Air Pollution Control Equipment Services, Emissions

The “Reasonable Possibility” of NSR Reform

Issue 9 and Volume 112.

By Robynn Andracsek, P.E., Burns & McDonnell and Contributing Editor

It’s time to change out some tubes in your coal-fired boiler. Do you:

A) Justify the expense based on extending the life of the boiler and make the repairs.
B) Perform an environmental analysis to determine if the repairs will require a construction permit, get the permit if needed and make the repairs.
C) Get a construction permit and make repairs.
D) Any of the above, depending on what year it is.

If you know anything about New Source Review (NSR), you probably answered D.

NSR is the regulation that defines a “modification,” regulates if a federal construction permit is needed and requires the installation of control devices. Although NSR has been around since 1977 without major modification, it has been reinterpreted through the years, in part to fill in holes in the original regulation. Another method of repairing the regulation is simply to rewrite it, which has been the Environmental Protection Agency’s (EPA’s) goal since 2004. Their process is known as “NSR Reform.”

It’s good that EPA recognizes NSR as seriously flawed and that the agency is trying to fix it; it’s just that they haven’t had much success to date. You may have heard of some of the larger failures of NSR Reform, such as exemptions for Pollution Control Projects or the Routine Equipment Replacement Rule, both of which were excellent ideas subsequently vacated by the courts. However, you may not have heard of “reasonable possibility” record keeping and reporting, which is still valid.

The “reasonable possibility” standard applies when a modification does not trip Prevention of Significant Deterioration (PSD) permitting. Essentially, it forces a facility to create documents supporting its claim that PSD permitting is not needed. Such CYA (cover your…ahem) documentation is a good idea for any company in a litigious industry. But the “reasonable possibility” standard goes a step beyond being just a good idea. It mandates the record keeping. In our earlier boiler tube example, a facility would document that the equipment replacement will not result in a significant increase in pollution (through an increase in hourly emissions, an increase in capacity factor and so on) and submit those calculations and supporting data to the state agency.

EPA’s Two-Step Test

Under EPA’s test for PSD applicability, the first step is to determine if the modification is either a physical or an operational change. Routine maintenance, repair and replacement (RMRR) activities are excluded. As we have discussed in previous columns, the meaning of “routine” is critical but not defined. The second step is to determine if emissions will end up rising above the PSD “significant emission rate” thresholds. (See Table 1.) The difference between this traditional two-step applicability and the additional classification for reasonably possible projects is shown in Figure 1.

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According to the EPA, the emissions increase to which the reasonable possibility trigger is applied is calculated as the difference between the project’s baseline actual emissions and sum of projected actual emissions and emissions attributable to an independent factor (such as demand growth).

What To Do

First, determine if your project is a PSD modification and not RMRR (this despite the fact that “routine” is not defined). Then, calculate your emissions increase using an actual-to-projected-actual applicability test (include demand growth) and compare the results to the thresholds in Table 1. The “demand growth” increase must be included in making the “reasonable possibility” determination. However, if including demand growth causes the increase to exceed the PSD threshold, a PSD permit is not necessarily needed; the non-demand growth increase must exceed the PSD threshold in order to trigger PSD permitting.

If the increase falls between 50 percent and 99 percent of the threshold, it is “reasonably possible” that your project could—but doesn’t—trip PSD. It’s at this point that you must keep records describing the project, identifying emissions units affected by the project and providing the results of your applicability calculation. Don’t forget to get a non-PSD, state construction permit, if required. After the project starts up, monitor emissions, calculate annual emissions and maintain records of emissions for at least five years.

The Best of Intentions

According to the regulation’s preamble, its purpose was to “…limit recordkeeping requirements to those projects for which variability in calculating emissions creates an interest in obtaining additional information in order to confirm that the appropriate applicability outcome is reached.” In other words, this regulation was meant for our own good, to help us keep records to protect us against PSD look-backs.

You can’t please all of the people all of the time; there is already a lawsuit over reasonable possibility brought by New Jersey (who, it seems, can’t be pleased at all.) New Jersey Attorney General Anne Milgram and New Jersey Department of Environmental Protection Commissioner Lisa P. Jackson have challenged the reasonable possibility rule as not being strict enough.

Milgram said, “What this rule does, essentially, is leave plant operators to determine for themselves whether their emissions call for installation of new pollution controls. The quality of our air is too important a consideration to be left to the discretion of those who are polluting it.” New Jersey wants each PSD determination to be submitted to the state agency for concurrence, no matter how small a change it is. Can you imagine having to get permission from the state agency to change a light bulb? Figure 2 represents how New Jersey wants PSD applicability to be interpreted.

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Reasonable possibility record keeping and reporting serves to protect the utility from New Source Review violations as well as increasing your paperwork burden and opportunity for penalties. Although prudent to keep records documenting your PSD applicability decisions, you now have a regulatory mandate to do so. Furthermore, if New Jersey prevails, “reasonable possibility” record keeping could conceivably encompass all actions, without exception.

Back to our example. Thirty years ago the answer was A, today the answer is B and, if New Jersey gets its way, the future answer no doubt will be C.

References:

  1. http://www.epa.gov/nsr/documents/Fact%20Sheet_RP_final.pdf
  2. 72 FR 72610
  3. http://www.nj.gov/oag/newsreleases08/pr20080219b.html