5 Colo. Code Regs. § 1001-5, pt. F
Rational and Justification for the Repeal and Repromulgation of Regulation Number 3 and Common Provisions Regulation as Related to Regulation Number 3
On December 14, 1978, the Air Quality Control Commission revised Regulation Number 3 (concerning requirements for filing air pollution emission notices, obtaining emission permits, and payment of fees with respect to both) for the primary purpose of bringing Colorado's air pollutant emission permit program into conformity with the requirements of the Federal Clean Air Act Amendments of 1977 to the extent authorized by the then effective State statutory authority: "The Air Pollution Control Act of 1970, "C.R.S. 1973, 25-7-101 et seq. The regulation as revised in 1978 and which became effective January 30, 1972, was submitted to the U.S. Environmental Protection Agency as a revision to the state Implementation Plan ("SIP") pursuant to Subsection 129(c) of the Federal Clean Air Act Amendments of 1977.
Since that submittal, the Colorado General Assembly has repealed and reenacted the State's basic air pollution control statute: Article 7 of Title 25, Colorado Revised Statutes, 1973. The new article, known as the "Colorado Air Quality Control Act" (designated House Bill 1109 in the 1979 legislative session), became effective June 20, 1979, and largely brought the State statute into conformity with the Federal legislation, mandating the Commission to develop a comprehensive air pollution control program meeting the requirements of the Federal Clean Air Act. Revisions also respond to the requirements set forth in the October 5, 1979 Federal Register notice which conditionally approved portions of the Colorado SIP and set forth certain requirements for securing their unconditional approval. E.G., see Section IV.D.2.a.(iv) of revised Regulation Number 3, which incorporates the requirements of Section l72(b)(II)(A) of the Clean Air Act. 44 Fed. Reg. 57401, 57408 (1979).
The Commission has made an effort to formulate a permit program meeting the requirement of and paralleling of the provisions EPA policies and rules to the extent authorized by House Bill 1109 and to the extent deemed appropriate by the Commission for Colorado's particular circumstances. This has been done in order to meet certain specific requirements expressly set forth in the Federal Clean Air Act, to meet certain specific requirements EPA has determined are required for compliance with the Federal Act, and to avoid subjecting sources of air pollution in Colorado to differing State and Federal requirements. The Commission considered the assurance of reasonable further progress toward attainment of National Ambient Air Quality Standards as the primary underlying criterion in developing permit requirements for sources located in or near nonattainment areas. Consideration has also been given to the opinion of the United States Court of appeals for the District of Columbia in the case of Alabama Power Company v. Costle F.2d (D.C. Cir., 1979).
APENs
In order to reduce the administrative burden on both the Air Pollution Control Division ("the Division") and owners and operators of air pollution sources, the filing of revised air pollution emission notices for the purpose of reporting significant changes in emissions will be required only on an annual basis, rather than whenever a significant change in emissions occurs. In making this revision, the Commission relied on the representations of the Division that annual reporting would be sufficient for purposes of keeping the emissions inventory current.
Street Sanding
With the exception of street sanding (and indirect sources), the exemptions provided in the revised regulation from the APEN-filing and emission permit requirements are for minor or insignificant sources of emissions. Although not finding that particulate emissions resulting from the application and re-entrainment of "sand" applied to snow or ice covered roadways as a traffic safety measure are insignificant, the Commission has exempted sanding from the APEN-filing and permit requirements out of administrative necessity. Little benefit can be obtained from the filing of APENs in light of the fact that the amount of emissions cannot be predicted with any reasonable accuracy due to varying factors such as weather. APENs would therefore serve little purpose as notices of expected emissions.
It is the judgment of the Commission that protection of persons and property by sanding snow and ice covered roadways is an overriding consideration and that the costs of not taking such safety measures would far outweigh any air quality benefits resulting from requiring permits for sanding. Sanding should not therefore be prohibited -- even without a permit. The only reason for imposing a permit requirement would be to facilitate enforcement of control measures to limit emissions, which the Commission believes may be accomplished without a permit requirement through emission control regulations and provisions in local elements of the State Implementation Plan.
Major Source, Major Modifications, and the "bubble" Concept
The Commission has retained requirements that new "major sources" locating in nonattainment areas and "major modifications" to existing sources in nonattainment areas meet special requirements (Offsets, LAER, etc.) designed to allow for continued development in such areas without interfering with reasonable further progress toward attainment of National Ambient Air Quality Standards. The criteria for determining when a new source or modification to an existing source is "major" however, have been extensively revised.
Prior to the U.S. Court of Appeals Decision in Alabama Power Company v. Costle, EPA had defined "potential to emit" -- a key phrase in the definition of "major emitting facility" -- in terms of uncontrolled emissions. The court however, interpreted the phrase "potential to emit" as used in the definition of "major emitting facility" in Section 169(1) of the Clean Air Act as taking "into account the anticipated functioning of the air pollution control equipment designed into the facility," thereby drastically reducing the number of sources qualifying as major. In response to this decision, on September 5, 1979, EPA proposed amendments to its regulations concerning requirements for SIPs including those pertaining to prevention of significant deterioration of air quality ("PSL)") and new source review in nonattainment areas, as well as EPA's Emission Offset Interpretative Ruling. 44 Fed. Reg. 51924 (1979). The Commission in reviewing Regulation Number 3 and the Common Provisions Regulation has incorporated many of the amendments adopted by EPA in its regulations including classifications of sources as major or minor based on controlled emissions.
The court in Alabama Power Company struck down the ~PA regulation definition of "major modification" which definition required the imposition of the special nonattainment area requirements (Offsets, LAER, etc.) on sources when modifications resulted in an increase in emissions of a criteria pollutants of 100 tons per year or more (for certain~ listed categories of sources; 250 tons or more for sources not listed). The court held that the special nonattainment requirements applied to all modifications of major emitting facilities except those resulting in only "de minimus" increases in emissions. The court stated, however, that it would be permissible to look at the net increase in potential emissions from a major source in determining whether Offsets, LAER, etc., will be required.
In its proposed rules, EPA has adopted the "net increase" or "bubble" approach which generally allows a major source undergoing modification to avoid permit review as a major modification by allowing emission reductions elsewhere at the source to offset any increases resulting from the proposed modification. The Commission has adopted the "bubble" concept and many of EPA's specific regulatory provisions with respect to the concept as applied to modifications.
The court in Alabama Power Company also held that fugitive emissions could be included in determining whether a source is "major" only to the extent, such emissions were expressly determined to be included by rule of the EPA administrator. In response, EPA has proposed a regulatory definition of "Potential to emit" by which fugitive emissions from twenty-seven (27) listed sources would be included in determinations of which new sources and modifications are major. 44 Fed. Reg. 51956, 51958 (1979). In recognition of the fact that such emissions would be included in determinations of whether a source or modification was major if they were emitted through a stack (as opposed to being "fugitive"), recognizing that generally emissions from the twenty-seven (27) listed source categories contribute to hazards to public health and welfare, and to be consistent with the federal scheme, the Commission has also decided to consider fugitive emissions from the twenty-seven source categories in major source/major modification determinations to the extent they are quantifiable. An owner or operator may avoid the inclusion of fugitive emissions of particulate matter by demonstrating that such emissions are of a size and substance, which do not adversely affect public health or welfare.
Banking
C.R.S. 1973, 25-7-304 requires the attainment program to provide that emission reduction offsets exceeding those required for the granting of a permit "may be preserved for sale or use in the future." Section V of Regulation Number 3 establishes an administrative framework and the basic requirements of such a procedure consistent with the "banking" provisions established by EPA in its Emission Offset Interpretative Ruling, 44 Fed. Keg. 3274, 3280, 3285 (January 16, 1979) (to be codified as Appendix S to 40 C.R.S. Part 51).
Extended "Debugging" Period.
Pursuant to C.R.S. 1973, 25-7-1 14(4)(j), the Division may grant the owner or operator of a new source up to six months after commencement of operation in which to demonstrate compliance with all terms and conditions of its emission permit. The Commission determined, however, that under certain circumstances it would be appropriate to allow a source employing innovative control technology additional time in which to bring the operation of the source into full compliance. Therefore, pursuant to its authority under C.R.S. 1973, 25-7-109(5), the Commission has provided in paragraph IV. H.6. of Regulation Number 3 for such temporary relief from controls under specified limited circumstances. The provision is intended for very limited application.
PSD
Regulation Number 3 does not address the subject of special permits for major sources locating in attainment areas to insure prevention of significant deterioration of air quality. The Commission decided to wait until EPA's PSD regulations to establish a fully State-operated program. State emission permits are nonetheless still required for sources locating in attainment areas.
Common Provisions Regulation
In connection with the revision of Regulation Number 3, the Commission concurrently made limited, related revisions in its Common Provisions Regulation. Sections I.B. and I.C. of that regulation have been changed to reflect the renumbering of the Sections in the State statute authorizing the Commission to promulgate regulations and to reflect the amended language in the declaration of legislative intent.
Section I.F. of the regulation was amended to add new abbreviations used in revised Regulation Number 3 and Section I.G. (definitions) was amended to delete, revise, and add terms and their definitions to reflect changes in the terminology used in Regulation Number 3.
Concerning May 13, 1982 Amendment to Section IV.C. (Public Comment) for Small Sources Locating in Nonattainment Areas
The rationale for this proposed revision is based on the underlying purpose of public comment: to obtain public input on proposed sources that the Air Pollution Control Division (APCD) can use in considering whether a permit should be granted. Under the previous regulation all sources locating in nonattainment areas were subject to the public comment requirement unless the APCD exercised its discretion under Section IV.C.3. (sources of less than 6 month's duration) to exempt them. APCD experience has shown that there are four categories of small sources that frequently locate in nonattainment areas, but which did not stimulate comment from the public. These categories are:
Basically, all the effort put into preparation of public comment packages for these sources can now be used more efficiently and the associated expense to industry saved. The limit of 5 Tons Per Year (tpy) of controlled annual emissions is based on calculations that show most of the sources in these four categories emit less than 5 tpy of any one pollutant. Service stations, for example, generally emit I to 2 tpy. In many cases less than I tpy is emitted.
Under the revised regulation, sources less than 5 tpy can still be subject to public comment if the Division determines it appropriate based on criteria set forth in the regulation. The difference is that the APCD would have discretion to decide instead of being required to provide public notice. Controversial sources such as gravel pits, odor sources and landfill operations are subjected to public comment by the APCD regardless of the level of emissions. This practice will continue in effect.
