clean Air Act
A. ?cblic hearincat
/•« strongly urge that, whenever possible , the Seeional
Office actively participate in any public hearing hela under
HQ(c). £2A's participation will be useful for two reasons.
First, it will help to ensure that the public health impacts
of alternative nitigative measured will be considered in the
decision marine process. Second , it will give us the
opportunity to establish on the record early in the process
that blanket SIP suspensions throughout a State may not be
acceptable and that the findings required by-
Section 110(f ) (2) (A)- and (S)-of the Act aust be made for
each source to be coverec by the suspension. Therefore,
Regional Offices should testify generally that EPA recognize
and will cooperate in attempting to ease the lapact of fuel
shortages but that, because the health prcbleas which could
result frcr.- suspending- air quality standards are a grave
concern, suspensions should not be granted lightly. The
spokesperson should also advise that temporary energy
emergency suspensions should be issued on a source-specific
basis and only where the findings required by Section
110(f)(2)(A) and (3) have be-en made.
•
The purpose of the public hearing required in Section
110(f) is, in part, to provide a factual record for the
Governor and EPA to use in, determining whether tem?crar?
suspension of portions of the implementation plan are
justified. As a minimum, the public hearing should ccr-r
the following:
(1) the nature and extent of the energy eaergency;
(2) current and projected unemployment impacts associ-
ated with the energy emergency;
-------
(3) current and projected loss of necessary energy
supplies for residential use associated wits the
energy emergency;
(4) alternative strategies for reducing the adverse
impacts of the energy emergency and the conse-
quences of these strategies on unemployment
and on residential energy supply;
(S) amount of energy savings expected to result frcm
temporary suspension of portions of the implemen-
tation plan;
(6) to the extent possible, pollutant emission levels
bath before and after the proposed temporary
suspension of portions of the. implementation plan;
and
(7) te the extent possible**preliminary assessment of
the air quality and health effect impacts of the
proposed temporary_suspension of portions of the
implementation plan.
Information- provided en items (5} through (7) should,
whenever possible, include source by source data, for those
sources which, because of their location, the nature and
quantity of their emissions, the density of peculation in
the area, or other reasons, we sight reasonably anticipate
would have an unacceptably adverse impact on public health
should they be included under a temporary suspension deter-
mination.
Secause of the emergency nature of this process, it is
unlikely that the public will be given much notics (procaolv
less than one week) prior ta a hearing. Accordingly, it
will be useful for those Regions likely ta be affected ta
begin ta prepare a position on SIS suspensions on a priority
basis for each State within the Region. Sfforts should
begin immediately ta evaluate possible adverse air cuaiir*
imaacts within States expected to initiate the Section
llQ(f) process as scon as necessary. Clearly, any air
auality analyses done as part of this effort will be cursory
and r*« only be intended ta cegin a screening process.
tlnleas recant armcspneric disnersicn modeling analyses far
particular areas or*sources has been done for other reasons,
simple rollback (rollforward) estLnatas will have ta suffice
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-7-
for projecting air quality L-npacts. Areas should be screene-
on the ,caafa °^ recent ambient monitoring data and furthe~"
on the basis of alert episode days. Source impacts saouid
be screened on the basis of size, decree of reliance on
affected fuel, emission density, stack heights, etc.
The general purpose of this analysis is to identify
those specific areas or particular sources where a sus^ensicr
of the SIS would be nost likely to have severe air quality
iapacts and resultant severe public health effects. It
would be most desirable to coordinate this effort to the
maximum extent possible wirh the appropriate State agency
aiaca the Stats will sake the initial decision on the
casa-ey-cas« SI? suspensions.
B. Regional Responsibilities Following SI? Suspension
Decision;
The Regional Office should maintain a current listing
of all individual sources that are granted a. suspension on a
day-tc-day basis. Each source grantee a suspension should
be contacted by the Regional Office to determine the specific
course of action which the source intends to take in resp
to the suspension. Such information will facilitate a
better assessment ofi the potential air quality impacts that.
can be expected.
The Regional Offics should ensure that every effort is
mace ta process at lease daily data from all aviiable
ambient monitoring networks in and around those arsas where
SI? suspensions have been granted... To the extent that
resource"constraints limit this effort, highest priority
should be placed on those areas that are most likely to
reach episode, levels based upon, historical ambient air
quality and the- number, concentration, and size of sources
granted SI? suspensions in the area.. The Regional Office.
should notify the Division of Stationary Source Enforcement
(DSS2) and the Office of. Air Quality Planning and Standards
(OAC?S) when air pollution concentrations in areas affected
by SI? suspensions are exceeding dangerous levels (i.e.,
episode alert levels and higher). . It is likely that tinei?
air quality conitoring data will provide the single most
important basis for supporting a determination by the
Adaisistrator ta take an emergency action under Section 303
of the Clean Air Act or to recoisaend that the President
rescind or not extend his emergency declarations for a
specific area.
-------
The EPA Administrator say disapprove a suspension
issued by a Governor only Li those limited situations in
which the suspension does not meet the retirements of
Section UO(f)(2)(A) and (3) cf the Clean "Air Act (i.t
where high levels of unemployment and loss of necessary
energy supplies for residential dwellings do not exist or
the unemployment, or loss cannot be totally or partially
alleviated by the SI? suspension). In order to assure that
suspensions apply only to sources e*peri«ncing an emergence,
EPA should ace quickly to disapprove suspensions covering *
sources for which the necessary findings cannot be cade.
The authority to disapprove suspensions should be delegated
to the Regional Administrators, with EPA headquarters
concurrtnce, in order to assure expedited action. (A
delegation of Section 110(f}(3) authority is included Li the
attached memorandum to the Regional Administrators for your
signature.)
Regional Offices should give* high priority to reviewing
any actual suspension issued by Governors to assure that
they are consistent with the criteria set forth in Section
110(f)(2)(A) and (B). Reviews should focus on sources in
those areas (and, where known , major sources) for which O
has determined,, based on* available supplies and possible
interconnections, that the emergency is less critical. D
will keep the Regional Offices informed of COS's detarrr.i-.i~
tions and will request OGE determinations as necessary ts
enable Regional Offices to sec proper priorities for reviews
of SI? suspensions.
The memorandum attached for your signature directs
Regional Administrator to designate a contact for energy
emergency information. DSSS's Regional Programs Section
will contact Regional Office designers each- day to obtain
information for- inclusion in a daily status chart. BSS2
will be primarily responsible for contacting the Regional
Offices, to request specific information, for answering any
Regional questions t and for receiving and disseminating
necessary data to appropriate Regional and headquarters
Offices.
IV. EPA Response to Inquiries frca States and Sources
Generally, "inquiries can be expected to fall with is she
categories listed below. -Suggested Regional Office raspc-sa*
are indicated. gm
-------
A. Source inquiries about possible suspension of
promulgated implementation
Response: Only the Governor can suspend such a SI?.
Source may petition Governor to petition the President far a
SllQ(f) emergency declaration. 5?A will not concur in
relaxation or environmental regulations prior to a declara-
tion under S11G(£).
B. Source inquiries about possible suspension of federal!?
promulgated SIP:
Response's The President has not delegated bis aathority
to suspend such a SIP. Sources aay direct petitions to the
President but should send copies to the Administrator and
Regional Administrator to assure quicJc response.1 Source
must present information to allov the President to determine:
(1) that an energy emergency exists in the vicinity of the
source of such severity that, a temporary suspension of any
part of the SI? aay be necessary and other means of re-
sponding may be inadequate; (2) that there exists in the
vicinity of such source a temporary energy emergency in-
volving high levels of unemployment or loss of necessary
energy supplies for residential dwellings; and (3) that such
loss, or- unemployment can be totally or partially alleviated
by a SIP suspension. (D3SS should be notified immediately
of any expected petitions for suspension of federally
promulgated S !?'«.)
