1. www.epa.gov/nsr New Source Review (NSR) Prevention of Significant Deterioration (PSD): Refinement of Increment Modeling Procedures Proposal Jessica Montañez Office of Air Quality Planning and Standards New Source Review Group 1

2. Agenda What is New Source Review? What are the Requirements of the PSD Program? PSD Increments Purpose of this Proposal Refinements of Increment Modeling Procedures Proposal Topics Addressed in this Proposal 2

3. What is New Source Review? Thresholds used to identify whether a source is major or minor. Major sources for: PSD are those with potential to emit (i.e. capability at maximum design capacity to emit a pollutant) 100 or 250 tons/year or more depending on the source category NA NSR are those with potential to emit 100 tons/year or more. Sources might be subject to NA NSR because lower thresholds apply depending on the nonattainment severity. Regulated NSR pollutants. For: PSD include National Ambient Air Quality Standards (NAAQS) and other pollutants such as sulfuric acid mist and hydrogen sulfide NA NSR include only the NAAQS Major NSR in attainment areas (PSD) Minor NSR in both attainment and nonattainment areas Major NSR in nonattainment areas (NA NSR) New Source Review pre-construction permitting program for new or modified stationary sources NSR is divided into three parts: 3

4. What Are the Requirements of the PSD Program? Once it is determined that a source is subject to the PSD program, the program requires: Installation of Best Available Control Technology (BACT) Performing Air Quality Analysis to preserve existing clean air (including National Parks and Wilderness Areas where applicable) NAAQS Analysis (monitoring and modeling) Increment Analysis (modeling) Performing an Additional Impacts Analysis Public Involvement 4

5. PSD Increments One of the significant components of the PSD program is the requirement to evaluate increment consumption Baseline Concentration - the ambient concentration that existed in the area before a PSD source submits the first PSD application in the area Increment - maximum allowed increase in concentration of a pollutant above the baseline concentration in an area Increment standards exist for 3 pollutants for a variety of averaging periods and area classifications Particulate Matter (PM 10 ) Sulfur Dioxide (SO 2 ) Nitrogen Dioxide (NO 2 ) Increment standards for Class I areas are the smallest ones followed by Class II and Class III Class I - national parks and other natural areas of concern Class II - nearly all other areas in the United States Class III – areas targeted for industrial development Increment per Area Classification (  g/m 3 ) Averaging Period Pollutant I IIIII AnnualPM-1041734 SO 2 22040 NO 2 2.52550 24-hrPM-1083060 SO 2 591182 3-hrSO 2 25512700 5

6. Purpose of this Proposal  Purpose:  Refine the method for analyzing increment consumption through rulemaking  Why?  Over time, EPA has developed recommended approaches for increment analyses through guidelines and guidance documents because PSD regulations contained only a few basic requirements  Guidance on Air Quality Models, 40CFR Part 51 Appendix W  Draft NSR Workshop Manual  However, different interpretations and approaches have resulted over how binding the guidelines and guidance documents are and who has the ultimate discretion to determine which approaches are reasonable for a specific increment analysis “EPA and states have generally used an emissions inventory and modeling approach to calculate increment consumption.” 6

7. Refinements of Increment Modeling Procedures Proposal  Proposed rule:  Clarifies how PSD emissions increases are calculated to determine compliance with the PSD increment  Incorporates some of Western States Air Resources Council (WESTAR) recommendations  Addresses issues related to the 2004 State of North Dakota and the U.S. EPA Memorandum of Understanding (MOU)  Proposal:  Published in Federal Register on June 6, 2007  Comment period closed on August 6, 2007  Comment period reopened on August 29, 2007  New comment period closes on September 28, 2007 7

8. Refinements of Increment Modeling Procedures Proposal (Continued) Topics addressed in the proposal: What is the effect of the 1990 Draft NSR Workshop Manual? How should actual emissions from applicable sources that consume the PSD increment be estimated? How is a source with a Class I Area Federal Land Manager (FLM) variance treated in subsequent increment consumption modeling? What alternative time periods can be used to model pollutant concentrations? How should actual emissions be calculated for modeling short-term increments? What are appropriate types of meteorological data and processing that should be used for certain dispersion model applications? How many years of meteorological data are appropriate for modeling increment consumption? What are the requirements for modeling documentation, data and software availability? 8

9. What is the Effect of the 1990 Draft NSR Workshop Manual? We are only proposing to clarify that the 1990 Draft NSR Workshop Manual does not by itself establish final policies or interpretations Policies or interpretations from the NSR Workshop Manual that where issued in final form (such as rulemakings, guidance memorandum, or adjudications by the Administrator or the Environmental Appeals Board) are the ones that will be followed by EPA 9

