Clean Air Act Approval and Promulgation of New Source Review Implementation Plan for Clark County, NV

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[NV 11-1-7118; FRL-5265-3]

Clean Air Act Approval and Promulgation of New Source Review

Implementation Plan for Clark County, NV

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking.

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SUMMARY: The EPA proposes to approve with a contingency, and disapprove

in

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the alternative, a requested State Implementation Plan (SIP) revision

submitted by the State of Nevada on behalf of Clark County for the

purpose of meeting requirements of the Clean Air Act, as amended in

1990 (CAA or Act) with regard to new source review (NSR) in areas that

have not attained the national ambient air quality standards (NAAQS).

The requested revision was submitted by the State to satisfy certain

Federal requirements for an approvable nonattainment new source review

SIP. This submittal also satisfies the requirements for a Prevention of

Significant Deterioration (PSD) program. This proposed approval is

contingent upon Clark County correcting existing deficiencies in its

NSR and PSD submittal before EPA promulgates a final rulemaking on this

submittal. Should Clark County fail to correct all deficiencies in this

submittal, then this document will serve as a proposed disapproval of

the submittal.

DATES: Comments on this proposed action must be received in writing by

August 28, 1995.

ADDRESSES: To submit comments or receive further information, please

contact: Jennifer Fox, Environmental Engineer, New Source Section, Air

& Toxics Division (A-5-1), EPA Region 9, 75 Hawthorne Street, San

Francisco, CA 94105. Copies of the State's submittal and other

information are available for inspection during normal business hours

at the following locations: (1) EPA Region 9, 75 Hawthorne Street, San

Francisco, CA 94105; (2) State of Nevada Department of Conservation and

Natural Resources, Division of Environmental Protection, Capitol

Complex, 333 W. Nye Lane, Carson City, Nevada 89710; (3) Clark County

Health District, 625 Shadow Lane, Las Vegas, NV 89127.

FOR FURTHER INFORMATION CONTACT: Jennifer Fox at (415) 744-1257.

SUPPLEMENTARY INFORMATION: The air quality planning requirements for

nonattainment NSR are set out in part D of title I of the Clean Air

Act. EPA has issued a ``General Preamble'' describing EPA's preliminary

views on how EPA intends to review SIPs and SIP revisions submitted

under part D, including those State submittals containing nonattainment

NSR SIP requirements [see 57 FR 13498 (April 16, 1992) and 57 FR 18070

(April 28, 1992)]. Because EPA is describing its interpretations here

only in broad terms, the reader should refer to the General Preamble

for a more detailed discussion. EPA is currently developing a proposed

rule to implement the changes under the 1990 Amendments in the new

source review provisions in Parts C and D of Title I of the Act. EPA

expects to propose this rule sometime during 1995. Upon promulgation of

those regulations, EPA will review those NSR SIP submittals on which it

has taken final action to determine whether additional SIP revisions

are necessary.

Procedural Background

The Act requires States to observe certain procedural requirements

in developing implementation plans and plan revisions for submission to

EPA. Section 110(a)(2) and section 110(l) of the Act provide that each

implementation plan or revision to an implementation plan submitted by

a State must be adopted after reasonable notice and public

hearing.1

\1\ Section 172(c)(7) of the Act provides that plan provisions

for nonattainment areas shall meet the applicable provisions of

Section 110(a)(2).

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The Clark County Health District held a public hearing on April 22,

1993 to entertain public comment on the new source review rules. On

July 29, 1993, the rules were adopted by the District and submitted to

the State. On November 30, 1993 the rules were submitted to EPA as a

proposed revision to the Nevada SIP.

The SIP revision was not reviewed by EPA within six months to

determine completeness, and was therefore deemed complete by default.

The submittal has since been reviewed and found to be complete but

lacking certain requirements that would make it fully approvable. Clark

County has, however, expressed an interest in revising their SIP to

make the required changes and has submitted draft versions of the rule

which address the deficiencies described below. Therefore, contingent

on the submittal of a fully approvable SIP, EPA proposes to approve the

Clark County Health District's nonattainment NSR and attainment PSD SIP

submittal. If the District fails to address the deficiencies before

EPA's final action on this submittal (which we expect will be within 6

months), then EPA's final action will be a disapproval.

