ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 51, 70, and 71
[FRL- ]
Operating Permits Program and
Federal Operating Permits Program
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
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SUMMARY: The EPA is today proposing new streamlined
procedures for revising stationary source operating permits
issued by State and local permitting authorities or EPA
under title V of the Clean Air Act (Act). This proposal is
a supplement to actions published in the Federal Register on
August 29, 1994 and on April 27, 1995 as they relate to
permit revisions. In addition, today's notice proposes
changes to the certification that responsible officials of
permitted sources are required to submit and the emergency
defense available for violations of permit terms. It also
clarifies the application of title I and title V permitting
requirements to non-major research and development (R&D)
facilities that are located with sources that are major
under the Act. Finally, it proposes to revise the
procedural requirements applicable to minor new source
review (NSR) permitting under title I of the Act to clarify
the flexibility States possess in providing adequate process
for minor NSR actions.
Several concerns over complexity and burden of the
previously proposed permit revision system were raised in
response to these notices. As a result, the Agency today is
proposing to establish a system for revising operating
permits that is simpler, more flexible, and easier to
implement than that proposed in the prior notices.
Implementation of today's proposal would benefit the
environment primarily through enhanced implementation of,
and compliance with, air quality control requirements. The
extent of benefit would be nationwide and could potentially
include all requirements of the Act applicable to part 70
sources.
DATES: Comments on the proposed regulatory changes must be
received by [60 days from the date of publication], 1995.
Comments on the revised Information Collection Request (ICR)
for the revised part 70 must be received by [60 days from
the date of publication], 1995.
ADDRESSES: Comments on the proposed revisions to 40 CFR
part 70 must be mailed (in duplicate if possible) to: EPA
Air Docket (LE-131), Attn: Docket No. A-93-50, room M-1500,
Waterside Mall, 401 M Street SW, Washington, DC 20460.
Comments regarding the 40 CFR part 71 Federal operating
permits program must be mailed to the same address, Attn:
Docket No. A-93-51. Please identify comments as pertaining
to today's proposal notice by date and FR cite. Comments on
the draft ICR for the revised part 70 are to be submitted as
per instructions in Section VI. E., Paperwork Reduction Act,
of this preamble.
Docket: Supporting information used in developing the
proposed regulatory revisions to part 70 and part 71 are
contained in Docket Nos. A-93-50 and A-93-51 respectively,
at the preceding address. This docket is available for
public inspection and copying between 8:30 a.m. and
3:30 p.m. Monday through Friday. A reasonable fee may be
charged for copying.
FOR FURTHER INFORMATION CONTACT: Regarding proposed
revisions to part 70, Michael Trutna (919/541-5345), Ray
Vogel (919/541-3153), or Roger Powell (919/541-5331), mail
drop 12, United States Environmental Protection Agency,
Office of Air Quality Planning and Standards, Information
Transfer and Program Integration Division, Research Triangle
Park, North Carolina 27711. Regarding proposed revisions to
part 71, Candace Carraway (919/541-3189) or Kirt Cox
(919/541-5399) at the same address.
SUPPLEMENTARY INFORMATION:
Today's proposal reflects the principles articulated in
the President's and the Vice President's March 16, 1995
report, "Reinventing Environmental Regulation." That report
establishes as goals for environmental regulation building
partnerships between EPA and State and local agencies,
minimizing costs, providing flexibility in implementing
programs, tailoring solutions to the problem, and shifting
responsibilities to State and local agencies. The Agency
believes that the proposal in today's notice meets the goals
of the report.
Public Comments
If possible, comments should be sent in both paper and
computerized form. Two paper copies of each set of comments
are requested. Comments generated on computer should also
be sent on an IBM-compatible, 3 1/2 inch diskette and
clearly labeled. Please identify comments as pertaining to
today's proposal notice by date and FR cite.
Table of Contents
The contents of today's preamble are in the following
format:
I. Background
A. Operating Permits Regulations
B. Proposed Permit Revision System
C. Other Proposed Revisions in Today's Notice
D. Environmental Benefits
E. August 1994 Proposed Revisions
II. Alternative Proposal for Part 70 Permit Revision System
A. Overview
B. When is a Permit Revision Required
C. Automatic Incorporation for Changes Subject to State
Review Programs
D. Incorporation of Changes Not Subject to State Review
Programs
E. Opportunity for EPA to Object and Permit Shield
F. Flexible Permits
G. Title I Modifications
H. EPA Issuance of PSD Permits
I. Rulemaking Under Section 302(j)
J. Revisions to 51.161
K. Incorporation of MACT Standards
L. Clarification for Section 112(r)
M. Solicitation of Input
III. Part 70 Program Revisions
IV. Proposal for the Federal Operating Permits Program
A. Overview
B. Changes Subject to State Review Programs
C. Changes Not Subject to State Review Programs
D. Combination Changes
E. Opportunity for EPA to Object and Permit Shield
F. Other Part 71 Changes
V. Other Changes and Clarifications
A. Rationale for Proposed Exemption for Non-major R&D
Activities
B. Emergency Defense
C. Certification Language
D. Provisions Related to Tribal Programs
VI. Administrative Requirements
A. Public Hearing
B. Docket
C. Office of Management and Budget Review
D. Regulatory Flexibility Act Compliance
E. Paperwork Reduction Act
F. Unfunded Mandates
I. Background
A. Operating Permits Regulations
Title V requires that EPA develop regulations which set
minimum standards for State operating permits programs.
Those regulations, codified in part 70 of chapter I of
title 40 of the Code of Federal Regulations, were originally
promulgated on July 21, 1992 (57 FR 32250). On August 29,
1994, EPA proposed a number of revisions to the part 70
regulations as a result of negotiations with litigants who
petitioned for review of part 70 after its promulgation.
The August 1994 proposal included new provisions governing
permit revision processes. Today's proposal supplements
that part of the August 1994 proposal and defines a simpler
approach to revising permits designed to build upon existing
State permitting programs.
Title V also requires that States submit their
operating permit programs for EPA approval and that EPA
promulgate and administer a Federal operating permits
program for States that have not obtained EPA approval by
November 15, 1995. The EPA's proposed regulations, to be
codified at part 71, for the Federal operating permits
program were published on April 27, 1995 (60 FR 20804). In
large part the proposed regulations were modeled on the
original part 70. However, the permit revision procedures
for proposed part 71 were based on the August 1994 proposal
for part 70 permit revisions. Today EPA is proposing an
alternative permit revision process for part 71 that is
based on today's proposal for part 70 permit revision
procedures.
B. Proposed Permit Revision System
The August 1994 notice proposed to revise 70.7 of
part 70 to set out a four-track system for revising
operating permits. Comments received at the October 19,
1994 public hearing and comments submitted to the docket
indicate that the proposed four-track system was widely
perceived as too complicated, prescriptive, and disruptive
to existing State programs. In response to those concerns,
EPA sought further input from representatives of State and
local permitting agencies, industry, and environmental
groups to learn more directly of their implementation
concerns. The EPA received thoughtful ideas from these
groups about how the process for permit revisions might be
accomplished in a more streamlined fashion. The docket for
today's action contains some specific alternative permit
revision approaches recommended by these commenters.
Representatives of the various groups were in general
agreement on a number of issues. First, any permit revision
system would need to be far simpler to implement than that
laid out in the August 1994 proposal. Second, it should be
as streamlined and expeditious as possible so as not to
impede unduly a source's ability to respond to changes in
market conditions. Third, it should provide public process
commensurate with the environmental significance of the
change. Fourth, for changes subject to a State
preconstruction review program established pursuant to the
Act (e.g., NSR), public, affected State, and EPA review of
the more environmentally significant changes should occur
during the underlying process, instead of a subsequent
part 70 permit revision process. Finally, the process
should maximize State and local agency flexibility.
As discussed in Section II of this preamble, today's
alternative proposal satisfies all of these criteria by
building on underlying State review programs. After
considering comments received on today's proposal, EPA
intends to promulgate final rules regarding permit revisions
along with the other issues addressed in the August 1994 and
April 1995 proposals.
C. Other Proposed Revisions in Today's Notice
Today's notice also proposes additional rule revisions
to address other issues raised by litigants in their
petitions for review of part 70. These issues involve the
current rule's provisions regarding responsible official
certifications, the emergency defense for violations of some
types of permit terms, section 302(j) rulemaking regarding
inclusion of fugitive emissions in the definition of major
source, and the definition of title I modification. It also
proposes to clarify the public review requirements of
title I and title V applicable to minor NSR permits and
their subsequent incorporation into part 70 permits. The
EPA currently expects to complete rulemaking on these issues
at the same time it takes final action on the other issues
addressed in the August 1994 proposal. Proposed actions
regarding responsible official certifications, the emergency
defense, and the definitions of major source and title I
modification are also included in today's notice with
respect to the part 71 Federal operating permits program
provisions.
Finally, in today's notice EPA is clarifying that non-
major R&D activities located with a source that is major
under sections 112 or 302(j) of the Act or parts C or D of
title I of the Act need not be considered part of that major
source. Depending on the extent to which a non-major R&D
facility contributes to the activity of the major source,
the R&D facility need not be subject to permitting under
title I or title V.
A number of revisions to the definitions in 70.2 are
included in today's notice to be consistent with the
proposed revisions. Other definitions are proposed to be
added where needed for clarity.
D. Environmental Benefits
The operating permits program provides a uniform
vehicle for State and local agencies to administer other
titles of the Act; not only the requirements for attainment
and maintenance of the national ambient air quality
standards (NAAQS) but of other provisions such as those to
protect the public from harmful effects of HAPs. It is
through an efficient permit program that many of the
environmental benefits of these programs are realized.
Part 70 helps achieve these benefits by giving company
officials the opportunity to be fully knowledgeable about
their compliance obligations and creates strong incentives
for assuring that compliance is maintained. This will in
turn result in improved air quality for the public, and
States will not have to adopt new regulations to meet air
quality standards to make up for noncompliance with existing
rules. In the process of developing permit applications for
part 70 programs, companies have discovered new uncontrolled
emission points or air pollution requirements that applied
to them but of which they were not previously aware. As a
result, these facilities are taking steps to comply with
those requirements. The vast majority of businesses in this
country want to comply with environmental regulations. The
part 70 program clarifies their obligations while avoiding
possibly costly litigation.
Implementation of today's proposal will facilitate
accomplishing the described environmental benefits. The
proposed revisions would focus public and EPA review on, and
ensure that resources will be targeted to reviewing, changes
with the most environmentally significant impacts. In
addition, the proposed streamlined permit revision system
assures that permits are speedily revised to include all Act
obligations for a source while avoiding unnecessary
procedural delays and opportunity costs. This will assure
certainty of compliance obligations for all parties.