Prevention of Significant Deterioration Program Regulations in Regulation Number 3
This Statement of oasis and Purpose for the Prevention of Significant Deterioration (PSD) Program Regulations complies with the State Administrative Procedure Act, CR5 1973, 24-4-103(4). The statutory authority for the PSD regulations are in the Air Quality Control Act at CR5 973, 25-7-102, 25-7-105, 25-7-106, 25-7-108, 25-7-109, 25-7-114, 25-7-116, 25-7-201 et seq. The general purpose of these regulations is to prevent the significant deterioration of air quality in those Sections of the state, which has attained the national ambient air quality standards. The parties to this rulemaking include:
Colorado Association of Commerce and Industry; Rocky Mountain Oil & Gas Association, Inc.; Chevron Shale Oil Company; Union Oil Company of California; Colorado Ute Electric Association, Inc.; The Colorado Mountain Club; COAL; Public Service Company of Colorado; City of Colorado Springs; CF&I Steel; Environmental Defense Fund, Inc.; United States Department of the Interior; and United States Department of Agriculture.
The Air Pollution Control Division acted as staff for and advised the Commission during the proceeding. See CRS 1973, 25-7-lll(2)(g).
The PSD regulations adopted by the Commission are in many respects identical to the U.S. Environmental Protection Agency (EPA) PSD regulations. See 40 CFR 51.24 et seq.; 40 CFR 52.21 et seq. The primary reason for this is that the State Act requires that the S~PSD program be in accordance with the federal Clean Air Act PSD provisions. See CRS 1973, 25-7-203. Thus, federal PSD requirements are generally a minimum for the State PSD Program. For these reasons, to the extent that the federal PSD rules are identical or substantially identical to the state regulations, the Commission incorporates herein the EPA statements of basis and purpose for the federal PSD rules at 43 Fed. Reg. 26380 et seq. (June 19, 1978) and 45 Fed. Reg. 52676 et seq. (August 7, 1980).
The Commission has additional authorities to prevent significant deterioration of air quality. In several important areas the Commission has tailored these regulations to meet the concerns of Colorado citizens. These areas include the requirement for an impact analysis on water to determine acid deposition effects, the authority to make independent determinations on adverse impact to visibility in Class I areas if the federal land manager fails to fulfill his responsibility to do so, the requirement to establish baselines for, and to monitor air quality related values in, Class I areas to determine the effects of emissions on such values, and the application of Class I sulfur dioxide increments to several Class II primitive areas and national monuments.
The proposed PSD regulations included several provisions reflecting the terms of a settlement agreement in the matter of Chemical Manufacturer's Association, et al. V. EPA in which EPA has agreed to propose amendments to its P50 rules. The Commission has rejected the adoption of such provisions for several reasons. They are arguably less stringent than current EPA rules in that they would appear to permit more air pollution. Because they may be less stringent, their adoption appeared likely on the basis of EPA testimony to impede the approval of the state PSD program by EPA at this time. Finally, EPA's schedule for consideration of such provisions is unknown. Subsequent to EPA action on the provisions of the settlement agreement, the Commission will reconsider those provisions.
The PSD regulations will generally not become applicable to major sources or major modifications in Colorado - until EPA has approved them. See CRS 1973, 25-7-210. However, the regulations pertaining to attainment area designations and the enforcement of Class I sulfur dioxide increments in those areas- listed in CRS 1973, 25-7-209 will be applicable upon the effective date of these regulations. These regulations will be effective twenty (20) days from publication in the Colorado Register.
DEFINITION OF "ACTUAL EMISSIONS"
The definition adopted is essentially identical to the EPA definition.
One party proposed that reference should be made to consideration of control efficiency. The Commission did not adopt this proposal because the definition inferentially considers control equipment efficiency and the reference requested would create confusion, when actual test data were available, as to whether a separate "efficiency" factor was to be applied.
Another party, in commenting on the definition of "baseline concentration," expressed concern that the determination of "actual emissions" could take place, for example, during a low-demand period for a power plant. Such determination would result in an emission rate considerably less than the full-capacity allowable emission rate, resulting in a low baseline concentration. The power plant, operating the next year at full capacity, could consume all or most of the available increment, prohibiting growth in the area. The Commission recognizes that, for certain sources such as power plants (i.e., fossil fuel-fired steam generators), the source must respond to constantly changing demands with significant changes in emissions from year to year. Therefore, for fossil fuel-fired steam generators, "allowable emissions" should generally be considered "representative of normal unit operation" rather than actual emissions in determinations of "actual emissions" for determining baseline concentration and increment consumption, unless it is clearly demonstrated that a lower level of emissions will never be exceeded.
DEFINITION OF "BASELINE AREA" AND "BASELINE DATE"
"Baseline area" is not specifically defined in the State Act but is simply referred to as "an area subject to this article~~ in the definition of baseline concentration. CRS 1973, 25-7-202. The Federal Clean Air Act definition of "baseline concentration," Section 169(4), is identical to the state's, and EPA has interpreted" an area subject to this article" to mean the attainment and unclassifiable areas designated pursuant to Section 107(d)(l)(D) or (E) of the Federal Clean Air Act. Such an interpretation is also reasonable under the Colorado Air Quality Control Act which states that the Commission shall adopt measures "to prevent significant deterioration of ambient air quality in each region, or portion thereof, of the state identified pursuant to Section 107(d)(1)(D) or (E) of the Federal Act." The result of EPA's definition is that the entire state is the baseline area for 502, and air quality control regions for particulate matter.
Several parties proposed alternative approaches to the definition of baseline area. These approaches ranged from a modeled 1-µg/m3 impact area (based on 7.5 minute quadrangles, the county-township-range-section system, or a metric grid) to the entire state.
The Commission adopted the EPA definition for the following reasons:
Testimony from Pitkin County and members of the general public indicated concern that with small baseline areas, minor source emission increases would continue to raise the background ambient air concentrations, especially for particulate matter, before a major source would locate in an area to begin the counting of increment consumption. The baseline areas selected by the Commission for particulate matter represent a balance between a recognition that particulate matter emissions are often a more localized problem than are gaseous emissions (hence the use of AQCRs for particulate matter instead of the entire state, as is the approach for S02) and the need to begin counting increment consumption expeditiously (hence, the use of AQCRs for particulate matter rather than the smaller impact area). Only two AQCRs in Colorado have been triggered during the six years PSD has been in effect. Since triggered baseline areas can in the future be subdivided into triggered and untriggered areas, the Commission considers the use of baseline areas the size of AQCRs sufficiently flexible for purposes of reasonable application, economic growth, and prevention of air quality deterioration.
DEFINITION OF "BASELINE CONCENTRATION"
Two parties proposed changes to this definition, both suggesting the substitution of "allowable" for "actual" emissions in portions of the definition. The concern regarding power plant actual versus allowable emissions is discussed under "Actual Emissions". The other concern arises from the possibility of a large difference between actual and allowable emissions in the calculation of increment consumption or in establishing baseline concentrations. This is discussed extensively in the EPA preamble to the August 7, 1980 PSD regulations (Division Exhibit B, pp. 74-76) concerning increment consumption. EPA's rationale is that actual emissions more reasonably represent actual air quality than allowable emissions and that because actual emissions are based on at least two years of operation, future emissions could be reasonably expected to remain at the same level. EPA therefore uses actual emissions to avoid "paper consumption" of increment (or modeled baseline concentrations which would exceed monitored levels) The Commission concurs with the EPA rationale and has adopted the EPA approach of using actual emissions to track increment consumption and determine baseline concentrations.
DEFINITION OF "COMPLETE"
The Environmental Defense Fund (EDF) proposed a list of specific elements of a PSD permit application, for aid in determining whether an application is "complete," which was generally incorporated in the final rule. The proposed list of items would add some certainty and clarification for the applicant and the Division of the specific items required demonstrating completeness of an application. Regarding items (i) and (iii)-(iv)., opposition to the list by several parties was primarily that it was redundant with other requirements of the rules. York, Nov. 10 Tr. at 18 et seq. and 60 et seq. Item (ii) was retained because, for many or most applications, such information would be necessary to verify the applicant's modeling.
DEFINITION OF "NET EMISSIONS INCREASE"
Several parties proposed crediting increases or decreases in emissions, which occur up to five years after a modification, becomes operational. The Commission did not adopt this recommendation because EPA specifically prohibits states from crediting decreases, which would occur after the change occurs. 40 CFR 5l.24(b)(3) . In addition, it would prove difficult to exact an enforceable agreement for a source to close down or otherwise decrease emissions at some future date.
Several parties proposed in paragraph f(ii) to shift "enforceable" from time of construction to time of operation. This change would not be consistent with the state statutory requirements, which prohibit construction or operation of a non-permitted new source or modification. The suggested change would also needlessly complicate the correlation of permits to enforceable decreases in emissions.
In response to a party comment that 90 days to report a reduction in emissions is too short, the Commission agreed and has allowed such reports to be made within a year of the decrease unless an extension is granted. A longer time would make the reduction difficult to verify.
DEFINITION OF "SECONDARY EMISSIONS"
The final definition incorporates a recent amendment by EPA, 47 Fed. Reg. 27554 (June 25, 1982) and is consistent with CRS 1973, 25-7-202(6.5).
DEFINITION OF "ALLOWABLE EMISSIONS"
In several Sections of EPA's PSD rules, including its definition of "allowable emissions," EPA grants credit for permit conditions only if they are "federally enforceable. In each of such Sections, the Commission has deleted the qualification of "federally" and has in the Common Provisions Regulation defined "enforceable" so that it is consistent with 'S definition of 'federally enforceable."
DEFINITION OF "SIGNIFICANT"
Several parties commented that the proposed definition, which defined both "significant" and "significantly" and included a listing of "significant concentrations," was confusing and unnecessary. The proposed definition also gave the Division the discretion to (1) determine that certain sources were not significant even if the source met the definition, and (2) to determine significance levels for non-listed pollutants. In addition, it limited the definition for sources affecting Class I areas to those sources producing a "significant" impact. There were several Sections in the proposed regulations that used the "significant" definition of ambient concentrations to allow impacts to Class I areas not allowed under EPA rules. EPA and the National Park Service commented that these changes resulted in a less stringent definition. The Commission agreed with these comments. The final definition is essentially identical to EPA's and uses only emission rates to define "significant," and the use of "significant" to qualify impacts to Class I areas in other Sections of the rules has been deleted.
DEFINITION OF "MODIFICATION"
One party proposed that an existing exception for increases in ~ emissions caused by adding new emission control equipment (e.g., replacing scrubbers with fabric filters) be retained. The Commission acknowledges that this exemption was intended to avoid penalizing a source willing to improve particulate matter collection by converting from scrubbers to baghouses or electrostatic precipitators. Since scrubbers collect gaseous pollutants, but baghouses and precipitators do not, the amount of SO2 emitted would increase, hence the exemption. Since there are a number of nonattainment areas for particulate matter, but none for SO2, the Commission will continue to encourage additional control of particulate matter by including this exemption in the definition of "modification."
