1. Air Quality Technical Advisory Committee Meeting September 27, 2006 Virendra Trivedi Chief, New Source Review/Title V Section Division of Permits Bureau of Air Quality PA Department of Environmental Protection vtrivedi@state.pa.us

2. Topics Covered Preliminary Summary of Public Comments Draft Concepts for Final Rulemaking

3. Overview of Proposed NSR Rulemaking Process EPA published the NSR reform rule in the Federal Register (67 Fed. Reg. 80186) on December 31, 2002. EPA’s final rule makes NSR reform mandatory for state and local agencies. EPA requires states to submit modifications to their existing NSR regulations to conform to the EPA’s NSR Reform rules or make an “equivalency demonstration”.

4. Overview of Proposed NSR Rulemaking Process AQTAC reviewed the proposed regulatory revisions on August 9, and August 30, 2005. The Environmental Quality Board (EQB) approved the proposed NSR amendments on December 20, 2005. The proposed amendments to Subchapter E were published in the Pennsylvania Bulletin on April 29, 2006.

5. Overview of Proposed NSR Rulemaking Process The Department held three (3) public hearings. The public comment period for the proposed rulemaking closed on July 31, 2006. The EQB received comments from 33 commentators.

6. Excerpts from EPA’s Comments Revise certain definitions including: Baseline actual emissions, projected actual emissions, net emissions increase, Begin actual construction, Federally enforceable Add certain definitions including: significant emissions increase, replacement unit

7. Excerpts from EPA’s Comments Postpone adoption of PM2.5 NSR requirements until EPA promulgates the PM2.5 implementation rule. Include hourly and daily emission test criteria, if the three-tiered (hourly, daily and annual) applicability test is retained. Provide an amnesty period for the generation of certain types of emission reduction credits. PM-10, PM2.5 and SO 2

8. Excerpts from EPA’s Comments Advance Clean Coal Technology: The presumptive lowest achievable emission rate (LAER) provision is not approvable. LAER must be the more stringent of either: A limit in a SIP for a class or category of sources. An emissions limit that has been achieved in practice.

9. Excerpts from EPA’s Comments The baseline actual emissions provision varies significantly from the Federal minimum requirement. The same baseline period should be allowed for all emission units associated with a project; different baselines for different pollutants should be allowed. The PAL reporting and monitoring provisions conflict with the Federal NSR requirements.

10. Excerpts from Industry’s Comments Look-back Period The Department should use the ten year “look-back” period consistent with the Federal NSR regulations rather than proposing a five year look-back. If the EQB does not adopt the federal approach, the EQB should adopt a 5-year look back with provisions to allow a more representative 2-year period out of the last 10 years. DEP should allow the use of a different 2-year period to determine the baseline emissions for each emission unit and each pollutant affected by a project.

11. Excerpts from Industry’s Comments Projected Actual Emissions Projected actual emissions should not become permit restrictions. If retained, they should be revised to better specify the procedural requirements for establishing the emission limit, including any timing constraints. Projected emissions should be calculated, monitored and reported in terms of 12 month periods consistent with the established policy and guidance and the federal rule.

12. Excerpts from Industry’s Comments De minimis Aggregation De minimis aggregation should be limited to a 5- year contemporaneous period and only required in the case of similar projects. The Department has provided no explanation for increasing the de minimis emission aggregation period from 5 years to 15 years. The provision should be revised to clarify that the LAER requirements do not apply to the de minimis emission increases.

13. Excerpts from Industry’s Comments Plantwide Applicability Limits (PALs) PAL provisions should allow a 10-year look-back period. A Best Available Technology (BAT) requirement for new sources installed under a PAL removes a primary incentive for the PAL. PALs should have a 10-year term and be fixed rather than declining. There is lack of clarity regarding how a PAL permit interacts with existing approvals and operating permits. The PAL recordkeeping and reporting provisions should be coordinated with the Title V recordkeeping and reporting provisions.

14. Excerpts from Industry’s Comments Plantwide Applicability Limit (PAL) (Continued) Units constructed after the 2-year PAL baseline period are added to the PAL at a rate equal to the actual emissions of the unit. The federal rules provide for adding to the PAL for such units at a rate equal to the potential to emit.

15. Excerpts from Industry’s Comments Southeast Pennsylvania Ozone Requirements Adopt the major source thresholds consistent with the "moderate" ozone nonattainment status under the new 8-hour ozone standard for the counties of Bucks, Chester, Delaware, Montgomery and Philadelphia. The proposed retention of the 25 TPY requirement for NOx and VOC will create a competitive disadvantage. There is no explanation for adding the new 15-year emissions netting period in the proposed rule.

16. Excerpts from Industry’s Comments Advanced Clean Coal Generation Technology Separate provisions for Advanced Clean Coal Generation Technology show an unfair preference to one particular segment of industry. Parameters used to establish LAER may be unachievable, particularly in a retrofit scenario.