Implementation of today's proposal also will help
achieve environmental benefits through its requirements for
flexible permits. In particular, the flexible permit
provisions of today's proposal would allow more options for
sources in designing their title V permits to meet
environmental obligations. This increased flexibility would
allow sources to rely on emissions trading to meet pollution
control requirements and to use pollution prevention
approaches which can achieve additional emissions
reductions.
E. August 1994 Proposed Revisions
The August 1994 proposal is not being withdrawn, but is
instead being supplemented by today's proposal. Today's
proposal primarily addresses provisions in 70.7 for
revising permits, which was also the primary focus of the
August 1994 notice. There were, however, many proposed
revisions to part 70 in the August 1994 notice that
addressed other portions of part 70. These proposed
changes, which are described in the next several paragraphs,
are still being considered for promulgation after review of
comments. The period of comment has closed for the August
1994 notice; however, EPA will consider additional comments
on any of the August 1994 proposed provisions to the extent
they would be affected by the proposed revisions in today's
notice.
In 70.2, revisions were proposed in the August 1994
notice for the definitions of "Applicable requirement,"
"Major source," "Potential to emit," and "Responsible
official." The notice proposed new definitions for "Major
NSR" and "Minor NSR" and proposed to delete the definition
of "Section 502(b)(10) changes." Proposed revisions to
70.3 would exempt sources from part 70 applicability if
they were subject solely because of being major for a
section 112(r)-only pollutant and would add to the list of
sources subject to part 70 those sources subject to parts C
and D of the Act.
Proposed revisions to 70.4 included consolidating
provisions for program modification in paragraph (i)(1),
changing the maximum period for judicial review from 90 days
to 125 days, changing the time period for acting on early
reductions permits from 9 to 12 months, revising the interim
approval criteria for part 70 programs, and adding a
provision that EPA can continue to issue phase II acid rain
permits.
For 70.5, the August 1994 proposal included
provisions for deleting the 12-month deferral for permit
application submittals except for new major sources,
provisions for flexibility in submitting acid rain permit
applications, clarification of the information needed for a
permit application to be deemed complete, clarification that
emissions may not be discounted when determining major
source status, and addition of the requirement for
applications to identify units eligible for emissions
trading.
Section 70.6 was proposed to be revised to add
provisions for defining "prompt" with respect to reporting
deviations from the permit and for defining "upset
conditions" and to require weekly reporting if the source
switched to a new alternative scenario unless the type of
monitoring indicated the switch.
Changes proposed to 70.7 other than for permit
revisions included provisions for accommodating changes that
occur during permit issuance, changing the time period for
acting on early reductions permits from 9 months to 12
months, and adding a provision for notifying the public of
sources covered under general permits.
Section 70.8 was proposed to be revised to include a
provision that the public would be notified of the end of
EPA's 45-day review period. A clarification was proposed
for 70.9 that periodic updates of the permit fee
demonstration were necessary as required by EPA. Section
70.10 was proposed to be revised to specify the application
of sanctions for failure to submit a program or obtain
program approval and operation of a Federal program.
Finally, 70.11 was proposed to be revised to allow mental
state to be considered for penalties assessed above $10,000.
II. Alternative Proposal for Part 70 Permit Revision System
A. Overview
Pursuant to the Act, States have adopted programs for
reviewing and potentially regulating the air quality impacts
of constructing or modifying sources of air pollution (e.g.,
NSR). States will also adopt programs for reviewing changes
to sources of toxic air emissions prior to their operation
under certain circumstances. (For the sake of brevity,
these programs will be generally referred to as "State
review programs.")
Today's proposal for revising part 70 permits builds on
these State review programs by providing for automatic
incorporation into part 70 permits of all changes subject to
those programs. It makes use of the procedural requirements
already applicable to those programs to provide adequate
public review of the part 70 permit revisions occasioned by
those changes. For the more environmentally significant
changes reviewed by State programs, the public, affected
States, and EPA would have a 30-day review opportunity
during the State review process. For all other changes
subject to a State review program, States would have broad
discretion to use procedures that are commensurate with the
environmental significance of the change. De minimis
changes (as defined by the State and approved by EPA in the
State's part 70 program) could be processed without public,
affected State, or EPA review. Further, changes subject to
an applicable requirement that do not conflict with existing
permit terms could generally be made immediately upon notice
of the change by the source.
Since most State preconstruction review programs govern
nearly all source changes requiring a part 70 permit
revision, EPA expects the vast majority of changes would
qualify for this automatic incorporation process. However,
for changes that are not subject to a State review program,
the proposal would provide for a separate part 70 process.
The more significant changes of this type would get public
process consistent with the procedures required for initial
permit issuance. For other changes, States would have
discretion to devise procedures that match the amount and
timing of public process to the environmental significance
of the change. Changes that a State defines and EPA
approves as de minimis could be processed without public,
affected State, or EPA review. Indeed, certain changes that
render a source subject to a newly applicable requirement
could be incorporated into the part 70 permit by means of a
notice submitted by the permittee, so long as the change did
not conflict with existing permit terms and no source-
specific determinations need be made in applying the
requirement to the source. States would have to provide for
periodic notification to the public of all part 70 permit
revisions and for public access to decisions.
The Agency's opportunity to object to a permit revision
would generally be limited to the relatively small group of
more environmentally significant changes. Even for these
changes, EPA would be required to object before the State
took final action on the proposed change for all defects
that are reasonably apparent at that time. For de minimis
changes, EPA would waive its opportunity to object until
permit renewal. For all other less environmentally
significant changes, EPA would waive its opportunity to
object for a 5-year period after approval of a program
except in response to a citizen's meritorious petition where
the error in the permit revision would have a significant
adverse environmental effect. During this 5-year period,
EPA would audit State program implementation to ascertain
whether its waiver of its review should be suspended or
extended for one or more States.
The fundamental premise of this proposal is that the
section 502(b)(6) requirement for adequate, streamlined, and
reasonable permit revision procedures is best met by
building on State review programs established pursuant to
the Act. The Federal regulations governing these underlying
State programs address most of the procedural requirements
of title V. For example, Federal NSR regulations generally
address the need for, and extent of, opportunities for
public participation in NSR permitting ( 51.160-161).
(The EPA is also proposing revisions to its NSR regulations
to clarify the extent of States' discretion in providing
public process for minor NSR permit actions.) Section
502(b)(6) does not require more public process than the
regulations governing these programs require. To the extent
a State program meets the requirements of applicable Federal
regulations, the public procedures afforded by the State
program are sufficient for title V purposes as well.
In those few instances where the applicable Federal
regulations or the State programs themselves do not address
title V requirements (such as those in 70.6 requiring
sufficient permit conditions to assure compliance with all
applicable requirements), States would have to augment
either their underlying program or their part 70 program so
as to avoid the need for a part 70 revision process
subsequent to the State review process. By building on
State review programs in this way, title V permit revision
procedures would be more streamlined than those afforded by
the current part 70 rule and at the same time provide public
review of the more significant changes prior to the change
being made, when public comments can have the most effect.
Only where a change is not subject to a State review program
would the proposal call for a separate title V process to be
provided.
Another central tenet of today's proposal is that EPA
should not prescribe for State part 70 programs detailed
revision procedures for all or even most potential source
changes. As a result of States' differing circumstances,
State air programs vary widely in scope and the type and
stringency of controls they impose. The diversity of State
requirements is not susceptible to precise or simple
categorization, so nationally prescribed procedures run the
risk of being complicated and/or ill-suited to at least some
types of changes. The Agency therefore believes that States
should be afforded broad discretion to determine permit
revision procedures, including the amount and timing of
public review, for all but the most significant changes.
While today's proposal does specify minimum
requirements for permit revision procedures, it also
provides that States may obtain part 70 program approval by
adopting substantially equivalent alternative procedures.
States would thus have additional flexibility to craft
procedures that vary somewhat from the specified minima but
that achieve substantially equivalent results.
B. When is a Permit Revision Required?
As a starting point, it is necessary to know when a
permit revision is needed. In the August 1994 notice, EPA
proposed to amend the regulations to make clear that permit
revisions are needed for changes that (1) cannot be operated
without violating the existing part 70 permit or (2) render
the source newly subject to an applicable requirement.
Today's proposal maintains that approach to defining when a
permit revision is needed.
The Agency would like to reiterate that the applicable
requirements resulting from minor or major NSR are the terms
and conditions of an NSR permit. Simply triggering NSR at a
source with an existing part 70 permit does not in and of
itself require a part 70 permit revision. A part 70 permit
revision would be necessary only to add any new or different
NSR permit terms that result from the review and any
additional provisions to assure compliance with them.
Even changes that would result in application of a
minor NSR or other requirement might not require a permit
revision to the extent the permit has been crafted to
accommodate the change. For example, a State may create an
"advance" NSR provision or include a minor NSR standard
exemption in a source's part 70 permit. Both of these
provisions would define the minor NSR requirement applicable
to a particular change or changes such that the source could
undertake the changes without an approval process, provided
that the terms of the advance NSR provisions were met. In
essence, the change would already be authorized by the
permit as long as it met the requirements (including any
necessary conditions) already in the permit. A change
meeting these conditions, therefore, would not trigger a
part 70 permit revision unless the change contravened a
permit term or triggered some other applicable requirement
not provided for in the permit.
As another example, if a source installs a piece of
equipment that is subject to a reasonably available control
technology (RACT) requirement, the installation would not
require a permit revision if the RACT requirement was
already adequately described in the permit. A permit
revision would be needed only if the installation would
contravene the permit or trigger some other applicable
requirement not addressed by the permit. The source would,
however, likely need to provide notice to the permitting
authority describing the equipment being installed and the
applicable requirement to which it is subject.
The August 1994 notice proposed to narrow, but not
eliminate, the current rule's "off-permit" provisions.
Under those provisions, a change that a source can operate
without violating its permit but that renders the source
newly subject to an applicable requirement may be
incorporated into the part 70 permit after the change is
operated, if the State's program provides the off-permit
mechanism. Today's proposal, however, would require a
permit revision by the time the change is operated. Since
under today's proposal all changes that undergo a State
review program would be immediately incorporated into the
part 70 permit on completion of that review, the need for
the off-permit mechanism would be substantially reduced.
For changes that do not undergo such review but are subject
to applicable requirements the terms of which do not vary
from source to source, today's proposal would allow the
source to revise the permit, and thus operate the change,
upon notifying the permitting authority, provided the change
can be operated without violating any existing permit terms.
(See Section II. D. of this preamble, Incorporation of
Changes Not Subject to State Review Programs.) Today's
proposed approach would thus ensure that the part 70 permit
is a contemporaneous and comprehensive summary of all
applicable Act requirements, an approach most consistent
with the statutory purposes of title V and favored by many
State permitting authorities. Consequently, EPA is
proposing to eliminate the off-permit provision of the
current rule if it adopts today's proposed permit revision
system.