It should, however, be noted that this exemption is not included in the definition of "major modification," so a significant increase in SO2 emissions from a major source will result in P50 applicability. The effect of this is to provide the exemption only for minor sources and minor modifications.
DEFINITION OF "STATIONARY SOURCE"
The proposed definition was revised to include language essentially identical to that of EPA at 40 CFR 51.24(b)(5) and (b)(6) . The final rule allows more discretion to define stationary source on a case-by-case basis. The definition clarifies that a source in a nonattainment area may also be "an identifiable piece of process equipment" which makes it consistent with a recent federal case. See Natural Resources Defense Council Et al. V. Gorsuch, et al., 685 F.2d 718 (D.C. Cir. 1982).
DEFINITION OF "FUGITIVE DUST"
The State Act exempts "fugitive dust" from regulation under the PSD program, including exemption from determinations of whether a source or modification is major and of increment consumption. C.R.S. 1973, 25-7-202(4), -202(5), -204(l)(b), and -204(2)(c). "Fugitive Dust" is defined as:
Soil or other airborne particulate matter (excluding particulates produced directly during combustion) resulting from natural forces or from surface use or disturbance, including, but not limited to, all dust from wind erosion of exposed surfaces or storage piles and from agriculture, construction, forestry, unpaved roads, mining, exploration, or similar activities in which earth is either moved, stored, transported, or redistributed; except that fugitive dust shall not include any fraction of such soil or other airborne particulate matter which is of a size or substance to adversely affect public health or welfare.
C.R.S. 1973, 25-7-202(3). Under such definition, fugitive particulates are regulated in the PSD program if they are "of a size or substance to adversely affect public health or welfare."
The exemption of "fugitive dust" is an issue because EPA counts total suspended particulates ("TSP") in determining increment consumption, maintenance of primary and secondary NMQS, and source applicability. Therefore, to the extent that the state excludes some sizes of particulate matter in these determinations, its regulations are arguably less stringent than EPA's, although as explained, because of depositional effects, there is generally an insignificant difference between the counting of TSP and the counting of smaller particulates.
The basis for setting the primary NAAQS is health effects; the basis for setting the secondary NAAQS is welfare effects. These are. also the bases under the State Act for counting fugitive particulates in the PSD program. Because the bases for the State's inclusion of fugitive particulates and for EPA'S promulgation of particulate matter NAAQS are essentially identical, it is appropriate to consider whether the NAAQS should be the standard for determining which particulates are "of a size or substance to adversely affect public health or welfare." However, EPA's current primary and secondary NAAQS for particulates are based on the "Air Quality Criteria for Particulate Matter" (1969), Div. Ex. R., which has generally been superseded by more recent research and analysis. For that reason, EPA in the CMA v. EPA Settlement Agreement has agreed in the near future to promulgate new primary, and perhaps secondary, NAAQS for particulates which would exclude particulates above a size posing no health or welfare risks.
EPA's staff review, in anticipation of revisions to the particulate matter definition and NAAQS, of the effects of particulate matter on health concludes that the size counted should be less than 10 urns, which includes those particles capable of penetrating the thoracic regions. "Review of the National Ambient Air Quality Standards for Particulate Matter: Assessment of Scientific and Technical Information," EPA 450/5-82-001 (January 1982).
EPA staff review of welfare impacts indicates that visibility impacts are generally caused by fine particulates of less than 2.5 um. Id. at 122. However, such review recognizes that "the full size range of particles including dustfall can contribute to soiling, become a nuisance and result in increased cost and decreased enjoyment of the environment." Id. At 140. Further, the EPA "staff recommends consideration of the economic and other effects associated with soiling and nuisance when determining whether a secondary standard for TP or for TSP or other large particle indicator is desirable," id. at 141, and that "the basis for selecting a particular level for a secondary TP or TSP standard is a matter of judgment." (emphasis added) Id. at 147. The EPA staff review indicates that EPA will probably propose fine particulate secondary standard but is undecided as to whether to establish a TSP or large particulate secondary standard, and that there is a basis for concluding that welfare impacts are being caused by all sizes of particulates. Additionally, there was public and party testimony on welfare effects from fugitive particulates, some of which can be assumed to be large particles. See Markey, November 10 Tr. at 2 et seq.
One of the apparent concerns of parties and persons opposing the use by the Commission of TSP as a welfare standard is that the increment would be consumed and that no further development could occur. Division Exhibit W, which compares the modeled ambient impacts of TSP using a deposition model with particulates of 10 urn or less using the same model, shows that the larger particles deposit quickly and that the ambient impact is relatively the same at a distance of 1000 meters or greater. The implication of this is that for many sources the modeling of increment consumption would have the same general results whether TSP is counted or whether only particles 10 urn or less are counted (assuming the boundary of the source is 1000 meters or farther from the emissions point). Another implication is that welfare impacts from large particulates can only result within relatively short distances of a source.
Another concern was that the legislative intent was not to count TSP, although there was not clear evidence of legislative intent presented to the Commission. In any event, statutory language leaves the determination to the Commission to decide what particulates are of a size or substance to adversely affect health or welfare.
Given the foregoing considerations and the Commission's general interest in interpreting health and welfare effects of particulates consistent with EPA, but also given the uncertainty surrounding the revision of the particulate NAAQS by EPA, the Commission determines that in applying the definition of "fugitive dust", the adverse effects on health or welfare of fugitive particulate emissions should be determined individually for each source. Adverse welfare effects of nuisance and soiling will be presumed to occur if the source would have offsite, ambient, particulate impacts unless the permit applicant rebuts such presumption with clear and convincing evidence. The result of this presumption will be that in most cases, large particulates will be counted and there will be no difference between EPA s treatment of particulates and the states. Other health and welfare effects shall generally be evaluated based on EPA's most recent research and analysis, but the permit applicant shall have the burden of proof of demonstrating with clear and convincing evidence, which, if any, sizes or substances of fugitive particulates do not adversely affect, health or welfare. This presumption of health and. welfare effects has been incorporated in the definitions of "major stationary source" and "major modification," Section XI.A.4 on Exclusions from Increment Consumption, and Section V.D.3.c.(i)(B).
Upon EPA's adoption of revised NAAQS for particulates, the Commission may consider whether to revise this Statement of Basis and Purpose or the definition of "fugitive dust" to reflect such revisions., Should EPA decide not to have a secondary NAAQS incorporating nuisance and soiling (welfare) impacts of large particulates, the Commission will consider whether the welfare effects of large particulates are significant enough to be included, or whether they are relatively insignificant and, thus, should not be counted in the state PSD Program.
DEFINITION OF "MAJOR SOURCE" AND "MAJOR MODIFICATION"
The State Act permits the counting of fugitive emissions in determining whether a source or modification is major "only if the Commission adopts regulations to include fugitive emissions for that source category." CR5 1973, 25-7-202(4) and (5). The Federal Clean Air Act has a similar requirement at Sec. 302(j). EPA has interpreted the rulemaking requirement to mean simply a consideration in rulemaking of whether fugitive emissions should be counted and a requirement that affected industries be allowed to present policy or factual reasons why fugitive emissions should not be counted. 45 Fed. Reg. 52676 (August 7, 1980). Based on this rationale, EPA's rules currently list 26 categories of sources for which fugitive emissions are counted. A similar interpretation of the State Act is reasonable and has been adopted by the Commission.
One party recommended the addition of uranium mills and coal mines to the list of sources for which fugitive emissions would be counted. However, those sources could not be considered in this proceeding due to inadequate public notice. The Commission intends to consider those sources for listing as soon as practicable.
In the CMA v. EPA Settlement Agreement, the EPA has agreed to remove these 26 listed sources on the basis of industry's argument that the rulemaking requirement means that EPA must identify reasonable methods for measuring and modeling fugitive emissions from a category of sources. Although not agreeing that this is legally required under state or Federal law, the Commission has determined that Division Exhibit F, primarily, makes that demonstration for the ten categories located or expected to locate in Colorado.
It should be noted that measurement methods are not only available, but have been in use for a number of years and have provided test results that are the basis for the fugitive emission factors used by EPA and other control agencies, including the Colorado Air Pollution Control Division.
The following important parallels between stack emission 'factors and fugitive emission factors support the conclusion that fugitive emission factors are relatively as reliable and as reasonably available as stack emission factors:
* Both are based on numerous test data at different locations on different equipment or operations.
* Both are influenced by many variables (e.g., for a stack, flow rate, temperature, process variations; for a fugitive plume, wind speed, moisture content of the material, size distribution of the material).
* Neither is intended to represent actual emissions from a specific source. Actual acceptable test data for a specific or similar source would always be used in lieu of an emission factor.
* Both are intended as air management tools to allow pre-construction assessment of a source impact or as a representative value to average total emissions from a number of similar sources (e.g., all waste incinerators, commercial boilers, or coal storage piles) for such air quality management purposes as determining "reasonable further progress" in nonattainment areas.
Stack and fugitive emission factors are both estimates; such factors are nevertheless widely used by control agencies and applicants alike. However, control agencies generally have no objection to, and would prefer, actual test data in lieu of factors whenever such information is submitted. (See Testimony of McCutchen, October 28, 1982; Egley, November 18, 1982, pp. 72-75 and p. 99; Bertolin, October 29, (am), p.39.)
One party's concern involved whether the emission factors for a facility can be extrapolated to a larger facility, specifically, from a 7000 ton per day oil shale processing facility to a 50,000 ton per day facility. Scale-up is a widely used and accepted approach throughout industry for estimating the feasibility of larger-scale facilities from results at smaller-scale facilities. There are a number of well-known precautions that should always be considered when extrapolating, and a control agency should be at least as cautious in extrapolating emission levels as the applicant is in extrapolating process data. Of course, if different equipment, such as a retort, is to be used at a proposed facility, an emission estimate would be based on mining and handling practices and on different processing equipment emission factors (e.g., refinery emission factors) which are similar to oil shale processing activities where such would be more accurate than extrapolation. Therefore, either through extrapolation or through the application of other more applicable and available emissions factors, relatively accurate emissions levels from all types of oil shale facilities can be calculated.
The same modeling techniques used to model stack emissions can be and are used to model fugitive emissions (Division Appendix F). One modeling parameter, deposition, is more critical in modeling fugitive particulate emissions and should be carefully evaluated. Fugitive particulate emissions usually contain larger particles than do controlled stack emissions. These large particles generally settle out rapidly, so that the impact at a plant boundary is usually much less than would be anticipated by the quantity of emissions at the source. See "Fugitive Dust." However, acceptable models exist which incorporate deposition and thereby provide a reasonably accurate assessment of fugitive particulate emission impact. Models without deposition can be used for gaseous and fine particulate fugitive emissions. Models have recognized limitations, but they are as accurate for fugitive emissions as for stack emissions.
