ENV-39-07-00006-AA Requirements for Proposed New Major Facilities and Major Modifications to Existing Facilities

2/18/09 N.Y. St. Reg. ENV-39-07-00006-AA

NEW YORK STATE REGISTER

VOLUME XXXI, ISSUE 7

February 18, 2009

RULE MAKING ACTIVITIES

DEPARTMENT OF ENVIRONMENTAL CONSERVATION

AMENDED NOTICE OF ADOPTION

 

I.D No. ENV-39-07-00006-AA

Filing No. 112

Filing Date. Feb. 03, 2009

Effective Date. Mar. 05, 2009

Requirements for Proposed New Major Facilities and Major Modifications to Existing Facilities

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:

Action taken:

Amendment of Parts 200, 201 and 231 of Title 6 NYCRR.

Amended action:

This action amends the rule that was filed with the Secretary of State on January 20, 2009, to be effective February 19, 2009, File No. 00074. The notice of adoption, I.D. No. ENV-39-07-00006-A, was published in the February 4, 2009 issue of the State Register.

Statutory authority:

Environmental Conservation Law, sections 1-0101, 3-0301, 3-0303, 19-0103, 19-0105, 19-0107, 19-0301, 19-0302, 19-0303, 19-0305; and Federal Clean Air Act, sections 160-169, 171-193 (42 U.S.C. 7470-7479; 7501-7515)

Subject:

Requirements for proposed new major facilities and major modifications to existing facilities.

Purpose:

The Department is undertaking this rulemaking to comply with the 2002 Federal New Source Review Rule as amended on 12/21/07.

Substance of amended rule:

The Department of Environmental Conservation (Department) is proposing revisions to its rulemaking proposal published in the State Register on September 26, 2007 for Parts 200, 201 and 231 of Title 6 of the Official Compilation of Codes, Rules, and Regulations of the State of New York, entitled “General Provisions,” “Permits and Registrations” and “New Source Review in Nonattainment Areas and Ozone Transport Regions” respectively.

The Part 200 amendments will add a definition for Routine Maintenance, Repair, or Replacement (RMRR), codifying current Department practice of reviewing RMRR activities on a case by case basis, taking into account the nature and extent of the activity and its frequency and cost. In addition, the Department is revising Part 200 (Sections 200.9 and 200.10). Section 200.9 is being amended to include all federal materials referenced in the proposed amendments to Part 231. Section 200.10(a) is being amended to reflect that the Department is no longer delegated responsibility for implementation of the Federal Prevention of Significant Deterioration (PSD) Program.

The proposed amendments to Part 201 revise the definition for “major stationary source or major source” at 6 NYCRR 201-2.1(b)(21). The definition will now encompass the term “major facility” and incorporate major facility and significant project thresholds for facilities emitting particulate matter or particles with an aerodynamic diameter less than or equal to a nominal 2.5 micro-meters (PM-2.5). EPA designated the New York City metropolitan area as nonattainment for the PM 2.5 standard (70 Fed. Reg. 944). Nonattainment new source review (NNSR) is now required for new major facilities and major modifications to existing facilities that emit PM 2.5 in significant amounts in the PM2.5 nonattainment area.

The existing nonattainment New Source Review program at Part 231 will be re-titled “New Source Review for New and Modified Facilities” and will include new Subparts 231-3 through 231-13. The new subparts will implement nonattainment New Source Review (NNSR) and attainment New Source Review (PSD). The NNSR requirements are based on New York’s existing NNSR program Subpart 231-2, with revisions to include selected provisions from the December 31, 2002 Federal NSR reform rule and EPA’s December 21, 2007 Reasonable Possibility in Recordkeeping Rule. The PSD requirements are also based largely on the December 31, 2002 Federal NSR reform rule as codified at 40 CFR 52.21.

The proposed revisions to Part 231 will change the basis of applicability for modifications and emission reduction credits (ERCs) from an “Emission Unit” basis to an “Emission Source” basis, incorporate various federal requirements, provide clarification of existing requirements, and require comprehensive reporting, monitoring, and recordkeeping that will conform to the requirements of Title V. Through this rulemaking, the Department will also establish a new method for determining baseline actual emissions. Baseline actual emissions will be determined by using any 24 consecutive month period of emissions in the previous five years. All facilities (no separate baseline period for electric utility steam generating units) will be required to determine their baseline actual emissions using this method.

The Department will retain existing Subpart 231-1 “Requirements for emission sources subject to the regulation prior to November 15, 1992” and Subpart 231-2, “Requirements for emission units subject to the regulation on or after November 15, 1992”. These regulations are currently cited in many air permits issued throughout the State and retaining them will facilitate implementation and enforcement of the NSR program. Existing Subpart 231-2 will be revised only to indicate that the Subpart will not apply after the date the proposed revisions to Part 231 become effective. Thus, permit applications received on or after the effective date of revised Part 231 will be processed according to the provisions of Subparts 231-3 through 231-13, as applicable.

