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Montana Department of Environmental Quality (MDEQ)
Title V Program Review
Conducted by
United States Environmental Protection Agency (USEPA)
Region 8
September 2014
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TABLE OF CONTENTS
EXECUTIVE SUMMARY 1
INTRODUCTION 3
OBJECTIVE OF THE PROGRAM REVIEW 3
PROGRAM REVIEW PROCESS 3
PROGRAM REVIEW PROCEDURE 5
FOLLOW-UP TO SECOND ROUND REVIEW 5
THIRD ROUND REVIEW'S FINDINGS AND COMMENTS 6
MDEQ ORGANIZATION AND STAFFING 8
TRAINING 8
FEE AUDIT 8
CONCLUSION 9
ATTACHMENT 1: TITLE V THIRD ROUND STATE PROGRAM REVIEW
QUESTIONNAIRE AND RESPONSES BY MDEQ
ATTACHMENT 2: STATE/LOCAL TITLE V PROGRAM FISCAL TRACKING
EVALUATION QUESTIONNAIRE AND MDEQ RESPONSES
ATTACHMENT 3: FOLLOW-UP QUESTIONS FOR THE CONFERENCE CALL
ATTACHMENT 4: MONTANA AIR PERMITTING SECTION ORGANIZATION
CHART
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Executive Summary
In June 2014, the United States Environmental Protection Agency (EPA) conducted the third
round review of the Montana Department of Environmental Quality's (MDEQ) Title V operating
permits program. This review was accomplished via a conference call with MDEQ as opposed
to the site visits conducted during the first two reviews. The first round of the program review
was conducted in fiscal year 2003. EPA issued the final report for the first round in May 2004.
The second round review was conducted in fiscal year 2008. EPA issued the final report for the
second round in August 2008. The third round evaluation (like the previous evaluations)
consisted of a discussion of MDEQ's responses to the program evaluation questionnaire. The
questionnaire was developed during the second review and revised slightly for the third round
(the first round questionnaire was more expansive than the second and subsequent third round
evaluation questionnaires). The evaluation also consisted of a title V program fee audit
questionnaire.
The goal of the third round evaluation was to review any concerns raised by MDEQ or EPA in
the prior evaluation (second round), to determine how any unaddressed concerns might be
addressed, to identify any good practices developed by MDEQ that may benefit other permitting
authorities and EPA, document any areas needing improvement, and learn what assistance EPA
can provide.
EPA Concerns from the Second Round Evaluation:
Visual Survey Language - During the second round review, EPA recommended that MDEQ
revise the Visual Survey Language (VSL) in Title V permits. The language at the time required
facilities to conduct a visual survey of emitting units for any excessive emissions. Excessive
emissions were defined as any visible emissions which meet or exceed 15% opacity. EPA was
concerned that the language did not specify how the observer should quantify the opacity. As a
result of EPA's second round review comments, MDEQ has revised the VSL used in their Title
V permits.
Prompt Deviation Reporting - EPA recommended that MDEQ revise the "prompt deviation
reporting" language. EPA's concern was that reporting deviations under ARM 17.8.1212(3)(b)
as part of routine reporting at least every six months has been deemed by the courts not to be
prompt. MDEQ has revised this language based on EPA's recommended language.
Title V fee Audit - MDEQ provided detailed information about Title V revenues and expenses
by making available MDEQ's financial specialist and samples of fee tracking forms and
computer generated reports. However, EPA recommended that MDEQ design an additional
report that explicitly identifies Title V operating permit revenues and expenses in a simpler
format than is currently used. As a follow up to the second round review comments, the MDEQ
can now generate the report if requested.
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EPA Concerns from the Third Round Evaluation:
Visual Survey Language-While the VSL was modified following the second round review,
MDEQ requested assistance in further refining the VSL. MDEQ noted that the modified VSL
allowed some permittees to perform Method 9 sampling on a semiannual schedule. To assist
MDEQ, EPA provided MDEQ the Region 7 Policy on Periodic Monitoring for Opacity. The
Region 7 policy allows for visual observations that are qualitative as opposed to quantitative.
Conclusions
MDEQ has provided all of the necessary information to EPA during this review and has
addressed issues raised by EPA. MDEQ's field experience and knowledge of air permitting has
assisted EPA in understanding the challenges faced by the state. No significant deficiencies
were noted during this review.
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Introduction
EPA conducted this program evaluation as part of its obligation to oversee and review state
programs that have been approved by EPA, and in response to recommendations from an audit
conducted in July 2002 by the Office of Inspector General.
The state of Montana operates a fully EPA approved program that allows it to implement the
requirements of title V of the Clean Air Act (CAA), including the issuance of operating permits.
EPA has a statutory responsibility to oversee the programs it approved by performing oversight
duties, including occasional program reviews. Such responsibilities include overseeing the
activities of the State program to ensure that local, regional, and national environmental goals
and objectives meet minimum requirements outlined by the federal regulation.
Objective of the Program Review
Following the completion of the first and second round reviews for states in Region 8, EPA
nationally committed to a third round of reviews. While the questionnaire used for the first
round reviews was developed by a "national workgroup" for national consistency, the second
and third round review questionnaires were developed by the Regions to emphasize Regional
priorities that were identified during the first round reviews.
Region 8 consulted with other Regions about the approach and format of the questionnaire and
the extent of the follow-up review of State programs. Region 8 concluded that the follow-up
reviews do not need to be as extensive as the first round reviews, but should build on the findings
and recommendations of the first round review.