10. How Should Actual Emissions from Applicable Sources that Consume the PSD Increment be Estimated? Increment consumption analysis include: Actual emissions: From any major stationary source on which construction commenced after the major source baseline date Increases and decreases at any stationary source occurring after the minor source baseline date Secondary emissions Mobile sources emissions: States that have neglected to account for these emissions in prior increment analysis should simply include them in their next permit review or periodic review of increment consumption We are proposing to amend the reference to ”any stationary source” in 40 CFR 51.166(b)(13)(ii)(b) and 52.21 (b)(13)(ii)(b) of our regulations to make clear that actual increment consuming emissions are not limited solely to stationary source emissions Increment consumption analysis exclude: Categories mentioned in Clean Air Act Section 163(c) Concentrations attributable to temporary increases in emissions from sources affected by SIP revisions approved by EPA, 40 CFR 51.166(f)(1)(v) Secondary emissions: emissions which occur as a result of the construction or operation of a major source or modification, but do not come from the major source itself. They include emissions from any offsite support facility. Must be specific, well- defined, quantifiable, and impact the same general area as the major source or modification under review. 10

11. How Should Actual Emissions from Applicable Sources that Consume the PSD Increment be Estimated? (Continued) Proposing to: Give each reviewing authority the discretion to use its best professional judgment when determining sources’ actual emissions Adopt a revised definition of “actual emissions” for increment calculation purposes in 40CFR51.166(f) and 52.21(f) rather than revising 40CFR 51.166(b)(21) and 40CFR 52.21(b)(21) Requesting comment on WESTAR’s recommended two-step approach: EPA should develop a menu of acceptable emissions calculation approaches for both short- term and annual PSD analyses Allow the reviewing authority to select what they believe to be the most appropriate option from the menu based on a set of guiding principles 11

12. How Should Actual Emissions from Applicable Sources that Consume the PSD Increment be Estimated? (Continued) WESTAR’s suggested guiding principles: Maximize the accuracy of the method(s) used in reflecting the actual status of air quality during each time period associated with applicable standards Conform to the Act, Federal PSD rules, and other applicable laws and rules Ensure consistency between emissions calculation methods used for sources in the baseline emissions inventory and the current emissions inventory Ensure that selected methods are practical given the availability of reviewing authority access to the emissions data Support fairness and consistency on how emissions are calculated for various source types across and within States Support key air quality management objectives that States and EPA are seeking to achieve, such as encouraging sources’ use of continuous emissions monitoring systems (CEMS) and discouraging sources from seeking more permitted air quality than they need 12

13. How is a Source with a Class I Area Federal Land Manager (FLM) Variance Treated in Subsequent Increment Consumption Modeling? When a proposed source subject to permitting has the potential to adversely impact a Class I area, an additional review is required to assess whether the source has the potential to adversely impact the area’s AQRVs AQRVs – resource that might be affected by a change in air quality as defined by the FLM, State or Indian Governing Body Sections 165(d)(2)(C)(ii) and 165(d)(2)(C)(iii) of the CAA state that AQRVs control whether a permit is issued or not The FLM, State or Indian Governing Body has the burden of demonstrating an adverse impact on AQRVs, if any, when the Class I increment is not exceeded. The permit applicant has the burden of convincing the FLM, State or Indian Governing Body that the proposed source will not have an adverse impact on AQRVs when the source causes or contributes to a violation of the Class I increment This certification is known as a “variance” 13

14. How is a Source with a Class I Area Federal Land Manager (FLM) Variance Treated in Subsequent Increment Consumption Modeling? (Continued) Section 165(d)(C) of the Act is ambiguous as to whether the Class I increment should continue to apply in the Class I area for which a variance has been issued For that reason, we are proposing to: Retain the Class I increment for the purpose of establishing the burden of proof in the AQRV analysis Not require a SIP to be amended to offset the contribution of sources that have received a variance because they do not adversely affect AQRVs Allow States to exclude the emissions from sources receiving an FLM variance from the Class I increment calculation Require States to include the emissions from the variance source for purposes of determining compliance with the Class II increment assessment 14

15. What Alternative Time Periods Can be Used to Model Pollutant Concentrations? When modeling air quality, we have called for the change in concentration to be based on the actual emissions rates from increment consuming sources over the 2 years immediately preceding a particular date. Exception: a different time period of time may be used when it is more representative of normal source operations (40CFR 51.166(b0(21)(ii) and 52.21 (b)(21)(ii)) Usually applied to catastrophic occurrences only In the 2002 new definition of “baseline actual emissions” for modifications. The definition allows for any consecutive: –2-year period in the last 10 years for non-utilities –2-year period in the last 5 years for utilities This proposal intends to clarify those circumstances when it is permissible to use another time period to represent actual emissions as of a particular date 15