C. Source or State inquiries about possible suspension of
ncn-SI? federal air pollution control requirements (e.g.,
Sew Source Performance Standards f interim requirements in
federal orders or consent decrees^ etc.) :
Response: There is no statutory authority for emergency
suspension of non-51? requirements , since SiiO(f) relates
only to SIP'S. If, however, a determination of an emergency
has been made under SllQ(f) relative to SI?'s; SPA will
exercise enforcement discretion on a case-by-case basis in
dealing with non-Si? situations. Where the findings neces-
sary for a 51? suspension could not have been made in a
specific case, EPA will enforce the applicable requirements
and "ill seek appropriate penalties. Where those findings
cculd be made for a source subject to non-Si? federal
requirements, EPA will generally refrain frca enforcing or
seeking penalties based on a source's no n compliance -here
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-10-
all other possible a taps are being tafcen to comply and whe->
violation results from efforts to minimize the impacts of a2
emergency on high levels of unemployment or loss of aecessa-.
energy supplies to residences. A commitment not to tnforsa""
may be made only in writing to a specific source and only"
with the concurrence of the Division of Stationary Source
Enforcement. In no event may a source be exempt £rca pcssiz'f
action under Section 303 of the Clean Air Act. It ix
unlikely that any relaxation of incremental compliance.
schedules will be- appropriate.
D. Source, or State inquiries about possible suspension of
federal rec^iirements for water pollution control:
Responses Ift based on the provisions of Section
110(f) of the Clean Air Act, a proclamation is made and
petitions for relief from NPDES requirements, are received/
the Regional Office should immediately contact the Office; of
Water Enforcement for guidance. .The following conditions
for temporary modification of individual discharge permits
will generally apply*
1* On a case-by-case- basisr E2A will review written
applications foe relief from individual eermit
conditions ta detsraines
a* the specific persit conditions which the
dischargee wishes to have amended
b. the specific energy savings frca. each suspen-
sion of water treatment activity;'
c. additional steps- the permittee is taJcisg to
reduce, total plant energy consumption;
d* the anticipated environmental damage which
will result frcm the cessation of all or
portions of the treatment process;
e. other area wide energy conservation aeasures.
2. Except where- a balancing- test would dictate a
contrary result, written recjuests will be disap-
proved if-they petition for relief frca the fol-
lowing:
-------
-li-
ft, a requirement which, if suspended, would
result in short-tera suspension of curr«_
treataent activity and which would result"in
long—term environmental damager
b. ft requirement limiting the discharge of toxic
substances (N3DCr etc.);
c. the construction steps which are in their
compliance schedules;
d. disinfection requirements where water is usec
for swimming cr food processing/ etc.
In all cases, relief may be granted using prosecutor^
discretion and the Regions will issue legally enforceable
documents, which require full compliance at the end of the
emergency period. Tnese documents will also require in-
creased levels- of monitoring and reporting is order to
safeguard the environment*
V. Recommendation
We recommend, that you; siga the attached memoranda to
the Regional Administrators which emphasises that S2A's-
respcnse to an emergency must be handled as the highest
Agency priority.
Marvin. B. Durning David CS. Hawkins
Attachments
cc: DO2r atts-i Ms. Tvonne Allen
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I UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. C.C.
March 6, 1579
MSIOSAHSUH
TO: Regional Administrators, Regions t-X
SU3JSCT: Response ta Energy Saergency; lapleaer.tation of
Action 110 (f) of the Clsan Air Act, as .\zended
Tie Regional Offices should place hig-asst priority on
ess-poncing to any energy eaergancy which say arise end
Lzal-.c-nting £?.\'s rssponsibilitias under Section
U<3(f) of
the Clean Air Act. Each Regional Administrator should ta.-.c
action to iarlement the cuidanc« and rscoasendations set
forth in the attached seoorandus ta ea fros Mr. burning ard
Mr. Hawkins.
The Clean Air Act provides that I say disarsrove any
SI? suspension which £ determine does not csaply with
Section" 110 (f) (2) (A) and (3) of the Clean Air Act. To
assure that disapprovals of inappropriate suspensions are
expedited, I heceby delacate to the" Regional .\drinistracors
sy authority on car Section llG(f)(3) to disapprove suspen-
sions* issued by* Governors. This authority say be exercisec
by the Regional Administrators only with the prior concur-
rence. of the Assistant. Adninistrator for Znforcecent an-d
the Assistant Administrator for Air, Xoise and Radiation.
Concurrence froa the Office of Snforceaent and the Office c'
Airr Uoise and Radiation should be requested and will be
given by telephone through the designated SPA headquarters
contact. I have- designated Ms. Martha Prothro (?TS 755-252:
of the Division of Stationary Source Enforcement as the £.-\
Eeadcuartsrs- contact on all Section 110 (f) matters.
Hs. Prothro's alternate is Mr. tfeldon alake (?TS 755-2542).
Each Regional Adainirtrator should designate a regional
contact and alternate and the contact should call
Ms. Frothro as soon as possible.
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-2-
In addition to tais energy emergency plan to ianlere--
Section llOff), we are initiating the development cf'an ***
emergency 9!an to minimize adverse environnental effects
wnicn coula result from a gasoline shortace. I will fcrva"1
guidance
Couglas s. Ccstle
Attacfaaent.
ce: Secartaent of Energy
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UNITED.STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C.
TMC MMIMISTlUTOIt
JUL 21379
MEMORANDUM
TO: Regional Administrators, Regions I-X
SUBJECT: Supplement to the Memorandum of March 6, 1979, Regarding
Implementation of Section 110(f) of the Clean Air Act
On March 6, 1979,* I sent to the Regional Administrators guidance on
implementing Section 110(f) of the Clean Air Act. Since that time
headquarter1 s staff has clarified the Informational requirements for
adequately addressing Section HO(.f) issues-and .has also developed a
policy concerning the use of price differentials between low and high
sulfur, fuel oils in Section 110(f) proceedings. Each Regional
Administrator should take action to implement the supplemental guidance
and recommendations set forth in the attached memorandum to me frtm
Mr. Durning and Mr. Hawkins.
I have designated Mr. Paul Stolpman (phone: 426-2482) as the
headquarters contact on the analysis needed to support all 110(f)
actions. Mr. Stolpman's alternate is Mr. George Sugiyama
(phone: 426-2432). Action on the 110(f) applications remains as
set forth in previous guidance.
Douglas M. Costic
Attachment
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. O.C 20460
JUM 1 9 1379
TMC AOMINISTRA7C,
SUBJECT: Supplemental Guidance Regarding Implementation of Section T!0(f)
of the Clean Air Act - ACTION MEMORANDUM
FROM : Assistant Administrator for Air, Noise, and Radiation
Assistant Administrator for Enforcement
TO : The Administrator
Regional guidance on responding to an energy emergency under Section
110(f) was issued on March 6, 1979. Since that time the President has
declared a regional energy emergency *in Florida; Connecticut and Kew York
have held hearings on low sulfur fuel oil availability; and the President
has instructed EPA to use full authority to take price differentials into
account in making recommendations on Section 110(f) waiver requests. Base<
on our experience subsequent to the Section 110(f) regional guidance we ncv
propose the following supplemental guidance detailing '1nforma.ri on necessary
for determining the existence of an. energy emergency and policy guidance cr
the extent to which price differentials are to be incorporated in a waiver
recommendation.
I. Policy on Price Differentials
The President, in his April 5, 1979, energy address* directed the
Administrator to "consider unusually large increases in the) price
differential between complying and non-complying fuels as a basis for
recommending approval of state suspension requests* and to 'use his
full authority to take Into account price differentials and to provide
the President with information on price differential increases when making
recommendations to him on such requests." This directive does not imply
that states must make a price differential case when petitioning for
Section 110(f) waivers. It does allow the Administrator to consider
price differentials whenever a state makes such a case.
On June 7, 1979, the State of New York held hearings on a request by a
public utility for a Section 110(f) SIP suspension of the low sulfur fuel
oil. requirement. The issue before New York was not based on an actual
unavailability of complying low sulfur fuel oil but was based on whether
the high price of complying fuel oil relative to non-complying fuel oil
was sufficient justification for a SIP suspension. EPA was requested
by New York to provide policy guidance on this issue.
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-2-
Price differentials between complying and non-complying fuel oils
provide a sufficient justification for a SIP suspension only when such
differentials actually cause (or are anticipated to cause) the effects
of an energy emergency listed in Section 110(fj(2), i.e.. high levels of
unemployment or a loss of necessary energy supplies for residential
dwellings and such effects could be totally or partially alleviated by
an emergency suspension.