The following information, which is primarily from Division Exhibit F, concerns the major policy and factual reasons for counting fugitive emissions from each of ten source categories:
Coal Cleaning. A typical plant would process 10,000 tons per year (tpy) of coal and emit approximately 280 tpy of particulate matter, 96% of which would be fugitive emissions. Over 100 tpy of the fugitive emissions are less than 15 microns in diameter and are considered inhalable particulate (IP).
Portland Cement. The typical plant produces 500,000 tpy of cement and emits approximately 370 tpy of particulate matter, 60% of which would be fugitive emissions.
Iron & Steel Mills (Including Coke Ovens). A typical plant would produce several million tons of steel per year and emit approximately 3,600 tpy of particulate matter, 64% of which would be fugitive emissions. The coke plant would produce over half a million tons of coke per year and emit approximately 700 tpy of particulate matter, 10% of which would be fugitive emissions, and 1,500 tpy of uncontrolled fugitive hydrocarbon emissions.
Petroleum Refineries. A typical plant would process 25,000 barrels of oil per day and emit approximately 1,100 tpy of hydrocarbons, 57% of which would be fugitive emissions.
Lime Plants. A typical plant would produce 300,000 tpy of lime and emit approximately 1,800 tpy of particulate matter, 33% of which would be fugitive emissions.
Fuel Conversion. A typical shale oil plant would produce 50,000 barrels per day of oil and emit 4,800 tpy of particulate matter, 12% (500 tpy) of which would be fugitive emissions, and 8,611 tpy of hydrocarbons, 12% (1,080 tpy) of which would be fugitive emissions.
Sintering Plants. A typical plant would emit approximately 400 tpy of particulate matter, 20% (80 tpy) of which would be fugitive emissions.
Power Plants and Boilers. A typical, but well-controlled, new 500 MW power plant burns 2.1 million tpy of coal and emits approximately 620 tpy of particulate matter, 18% (110 tpy) of which would be fugitive emissions. These fugitive emissions are from coal handling and storage, among the most visible and complaint-related of all fugitive emission sources.
Petroleum Transfer and Storage. A typical plant has a capacity of 476,000 barrels and an annual throughput of 7,123,000 barrels per year and emits 267 tpy of hydrocarbons, 72% of which are fugitive emissions.
In conclusion, the Commission has determined that fugitive emissions from the sources listed should be included in determining whether the source or modification is major for the following general reasons:
PUBLIC COMMENT AND HEARING REQUIREMENTS
The Commission has adopted a regulation designed to offer maximum opportunity for any interested person to learn about, and become involved in, the PSD permit review process. Adopted in the final rule are proposals by one party that (a) the public notice be printed not only in a newspaper of local distribution, but also in one of state-wide distribution to increase the number of potential interested persons reached by the notice, (b) that the public hearing be held at least 60 days after the Federal Land Manager (FLM) has received the notice and permit application, to allow the FLM adequate response time, and (c) that any interested person receive notice of public hearing. In addition, the Commission agrees with the Division proposal to implement and maintain an "interested party" mailing list as described in Division Exhibit M.
The proposed rule contained a requirement that the Division notify the county Commissioners in affected counties when a proposed source would consume 50 percent or more of the remaining PSD increment. Two parties proposed that this requirement be deleted as allowing local land use decision-makers to unduly influence air permit decisions. The intent of this requirement, which has been modified to notify county Commissioners of any PSO permit applications, is not to provide opportunity for counties to comment to the Division on land use; rather, it is to provide information to the counties on proposed sources so that the counties can more adequately assess their priorities and needs. PSD permit approval or denial is to be based solely on the criteria specified in this regulation; land use decisions are, and will remain, the responsibility of local governments.
Regarding the issue of land use decisions, one party commented that Section IV.C.4.e.(iii) of this final rule, which solicits comments from interested parties on alternatives to a proposed PSD source or modification, constitutes the inclusion of land use factors in permit approval determinations. The Commission did not remove this Section because it is required by the State Act, CRS 1973, 25-7-l14(4)(f)(l)(B). Furthermore, the intent of soliciting such alternatives is for the assessment of alternatives with respect to control technology and source impact, not land use.
CONTROL TECHNOLOGY REVIEW
One party proposed that the last sentence in Section IV.D.3.a.(i)(C), which requires the owner or operator of a phased project to demonstrate the adequacy of a previous best available control technology (BACT) determination, be deleted. The Commission did not delete this sentence because (1) an EPA regulation requires such a condition and deletion of this requirement could be considered less stringent, and (2) the requirement is intended to provide for the possibility of a different BACT determination if new technology has developed between the time of permit review and the next phase of a project for which construction has not yet commenced, a time period which can easily exceed five years on large projects.
POST-CONSTRUCTION MONITORING
Five parties proposed that post-construction monitoring requirements be limited to a maximum of one year. The Commission recognizes the concern of lessening the burdens on owners or operators, particularly if the information being gathered is unnecessary. But in many cases, there can be a very real need for monitoring for periods of time greater than a year to obtain reliable data. Accordingly, the final rule requires post-construction ambient monitoring for a period up to one year; additional ambient monitoring can be required only if it is necessary to determine the effect of emissions from the source on air quality. This necessitates an evaluation by the Division regarding the adequacy of the data, and a showing by the Division that additional monitoring is needed, before more than a year of monitoring could be required.
OPERATION OF MONITORING STATIONS
Three parties proposed that the rule be written to allow the latest changes in EPA-approved methods to be used without first having to amend the rule. The Commission agrees with the need to use the most up-to-date approved methods. Accordingly, the final rule specifies that "EPA accepted procedures...as approved by the Division" can be used.
ADDITIONAL IMPACT ANALYSIS
Section IV.D.3.a.(vi) of the final rule requires an owner or operator of a proposed PSD source to provide an analysis of the impairment to water that would occur as a result of emissions associated with the source.
This analysis is not required by the EPA rules. The Inclusion of water in the additional impact analysis reflects a strong concern by the Commission based in the record regarding acid deposition. At this time there is neither the information nor the evidence of damage to justify regulating acid deposition in Colorado. However, the vulnerability of high altitude lakes to acid deposition and the potential increases in acid-forming pollutants such as SO2 and NOx on the Western Slope from sources subject to the PSD program, particularly oil shale processing and large power plants, clearly demonstrate a need for a program to gather data, track and analyze this potential environmental problem. The inclusion of water in the additional impact analysis is intended to gather information on the problem; this analysis is not intended to affect permit approval or denial or control technology review decisions except for determinations of adverse impact to AQRVs in Class I areas. The issues, which have been raised concerning water impact analysis, are discussed in detail.
The State Air Quality Control Act requires a PSD permit hearing to consider "air quality impacts of the source... and other appropriate considerations." C.R.S. 1973, 25-7-114(4)(f). Acid deposition can be construed as an indirect but potentially significant air quality impact which should be analyzed, especially in light of one of the stated purposes of the PSD Program "to protect public health and welfare from any actual or potential adverse effect which.... may reasonably be anticipated to occur from air pollution or from exposures to pollutants in other media, which pollutants originate as emissions to the ambient air (emphasis added). Section 160(1) of the Clean Air Act. Acid deposition in water is those pollutants in other media originating as emissions to the ambient air.
The Federal Land Manager (FLM) of a Class 1 area is responsible for determining whether a source has an adverse impact on air quality related values which is generally defined as follows:
Any value of an area, which may be affected by a change in air quality. Examples include flora, fauna, soil, water, visibility, culture, and odors. Forest Service Comments, October 7, 1982, p.1.
Acid deposition may adversely affect such values, and thus an analysis of its effects should be required for review by the federal land managers of affected Class I areas.
The major issues discussed during the hearings are summarized:
John Turk of the USGS is involved in acid deposition research in Colorado and stated that 370 lakes in the Flattops Wilderness area comprising 157 hectares would be sensitive to potentially harmful degrees of acidification if precipitation attains an average pH of 4.0. (Exhibit 3, Nov. 10 Tr. at 153)
Ben Parkhurst maintains that there is talk of Colorado's lakes being sensitive (Oct. 29 Tr. at 146), but states that sensitivity must be considered together with acid inputs. Thus, if acid input to the water system is not sufficiently large the sensitivity question is not important.
Dr. William Lewis stated that Colorado's lakes are sensitive to acid deposition as demonstrated by the measured loss in buffering capacity he found in his studies. (Nov. 18 Tr. at 136-138)
In conclusion it can be inferred that some Colorado lakes are poorly buffered and if sufficient levels of acidity are introduced into the lakes, these poorly buffered "sensitive" lakes could develop acidification problems.
John Turk of the USGS states that there has not been any large degree of acidification taking place in the lakes or streams he has studied in the Flattops. (Nov. 10 Tr. at 172)
Ben Parkhurst also states that there is no evidence to show that any acidification has taken place in Colorado Lakes. (Oct. 29 Tr. at 144 and 150-152)
Dr. William Lewis states that he has noted pH changes in lakes he has studied (Nov. 18 Tr. at 140), but he does not consider that to be the major point in regard to the acidification question. Lewis considers the loss of buffering capacity to be the best indicator of acidification effects on lakes and he has found statistically valid evidence to show that this has occurred. (Nov. 18 Tr. At 13 6-138)
In summary, there is some evidence that pH has dropped slightly in some of the lakes Lewis has studied, however, it does not appear that acidification (drop in pH) has occurred to any large degree in Colorado, however, in the prediction of future impacts, buffering capacity should be examined and this has dropped in the lakes examined by Lewis.
Paul Ferraro has done some research on estimating potential acid deposition impacts on Colorado and has determined that under different energy development scenarios, there is a potential for acidification in sensitive lakes. (Nov. 10 Tr. at 158-159)
Parkhurst states that he would not expect acidification to be a problem in the future, unless the acid deposition reaches levels similar to those found in the Northeast. (Oct. 29 Tr. at 154-156) Parkhurst states that Ferraro's study is conservative and a pH drop to 5.8 would not affect fish.
Oppenheimer (EDF Exhibit 32 p. 6) states that if a 1-µg/m3 increase in SO2 (annual average) occurs, acid deposition levels could result which would be damaging to sensitive lakes.
In summary, it can be inferred that there is a potential for energy development activities to cause increased levels of acids to be deposited in the watershed, and effects on pH may occur depending on the buffering capacity of the water. The degree of the effect will depend on the amount of acid, thus the amount of emissions.
