Approval and Promulgation of Air Quality Implementation Plans; Commonwealth of VirginiaPrevention of Significant Deterioration Program

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[VA25-1; A-1-FRL-5402-1]

Approval and Promulgation of Air Quality Implementation Plans;

Commonwealth of Virginia--Prevention of Significant Deterioration

Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to disapprove or, in the alternative, to

conditionally approve a State Implementation Plan (SIP) revision

submitted by the Commonwealth of Virginia. This revision, consisting of

two parts, establishes a program for prevention of significant

deterioration of air quality (PSD). The first part includes Virginia's

regulations and procedures for a PSD program. The second part includes

amendments to those regulations submitted as part of the SIP revision.

The intended effect of this action is to propose disapproval or, in the

alternative, approval of Virginia's request to amend its SIP to satisfy

federal new source review requirements for the preconstruction

permitting of new sources and modifications in attainment and

unclassifiable areas, on the condition that deficiencies in the state

program are corrected and submitted within one year of approval. This

action is being taken under the Clean Air Act (CAA).

DATES: Comments must be received on or before February 23, 1996. Public

comments on this document are requested and will be considered before

taking final action on this SIP revision.

ADDRESSES: Comments may be mailed to Marcia L. Spink, Associate

Director, Air, Radiation, and Toxics Division, U.S. Environmental

Protection Agency, Region III, 841 Chestnut Building, Philadelphia, PA

19107. Copies of the documents relevant to this action are available

for public inspection during normal business hours at the Air,

Radiation, and Toxics Division, U.S. Environmental Protection Agency,

Region III, 841 Chestnut Building, Philadelphia, PA 19107, and at the

Virginia Department of Environmental Quality, P.O. Box 10089, Richmond,

Virginia, 23240.

FOR FURTHER INFORMATION CONTACT: Lisa M. Donahue (215) 597-2923, at the

EPA Region III address above.

SUPPLEMENTARY INFORMATION: In a series of submittals, the Virginia

Department of Air Pollution Control (DAPC), now known as the Department

of Environmental Quality (VDEQ), submitted the elements for a revision

to its SIP that would establish a program for the prevention of

significant deterioration of air quality (PSD) in the review and

permitting of new major sources and major modifications (the PSD

program). On December 17 and 18, 1992, the VDEQ transmitted a request

for the approval of the Commonwealth's regulations for PSD and its

``Procedures for Implementation of Prevention of Significant

Deterioration (PSD) of Air Quality Program (AQP-11)'', a non-regulatory

procedures document, as a revision to the Virginia State Implementation

Plan. Specifically, the December 17, 1992 submittal included AQP-11,

and the December 18, 1992 submittal consisted of Virginia Regulation

for the Control and Abatement of Air Pollution, Sec. 120-08-02

Permits--Major Stationary Sources and Major Modifications Locating in

Prevention of Significant Deterioration Areas. On February 3, 1993,

DAPC sent a Summary of Public Testimony and Response Thereto in order

to satisfy federal SIP revision completeness criteria. On February 18,

1993 DAPC sent Virginia Regulations Appendix L, also to be included in

the SIP revision. On August 16, 1993 the VDEQ submitted a supplementary

revision to Sec. 120-01-01 and 120-08-02 to correct deficiencies in its

earlier PSD regulations.

[[Page 1881]]

If Virginia's PSD regulations are disapproved by EPA the current

federal implementation plan (FIP) for PSD in Virginia at 40 CFR 52.2451

and the delegation agreement between EPA and Virginia will continue to

be in effect. If Virginia's PSD regulations are approved by EPA, the

state will have authority to implement and enforce the PSD program

through its SIP, the current FIP at 40 CFR 52.2451 will be withdrawn,

and the delegation agreement between EPA and Virginia will be

terminated.

Background

On June 19, 1978, EPA promulgated the PSD regulations of 40 CFR

52.21 (b) through (w) into the Virginia SIP at 40 CFR 52.2451 and

federally implemented the PSD program in Virginia. As of June 3, 1981,

authority for implementation of the Federal PSD program was delegated

to the Commonwealth of Virginia, and Virginia began issuing and

enforcing Federal PSD permits. On September 20, 1991, Virginia was

granted the authority to implement and enforce the nitrogen dioxide

(NO2) increment portion of the federal PSD program.