Whenever It appears that price differentials nay become part of the
basis or the basis of a Governor's petition to the President for t
declaration of an energy emergency. Regional Administrators should make
every effort to assure that the state develops an adequate record on the
Impact of price differentials. Recoanendatfons to the President concerning
petitions for an energy emergency shall not be based on price differentials
in the absence of an adequate record establishing the impact of such price
differentials. Further. In exercising the Section 110(f)(3) disapproval
authority EPA shall examine ne price. differential Impact of t SIP
suspension to determine Its continued validity and act accordingly.
During the period of a suspension, price differentials and the impacts
of price differentials will be monitored by EPA to determine the continued
validity of a price differential basis for a SIP suspension.
II. Information Mecessary to Document the Existence of An Energy Emergen
The following list of Information needs Is an expansion of those ge
Items listed in paragraph III (A) on pages 5 and 6 of the March 6, 1979,
regional guidance. As the record of any EPA decision or recommendation
regarding a Section 110(f) waiver request will be primarily the state's
record, a concerted effort should be made to assure that such record
contains the following information as well as any available information
on the issues listed in paragraph III(A). Although EPA should provide
assistance In developing the state's record* the responsibility of provider
this information rests with the state and the source.
1. Identities of affected or potentially affected parties, including T
(a) parties claiming a shortage together with the basis of
their claims,
(b) affected customers (ultimate users), and
(c) suppliers (potential or actual) to parties experiencing
shortages or cutbacks.
2. Information concerning the amount and duration of an expected
shortage including:
(a) monthly demand for two calendar quarters before and after
a SIP suspension,
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-3-
(b) projected shortfall of conforming fuel for the period in
Hem (a).
(c) any circumstances affecting a shortage, such as abnormal
weather conditions
(d) unanticipated changes in supply, demand, or availability cf
transportation.
3. A summary of the current inventories of the various parties
affected, including the following information:.
(a) by type and sulfur content
(b) storage capacity/blending capacity
(c) historical comparison of* supplies/inventory over last
2 years
(d) desulfurization capacity and a historical summary
of such capability, including any recent (3 year) changes
in desulfurization capacity.
4; Information on alternative supplies of available conforming fuel
and documentation of those steps taken to locate such fuels. An adequate
documentation will include a list of all suppliers contacted (including
date of contact and mode of contact), the response of each supplier
contacted, copies of correspondence with the suppliers (including telephone
logs), and any other memoranda, notes, or reports evidencing the
availability or unavailability of fuel oil.
5. Information on the availability of other fuel supplies which
though not conforming represent a minimal increase in sulfur levels
(i.e.* IS sulfur content versus 0.32 sulfur content).
6. A summary of the contractual arrangements between various parties,
suppliers and users and a description of the available options in the
event of a fuel oil shortage.
7. What actions have been taken or considered to mitigate the
environmental, energy, and employment Impacts of the shortage situation
or to conserve conforming fuel (mandatory or voluntary)? Examples of
such measures may be conservation measures, voltage reductions.
thermostat reductions, wheeling and the substitution of natural gas for
oil. The amount of conforming fuel oil saved by each measure -should be
detailed.
8. Which facilities may have to close down as a result of the
shortages? What is the potential impact on employment in the area?
9." Which facilities can convert to alternate fuels? What is the
lead time necessary for these facilities to convert?
-------
10. How will SIP suspensions alleviate the shortage?
(a) what 1s the present SIP limitation on fuel use 4
(b) what would the new requirement be If the SIP is suspended.
(c) how much conforming fuel would be saved.
(d) can anything within the existing SIP be done to wholly or
partially alleviate the shortage.
(e) What steps will the state undertake to mitigate environ-
mental Impacts.
(f) can a fuel user blend conforming and non-conforming fuels
to minimize any local environmental Impact of using non-
conforming fuels?
11. Which sources would violate NAAQS If the emissions limitations
are suspended? What Is the present attainment status in the affected areas?
With regard to a request for a 110(f) suspension based on price
differentials the following additional Information would be required:
1. A discussion of fuel prices, Including:
(a) a one year history of prices paid for conforming fuel.
under contract or on the spot market.
(b) the prices of non-conforming fuels by sulfur content.
(c) the prices of any available alternative fuels the use of
which would not require a suspension.
2. The impact of price differentials of complying fuels relative to
non-complying fuels (at various sulfur levels) on unemployment (e.g.. layoffs
plant closures) and residential energy supplies, including:
(a) a examination of various sulfur content fuels and alternative
fuels.
(b) the mitigating effects of conservation measures and the
substitution of natural gas for oil.
III. Recommendation
recommend that you sign the attached memorandum to the Regional
x
•- £ u [-/u-i -
David S. Hawkins Marvin B. Ourning
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REFERENCES FOR SECTION 8.4
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PN 113-88-03-31-048
Ti UNITED STATES ENVIRONMEN1AL PROTECTION AGENCY
I „. WASHINGTON. D.C. 20460
3 1 MAS J9S3 OFHCE c<
AIM AND BADlATiOM
MEMORANDUM
SUBJECT: Transmittal of Reissued OAQPS eiMS^ilicy
FROM: Gerald A. End son, Directc
Office of Air Quality Jwftfirflg^a*?!^Standards
TO: Air and Waste Management Division Director
Region II
Air Management Division Directors
Region I, III and IX
Air, Pesticides and Toxics Management Division
Directors
Regions IV and VI
Air and Toxics Division Directors
Regions VII, VIII and X
Air and Radiation Division Director
Region V
Attached is the OAQPS policy on Continuous Emission
Monitoring Systems (CEMS) data. This policy was originally
issued on July 28, 1987. However, because of the late
transmittal date, FY 1988 implementation of the policy was
done voluntarily. The policy, after minor streamlining, is
being reissued at this time to insure implementation during
FY 1989. It has been streamlined by removing the outdated
section called "Future Actions.*
In accordance with the Operating Year Plan, FTEs and
LOE contract funds have been allocated to the Regional Offices
for CEMS and compliance monitoring activities. Implementation
of this strategy should help you utilize these available resources
more efficiently and effectively.
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- 2 -
Furthernore, note that tracking S02 CEMS requirements is
an element of the FY 1989 Strategic Planning and Management
System (SPMS). The FY 1989 SPMS requires determination and
reporting of the compliance status of SC>2 sources subject to
CEMS requirements. Specifically, these sources are to be
identified, and their compliance status determined with
respect to CEMS installation, certification, report submission
and emission limits. While SO2 sources are emphasized in
SPMS, this measure should be carried out for all sources with
CEMS requirements.
If you wish to discuss this further, please contact me or
Louis Paley of SSCD at FTS 382-2835.
Attachment
cc: John Calcagni, AQMD
Jack R. Farmer, ESD
William Lax ton, TSD
Don R. Clay, CAR
Bruce Armstrong, OPAR
Paul M. Stolpman, OPAR
Michael S. Alushin, A ED
Alan W. Eckert, OGC
CEMS Technical Coordinators
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C 20460
8 1 MAR 1988
OFFKEOF
AIR AND (AOIATION
SUBJECT: GEMS Policy
APPROVED: Gerald A. End son, Direct? _ _
Office of Air Quality Planning and Standards
DATE:
Purpose
This states the OAQPS policy, which is effective
immediately, on the use of Continuous Emission Monitoring
Systems (CEMS) data and provides specific guidance as to how
that policy should be implemented.
Definition
CEMS is one of several self-monitoring techniques used
by regulatory agencies to monitor continuous compliance of
sources. Sampling and analysis of sulfur in fuel to assess
SO2 compliance of sources and recordkeeping for assessment of
compliance with volatile organic compound (VOC) emission
limitations are two other self-monitoring techniques.
Information
As the air compliance program resolves initial compliance
problems and sources install control equipment, efforts to
assure continuous compliance become increasingly important.
Based on the review of State and Regional programs that
promote the use of CEMS, OAQPS has found that CEMS is a
valuable tool for assuring continuous compliance.
Self-monitoring techniques should be integrated into the air
compliance program as a means of assessing stationary source
continuous compliance with air quality regulations.