Paul Ferraro has utilized what he refers to as a ''first cut'' approach in estimating impacts due to acid deposition. The approach utilizes methods employed by John Turk for determining sensitivity of waters and methods for estimating deposition rates developed by Systems Applications, Inc. (Nov. 10 Tr. at 154-176)
Oppenheimer (EDF Exhibit 32 p. 12-13) states that acid deposition modeling could be conducted using presently available plume models (approved by EPA), which incorporate a plume depletion function to account for deposition. Results from this model could then be compared to deposition standards.
In summary, there appear to be only screening techniques available at this time for estimating the impacts of acid deposition.
Parkhurst stated that fish could survive in pH's as low as 4.1. (Oct. 29 Tr. 143)
Lewis states that he feels that trout would be adversely impacted if pH dropped significantly below six as an average. He would not expect trout populations to be able to reproduce and grow at a pH below six. (Nov. 18 Tr. at 152,153)
Parkhurst also states that a permanent pH decrease from 6.0 to 5.0 is not a natural variation and that many species would probably be eliminated and species numbers and diversities reduced. (Nov. 10 Tr. at 110)
Parkhurst also testified that there is not any evidence to show that trout are capable of both reproducing and maturing in an environment, which is consistently of a pH of 4.5 or less. (Nov. 10 Tr. at 114)
In conclusion, the record does not clearly identify the point at which damage to fish will occur. However, testimony indicates that below a pH of 4.5, and maybe below 6, fish populations would not be able to reproduce and mature.
Summary
Few definitive conclusions could be drawn from the evidence and testimony. The main point of agreement was that at the present time there has not been any adverse acidification identified in any of Colorado's watersheds. The buffering capacity of lakes appears to be the important factor to consider in determining sensitivity of lakes. Testimony was given that buffering capacity has diminished in certain mountain lakes; however, the cause of this loss has not been identified. No agreement was reached on what level of pH could be tolerated by aquatic ecosystems without causing adverse impact. It could be agreed by all parties that more research must be conducted on acid deposition so that its effects may be better understood and predicted by appropriate models.
Although more information is needed, studies in the Northeastern United States, Canada, and Europe show that acid deposition can be a serious problem (Oct. 29 Tr. at 144-145 and EDF Exhibit 32 p.3). Colorado contains many lakes, which are sensitive, exhibiting low buffering capacities. If energy development occurs on the Western Slope emissions of acid precursors will grow substantially, which will result in increased acid deposition levels. The nature of energy industry in Colorado may result in rapid growth in a short period of time, which will occur before all information on acid deposition is understood. If a large industry develops and new information shows that ambient air standards and increments do not protect the state from acidification problems, a valuable resource may be damaged. For these reasons, the Commission intends to remain vigilant in monitoring this problem, and as analytical capabilities are developed or a problem develops, to re-address this issue for possible regulatory and/or legislative solutions. A subcommittee should be formed, if resources permit, to develop specific guidelines for acid deposition analyses based on recent modeling innovations. In the interim, proposed PSD sources emitting acid or acid precursors will be required to analyze the impact of these emissions on water, utilizing the most up-to-date techniques available.
AREA CLASSIFICATIONS
Several parties objected to the application of Class I sulfur dioxide increments to those areas of Colorado listed in Section VIII.B. which are otherwise Class II areas. The sulfur dioxide Class I increments are required to be enforced in these areas by CRS 1973, 25-7-209. However, pursuant to CRS 1973, Section 25-7-105(8) (Supp. 1982), this Section VIII.S. may not be made a part of the State Implementation Plan (SIP) until these areas are redesignated as Class I under the procedures of Section IX. Until they are redesignated, they may only be enforced under state law and regulations. However, unlike Class I areas, the increment in these areas may be protected now. See CR5 1973, 25-7-210.
The Commission has also determined that the variances from increment consumption allowed by Sections XIV.C., XIV.D., XIV.E., and XIV.F. for Class I areas should also apply to the areas listed in Section VIII.B. It is a reasonable interpretation of CRS 1973, 25-7-209 that if the Class I (sulfur dioxide) increments are to apply to such areas, the variances from the increments should also apply. There is nothing in the State Act to indicate that the areas listed in CRS 1973, 25-7-209, are to be given better air quality protection than Class I areas, which would be the result if the variances did not apply.
REDESIGNATIQN
Several parties objected to what were considered burdensome requirements for redesignating areas to Class I. The adopted rule incorporates only the minimal requirements for redesignation from state and federal law. See CR5 1973, 25-7-208; Sec. 164 of the Federal Clean Air Act; 40 CFR 5l7 ~(g). However, the Commission did lessen the burden imposed by the proposed rule on those persons requesting a redesignation by allowing such requests to be made without providing all of the information necessary for a redesignation. Who would provide such information is not specified so that it could be any combination of federal, state and private entities.
TECHNICAL MODELING & MONITORING REQUIREMENTS
Several parties proposed the inclusion of future EPA amendments or guidelines in this Section of the regulation, which specifies the air quality model, monitoring and stack height requirements to be used. In response, the Commission adopted the use of "EPA approved" terminology instead of references to specific documents.
Two parties proposed language making EPA or the state responsible for any needed meteorological data. The Commission did not adopt this proposal because it is the applicant's responsibility to demonstrate that it will not cause exceedance of an NAAQS or increment, and meteorological data are nearly always needed to make such determinations. If the Division has such data, it has an obligation to make that data available to the applicant.
INNOVATIVE CONTROL TECHNOLOGY
Several parties proposed that the phrase "greater than or" be deleted from Section XIII.B.2. which specifies that the innovative system achieve emission reductions "greater than or equivalent to" BACT. The EPA regulation uses the phrase "equivalent to" and the parties considered the proposed state rule more stringent. The Commission does not consider the phrase "greater than or equivalent to" (emphasis added) to be more stringent, but instead to be a clarification that an acceptable innovation can result in either equivalent or lesser emissions from the source, but not a higher level of emissions. The preamble to the EPA RSD regulation (Div. Exhibit B, p. 84) clearly specifies that the "...final emission limitation must at least represent the BACT level that would have been initially defined."
FEDERAL CLASS I AREAS
Section XIV.A. allows the Division or the Board (if applicable) to determine independently if there are an adverse impact to visibility in Class I areas if the federal land manager (FLM) fails to make such determination or such determination is in error. This authority is intended to allow the state to fulfill the FLM's responsibility for protection of visibility if for whatever reason, including political, the FLt4 fails to do so. The Commission recognizes that scenic vistas are an important resource of the State of Colorado. (Colorado Mountain Club Exhibit #1) A subcommittee may be formed to further develop visibility protection for the State of Colorado.
Several parties suggested problems with the state's independent authority' to make such visibility determinations. These consisted of (1) measuring or predicting visibility impairment, (2) quantifying man-induced, as opposed to naturally-occurring, visibility impairment, (3) the subjectiveness of visibility impairment, (4) the lack of correlation of current particulate standards to visibility impairment, and (5) the lack of guidance in the regulation regarding determinations of significant and adverse visibility impacts.
The Commission's response to these concerns is as follows:
Visibility theory involving scattering and absorption of light is well documented and has been incorporated into the models described in the Workbook for Estimating Visibility Impairment (EPA-450/4-8-031). The preface to the Workbook for Estimating Visibility Impairment states: "EPA believes these techniques are at a point where the results should now be employed to assist decision-makers in their assessments." "These techniques" include the Plu-Vu Model. Div. Ex. J at iii. Thus, these models are appropriate for use at this time.
Section XIV.B. of the regulation allows the Division to require a source, which will have or is likely to have an impact on any Class 1 area to conduct monitoring to establish the baseline status of and impacts on AQRVs in such Class 1 areas. EPA has not imposed this requirement on applicants, although under EPA rules and the Commission rule, Section IV.D.3.(a)(vi), an Additional Impact Analysis is required which would include an analysis of impacts on AQRVs based on available data, for example, through literature searches. The data gathered from such monitoring are important and necessary in aiding the federal land manager of a Class 1 area in determining whether or not a source will cause an adverse impact on AQRVs and the state in deciding on concurrence with such determination. The data also aid the public information function of the Additional Impacts Analysis. The authority to require submission of such Information includes, but is not limited to, CRS 1973, 25-7-206(2), 25-7-106(5) and (6), and 25-7-114(4).
The National Park Service ("NPS") and the Forest Service ("FS") supported the rule as a supplement to their current monitoring activities on the basis that the data is necessary to determining adverse impacts on AQRV5, including visibility. See Mitchell, Nov. 18 Tr. at 122 et seq., 161 et seq.; Haddow, Oct. 28 (p.m.) Tr. At 22 et seq., Nov. 10 Tr. at 68 et. Seq.; Region 2-USDA Forest Service Comments on Proposed PSD Rule; Comments on the May 19, 1982 Proposed Colorado PSD Regulation by National Park Service Air Quality Division.
The NPS stated its willingness to provide a list of sensitive receptors of AQRVs to applicants for monitoring Mitchell, Nov. 18 Tr. at 162.
The Forest Service recognized severe technical difficulties and high costs of monitoring some pollutants and visibility in wilderness areas. Haddow, Oct. 28 (p.m.) Tr. at 22 ~. However, lichen monitoring could be done without great difficulty and special use permits are available for some complex monitoring. Haddow, Nov. 10 (p.m.) Tr. at 112., The FS intends to identify sensitive indicators of AQRVs for each Class 1 area, e.g. 2 or 3 species of lichen and 2 or 3 scenic views, and proposes that the state require the monitoring of such indicators Id. at 82-83.
EDF's and FOE's general contentions in support of the proposed monitoring requirements were:
"EDF and FOE Final Recommendations; Summaries of the Record and Legal and Policy Analyses," Section IV.
The Trade Association Parties' general contentions in opposition to the monitoring requirements were:
Trade Association Parties' Closing Argument at 31-34.
The cited testimony and evidence and other portions of the record support the conclusion that monitoring of AQRVs or sensitive receptors of AQRV5 would be helpful, and in many cases necessary, to determine whether adverse impacts on AQRVs would occur. It is also evident that baseline data are not available and may never be developed by federal land managers for some AQRVs and sensitive receptors and for some Class 1 areas. Thus, the primary issue is where to place the responsibility for obtaining background data on AQRVs - the federal land manager, the state and/or the applicant.
As the Forest Service suggested, it is traditional permitting practice to require a permit applicant to obtain the data upon which the agency decides. Haddow, Nov. 10. (p.m.) Tr. at 89. This practice is consistent with the economic philosophy that companies should internalize their environmental costs. Furthermore, the Clean Air Act does not change such practice; it places the "affirmative responsibility" on federal land managers to protect AQRVs and to consider whether there will be an adverse impact on AQRVs but does not expressly state whose responsibility it is to provide necessary data upon which to exercise their responsibility.
