PSD/Nonattainment Applicability Arturo J. Garza Air Permits Division Texas Commission on Environmental Quality Environmental Trade Fair 2016

Overview  Background Comments: PSD and NNSR  Applicability Structure  Concepts  PSD Applicability/GHG Permitting  NNSR Applicability  Examples  Resource Materials

Background Comments – PSD & Nonattainment

PSD/NNSR – Background  Both are federal programs  Both are pollutant-specific  Simultaneous PSD and NNSR is possible  PSD applies anywhere to GHGs  Applicability depends on location/attainment status  Both are structurally similar

Applicability Structure

Federal NSR Applicability At greenfield site or existing minor source with a new project:  Project increase is itself a major source (i.e., project increase exceeds major source definition) At existing major sources:  Project increase ≥ MM (or netting) threshold, and  Net increase ≥ MM definition

Applicability Summary

Existing Major Source Project Increase MS? / MM? Federal NSR Applies? No Yes no netting allowed YesNo Yes conduct netting Yes if net increase > MM

Concepts & Terms

Terminology o NAAQS: Attainment Status/ Classifications o Applicability Logic o Modification and Pollutant- Specific Determinations o Source Designations: Named / Major o PSD: Major / MA-MA o NNSR: LAER and Offsets o Baseline Actual and New Allowable Emissions o Project Increase Major Modification Major Source o Netting: Thresholds Windows Creditability Significance

Attainment (or not)  Monitored concentrations vs. NAAQS  Attainment:below NAAQS  Nonattainment:at/over NAAQS

NAAQS  National Ambient Air Quality Standards  Criteria pollutants  O 3 (VOC or NO X ), NO 2, CO, SO 2, PM, PM 10, PM 2.5, and Pb  Ambient concentrations - µg/m 3  Air quality monitored

Lead Nonattainment Area DFW Ozone Nonattainment Area – 1997 Serious – 2008 Moderate Wise Wise County (DFW) – Ozone Nonattainment Area Attainment Moderate (Effective 7/20/12) HGB Ozone Nonattainment Area – 1997 Severe – 2008 Marginal Current Nonattainment Areas Moderate PM 10 Nonattainment Area

Modifications  Physical change  Change in method of operation  Increase in emissions  Criteria pollutants  O 3, NO 2, CO, SO 2, PM, PM 2.5, PM 10, Pb

Federal NSR Applicability Pollutant Federal Modification? Major Project? Significant Net Emission Increase? No Federal NSR Major Site? Project Increase Significant? No Yes No Yes Federal NSR Determine Net Emission Increase No Yes No Determine Site PTE & Project Increase No Federal NSR No Federal NSR Yes

PSD Applicability/GHG Permitting

PSD Requirements  Major for any regulated pollutant, major for all  Applies to GHGs  Application of BACT  Air quality analysis  Within 100 km of a Class I area? - Inform affected agencies

PSD Major Source Definitions 100 tpy:  Any criteria pollutant  28 ‘named’ source categories  Listed at 40 CFR §52.21(b)(1)(i)40 CFR §52.21(b)(1)(i) 250 tpy:  Any criteria pollutant  All other ‘un-named’ source categories  Not listed at 40 CFR §52.21(b)(1)(i)40 CFR §52.21(b)(1)(i)

PSD Major Modification Definitions Significant Emission Rates for Criteria Pollutants: CO≥100tpy NO X ≥40tpy SO 2 ≥40tpy VOC≥40tpy PM≥25tpy PM 10 ≥15tpy PM 2.5 ≥10tpy Pb≥0.6tpy

PSD Major Modification Definitions Significant Emission Rates for Non-Criteria Pollutants: Fluorides≥ 3 tpy Sulfuric acid mist≥7 tpy Hydrogen sulfide≥10 tpy Total reduced sulfur≥10 tpy

PSD & GHGs  Parts of 30 TAC § superseded by SCOTUS  Applicability categories  Applicability thresholds  PSD BACT applies  BACT requirements listed in permit conditions