Summary of Rule Contents

The Air Pollution Control Division of the Clark County Health

District submitted to EPA for adoption into the applicable NSR SIP

Rules 0 (Definitions), 12 (Preconstruction Review for New or Modified

Stationary Sources), and 58 (Emission Reduction Credits). Rules 0, 12,

and 58 are intended to replace existing NSR SIP Rules 1 (Definitions)

and 15 (Source Registration).

These submitted rules constitute the District's new source

permitting regulations. Rule 0 consists of definitions of all terms

relating to new sources and modifications to existing sources of air

pollution, and their regulation. Rule 12 contains new and modified

source permitting requirements, including applicability, major source

definitions, offsets, increment analysis, and Lowest Achievable

Emission Rate/Best Available Control Technology. Rule 58 establishes

procedures for the creation, banking, and use of emission reduction

credits. This last rule has indirect bearing on new source review, as

these credits can be obtained by new sources and used as offsets.

In Clark County, the Las Vegas Valley, Boulder City, and El Dorado

Valley are currently designated as Serious nonattainment for PM-10 and

Moderate nonattainment (>12.7 ppm) for CO. All other areas within the

District are designated as attainment or unclassifiable with respect to

the NAAQS. District nonattainment rules must therefore apply to all

major new or modified stationary sources proposing to emit CO or PM-10

in the areas noted above. The nonattainment provisions must also apply

to any source which would contribute to a violation of the NAAQS. The

PSD provisions submitted by the District apply to certain new sources

or modifications proposing to emit attainment pollutants in specified

amounts.

The Clean Air Act requirements are found at sections 172 and 173

for nonattainment NSR permitting and at section 165 for PSD permitting.

With certain exceptions, described below, Clark County's submittal

satisfies these requirements. For a detailed description of how the

submitted rule meets the applicable requirements, please refer to EPA's

technical support document.

Rule Deficiencies That Must Be Corrected

Rule 0

Modification: The definition of ``modification'' in the submitted

rule differs from the federal definition. The CFR defines a

modification as a change resulting in a ``net emissions increase.'' A

net emissions increase is based on an increase in actual emissions for

a physical or operational change, or an increase in potential emissions

in the case of sources which have not yet constructed.

The submitted rule, however, defines a ``modification'' as an

increase in a source's ``potential to emit.'' As a result the rule

fails to require review for

[[Page 38779]]

modifications which involve a ``major'' increase in actual emissions,

but no increase in potential to emit. To correct this deficiency,

calculations in the District rule must be based on increases in actual

emissions (and for sources which have not begun normal operations,

actual emissions shall equal the potential to emit). Because the

district has correctly defined ``potential to emit'' and ``actual

emissions,'' this change can be made by incorporating the federal

definition of ``net emissions increase'' into the District rule

definition of ``modification.''

Regulated Air Pollutant: The definition of ``regulated air

pollutant'' in the submitted rule contains a list of emissions which

are ``regulated by sections containing Emission limits and by Section

12.'' The list of ``Chemical Substances Requiring BACT and Public

Notification'' in Section 12.2.7, however, contains substances which

are not included in the definition of ``regulated air pollutant.'' This

oversight should be corrected for rule consistency.

Volatile Organic Compound: The definition of ``volatile organic

compound'' in the submitted rule contains a list of substances exempt

from regulation as VOCs which is inconsistent with the exemption list

in 40 CFR 51.100(s). This discrepancy should be corrected to avoid

granting VOC emission reduction credits, as well as requiring VOC

offsets, for exempt compounds. The definition in the CFR should be

adopted verbatim into this section.

Rule 12

Public Notice: The submitted rule does not specify that public

comments regarding an air quality permit application will be

considered, except in the event of a public hearing. A thirty-day

public comment period should be required for each permit application,

as specified by 40 CFR 51.166(q). All public comment, oral and written,

received within the specified time, should be considered in making the

final decision on the approvability of the permit application.