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- 2 -
Some of the States Which effectively use CEMS data in
compliance monitoring and in supplementing or supporting
enforcement actions are Washington (with S02 and total reduced
sulfur data) and Tennessee (with opacity monitoring data).
Ohio has a comprehensive program for requiring CEMS in
operating permits which has resulted in installation of CEMS
on a wide variety of source types. Pennsylvania and Indiana
have highly structured .CEMS programs* including penalty
programs based on reported excess emissions.
OAQPS is committed to promoting, encouraging and utilizing
CEMS data as a compliance assessment measure. Our Office is
also committed to the use of CEMS in direct enforcement where
CEMS is the compliance test method and for supporting enforcement
where CEMS is not the compliance test method. OAQPS encourages
the use of CEMS data by States in compliance monitoring and-
in supplementing or supporting enforcement actions. If it is
technically feasible, CEMS requirements should be incorporated
into NSR preconstruct ion reviews, operating permits and
resolutions of enforcement actions including consent decrees
and administrative orders.
CEMS should be used to assure continuous compliance of
sources in both attainment and nonattainment areas. Resources
should be allocated to monitor continuous compliance of .
sources in areas where the greatest environmental benefit is
likely to occur. Therefore, priority should be given to
NESHAPS sources subject to continuous monitoring requirements
(currently 40 CFR 61, subparts F, N, O and V) and to SIP
(including major and minor NSR sources) and NSPS sources in
nonattainment areas (for the pollutant for which the area is
in nonattainment). Next, CEMS should be used to monitor the
continuous compliance of NSPS and PSD sources in attainment
areas. Sources with excessive emission limit excursions
identified by CEMS data should be targeted for follow-up
action (on-site inspection or $114 letter). Where CEMS is
the compliance test method, CEMS data should be used to identify
significant violators. These sources will then be tracked in
accordance with the "Timely and Appropriate Enforcement
Response Guidance," issued by OAR on April 11, 1986.
There are two different types of CEMS data - direct
compliance monitoring data and excess emissions monitoring data.
Where CEMS is the compliance test method, the status of the
source is established and documented by CEMS data. Compliance
status determined by CEMS data should be coded in the Compliance
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- 3 -
Data System (CDS). Violations identified by direct compliance
monitoring data require appropriate enforcement action
including the assessment of penalties. There are plans to
modify the OEM Subset of CDS to allow for entry of direct
compliance monitoring data. Use of CEMS data for direct
enforcement where CEMS is the compliance test method is
discussed in "Guidance: Enforcement Applications of Continuous
Emission Monitoring System Data," issued by OAQPS and OECM on
April 22, 1986.
The second type of CEMS data is where CEMS is not the
compliance method. In these cases, CEMS data should be used
to monitor the continuous compliance of sources and to initiate
follow-up action including on-site inspections, requesting
further information, and issuing a notice of violation. This
application is also discussed in the aforementioned guidance.
Conclusion
CEMS is an important technique for monitoring the
continuous compliance of stationary sources. It should be an
expanding component of the air compliance program. Evaluation
of CEMS data has been shown to be effective for identifying
sources with continuous compliance problems and has allowed
agencies to utilize their compliance monitoring resources
more effectively.
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REFERENCES FOR SECTION 8.5
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August 25, 1988
NOTE TO JERRY EMISON
SUBJECT: Gibson County, Indiana, S02 Plan
THRU: John Calcagni
This note is a "heads up" concerning Indiana's S02 control plan for
Gibson County. The plan allows for delayed compliance with the SO?
limitations (one limit for attainment of the primary NAAQS and a second
limit for attainment of the secondary NAAQS with interim milestones) for
Public Service of Indiana's (PSI) Gibson Power Plant. The plan
also allows PSI Gibson to come in with alternate limitations. We concur
with the plan for the reasons stated in the attached analysis.
If you have any questions, I will be happy to answer them.
Bob Bauman
Attachment
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Gibson County, Indiana, S02 SIP
Issue
Delayed compliance schedule.
Background
The State plan contains the following requirements:
1. SO? Limitations
(Ibs/mmBtu) Unit Compliance Dates
1.2 5 All times
5.1 1-4 Now to 12/31/91
3.57 1-4 12/31/91 - 12/30/93 (to attain
the primary 24-hour NAAQS)
3.13 1-4 12/31/93 - 12/30/95
2.57 1-4 12/31/95 (to attain the
secondary 3-hour NAAQS)
2. PSI Gibson is required to submit a compliance plan prior to 12/31/88
specifying control measures and increments of progress. The plan may also
contain alternative individual limitations for units 1-4.
3. The IDEM is required to present a compliance plan to the Indiana
Board prior to 11/30/89 and to submit a Board-adopted plan to EPA as a SIP
revision by 5/30/90.
Analysis
The date to attain the primary NAAQS (12/31/91) is within the 3-year
timeframe in section 110(a)(2)(A) for EPA's final approval of the State's
plan. The date to attain the secondary NAAQS (12/31/95) is reasonable. In
the case of attainment of the secondary NAAQS, section 110(a)(2)(A) requires
that a plan specify a reasonable time to attain. Although EPA has defined
reasonable at 40 CFR 51.110(c)(2), EPA does not have a written policy on
what length of time constitutes a reasonable time. In past cases, EPA has
deferred to the State.
PSI has not selected or been required to select the control method to
achieve the limitations. The State submittal outlines three control methods
and estimates times as required by section 110(a)(2)(B) to accomplish
compliance: switch to low sulfur coal, install two FGD's with interim switch
to low sulfur coal, and install one FGD with some low sulfur coal.
-------
Indiana has provided justification which is summarized as follows.
State Justification
The compliance schedule and cost estimates recognize that PSI's existing
coal contracts limit their ability to rapidly substitute lower sulfur coal
for their existing supply. The State has provided for:
- Sufficient time to renegotiate current coal contracts to the benefit
of the utility, ratepayers, coal companies, coal miners, and
communities.
- Sufficient time to design and construct one or two FGD's if necessary.
- Time to thoroughly investigate emerging clean coal technologies.
- Phased-in costs.
- Time for local coal companies to develop existing coal reserves which
could then supply compliance fuel.
Conclusion
Social and economic impacts are substantial and good cause exists for
postponing application of control technology for more than 3 years from plan
submission.
The degree of emission reduction (47 percent reduction), the social and
economic problems involved in carrying out the control options, displacement
of over 3 million tons of IN/IL coal or the design/construction/installation
of two FGD's or combination thereof, the length of time for phase-in of
control equipment, and the increased costs to ratepayers warrant effort to
minimize impacts consistent with the requirements of the Clean Air Act and
justify more than a 3-year schedule.
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PN 110-36-08-07-
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
AUB-TBBS
All
MEMORANDUM
SUBJECT: Policy on SIP Revisions Requesting Compliance Oate
Extensions for VOC Sources
FROM: J. Craig Potter
Assistant Administrator
for Air and Radiation
TO: Regional Administrators
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Policy on SIP Revisions Requestina Compliance Date
Extensions for VOC Sources
In order to approve a source-specific compliance date
extension, two tests must be met. First, a State must
demonstrate that the extension will not interfere with timely
attainment (attainment by the formally established attainment
date) and maintenance of the ozone standard and, where relevant
"reasonable further progress" (RFP) towards timely attainment. I/
The attainment date will generally be December 31, 1982, or the ~
date established under Section 110 where the State has adequate-
ly responded to a request for SIP revisions under S110(a)(2)(H),
or December 31, 1987 in ozone extension areas. The demonstra-
tion may be based on a comparison between the margin for
attainment predicted by the demonstration submitted with the
approved ozone SIP 2/ and the increased emissions that would
result under the prooosed compliance date extension. 3/ If
there is an adequate margin to absorb the increased emTssions
(and the extension would ,ot interfere with RFP), then EPA
may conclude that the compliance date extension will not
interfere with the attainment and continued maintenance of
the ozone standard.
I/ The reference to a demonstration of RFP towards timely
attainment is not intended to redefine RFP but only reaffirms
that an RFP analysis is required.