On June 3, 1993 (58 FR 31636), EPA promulgated rules which revised

the PSD requirement for particulate matter (PM). The revised increments

for PM restrict increases in ambient concentrations of PM-10, which is

defined as particles with an aerodynamic diameter of less than or equal

to 10 micrometers. The revisions affect the regulations of 40 CFR parts

51 and 52 which specify the increments for PM, and became effective on

June 3, 1994. On July 20, 1993 (58 FR 38822), EPA promulgated rules

which revised the ``Guidelines for Air Quality Models'' by adding a

1993 supplement to the Guidelines. The revisions affect the regulations

of 40 CFR parts 51 and 52 which specify the version of the guidelines,

and became effective on August 19, 1993. Virginia must still revise its

regulations to include the PM-10 increment and modeling guideline

provisions and submit them as a revision to the SIP. However, EPA does

not believe that it should delay the processing of the SIP revisions

relating to PSD which Virginia has already submitted because of the

need for additional revisions pertaining to PM-10 and modelling

guidelines.

EPA proposes to retain authority, under 40 CFR 52.21, for

implementing and enforcing all Virginia PSD permits, or portions

thereof, involving requirements related to PM-10. EPA also proposes to

keep its current delegation of authority to Virginia to issue PSD

permits in effect insofar, and only insofar, as PSD requirements

pertaining to PM-10 are concerned. On October 16, 1995, Virginia

published a ``Notice of Intended Regulatory Revision UU Concerning

Prevention of Significant Deterioration'' and notified EPA of its

intent. The purpose of the proposed action is to amend Virginia's PSD

regulation to make it conform with federal PSD PM-10 increment and

modeling guideline provisions. EPA solicits comments on this issue.

Summary and Analysis of Virginia's Submittal

In the first part of the Commonwealth's submittal, the Commonwealth

requested that the ``Virginia Regulations for the Control and Abatement

of Air Pollution for Prevention of Significant Deterioration, Sec. 120-

08-02 and Appendix L'', and ``Air Quality Program Policies and

Procedures for Implementation of Prevention of Significant

Deterioration (PSD) of Air Quality Program (AQP-11)'' be added to the

Virginia State Implementation Plan.

Virginia's submittal included four commitments. The first

commitment, to adopt certain regulatory changes and submit them for EPA

approval, is addressed in this notice. The other three commitments

were: the state will ``transmit to the Regional Administrator or his

designee a copy of each permit application relating to a major

stationary source or major modification, and provide notice to the

Regional Administrator of every action related to the consideration of

such permit,'' ``make a positive determination of completeness of an

application and will notify the applicant whether or not the

application is complete,'' and ``perform a periodic assessment'' of the

PSD SIP.

The second part of Virginia's submittal, consisting of amendments

to Virginia Regulation Sec. 120-08-02, Permits for Major Stationary

Sources and Major Modifications in Prevention of Significant

Deterioration Areas, and Appendix L, Prevention of Significant

Deterioration Areas, was submitted on August 16, 1993. These

corrections to the PSD regulations included certain elements necessary

for federal approval of the state PSD program. The August 16, 1993 part

of the submittal also included a revision to general definitions for

Class I, II, and III areas, at Sec. 120-01-02, Terms Defined.

The provisions of Virginia Regulation Sec. 120-08-02 apply to the

construction of any major source or major modification in areas that

are designated attainment or unclassifiable for the National Ambient

Air Quality Standards (NAAQS). Specific applicable geographic locations

in Virginia are designated in Appendix L of the regulations. Through

the definitions of major source and major modification equivalent to

federal definitions, Virginia's regulations capture the correct

universe of sources for the PSD program. Each new source or

modification is required to apply Best Available Control Technology

(BACT) and demonstrate that the proposed source or modification would

not cause or contribute to air pollution in violation of a NAAQS in any

Air Quality Control Region or an applicable maximum allowable increase

over the baseline concentration (increment) in any area.

Regulation 120-01-02, Terms Defined, was included in the August 16,

1993 supplement to the submittal. The definitions of Class I, II, and

III geographic locations in Virginia that are applicable to PSD are

designated in Appendix L of the regulations and defined by locality for

criteria and other pollutants. Appendix L classifies PSD areas, which

include two federal Class I areas, James River Face Wilderness Area and

Shenandoah National Park. Virginia has no Class III areas.