At the same time, the Agency is interested in receiving
comment on whether changes that are expressly exempted from
minor NSR but are nevertheless subject to an applicable
requirement such as new source performance standards (NSPS)
or RACT should be allowed to remain off-permit until permit
renewal. As explained elsewhere in today's notice, EPA is
proposing a streamlined means of incorporating such
requirements into permits that would maintain the
comprehensiveness of the permit. The Agency solicits
comment on whether its proposed revision procedures
appropriately balance the need for source flexibility and a
comprehensive permit with regard to these changes or whether
these changes should only be incorporated into the permit at
permit renewal.
It is worth pointing out that today's notice also
supplements the August 1994 notice's proposed revisions of
the part 70 regulations implementing section 502(b)(10) of
the Act. Under the August 1994 proposal, part 70 would
implement section 502(b)(10) by providing for the
establishment of emissions caps in part 70 permits and for
emissions trading under such caps. Today's notice provides
a further explanation in 70.2 and 70.4 of the utility of
emissions caps and how such caps may be implemented. It
further proposes regulatory changes to codify relevant
definitions and program elements.
C. Automatic Incorporation for Changes Subject to State
Review Programs
1. Scope
As indicated above, today's proposal would establish
two basic categories of changes for permit revision
purposes. The first category would include all changes that
are subject to State review programs established pursuant to
the Act. These changes would be automatically incorporated
into a part 70 permit upon completion of that review or,
where the State review program does not require prior
permitting authority review and approval, upon submission by
the source of a notice describing the change and identifying
the requirement applicable to the change. The second
category would include all other changes that require a
permit revision, and States would have broad discretion to
design a part 70 permit review process for these changes.
Under today's proposal, the first category of changes
would include all changes that are subject to major or minor
NSR or regulations implementing section 112(g) and changes
that entail a source-specific revision of the State's
implementation plan (SIP). The process afforded by these
State review programs would (1) have to include an adequate
opportunity for public participation and affected State and
EPA review, and (2) have to define revisions needed to the
part 70 permit as a result of the change.
Under some State minor NSR programs, not all changes
subject to minor NSR requirements get case-by-case
permitting authority review and approval. Instead, some
types of changes are subject to general rules, and the
source may make such a change without prior permitting
authority approval so long as it complies with the
applicable requirements. These changes would be included in
the first category even though they individually do not
receive affirmative permitting authority review and
approval. In the case of such changes, the State has
determined that particular categories of changes do not
require case-by-case review and may be adequately controlled
by application of general requirements. (Changes subject to
general rules are typically changes that occur frequently
enough and are defined and understood well enough that a
generic approach to their control is both efficient and
effective.) Presumably there would also be no need for
permitting authority review upon incorporation of the change
into the part 70 permit, unless the change would require
revision of an existing part 70 permit term. The Agency
thus believes that part 70 permits may be revised to reflect
such changes by means of a notice submitted by the source
describing the change and the Act requirements newly
applicable to the source as a result of the change, provided
the change can be made without violating an existing part 70
permit term. As explained further below, a permit revision
made in this way (i.e., without prior permitting authority
review and approval) would not shield a source against
enforcement action for failing to comply with the
requirements actually applicable to change.
As also described in more detail below, what
constitutes an adequate opportunity for public participation
and affected State and EPA review would vary with the
environmental significance of the change. Briefly, for the
more environmentally significant changes, the full process
required by the Federal regulations applicable to the State
review program would be required. For instance, for changes
subject to major NSR, a 30-day prior public comment period
would be required ( 51.160-166). For less environmentally
significant changes, States would have discretion to vary
the amount and timing of public process provided with the
environmental significance of the change. The State could
exempt those de minimis categories of changes subject to
minor NSR from prior public, affected State, and EPA review
altogether based on its determination approved by EPA that
subjecting such changes to review would yield a gain of
trivial or no value (Alabama Power Co. v. Costle, 626 F. 2d
323 (D.C.Cir. 1979). As EPA is making clear in today's
proposed revisions to the regulations governing NSR, States
already have discretion to provide public review for minor
NSR actions commensurate with the environmental impact of
the change, including exempting de minimis changes from
public process entirely.
Process aside, part 70 includes permit content
requirements not all of which are necessarily addressed by
current State programs. To gain part 70 program approval,
States would have to impose these requirements pursuant to
State regulations governing either the underlying program(s)
or the part 70 program.
Changes subject to a State review program may affect a
part 70 permit limit not governed by the review program or
render a source subject to Act requirements in addition to
those imposed by the review program itself. For example, a
change subject to minor NSR may also render the source
subject to a maximum achievable control technology (MACT)
standard. For such "combination changes" the question
arises as to what revision process applies. With the
exception of establishing new monitoring approaches, the
general rule would be that a combination change (i.e., a
change that renders a source subject to two or more
applicable requirements, not all of which are imposed
pursuant to a State review program) can be processed
together using the automatic incorporation process, provided
the change receives public or EPA review in the State
process as appropriate for the different applicable
requirements triggered. For example, where an emissions
increase is subject to minor NSR and section 112(j) of the
Act, the change could be processed using the State's minor
NSR program, but the process provided would have to meet the
procedural requirements applicable to section 112(j)
determinations. As explained in Section II. D. of this
preamble regarding changes not reviewed under a State review
program, section 112(j) determinations would be included in
the category of more environmentally significant changes and
would thus be subject to a required 30-day opportunity for
prior public, affected State, and EPA review.
Under today's proposal, a change would be included in
the first category of changes and be automatically
incorporated into a part 70 permit if it is subject to a
State review program. Several groups have suggested that
RACT and MACT requirements that do not entail source-
specific determinations be eligible for automatic
incorporation even if the change triggering the RACT or MACT
requirement is not subject to a State review program. The
EPA agrees with the basic premise of this suggestion that
incorporation of such requirements into part 70 permits
warrants little or no review, provided they do not conflict
with any existing part 70 permit term. Where RACT and MACT
are so specifically defined that little or no judgement need
be exercised in applying the requirement to the source,
there is little to be gained from reviewing the source's
judgement that the requirement applies. Instead, it should
be enough for the source to submit a notice to the
permitting authority upon making the change stating that the
source is consequently subject to the MACT or RACT
requirement and that the notice is attached to the source's
permit. Under such a process, the source would not be
shielded from enforcement action if it were mistaken as to
the scope or nature of the Act requirements applicable to
the change.
The EPA is proposing that such requirements, when
triggered by a change that is not subject to a State review
program, be included in the second category of changes but
nevertheless get the benefit of an automatic incorporation
process (see Section II. D. of this preamble). Eligible
requirements would be those that do not require
interpretation as to applicability and do not require
creation of source-specific permit terms or conditions. The
justification for automatic incorporation of these types of
requirements is that their application is so straightforward
that little is to be gained from additional process.
The EPA is proposing to place these requirements in the
second category. However, the Agency is not now in a
position to say that no RACT or MACT requirement warrants
additional process or to catalog which requirements warrant
additional process and which do not. While most RACT
requirements and some MACT requirements now appear
candidates for automatic incorporation, a determination
would have to be made for specific requirements whether
further process is warranted. In the case of MACT, EPA
could make that determination when it issues new MACT
standards, and as the Agency indicated in the August 1994
proposal, MACT compliance schedules could be automatically
incorporated into a permit. As for RACT and other SIP
requirements, States are in the best position to judge
whether specific requirements are appropriate for automatic
incorporation. States could make such judgments for SIP-
based requirements and provide for automatic incorporation
of those it deemed appropriate, as well as for those MACT
requirements that EPA has determined are eligible for
automatic incorporation.
To the extent they must be incorporated into part 70
permits at all, title VI requirements (relating to
stratospheric ozone protection) may also be candidates for
automatic incorporation where they entail few if any source-
specific determinations. The Agency solicits comment on
what title VI requirements would be appropriately processed
in this way.
2. Automatic Incorporation Process
For changes that are reviewed by a State review
program, the permitting authority would automatically
incorporate the change into the part 70 permit immediately
on completion of the review. The permitting authority could
accomplish this by simply attaching the results of the
review to the part 70 permit. The source could operate the
change upon completion of the review process. For changes
regulated by a State review program through a general rule,
the source would submit a notice describing the change and
the applicable requirements that attach as a result of the
change. As part of the notice, the source would have to
certify that it could operate the change without violating
any existing permit terms and supply any additional permit
terms required by part 70 (i.e., periodic reporting
requirements). The source could operate the change upon
submitting the notice.
Preconstruction permits in many cases impose new
applicable requirements or alter existing ones. These new
or altered requirements and other terms and conditions of
the new preconstruction permit would be applicable
requirements for incorporation into the part 70 permit. Any
existing terms and conditions of the part 70 permit that no
longer applied or were revised as a result of the
preconstruction permitting action would need to be either
replaced by the new terms and conditions, declared no longer
applicable, or revised as part of the permit issued pursuant
to preconstruction review. The permitting authority would
then attach this permit upon issuance to the part 70 permit.
Under the proposed system, it would be important for
the permitting authority to identify during the
preconstruction review process which terms of the existing
part 70 permit would be changed or eliminated because they
would no longer be relevant. For instance, during
consideration of a minor NSR permit for a replacement
emissions unit, the public notice would need to include
information about any part 70 permit terms affected by the
change. The permitting authority would also have to specify
in the final NSR action which terms and conditions of the
operating permit were being revised by the automatic
incorporation process. One way for the permitting authority
to do this would be to prepare an attachment to the permit
identifying which terms of the part 70 permit were replaced
or revised.
The mechanism for automatically incorporating a change
would also have to ensure that the part 70 permit content
requirements of 70.6(a) and (c) of the current rule are
addressed. Many of these requirements could be included in
the original part 70 permit as boilerplate conditions, so as
to cover any subsequent permit revisions. Requirements
relating to reporting, annual certification, and inspection
and entry should translate well to boilerplate conditions.
Since new requirements established in a prior review could
be attached to the part 70 permit, the original part 70
permit would have to ensure that the boilerplate conditions
applied to any new requirements attached to the permit as
well. On the other hand, some requirements are often
created or revised on a unit-by-unit basis. In such cases,
these requirements would have to be explicitly addressed by
the State pursuant to its review program. The permitting
authority would also have to approve as part of that review
the adequacy of any associated changes to previously
approved conditions.
Under a unitary permit program permitting authorities
need not attach new or different applicable requirements to
the permit, provided the unitary permit has already
incorporated them and contains sufficient terms or
conditions to assure compliance with any new or different
applicable requirements consistent with 70.6. For
purposes of part 70, a unitary permit means a single permit
which contains all terms and conditions needed to meet the
requirements of part 70 and the requirements of major or
minor NSR or actions requiring review under regulations
implementing section 112(g) of the Act.