The main objectives of the third round reviews are to conduct a follow-up to the first and second
round reviews by: 1) ensuring that areas of concern identified by EPA during the first and second
rounds have been addressed or are being addressed satisfactory; 2) ensuring that the MDEQ
concerns have also been addressed or are being addressed to MDEQ's satisfaction; 3) identifying
and documenting new good practices that can benefit other permitting authorities; 4) identifying
and documenting areas of concerns that need improvement; and 5) getting feedback on how EPA
can be of service to the permitting authorities.
Program Review Process
In June 2014, the United States Environmental Protection Agency (EPA) conducted the third
round review of MDEQ's Title V operating permits program. This review was accomplished via
a conference call with MDEQ as opposed to the site visits conducted during the first two
reviews. The first round of the program review was conducted in fiscal year 2003. EPA issued
the final report for the first round in May 2004. The second round review was conducted in
fiscal year 2008. EPA issued the final report for the second round in August 2008.
The first round review was conducted in response to the 2002 Office of Inspector General audit
recommendations that EPA: examine ways it can improve permitting authorities' Title V
operating permit programs and expedite the permit issuance rate; note and document good
practices which other agencies can learn from; assess deficiencies in the program; and to learn
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how EPA can help the permitting authorities improve their overall program. In meeting these
goals, EPA developed a questionnaire that was sent to each permitting authority and followed up
with on-site visits to conduct interviews and file reviews. The findings of MDEQ Title V
operating permit program's review were outlined in the May 2004 final report with the main
categories as follows: a) programmatic areas where MDEQ has improved in the past five years;
b) programmatic areas where improvements can be made; and c) programmatic areas where
MDEQ needs additional assistance from EPA.
The second round review focused primarily on: 1) assessing and documenting MDEQ progress
in areas where EPA had previously identified as areas needing improvements; 2) assessing
permitting authorities' evaluation of EPA's effort in providing additional assistance to improve
its Title V operating programs; 3) identifying continued improvements in the program's
previously identified strong attributes; 4) identifying new good practices by the State since the
first round review and 5) conducting a Title V operating permit program fee audit.
The format of the third round review differed than the first two rounds. EPA provided a standard
Title V questionnaire (Attachment 1) and fiscal tracking questionnaire (Attachment 2) to MDEQ
as has been done in the previous two reviews. In addition, since the third round program review
was conducted via conference call, not in person, a follow-up list of questions based on MDEQ's
third round review questionnaire responses was also forwarded to the state (Attachment 3) in
advance of the call.
As mentioned above, a separate questionnaire was provided by EPA to MDEQ for the title V fee
audit (State/local Title V Program Fiscal Tracking Evaluation Document). The purpose of the fee
audit is to determine whether the following are satisfied:
• Sources are being billed in accordance with fee requirements and are paying the
required fees;
• Division of expenses is identified by MDEQ between title V and non-title V programs;
• Features are integrated into MDEQ's accounting/financial management system which
will identify title V revenue and expenditures separate from other funding, and which
certify the disposition of title V funds;
• Title V fees collected from sources are used by MDEQ to pay for the entire title V
program; and
• No such fees are used as CAA Section 105 grant matching.
During the third round review, EPA found that MDEQ had addressed the major issues identified
by EPA as needing improvement during the first two reviews. The issues addressed included
incorporating "credible evidence busting language" into its operating permits, improving "testing
frequencies" language on a case-by-case basis, and prominently listing all regulatory citations in
the permit.
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Program Review Procedure
EPA sent the third round review questionnaire and the Title V fee audit questionnaire to MDEQ
on March 24, 2014. MDEQ submitted an electronic copy of the completed questionnaires to
EPA on April 28, 2014. After the review of MDEQ's responses to both the Title V program
review and Title V fee audit questionnaires, EPA sent an e-mail on June 18, 2014 to MDEQ with
additional questions to be discussed during the conference call. The conference call took place
on June 24, 2014.
During the conference call, EPA's Montana Air Permit Coordinator (Robert Duraski) and
Colorado Air Permit Coordinator (DJ Law) spoke with MDEQ's staff. MDEQ's staff in
attendance were: Julie Merkel; Air Permitting Section Supervisor and Ed Warner; Lead
Permitting Engineer.
During the June 24, 2014 conference call, EPA staff began the review by briefly stating that the
purpose of the review was to conduct a follow-up to the previous reviews. EPA informed
MDEQ that EPA's main objectives of conducting an on-going review of States' program are
twofold. First, EPA seeks to continue to effectively perform its regulatory oversight obligation
under the Clean Air Act. Second, EPA hopes such periodic reviews will improve
communication and the relationship between the agency and MDEQ and thus continue to
improve State's Title V operating program. EPA and MDEQ then discussed topics as listed in
the follow-up questionnaire.
Follow-up to Second Round Review
Visual Survey Language - During the second round review, EPA recommended that MDEQ
revise the VSL in Title V permits. The language at the time required facilities to conduct a
visual survey of emitting units for any excessive emissions. Excessive emissions were defined
as any visible emissions which meet or exceed 15% opacity. EPA commented that the language
did not specify how the observer should quantify the opacity. EPA recommended MDEQ
revised the language by requiring EPA Method 9 be used to quantify the opacity if the observer
sees any emissions during a visual survey. Prior to the third round review, MDEQ staff raised
concerns about "any visible emissions" triggering a method 9 test, believing this was excessive
under some conditions. EPA agreed that the staffs concerns needed to be addressed and raised
the issue during the third round review. The results of these discussions are discussed below
under the Third Round Review Findings and Comments.
