1. Joelle Burleson Planning Section, Rules Development Branch Division of Air Quality Air Quality Rules Update 1

2. Overview of Topics Permit Exemptions NC Air Toxics Rules Update Process for Legislatively Required Review/Reissue of All Air Quality Rules GHG Regulations, Outcome of Court Ruling and Effect on TV facilities Mercury and Air Toxics Standards (MATS) – EGU updates Cross State Air Pollution Rule (CSAPR) and Clean Air Interstate Rule (CAIR) Implementation National Ambient Air Quality Standards (NAAQS) and Attainment Status Update 2

3. Permit Exemptions Rule Revisions Impetus: Frustration with 02Q.0102 Difficult to understand and implement Internal Workgroup Formed Regional and Central Office Permitting staff representatives, Rules staff, and Division of Environmental Assistance and Customer Service (DEACS) representative Goal: Streamline, improve the structure, update, make it easier to use for all In Parallel, Division “fresh look” at non-Title V Permitting Level of effort relative to low emissions; Different approach with same compliance rates and air quality?; Consideration of emissions, compliance, regulatory framework, complexity, and staff experience 3

4. Permit Exemptions Rule Revisions Permit Exemptions Rule Revisions web page: http://www.ncair.org/rules/Exemptions/ http://www.ncair.org/rules/Exemptions/ Markup version of 02Q.0102 changes Table of Proposed Changes Draft 02Q.0904 Concrete Manufacturing Facilities Presentation Permit by Rule drafts containing conditions similar to those in small or general permits for: grain elevators yarn spinners peak shavers (amendment to 02Q.0903) to be added as become available 4

5. Permit Exemptions Rule Revisions Stakeholder Meeting held November 6, 2014 Participation from environmental groups, regulated community, local programs Feedback was requested Agency very recently received comments and suggestions regarding alternative tiered threshold approaches to further simplify the permitting process Evaluating comments; further discussion needed 5

6. NC Air Toxics Rules Session Law 2012-91Requires DAQ report to the ERC on its implementation December 1, 2012, 2013 and 2014 Includes an analysis of air toxic emission changes and a summary of results of the Division’s analysis of air quality impacts. Final Report submitted December 2014 6

7. NC Air Toxics Rules Final Section 4 Report Findings 7 Toxic air emissions below thresholds for further analysis Modeling done previously for the facility used to determine compliance Facility voluntarily provided air toxics modeling showing compliance Air toxics modeling over AAL resulting in Director’s Call Agency performed modeling showing no unacceptable risk. 12271105 Table 1: Analysis of air toxics permit applications: June 28, 2012 through September 19, 2014.

8. NC Air Toxics Figure 1. Long-term air toxic emissions changes 1993-2013 8

9. NC Air Toxics Rules Toxics Clerical Revision Place Toxics Permitting Emission Rates (TPERs) for non-obstructed vertically oriented stacks in 02Q.0711(b) for 3 pollutants in appropriate columns ethylene glycol monoethyl ether - 2.0 lb/hr acute systemic methyl isobutyl ketone - 31.59 lb/hr acute irritant toluene - 197.96 lb/day chronic toxicants Hearing Officer’s Report and revised rule approved at March 2015 EMC Tentatively effective May 1, 2015 9

10. Periodic Review and Expiration of Existing Rules per Regulatory Reform Act (S.L. 2013-413) 3 Steps Step 1 [G.S. 150B-21.3A(c)(1)]- Agency determination Initial determination of classification 60 day public comment period Step 2 [G.S. 150B-21.3A(c)(2)]- Rules Review Commission (RRC) review Reviews agency’s report Makes final determination regarding classification Step 3 [G.S. 150B-21.3A(c)(3)]- Administrative Procedure Oversight (APO) Committee consultation 60 day opportunity to review final determination before it becomes effective 10

11. Step 1-Agency Determination Initial Classification as: Necessary with substantive public interest Necessary without substantive public interest Unnecessary 11

12. Step 1 Continued Public Comment For at least 60 days Comments on determination and rules Comments submitted on the web (http://rulesreview.ncdenr.gov/)http://rulesreview.ncdenr.gov/ Agency reviews and responds in report Agency submits report to RRC Initial determination All comments received Response to comments 12

13. DENR Rules Review Public Comment Website 13

14. Steps 2 and 3 Step 2 - RRC review Reviews report and public comments to determine if rule has been classified correctly Submits final determination report to APO Committee Step 3 - APO consultation Final determination does not become effective until APO consultation concludes Have 60 days to review 14

15. Effect of Final Classification Unnecessary Rule will expire and be removed from code following APO finalization of report Necessary without substantive public interest Rule will remain in effect without further action Necessary with substantive public interest Rule shall be readopted as if it was new in accordance with APA 15