Variance to Rule Requirements: The submitted rule outlines the

procedure by which the Board of Health may grant a variance to

subsection 12.2.10.6 (which requires impact analysis for NOx

sources of 100 tpy or greater). The District has explained that this

variance is intended to refer to the lowered major source applicability

threshold of 50 tpy for NOx sources in the Las Vegas Valley. If

so, this must be clarified in the rule, so that no variance may be

granted to a source required by federal standards to undergo new source

review.

Fugitive Emissions: The submitted rule contains a definition of

potential to emit which includes fugitive emissions only for sources of

PM-10 in the nonattainment area. Fugitives must also be included in the

major source applicability determination, defined by a source's

potential to emit, for all other regulated pollutants, if the source

belongs to one of the source categories listed in 40 CFR

51.165(a)(1)(iv)(C).

Additional Impact Analysis for Attainment Pollutants: In many

cases, the submitted rule correctly requires major sources to perform

an additional impact analysis, as required in 40 CFR 51.166(i) and

51.166(o). However, the rule fails to require the analysis for VOC,

lead and CO in sections 12.2.5, 12.2.8, and 12.2.13, respectively. In

addition, the rule fails to require the analysis for major

modifications. The rule must be amended to require the additional

impact analysis for pollutant subject to regulation under the Act which

will be emitted by the new source or modifications.

Alternative Siting Analysis: The submitted rule lacks a requirement

that an alternative siting analysis be performed by all permit

applicants for sources located within a nonattainment area. This

analysis, required by CAA 173(a)(5), would demonstrate that the

benefits of a proposed source significantly outweigh the environmental

and social costs imposed as a result of its location, construction, or

modification.

Class I Area Visibility Protection: The submitted rule lacks the

visibility protection requirements of section 169A of the CAA and

described in 40 CFR 51.307. These provisions require review of major

sources and modifications that may have an impact on visibility in any

mandatory Class I Federal Area. This may have been overlooked, because

there are currently no Class I areas in Clark County. Nonetheless, this

requirement should be included in the event that such an area be

designated in the future, or that a source may impact a Class I area

outside of Clark County.

PSD Ambient Air Increments: The submitted rule lacks provisions

which set the maximum allowable increases in PM-10, SO2, and

NO2 to those increments listed in 40 CFR 51.166(c), for designated

attainment or unclassifiable areas. The increments must be listed in

the rule.

Offsets: The submitted rule states that, when required, offsets

must be obtained by a source either prior to, or within thirty days of,

the issuance of the Operating Permit, depending on the pollutant.

Section 173 of the CAA, however, requires that offsets be federally

enforceable prior to the issuance of an Authority to Construct Permit,

and in effect by the time operation commences. This requirement must be

changed in order to make the rule approvable.

Additional Requirements: The submitted rule contains no provisions

which require new source review for a source or modification which

becomes major due to a relaxation in a federally-enforceable limit. As

described in 40 CFR 51.165(a)(5)(ii), such sources and modifications

are subject to major new source review ``as though construction had not

yet commenced.'' The submitted rule must add this requirement.

Hazardous Air Pollutants: The list of hazardous air pollutants in

the submitted rule must be expanded to include those pollutants listed

in 40 CFR 51.166(b)(23)(i), which are not also regulated by Section

112(b)(1) of the Act. These pollutants and their significance levels

must be listed.

Rule 58

RACT Adjustment: The submitted rule lacks provisions requiring that

existing and future emission reduction credits (ERCs) are surplus to

Reasonably Available Control Technology (RACT) requirements at time of

use. EPA interprets section 172(c)(1) of the Act to require a RACT

level of reductions on ERCs as well as on all applicable sources. This

ensures that all ERCs will be surplus at their time of use, since any

banked credits that predate a RACT requirement will not be able to be

counted as a credit toward meeting that requirement.

Prior Shutdowns: The submitted rule does not disallow ``prior

shutdown'' credits as required in 40 CFR 51.165(a)(1)(xxv). As defined

by this CFR section, prior shutdown credits are generated by facilities

which apply for credit after the facility has already ceased to

operate. The provision limiting shutdown credits applies either when

the District attainment plan has been disapproved, or when this plan is

not yet due, but a due date during the creation of this plan is missed.

In this case, sources which seek ERCs due to a shutdown must do so at

the time operation of the source ceases.