Prompt Deviation Reporting - EPA recommended that MDEQ revise the "prompt deviation
reporting" language. The language at the time stated ".. .to be considered prompt, deviations
shall be reported as part of routine reporting requirements under ARM 17.8.1212(3)(b) and, if
applicable, in accordance with the malfunction reporting requirements under ARM 17.8.110,
unless otherwise specified in an applicable requirement." EPA commented that reporting
deviations under ARM 17.8.1212(3)(b) as part of routine reporting at least every six months has
been deemed by the courts not to be prompt. See NYPIRG v. EPA, 427 F.3d 172, 184-185 (2nd
Cir. 2005) in which the court concludes that quarterly reporting may or may not be "prompt,"
depending on the circumstances, but semi-annual reporting is a separate CAA requirement, and
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therefore prompt reporting must be more frequent than semi-annual. MDEQ has revised this
language based on EPA's recommended language.
Title V fee Audit - MDEQ provided detailed information about Title V revenues and expenses
by making available MDEQ's financial specialist and samples of fee tracking forms and
computer generated reports. However, EPA recommended that MDEQ design an additional
report that explicitly identifies Title V operating permit revenues and expenses in a simpler
format than is currently used. Such a report should also track the number of "Full time
Employees" (FTEs) supported by Title V fees at any particular time. EPA noted that such a
report is needed to satisfy the requirement that permitting authorities demonstrate "how required
fee revenues are used solely to cover the costs of meeting the various functions of the permitting
program." 40 CFR 70.9(d). The MDEQ can now generate the report upon request.
Third Round Review's Findings and Comments
Visual Survey Language
Background: During the second round review, EPA noted that the VSL in MDEQ's permits
included the following:
"Once per calendar week during daylight hours, Facility shall visually survey the
Emitting Unit for any sources of excessive emission. For the purpose of this survey,
excessive emissions are considered to be any visible emissions, which meet or exceed
15% opacity..."
EPA commented that:
"Because 15% opacity in the above language cannot be quantified by conducting only a
visual survey. Quantification of opacity can only be achieved by conducting EPA
approved Method 9 opacity reading. EPA recommends revising the language as follows
"for the purpose of this survey, excessive emissions are considered to be any visible
emissions, which meet or exceed a Method 9 established 15% opacity" or similar
language."
Prior to the third round review, MDEQ requested assistance in further refining the VSL. To
clarify the language per EPA's request during the second round review, MDEQ allowed the
permittee the choice between performing a Method 9 test when any visible emissions were
observed or simply performing semiannual Method 9 test with no visible emission trigger. Since
most sites have no visible emissions, the first option of performing a Method 9 test when
emissions were observed was considered adequate.
MDEQ's concern related to sites that routinely had visual emissions. Such facilities would
naturally opt to collect semiannual Method 9 test since the option to "perform a Method 9 test
when any visual emission are observed" would require performing a Method 9 test every time
they performed a visual survey. MDEQ also pointed out that semiannual Method 9 test may not
satisfy the "continuous compliance" requirement of the CAA.
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To assist MDEQ, EPA proposed MDEQ consider adopting EPA's REGION 7POLICY ON
PERIODIC MONITORING FOR OPACITY. The Region 7 policy allows for visual observations
that are qualitative as opposed to quantitative. If the observer simply notes an increase in the
emissions at a site, this observed increase would be used to trigger a Method 9 test. MDEQ will
consider the idea and offered to forward any proposed change in the VSL to EPA. EPA
forwarded the Region 7 policy for consideration to MDEQ following the meeting.
Issues affecting the Title V program that MDEQ considered particularly important.
MDEQ stated in the questionnaire that:
"Permit appeals and the resources that it takes to engage in the litigation process is
becoming more and more of an issue for the Department. Specifically, appeals and
special interest in coal-fired EGUs has become an issue."
In the discussion with EPA staff, MDEQ stated that the major challenges faced were from
organizations questioning the power plant's Continuous Air Monitoring plans. The issue was the
validity of a linear correlation between the PM measurement and opacity adopted in these
permits. The problem was the "Goodness of Fit," or R2 value, was low implying that the linear
correlation did not predict the PM well given the opacity. The monitoring plans were changed to
the satisfaction of the petitioners by requiring Continuous Emission Monitoring Systems
(CEMS) for PM. Addressing these appeals consumed a substantial amount of MDEQ's staff
hours.
MDEQ then mentioned that another power plant permit just completed its public review and no
comments were received. MDEQ feels the lessons learned from the previous appeals helped
them prepare the most recent permit in such a way that appeal concerns with monitoring were
adequately addressed.
Percent of Title V permits expired before they can be renewed
The States response to the questionnaire was:
"100% expired before they could be renewed. (All renewals were posted final after the
previous versions' expiration date)"
EPA discussed the timeliness challenges MDEQ encountered when renewing permits. MDEQ
explained that the permittee is allowed to submit their renewal application eighteen to 6 months
prior to expiration. The permittee has commonly submitted applications close to the 6 month
limit which greatly reduces the time MDEQ has to review and finalize the renewal.
When MDEQ reviewed their permit database they noted that 100% of the renewals were
completed within eighteen month of the actual date the permit was submitted. Based on this
data, if the renewal applications were submitted closer to the "eighteen months prior to
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expiration" as opposed to being submitted closer to the "6 month prior to expiration"
requirement, a large fraction of the renewals would have been renewed prior to expiration.