3. Criteria for State Review Programs
Background. As noted earlier, State review programs
are generally governed by Federal regulations. These
regulations address procedural requirements, including the
provision of an opportunity for public participation. In
the case of major NSR, EPA believes that all State programs
meet the applicable Federal procedural requirements, which
call for prior public notice and a 30-day public comment
period. Regulations governing section 112(g) are not yet
final, but States will presumably establish programs that
comply with the requirements of those regulations.
Under the applicable Federal regulations, States have
broad discretion to determine the scope of their minor NSR
programs as needed to attain and maintain the national
ambient air quality standards. Indeed, States may exempt
categories of changes from minor NSR altogether on de
minimis grounds (i.e., the change is trivial in size and of
no importance in safeguarding ambient standards). States
have exercised this discretion to subject some or many, but
generally not all, minor source changes to their minor NSR
programs. The EPA does not intend to revisit the scope of
State minor NSR programs as part of the review process for
approving State part 70 programs.
Just as States may exclude some categories of sources
or changes from minor NSR, they have also exempted at least
some from public procedures. The EPA recognizes that States
may also structure their minor NSR program to limit the
public process afforded during preconstruction review
consistent with the environmental significance of the
change. Elsewhere in today's notice, EPA is proposing to
revise the Federal regulations governing minor NSR at
51.161 to clarify the scope of State discretion in
affording public process for minor NSR actions.
As discussed in the August 1994 preamble (59 FR 44478-
79), the circumstances surrounding some of the exemptions
from public process in minor NSR programs may have changed
since they were adopted and thus the basis for these
exemptions warrant review. The EPA, however, believes that
the majority of State minor NSR programs generally afford
adequate public process for the less environmentally
significant changes, as EPA is proposing to define them in
today's notice, for both title I and title V purposes.
Indeed, EPA is proposing to revise 51.161 to make clear
the considerable flexibility States have to fashion public
participation requirements to the environmental significance
of changes subject to minor NSR. The Agency also believes
that States are in the best position to make an initial
assessment of the continuing adequacy of their procedures.
As further explained subsequently in this preamble, if a
State's procedures should be found in need of some changes,
the changes could be accomplished through revisions of
either the State's minor NSR program or its part 70 program.
States would thus have flexibility to make changes in the
context they found most appropriate.
Beyond public process requirements, State programs do
not necessarily address all of part 70's permit content
requirements, since some of those requirements are not found
in the Federal regulations governing the State
preconstruction programs. Thus, for States to provide
automatic incorporation for changes that undergo a State
review program, States may need to revise their regulations
governing either their part 70 program or preconstruction
review programs, to ensure that all of part 70's permit
content requirements are addressed.
More Environmentally Significant Changes Reviewed by
States. For purposes of establishing the adequacy of a
State review program, today's proposal would divide changes
subject to such review into two categories, those that are
more environmentally significant and those that are less
environmentally significant. The Agency proposes to include
in the category of changes that are more environmentally
significant the following:
o Any change subject to major NSR;
o Any physical change or change in the method of
operation of a part 70 source associated with a project
where the prospective emissions increases from such
changes, considered by themselves, would be a
significant emissions increase of any pollutant subject
to regulation under part C or D of the Act;
o Any change subject to review as a modification under
the regulations implementing section 112(g) of the Act;
and
o Any other change determined by the permitting
authority to have a similarly significant environmental
impact.
The Agency has identified the types of changes listed
above as being more environmentally significant because they
either have been specifically identified in the Act for
preconstruction or pre-operation review (i.e., major NSR
under parts C and D or prior review under section 112(g) of
the Act) or involve difficult judgments which affect whether
construction activity would be subject to one or more of the
reviews prescribed by Congress (i.e., minor NSR governing
net-outs).
While all major NSR actions have been included in the
category of more environmentally significant changes, EPA
recognizes that in an extreme ozone nonattainment area any
change at a major stationary source which results in any
increase in emissions of nitrogen oxides (NOx) or volatile
organic compounds (VOC) from a discrete operation, unit, or
other pollutant emitting activity is a modification subject
to major NSR. In the South Coast Air Quality Management
District (SCAQMD) of California, the only extreme ozone
nonattainment area, potentially several hundred, if not
several thousand, major modifications can occur each year
under applicable definitions of major source (10 tons per
year (tpy)) and major modification (any increase, as
described above). As a comparison, in most areas of the
country, a major modification does not occur unless there is
an increase of 40 tpy or more of VOC.
Today's proposal would require that all changes in the
more environmentally significant category meet the full
public process requirements specified by the Federal
regulations governing the underlying State review program.
Thus, for all major NSR changes, including major
modifications, the State permitting authority would have to
provide (as is currently required) prior public notice and a
30-day public comment period. The Agency is concerned,
however, that full NSR procedures may be unworkable for
extreme ozone nonattainment areas in light of the "any
increase" threshold for triggering major NSR for
modifications in those areas. Some relief from the full NSR
procedural requirements may thus be appropriate for smaller
major NSR actions in extreme nonattainment areas. The
Agency is considering a proposal to revise the Federal major
NSR requirements to allow States to devise more streamlined
public procedures for smaller actions in extreme ozone
nonattainment areas, and it solicits comment on whether and
how to provide such relief.
The Agency is proposing to include one category of
minor NSR changes, i.e., certain net outs, in the more
environmentally significant category. Net-outs are minor
NSR actions which allow a source to avoid major NSR where
the prospective emissions increases from changes associated
with a project considered by themselves would require major
NSR except that the source makes a contemporaneous emissions
decrease at the same site sufficient to keep the net
increase below the major NSR applicability threshold.
Netting transactions often involve some of the most
complicated analyses undertaken by permitting authorities.
They are also among the most important minor NSR decisions
permitting authorities make, since they shield changes which
significantly increase emissions from the control
requirements of major NSR. The EPA is concerned about the
number of net-outs that might be subject to today's proposal
and the possible burden of requiring 30-day public review.
The Agency solicits information from States on the number of
net-outs that would fall within the proposed category of
net-outs and the relative difficulty and complexity these
net-out determinations would typically require. The EPA is
also interested in learning from the experience of States
and industry as to what percentage of net-outs involve a
project where the prospective emissions increase from a
single physical change or change in the method of operation
is greater than the significance levels (as opposed to
projects comprised of small changes that individually do not
exceed the significance level but do exceed the levels when
summed).
In including net-out transactions in the more
environmentally significant category, EPA proposes to cover
those changes where emissions increases from changes
associated with a project, considered by themselves, would
exceed major source thresholds or modification levels before
including decreases at the source. In a moderate ozone
nonattainment area, for example, where the major
modification threshold is 40 tpy for VOC, a 50 tpy VOC
increase that is offset by an 11 tpy decrease (net 39 tpy
increase) would be classified as a more environmentally
significant change, but a 35 tpy increase would not. In
keeping with section 182(c)(6) of the Act, the definition of
covered net outs would also include individual changes whose
emission increases exceed cumulative major NSR applicability
thresholds (e.g., 25 tpy over 5 years in severe and serious
ozone nonattainment areas).
The Agency considered including in the category of more
environmentally significant changes minor NSR limits that a
source undertakes to keep its potential emissions below
major NSR thresholds. These limits on emissions which
create so-called "synthetic minor" sources or modifications
account for many minor NSR permit actions, and play a
critical role in shielding large sources or source
modifications from major NSR.
The types of controls used to establish synthetic
minors vary widely among States and sources. Many are
straightforward in terms of the limit's effect on emissions
and its enforceability. However, others are unique to a
source and involve assessments of source-specific
operational limits. Synthetic minor controls also vary in
terms of their net effect on a source's emissions.
The Agency has decided not to propose inclusion of
synthetic minor actions in the category of more
environmentally significant changes, largely because of the
difficulty of formulating a national definition of those
synthetic minors that merit full public review procedures.
Instead, it is proposing to include all synthetic minors in
the less environmentally significant category of changes
that undergo prior review. As subsequently explained in
more detail, States have broad discretion to fashion
revision procedures for this category that match public
process to the environmental significance of the change. In
light of the potential environmental significance of
synthetic minor controls, however, EPA expects each State to
identify the more significant types of synthetic minor
actions it issues and afford these a substantial opportunity
for public and affected State review prior to the State's
final action in the minor NSR process.
Several factors would be relevant in identifying the
more significant synthetic minors. One is the size of the
source or modification before the synthetic minor control is
applied. In some cases, the source or modification far
exceeds the applicable major NSR threshold without the
control. Another is the use of synthetic minor controls to
reduce a source's emissions to just below the applicable
major NSR threshold. In these cases, the control leaves
little margin for error. A third factor to consider is
whether the synthetic minor control entails the application
of technology or other control measures whose effect on
emissions is not well or easily established. In these
situations, the permitting authority is required to exercise
considerable judgment in determining the efficacy of the
control. Depending on a State's situation and experience,
synthetic minor actions meeting any one of these criteria
may warrant providing prior public review. Where an action
meets more than one of the criteria, e.g., where the source
without controls is very large and the effect of proposed
controls is not well established, an increased opportunity
for prior public review and comment may be in order.
Finally, EPA is proposing that States have discretion
to designate other types of actions for inclusion in the
more environmentally significant category. As explained
earlier, minor NSR controls vary by State in scope, type,
stringency, and significance, and States may thus find it
appropriate to include other types of minor NSR actions in
the more environmentally significant category.
Adequate Review for the More Environmentally
Significant Changes. For the more environmentally
significant changes, permitting actions by a State would
have to follow the full public procedures required by
existing regulations (or in the case of section 112(g) of
the Act, those defined in EPA's final implementing
regulations) with respect to public (including affected
States) and EPA notice and opportunity to comment. (As
discussed earlier, for smaller major NSR changes in extreme
ozone nonattainment areas, EPA is considering the need to
revise the Federal NSR regulations to provide for less than
full process for such changes.) In the case of minor NSR,
the Agency is today proposing changes to the Federal
regulations governing that program to clarify States'
discretion in affording adequate public process. For net-
outs, the only category of minor NSR changes that would be
included in the more environmentally significant category,
the proposed revisions of 51.161 would clarify that such
actions are subject to the full procedures set forth in the
existing regulations.
The public process requirements for the more
environmentally significant changes would include prior
notice and a 30-day opportunity to comment on the permitting
authority's proposed action on the source's application for
the change. Affected States and EPA would also have to be
notified and afforded the same opportunity to comment.
Because the State review process would have to address any
part 70 permit revision, the public notice of the change
would have to contain draft part 70 permit terms as needed
to revise the existing part 70 permit and to meet the
part 70 permit content requirements of 70.6(a) and (c).