V For areas where revisions to the Part D SIP are required
(such as 1987 extension areas or SIP call areas) and those
revisions have not been fully approved, the State would have
to submit a demonstration the eauivalent of that required
for EPA anoroval of the ozone SIP. Without an approvable
demonstration EP\ cannot determine whether the individual
compliance date extension will interfere with timely attain-
ment and maintenance of the standard, or with RFP. A
de minimus showing would not be acceptable, since in the
aggregate even very small sources would contribute signifi-
cantly to ozone formation.
3/ In making such a comparison it will be necessary to
BTtermine what, if any, portion of the margin has been utilized
by new sources of VOCs that may have located in the area
since the SIP was approved, as well as by existing VOC sources
that may have already been granted compliance date extensions.
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-2-
If the State or EPA believes that there has been a substantial
chanqe in the. inventory of VOC sources or total voc emissions
since the ozone SIP was approved so- that the margin of attain-
ment has channel sionificantlv, a revised demonstration in
supoort of the source-snecific SIP revision should be submit-
ted. _4/
Second, time extensions also must be consistent with the
requirement that nonattainment area SIPs provide for "imnlenen-
tation of all reasonably available control measures as
expeditiously as practicable" ($172(b)(2)]. Expeditiousness
should be demonstrated by determinina when the source was
first put on notice of the applicable requirement (e.g.,
adoption of the current regulation by the State) and the tim
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-3-
revision. Unless it can be shown that the original tiraeframe
approved in the SIP did not allow sufficient time for an
economically and technologically feasible compliance plan to
be implemented, a SIP revision for a compliance date extension
beyond the timeframes set forth above should be denied.
In conclusion, both the demonstration of timely attainment
(including RFP where relevant) and maintenance and the
expeditiousness tests must be met before a State SIP revision
can be approved.
q Potter
Assistant Administrator
for Air and Radiation
AJ6-7B66
i
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REFERENCES FOR SECTION 9.2
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REFERENCES FOR SECTION 9.3
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"4
V ^^^rf *
\ ^j/V J UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
'*-. .C WASHINGTON DC 20460
t awC1
FES I 5 1989
Mr. John W. Boston
Vice President -ft"*,. ~ >',-,.>CL
Wisconsin Electric Power Company
Post Offi.-e Box 2046
Milwaukee, Wisconsin 52301
Dear Mr. Boston:
This is a revised final determination, on reconsideration,
regarding the applicability of the Clean Air Act's New Source
Performance Standards (NSPS) and Prevention of Significant
Deterioration (PSD) provisions to the proposed life extension
project at the Port Washington steam electric generating station,
which is owned and operated by Wisconsin Electric Power Company
(WEPCO). This determination supplements the determination set
forth in an October 14, 1988 letter to you from Lee M. Thomas,
which in turn incorporated my September 9, 1988 memorandum. I
find it necessary to reconsider EPA's original determination and
issue this revised determination in part to address matters
raised by, and new information submitted by, WEPCO
representatives since the October 14 letter. WEPCO believes that
these new aspects call .into question the accuracy of EPA's prior
determination.
For the following reasons, EPA today reaffirms, with limited
exceptions detailed below, its earlier findings regarding the
Port Washington life extension project. I hereby incorporate by
reference the October 14 letter and the September 9 memorandum,
and reaffirm the findings and conclusions in those two documents
except where they are specifically superseded below.
This action constitutes final agency action for purposes of
judicial review under section 307(b) of the Clean Air Act, 42
U.S.C. S 7607(b).
I. CAPITAL EXPENDITURE
SPX explained in its earlier determination that under the
General Provisions of the NSPS regulations, a physical or
operational change which increases emissions at an affected
facility is a modification subject to NSPS. See 40 CFR 60.14U).
However, 40 CFR 60.14(e) provides certain exceptions to that
general rule. In particular, section 60.14(e}(2) provides that
an increase in production rate at an affected facility would not,
by itself, be considered a modification if that increase is
accomplished without a capital expenditure.
As has been discussed in recent meetings between WEPCO and
EPA, the October 14, 1988 letter from Lee M. Thomas was based in
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- 2 -
part on information supplied by WEPCO in a letter dated October
11, 1988 which indicated that the increase in production rate at
each of the five units would be accomplished with a capital
expenditure. On October 13, 1988, and November 22, 1988 WEPCO
submitted revised capital expenditure calculations. EPA has
carefully reconsidered its earlier determination based on those
two additional submissions.1 However, as explained below, they
provide no grounds on which to alter EPA's earlier finding on
capital expenditure.
The modification provisions are designed in part to subject
to MSPS those emissions increases caused by an increase in
production rate that is in turn attributable to a significant
investment in improvements to the capital stock. Consistent with
this intent, capital expenditure calculations employ the total,
as opposed to annual, cost of a given project at each affected
facility.
Thus, the December 16, 1975 preamble to the promulgated
definition of capital expenditure states that "...the total cost
of increasing the production or operating rate must be
determined. All expenditures necessary to increasing the
facility's operating rate must be included in this total" (40 FR
58416) (emphasis added). The total coat of the planned work at
each facility is then compared to the product of the existing
facility's basis and the annual asset guideline repair allowance
percentage used by the Internal Revenue Service for taxation
purposes. If the total project cost for each facility exceeds
-.he product of the basis and repair percentage for each facility,
there is a capital expenditure at that facility. See 40 CFR
60.2.
It is appropriate to accumulate, for capital expenditure
purposes, the cost of the renovations necessary to increase the
facility's production rate, because the overall work necessary to
increase a facility's production rate pursuant to a particular
renovation project is the same whether the work is performed in
one calendar year or during two (or more) years. The use of
annual costs could encourage sources to distort normal business
planning.by artificially stretching out costs over time as a
means of,-evading a finding of capital expenditure and consequent
NSPS
1 The October 13, 1988 submission was not received in
tiae to be considered in issuing BPA's letter of October 14,
1988.
2 Indeed, it appears that WEPCO may have extended the planned
length of the Port Washington life extension project for
precisely this purpose after being informed by EPA in the Octobe^
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Rather, the purpose of the exemption in 40 CFR 60.14(e)(2)
is to exclude from NSPS coverage increases in production rate
that are accomplished without "an expenditure for long-term
additions or improvements." See 39 FR 36948 (preamble to
proposed NSPS regulationsi. Where the economic realities of the
case are that increased production and, hence, emissions, are due
to normal fluctuations in the business cycle rather than a
considered decision to invest in substantial capital
improvements, the NSPS do not apply.
The letter submitted on October 13 from Neil Childress of
your staff to Gary McCutchen of EPA presented updated basis
figures (determined by multiplying the original capital
investment in the facility by a coefficient representing the
inflation in construction costs between the year of the
investment and the year in which the capital expenditure
calculation is made) for each of the emissions units at Port
Washington. These figures included costs of repair or
replacement of equipment, such as steam turbines, that is not
part of the existing affected facility for NSPS purposes. Since
applicability determinations under the NSPS modification
provisions are based on the existing affected facility, capital
expenditure determinations likewise are limited to costs
associated with the affected facility. For NSPS Subpart Da, the
affected facility is the steam generating unit as defined at 40
CFR 60.40a. Therefore, EPA staff requested WEPCO to limit the
basis figures to the steam generating unit.
The November 22, 1988 letter from Neil Childress to Walt
Stevenson of EPA presented revised cost figures on the renovation
work on steam generating units 1-4 related to the capital
expenditure calculations. These November 22 basis figures are
understood to be limited to costs associated with the affected
facility. The November 22 letter also presented a revised and
extended schedule for the renovation work, under which the costs
of repairs in any one year would not exceed the product of the
annual asset guideline repair allowance percentage, which is 5%
for electric utility steam generating units, and the basis of
each unit. Mr Childress' letter concluded that since 5% of each
14, 1988 letter that there would be a capital expenditure using
the original schedule. The unit 1 renovations have been extended
from four years to five; unit 2 has been extended from four years
to six; unit 3 has been extended from three years to six; unit 4
has been extended from two years to four. (Compare Telecopier
Transmission, Neil Childress, WEPCO, to Gary McCutchen, EPA,
October 11, 1988 (table attached to Response to Question No. 4)
with Letter, Neil Childress, WEPCO, to Walt Stevenson, EPA,
November 22, 1988, at page 2.)
