Approval and Promulgation of Air Quality Implementation Plans; Pennsylvania New Source Review and Emissions Registry Regulation

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[PA042-4065; FRL-5925-7]

Approval and Promulgation of Air Quality Implementation Plans;

Pennsylvania New Source Review and Emissions Registry Regulation

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is granting limited approval of a State Implementation

Plan (SIP) revision submitted by the Commonwealth of Pennsylvania. This

revision requires major new and modified sources of volatile organic

compounds (VOCs), nitrogen oxides (NOX), particulate matter

(PM), particulate matter with an aerodynamic diameter of less than 10

microns (PM-

[[Page 64723]]

10), PM-10 precursors, sulfur oxides (SOX), carbon monoxide

(CO), or lead (Pb) to meet certain new source review (NSR) permitting

requirements if they are proposing to locate in a designated

nonattainment area. These requirements also apply to major new and

modified sources of VOC and NOX proposing to locate in the

ozone transport region (OTR). The intended effect of this action is to

grant limited approval of Pennsylvania's NSR requirements.

EFFECTIVE DATE: This final rule is effective on January 8, 1998.

ADDRESSES: 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, Pennsylvania

19107; the Air and Radiation Docket and Information Center, U.S.

Environmental Protection Agency, 401 M Street, SW, Washington, DC

20460; and the Pennsylvania Department of Environmental Protection,

Bureau of Air Quality, P.O. Box 8468, 400 Market Street, Harrisburg,

Pennsylvania 17105.

FOR FURTHER INFORMATION CONTACT: Marcia L. Spink (3AT00), (215) 566-

2104.

SUPPLEMENTARY INFORMATION:

Background

On May 2, 1997 (62 FR 24060), EPA published a notice of proposed

rulemaking (NPR) for the Commonwealth of Pennsylvania. The NPR proposed

limited approval of Pennsylvania's NSR requirements for major new and

modified sources locating in areas designated nonattainment for a given

pollutant, and, in the case of VOC or NOX sources, if they

are being located in the OTR. The formal SIP revision submittal, which

was submitted by Pennsylvania on February 4, 1994, also included

associated new definitions and revisions to existing definitions,

emissions banking requirements, and procedures for an emissions

reductions credit (ERC) registry. The definitions are codified in

section 121.1 of Pennsylvania's air pollution control regulations. The

NSR, emissions banking and ERC registry provisions are codified in

Sections 127.201 through 127.217 of Pennsylvania's air pollution

control regulations, and replace the existing SIP provisions, which

were codified at Section 127.61 through 127.73. A description of

Pennsylvania's revised NSR and emissions banking and ERC registry

requirements and the rationale for EPA's proposed action are explained

in the NPR and will not be restated here. This action is being taken

pursuant to section 110 of the Clean Air Act.

Public Comments Received and EPA's Responses

During the public comment period following publication of the NPR,

EPA received three public comments from interested parties. A summary

of those comments and EPA responses is provided below.

Comment 1: The first commenter agrees with EPA's proposed

rulemaking action, particularly to the extent it supports the use of

``shutdown'' credits for new source offsets.

EPA's Response: None required.

Comment 2: The second commenter, Duquesne Light Company (Duquesne),

an electric utility that serves the greater Pittsburgh area, takes

issue with EPA's proposed limited approval action and contends that EPA

must take limited approval/limited disapproval action so that the

Pennsylvania Department of Environmental Protection (PADEP) may correct

deficiencies in its rule which render it more stringent than federal

requirements for NSR promulgated under the Clean Air Act. Duquesne

argues that because PADEP has not adopted the federal definition of

``actual emissions,'' its regulation is, de facto, more stringent with

regard to NSR-related baselines, particularly those associated with

creating emission reduction credits (ERCs) for use as emission offsets.

Duquesne asserts that Pennsylvania's de facto approach to defining

actual emissions cannot be characterized as an alternative wording that

is at least as stringent as EPA's definitions because PADEP's approach

is, in effect, more stringent than the EPA's definitions. Duquesne

comments that, under Pennsylvania law, PADEP is not allowed to make

such a ``more stringent'' demonstration for its NSR program. Duquesne

references section 4.2 of the Pennsylvania Air Pollution Control Act

(APCA) and argues that it mandates that PADEP's regulations ``* * *

shall be no more stringent than those required by the federal Clean Air

Act,'' unless the Pennsylvania Environmental Quality Board (PA EQB) has

made a determination that such regulations are ``reasonably necessary''

to exceed minimum Clean Air Act requirements. Duquesne contends that

the PA EQB has not made the required determination for PADEP's NSR

regulations.