The Commission has determined that there is available research and test methods, for obtaining background data and impact data on many AQRVs that will be critical in making adverse impact determinations, even though there are not generally adopted reference methods or modeling techniques. For example, to perform a reasonably accurate visibility impairment analysis, background data is needed. Div. Ex. J. Although there are no generally accepted reference methods for estimating visibility impacts, methods for estimating visibility Impairment have been developed and are relatively sophisticated. See Div. Ex. J.; Geier, Oct. 28 (a.m.) Tr. at 62-71. The rule recognizes this potential limitation on monitoring AQRVs by only allowing monitoring if "monitoring methods are reasonably available and research and development of monitoring methods are unnecessary."
In response to the objection that the Division's discretion in selecting AQRVs for monitoring is too vague and broad, the rule provides:
In response to the objection that the monitoring of AQRVs may not be economically reasonable, the rule provides that:
SULFUR DIOXIDE AMBIENT AIR STANDARDS FOR THE STATE OF COLORADO
The proposed rule would have revised the Colorado ambient air quality standard for sulfur dioxide to be consistent with the federal standard. Because the Colorado standard is not enforceable in the permitting process, see CRS 1973, 25-7-114(4)(g), the Commission ordered on November 10, 1982 That revisions of the state ambient air quality standard for SO2 be removed as a subject of this rulemaking. The Commission agreed to reconsider the state standard if and when it becomes enforceable.
PUBLIC ACCESS TO CONFIDENTIAL INFORMATION
One party raised the issue of whether Section VII of Regulation NO. 3 improperly restricts access to confidential information, which would be available under the Federal Clean Air Act. Section VII may not be considered for amendment in this rulemaking due to lack of public notice.
Revisions to Regulation Number 3 (Excluding PSD Program Revisions)
This Rationale complies with the requirement of the Administrative Procedures Act, C.R.S. 1973, 24-4-103(4), to prepare a Statement of Basis and Purpose for adopted regulations. The statutory authority for these amendments are at C.R.S. 1973, 25-7-102, 25-7-105, 25-7-106, 25-7-109, and 25-7-114. These revisions to Regulation Number 3, adopted February 10, 1982, are intended to clarify and further define certain portions of the regulation adopted June 5, 1980. The 1980 revisions were extensive changes designed to reflect the new provisions of the 1979 Colorado Air Quality Control act (HB 1109); these changes reflect policy changes and clarifications to the existing rule. The basis and purpose of each revision is discussed below.
Section II.C.1.j. of Regulation Number 3 allows the Division to exempt sources from Air Pollutant Emission Notice (APEN) filing and permit requirements if the criteria in this Section are met. Since mid-1980, the Division has granted approximately 25 exemptions under Section II.C.1.j. Of the approximately 700 permits issued by the Division annually, 55 percent are to sources with uncontrolled emissions of less than 5 tons per year (tpy); 35 percent of the total permits are to sources with uncontrolled emissions below 1 tpy. Thus, except for the specific source categories exempted by the Commission under Section II.C.1. of Regulation Number 3, nearly every air pollution source, no matter how minimal its emissions, has had to file an APEN and obtain a permit. The record supports a finding that most sources of less than one ton per year emissions and some of less than five tons per year emissions will have a negligible impact on air quality and should be exempted from the APEN and/or permit requirement.
On that basis and for the following more specific reasons and purposes the adopted revisions to Section II regarding APEN filing exemptions and to Section III regarding permit exemptions are intended to:
Emissions from these 1 to 5 tpy sources, according to a Division study, account for no more than two percent of total emissions, yet comprise 20 percent of the total sources obtaining permits. Such sources could, however, produce 24-hour ambient air impacts as high as 10 ug/m3, which could be significant in certain cases, especially if such source would cause a violation of a NAAQS or increment or by itself or in combination with similar sources cause a health or welfare problem or interfere with reasonable further progress towards attainment.
Volatile Organic Compound (VOC) sources are treated differently. The record demonstrates that 45 percent of the total of all uncontrolled stationary source VOC emissions are emitted by sources ranging from 1 to 5 tpy in size. Most of these sources locate in urban areas such as Denver, which is nonattainment for ozone. Since VOC emissions are an ozone precursor, such sources should be subject to permitting requirements to ensure compliance with applicable VOC emission limitations.
Therefore, VOC sources equal to or exceeding 1 tpy (uncontrolled) locating in nonattainment areas must both file an APEN and obtain a permit. VOC sources ranging from 1 tpy to 5 tpy locating in attainment areas where there is less concern for ozone will be treated like other sources and will be at least required to file an APEN.
The purpose of this revision to Sections II.B. and II.C. is to clarify and revise the requirements for reporting changes in emissions (either increases or decreases) to the Division.
The record shows that an acceptable emissions inventory, usually referred to as the EIS (for Emissions Inventory Subsystem), is essential for effective air quality management and that the revised APENs provide an effective system for obtaining EIS data. Revised APENs reporting significant changes in emissions are required by statute, C.R.S. 1973, 25-7-114(1), and the $40 fee for a revised APEN defrays the cost of processing the information (see "Fiscal Impact"). The levels set for reporting emissions changes are significant and will allow the effective tracking of air quality changes and use for air quality management.
It is obvious, however, that there has been confusion concerning these requirements in the past. The following statements should clarify the confusion:
The Commission has made these revisions economically reasonable by easing the burden of reporting by allowing the use of any mutually convenient reporting format in lieu of a "standard" form and by allowing individual, but similar, emission point sources to be grouped. It should be stressed that this grouping of emission point sources for purposes of reporting significant changes to the Division does not constitute, nor does it set any precedent for, any netting or bubbling or other emission trading approach; emission trading can be conducted only through specific regulations pertaining to this activity. These APEN groupings also do not relieve the source of any obligation to meet any emission control limitations for specific point sources within the group.
In general, the reporting requirements for significant changes have been given greater latitude than existed before, partly in response to concerns that, at certain reporting levels, the accuracy requested exceeds the accuracy of the available data, and in response to EPA requirements for reporting EIS changes which are in the range of 5 tpy for small sources or 5 percent for 100 tpy or larger sources. The adopted "significant change" definition reflects a deliberate selection based on the public hearing testimony and the exhibits and testimony submitted by the Division and interested parties during these deliberations. For odorous, hazardous or toxic pollutants, any emissions change must be reported (again, on an annual basis). With changes of only 0.0004 tpy (for beryllium), for example, considered "significant" by EPA, close scrutiny of all hazardous, toxic and odorous pollutants is needed.
An issue raised is whether the Commission has statutory authority to require a $40.00 filing fee with a revised APEN. The statutory authority for a fee states, "Any person required by the Commission to file an air pollutant emission notice shall pay a nonrefundable fee of forty dollars...." C.R.S. 1973, 25-7-114(5)(a). The statutory authority for requiring the filing of APENs and revised APENs refers to: "air pollutant emission notice" and "revised emission notice", C.R.S. 1973, 25-7-114, the latter reference being to "revised (air pollutant) emission notice". Section 25-7-114(5)(a) does not limit the $40.00 fee to initial APENs filed for a source but refers simply to "air pollutant emission notice" which may be interpreted to include both initial and revised APENs. Testimony by the Division estimated the administrative costs of processing a revised APEN at over $40.00. For these reasons, the Commission finds that it has authority and should charge a $40.00 filing fee for revised APENs.
A source existing before the adoption of the first Colorado Air Quality Control Act and the date of its implementing regulations of February 1, 1972, is not required to obtain a permit. This revision is intended to clarify the date prior to which existing sources are considered "grandfathered" and exempt from a permit requirement.
The purpose of this revision is to decrease the extent of the exemption for stationary internal combustion engines. Prior to this revision, stationary internal combustion engines less than 1000 HP in attainment areas and less than 250 HP in nonattainment areas were exempt from permit requirements. The record shows that these sources not only constitute large individual sources (a 1000 HP engine can emit 96 tpy of NOx), but also can be situated close to each other (one compressor station in Colorado consists of 15 925 HP stationary internal combustion engines which can emit a total of 1340 tpy NOx). Small stationary internal combustion engines in terms of emissions (less than 5 tpy) or size (less than 50 HP) are excluded from permit requirements. In addition, the Commission has retained the exclusion from permit requirements for emergency power generators and added exclusion for stationary internal combustion engines powering portable oil drilling rigs.
The exclusion for stationary internal combustion engines on portable oil drilling rigs is based on testimony and on information developed by the Division which indicates that these sources move frequently (average 10 days per well site), generally are located at remote sites, and emit only 1.3 tons N02 per well drilled. The Division indicated that the total estimated NOx emissions from portable oil drilling rigs in Colorado could be as high as 2200 tpy and that this could increase the total NO emissions inventory in specific active drilling areas by as much as 50 percent. To determine if an air quality problem exists for these sources, testimony from the Colorado Petroleum Association (CPA) indicates a willingness to provide the information needed by the Division to assess emissions by modifying existing data-gathering reports.
One party requested a delayed effective date for this revision so that compressor stations planned for construction during the summer of 1983 would not be held up by an unanticipated requirement that permits be obtained. Such a request is reasonable, and the delayed effective date of October 1; 1983, has been adopted.
Since the record shows that sources for which public comment has been received are in every case either large (greater than 25 tpy) or controversial (e.g., odorous emissions), the public comment requirement for sources in nonattainment areas is being raised from 5 tpy to 25 tpy, which makes it the same as for sources locating in attainment areas. Demolition projects have been exempted from public comment requirements because they often need to be completed, by contract agreement, in a short period of time, and the need for public comment has on occasion been an unnecessary time delay. Very few public responses have been received for small demolition projects. The Division retains the authority to require public comment for demolition projects if considered warranted for reasons of asbestos emissions or other significant concerns.
Under previous rules, owners and operators applying for new permits have not been held to any time limits for commencing construction or operation once the permit to operate has been obtained. Sources must be evaluated (C.R.S. 1973, 25-7-114(4)(b)) to determine whether operation of the source will comply with all applicable regulations, an evaluation that can be made with an acceptable degree of certainty provided that the source actually does construct and operate within a reasonable period of time following receipt of the permit. However, a source which delays construction for a number of years may finally initiate operation at a time when ambient air concentrations or other factors used in evaluating compliance have changed; in addition, delaying construction and operation results in the reserving of emissions that could have been used by other applicants.
This provision implements an 18-month construction deadline, imposed by the Division, to all sources, major and minor, statewide. Owners and operators will be prevented from applying for a permit without intending to construct in the near future, a form of "reserving" emissions or increments which makes compliance analysis difficult and could inhibit real economic growth in the state. Under these provisions, the Division will grant necessary extensions to permits that are issued, so a source with good reason for delaying a project would not be penalized by loss of a permit.