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- 4 -
unit's updated basis is not exceeded by the cost of renovation
work in any one year, there would not be a capital expenditure at
any of the units. The revised figures also show that the total
costs for each unit over the entire renovation period would
exceed the 5% basis figure by 50% to 325%.
As explained above, it is the total cost/ not the annual
cost of a renovation project that determines whether a capital
expenditure has occurred. Accordingly, based on the calculations
and total project costs in WEPCO's November 22. 1988 letter, the
proposed project would result in a capital expenditure at each of
the five Port Washington units, and those units would not qualify
for the exemption in the NSPS modification provisions at 40 CFR
60.14(e) (2) .' As to unit 5, WEPCO did not submit cost data
limited to the affected facility. Thus, I have no reason to
alter EPA's original determination that WEPCO has not
demonstrated that the increase in production rate at unit 5 can
be accomplished without a capital expenditure.
In addition, I have determined that it is more appropriate
to utilize the original basis of each affected facility (as
adjusted to reflect past capital improvements) , expressed in
nominal dollars, rather than the updated basis, expressed in
current dollars, in determining NSPS applicability. Thus, even
if WEPCO were correct that annual renovation costs, rather than
total costs, should be used in capital expenditure calculations,
in this case a comparison of annual renovation costs and the
3 WEPCO has argued that since the definition of capital
expenditure at 40 CPR 60.2 refers to the IRS "annual asset
guideline repair allowance percentage" (emphasis added), EPA is
bound by the literal language of its own regulations to use
annual rather than total project costs in making capital
expenditure calculations. However, the regulations do not
dictate such a result. Instead, on their face they call for a
comparison- between total renovation costs and the annual asset
guideline. Bad SPA intended the result suggested by WZPCO, it
would have explicitly called for comparison of annual costs of
the change for projects exceeding one year with the annual asset
guideline. This it did not do. In addition, as indicated above,
the purpose of the capital expenditure provision would not be
served by annualizing project costs for capital expenditure
purposes.
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- 5 -
(adjusted) original basis of each affected facility shows that a
capital expenditure would still occur."
In making a more detailed inquiry into the capital
expenditure matter in response to WEPCO's request, I have found
that neither the NSPS General Provisions nor the preamble thereto
contain any discussion of the matter of original versus updated
basis, and that EPA has rarely been called upon to address this
issue. However, upon review of EPA's past practice in this area,
I have found that in developing performance standards for
particular industries, EPA has provided the regulated community
a mechanism to calculate the original basis in making capital
expenditure calculations. See, e.g., "Equipment Leaks of VOC in
Petroleum Refining Industry — Background Information for
Promulgated Standards," EPA-450/3-81-015b, December 7, 1983.'
This suggests that EPA intended the original basis to be utilized
to determine whether a capital expenditure is going to be made.
Moreover, I believe that the use of original basis is
consistent with the overall purpose of the NSPS modification
regulations in general, and the capital expenditure provisions in
particular. The effect of using original basis is that the
greater the age of an affected facility, the more likely it is
that a/given investment resulting in increased production will be
deemed a capital expenditure and trigger NSPS. This is
consistent with Congress* intent in adopting new source
performance standards. Older facilities are more likely to use
outdated equipment which does not reduce pollution to the extent
more current technology does. Congress included modified sources
within the new source performance standards of section 111 to
ensure the use of new technology on such sources. See CAA
§§ lll(a)(2), lll(a)(4);
II. AIR HEATER RENOVATIONS AT UNIT 1
In January 1989, WEPCO asked EPA to determine whether
replacement of the heat transfer surface elements on the unit 1
air heater would trigger PSD or NSPS applicability. However, in
a letter dated February 3, 1989, WEPCO withdrew this request.
4 It is worth noting in this regard that if EPA were to
adhere to a literal reading of IRS guidelines as urged by WEPCO,
it would have no choice but to use original basis as well as
annualized costs in making capital expenditure calculations for
Port Washington. Using this formula, WEPCO would exceed the
repair allowance percentage at units 1-5 for most years, and
NSPS would still apply.
9 This Background Information Document provides an
alternative to the method prescribed in the General Provision
when it is difficult to determine original costs. The formula
uses replacement costs and an inflation index to "approximate the
original cost basis of the affected facility."
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- 6 -
asserting that it could not receive approval in the time
necessary, while reserving the right to renew it at a later time
as to unit 1 or any other unit at Port Washington. Because this
issue may arise again, and because I believe it bears upon the
project as a whole, I find it appropriate to address the matter
of air heater element replacement. Based on the information
submitted regarding this new plan, as well as the earlier
information submitted regarding air heater replacement work, I
conclude that if WEPCO were to proceed under its revised and now
withdrawn plan, it would not alter EPA's earlier finding that PSD
and NSPS would apply. In order-to explain this finding, it is
useful to first summarize the relevant facts.
Originally, WEPCO advised EPA that it planned to replace the
air heaters at units 1 - 4 in their entirety. As WEPCO
explained:
Air heaters are subject to the erosive and
corrosive effects of the flue gas passing through them
and require regular maintenance of the heat transfer
surfaces.
The plate-type air heaters on Units 1 - 4 do not
lend themselves to replacement of the individual
elements. Worn sections have been patched and blocked,
where accessible, over the years. Now, however,
overall corrosion and perforation h«s passed beyond the
practical point of repair, and replacement of the air
heaters is the economical way to maintain the air
preheater system.
The air heaters on Port Washington Unit 5 and the
other units on the Wisconsin Electric system [other
than Port Washington units 1-4] are of the Ljungstrom
basket design, which allows the heat transfer surfaces
i_ .akets) to be replaced easily. ***
See, e.g.. List of Port Washington Projects, p. 6 (Attachment to
April 22, 1988 letter from John W. Boston, WEPCO, to Gary
McCutchen. EPA).
On January 11, 1989, WEPCO informed the State of Wisconsin
that it was considering replacing all the plate elements at unit
1. In a letter to the State of Wisconsin, WEPCO described this
project as routine repair work, "necessary to halt the continuing
decrease in the capability of Unit 1," and submitted a list of 40
generating units where significant portions of the air heater
have been replaced. See Letter, with attachment, from Mark P.
Steinberg, WEPCO, to Dale Ziege, Wisconsin Department of Natural
Resources, January 11, 1989.
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- 7 -
In a telephone conversation with EPA staff the next day,
WEPCO indicated that it desired to perform the unit 1 plate
replacement work during a current unit outage; that it intended
to replace only half, not all, of the elements, at a cost of
approximately 3500,000; that it intended to later scrap this work
and replace the entire air heater as described in the original
scope of work, at a cost of 32,600,000; and that it was
considering performing the sane work at unit 4 also. See Record
of Telephone Conversation between David Schulz, EPA, and Mark
Steinberg. Neil Childress, and Walter Woelfle, WEPCO, January 12,
1989.
In a meeting on January 17, 1989, WEPCO related that if it
replaced half of the plate elements now, it probably would
replace the remainder as part of the total renovation project at
a later date and not replace the air heater in whole. WEPCO also
related that complete replacement of the plate elements should
increase unit 1's capability to the original design capacity.
Finally, WEPCO stated in response to questions from EPA staff
that none of the air heaters or plate elements at units 1-4 had
ever been replaced in the past. See Memorandum, Meeting with
WEPCO regarding the Port Washington Generating Station, from
David Schulz. EPA, to Files, January 27, 1989.
In addition to the above information, I note that WEPCO's
list of 40 units at which air heater element replacements have
occurred include no units containing plate elements such as those
on units 1 - 4 at Port Washington. Instead, all of the examples
submitted are of the Ljungstrom basket type or the tubular type.