While the permit renewals are submitted in accordance with the regulations and MDEQ has
approved 100% of the renewals within eighteen months of the submittal date, methods to ensure
the permitees submit renewals closer to the "eighteen months prior to expiration" date are being
investigated by the MDEQ.
MDEQ Organization and Staffing
At the time of the review, the MDEQ Air Permitting Section was located in the Air Resources
Management Bureau, under the Air Permitting, Compliance and Registration Program. The Air
Permitting Section works closely with the Air Compliance Section and Technical Support
Section. The Air Permitting Section is generally responsible for construction and operating
permitting programs. At the time of the review, MDEQ had a staff of 5 permit writers, 1 lead
permit engineer and 1 program manager. Two positions were vacant. The staff shifts as required
between Title V, NSR and minor permits. An organization chart is provided as Attachment 4.
Training
Some of the permit engineers are new and have required on the job training. The permit staff has
received adequate training. The MDEQ employees participate in training based on availability.
Additionally, the permitting staff participates in training offered in meetings, permit workshops
and on the job training. MDEQ has many permitters who have not attended Continuous Air
Monitoring (CAM) training. Maximum Achievable Control Technology (MACT) training would
also be beneficial.
Fee Audit
EPA did not conduct a formal Title V operating permit fee audit during the first round review. A
fee audit was conducted during the second round review. A fee questionnaire was submitted
during the third round, but no audit was performed.
During the third round review, EPA and MDEQ discussed MDEQ's proposed fee increases. The
fees in place during the review were:
• $500 application fee;
• Annual operating of $800 base administrative fee; plus
• $38.24/ton of PMio, SO2, Pb, NOx, and VOCs emitted per year.
The proposed fee increases were as follows:
• ARM 17.8.504(2)(a): New Title V operating permit from $500 to $6500
• ARM 17.8.504(2)(b): Title V operating permit renewal from $500 to $4500
• ARM 17.8.504(2)(c): Title V operating permit modification from $500 to $3500
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During the conference call, MDEQ mentioned that the fees will not be increased. An economic
analysis of their cash flow indicated that the program could sustain itself for five years without
these increases.
Conclusion
In conclusion, MDEQ implements an effective Title V program that continues to evolve as
challenges arise. MDEQ continues to communicate with EPA staff to address issues in proposed
permits. The Title V fee review demonstrates MDEQ's ability to continue to operate a program
that meets the fee requirements of Part 70. MDEQ has provided all of the necessary information
to EPA during these reviews and has addressed issues raised by EPA. MDEQ's Title V program
continues to meet the requirements of the Part 70 regulations. No significant deficiencies were
noted during this review.
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Attachment 1
Title V Third Round State Program Review Questionnaire and Responses by MDEQ
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Title V Third Round State Program Review Questionnaire
I. General Questions and Responses to First and Second round Reviews
A. What has been done in response to EPA recommendations for improvements from the
second round program review?
The following programmatic areas were identified as needing improvement in the
previous program review:
1. Visual Survey Language - The Department has updated visual survey language
which is being included in all of the renewals, as appropriate. An example of the
updated language is as follows:
Once per calendar week, during daylight hours, {facility name) shall visually
survey the (emitting unit) for any visible emissions. If visible emissions are
observed during the visual survey, {facility name) must conduct a Method 9
source test. The Method 9 source test must begin within one hour of any
observation of visible emissions. If visible emissions meet or exceed 15%
opacity based on the Method 9 source test, {facility name) shall immediately take
corrective action to contain or minimize the source of emissions. If corrective
actions are taken, then (facility name) shall immediately conduct a subsequent
visual survey (and subsequent Method 9 source test if visible emissions remain)
to monitor compliance. The person conducting the visual survey shall record the
results of the survey (including the results of any Method 9 source test
performed) in a log, including any corrective action taken. Conducting a visual
survey does not relieve {facility name) of the liability for a violation determined
using Method 9 (ARM 17.8.101(27)).
Method 9 source tests must be performed in accordance with the Montana Source
Test Protocol and Procedures Manual, except that prior notification of the test is
not required. Each observation period must be a minimum of 6 minutes unless
any one reading is 20% or greater, then the observation period must be a
minimum of 20 minutes or until a violation of the standard has been documented,
whichever is a shorter period of time (ARM 17.8.1213).
2. Prompt Deviation Reporting - The Department has updated the prompt deviation
language and has incorporated the revised language in at the time of permit renewals.
The language is revised as follows:
The permittee shall promptly report deviations from permit requirements,
including those attributable to upset conditions as defined in the permit, the
probable cause of such deviations, and any corrective actions or preventive
measures taken. To be considered prompt, deviations shall be reported to the
Department within the following timeframes (unless otherwise specified in an
applicable requirement):
1. For deviations which may result in emissions potentially in violation of
permit limitations:
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a. An initial phone notification (or faxed or electronic notification)
describing the incident within 24 hours (or the next business day)
of discovery; and
b. A follow-up written, faxed, or electronic report within 30 days of
discovery of the deviation that describes the probable cause of
the reported deviation and any corrective actions or preventive
measures taken.
2. For deviations attributable to malfunctions, deviations shall be reported
to the Department in accordance with the malfunction reporting
requirements under ARM 17.8.110; and
3. For all other deviations, deviations shall be reported to the Department
via a written, faxed, or electronic report within 90 days of discovery (as
determined through routine internal review by the permittee).