The EPA maintains a list of NRVOCs, which are considered either totally non-reactive or insignificantly reactive in the formation of ozone. NRVOCs can therefore be used to replace reactive VOCs as offsets.
A list of additions to this list appeared in the July 22, 1980 Federal Register. The revision to Regulation Number 3 updates the list of NRVOC5, which are non-hazardous, to conform to EPA's revised list of NRVOC. In addition to this, the revision extends the concept of NRVOC Statewide (instead of nonattainment areas only), and clarifies that NRVOCs will be reviewed separately during initial approval analysis of a new source. Previously, NRVOCs pertained to nonattainment areas only and were used only based on emission-offset credit. The revision clarifies that NRVOCs can be substituted for VOCs for banking and other emission reduction credits.
No revisions to Sections IV.D.2.c. or IV.D.3.b. were made because the State Act provides for the exemption of Section IV.D.2.c. at C.R.S. 1973, 25-7-303.
Revisions to Regulation Number 3 Section II.C.1.
The specific statutory authority under which the Commission shall hold and conduct this hearing is prescribed by 24-4-103, 25-7-105, -106, -110, and the hearing will be conducted in accord with provisions of 24-4-103 and 25-7-110, C.R.S. 1982 and the Commission's Procedural Rules.
The revision to Regulation Number 3 Section II. C.1. is an addition to the list of sources, which are exempt from filing Air Pollution Emission notices. Addition of Part l. (small L) to this regulation exempts petroleum industry flares, approved by the Oil and Gas Conservation Commission, from having to file an Air Pollution Emission Notice (APEN) if emissions of any pollutant do not exceed five (5) tons per year. This exemption only applies to flares, which do not combust gas containing hydrogen sulfide (H2S) except in trace amounts, since H2S is classified as a hazardous air pollutant. Previously APENS were required for these flares when emissions exceeded 1 ton per year.
The Air Quality Control Commission adopts this change for the following reasons:
Addition of Section XV to Air Quality Control Commission Regulation Number 3 Regulation Requiring an Air Contaminant Emission Notice, Emission Permit Fees
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirement of the Administrative Procedures Act, C.R.S. 1973, Section 24-4-103 (4) for adopted or modified regulations.
This revision to Regulation Number 3, adopted November 19, 1987, is intended to bring the Colorado regulations into conformance with current U.S. EPA regulations. U.S. EPA's regulations were revised in response to a court order which required each state to develop a program to assess and remedy visibility impairment in Class I areas from new and existing sources, as established in Section 169A of the Clean Air Act.
Section XV. is added to Regulation Number 3 as part of the State's plan to meet the national goal of preventing future, and remedying existing, visibility impairment in Class I areas. Section XV. Together with this Statement of Basis, Specific Statutory Authority and Purpose and the monitoring and long-term strategies represents Colorado's State Implementation Plan (SIP).
This Regulation addresses a type of visibility impairment, which can be traced to a single source or small group of sources known as reasonably attributable impairment. The U.S. EPA deferred action on the regulation of regional haze and urban plumes due to scientific and technical limitations in visibility monitoring techniques and modeling methods.
The FLMs were consulted and their suggestions considered in developing the plan. In addition, the Commission provided public notice 60 days prior to the public hearing stating that interested parties would be given the opportunity to provide testimony concerning the Regulation and its requirements at the hearing. Wyoming, Utah and New Mexico were also sent notice of the hearing.
Section XV.D. allows the FLMs to certify visibility impairment to the Division Director at any time. At such time of certification, the Division must assess the impairment, identify the contributing source(s), and conduct a Best Available Retrofit Technology (BART) analysis for any contributing sources located in Colorado. The FLMs have not certified reasonably attributable impairment as of this adoption date. Section D. also requires BART and is incorporated for future use, if necessary.
Any source subject to the BART requirements of this Section may apply to the U.S. EPA Administrator for an exemption. The application to the U.S. EPA must include a written concurrence from the Division and Commission; therefore, the source must first apply to the Division, as set forth in Section D.2.c. An exemption granted by the Division and approved by the Commission will constitute the written concurrence required by U.S. EPA.
The New Source Review requirement of Section XV.E. is included for purpose of reinforcing Sections IV.D.2.a. (vi) and IV.D.3.a. (vi).
In addition to existing and new source review, the Division must develop a visibility monitoring strategy to collect information on visibility conditions and must develop a long-term (10-15 year) strategy to assure progress towards the national goal. The monitoring plan and the long-term strategy are set forth in the SIP submitted to the U.S. EPA. Section XV.F. provides procedures for reviewing and revising the long-term strategy.
State Implementation Plan for Class I Visibility Protection State of Colorado
The purpose of this plan is to assure reasonable progress towards meeting the national goal of preventing future, and remedying existing, visibility impairment in Class I areas.
The plan includes provisions for existing and new source review (attached as Regulation Number 3, Section XV.), a monitoring strategy, a long-term strategy, and consultation with FLMs.
Monitoring Strategy
The State of Colorado's Class I Visibility monitoring strategy is based on meeting four goals:
The goals will be achieved through a combination of objectives concerning monitoring, gathering and evaluating existing visibility data, and mechanisms for the use of visibility data in decision-making.
Potential new major stationary sources or major modifications to existing stationary sources subject to the Air Quality Control Commission (AQCC) Regulation Number 3, Section IV.3, are required to perform an analysis of visibility impacts on potentially affected Class I areas. The analysis must be conducted utilizing existing visibility data, if any. The Division must consider and evaluate available data from potentially affected Class I areas or other areas that may be representative of background conditions in the Class I area(s) of interest. If data is adequate, the permittee will be notified of the background or base level of visibility against which impacts will be assessed (Regulation Number 3, Section IV.3.(a)(iii)(D)). If visibility data is not adequate, Regulation Number 3, Section XIV. allows the Division to require any source, which will have or is likely to have an impact on any Class I area to conduct monitoring to establish baseline status of visibility. The monitoring information will be used in the new source review analysis and will add to the background and trend data bank of that Class I area. No monitoring shall be required if it is currently being conducted by any federal, state, or local agency (AQCC Regulation Number 3, Section XIV.B.1).
FLMs may at any time identify to the Division Class I areas where emissions from a specific source or small group of sources may be causing or contributing to visibility impairment in the Class I area. The Division will determine if emissions from any local sources can be reasonably attributed to cause or contribute to the documented visibility impairment. In making this determination the Division will consider all available data including the following:
The Division may be unable to make a decision regarding "reasonable attribution" of visibility impairment from an existing source or sources using available data. The Division will make available to the affected FLML and the U.S. EPA a discussion of what data was considered and what measures the Division is taking, if any, to resolve the situation. The Division may consider modeling the impact of nearby suspected sources with existing visibility models. Funding and other factors may limit the Division's ability to unilaterally initiate studies designed to establish "reasonable attribution". Therefore, the Division may join with the FLMs, the suspected source(s), the U.S. EPA, and others in implementing special monitoring and analysis programs to address the specific problem.
The Division will sponsor or share in the operation of visibility stations with FLMs as the need arises and resources allow. Fiscal, logistical, and other considerations may constrain the Division in conducting visibility monitoring in Class I areas.
The Division will request from each FLM responsible for Class I areas in Colorado copies of any and all past or existing programs designed to monitor or evaluate visibility. All future visibility data gathered by each FLM will also be requested, including any analysis and interpretation.
The Division will assemble and evaluate the visibility data supplied by the FLM in addition to any other data collected by the Division or any other appropriate source (such as a proposed major stationary source) on an annual basis.
Long-Term Strategy (LTS)
The Commission shall review the strategy set forth below and prepare a public report as required in Section XV.F. The FLMs shall be consulted throughout all phases of the LTS development and revisions.
A Commission subcommittee will be established to address the following components of the LTS:
The Division is pursuing the adoption of statewide visibility standards. The subcommittee will determine how and if standards should be set and how the standards will apply to various areas of the state. Although the end result may apply to regional haze, Class I areas will benefit from statewide standards.
The Division presently has smoke management agreements with the FLMs. The affected agencies are required to obtain an open burning permit from the Division. Virtually all controlled burns are for wildlife habitat and range management; little slash/timber management burning occurs.
The Division believes existing smoke management techniques do not adversely affect visibility in Class I areas. The subcommittee will address this issue to determine how smoke management should be integrated into the LTS. If necessary, the existing agreements may be revised during the LTS review process. The Division will continue to coordinate with the FLMs to insure that best smoke management techniques are employed.
The FLMs declined to identify integral vistas (important views of landmarks or panoramas that extend outside of the boundaries of the Class I areas and considered critical to the enjoyment of the areas). The Commission is therefore not required to address vistas but may do so under their own authority. The subcommittee shall determine if integral vistas and/or other scenic vistas should be identified, and if so, the criteria to be used for such identification. Any vistas shall be identified using the specific criteria developed by the subcommittee.
The Division is in process of studying PM10 emissions and their role in the formation of Denver's brown cloud. Conceivably, such studies could lead to information and strategies related to visibility impairment. The subcommittee will address the integration of this component into the LTS.
The FLMs and Division have not identified reasonably attributable impairment at this time, therefore the Commission will not address source retirement and replacement, construction activities, and enforceability of emission limitations. Should the FLMs or Division identify impairment from a specific source or small groups of sources, the Commission will address these issues during the LTS review process.
Each time the LTS is reviewed, the following six factors (at minimum) must be addressed.
Consultation with Federal Land Managers (FLMs)
The Division as part of the implementation of this Regulation will send within 30 days of its adoption written notification to the FLMs stating that the Division Director is the official to whom any recommendations may be sent regarding Colorado's SIP for Class I visibility protection, including but not limited to:
The Division will provide the opportunity for consultation with the FLMs, in person and at least 60 days prior to any public hearing on any element of the SIP. The Division is interested in the FLMs opinion regarding:
The FLMs may contact the Division Director at any time regarding the implementation of the SIP for Class I visibility protection.
Revisions to Regulation Number 3 and the Common Provisions Definitions
Revisions are made to Regulation Number 3 and definitions in the Common Provisions. Prevention of Significant Deterioration (PSD) and New Source Review (nonattainment) requirements are revised to conform to the Federal regulations. Provisions for the regulation of the National Ambient Air Quality Standard (NAAQS) for particulate matter (PM-10) are added. Section V, concerning certification of Emission reduction, is revised to conform to Federal requirements. Other minor changes are made to clarify existing policies. Requirements for Revised Air Pollution Emission Notices (APENS), Air Quality Related Value (AQRV) monitoring, solid waste fuel, and temporary sources are revised.