16. Air Quality Rules 353 Air Quality Rules 15A NCAC 02D, Air Pollution Control Requirements (263 rules) 15A NCAC 02Q, Air Quality Permits Procedures (90 rules) Subchapters interrelated Most rules are classified as “Necessary with substantive public interest” Majority of Rules are federally required/approved under Clean Air Act (CAA) authorities (CAA Section 110 state implementation plan (SIP), Section 111d emissions guidelines, Title V and others) Identification that rule is federally required does not necessarily preclude repeal as part of re-adoption process if warranted; however, a demonstration to EPA may be required. (e.g., 110(l) demonstration of non-interference with attainment or maintenance of a National Ambient Air Quality Standard (NAAQS)) 16

17. 15A NCAC 02D and 02Q Summary Necessary with Substantive Public Interest Necessary without Substantive Public Interest UnnecessaryTotal 15A NCAC 02D232427263 15A NCAC 02Q9000 Total322427353 17

18. Unnecessary Rules Rules repealed effective January 1, 2015(12) 15A NCAC 02D.0800, Complex Sources (5 rules) - already in process of being repealed 15A NCAC 02Q.0600, Transportation Facility Procedures (7 rules) - already in process of being repealed Removed from report per January AQC approval 18

19. Unnecessary Rules, cont’d 15A NCAC 02D.1600 General Conformity 3 rules Requirement for states to have in rules made optional 15A NCAC 02D.2400 Clean Air Interstate Rules (CAIR) 13 rules Cross State Air Pollution Rule (CSAPR) stay lifted, CAIR will be phasing out 15A NCAC 02D.2500 Clean Air Mercury Rules (CAMR) 11 rules Courts previously determined developed under inappropriate CAA authority and overturned rules (rules replaced by Mercury and Air Toxics Standards (MATS)) 19

20. Rules Without Substantive Interest 15A NCAC 02D.0103, Copies of Referenced Federal Regulations 15A NCAC 02D.0104, Incorporation by Reference 15A NCAC 02D.0105, Mailing List 15A NCAC 02D.1905, Regional Office Locations 20

21. Next Steps Determinations approved by AQC – Jan 2015 Approved by EMC - March 2015 Public Comment Period- mid-March to mid-May 2015 Report to AQC - July 2015 Report to EMC for final approval - September 2015 Report Due to RRC - By November 15, 2015 RRC Reviews Report – December 17, 2015 Final Determination Effective after APO consultation- Beginning of 2016 Schedule for Rulemaking to re-adopt rules in accordance with APA developed with RRC staff and re-adoption process begins 21

22. Greenhouse Gas (GHG) Permitting Rule Update Supreme Court Opinion, UARG v. EPA, 6-23-2014 EPA can’t require Prevention of Significant Deterioration (PSD) or Title V permits solely on the basis of GHG emissions Request to Proceed to Hearing on temporary rule approved at September AQC & EMC to clarify applicability of PSD and Title V permits based on Court Opinion 22

23. Greenhouse Gas (GHG) Permitting Rule Update October 1 st Hearing on temporary amendments to 15A NCAC 02D.0544, Prevention of Significant Deterioration Requirements for Greenhouse Gases and 02Q.0502, Applicability, held in Raleigh Comment Closed October 9, 2014 (4 commenters) Hearing Officer’s Report presented and EMC adopted at November Meeting Temporary Rule Effective date - December 2, 2014 Permanent rulemaking to replace temporary rule Request to proceed to hearing approved at March 2015 AQC and EMC; tentatively effective November 2015 23

24. Update on Utility Boiler MACT Rule (aka EGU MATS Rule) MACT Compliance Date = April 2015 MACT Emission Performance Test Report due Oct 2015 Supreme Court Ruling on “Appropriate and Necessary” expected in June 2015 New Startup and Shutdown (SS) Rule issued in Nov 2014 SS Litigation Started in Feb 2015 24

25. Update on Utility Boiler MACT Rule DateAction on “Appropriate and Necessary” Consideration April 2014Divided 3-judge panel of U.S. Court of Appeals for D.C. Circuit ruled EPA’s interpretation of Clean Air Act was reasonable for developing EGU MACT rule, finding EPA followed Congress’s intent to consider costs in rulemaking. However, one judge found it was unreasonable for EPA to exclude cost consideration. Nov 2014Supreme Court accepted EGU MACT rule case in response to appeal from 2 industry groups and 21 states. The basic question is whether and when EPA must take regulation costs into account. The court will hear arguments in spring of 2015 and is likely to rule in June 2015. 25