New Subparts 231-3 through 231-13 have been added to include provisions from the EPA December 31, 2002 NSR Rule, and incorporate the Federal PSD program. The NNSR provisions currently specified in Subpart 231-2 are being updated and incorporated into these new subparts. The Department is also adopting a State PSD program which is based largely on the Federal PSD rule and included in Subparts 231-7, 231-8, and 231-12. The subparts of the proposed regulation are being organized to ease determinations of applicability, to collect common requirements into groups, and to streamline the regulation. The organization of the new regulation strives to make a more coherent series of requirements and obligations.

Subpart 231-3 General Provisions specifies provisions which apply generally such as a transition plan, exemptions, general prohibitions, source obligation, general permit requirements, facility shakedown periods, and circumvention. Proposed Section 231-3.4 (Exemptions) has been revised to remove the Clean Coal technology exemptions. The Department has determined that these exemptions are out of date and no longer necessary for implementing the NSR program. The Source Obligation section (231-3.6) includes a requirement that any owner or operator of a facility that proposes a project that involves a physical change or change in the method of operation that the owner or operator determines would be followed by a facility emissions increase that equals or exceeds any of the significant project thresholds in Subpart 231-13, Tables 3, 4 or 6, must notify the Department in writing of the proposed project prior to implementing the change if the owner or operator determines that the project does not constitute a modification because all the emission increases are attributable to independent factors in accordance with Clause 231-4.1(b)(40)(i)(c). The notification must include (1) a description of the change, (2) the calculation of the projected emissions increase, (3) the proposed date of the change, and (4) an explanation of the factual basis for the conclusion that none of the projected emission increases are attributable to the proposed project.

Subpart 231-4 defines the terms used throughout Part 231 and incorporates terms from both the existing Subpart 231-2 and the Federal PSD rule, 40 CFR 52.21. The Department has made minor revisions to terms used in existing Subpart 231-2 and 40 CFR 52.21 so that definitions are consistent for both nonattainment and attainment NSR and with New York’s regulations. The Department has also removed the previously proposed Clean Coal technology definitions to be consistent with the removal of the Clean Coal technology exemptions in Subpart 231-3.

To facilitate the implementation and administration of Part 231, the Department has included the requirements for new and modified facilities in four main Subparts (231-5 to 231-8) depending on the facility’s location in an attainment or nonattainment area.

Subpart 231-5 is applicable to new facilities and to modifications at existing non-major facilities in nonattainment areas. Proposed new major facilities will continue to be subject to the requirements to install Lowest Achievable Emission Rate (LAER) and obtain emission offsets as they are under existing Subpart 231-2. The subpart also specifies that non-major facilities undertaking projects which are major by themselves, or increase the emissions of the facility above major thresholds must obtain permits which limit emissions.

Subpart 231-6 applies to modifications at existing major facilities in nonattainment areas. The subpart continues the requirements for LAER technology and emission offsets that exist in the Department’s current nonattainment NSR program. The subpart also specifies that facilities can perform a netting exercise to determine whether the modification, when considering other contemporaneous activities at the facility, would exceed applicable emissions thresholds.

Subpart 231-7 applies to new facilities and to modifications at existing non-major facilities in attainment areas. The subpart implements the requirements for determination of air quality impacts through modeling, and the application of Best Available Control Technology (BACT). The subpart also specifies that non-major facilities undertaking projects which are major by themselves, or increase the emissions of the facility above major thresholds must obtain permits which limit emissions.

Subpart 231-8 applies to modifications at existing major facilities in attainment areas of the State. The subpart implements the requirements for determination of air quality impacts through modeling and the application of BACT in the case of facilities which undertake a NSR major modification. These requirements address Federal PSD requirements. The subpart also specifies that facilities can perform a netting exercise to determine whether the modification, when combined with other contemporaneous activities at the facility, would exceed emissions thresholds.

The remaining five subparts include general provisions that apply to both new and modified subject facilities.

Subpart 231-9 sets forth the requirements for establishing Plantwide Applicability Limitations (PAL) at Title V facilities. A PAL allows a facility to undertake modifications without being subject to NSR review as long as the facility does not exceed its PAL emission limit. Subpart 231-9 is based on the PAL provisions from the December 31, 2002 Federal NSR rule (67 Fed Reg at 80278), which specify PAL creation, duration, and expiration. The Department has made a few revisions to the Federal regulatory language to take into account Subpart 201-6, New York’s approved Title V regulation and to ensure that reduced emissions and improved air quality will result. PALs are established in Title V permits and are subject to Title V permit application and processing procedures for creation, modification, or renewal. PALs are created for an initial period of 10 years, less if established during the middle of a Title V permit term, and can be renewed for 10 years, subject to certain restrictions. The proposed regulation requires that the PAL shall be reduced to 75 percent of the initial PAL, commencing with the first day of the sixth year of the PAL, unless the owner or operator demonstrates that a lesser level of reduction is justified. The owner or operator may seek an alternative reduced PAL by demonstrating that the application of BACT and/or LAER, as applicable, on all major PAL emission sources at the facility would not result in a 25 percent reduction in the initial PAL. The Department may authorize a reduction in the PAL to a level that would reflect the emissions from the facility if all major PAL emission sources are operated at full capacity after complying with BACT and/or LAER, as applicable.