Prompt deviation reports do not need to be resubmitted with regular semiannual
(or other routine) reports, but may be referenced by the date of submittal.
3. Title V Fee Audit
The Department will provide reports to EPA as requested to the extent that the
Department has the appropriate tools to create such reports. If the Department is
not providing reports satisfactory with EPA requirements, the Department will
work with EPA to produce the requested information.
B. What key EPA comments on individual Title Vpermits remain unresolved (EPA to
determine this)? What is the State's position on these unresolved comments?
The Department is unaware of any unresolved EPA comments. If there are unresolved
EPA comments brought to the Department's attention, the Department will work
diligently with EPA to find a satisfactory solution.
C. Have any procedures in Title V changed (e.g., public participation, petitions,
communication with EPA) since the second round review? (If so, which ones)
No. The Department has worked more closely with EPA to communicate Title V permit
actions/renewals that generate a high level of interest from outside groups, so that EPA is
aware of public interest levels. The Department appreciates EPA's input in this regard.
D. What does the state think it's doing especially well in the Title Vprogram?
The Department believes it is doing well in writing clear and concise conditions, with
compliance demonstrations, reporting and recordkeeping requirements that are
understandable by the facility and the public. This helps the facilities implement the
compliance demonstrations, and helps the public understand how the Department is
determining compliance with the conditions. The Department also believes it is doing
well communicating with facility representatives prior to application submittal and
gathering accurate and complete information up front which reduces the incompleteness
issues of applications.
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E. Are there any issues affecting the Title Vprogram in your state right now that you
consider particularly important?
Permit appeals and the resources that it takes to engage in the litigation process is
becoming more and more of an issue for the Department. Specifically, appeals and
special interest in coal-fired EGUs has become an issue.
1. Which one would you rate as the most important?
Coal-fired EGU Title V permit appeals
2. Are there any EPA policies or regulatory issues that are causing concern ?
There are no EPA policies or regulatory issues that are causing concern at this time.
3. How can EPA help?
The continued communication and engagement of EPA with the Department is much
appreciated.
II. Permit Issuance
A. Since the second round review, what percent of Title V initial permits have you issued
within the regulatory timeframe specified in 40 CFR 70.7(a)(2) ?
Approximately 75% of the overall population
B. Since the second round review, what percent of Title V significant permit modifications
have you issued within the regulatory timeframe specified in 40 CFR 70.7(a)(2) and
(e)(4)(H)?
Approximately 96% of the Title V significant modifications have been issued within 18
months (as specified in 40 CFR 70.7(a)(2)). Approximately 96% of the Title V
significant modifications have been issued within 9 months (as specified in 40 CFR
70.7(e)(4)9ii)). {Note: Only 3 late significant mods were issued in that time frame, and
one of the applications was withdrawn so 2 late actions were counted. Those 2 actions
took longer than 18 months. All the remaining were completed within 9 months)
C. What percent of Title V permits expire before they can be renewed?
100% expired before they could be renewed. (All renewals were posted final after the
previous versions' expiration date)
1. For those permits that could not be renewed before they expired, what are the
reasons they could not be renewed prior to their expiration?
According to our regulatory timeframes, a source must submit a renewal application no
later than six months prior to expiration. Title V regulatory timeframes in Montana alone
require 3.5 months, leaving only 2.5 months for application review, file review, CAM
review, and approval, and permit modifications, as necessary. The entire 18 month
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issuance timeframe is utilized to issue the permits appropriately. Review, and approval,
and permit modifications, as necessary. The entire 18 month issuance timeframe is
utilized to issue the permits appropriately. Review, and approval, and permit
modifications, as necessary. The entire 18 month issuance timeframe is utilized to issue
the permits appropriately.
D. Have unresolved violations created any delay in issuing Title Vrenewals?
Not significantly
E. Have permittees requested a hold in renewal for any reason ?
None have thus far.
F. CAM
1. Are CAM plan requirements slowing the renewal process?
Not with a degree of significance.
a. If so, what is it about CAM that's problematic?
2. Where CAM plans have been inadequate, what have been the main types of
inadequacies that have caused difficulties or delays in permit issuance?
The submittal of inadequate or insufficient indicators and lack of data correlation to
demonstrate how they can be good indicators of compliance.
3. What difficulties have you had in getting better plans to be submitted?
Facilities have been very cooperative in providing any information requested by the
Department. In some cases, if the information is inadequate, the draft permit is
issued with what the Department believes are the appropriate parameters. The facility
must then provide justification as to why that is not appropriate for their particular
situation.
4. Have you had to supplement the CAM technical guidance document (TGC) with
state-issued guidance?
No
5. Is CAM training adequate?
CAM training is adequate. However, the Department has many permiters who have
not attended the training.
6. Are CAM applicability determinations resource-intensive or difficult?
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Generally they are not, however, determinations on older units that have less
emission information available (particularly for uncontrolled emissions) may require
more resources and research to make a Department determination. In addition, less
experienced staff who have not had CAM training, may find the determinations more
difficult. Specifically, staff need more training and experience to know what level of
detail is required by the Department to check statistical analysis and/or data
correlations that are used to support information within the CAM plan.
G. What improvements does the State believe it has made to the management of the Title
Vpermit program, since the second round review, that could be described as best
practices and could be of interest to other States?
The Department has worked on developing good working relationships with facility
representatives as well as consulting firms to assist in the development of complete and
accurate applications sooner in the process. Often times, facility representatives and/or
consulting firms come in and talk to us prior to submittal of an application to talk about
expectations and requirements of the permit application.