PSD & GHGs – New Sources  Major for non-GHG criteria pollutants  GHG PTE > 75,000 tpy CO 2 e GHG PTE GWP CO 2 e

PSD & GHG – Existing Sources  Existing major source for non-GHG criteria pollutants  Criteria pollutant project increase: major modification for non-GHG criteria pollutant  GHG > 0, GHG PTE > 75,000 tpy CO 2 e GHG PTE GWP CO 2 e

Federal NSR Applicability Pollutant Federal Modification? Major Project? Significant Net Emission Increase? No Federal NSR Major Site? Project Increase Significant? No Yes No Yes Federal NSR Determine Net Emission Increase No Yes No Determine Site PTE & Project Increase No Federal NSR No Federal NSR Yes

NNSR Applicability

NNSR Requirements  Only nonattainment area pollutants  New major sources  Major modifications of existing major sources  Most commonly encountered criteria pollutant in areas: O 3 (NO X, VOC)  LAER and offsets

NNSR Major Source Definitions  Major source independent of listed status  Depends on location/classification  HGB / O 3 / Severe  DFW / O 3 / Serious  El Paso / PM 10 / Moderate  Colin County (DFW) / Pb / un-classified

NNSR Major Source Definitions NA Area / ClassificationCriteria Pollutant HGB / Severe≥ 25 tpy: VOC and NO X DFW / Serious≥ 50 tpy: VOC and NO X El Paso / Moderate≥ 100 tpy: PM 10 Colin County / None≥ 100 tpy: Pb

NNSR Major Modification Definitions NA Area / ClassificationSER: Criteria Pollutant HGB / Severe≥ 25 tpy: VOC and NO X DFW / Serious≥ 25 tpy: VOC and NO X El Paso / Moderate≥ 15 tpy: PM 10 Colin County / None≥ 0.6 tpy: Pb

Project Increase Proposed PTE – Baseline Actual = PI Baseline Actual:  Highest actual tpy average  Any consecutive 24 months from previous 10 years  Previous 5 years for electric utilities  Different 2-year tpy avg. acceptable / different pollutants

Project Increase + Proposed PTE (project increases only) -Baseline Actual (affected facilities) = Project Emission Increase Proposed PTE (project increases only) Project Increase Baseline Actual

Baseline Timeline 2015 Jan 1, Application Submittal year window for selecting 24-month Baseline Actual Emission Rate

NNSR – LAER  FCAA’s most stringent control requirement  Control to applicable SIP limit or most stringent limit achievable  Economics and technical practicability do not apply  Applicable to each criteria pollutant subject to NNSR  New major sources/major modifications at existing major sources  References: RBLC / State SIPs / Recent Permits in Texas, others

NNSR – Offsets  An actual emission reduction, greater than or equal to the project’s emission increase  Depends on nonattainment area’s offset ratio  Use ratio as multiplier with project increase (PI) to quantify  For example, PI = 42 tpy, ratio = 1.20:1  Required offset reduction = 50.4 tpy

DFW - Serious Major Source ≥ 50 tpy Major Mod. ≥ 25 tpy Offset Ratio = 1.2 to 1 Wise Wise County (DFW) - Moderate Major Source ≥ 100 tpy Major Mod. ≥ 40 tpy Offset Ratio = 1.15 to 1 HGB - Severe Major Source ≥ 25 tpy Major Mod. ≥ 25 tpy Offset Ratio = 1.3 to 1 Current Nonattainment Areas

PSD/NNSR: Comparisons/Contrasts

PSD & NNSR – Contrasted PSDNNSR Attainment (below NAAQS) Nonattainment (at/above NAAQS) All countiesDFW, HGB, El Paso, Collin O 3 (NO x and VOC) SO 2, CO, PM O 3 (NO X and VOC), PM 10, Pb M/A - M/A (yes)M/A - M/A (no)

PSD/NNSR: What’s Different?  Major source and major modification thresholds  Netting applicability thresholds  Netting results evaluation thresholds  Creditability effects, contemporaneous changes  Ensuing technical review of the application