17. Excerpts from Industry’s Comments General Comments Pennsylvania should adopt the federal NSR regulations to ensure that the state is not disadvantaged compared to surrounding states. Any provisions that differ from the federal program should be kept to a minimum. Portions of the proposed regulation should be rewritten for clarity. Specifically, problems arise with the multiple uses of the term "net emissions increase."

18. Excerpts from Industry’s Comments Lb/hr and Lb/day The lb/hr and lb/day de minimis aggregation thresholds are burdensome and should be eliminated. These hourly and daily triggers could cause a project to trigger PA NNSR when there isn't any annual increase in emissions.

19. Excerpts from Industry’s Comments Emission Reduction Credits (ERCs) The proposed rule adds a restriction that emission reductions necessary to meet allowance-based programs may not be used to generate ERCs. The requirement for an application to bank emission credits within one year is a serious impediment to economic development and the to the restart of temporarily closed facilities.

20. Excerpts from Industry’s Comments PM2.5 and PM-10 The proposed PM 2.5 requirements are premature and should be eliminated until EPA promulgates a federal regulation. No justification has been provided for the proposed lowering of the threshold from 100 tons per year to 70 tons per year of PM-10 for sources subject to NSR

21. Excerpts from Industry’s Comments Definitions All definitions should be added to Section 121.1. The definition of the term “allowable emissions” should be clarified. The definition of “major modification” is imprecise. The definition of the term “major facility” is ambiguous. The definition of the term “actual emissions” is different than the corresponding federal definition.

22. Excerpts from Industry’s Comments Definitions Emissions from start-ups, shutdowns, and malfunctions should not be treated differently under the definitions of "baseline actual emissions" and “projected future actual emissions.“ The term “new emission unit” does not take into account the reasonable "shakedown" period that is typically included in plan approvals. The definition of the term “actual emissions” should use a 24-month consecutive period rather than a a two-year period.

23. Excerpts from Clean Air Council’s comments Clean Air Council supports the following provisions: The 5-year look-back period Deletion of the “potential-to-potential test” and addition of the “actual-to-future-actual test.” Continuation of severe ozone nonattainment area provisions in the five-county Philadelphia area Lb/hr and lb/day de minimis aggregation thresholds

24. Excerpts from Clean Air Council’s comments (cont.) The Council supports the following provision of PALs : The use of a 5 year look-back for PAL baseline determinations. The decision to use the same 2-year period to determine a baseline for all pollutants and sources. The requirement for BAT on new sources under an existing PAL. The Council suggests adding a provision to change the PAL period to 5 years and adding a modest decline upon renewal.

25. Excerpts from Clean Air Council’s comments (cont.) The Council supports the provision of Clean Coal Technology Provision but suggests requiring the following emission rates to qualify: SO2: 0.015 lb/MMBtu NOx: 0.025 lb/MMBtu CO: 0.04 lb/MMBtu PM10: 0.007 lb/MMBtu VOC: 0.006 lb/MMBtu Hg: 0.2 -6 lb/MMBtu

26. Excerpts from IRRC’s comments Independent Regulatory Review Commission (IRRC) outlined three examples of areas where the proposed regulation is more stringent than the federal rules: Look-back Period: Philadelphia Five-county Area Best Available Technology and PALs IRRC supports retaining all definitions in Section 121.1.

27. Draft Concepts for Final Rulemaking

28. Definitions: Move all NSR definitions to 25 Pa. Code Section 121.1. Delete the following definitions: PM-10 precursor Extreme Ozone Nonattainment Area definitions Marginal Ozone Nonattainment Area definitions Moderate Ozone Nonattainment Area definitions Serious Ozone Nonattainment Area definitions Add the following additional definitions: Air Contamination Source Replacement Unit Significant Emissions Increase

29. Draft Concepts for Final Rulemaking Definitions: Revise the following proposed definitions: Actual Emissions Best Available Control Technology De Minimis Emissions Increase Emissions Unit Federally Enforceable Major Facility, Major Modification Net Emissions Increase Plantwide Applicability Limit Projected Actual Emissions, Significant

30. Draft Concepts for Final Rulemaking Postpone final action on PM-2.5 requirement pending adopting of PM2.5 requirements by EPA Delete existing PM-10 precursor requirements Revise the proposed Section 127.203a Delete Lbs/hr and Lbs/day requirements

31. Draft Concepts for Final Rulemaking Baseline Actual Emissions: Allow a 24-month period within 5 years Use of a different 24 month-period within 10 years will be allowed if it is representative of normal operations Allow a different 24-month period for each pollutant if it is more appropriate due to extenuating circumstances.

32. Draft Concepts for Final Rulemaking Emission Reduction Credits (ERCs): Provide an amnesty period for the generation of certain pollutants PM-10, PM2.5 and SO 2