Finally, EPA recognizes that in some situations part 70
permit terms based on decisions made in the preconstruction
review process may require revision before the source can
operate the change. In many of these instances, such
changes arise from a shakedown period which the source
undergoes prior to full scale operation. The Agency
believes that, in general, shakedown changes are being
adequately addressed in the day-to-day implementation of
State NSR programs, and that the State procedures afforded
these changes should typically suffice for part 70 permit
revision purposes. As with the change before shakedown,
EPA would expect States to match the type and amount of
additional review to the significance of the shakedown
change. Only where a second major NSR process is necessary
to review the change (i.e., the change would involve
substantially new emissions or represent a fundamental
departure from the previously approved project) would a full
opportunity for public, affected State, and EPA review of
the change be required.
Less Environmentally Significant Changes Subject to a
State Review Program. All changes that are subject to a
State review program other than those designated more
environmentally significant would be included in a second
("less environmentally significant") category. The changes
in this second category would range from significant
synthetic minor actions that shield sources from major NSR
requirements to changes with minimal environmental impact.
States would have the flexibility to vary the process
provided for the changes in this second category with the
relative environmental significance of the change. A State
may designate certain categories of minor NSR changes,
subject to EPA approval, as de minimis based upon its
determination approved by EPA that meets the test prescribed
by the Alabama Power case. For changes that fall in these
de minimis categories, the State may forego prior public,
affected State, or EPA review altogether.
As noted previously, most States already exempt at
least some minor NSR actions from public process. In
evaluating what changes may be considered de minimis, many
factors are potentially relevant and will vary to some
extent with States' varying situations. The scope of the de
minimis category is properly determined on a State-by-State
basis as permitting authorities develop program revisions to
meet the revised part 70 requirements. In determining the
coverage of the de minimis category, the State should
examine the relevant factors in the context of the State's
situation, subject its proposed findings to public review,
and base its final determination on the relevant record.
The State may accomplish this as part of the rulemaking to
revise its program to conform with EPA's revised part 70
rule or in a separate rulemaking.
The most important factor for States to consider in
identifying de minimis changes is the air quality in an
area. Changes that are important in a nonattainment area
may be of considerably less interest to the public (or EPA)
in an attainment area. Due to differences in the nature of
the air quality problems in different nonattainment areas,
the need for or appropriateness of EPA and public
involvement may also vary.
Another important factor is the emissions impact of the
types of changes being considered for the de minimis
category. In this context, the size of any emissions
increase and the type of emissions involved are relevant.
Smaller increases of relatively less harmful pollutants are
more likely candidates for de minimis categorization.
Also relevant is the nature of applicable controls.
Changes which are typically addressed by the application of
well established control technology are not likely to
require public scrutiny. Registration requirements pursuant
to which sources must report, but not necessarily mitigate,
emission increases below a specified threshold would in many
States warrant an exemption from public review. On the
other hand, public review may be appropriate for changes
which require unfamiliar control technologies or source-
specific determinations of control levels.
A State's prior experience with public interest in
permitting decisions for particular types of changes is
another factor the State may weigh. A State which does not
now provide public notice and opportunity to comment on
permit revisions for many or all changes could not use the
lack of past public involvement in the permitting actions
for those changes to establish a lack of public interest in
them. On the other hand, if a State's experience shows the
public does not comment or express interest in certain types
of changes, the State could well conclude that such changes
are de minimis. The public's response to the State's
rulemaking to determine the scope of the de minimis category
is similarly pertinent. The general compliance status of
sources in the relevant jurisdiction may also suggest that
more or less public oversight of permitting actions would be
appropriate.
The factors described above are not mutually exclusive;
for example, the size, complexity, and track record of
particular types of changes, when considered together, may
establish that de minimis categorization is or is not
appropriate. The Agency further recognizes that other
factors may also be relevant, and solicits comment on
whether other circumstances should also be considered by
States in determining the scope of the de minimis category.
In view of the nature and number of the factors
described above, EPA anticipates that States' determination
of de minimis changes will justifiably differ, even to a
significant extent. In States with relatively extensive
minor NSR programs, EPA would expect that the de minimis
category could be established such that the majority of
changes would be processed as de minimis but the bulk of
total emission increases governed by minor NSR would be
subject to public review. This is because, in the case of
extensive programs, many or even most minor NSR changes
typically involve very small emissions increases. The
Agency is aware of one State, for example, in which 90 per
cent of minor NSR changes involve emissions units of less
than 5 tpy, and those changes together account for only
about 10 per cent of total emissions increases governed by
the program. In this State, defining a de minimis category
at or below 5 tpy would mean that only 10 per cent of the
changes by number would go through public and affected State
review, but that review would cover 90 per cent of total
emissions increases. Such an approach would be acceptable
under today's proposal and would be an appropriate way to
minimize the burden of the permitting program on sources and
permitting authorities without compromising citizens'
opportunity to participate in decisionmaking regarding the
bulk of emissions increases.
By providing the above example, EPA does not mean to
suggest that States need conduct the type of analysis
described to determine an appropriate de minimis category.
It is merely one example of an acceptable approach to
defining de minimis changes. The Agency expects States to
consider their particular situations and make determinations
that are appropriate for their situations, in light of the
relevant factors. In States with less extensive minor NSR
programs and less significant air quality problems, for
example, de minimis changes might be appropriately defined
to include changes that increase emissions by as much as 25
tons. The Agency believes States are in the best position
to weigh the relevant factors in determining what changes
may be exempt from public review. A de minimis change
category developed based on the factors discussed above
would be granted substantial deference in EPA's review of
States' part 70 program revisions.
Adequate Process for Less Environmentally Significant
Changes. For minor NSR actions not in the more
environmentally significant category, States would have
considerable discretion to match the amount and timing of
process to the environmental significance of the change. In
reviewing State programs, EPA would recognize States' need
for flexibility in devising procedures that take into
account the relevant factors for a particular State,
including existing air quality levels and the scope and
complexity of its minor NSR controls. States would have to
afford an adequate opportunity for public participation for
all changes other than de minimis changes, but could use
various methods including prior or after-the-fact notice and
comment periods, batch processing, and the use of general
permits or permits by rule. For the least significant
changes, States could provide little public process beyond a
notice in some manner to the public, which could be after
the change occurred. Notice could be given by means other
than newspapers where alternative methods, such as State
registers or computer bulletin boards, are generally
accessible by interested persons. States should require
prior notice and comment where actions involve larger
emissions that warrant greater scrutiny because of their
environmental significance, although comment periods need
not be 30 days where a shorter period such as 15 days or
less would likely be sufficient in view of the significance
or complexity of the change.
All minor NSR actions (including those de minimis
changes exempted from public and EPA review) would have to
be reviewed by the permitting authority to assure that the
change met all applicable requirements and the part 70
permit requirements of 70.6(a) and (c). In particular,
changes to monitoring methods in part 70 permits would have
to be specifically approved by the permitting authority as
adequate for determining compliance with applicable
requirements and part 70 permit terms prior to revising the
permit.
Program Revisions for NSR Changes. States could revise
their regulations as needed to provide for adequate review
of minor NSR changes in two ways: (1) revise their minor
NSR regulations as necessary to meet the requirements
outlined above, or (2) revise their part 70 program
regulations to provide that those requirements be met in the
context of the NSR review process. Either approach would
ensure that adequate process is provided, so a State may be
given the flexibility to decide which approach would be most
suitable for it.
Comparison of Proposed Approach and Current Part 70 for
Minor NSR Changes. Before describing the proposed approach
for changes not subject to a State review program, the
Agency would like to compare its treatment under today's
proposal of minor NSR changes to what is currently required
under part 70. The minor NSR process is the origin of the
vast majority of changes occurring at part 70 sources which
cause the need for a part 70 permit revision. It is
therefore helpful to compare these two regulatory approaches
to understand the relative effectiveness of the proposal in
accomplishing streamlining. This discussion addresses, in
order, minor NSR changes that would be considered more
environmentally significant, synthetic minors, other minor
NSR changes that conflict with the part 70 permit, and
finally other minor NSR changes that do not conflict with
the part 70 permit.
For minor NSR changes which would be classified as more
environmentally significant changes under today's proposal
(i.e., major net-outs), both the current and proposed
part 70 would subject the change to a full public and EPA
review process involving a 30-day public comment period.
Today's proposal, however, would impose this requirement in
conjunction with the otherwise occurring State minor NSR
process. This is a much faster and more efficient process
than under the current part 70 where the sequential
significant permit modification process would be imposed
(possibly for up to 18 months) after the NSR process has
been completed (unless the State chooses to enhance its
minor NSR process).
Whereas part 70 imposes the significant permit
modification process for synthetic minors, these would be
considered in the less environmentally significant category
and subject under today's proposal to a more streamlined
combined process matched to the environmentally significance
of the changes. In addition to shortening greatly the time
to complete permit revisions via combination of the part 70
process with other State review processes, today's proposal
would also limit EPA's review role for less environmentally
significant changes during the first 5 years after program
approval. This would add greater certainty to the critical
initial implementation of the program.
Other types of minor NSR changes that conflict with the
terms of the part 70 permit would be required to be adopted
as a permit revision before operation under both today's
proposal and the current part 70. Under today's proposal,
EPA expects States to treat these either as de minimis, for
which no public or EPA review would be required, or as being
within the category of less environmentally significant
changes for which process would be matched to environmental
significance of the change. For the least significant of
these changes (other than de minimis), States could provide
little public process beyond a notice in some manner to the
public, which could be after the change occurred. The only
EPA review for any of the less environmentally significant
changes over the first 5 years after program approval would
be in the event of a citizen petition. Under the current
part 70, most of these changes, (including those considered
de minimis under today's proposal), would be processed as
minor permit modifications. For minor permit modifications,
even though the change may be made immediately upon sending
a notice to the permitting authority and there is no public
review, the uncertainty resulting from EPA's 45-day review
period and possible objection after-the-fact is a
significant concern to sources making changes under this
process. Thus, under today's proposal, a key benefit for
these changes is the 5-year waiver of EPA's objection
(except in response to citizen's petitions) and the
exclusion of public, affected State, and EPA review for de
minimis changes.
Today's proposal does not differentiate between those
minor NSR changes that conflict with the terms of the
part 70 permit and those that do not. The current part 70
does allow States to make this distinction. Specifically,
source changes reviewed under minor NSR that do not conflict
with the terms of an existing part 70 permit may be treated
under the current part 70 as off-permit, meaning the terms
and conditions of any resulting minor NSR permits need not
be incorporated into the part 70 permit until renewal. For
changes that qualify for off-permit treatment, the source
must provide contemporaneous notice to both EPA and the
permitting authority. This notice requirement is in
addition to the review process required under the State's
minor NSR program. The requirements of 70.6 would of
course not attach until the off-permit change is
incorporated into the part 70 permit at renewal. A change
that is not off-permit (either because it conflicts with the
existing part 70 permit or because the State has chosen not
to allow for off-permit) and that is neither a net-out nor a
synthetic minor could be treated as a minor permit
modification.