I conclude that those examples are too dissimilar to the plate-
type elements in use at units 1 - 4 to support WEPCO's contention
that the work in question is routine.*
Based on all of the foregoing, I find no reason to depart
from EPA's earlier conclusion that PSD and NSPS would apply to
the air heater work on unit 1. It appears that despite WEPCO's
recent recharacterization of this work as a separate project, it
is properly viewed as an integral part of the overall Port
Washington, life extension project. WEPCO cannot evade PSD and
NSPS applicability by carving out, and seeking separate treatment
of, significant portions of an otherwise integrated renovation
program. '"Such piecemeal actions, if allowed to go unchallenged,
could readily eviscerate the clear intent of the Clean Air Act's
•Further, even the list of air heater replacement work
submitted by WEPCO did not establish this as routine repair work.
Those 40 units comprise only a small fraction of total operating
utility units, and even at the 40 units, air heater repair or
replacement appears to have been a one-time occurrence, not
routine repair.
-------
new source provisions. Accordingly, if seen as part of WEPCO's
previously proposed renovation project, the recent
recharacterization of the unit 1 air heater work does nothing to
alter the factors determinative of PSO and NSPS coverage.
III. CAPACITY TESTING FOR UNITS 1 - 4
A. Impact of Test Results on NSPS Applicability.
In Lee Thomas' October 14, 1988 letter, EPA stated that
baseline emissions for NSPS purposes are determined by nourly
maximum capacity just prior to the renovations. EPA relied on
actual operating data to determine that current maximum capacity
at units 1-4 has significantly deteriorated, such that the
restoration of original design capacity through the life
extension project would result in corresponding emissions
increases. As to unit 5, EPA stated that current capacity at
unit 5 is zero because it is physically inoperable. EPA rejected
WEPCO's unsupported assertions that all five units could be
operated at high capacities, but held open the possibility of
further discussions on that point. Subsequently, in November and
December of 1988, following discussions with EPA, WEPCO conducted
capacity tests to determine current actual capacity.
Based on its review and analysis of the test data, EPA finds
that the tests adequately demonstrate that units 2 and 3 can be
operated at their original design capacity on a sustained basis.
Accordingly, I hereby supersede EPA's earlier determination and
find that NSPS would not apply to units 2 and 3 by virtue of the
proposed renovations so long as the capacity of these units after
completion of the work is no higher than demonstrated in the
recent tests (694,000 and 690,000 pounds of steam per hour,
respectively). As discussed in more detail below, this revised
NSPS determination does not affect our determination that the PSD
provisions would be applicable to the proposed work on these two
units.
During the tests on units 1 and 4, WEPCO was able to operate
these units at 497,000 and 586,000 pounds of steaa per hour,
respectively, representing 72% and 89% of these units' respective
original design capacities. These tests are adequate to confirm
EPA's original determination that units 1 and 4 are not capable
of operating at their original design capacities, and that
restoration of the lost capacity through the life extension will
trigger NSPS coverage. EPA today also determines that these
tests are not adequate to show that current actual capacity for
purposes of establishing the NSPS baseline is as high as the
levels achieved during the recent tests. Rather, I reaffirm that
baseline for those units is determined by the lower capacities
reflected in recent actual operating data as set forth in Lee
Thomas* October 14 letter. EPA must reject the tests for
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- 9 -
purposes of establishing actual NSPS baselines because during the
testing discussed above, there were significant, measured
exceedances of the applicable particulate mass emission limit,
and several measured exceedances of the applicable opacity limit
contained in the Wisconsin State Implementation Plan. One of the
purposes of these tests was to determine the maximum actual
capacity of the Port Washington units that can be achieved in a
lawful manner. As a consequence of the measured exceedances,
WEPCO's tests cannot be relied on to demonstrate that the company
could lawfully sustain the levels achieved during the testing.
Regarding unit 5, I find that by declining to conduct or
schedule capacity tests, WEPCO has effectively conceded that unit
5 is at present inoperable. Therefore, I reaffirm that its
baseline for NSPS purposes is zero.
B. Impact of Test Results on PSD Applicability.
In its February 3, 1989 letter, WEPCO asserted that EPA's
October 14, 1988 determination assumed that the emission rate of
each unit would increase following the renovations. Thus, WEPCO
claims, EPA did not address the question whether units that are
not increasing their emission rates following renovation can be
deemed to trigger PSD. WEPCO is incorrect on both counts.
EPA's prior determination explained that under the PSD
program, unlike NSPS, baseline emissions are determined by
representative actual emissions prior to the physical or
operational change. Accordingly, the results of testing
conducted by WEPCO, intended to determine current maximum hourly
capacity, have no impact on the existence of a significant net
emissions increase for PSD purposes. Hence, those test results
provide no reason to alter EPA's prior determination regarding
PSD applicability.
Actual emissions are the product of the emission rate
(amount of pollution per unit of production or throughput, e.g.,
pounds of sulfur dioxide per ton of coal combusted), the
production rate or capacity utilization (amount of production or
throughput P«r boor, e.g., tons of coal combusted per hour), and
the hours>-~«f operation (e.g., hours per year). In its prior
determination, SPA explained that an increase in any one of these
three factors, if attributable to a physical or operational
change, can trigger an emissions increase for PSD purposes, and
rejected WBPCO's contention that only increases in the emission
rate were determinative. In so doing, BPA explicitly assumed
that emissions increases at Port Washington would come not from
an increase in emission rate, but rather from increases in
production rate or hours of operation. See Memorandum from Don
R. Clay, September 9, 1988 at 8.
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- 10 -
WEPCO further i.T.piies ir. its February 3. 1939 letter that ™
the demonstration that uni's 2 and 3 can operate now at r.axi-ur '
design capacity means that ther* will be no increase in
production rate for PSD purposes following the renovations. This
is not the case because PSD baseline emissions are determined by
representative actual emission rate, production rate, and hours
of operation prior to the physical change. Representative actual
emissions are determined by examining the actual emissions
during a representative two year period, (See 40 CFR
52.21(b)(21)(ii)) which in this case the Administrator determined
to be 1983 and 1984 (See Lee Thomas' Oct. 14 letter, at 5). The
hourly capacity demonstration for NSPS purposes is not relevant
to the PSD analysis.
IV. NSPS OPERATIONAL LIMITATIONS
In my September 9, 1988 memorandum, I pointed out that an
affected facility cannot avoid NSPS applicability by offsetting,
through the use of fuel with a lower sulfur content, an increase
in the emission rate that would otherwise occur due to a physical
or operational change. As I explained at that time, 40 CFR
60.14(e) provides that use of an alternative fuel or raw material
— such as higher-sulfur coal — which an existing facility was
designed to accommodate before a physical or operational change
does not constitute a modification for NSPS purposes. It follows
that the facility cannot avoid NSPS by switching to lower-sulfur
fuel to counteract a prospective increase in emission rate
because, under the regulations, the facility would always have to
option to switch back to a higher-sulfur fuel at a later date
without triggering NSPS.
Subsequent t'o me issuance of EPA's October 14, 1988 letter,
WEPCO inquired whether it might be able to utilize lower-sulfur
coal to avoid NSPS at Port Washington, notwithstanding the
regulatory provision explained above, by agreeing to federally
enforceable permit conditions that would bar the company from
switching back to higher sulfur coal in the future. Restrictions
of this nature are acceptable for netting transactions under the
Act's PSD provisions. However, the statute reflects a basic
political decision that fossil fuel-fired sources not rely only
on natural occurring less-polluting fuels to comply with the
NSPS. Instead, Congress declared that compliance must depend in
part upon the application of flue gas treatment or other
pollution control technologies. Thus, section 111(a)(1)(A)(ii)
defines "standard of performance" for fossil fuel-fired sources
as
requiring the achievement of a percentage reduction in
the emissions from such category of sources from the
emissions which would have resulted from the use of
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- 11 -
fuels which are not subject to treatment prior to
combustion ... .
Congress further clarified this point in a later paragraph of
section 111(a) by adding:
For the purpose of subparagraph (1)(A)(ii). any
cleaning of the fuel or reduction in the pollution
characteristics of the fuel after extraction and prior
to combustion may be credited ... to a source which
burns such fuel.
This core policy judgment is reflected as well in the
legislative history of the 1977 Clean Air Act amendments. For
example, the Conference Report states:
The Senate concurs in the House provision with
minor amendments. The agreement requires (1) that the
standards of performance for fossil fuel-fired boilers
be substantially upgraded to require the use of the
best technological system of continuous emission
reduction and to preclude use of untreated low sulfur
coal alone as a means of compliance; ... (3) that for
fossil fuel-fired sources, the new source performance
standards must be comprised of both a standard of
performance for emissions and an enforceable
requirement for a percentage reduction in pollution
from untreated fuel.