The procedures used to determine increment allocation, consumption

and protection, established in Virginia's AQP-11, are consistent with

federal regulations. Under Virginia's program, increment is allocated

to permit applicants on a sequential basis at the time an application

is determined to be complete. Increment consumption shall be calculated

using the most recent representative meteorological data. Any PSD

applicant shall be required to demonstrate through air quality modeling

that emissions increases would not cause or contribute to any violation

of allowable increments within a Class I area if: (1.) the applicant

proposes to construct or modify within 100 kilometers of a Class I

area, (2.) EPA believes a demonstration is necessary, even though the

applicant will be constructing beyond 100 kilometers, or (3.) Virginia

believes the change in question may appreciably affect increment

consumption in the Class I area. Virginia's regulations also include

the requirements of 40 CFR 51.166(p) for sources impacting federal

class I areas. In Sec. 120-08-02 and AQP-11, Virginia cites and will

use EPA's Guideline on Air Quality Models and EPA guidance regarding

``Class I Area Significant Impact Levels and Modeling Class I Area

Impacts'' for increment analysis and maintenance of the NAAQS. An

inventory of emissions that consume Class I increment will be

maintained by the Commonwealth. AQP-11 also outlines steps to prevent

[[Page 1882]]

increment violations and to respond to a Federal Land Manager who has

determined that a proposed emissions increase would have an adverse

impact on the air quality related values.

The PSD provisions of the CAA emphasize the importance of public

participation in permitting decisions. See section 160(5) of the CAA.

In addition, section 165(a)(2) of the CAA provides that no PSD permit

shall be issued unless a ``public hearing has been held with

opportunity for interested persons including representatives of the

Administrator to appear and submit written or oral presentations on the

air quality impacts to the source, alternatives thereto, control

technology requirements, and other appropriate considerations.'' See

also section 40 CFR 51.166(q)(2)(v). Further, 40 CFR 51.166(a)(1)

provides that ``[i]n accordance with the policy of section 101(b)(1) of

the CAA and the purposes of section 160 of the CAA, each applicable

State implementation plan shall contain emission limitations and such

other measures as may be necessary to prevent significant deterioration

of air quality.'' See also section 161 of the CAA.

EPA interprets existing law and regulations to require an

opportunity for state judicial review of PSD permit actions under

approved PSD SIPs by permit applicants and affected members of the

public in order to ensure an adequate and meaningful opportunity for

public review and comment on all issues within the scope of the

permitting decision, including environmental justice concerns and

alternatives to the proposed source. The EPA believes that an

opportunity for public review and comment, as provided in the statute

and regulations, is seriously compromised where an affected member of

the public is unable to obtain judicial review of an alleged failure of

the state to abide by its PSD SIP permitting rules. Accordingly, all

such persons, as well as the applicant, must be able to challenge PSD

permitting actions in a judicial forum.

In Section 307(b) of the CAA, Congress expressly provided an

opportunity for judicial review of PSD permitting decisions when EPA is

the permitting authority. In a federal PSD program (PSD FIP) such as

the one currently in effect in Virginia, any member of the public who

has participated in the public comment process and meets the threshold

standing requirements of Article III of the U.S. Constitution may

petition for administrative review of the permit within 30 days of

issuance and ultimately seek judicial review of the administrative

disposition of the permit. There is no indication that Congress

intended that citizens' rights would be diminished upon the EPA

approval of a state's PSD program.

Similarly, Congress has provided citizens the ability to challenge

the failure of a major source to obtain the PSD permit required under

Part C of the CAA or the violation of such permit in Federal district

court under the citizen suit provisions of section 304(a)(3),

regardless of whether the permitting authority is the EPA or a State.