Subpart 231-10 defines emission offset and Emission Reduction Credit (ERC) creation and use. The provisions for ERC creation and use are substantially the same as existing Subpart 231-2 except for the determination of ERC enforceability. Under proposed Subpart 231-10 the Department has clarified how ERCs are made enforceable.

Subpart 231-11 sets forth permit requirements for new major facilities, NSR major modifications, and netting. This Subpart also establishes reasonable possibility requirements for insignificant modifications. These requirements are in addition to any Part 201 requirements that may apply. The Federal Reasonable Possibility Rule only requires post-change monitoring for insignificant modifications if the projected actual emissions increase (Part 231 project emission potential) is by itself greater than or equal to 50 percent of the applicable significance threshold. Proposed Part 231 extends the post-change monitoring requirement to also include any modification with a project emission potential which is less than 50 percent of the applicable significant project threshold in Table 3, Table 4 or Table 6 of Subpart 231-13, but equals or exceeds 50 percent of the applicable significant project threshold when emissions excluded in accordance with Clause 231-4.1(b)(42)(i)(c) (emissions from independent and unrelated factors) are added. For such modifications, facilities will be required to keep records of their calculation of emission increases from independent and unrelated factors such as demand growth, monitor post-modification emissions, and submit annual reports to verify the accuracy of their calculations. Additionally, the Federal Reasonable Possibility Rule only requires EUSGUs to notify the Department, prior to beginning actual construction, for any modification with a project emission potential which equals or exceeds 50 percent of the applicable significant project threshold. Proposed Part 231 extends the pre-construction notification requirement to any facility that proposes a modification with a project emission potential which equals or exceeds 50 percent of the applicable significant project threshold or proposes a modification with a project emission potential which is less than 50 percent of the applicable significant project threshold in Table 3, Table 4 or Table 6 of Subpart 231-13, but equals or exceeds 50 percent of the applicable significant project threshold when emissions excluded in accordance with Clause 231-4.1(b)(42)(i)(c) (emissions from independent and unrelated factors) are added.

Subpart 231-12 specifies the ambient air quality impact analysis requirements for facilities in attainment areas. These requirements emanate from the Federal PSD rule which is codified at 40 CFR 52.21.

Subpart 231-13 includes several tables which list applicable emission thresholds for proposed new and modified facilities, emission offset ratios, Federal Class I variance maximum allowable increase concentrations, and maximum allowable increase in SO2 concentrations for gubernatorial variances. Table 9 – Source Category List includes the new chemical process plant exclusion for ethanol production facilities that produce ethanol by natural fermentation (included in NAICS codes 325193 or 312140). This exclusion was promulgated in the EPA May 1st, 2007 Final Rule for 40 CFR Parts 51, 52, 70, and 71 Prevention of Significant Deterioration, Nonattainment New Source Review, and Title V: Treatment of Certain Ethanol Production Facilities Under the ‘‘Major Emitting Facility’’ definition.

Amended rule as compared with adopted rule:

Nonsubstantive revisions were made in sections: 200.1(cl), 201-2.1(b)(21), 231-3.6(a), 231-4.1(b)(29)(iii), 231-5.1(a)(1), (2), (b), 231-5.2(d)(1), (e)(1), 231-6.3(d)(1), (e)(1), 231-7.1(a)(1), (2), (b), 231-10.1(h), (i), 231-10.2(c) and 231-10.7.

Text of amended rule and any required statements and analyses may be obtained from:

Rick Leone, P.E., NYSDEC, Division of Air Resources, 625 Broadway, Albany, NY 12233-3254, [phone], email: [e-mail]

Additional matter required by statute:

Pursuant to Article 8 of the State Environmental Quality Review Act, a Short Environmental Assessment Form, a Negative Declaration and a Coastal Assessment Form have been prepared and are on file. This rule has been approved by the Environmental Board.

Revised Regulatory Impact Statement

There were no changes to the previously published Revised Regulatory Impact Statement.

Revised Regulatory Flexibility Analysis

There were no changes to the previously published Revised Regulatory Flexibility Analysis for small business and local governments.

Revised Rural Area Flexibility Analysis

There were no changes to the previously published Revised Rural Area Flexibility Analysis.

Revised Job Impact Statement

There were no changes to the previously published Revised Job Impact Statement.