16. What Alternative Time Periods Can be Used to Model Pollutant Concentrations? We are proposing to: Establish a new definition of “actual emissions” in 40 CFR 51.166(f)(1)(iv) and 52.21(f)(1)(iv) to clarify this issue A different time period than the 24 months preceding a particular date may be used as long as it is more representative of normal source operations and there is credible information that the unit’s operations in the 24 months preceding the date where not typical operations as of that date A period after the particular date may be used, but only if such period is more representative of normal source operations as of the particular date Operations occurring prior to a particular date are not representative of normal source operations for a particular date if they permanently ceased more than 24 months prior to that date The time period most be one consecutive 24 month period or two non-consecutive 12 month periods 16

17. How Should Actual Emissions be Calculated for Modeling Short-Term Increments? Short-term increments are available for SO 2 (24-hr and 3-hr) and PM In the past we have recommended using the maximum actual emission rate (i.e., the highest occurrence for that averaging period during the previous two years of operation) to calculate short term increments We have recognized in practice that there is often not sufficient data available to determine the maximum short-term emissions rate over a 2-year period 17

18. How Should Actual Emissions be Calculated for Modeling Short-Term Increments? (Continued) We propose: Add a provision that allows permitting authorities to use their discretion to use data that promotes consistency in the analysis and does not bias the analysis in favor of one group of sources over another That maximum short term-rates may continue to be used where sufficient data are available, but need not be used in all circumstances Not to preclude reviewing authorities from mixing data of different types when they consider it appropriate To preserve the option of using allowable emissions at the discretion of the source or reviewing authority To adopt revised language for purposes of increment consumption assessment that requires the use of projected actual emissions for a modified source To continue to require the increment assessment be based on the potential to emit for a new source 18

19. What Are Appropriate Types of Meteorological Data and Processing that Should be Used for Increment Consumption Modeling? Dispersion model applications have utilized: meteorological data inputs derived from the direct processing of National Weather Service (NWS) observation data or meteorological data collected as part of a site-specific measurement program Prognostic meteorological models and other tools are available to project meteorological conditions in order to fill gaps in site-specific observational data 40 CFR Part 51 Appendix W indicates criteria for judging the adequacy and appropriateness of meteorological input data Spatial, temporal representativeness of the data Meteorological parameters selected to properly characterize the transport and diffusion conditions for a specific dispersion model Dispersion models estimate the concentration of pollutants at specified ground-level receptors surrounding an emissions source. 19

20. What Are Appropriate Types of Meteorological Data and Processing that Should be Used for Increment Consumption Modeling? (Continued) We propose: A determination of appropriateness would involve a process equal in rigor to that already used to review prognostic meteorological model output data for use in photochemical grid modeling applications at the regional scale We believe that our existing guidance for ozone, PM 2.5, and regional haze SIP 1 modeling provides a useful basis for the process by which the State may allow use of certain data sets created by prognostic meteorological models as input into dispersion model applications provided these data sets, by using the process, are appropriate 1 http://www.epa.gov/scram001/guidance/guide/final-03-pm-rh-guidance.pdf Photochemical grid models simulate the impacts from all sources by estimating pollutant concentrations and deposition of both inert and chemically reactive pollutants over large spatial scales. 20

21. How many years of meteorological data are appropriate for modeling increment consumption? When meteorological observation data is used for dispersion modeling, Appendix W states that: Five years of representative NWS meteorological observation data are required – the most recent, readily available 5-year period is preferred At least 1 year of site-specific meteorological data is required – as many as 5 years are preferred When prognostic meteorological data is used, Appendix W states that: Less than 5, but at least 3 years of data are required – the years need not be consecutive We propose: To allow the State to consider any data years that is has determined to be appropriate using the process described above even if those data years were not produced by the same exact meteorological model configuration and simulation That the State must further determine that a particular set of data years can be modeled to produce an appropriate depiction of the air quality issue at hand 21

22. What are the requirements for modeling documentation, data and software availability? Appendix W: Documentation and software availability for preferred modeling techniques include that the “model and its code cannot be proprietary.” Does not address the application of the non-proprietary requirement to data developed for input into or use by a preferred model, or to other software used to process input data for a preferred model A strict requirement to be non-proprietary is currently not applied to alternative models that may be selected for use on a case-by-case basis, subject to the approval of the appropriate reviewing authority 22

23. What are the requirements for modeling documentation, data and software availability? (Continued) What we propose in case of proprietary data: It is currently within the discretion of the State to require some independent review of the proprietary data by an oversight agency, if such a review is deemed critical to the overall assessment of the appropriateness of data for a particular modeling application It is also within the discretion of the State to conduct the review, provided that proprietary information and trade secrets are protected under a system that is equivalent to EPA’s rules for requesting non-disclosure of Confidential Business Information (CBI) submitted to the Agency What we propose in case of proprietary software: Document: The reproducibility of the data or model simulation and the applicant should facilitate such a demonstration when required The quality assurance procedures used in the development of the proprietary software to support the integrity and accuracy of the results 23

24. Questions? 24