D. Incorporation of Changes Not Subject to State Review
Programs
The EPA expects that the great majority of changes
requiring a part 70 permit revision would qualify for
automatic incorporation because they are subject to a State
program such as minor NSR. However, for changes that are
not subject to such review, States would have to provide for
a revision process at the part 70 permitting stage.
Depending on the scope of the State's minor NSR program,
such processing would be needed for changes that trigger
RACT, MACT, or other applicable Act requirements but not
minor NSR, or for changes to terms that were established
only through the part 70 permit process. As for changes
that are subject to State review programs as previously
described, full public, affected State, and EPA review would
be required only for the more environmentally significant of
these changes. For less environmentally significant changes
that are not subject to State review programs, States could
develop revision procedures that match the process to the
environmental significance of the change.
More Environmentally Significant Changes Not Subject to
State Review Programs. Under today's proposal, opportunity
for public, affected State, and EPA review equivalent to
that provided for permit issuance or renewal must be
afforded for the more environmentally significant changes
before the part 70 permit is revised and the change is
operated. For changes that are not subject to State review
programs, EPA proposes to define the more environmentally
significant category as including the establishment or
revision of the following:
(1) MACT determinations made under section 112(j) of
the Act;
(2) Alternative emission limits to meet section
112(i)(5) of the Act (early reductions);
(3) Alternative limits established pursuant to
70.6(a)(1)(iii) including any to implement RACT as
authorized by the SIP or any substitute section 112
standards established pursuant to a program approved by
EPA under section 112(l) of the Act;
(4) New or alternative monitoring methods that have not
been authorized for adequacy under major or minor NSR
or under regulations implementing section 112(g) of the
Act;
(5) (Establishment only) Emissions limits restricting
the potential to emit (PTE) of an entire source,
including the establishment of any plantwide
applicability limit (PAL) for defining applicability of
NSR or of regulations implementing section 112(g) of
the Act.
In revising part 70 permits to establish or change
(except for PTE limits) any of the above permit conditions,
the State's part 70 program would have to provide public,
affected State, and EPA process focused on the change
equivalent to that afforded for initial permit issuance.
The permitting authority would also have to design and
implement this process so as to complete review of the
majority of these types of permit revisions within 6 months
of receipt of an application for such a revision. The
requested change could only be made as allowed by the
underlying applicable requirement(s). The EPA is proposing
to reduce the processing time for the majority of these
changes from the 9-month period specified in the current
rule to 6 months to promote necessary streamlining and to
minimize undue delays. The Agency, however, solicits
comment on the feasibility of a 6-month turn-around time and
on other time periods which might better accomplish these
objectives.
The proposed list of the more environmentally
significant changes not otherwise subject to State review
focusses the most extensive review procedures on a
relatively manageable number of changes that involve actions
that have, or potentially have, the greatest environmental
consequences. Congress clearly intended that the limits
associated with section 112(j) MACT decisions and early
reductions be determined in the context of the title V
program. Section 112(j) targets implementation after the
effective date of the title V program, requires applicable
sources to file a permit application, and requires the MACT
limit be placed in a title V permit. Similarly, Congress in
section 112(i)(5) required the title V permitting authority
to establish in a title V permit an enforceable emissions
limitation for hazardous air pollutants (HAPs) reflecting
the early reduction which qualifies the source for an
alternative emission limitation exemption from MACT.
The EPA is also proposing to include in the more
environmentally significant list alternative emission limits
as authorized by an approved SIP or program under section
112(l) of the Act. Limits such as alterative RACT or MACT
are analogous to the two preceding types of limits
identified by Congress for title V implementation.
Accordingly, they warrant extensive review to assure that
general criteria contained in a SIP or a plan approved
pursuant to section 112(l) of the Act are applied in a
reasonable and enforceable fashion to a particular source
change. Moreover, as explained subsequently, EPA's
objection opportunity under today's proposal would fully
extend only to the more environmentally significant
categories of changes. Since under section 110 of the Act
EPA must be able to object to alternative SIP limits for
them to qualify as such, it is important to include
alternative SIP limits in the more environmentally
significant category of changes. The EPA solicits comment
on whether full public, affected State, and EPA review are
necessary for alternative MACT standards established under a
section 112(l) program or whether a lesser degree of public,
affected State, and EPA review would be adequate.
The establishment of limits on the PTE for an entire
source or plantwide emissions caps (see below) also warrants
a similarly high level of review. Development of such
limits involves a comprehensive review of a source's
emissions to restrict a source's emissions to below major
source thresholds. Because of the extensive nature of these
reviews, the Agency believes that a 30-day public review
period is warranted for establishing such caps. While
proposing these actions as being more environmentally
significant, the Agency does solicit comment as to whether
the establishment of (as well as revisions to) PTE limits
can be classified as less environmentally significant,
particularly for limits related to the applicability of
minor NSR.
Finally, the Agency believes that changes involving
shifts to new or alternative monitoring approaches not
otherwise matched to the source (e.g., through a prior
review) can often have potentially large environmental
impacts, because a new or different monitoring regime could
inadvertently allow emissions to increase without causing a
violation of the applicable requirements. The process
reserved for more environmentally significant changes is
appropriate to safeguard the integrity of the compliance
conditions of the permit unless another prior review serves
this function (e.g., major or minor NSR under today's
proposal). Permitting authorities could approve such
changes only where the new or alternative monitoring or
recordkeeping method was determined adequate to assure
compliance with the applicable requirement.
The EPA solicits comment on whether any other changes
not subject to State review programs should be designated
for inclusion in the more environmentally significant
category.
Other Changes Not Subject to State Review Programs.
For all other categories of changes for which a part 70
permit revision is required but that are not otherwise
subject to State review, a State could develop a process
that matches the review to the environmental significance of
the change. These categories of changes include, but are
not limited to:
(1) Revisions to emission limits restricting the PTE
of an entire source or any emissions unit, including
any PALs for defining applicability of NSR, or of
regulations implementing section 112(g) of the Act;
(2) Restrictions on the PTE of any emissions unit;
(3) Unique limits designed to meet an applicable
requirement;
(4) New alternative operating scenarios;
(5) Changes within the same monitoring method, or
"intra-monitoring changes;"
(6) Incorporation of MACT compliance details, including
applicability and compliance parameter level decisions;
and
(7) Emissions averaging restrictions made pursuant to
a standard under section 112(d) of the Act.
For these changes, States again might use various
methods to provide adequate public participation, including
prior or after-the-fact notice and comment periods. As
noted earlier, sources often take limits on the PTE of an
entire source to avoid being subject to more stringent
requirements that otherwise apply. Sources even more
frequently take limits on an emissions unit at the source to
keep the unit below major modification thresholds. Revising
plantwide caps or establishing or revising PTE limits for an
emissions unit involve making judgments regarding the
sufficiency and practical enforceability of a limit on
maximum allowable emissions which, if exceeded, would
trigger the applicability of more environmentally
significant requirements. For this reason and as with
significant synthetic minor NSR actions, EPA would expect
States to provide relatively more public process for
significant changes to PTE limits or caps. It would make
little sense to require full process to establish such
plantwide limits or caps if they could be revised with
little or no process. Also, the relative environmental
significance of MACT applicability and compliance parameter
decisions can vary with the particular MACT standard
involved. The EPA, in promulgating individual MACT
standards, will provide guidance whenever it believes States
should provide public or EPA review during the permit
process.
For those categories of changes that are determined by
the permitting authority to be de minimis, States may
incorporate these changes into part 70 permits without prior
review by the public, affected States, or EPA or an
opportunity for EPA objection or for citizens to petition
EPA to object. The previously described considerations
relevant to identifying de minimis changes subject to State
review programs are also relevant in determining that
categories of changes not otherwise subject to State review
are de minimis. States could also exempt from public and
EPA review on de minimis grounds changes that qualify for
administrative amendment treatment under section 70.7(d) of
the current part 70 rule. These include changes which
correct typographical errors, require more frequent
monitoring or reporting by the permittee, or alter ownership
or operational control of a source. The State could also
identify other inconsequential changes as de minimis and
submit a list of those changes to EPA when submitting part
70 program revisions for approval. Either the permittee or
the permitting authority could initiate the incorporation of
any such change into the permit by issuing a notice
describing what information in the part 70 permit is
affected and sending the notice to the permitting authority
or the permittee as appropriate. The notice would identify
the terms of the existing part 70 permit being changed and
any new terms needed to meet part 70 permit content
requirements. The notice would revise the permit upon its
mailing by the source to the permitting authority through
certified mail. No affirmative authorization by the
permitting authority would be required if the permittee
initiates the change.
Under today's proposal, the State part 70 program could
also provide that changes need not undergo State, EPA, or
public review before they are incorporated into the part 70
permit, provided that (1) they can be operated in compliance
with all applicable requirements and the federally-
enforceable terms of the existing part 70 permit, and (2)
the applicable requirements they trigger do not entail
source-specific determinations in applying the requirement
to the source.
As previously noted, many minor NSR programs exempt
from minor NSR altogether changes that do not increase
emissions above a certain amount, or that are of a
particular type or category. These changes may nonetheless
still be subject to applicable requirements such as NSPS or
SIP requirements. A small storage tank, for example, may be
exempt from NSR in certain States, but still may be subject
to RACT or NSPS requirements.
To the extent these changes do not conflict with the
part 70 permit and do not trigger requirements that entail
source-specific tailoring, EPA is proposing that they may be
exempt from any additional public, affected State, or EPA
review in the part 70 process. The State part 70 program
could provide that the source may operate the change upon
submitting a notice, provided that the change can be
operated in compliance with the existing part 70 permit. In
the notice, the source would describe the change, describe
any new permit terms needed to assure compliance with all
applicable requirements and relevant part 70 requirements,
and certify that the change is eligible for this process.
The part 70 permit would be revised upon mailing of the
notice by the source to the permitting authority by
certified mail. No permit shield would attach to changes so
incorporated into permits, since not even the permitting
authority would have reviewed whether the source correctly
identified all of the Act requirements applicable to the
change.
E. Opportunity for EPA to Object and Permit Shield
Under section 505 of the Act, the Administrator is to
receive and review copies of permit applications, including
applications for permit revisions, and to object to the
issuance of any permit which contains provisions that are
determined by the Administrator as not in compliance with
the applicable requirements of the Act, including title V
requirements. If the Administrator does not object to a
permit within the 45-day review period specified by the
statute, any person may petition the Administrator to do so
within 60 days of the expiration of the 45-day review
period. Under the Act, the Administrator may waive the
requirements for receipt and review of permits for any
category of sources covered by the part 70 program other
than major sources.