The operative language of section 304(a)(3) could be read as equivalent

to the federal New Source Review (NSR) enforcement provisions of

sections 113(a)(5) and 167, as enabling challenges to both construction

without any permit and construction without a permit that satisfies

applicable NSR requirements. The EPA believes that the better view is

that expressed in the legislative history of the 1977 Amendments, which

directed citizen challenges to State court: ``[i]n order to challenge

the legality of a permit which a State has actually issued, or proposes

to issue, under [the PSD provisions of the CAA] however, a citizen must

seek administrative remedies under the State permit consideration

process, or judicial review of the permit in State court.'' Staff of

the Subcommittee on Environmental Pollution of the Senate Committee on

Environment and Public Works, 95th Congress, 1st Session, A Section-by-

section Analysis of S. 252 and S. 253, Clean Air Act Amendments 36

(1977), reprinted in 5 Legislative History of the Clean Air Act

Amendments of 1977 (1977 Legislative History) 3892 (1977). The EPA

believes that Congress intended such opportunity for state judicial

review of PSD permit actions to be available to permit applicants and

at least those members of the public who can satisfy threshold standing

requirements under Article III of the Constitution.

Currently, under the PSD FIP in effect in Virginia, a Virginia

citizen can petition EPA to conduct an administrative review of a PSD

permit issued by Virginia (under a delegation agreement with EPA) and

seek judicial review of the final permitting action in federal court.

In sharp contrast, section 10-1.1318(B) of the Code of Virginia extends

the right to seek judicial review only to persons who have suffered an

``actual, threatened, or imminent injury * * *'' where ``such injury is

an invasion of an immediate, legally protected, pecuniary and

substantial interest which is concrete and particularized * * *'' The

Virginia statute, as well as Virginia case law, does not enable any

member of the public who participated in the public comment process on

a PSD permit and who meets the threshold standing requirements of

Article III of the Constitution to obtain judicial review of the permit

in the Commonwealth's court system.

The limited judicial review in Virginia thus does not meet the

minimum requirements for standing for judicial review required for PSD

SIP programs under the CAA and EPA's implementing regulations.

Therefore, the EPA is proposing to disapprove Virginia's PSD submittal.

The EPA solicits comment on this view, and, in the alternative,

proposes to approve the submittal should EPA conclude that such

judicial standing is not required for approval of a PSD SIP.

EPA has noted that some of Virginia's definitions do not conform

with the Clean Air Act Amendments (CAAA) of 1990, although they do

conform with federal regulations. EPA does not believe that this

affects the decision-making process for this proposed rulemaking

action. EPA is currently in the process of making changes to federal

regulations at 40 CFR parts C and D to comply with the CAAA. When EPA

promulgates changes to the PSD regulations, all states will be required

to comply with the new federal regulations, either through SIP

revisions or updated delegation agreements. Specific timetables for

those changes will be included in the rulemaking notice.

EPA's review of this material indicates that, with the exception of

the issue highlighted above, Virginia's regulations and procedures are

sufficient to implement and enforce a PSD program. A more detailed

evaluation of Virginia's regulations for PSD can be found, in this

rulemaking's docket file, in a memorandum entitled ``Revision to the

Commonwealth of Virginia Implementation Plan for Prevention of

Significant Deterioration of Air Quality--Technical Support Document''.

Copies of that document are available upon request from the EPA

regional office listed in the Addresses section of this notice.

Proposed Action

If the Agency determines, after reviewing public comment on this

issue, that Virginia's PSD program must provide access to judicial

review on a PSD permit to any party who participates in the public

comment process and who meets the threshold standing requirements of

Article III of the U.S. Constitution, EPA will disapprove the SIP

revision submitted

[[Page 1883]]

by Virginia. Alternatively, if the Agency determines, after reviewing

public comment on this proposal, that provisions for judicial review

are unnecessary, and that Virginia's PSD program, with the exception of

the PM-10 and modeling guideline provisions, meets the requirements of

the CAA applicable to state PSD Programs, EPA will conditionally

approve the SIP revision. In order to correct the deficiencies,

Virginia must amend the Virginia Regulations and AQP-11 to meet the

current federal PSD requirements at 40 CFR part 51 by addressing the

PM-10 and modeling guideline provisions. The program amendments must be

submitted within one year of conditional approval. If Virginia fails to

revise and submit the amendments within one year, the conditional

approval will convert to a disapproval.

EPA is soliciting public comments on Virginia's SIP submittal, and,

in particular, on the issues discussed in this notice. These comments

will be considered before taking final action. Interested parties may

submit written comments to the EPA Regional office listed in the

Addresses section of this notice.