EPA's Response: EPA disagrees with this commenter that because

Pennsylvania has not adopted the federal definition of ``actual

emissions,'' EPA must take limited approval/limited disapproval action

on the NSR SIP revision. The Clean Air Act requires that states adopt,

for inclusion into the SIP, permitting requirements for the

construction and modification of new major sources and major

modifications in nonattainment areas (and for major sources and major

modifications of VOC and NOX in the OTR). Federal rules

generally require that the SIP include legally enforceable procedures

to determine whether the construction and modification of any facility,

building, structure, or installation, or combination of these will

result in a violation of applicable portions of the control strategy;

or interfere with attainment or maintenance of a national standard in

the State in which the proposed source or modification is located or in

a neighboring State. Such SIP provisions must include the means by

which a State or local agency responsible for final decision making on

applications for approval to construct or modify will prevent such

construction and modification if it would result in either of the two

situations described above. EPA has determined that Pennsylvania's NSR-

related definitions and NSR-related regulations, as a whole, are

designed to be consistent with the tenets used in the design of the

relevant and required attainment plans and their associated control

strategies. EPA also disagrees that PADEP's NSR regulations must be

revised because they are, de facto, more stringent than federal NSR

requirements. EPA notes that the federal NSR regulations that apply to

this action do provide that a State's NSR program may be more stringent

than federal requirements. Consequently, a comment that a SIP revision

is more stringent that the federal minimum requirements generally is

not a basis for EPA to disapprove the revision.

EPA has determined pursuant to Section 110(a)(2)(E) of the Clean

Air Act and 40 CFR section 51, Appendix V, that Pennsylvania has

provided the necessary assurances that it has adequate authority to

implement the SIP revision and that it has followed all of the

procedural requirements of Pennsylvania laws and constitution in

adopting the submittal.1

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\1\ See, letter from Thomas J. Maslany, Director, Air, Radiation

and Toxics Division, USEPA, to Arthur A. Davis, Secretary,

Department of Environmental Resources, dated February 28, 1994.

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Section 4.2 of Pennsylvania's APCA (35 P.S. 4004.2) provides, in

pertinent part:

(b) Control measures or other requirements adopted under

subsection (a) of this section shall be no more stringent than those

required by the federal Clean Air Act unless

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authorized or required under this act or specifically required by

the Clean Air Act. This requirement shall not apply if the

[Environmental Quality Board] determines that it is reasonably

necessary for a control measure or other requirement to exceed

minimum Clean Air Act requirements in order for the Commonwealth:

(1) to achieve and maintain the ambient air quality standards, *

* *

The issue of whether Pennsylvania's NSR regulations exceeded the

requirements of the Clean Air Act and therefore was prohibited by the

APCA was raised during Pennsylvania's public comment period. The PA

EQB, in its response to comments, stated that the final regulations

comply with the requirements of section 4.2 of the APCA. (See,

Pennsylvania Bulletin 443, 447, January 15, 1994)

Duquesne also asserts that the Pennsylvania EQB has not determined

in accordance with subsection (b) of section 4.2 of the APCA that the

NSR regulations at issue are ``reasonably necessary'' to ``exceed

minimum Clean Air Act requirements'' (footnote 1 on page four of

Duquesne's May 29, 1997 comment letter). Duquesne's assertion is

incorrect as shown by the express findings of the PA EQB contained in

the Board Order adopting the regulations. The PA EQB Order approving

the NSR regulations specifically provides:

The EQB finds that:

(4) These regulations are necessary for the Commonwealth to

achieve and maintain ambient air quality standards . . .

(Pennsylvania Bulletin 443,458 January 15, 1994 which was part of

PADEP's February 4, 1994 SIP revision submission).

Consequently, EPA believes that the PA EQB has made the requisite

finding for the adoption of rules and regulations more stringent than

those required by the Clean Air Act.

Comment 3: The third commenter, Eichleay Environmental, a Division

of Eichleay Engineers Inc. (Eichleay), neither specifically agrees nor

disagrees with EPA's proposed action. Rather Eichleay states that EPA's

limited approval of Pennsylvania's SIP revision suggests ``begrudging

agreement'' with Pennsylvania's ERC program. Eichleay states its belief

that ``Pennsylvania's program is, if anything, too restrictive.''

Eichleay provides several suggestions for preserving the value and

longevity of ERCs which would require changes to Pennsylvania's

regulations.