PSD/NNSR: What’s the Same? PSD/NNSR: What’s the Same?  Some terminology and all applicability logic  PTE, Baseline Actual Emissions, Project Increases  Creditability criteria, contemporaneous changes  Netting window and calculation method

Simultaneous NNSR & PSD?  Is it possible to trigger both PSD and nonattainment for the same pollutant?  Yes (NO X ): NNSR, as an ozone precursor PSD, as a NAAQS criteria pollutant (NO 2 )

Next Steps: Greenfield Site or Existing Minor Source w/ New Project  Determine project increase  Compare to major source (MS) definition  If project increase < MS, FNSR is not required  If project increase ≥ MS, FNSR is required, and netting is not allowed

Next Steps: Existing Major Sources  Determine the project increase  Compare to major modification (MM) definition  If project increase < MM*, FNSR is not required  If project increase > MM*, conduct netting to see if FNSR is required *or netting threshold in certain NNSR areas

Federal NSR Applicability Pollutant Federal Modification? Major Project? Significant Net Emission Increase? No Federal NSR Major Site? Project Increase Significant? No Yes No Yes Federal NSR Determine Net Emission Increase No Yes No Determine Site PTE & Project Increase No Federal NSR No Federal NSR Yes

Example

Example 1  Company A is a minor source in a severe nonattainment area  Major source is defined as 25 tpy Current PTE=22 tpy NO x Proposed PTE=40 tpy NO x Baseline Actual=20 tpy NO x

Example 1 Project Increase Current PTE: 22 tpy; Proposed PTE: 40 tpy; Baseline Actual: 20 tpy; Major Source: 25 tpy Proposed PTE – Baseline Actual = PI 40 tpy – 20 tpy = 20 tpy increase The project increase is not a major source by itself. Federal NSR is not triggered, but minor NSR permitting requirements do apply.

Project Increase + Proposed PTE (project increases only) -Baseline Actual (affected facilities) = Project Emission Increase Proposed PTE (project increases only) Project Increase Baseline Actual

Netting

Netting Applicability Required if the project increase equals or exceeds the netting significance level for the pollutant. Proposed PTE (project increases only) minus Baseline Actual is greater than or equal to the Netting Significance Level Proposed PTE (project increases only) > Baseline Actual Netting Significance Level Project Increase

Netting General Concepts Netting – General Concepts  Only for existing major sources  Project emissions change in netting window*  Netting Threshold:  Project Increase > MM Definition unless lower thresholds for certain NNSR criteria pollutants or classifications apply * 5 years before start of construction to start of operations

Netting Applicability Thresholds  PSD: Major Modification Definition  NNSR: Major Modification Definition  Nonattainment criteria pollutant and location: 5 tpy VOC/NO X – HGB, DFW 15 tpy PM 10 – El Paso 0.6 tpy Pb – Colin County

Netting Method  Conducted for each pollutant in which netting is triggered  An evaluation of:  The current project, plus  Increases and decreases within the netting window

Netting Window Example Start of Construction Start of Operation

Modifications Identified in the Window  May be based on:  The date the modification was authorized, or  The date the change is operated  Must be used consistently  Indicate which method is used

Netting Creditable Emissions  Occur during the netting window  Cannot have been relied upon in issuing a federal NSR permit for the source  Remain in the window until start of operations authorized with permit issuance  Rely on emissions inventory

Netting Creditable Increases  The new level of emissions exceeds the Baseline Actual Emission Rate Proposed PTE – Baseline Actual = PI  Does not include emission increases at facilities under a plant-wide applicability limit (PAL)

Netting Creditable Decreases  The Baseline Actual exceeds the new level of emissions  Enforceable at and after the project modification begins operation (must be enforceable and real before the unit starts operation)  Reductions to comply with current or new requirements (e.g., BACT, SIP) don’t count

Determining Netting Increases & Decreases For each project within the window, based on a comparison of:  Baseline Actual Emission Rate and  PTE of that project (cannot use projected actuals except for the current project)

Baseline Actual Emission Rate Emissions, in tons/year, actually emitted during a consecutive 24-month period out of the previous 10 years (previous 5 years for electric utilities) from the date the project is authorized or modifications are operated

Using the Allowable as Net Project Increase A facility in operation less than 2 years can use its allowable emission rate as its net project increase.