26. Update on Utility Boiler MACT Rule DateAction on Startup and Shutdown (SS) Rules Nov 2014 EPA finalized rule modifying EGU SS definitions with alternate work practice to initiate startup and continue using only clean fuels until primary particulate control device is on line. Must comply with emissions standards within 4 hours of generation of electricity or thermal energy. Shutdown begins when unit is no longer making electricity or generating thermal energy and ends when no fuel is fired. Feb 2015 Industry and environmental groups issued notice to challenge the new EGU SS rules. Key industry issues are the SS monitoring requirements, startup consideration for only particulate controls, and failure to limit SS diluent cap for oxygen or carbon dioxide levels. Key environmental issues are EPA conclusion that it is impractical to measure SS emissions, whether substituting SS work practices instead of emission standards meet MACT requirements, and standard-setting process based on 3-hour tests for 30- day average emission limits. 26

27. Cross State Air Pollution Rule (CSAPR) Stay of CSAPR Implementation Lifted Late 2014 CSAPR Federal Implementation Plan (FIP) In Effect replacing CAIR Facility Allocations in Accounts Non-EGU NOx SIP Call Sources not included in CSAPR; discussing what form of demonstration that NOx SIP Call obligation is being met is needed 27

28. NC Current NAAQS Designation Status Standards and goals set a decade ago have been met!  1997 Ozone standard  1997 Fine particle standard  2006 Lead standard  2010 Nitrogen dioxide standard  2010 Sulfur dioxide (SO2) standard (all monitors attaining, designations deferred)  2012 Fine particle (PM2.5) standard 2008 ozone standard - Charlotte area now attaining 2015 ozone standard - what will the new EPA standard look like? 28

29. EPA’s Proposed Revisions to the Ozone Primary and Secondary NAAQS Proposed rule published in Federal Register on Dec. 17 th, 2014 (79 FR 75234) Comment deadline - March 17 th, 2015 Proposal to update both the Primary and Secondary standards Both would be 8-hour standards set within a range of 65 to 70 parts per billion (ppb) EPA requested comment on levels for the primary standard as low as 60 ppb EPA accepted comments on all aspects of the proposal, including on retaining the existing standard 29

30. Charlotte Area Redesignation Request and Maintenance SIP for 2008 Ozone NAAQS Pre-Hearing Drafts for Public Notice Public Comment Period: March 9 – April 10, 2015 Request EPA approval for: Redesignating area to attainment for current 2008 standard Relaxation of summertime gasoline volatility standard for Mecklenburg and Gaston Counties to provide for uniform statewide standard Final – submit to EPA by mid-April 30

31. NC Ozone Design Values (2012-2014) Relative to Proposed Revised Ozone NAAQS Levels 31

32. Recent Rule Amendments and Repeals  Transportation Facility Permit Rules  15A NCAC 02D. 0800 and 02Q.0600  Repealed effective January 1, 2015  Non-Title V Permit 8-year Duration  15A NCAC 02Q.0308  Amended effective January 1, 2015  Open Burning Rules to Reflect S.L. 2013-413  15A NCAC 02D.1903 adopted by EMC - Awaiting legislative review per session law  15A NCAC 02D.1901 and.1902 Forest Service name change effective January 1, 2015 32

33. Vehicle Emissions Inspection/Maintenance (I/M) Three Year Exemption Amendments to 02D.1000 previously adopted by EMC Exempt three most recent model years with less than 70,000 miles on odometer Approved by EPA in FR 2-5-2015 (effective 3-9-15) Per Session Law to become state effective first of month following certification of MILES system and certification of EPA approval DAQ coordinated with DMV – Certifications complete Effective April 1, 2015 33

34. Rules in Amendment Process  2012 PM2.5 National Ambient Air Quality Standard (NAAQS)  Incorporates 2012 PM2.5 NAAQS into state rules  15A NCAC 02D.0410  Open Burning Rules to Reflect S.L. 2014-120  Allows residential burning of stumps and logs  Deemed by S.L. not to be a nuisance  15A NCAC 02D.1903 and.1902  Removal of Source Reduction and Recycling Report Requirement  Aligns rule with S.L. 2014-120 repeal of G.S. 143-215.108(g)  15A NCAC 02Q.0206,.0304, and.0507  Request to Proceed to Hearing Approved at March AQC/EMC (except Open Burning) 34

35. Next AQC and EMC Meetings AQCMay 13, 2015 EMCMay 14, 2015 EMC homepage http://portal.ncdenr.org/web/emc/home Meetings available via webinar (sound and slides only) One link for committee meetings day One link for EMC day 35

36. Contact Information Joelle Burleson Rules Development Branch Supervisor Planning Section, Division of Air Quality, DENR joelle.burleson@ncdenr.gov 36