Property Rights: The submitted rule refers to procedures which

allow banking of ERCs ``in a legally protected manner.'' This language

suggests that banked ERCs could be protected under property rights

laws, or that their adjustment or rescission could be legally contested

by the owner of the ERCs. EPA cannot approve such language, and

encourages the District to

[[Page 38780]]

add language explicitly stating that banking does not guarantee ERCs

under any property rights laws.

Mobile and Area Sources: The submitted rule allows reductions

generated by mobile and area sources to be credited as ERCs which may

be used as offsets. The rule fails, however, to provide for the federal

enforceability of these credits. In addition, the submitted rule lacks

language detailing how these emissions are to be quantified. Both the

federal Emissions Trading Policy Statement (ETPS, 51 FR 43814, 4

December 1986) and the Economic Incentive Program Rules (EIP, 58 FR

11110, 23 February 1993) contain provisions concerning this issue.

Unless language is added which describes how mobile and area source

reductions are to be quantified and made federally-enforceable, EPA

requires that all references to area and mobile source reductions be

removed.

Proposed Action

EPA is proposing to approve, with disapproval in the alternative,

the plan revisions submitted by Clark County on November 30, 1993. Full

approval as a final action on these rules is contingent upon the

District making the required changes listed above.

If the specified changes are not made before EPA's final action on

this submittal, then EPA's final action will be a disapproval. If

finalized, this disapproval would constitute a disapproval under

section 179(a)(2) of the Act (see 57 FR 13566-67). As provided under

section 179(a) of the Act, Clark County would have up to 18 months

after a final SIP disapproval to correct the deficiencies that are the

subject of the disapproval before EPA is required to impose sanctions.

If the District does not correct its SIP deficiencies within 18 months,

then section 179(a)(4) requires the immediate application of sanctions.

According to 179(b), sanctions can take the form of a loss of highway

funds or a two to one emissions offset ratio. Once the Administrator

applies one of the section 179(b) sanctions, the State will then have

an additional six months to correct any deficiencies. Section 179(a)(4)

requires that both highway and offsets sanctions must be applied if any

deficiencies are still not corrected after the additional six month

period.

EPA is requesting comments on all aspects of the requested SIP

revision and EPA's proposed rulemaking action. Comments received by

date indicated above will be considered in the development of EPA's

final rule.

Administrative Review

Nothing in this action should be construed as permitting or

allowing or establishing a precedent for any future request for

revision to any state implementation plan. Each request for revision to

the state implementation plan shall be considered separately in light

of specific technical, economic, and environmental factors and in

relation to relevant statutory and regulatory requirements.

Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., EPA

must prepare a regulatory flexibility analysis assessing the impact of

any proposed or final rule on small entities. 5 U.S.C. 603 and 604.

Alternatively, EPA may certify that the rule will not have a

significant impact on a substantial number of small entities. Small

entities include small businesses, small not-for-profit enterprises,

and government entities with jurisdiction over populations of less than

50,000.

SIP approvals under section 110 and subchapter I, part D of the Act

do not create any new requirements, but simply approve requirements

that the State is already imposing. Therefore, because the Federal SIP-

approval does not impose any new requirements, I certify that it does

not have a significant impact on any small entities affected. Moreover,

due to the nature of the Federal-State relationship under the Act,

preparation of a regulatory flexibility analysis would constitute

Federal inquiry into the economic reasonableness of State action. The

Act forbids EPA to base its actions concerning SIP's on such grounds.

Union Electric Co. v. U.S. E.P.A., 427 U.S. 246, 256-66 (S.Ct 1976); 42

U.S.C. 7410(a)(2).

The Office of Management and Budget has exempted this rule from the

requirements of section 3 of Executive Order 12291.

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Hydrocarbons,

Intergovernmental relations, New source review, Nitrogen dioxide,

Particulate matter, Reporting and recordkeeping requirements, Sulfur

dioxide, Volatile organic compounds.

Authority: 42 U.S.C. 7401-7671q.

Dated: July 17, 1995.

Felicia Marcus,

Acting Regional Administrator.

[FR Doc. 95-18618 Filed 7-27-95; 8:45 am]

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