In fulfilling its review role with respect to permit
revisions, EPA will consider whether (1) all applicable
requirements and part 70 requirements to which the source is
subject as a result of the change are contained in the
permit revision, (2) the new or revised permit terms and
conditions are enforceable as a practical matter, and (3)
significant procedural requirements relating to adequate
public participation and development of a supporting record
have been met.
At the same time, EPA wants to minimize the potential
for Agency review to lengthen unduly the permit revision
process. The Agency is thus proposing to limit its review
and objection opportunity in several ways that will focus
EPA's limited resources on providing a timely reaction to
the more environmentally significant permit revisions.
First, for the more environmentally significant changes
(including those that are subject to a State review program
and those that are not), EPA is proposing that the Agency
would be required prior to the permitting authority taking
final action on the change to raise any objections to the
proposed change for any defect that was reasonably apparent
during the public review period. Failure by the Agency to
raise a timely objection would bar it from objecting to
issuance of the permit revision, except in response to a
citizen's petition under section 505(c). The Agency could
still reopen the permit for cause under section 505(e) of
the Act and 70.7(g) of the current rule.
Second, changes which the State proposed and EPA
approved as de minimis under the Alabama Power test would
not be subject to any EPA review or objection opportunity or
citizen petition opportunity prior to renewal of the part 70
permit. Changes which meet the Alabama Power de minimis
test are by definition environmentally insignificant, and
EPA is therefore proposing to exercise its inherent
administrative authority to exempt such changes from the
public, affected State, and EPA review and objection
opportunities that otherwise apply prior to permit renewal.
To the extent de minimis changes are improperly made or
incorporated into the permit, corrections can be made by
reopening the permit or when the permit is renewed with
little or no cost to the environment, provided the changes
are in fact de minimis.
Third, for the less environmentally significant changes
that do not qualify as de minimis, EPA is proposing to limit
its review and objection opportunities for at least the
first 5 years following program approval. For such changes,
EPA would object to a change only in response to a citizen's
meritorious petition under section 505(c) where the permit
revision at issue would likely lead to significant adverse
environmental consequences. During the 5-year period, the
Agency would rely on consultation with State officials and
audits of State programs to assist and monitor
implementation of the permit revision process with respect
to changes in the less environmentally significant category.
Depending on what the audits reveal, the Agency would revise
as appropriate the time period or scope of the above-
described limit on its objection authority. The EPA
contemplates extending the waiver in States where the audit
reveals no significant problems due to the waiver, and
reinstating the objection opportunity in States where the
audit shows otherwise.
For changes in the more environmentally significant
category, EPA would maintain its full authority to review
and object to permits on its own and in response to a
citizen's petition. While the Agency does not plan to
routinely review all or even most of these changes, EPA
believes it should retain its authority to do so in light of
the potentially large emission increases such changes
entail.
The Agency believes today's proposed approach to
exercising its review and objection authority would
facilitate efficient implementation of the proposed changes
to the part 70 permit revision process. Other aspects of
today's proposal would improve the integrity of part 70
permit revisions by ensuring public participation
commensurate with the environmental significance of the
change and public access to all permit revision decisions.
To the extent that potential public involvement increases,
there is less need for regular EPA oversight. The Agency
also recognizes that the first years of implementing any new
or revised program are the most challenging. States will
need time and flexibility to work through the many new
issues that will inevitably arise as they begin to implement
a revised permit revision system. States are more apt to
seek out EPA's help in addressing difficult issues of first
impression if EPA is in the role of colleague rather than
overseer.
Beyond that, EPA's own resources are limited. The
Agency believes that its resources would be best used to
focus on the more environmentally significant changes and to
assist and audit States' implementation of their programs.
The Agency could, as an exercise of its enforcement
discretion, simply refrain from objecting to less
environmentally significant changes. The Agency believes,
however, that to realize the full benefits of its proposed
approach to exercising its objection authority, a regulatory
limit is necessary. Regulations specifying EPA's role in
the permit revision process would best inform the public,
States, and sources as to what to expect and allow them to
plan accordingly. Particularly in the first critical years
of program implementation, a regulatory limit would provide
an important measure of certainty and stability at a time
when all affected groups are learning the new system.
The EPA is proposing a limit on its authority that
would coincide with States' early efforts to implement the
revised program. The limit on its authority would start
upon approval of each revised State program that implements
these revisions to part 70 and would continue for 5 years.
During the 5-year period, EPA would work with States to
facilitate a smooth transition to the revised program. Once
State program revisions were up and running, the Agency
would also conduct audits to determine States' performance
in meeting minimum program requirements. In conducting its
audits, EPA would make use of the applications for permit
revisions that States are required by section 505(a) of the
Act and 70.8 of the current rule to send to EPA. Based on
the results of these audits, EPA would decide whether to
revise the regulations to suspend or extend the limit on its
objection authority for particular States or States in
general.
An important safeguard in EPA's proposed approach is
the ability of citizens to petition the Agency to object to
a permit revision under section 505(c). If a citizen's
petition brings to EPA's attention a permit revision that
allegedly fails to fully or accurately incorporate all
applicable requirements, including title V requirements, or
for which required opportunities for public review were not
provided, the Agency would review the revision for possible
objection. Where its review revealed an environmentally
significant error in the permit revision, EPA would object.
For instance, an EPA objection would be warranted in the
case of a permit revision that purported to establish or
revise limits on a source's potential to emit to avoid
application of major NSR if the permit revision would in
fact allow increases above major NSR thresholds. On the
other hand, errors that did not have an adverse
environmental effect would not warrant an EPA objection.
Correction of such errors could await permit renewal with
little or no cost to the environment and with significant
potential savings to the source.
As a further safeguard, a permit shield would not be
available for permit revisions to incorporate changes in the
less environmentally significant category unless they were
revised and approved by EPA in response to a citizen's
petition. In other words, if EPA were to find that a source
was not complying with an Act requirement that became
applicable to the source as a result of such a change, the
Agency could take enforcement action against the source for
its non-compliance. The chance that a permit revision would
somehow incorrectly incorporate applicable requirements due
to a lack of EPA review would thus be offset by the prospect
of EPA enforcement of underlying applicable requirements.
In summary, EPA believes that the benefits of limiting
its objection authority with respect to the less
environmentally significant changes outweigh the potential
risk of the limitations, particularly in view of citizens'
petition opportunity. The Agency solicits comment on its
proposed limitations and on its legal authority to establish
them.
Several parties have asked EPA to clarify how it would
implement EPA's objection opportunity for changes that have
previously undergone major NSR or minor NSR where a citizen
petitions for an EPA objection and the alleged error would
have a significant environmental affect. Section 505(b) of
the Act provides for an objection if the permit "contains
provisions . . . not in compliance with the applicable
requirements of this Act, including the requirements of an
applicable implementation plan." To assure that the permit
contains provisions that are in compliance with all
applicable requirements of the Act, including SIP
requirements, EPA would review a change resulting from a NSR
action to see if the terms of the NSR permit were properly
incorporated into the part 70 permit, if the terms are
enforceable, and if the applicable substantive and
procedural requirements for public review and development of
supporting documentation were followed. For major NSR, EPA
would review the process followed by the permitting
authority in determining best available control technology
(BACT) or lowest achievable emission rate (LAER) to assure
that the required SIP procedures (including public
participation opportunities) were substantially met and
that any determination by the permitting authority was
properly supported, described in enforceable terms, and
consistent with all applicable requirements.
The EPA's purpose in reviewing whether an NSR action
was consistent with all applicable requirements would be to
assure that any BACT requirements were at least as stringent
as any other applicable requirements such as an NSPS and
that any minimum control requirements specifically
articulated in the SIP were met. The EPA would not second-
guess case-by-case technology determinations that meet the
minimum criteria set forth above. For more environmentally
significant changes subject to minor NSR, EPA would also
examine the calculations used to base any decision that
minor rather than major NSR was applicable to the change.
At the discretion of the permitting authority, the
permit shield would be available for changes in the more
environmentally significant category, in view of the public,
affected State, and EPA review opportunities provided for
those changes. For all other changes, the permit shield
would be available only for terms that are reviewed,
revised, or added by EPA in response to a citizen's
petition.
For permit revisions other than those for de minimis
changes, citizens would have 60 days after the expiration of
any EPA opportunity to object, or from the time the
permitting authority notified the public as to its approval
of the permit revision, to petition the Administrator to
make such objection. As in the current part 70, any
petition would (1) have to be based only on objections to
the permit which were raised with reasonable specificity
during any prior opportunity for public comment (unless the
petitioner demonstrates that it was impractical to raise
such objections at that time); (2) have to be based on
germane and non-frivolous grounds; and (3) have to raise
issues related to the incorporation of or correctness of
applicable requirements, enforceability, or procedural
requirements concerning public review consistent with EPA's
ability to object.
The EPA would like to avoid unnecessary petitions
wherever possible. Accordingly, the Agency suggests that
concerned citizens work with EPA early on in the process to
resolve as many concerns as possible before they rise to the
level of a formal petition.
The Agency is aware of industry concerns that
uncertainty is created by allowing citizens to petition EPA
to object to less environmentally significant changes.
Because such changes by their nature are less
environmentally significant, industry has suggested that the
opportunity for citizens' petitions be postponed until
permit renewal. The EPA believes that such postponement
conflicts with the explicit provisions of section 505(b)(2).
Moreover, as explained previously, at least some type of
changes in the less environmentally significant category
have large potential environmental consequences because they
shield a source from more stringent environmental controls.
The Agency has attempted to address industry concerns by
allowing States to notify the public of permit revisions on
a batched basis where sources must make changes frequently
(see following Section II. F. Flexible Permits). The EPA
also solicits comment on whether there is a legal basis for
postponing the opportunity for citizen petitions on less
environmentally significant changes until permit renewal.
F. Flexible Permits
Aside from providing streamlined permit revision
procedures, a permit system can promote source flexibility
by providing opportunities to design a permit which will
minimize the need for permit revisions. Many ways have been
identified to achieve this, including use of worst case
limits and alternative scenarios (56 FR 21748-49, May 10,
1991). In addition, as the July 21, 1992 preamble to the
final part 70 rulemaking stated, there are no limitations on
changes which do not trigger any applicable requirements and
which are not prohibited or addressed by the permit.
Section 502(b)(10) of the Act requires States to design
their title V programs to allow changes to be made at a
source without revising the source's title V permit so long
as the change does not exceed the emissions allowable under
the permit and does not constitute a "modification under any
provision of [title I of the Act]." The current rule
implements section 502(b)(10) by providing sources with a
potential means of establishing emissions caps in part 70
permits. Caps may be designed such that changes can be made
at a source without triggering reviews which can produce
additional applicable requirements (e.g., NSR or section
112(g) requirements), and thus the need for a permit
revision, provided emissions do not exceed the cap. The
current rule further provides that sources granted such a
cap may comply with the cap through emissions trading as
provided by the terms of the cap.