EPA is proposing to disapprove or, in the alternative,

conditionally approve Virginia's request to revise the Commonwealth's

SIP to include Virginia Regulation for the Control and Abatement of Air

Pollution, Sec. 120-08-02, permits for major sources and major

modifications located in prevention of significant deterioration areas,

and Appendix L, prevention of significant deterioration areas; and Air

Quality Program Policies and Procedures for Implementation of

Prevention of Significant Deterioration (PSD) of Air Quality Program,

AQP-11. EPA is also proposing to disapprove or, in the alternative,

conditionally approve supplementary revisions to Sec. 120-01-02,

Sec. 120-08-02, and Appendix L. For conditional approval, Virginia must

amend the program as specified above to satisfy the applicable federal

PSD requirements of 40 CFR part 51, subpart I. With the exception of

the PM-10 requirements, the Commonwealth will have authority to

implement and enforce the PSD program through its SIP, and the

delegation agreement will be terminated. EPA will retain authority

under 40 CFR Sec. 52.21, for implementing and enforcing all Virginia

PSD permits, or portions thereof, involving requirements related to PM-

10 until a SIP revision for PM-10 increments and modeling guidelines is

approved. EPA's current delegation of authority to Virginia to issue

PSD permits will remain in effect insofar, and only insofar, as PSD

requirements pertaining to PM-10 are concerned. If Virginia later

submits, as the October 16, 1995 ``Notice of Intended Regulatory

Action'' indicates, and receives EPA approval of a revision to the

Virginia PSD SIP incorporating the PM-10 increments and modeling

provisions, the delegation agreement will be completely terminated.

If these revisions to the PSD requirements of the Virginia SIP are

approved, EPA will continue to oversee implementation of this important

program by reviewing and commenting on proposed permits with respect to

applicable statutory and regulatory provisions and guidance. Also, EPA

will implement and enforce the PM-10 increment standards until such

time as EPA receives and approves a revision to the Virginia SIP

incorporating those standards into the SIP. If a final permit is issued

which still does not reflect consideration of the relevant factors, EPA

may deem the permit inadequate for purposes of implementing the

requirements of the Act and Virginia's SIP, and may consider

enforcement action under sections 113 and 167 of the Act to address the

permit deficiency.

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 disapprovals or conditional approvals under section 110 and

subchapter I, Part D of the Clean Air Act do not create any new

requirements but simply approve requirements that the State is already

imposing. Therefore, because the Federal SIP disapproval or approval in

this situation does not impose any new requirements, the Administrator

certifies 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 CAA, preparation of a flexibility analysis would

constitute Federal inquiry into the economic reasonableness of state

action. The Clean Air Act forbids EPA to base its actions concerning

SIPs on such grounds. Union Electric Co. v. U.S. EPA, 427 U.S. 246,

255-66 (1976); 42 U.S.C. 7410(a)(2).

Under Section 202 of the Unfunded Mandates Reform Act of 1995

(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA

must prepare a budgetary impact statement to accompany any proposal or

final that includes a Federal mandate that may result in estimated

costs to state, local or tribal governments in the aggregate; or to the

private sector, of $100 million or more. Under section 205, EPA must

select the most cost-effective and least burdensome alternative that

achieves the objectives of the rule and is consistent with statutory

requirements. Section 203 requires EPA to establish a plan for

informing and advising any small governments that may be significantly

or uniquely impacted by the rule. This federal action disapproves, or

conditionally approves pre-existing requirements. Accordingly, no

additional costs to state, local, or tribal governments, or to the

private sector, result from this action.

The Administrator's decision to disapprove, or in the alternative,

to conditionally approve Virginia's SIP revision for the Prevention of

Significant Deterioration Program will be based on whether it meets the

applicable requirements of the Clean Air Act and of the EPA regulations

in 40 CFR part 51.

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Carbon monoxide,

Hydrocarbons, Incorporation by reference, Intergovernmental relations,

Nitrogen dioxide, Ozone, Particulate matter, Reporting and

recordkeeping requirements, Sulfur oxides.

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

Dated: December 15, 1995.

Stanley L. Laskowski,

Acting Regional Administrator, Region III.

[FR Doc. 96-1051 Filed 1-23-96; 8:45 am]

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