H. What improvements does the state plan to make, if any, in the management of the Title
V permit program within the next five years?
The Department plans on the continued development of staff by engaging in training both
internally and externally. CAM is an example of a training the Department desires to
have for all of the permitting and compliance staff. The Department is also working on
promoting collaboration between the permit writers and compliance inspectors prior to
permit issuance to ensure that the compliance demonstrations, recordkeeping, and
reporting requirements are understandable and accurate. The staff are also working
collaboratively to ensure proper CAM plans are in place.
Public Participation
A. What forms of news media do you use to maximize public participation, for
implementation of 40 CFR 70.7(h) ?
The Department makes use of Newspapers of general circulation in the area of the facility
in question as well as the Department's website.
B. Do you have a mailing list for Title V public participation for implementation of 40
CFR 70.7(h)(1)? If so, please provide it.
The Department maintains a general air quality interested parties list (used for rule
notices, etc.), as well as lists that are application -specific (maintained by the permiter for
that action). In the public notice, information is provided on how to contact the permiter
for the particular action. The Department does not have a list specifically for Title V
public participation at this time, but would create one if it was requested and deemed to
provide significant benefit.
C. Is there a policy which outlines the response to comments procedure or process, such
as which comments are responded to, the time-frame for responding, how the
permitting authority will respond, to whom, etc. ?
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An unwritten policy exists
1. If written, can you provide a copy? If not written, could you describe the policy?
All comments received are provided with a response in the technical review
document of the permit when it is issued as proposed.
IV. Petitions
A. Since the second round review, to what extent have Title VPetitions:
1. Changed how permits are written;
Two petitions have been filed in Montana since the second round review. However,
the petitions were very similar to two Title V appeals, and were withdrawn at the
time of the appeal settlements. The petitions did not result in a change in how the
Department permits are written
2. Resulted in re-openings of other permits;
No permits were re-opened as a result of the petitions. However, the permits will be
re-opened as a result of the appeal settlements.
3. Resulted in an amended permitting process, to address any issues settled through
petitions granted in full or in part?
The permit process has not been amended to address petition issues.
V. EPA Relationship
A. Is there any EPA policy, on Title V, that is causing problems or confusion ?
Not significantly.
B. Has the state developed any tools, strategies, or best practices that have assisted in the
inclusion of MACTsubparts in Title Vpermits?
The Department is taking a case-by-case approach to addressing the inclusion of MACT
subparts in Title V permits.
C. Is the issue of startup-shutdown-malfunction (SSM) emissions causing problems or
confusion in Title Vpermit writing?
SSM emissions for permitted pollutants are being addressed more in Montana Air Quality
Permits. However, addressing them in Title V has added to permit processing time and
confusion, in some cases.
1. Has the state developed any tools, strategies, or best practices that have alleviated
problems or confusion if either exist?
The Department has worked on gaining a clear understanding of how SSM emissions
are addressed in Title V as well as MAQPs.
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D. Do you have any unaddressed training needs? What can EPA do to help?
As previously mentioned, the Department believes the permitting and compliance staff
would benefit from CAM training. As mentioned in the second round, MACT training is
also a needed resource particularly for those MACTs that affect more than one source
category. EPA could assist by sponsoring or providing such training.
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Attachment 2
State/local Title V Program Fiscal Tracking Evaluation Questionnaire and MDEQ
Responses
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State/local Title V Program
Fiscal Tracking Evaluation Document
Basic Questions for All
Permitting Authorities
More Detailed Questions - Factors to Support
a Permitting Authority's Answer to the Basic
Questions (Note: these are not all-inclusive,
and some ideas will not apply in all cases)
Possible Resources
Available
1 Tillc Y Kv Revenue
Can the Permitting
Authority show that
sources are being billed in
accordance with its fee
requirements(s), and that
sources are paying fees as
required?
YES
Where are the fee collection authority and the fee
rate(s) specified? Is the Permitting Authority
including referenced to these fee requirements in
its Title V permits? Administrative Rules of
Montana Title 17 Chapter 8 Subchapter
1210(2)(f) and ARM 17.8.Subchapter 5 in
rules and the operating permit general
conditions of every permit.
List the fee rate(s) formula applicable for the
time period being reviewed. (Include emission
based fees, application fees, hourly processing
fees, etc.). Fees effective DATE: $500
application fee; annual operating of $800 base
administrative fee plus $38.24/ton of PMio,
SO2, Pb, NOx, and VOCs emitted per year.
Does the Permitting Authority anticipate any
significant changes to its fee structure? Yes -
The Department is prepared to initiate
rulemaking for proposed amendments to
permit application fees. The proposed Title V
increases would be:
ARM 17.8.504(2)(a): New Title V operating
permit from $500 to $6500
ARM 17.8.504(2)(b): Title V operating permit
renewal from $500 to $4500
ARM 17.8.504(2)(c): Title V operating permit
modification from $500 to $3500
What is the current status in States/locals with
requirements to balance income and expenditures
of the Title V program annually (i.e., must rebate
any overage of fees, etc.)?There is no
regulatory requirement to rebate fees collected
in excess of statutory appropriation.
Req's/Auth:
State/local Title V
program legislation &
regulation
Permit ref s: Permits
state has
written/submitted to
EPA
Fee Rate(s):
State/local Title V
program submittal,
and then verify
w/Permitting
Authority that info is
up to date.
Billing/Payments:
Permitting Authority
records. Emission
data may be in AIRS.