As discussed in the August 1994 proposal, EPA believes
that the flexibility afforded by section 502(b)(10) is a
mandatory minimum element of State permit programs. In that
notice, the Agency proposed to revise the current rule to
require States to establish a cap in a source's permit at
the source's request, so long as the source proposed a cap
that met the terms of section 502(b)(10) (as well as the
enforceability requirements set forth in 70.6). In
addition, the Agency proposal would require the permit
applicant to include in its application proposed replicable
procedures and permit terms that ensure the emissions cap is
enforceable and trades pursuant to it are quantifiable and
enforceable. Any permit terms and conditions establishing
such a cap or allowing such trading could be established
only in a full permit issuance process. The permitting
authority would not be required to include in the cap or
emissions trading provisions any emissions units where the
permitting authority determined that the emissions were not
quantifiable or where it determined that there were no
replicable procedures or practical means to enforce the
emissions trades. The permit shield described in 70.6(f)
could extend to terms and conditions that allowed such
increases and decreases in emissions.
As discussed in the July 1992 preamble (57 FR 32267-8)
and in the August 1994 preamble (59 FR 44471-2), EPA
encourages the development of trading provisions in part 70
permits consistent with section 502(b)(10). As allowed in
the SIP, the Agency believes that an important option for
flexibility can be established through part 70 trading
conditions which are specific enough so that any source
authorized to use them has a clear method of demonstrating
compliance through the trading program without the need for
a permit revision. As described in more detail in the July
1992 preamble, the trading procedures approved into the SIP
must assure that each trade is quantifiable, accountable,
enforceable, and based on replicable procedures and meets
the underlying requirements. One example of the type of
trading program which could provide such flexibility is the
open market trading system proposed on August 3, 1995
(60 FR 39668). Under this approach, EPA intends to allow
sources to engage in trading of "discrete emissions
reductions" to achieve compliance with those applicable
requirements authorized for such compliance in the SIP and
in the permit. Another example would be the "emissions
budget" program, such as the acid rain program for sulfur
dioxide, under which sources can use allowances to meet the
underlying requirements. It is currently envisioned that
the part 70 permit need only contain a generic trading
provision requiring that sufficient discrete emissions
reductions be held to meet those applicable requirements
which are open for trading. Permit revisions would not be
needed to implement any trades, but the trading rule may
mandate that the part 70 permit contain certain reporting
and recordkeeping obligations to assure the integrity of the
trades themselves.
Another option for flexibility described in the August
1994 proposal allows the part 70 permit to contain "advance
NSR" provisions to the extent compatible with State NSR
requirements. Such advance NSR provisions provide for
including the result of the preconstruction review process
up front in the operating permit, including any part 70
permit terms needed to address such future change(s). Such
a provision, however, must be compatible with the
constraints of the applicable requirements (e.g., limits on
the term of a BACT determination) and be developed with its
implications of those requirements in mind (e.g., possible
consumption of the PSD increment). Many States should
immediately be able to rely on this provision to avoid the
need for a separate NSR permit or an operating permit
revision to be issued when the source actually makes the
change. Even where the issuance of a preconstruction permit
is required, the need for a part 70 permit revision can
still be avoided unless the NSR process results in new or
different terms that must be placed in the part 70 permit.
Several questions have arisen regarding the
practicality of such caps and advance NSR provisions.
Concerns have been raised that these opportunities would be
severely limited by section 502(b)(10) of the Act. While
allowing certain changes at a source to occur without a
permit revision, this provision excludes title I
modifications from this relief and subjects eligible changes
to a 7-day advance notification requirement.
The EPA believes that section 502(b)(10) was enacted by
Congress to provide additional flexibility to sources and
not to restrict any flexibility that already may be
available under the regulations governing applicable
requirements. For example, section 502(b)(10) would not
preclude the incorporation into a part 70 permit of an NSR
permit which defines how future changes at a source could
occur in a manner that would meet the relevant NSR
requirement. The part 70 permit itself may also define the
scope of future NSR obligations for the source so long as
this is allowed under the State's permitting program. No
NSR requirements are circumvented under such an approach.
Rather, compliance is determined beforehand so that the
source may operate the pre-approved change without first
obtaining a permit revision. The source would effectively
have a blueprint analogous to a type of alternative scenario
under which to operate if any of the pre-approved NSR
changes were to occur.
The exact design of an emissions cap to meet
70.4(b)(12)(i) of the August 1994 proposal and section
502(b)(10) will depend on the nature of the prospective
source operation and the scope of the relevant applicable
requirements, including the State's NSR programs and of
regulations implementing section 112(g). For example, in
one State it may be possible to define a PAL (or series of
PALs) which defines when such requirements would be
triggered. In other situations (e.g., where minor NSR
applies and requires a case-by-case technology review
whenever new capacity would be established), the PAL or
series of PALs would need to be coupled with an advance NSR
provision to address all NSR situations including those
requiring an advance technology review of any changes for
which pre-authorization was sought under the PAL.
Concerns have been raised that the 7-day advance notice
provision of section 502(b)(10) could hinder a source's
ability to respond quickly to changing market conditions by
making changes already authorized under a cap. The Agency
believes that the section 502(b)(10) notification
requirement can be met by a generic notice describing a
class of trades authorized by the permit and the source's
intent to engage in such trades during a specified period of
time. This notice must be sent at least 7 days prior to
initiating trading of emissions under the cap, which
incidentally could require notification during permit
issuance where a facility intends to trade as soon as it
receives its permit.
Concerns have also been raised that caps created
pursuant to the regulations at 70.4(b)(12) implementing
section 502(b)(10) would be severely limited if the Agency
were to interpret the title I modification limitation in
502(b)(10) to include changes subject to minor NSR. As
discussed in the next section of this preamble, (see Section
II. G. Title I Modifications), the Agency is proposing to
add regulatory language that defines the scope of title I
modification to clearly exclude modifications subject to
States' minor NSR programs. This action would directly
resolve these concerns. Thus, under today's proposal, this
definition of title I modification will enhance the ability
of sources to design emissions cap permits pursuant to
section 502(b)(10).
To promote greater certainty in implementing caps under
section 502(b)(10), the Agency proposes to codify into the
part 70 regulations the previous clarifications regarding
emissions caps and advance NSR provisions. Under today's
proposal, EPA would build upon its August 1994 proposal by
defining in 70.2 advance NSR, alternative scenarios,
emissions cap permits, and PALs. The Agency further
proposes to add to 70.4(b)(3) the obligation to issue
emissions cap permits pursuant to 70.4(b)(12)(i)
(regarding the mandatory nature of emissions caps) as the
Agency proposed to revise it in the August 1994 proposal.
This would require a permitting authority to accept
enforceable permit conditions proposed by a part 70 source
that (1) establish limits that keep the source from being
subject to requirements that apply above the limit and (2)
assure compliance with requirements applicable to future
operations in which the source may engage so as to avoid
permit revisions. These conditions would be established
during permit issuance or permit revision procedures for the
more environmentally significant changes.
To illustrate the type of flexibility that is available
using a part 70 created cap incorporating advance NSR, the
Agency refers readers to a draft permit providing a plant-
wide emission limit for a semiconductor facility. A copy of
this permit is available in the docket for this rulemaking.
This permit, when final, will include terms that allow the
source to undertake process changes without a permit
revision by combining an emissions cap on HAPs that renders
the source a synthetic minor and an emissions cap on
criteria pollutants with an advance NSR provision
authorizing certain types of changes involving VOCs and
specific exemptions for insignificant activities and
emissions. Under this draft permit, the source's routine
changes will not trigger a part 70 permit revision
obligation so long as: (1) each change complies with
applicable RACT and SIP requirements; (2) each change
triggers no newly applicable requirement; and (3) total
emissions do not exceed an aggregate emission limit for
VOCs. This permit also incorporates additional conditions
for pollution prevention planning, reporting, and training
to assure compliance with the emissions cap. The final
permit will also contain monitoring and other conditions
sufficient to demonstrate compliance with the VOC emission
limit.
While this permit is not yet final, EPA considers the
basic approach used in this permit as acceptable and
appropriate under part 70 and anticipates that it will serve
as a useful model which offers operational flexibility in an
environmentally protective framework. When a final decision
is made on the specific permit, it will be placed in the
docket for today's rulemaking.
The EPA encourages the use of the approach employed in
the draft permit by permitting authorities seeking to
minimize administrative burdens and maximize the flexibility
of regulated facilities, particularly those which make
frequent process changes that have a relatively small impact
on emissions. The EPA does note, however, that the terms
and conditions needed to meet minor NSR in advance may well
vary from State to State. In particular, States with case-
by-case control requirements approved as part of their minor
NSR programs may require more specific conditions to allow
sources to qualify for advance NSR. The EPA solicits
comment on the acceptability and effectiveness of this
approach.
Concerns have also been raised regarding the vast
quantity of trivial changes that can occur each year at
certain sources, including those in the electronics sector.
These changes are peripheral to the core processes of a
source and often do not affect emissions. In these cases,
other types of advance NSR conditions are potentially
useful. In particular, the part 70 permit can define in
advance a list of activities which the permitting authority
acknowledges are not physical changes or changes in the
method of operation and therefore do not trigger minor NSR.
Such changes when they subsequently occur would not
precipitate the need for a part 70 permit revision, since
they would not trigger minor NSR. The list of these
activities developed by the Oregon Department of
Environmental Quality which EPA has placed in the docket
serves as an example of what might be defined in individual
permits.
Finally, the Agency would like to clarify that NSR
registration provisions under an EPA-approved minor NSR
program that only require reporting of changes in emissions
levels, provided total emissions stay below certain
prescribed limits, could often be treated in the part 70
permit as a generic requirement which requires any necessary
reporting or notification by the source to the permitting
authority but does not require a revision to the permit.
Alternatively, implementation of such NSR registration rules
would be eligible for permit revision by source notice (see
the previous discussion, Other Changes Not Otherwise
Reviewed by States) where the applicable requirement itself
allows for updating the permit through a notification
procedure. Where neither of these approaches to SIP-
required NSR registration can be implemented (e.g., State
requires individual permit revisions for each transaction),
the Agency solicits comment on the ability to allow
permitting authorities to collect and batch process changes
over a month's time period and conduct one part 70 permit
revision at that time. This option would be available only
for those changes that were defined by the program as being
individually eligible for this treatment and that did not
conflict with the part 70 permit.
G. Title I Modification
The meaning of the section 502(b)(10) limitation,
"modifications under any provision of title I," has been
disputed since the rule's promulgation. In its proposed
rule to revise the criteria for granting State programs
interim approval (59 FR 44572 (August 29, 1994)), EPA
proposed that the phrase "modifications under any provision