H.R. Rep. No. 95-564, 95th Cong., 1st Sess. 130.
Because the will of Congress is so clear that lower-sulfur
fuels alone will not suffice to comply with NSPS, it would be
inconsistent with the legislative intent for EPA to allow sources
to use lower-sulfur fuel to avoid coverage of NSPS in the first
instance in the manner suggested by WEPCO. If EPA were to follow
such a course, numerous modifications to existing facilities
could escape coverage in a manner contrary to the statutory
purpose. -
V. THE TIMING OF THE LIFE EXTENSION PROJECT
In discussions with EPA, WEPCO has challenged, on grounds of
timing, EPA's position on baseline emissions for NSPS purposes.
In its prior determination, EPA explained that under the NSPS
regulations, baseline emissions are determined by hourly maximum
capacity just prior to the renovations. Thus, the baseline for
unit 5 at Port Washington is zero because the unit has been shut
down for several years due to safety concerns. In response.
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- 12 -
WEPCO has presented the hypothetical question whether EPA would
still have found a zero baseline if unit 5 had been shut down on
a Friday due to some unexpected or catastrophic failure of a
major component previously in good working order, and WEPCO had
sought to replace that component on the following Monday. WEPCO
asserts that in such circumstances, EPA should have established
baseline emissions using the emissions rate just prior to the
breakdown.
I find it unnecessary to engage in speculation by addressing
the hypothetical situation presented by WEPCO, because it is far
removed from the true circumstances surrounding the proposed Port
Washington life extension project. In fact, unit 5 has been shut
down for over four years, not a veekend, and that is the
foundation cf EPA's analysis and determination.
In conclusion, with limited exceptions, EPA today reaffirms
the decisions reached in the October 14 determination. In
addition, EPA has concluded that the work on each unit
constitutes a capital expenditure and that the proposed air
heater plate replacement work on unit 1 would trigger PSD and
NSPS. As a result of the capacity test demonstration, however,
I find that units 2 and 3 at Port Washington can be operated at
their design capacity on a sustained basis. Therefore EPA's
earlier determination with respect to NSPS applicability is
superseded and NSPS would not apply to units 2 and 3 by virtue of
the proposed renovations so long as the capacity of these units
after the completion of this work is no higher than demonstrated
in the recent tests. This determination does not affect PSD
applicability for these two units. If you should have any
questions about the foregoing, please feel free to contact me.
Thank you for your cooperation in this matter.
Sincerely,
Don R. ClaJ
Acting Assistant Administrator
for Air & Radiation
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APPENDIX B
S02 CHECKLIST
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SO2 Checklist
This checklist was developed from several other
checklists and from the SC>2 Guideline itself for use in
SIP processing oversight as required by SIP processing
reform. It should be used as a guide to identify
problems when reviewing a SIP and to prevent problems
from occuring when writing a SIP. This checklist is an
overview and is not intended to be comprehensive.
Readers are encouraged to refer to the appropriate
chapter in the SO2 Guideline for more information.
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sdps/jvitas
SO; CHECKLIST YES HQ REFERENCE
Determining Air Quality Status of Areas
* Modeling is used in demonstration
(see below)
* Justifies exclusion of any areas as
not ambient air
* Demonstration that SIP is being
implemented
* Redesignation will result in a
change in emission limits
Redesignation allows
emission increase
Emission increase justified
by SIP revision
* Monitoring includes eight
quarters of data showing
attainment
Ambient Air Quality Monitoring and Data Usage
* Monitoring data are included
Data are quality assured
Data are part of
SLAMS network
* Monitors located at points
of expected maximum ground
level concentrations
Air Quality Modeling
* Specifies version of Guideline on Air
Quality Models (Guideline) used
If prior to current version,
specifies reason for
grandfathering
* Specifies model(s) used
* Specifies terrain
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Specifies the 5-year set of
meteorological data used
If on-site data exist but were
not used, provides rationale
Outputs include 3 and 24 hour and
annual average results
Inputs reflect maximum allowable
emissions for short-term analyses
Justifies treatment of any
emissions not input at
maximum allowable
Justifies stack heights input with
respect to good engineering practice
(GEP) requirements
Modeling does not credit above
formula GEP stack height
Justifies any merged gas streams
input with respect to stack height
regulation
Does not include varying
emission rates with
meteorological conditions
Specifies background sources or
justifies absence
If background sources are
present they are explicitly
modeled
Justifies
background
concentrations
for those sources
not modeled
If actual stack height is below
formula GEP, downwash modeling is
provided
Justifies any deviations from
Guideline
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Stack Height Regulations
* Stack height negative declaration
evaluates sources:
with stacks > 65 meters
with merged gas streams and
emissions > 5000 tons/year
grandfathered and shows date of
documention for grandfathering
Control Strategy
* Specifies block (or running) averages
used
* Demonstrates no * xceedance of NAAQS
and PSD increment.
* Justifies rollback or multipoint
rollback
SIP Provisions
* Revision contains PSD
analysis
* Bubbling, trading or
balancing is included
Justifies use of above
Describes before and after
conditions of bubble, trade
or balance
* Sulfur variability is not credited
* Documents interstate and
international impacts
Implementation Enforcement Aspects
* Test method uses averaging time
consistent with modeling
demonstration
Test method does not rely on 30-day
averaging
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Does not allow administrative
revisions to the rule/permit
requirements
Specifies EPA test method
Rule/permit does not include an
expiration date
Rule/permit justifies any
ma1function, startup/shutdown, or
maintenance provision
Rule/permit requires Continuous
Emission Monitoring
Units of compliance are
specified in the rule/permit
(e.g. Ibs/mmBtu)
Justifies any mass/time
limits
Rule/permit specifies final
compliance date
compliance date does not exceed
3 years
Rule/permit specifies more than one
emission limit for any emission point
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TECHNICAL REPORT DATA
(Please read Instructions on the reverie before completing;
. REPORT NO.
2.
3. RECIPIENT'S ACCESSION NO.
4 TITLE AND SUBTITLE
S02 Guideline
5. REPORT DATE
October 1989
6. PERFORMING ORGANIZATION CODE
I. PERFORMING ORGANIZATION REPORT NO.
10. PROGRAM ELEMENT NO.
9 PERFORMING ORGANIZATION NAME AND ADDRESS
Radian Corporation
Progress Center
3200 E. Chapel Hill Road/Nelson Highway, PO Box 13000
Research Triangle Park, NC 27709
11. CONTRACT/GRANT NO.
68-02-4392
Work Assignment No. 44
12 SPONSORING AGENCY NAME AND ADDRESS
13. TYPE OF REPORT AND PERIOD COVERED
14. SPONSORING AGENCY CODE
15 SUPPLEMENTARY NOTES
16. ABSTRACT
The S02 Guideline is an integration and clarification of policy and guidance
information available for S02 programs. This Guideline is to aid the States and EPA
Regional Offices, especially in the development, review, and enforcement of future
S02 SIP revisions.
Each chapter of the Guideline presents a distillation of key policy and guidance for
various subjects that are important to S02 programs. Each chapter also contains
comprehensive references to the original material upon which the chapter is based.
These references include relevant statutory and regulatory requirements (i.e., the
Clean Air Act and the Code of Federal Regulations), FR notices, EPA guideline
documents, and Agency policy and guidance correspondence.
17.
KEY WORDS AND DOCUMENT ANALYSIS
DESCRIPTORS
b.lDENTIFIERS/OPEN ENDED TERMS
c. COSATI Field/Group
so2
State implementation plan (SIP)
Attainment
Ambient Air
Ambient Monitoring N$PS
Dispersion Modeling Redesignation
Stack Height Enforcement
18. DISTRIBUTION STATEMEN"
19. SECURITY CLASS tTins Report>
1. NO C'
20 SECURITY CLASS (Tins pagei
22 PR'Cc
EPA Form 2J2C-MR**. 4-77) PR&V.OUS ep'T:CN is OBSOLETE
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