If some fees are
hourly, there should
be some direct labor
tracking mechanism
(see accounting
system, below).
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1. I illc Y Kv Revenue - ( oniinued
Examine documentation of how the annual fees
for sources are determined. Audit several
sources' bills for accuracy.
• Are appropriate (actual or potential)
emission records used for $/ton based
fees? How are the Permitting Authority
and its sources determining actual
emissions for fee purposes? Actual
emissions are used to assess fees and
emissions are tracked by the required
submittal of annual emissions
inventories from each permitted source.
• Are records kept (and used) for any
hourly based fees? NA
• Review similar documentation for other
types of fee mechanisms. NA
Billing
• How is the Permitting Authority notifying
sources of the fees owed and due dates for
payment? Bills are mailed to sources
annually.
• Discuss how incoming payments are
recorded to the appropriate accounts
(receivings tracking). The invoices are
mailed out with the annual bill and are
to be returned with fee payment. The
invoices contain the appropriate
revenue code.
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I.TilIc V Kv Revenue — ( onlmucd
Payments...
• Are the sources paying the total fees
charged each year? Yes
• Are they paying on time? Yes, Title V
sources generally pay within 60 days of
being billed.
• If there's a collection problem, how is the
Permitting Authority addressing it?
Historically there has not been a
collection problem with Title V sources.
• Are late fees being assessed? If so, are
the late fees being credited to the Title V
accounts? Any late fee assessment for a
Title V source would be credited to the
Title V account.
2 I nk- V l'.\|vn(.liluiys
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Is the Permitting
Authority identifying
division of expenses
between Title V and non-
Title V programs?
YES
What matrix is the Permitting Authority using to
differentiate Title V activities from non-Title V
activities? The Department differentiates Title
V activities from non-Title V activities
through the use of separate expense codes.
Direct labor:
• If used by State/local program, review
time sheets and instructions given to
employees as to how to code information
into the time sheet. If time sheets are not
used, investigate method that State/local
program uses to differentiate Title V and
non-Title V direct labor. Task profiles
are assigned to an individual to reflect
the duties of their position. Task
profiles differentiate between Title V
and non-Title V direct labor costs.
Ensure that accounting system is set up
to utilize the various coding information.
Copy of accounting report provided.
Analyze time sheets/instructions (and/or
other direct labor differentiation
methods) for conformance with the
matrix of acceptable Title V activities.
See task profiles.
If used by State/local
program, sample time
sheets and
instructions given to
employees;
equivalent records for
alternate direct labor
differentiation
methods.
Accounting system
records showing that
administrative/clerical
personnel costs are
accounted for in the
Title V program
Accounting system
records showing that
non-labor costs
(travel, equipment,
office space costs,
etc.) are accounted for
in some fashion and a
portion is billed to
Title V.
EPA Guidance
includes: "Matrix of
Title V-Related and
Air Grant-Eligible
Activities,
Information
Document," Office
of Air & Radiation,
May 31, 1994
I ilk- V l\|vndiluivs — ( onlinucd
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Direct non-labor:
• Does the Permitting Authority utilize an
allocation system that separates travel
and equipment costs for Title V and non-
Title V functions? Yes
• If so, are the allocations in accordance
with the Permitting Authority's Title
V/non-Title V activity separation? Yes
• If not, are these included as part of
indirect costs? (Direct non-labor needs
to be addressed somewhere.)
Indirect labor & non-labor:
• How are indirect labor & non-labor costs
apportioned between Title V vs. non-
Title V accounts? (Indirect costs include
parts of secretarial & managerial
overhead, paper & supplies, space,
utilities, generalized computers, etc., that
is not addressed as direct labor/non-
labor) Indirect labor costs are
apportioned on a percentage of salary
and benefits. The current labor
indirect rate is 22.96%. Indirect non-
labor costs are apportioned on a
percentage of the operating expenses.
The current non-labor indirect rate is
4.00%. The Department differentiates
Title V expenses from non-Title V
expenses through the use of separate
expense codes.
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3. Accounting System (i.e.. the system lh:il pnnides lor analysis ol'lhc Title V program
rcMMiue :incl expenditure information gathered iihoxe).
Has the Permitting
Authority integrated
features into its
accounting/financial
management system
which will:
• Identify Title V
fee revenues
separate from
other funding?
Yes
• Identify Title V
expenditures
separate from
other expenses?
Yes
• Produce
management
reports,
periodically and
as requested,
which the
Permitting
Authority will be
able to use to
certify as to the
disposition of
Title V funds?
Yes - produce
reports from the
accounting
system as well as
management
spreadsheet
reports.
Describe the accounting structure that the
Permitting Authority uses to differentiate
Title V $ from other funds, [i.e., govt, fund,
enterprise fund, etc. — for more detail on
options, see the U of MD report.] The Title
V funds are given their own revenue codes
separating application fees and operating
fees for Title V and non-Title V sources
and expenditures are tracked on a Title V
non-Title V basis.
Does the accounting system have separate
categorization for Title V and non-Title V
funding and expenses? Yes.
If yes, are these features being used to
track Title V monies separate from
non-Title V monies? Yes
If no, does the Permitting Authority
keep any separate records that identify
Title V monies separate from non-
Title V monies? Could such
information potentially be integrated
into an accounting/financial
management system?
Review sample
reports/specific
reports for the time
period being
reviewed.
For background:
Overview of CLEAN
AIR Title V Financial
Management and
Reporting. A
Handbook for
Financial Officers and
Program Managers.