EPA's Response: EPA disagrees with the commenter that the proposed

limited approval action suggests EPA's ``begrudging agreement'' with

Pennsylvania's ERC program or any other provision of PADEP's NSR SIP

submittal. EPA's rationale for its proposed limited approval of the

Pennsylvania NSR SIP revision is articulated clearly in the notice of

proposed rulemaking. EPA's rationale is based entirely upon its review

of Pennsylvania's regulations and their conformance with federal NSR

requirements. As noted above, Eichleay's comments on EPA's notice of

proposed rulemaking included suggestions for changes to Pennsylvania's

NSR regulations. Under the Clean Air Act, EPA is limited to taking

action on SIP revision requests as submitted by the Governor or his

designee, and has no authority to unilaterally modify state regulations

via the SIP approval process.

Final Action

EPA is granting limited approval to Pennsylvania's revised NSR and

emissions banking and ERC registry provisions, as well as the

associated definitions of terms, submitted by PADEP on February 4, 1994

as a revision to the Pennsylvania SIP. The revised provisions

strengthen the SIP and meets the NSR requirements of the Clean Air Act.

Accordingly, this action revises 40 CFR section 52.2020 by adding

paragraph (c)(107) to reflect EPA's approval action. 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.

Administrative Requirements

A. Executive Order 12866

The Office of Management and Budget (OMB) has exempted this

regulatory action from E.O. 12866 review.

B. Regulatory Flexibility Act

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 sections 110 and 301, 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 approval does not impose any new requirements,

EPA 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 Clean Air Act, 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).

C. Unfunded Mandates

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 proposed or

final rule that includes a Federal mandate that may result in estimated

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

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. EPA has determined that the approval

action promulgated does not include a Federal mandate that may result

in estimated costs of $100 million or more to either State, local, or

tribal governments in the aggregate, or to the private sector. This

Federal action approves pre-existing requirements under State or local

law, and imposes no new requirements. Accordingly, no additional costs

to State, local, or tribal governments, or to the private sector,

result from this action.

D. Submission to Congress and the General Accounting Office

Under 5 U.S.C. 801(a)(1)(A) as added by the Small Business

Regulatory Enforcement Fairness Act of 1996, EPA submitted a report

containing this rule and other required information to the U.S. Senate,

the U.S. House of Representatives and the Comptroller General of the

General Accounting Office prior to publication of the rule in today's

Federal Register. This rule is not a ``major rule'' as defined by 5

U.S.C. 804(2).

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E. Petitions for Judicial Review

Under section 307(b)(1) of the Clean Air Act, petitions for

judicial review of this action must be filed in the United States Court

of Appeals for the appropriate circuit by February 9, 1998. Filing a

petition for reconsideration by the Administrator of this final rule

does not affect the finality of this rule for the purposes of judicial

review nor does it extend the time within which a petition for judicial

review may be filed, and shall not postpone the effectiveness of such

rule or action. This action granting limited approval of Pennsylvania's

NSR-related regulations including its provisions for emissions banking

and an ERC registry may not be challenged later in proceedings to

enforce its requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Incorporation by

reference, Nitrogen dioxide, Ozone, Particulate matter, Sulfur oxides.

Dated: November 7, 1997.

W. Michael McCabe,

Regional Administrator, Region III.

Chapter I, title 40 of the Code of Federal regulations is amended

as follows:

PART 52--[AMENDED]

1. The authority citation for part 52 continues to read as follows:

Authority: 42 U.S.C. 7401 et seq.

Subpart NN--Pennsylvania

2. Section 52.2020 amended by adding paragraphs (c)(107) to read as

follows:

Sec. 52.2020 Identification of plan.

* * * * *

(c) * * *

(107) Revisions to the Pennsylvania Regulations, Chapter 127 by the

Pennsylvania Department of Environmental Protection

(i) Incorporation by reference.

(A) Letter of February 4, 1994 from the Pennsylvania Department of

Environmental Protection transmitting revisions to the New Source

Review Provisions.

(B) Revisions to the following Pennsylvania Department of

Environmental Quality Regulations, effective January 15, 1994:

(1) Addition of Chapter 127, Subchapter E, New Source Review,

Sections 127.201 through 127.217 inclusive, effective January 15, 1994.

(2) Deletion of Chapter 127, Subchapter C, Sections 127.61 through

127.73.

(ii) Additional materials consisting of the remainder of the

February 4, 1994 State submittal pertaining to Chapter 127, Subchapter

E.

[FR Doc. 97-32189 Filed 12-8-97; 8:45 am]

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