Baseline Assessment for Projects in Window Years 2009 Project Baseline Actual Emissions

Net Emissions Increase Project increase +Non-project source-wide creditable contemporaneous emission increases - Source-wide creditable contemporaneous emission decreases (including the current project)= The amount that exceeds zero Project increase Emission increases Emission decreases Amount that exceeds zero Source-wide creditable contemporaneous (including the current project) Non-project source- wide creditable contemporaneous

Federal NSR Applicability At greenfield site or existing minor source with a new project:  Project increase is itself a major source (i.e., project increase exceeds major source definition) At existing major sources:  Project increase ≥ MM (or netting) threshold, and  Net increase ≥ MM definition

Applicability Summary Existing Major Source Project Increase MS? / MM? Federal NSR Applies? No Yes no netting allowed YesNo Yes conduct netting Yes if net increase > MM

More Examples

Example 2 Company B is a major source in a severe nonattainment area. Current PTE=50 tpy NO x Proposed PTE=52 tpy NO x Baseline Actual=48 tpy NO x Project Increase = 4 tpy NO x

Example 2 Is Netting Required? Major Source; Severe Nonattainment Area; Current PTE = 50 tpy; Proposed PTE = 52 tpy; Baseline Actual = 48 tpy; Project Increase = 4 tpy The project increase of 4 tpy does not exceed the netting significance level of 5 tpy for a severe nonattainment area. Netting is not required.

Example 3 Company C is a major source in a serious nonattainment area. Current PTE=50 tpy NO x Proposed PTE=60 tpy NO x Baseline Actual=47 tpy NO x Project Increase =13 tpy NO x (Proposed PTE - Baseline Actual)

Example 3 Is Netting Required? Major Source; Serious Nonattainment Area; Current PTE = 50 tpy; Proposed PTE = 60 tpy; Baseline Actual = 47 tpy; Project Increase = 13 tpy The project increase of 13 tpy exceeds the netting significance level of 5 tpy. Netting is required!

Example 3 Table 3F NO x

Example 3 Finding Net Increase Current Project 13 tons/year increase plus 11/2010 Project 5 tons/year plus 10/2011 Project 0.25 tons/year minus 4.25 tons/year Total Increase: 14 tons/year 13 tons/yr increase 5 tons/yr (increase) 0.25 tons/yr (increase) 4.25 tons/yr (decrease) 14 tons/yr Current Project 11/2010 Project 10/2011 Project Net Increase

Example 3 Nonattainment Review? Major mod. significant emission rate for serious nonattainment area = 25 tpy Total net increase (from previous slide) = 14 tpy Since 14 tpy is less than the major modification significant emission rate of 25 tpy, the project is not a major modification and... nonattainment review is not required.

Example 4 Company D is a major source in an attainment area. Current PTE=200 tpy NO x Proposed PTE=210 tpy NO x Baseline Actual=190 tpy NO x Project Increase = 20 tpy NO x

Example 4 PSD Required? Major Source; Attainment Area; Current PTE = 200 tpy; Proposed PTE = 210 tpy; Baseline Actual = 190 tpy; Project Increase = 20 tpy The project increase of 20 tpy does not exceed the major modification significance level of 40 tpy for NO X. Netting is not triggered. PSD review is not required.

Check Your Calculations!

Resource Materials  Recent PSD/NNSR Permit Actions Recent PSD/NNSR Permit Actions  Reference Guides:  Federal NSR Applicability Federal NSR Applicability  Preliminary Determination Summary Preliminary Determination Summary  PSD/Nonattainment Fact Sheets PSD/Nonattainment Fact Sheets  Forms, Macros, and Boilerplate Forms, Macros, and Boilerplate

Contact Information Air Permits Division (512) Combustion Section Marc Sturdivant - (512) Sean O’Brien - (512) Chemical Section Jesse Lovegren - (512) Rick Goertz - (512) Arturo J. Garza - (512)