Environmental
Finance Center,
Maryland Sea Grant
College, University of
Maryland, 0112
Skinner Hall, College
Park, MD 20742,
January 1997,
[Publication Number
UM-SG-CEPP-97-
02]
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4 Scp:ii :iiion ol l ille V Ironi $105 »r:int ;iihI »r;int match I'niidin**
Can the Permitting
Authority confirm that
the Title V fees
collected from sources
are used to pay for the
entire Title V program,
and that no Title V fees
are used as match to the
CAA section 105 Air
Program grant? Yes
Determine the federal §105 grant award
received, and the amount of state/local funds
used during the time period being reviewed.
The worksheet provided (PPG Match)
demonstrates that the Department
collected enough non-Title V revenue to
cover the required match without using
Title V monies.
Determine the Title V fees collected (and
Title V funds available, if carryover of Title
V fees is allowed by state/local regulations)
during the time period being reviewed.
Determine Title V expenditures during the
time period being reviewed.
Ensure that adequate non-Title V state/local
funds were available to provide required
match to the federal grant.
Ensure that sufficient Title V funds were
available to pay for the Title V program (i.e.
-Title V program is self-supporting)
Grant files — FSR's
for applicable
years. (See
appropriate EPA
Region grant &
project manager
staff)
Permitting
Authority
accounting system
reports showing
revenue and
expenditure
summaries for Title
V, grant, and other
activities
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Attachment 3
Follow-up Questions for the Conference Call
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MONTANA TITLE V PROGRAM REVIEW REQUEST FOR MORE
INFORMATION
JUNE 18, 2014
In preparation for Montana's Title V Third Round Review conference call, the EPA Staff has
outlined some questions and areas of further discussion for the call. Part 1 below contains
questions on the State's submittal to the Program Review Questionnaire, while Part 2 contains
questions on the Fiscal Tracking Evaluation.
PART 1: ADDITIONAL QUESTIONS ON MONTANA'S SUBMITTAL TO THE TITLE
V THIRD ROUND STATE PROGRAM REVIEW QUESTIONNAIRE
I.A.I. Visual Survey Language
The EPA Staffs present understanding of the requirements for opacity monitoring is:
"[The] Source shall conduct either a semiannual Method 9 source test or a weekly visual
survey of visible emissions for emitting units listed in this section. Under the visual
survey option, once per calendar week, during daylight hours, Source shall visually
survey the emitting units listed in this section for any visible emissions. If visible
emissions are observed during the visual survey, Source must conduct a Method 9 source
test... "
We would like to better understand this requirement and discuss it further on the call next week.
Based on our interpretation, we are wondering if this leads a permittee with visible emissions to
desire semiannual Method 9 testing as opposed to weekly visual testing since any visible
emissions result Method 9 tests. We would like to discuss whether or not semiannual monitoring
alone is considered sufficient to demonstrate compliance.
I.E. Are there any issues affecting the Title Vprogram in your state right now that you
consider particularly important?
MT states that:
"Permit appeals and the resources that it takes to engage in the litigation process is
becoming more and more of an issue for the Department. Specifically, appeals and
special interest in coal-fired EG Us has become an issue."
The Staff's questions are:
1. How many appeals have been submitted since the noted increase and have these
appeals been successful in that the permit was changed?
2. We would be interested in hearing more about a few of the more complex appeals
submitted and how MT developed a final response?
II.C. What percent of Title Vpermits expire before they can be renewed?
The States response was:
"100% expired before they could be renewed. (All renewals were posted final after the
previous versions' expiration date)"
Staffs questions:
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1. In order to better understand the issue, we would be interested in knowing how late
the permits were as a function of time? For example 50% of the permits were
renewed within one month after expiration.
2. Has the state looked at the distribution of permits submitted between the 18 month
and six month requirements? For example 30% of renewal applications were
submitted nine to six months prior to expiration.
II.C.1 For those permits that could not be renewed before they expired, what are the reasons
they could not be renewed prior to their expiration?
MT's response was:
"According to our regulatory timeframes, a source must submit a renewal application no
later than six months prior to expiration. Title V regulatory timeframes in Montana
alone require 3.5 months, leaving only 2.5 months for application review, file review,
CAM review, and approval, and permit modifications, as necessary. The entire 18
month issuance timeframe is utilized to issue the permits appropriately
The Staff's questions are:
1. We would like to better understand the response to this question and the issues
that the state is facing related to delayed permit issuance. For example, is the 2.5
month delay time only due to public and EPA comment periods or are there other
delays?
2. Has the state used the electronic Title V tracking database to better understand the
delays reported in permit renewals?
II.F.2 Where CAM plans have been inadequate, what have been the main types of
inadequacies that have caused difficulties or delays in permit issuance?
MT's response was:
"The submittal of inadequate or insufficient indicators and lack of data correlation to
demonstrate how they can be good indicators of compliance."
Staff question:
1. We would like to further discuss any analysis the state has conducted related to this
issue to better understand it.
PART 2: ADDITIONAL QUESTIONS ON MONTANA'S SUBMITTAL FOR Till
THIRD ROUND STATE/LOCAL TITLE V PROGRAM FISCAL TRACKING
EVALUATION DOCUMENT
ITitle V Fee Revenue
Staff request:
1. MT is proposing to change its fee structure. Please describe the new fee structure
and how it was developed. What is the anticipated timing for changing the fee
structure?
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Attachment
Montana Air Permitting Section Organization Chart
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