Dual Definition of Source
Federal regulations require the use of the dual definition of source for nonattainment areas. (See discussion, in the August 7, 1980 Federal Register, 45 FR52680 and 52693). The concept is intended to provide for more air pollution control in nonattainment areas, such that more rapid progress can be made toward attaining the standards.
When determining if a source locating in an attainment area is major, emission increases and decreases at the entire facility are considered. When determining if a source located in a nonattainment area is major, two cases are examined. First, if the single piece of equipment or modification itself represents a major source or significant increase, nonattainment review applies. Second, if the piece of equipment itself is not major, examine the entire facility as for attainment area sources. If a significant increase occurs, nonattainment review applies.
The definition of "Stationary Source" in the Common Provisions indicates the Commission intended to use the dual definition (see also the Statement of Basis and Purpose, March 10, 1983). The definition of "Net Emission Increase", Part K, however, incorrectly stated that only the single piece of equipment is examined. This was less stringent than Federal law and allowed facilities to install a series of de minimus units whose aggregate emissions could be significant, without undergoing nonattainment review. Part K is corrected to allow the Division to use the dual definition.
When the dual definition is used, nonattainment review applies to reconstructed sources. Section IV.D.2.a clarifies this.
Section IV.D.2.a. also clarifies that nonattainment review applies only to nonattainment pollutants emitted in major amounts. This differs from PSD requirements, which apply to attainment pollutants emitted in significant amounts if the source is major for any pollutant (attainment or nonattainment). (See discussion, 45FR52676.)
Fugitive Emissions
The Colorado Air Quality Control act includes fugitive emissions when calculating a source's potential to emit only if the Commission adopts regulations to include fugitive emissions for that source category. (See Statement of Basis and Purpose, March 10, 1983). Federal law requires that fugitive emissions are included for all "listed" sources (those listed in the definition of major source). The Commission is adopting the requirement to include fugitive emissions for all listed sources.
Portions of the Colorado Act Not Allowed in Federal Act
Portions of Regulation Number 3 are not allowed in the Federal Regulations, but are contained in the Colorado Act and therefore cannot be removed from regulation Number 3 until removed from the Colorado Act. The items are discussed below. The Division will not honor these items unless an applicant insists, in which case a permit from the EPA will be required to meet Federal law.
Best Available Control Technology (BACT):
The Colorado Act's definition of BACT states that revisions to New Source Performance Standards (NSPS, Regulation 6) or National Emission Standards for Hazardous Air Pollutants (NESHAPS, Regulation 8) made after April 10, 1983 (the effective date of the definition) can't be used to determine BACT. The Federal Act requires that BACT can't exceed the NSPS or NESHAP in effect at the time of application. The Division will make BACT determinations taking into consideration the most current NSPS and NESHAP regulations.
Clean area in nonattainment area: The Colorado Act and Section IV.d.2.B.ii allows exemption from nonattainment requirements if the source proves they are located in a clean portion of a nonattainment area. This is not allowed in the Federal Act.
Shale oil exemption: The Colorado Act and Section I.B.2.C.viii excludes from the definition of major modification a fuel switch to shale oil or coal/oil mixtures. This is not allowed in the Federal Act.
Fugitive Dust Exemption: The Colorado Act and Regulation Number 3 does not include fugitive dust that does not adversely affect public health or welfare when calculating a source's potential to emit. The March 10, 1983 Statement of Basis, Authority, and Purpose discusses the Commission's previous position. - The discussion indicates that when the EPA promulgates new standards for particulate matter the fugitive dust issue will be resolved. The EPA has promulgated a new NAAQS for PM-10, which replaces the TSP NAAOS. The PSD increments, however, are still based on TSP. PM-l0 fugitive emissions can thus be used to determine potential to emit, but some question remains as to whether or not TSP fugitive emissions should be used. The EPA is developing PM-10 increment standards. In the interim, if a source does not want to include fugitive dust (TSP or PM-10) for a State permit, an EPA permit may have to be obtained.
Permit Review Time Frame: The Colorado act contains specific time frames for processing permits (60 days, etc.). Section IV.F of Regulation Number 3 states that a permit is automatically issued if the Division fails to meet the time constraints. This is not acceptable for major source review. PSD and major nonattainment applications are often complex. The Federal Act allows one year to complete the review process (including public notice, hearings, etc.). The Division will automatically ask for a time extension for major source applications. If an extension is not granted and/or the time frame is not met, an EPA permit will be required.
Other Minor Revisions
These definitions are revised as follows to conform to the Federal Act: "construction" now includes demolition and modification; "enforceable" now includes Regulations Number 6 and 8; "Lowest Achievable Emission Rate" does not allow BACT to be exceeded.
References to the "Board" are deleted and replaced with "Commission" throughout the Regulation. The (Hearings) Board no longer exists.
Class I areas in neighboring states are recognized in Section VIII.
Section VIII.K is added to allow redesignation of an area to class III if a permit can't be obtained unless the area is redesignated and sufficient public notice is given. The Federal Act requires this.
Section XIII.B exempts Innovative Control Technology from BACT only, not all of the PSD requirements. This conforms to the Federal Act.
Public notice procedures (Section IV.C) for major sources are expanded and clarified to conform to the Federal Act.
The word "new' is removed from Section IV.D.2.a.iv to clarify that alternate sitting studies apply to new and modified sources.
Exemption c under the definition of modification is removed. This exemption allowed sources choosing to improve control of particulate matter to increase SO2 emissions without the need for>additional S02 control. (See Statement of Basis, Authority and Purpose, March 10, 1983). This exemption is no longer allowed, since it is inconsistent with the Federal Act.
The language pertaining to interim PSD authority is deleted. The State received full authority on September 2, 1986.
Annual fee requirements are added to Section VI. This provision was added to Section 25-7-114(5)(a) of the Colorado Act on July 1, 1987.
Household use of paints and solvents is exempt from APEN and permit requirements. The Division classifies these materials as toxic air pollutants which would require permits if emitted in any amount. The Division does not have available resources to regulate this activity.
The six-month, 25 acre APEN and permit exemption clarifies that all mining operations must obtain a permit (unless exempt elsewhere).
Temporary sources operating less than one month may receive initial and final permits at the same time. The Division will thus avoid issuing final permits for sources that no longer exist. The Division has discretion to issue the permits separately if the operator or owner of the source or the source type has a history of compliance problems.
PM-10 NAAQS
This new standard replaces the Total Suspended Particulate (TSP) standard for Federal purposes only. The State is adopting the PM-10 requirements and is also retaining the TSP standard at least until the EPA approves our PM-10 State Implementation Plan. This will ensure that Reasonable Further Progress will be maintained in the interim.
The PM-10 standard is implemented under Section 110 of the Federal Clean Air Act. The other criteria pollutants are regulated under Section 107, which includes provisions for designated nonattainment areas, emission offsets, and sanctions for areas where the standard is exceeded. Section 110 does not utilize nonattainment areas; it requires that the standard be met in all areas. The State regulations applied specifically to designated attainment and nonattainment areas. Since there are no PM-10 designated areas, reference to pollutants regulated under Section 110 is added in several places to ensure regulation of PM-10.
PM-10 sources that impact an area where the standard is exceeded are "major" if they emit 100 tons per year or more of PM-10. Such a source is then subject to PSD requirements (Section I.4.a). Such sources must also offset their impact to the degree which it exceeds the standard (as opposed to sources of other criteria pollutants, which must offset total emissions). Offsets will be required as part of the PSD source impact analysis, as necessary.
PM-10 fugitive emissions are included when calculating potential to emit. (See discussion under Portions of the Colorado Act not allowed in Federal Act in this Statement of Basis, Authority and Purpose).
PSD increments are still regulated in the TSP form, therefore significant emissions and impact levels exist for both PM-10 and TSP. PSD will apply to TSP until the EPA promulgates PM-10 increments.
New definitions are added to the Common Provisions to differentiate between particulate matter, PM-10 and TSP.
The EPA has left regulation of minor sources to the state. Section IV.D.3.E is added to require minor sources locating in areas where the PM-10 standard is being exceeded to apply BACT.
The Commission had the option to add PM-10 monitoring "phase in" provisions. Methods and equipment are reasonably available, therefore, phase in is not necessary.
Corrections to typographical errors are made for significant ambient levels of beryllium, lead, and hydrogen sulfide. (Section IV.D.3.b.iii)
Revised Air Pollution Emission Notices (APENS)
Section II.B requires Revised APENS when a significant change in emissions occurs. The definition of net emission increase requires that a Revised APEN be filed to receive credit for decreases. Historically, the Division has not received all of the APENS required. The April 1 deadline and calendar year requirement are added for clarification. The removal of a piece of equipment represents a significant change and the requirement for submittal of an APEN to cancel a permit is added for clarification. These clarifications will help the Division update the Emission Inventory System; proper credit will be received for emission decreases; and sources will avoid being charged an annual fee for equipment, which no longer exists.
The Regulation now requires all portable sources to submit revised APENS prior to relocating, regardless of the length of time at the new site. This helps the Division track sources in the event complaints are received.
Air Quality Related Value (AQRV) Monitoring
Section XIV.B.4.c limited the cost of AORV monitoring to 1/4 of the cost of the Additional Impact Analysis, including preconstruction monitoring. The Federal Land Managers testified that such a limit is not sufficient to provide even minimal AQRV monitoring. The limit is removed and the Division will determine economic feasibility on a case-by-case basis.
Section XIV.B.1. is revised to require joint monitoring among all major sources affecting an AQRV in the same Class I area. This will provide for ongoing, high quality data.
Waste Fuel Exemptions
Sections I.B.2.C.iii and IV.D.1.c.i (F) exempted switches to fuel derived from municipal solid waste from new source review. Due to the public's increased concern for toxic/hazardous emissions, many sources now undergo scrutiny for such emissions. All sources should be treated equally when proposing to burn municipal solid waste and should be required to apply the best control for reducing toxic/hazardous emissions. The exemptions for solid waste fuel are deleted.
Emission Reduction Credits
Revisions made to this portion of the Regulation are based on the Emission Trading Policy Statement; General Principles for Creation, Banking and Use of Emission Reduction Credits as published in 51FR43814. That Policy set out general principles that EPA will use to evaluate emission trades under the Clean Air Act. The goal of that Policy is to create more flexibility for the states and industry to help meet the goals of the Clean Air Act more quickly and inexpensively. The purpose of Colorado adopting the salient points of that Policy is to create a generic regulation, which is acceptable to EPA, and thereby eliminate the need for a SIP revision for every banking or emission trading action. Other than clarifications and procedural changes the key changes to this portion of the Regulation include:
"A Regulation Requiring Air Contaminant Emission Notices, Emission permits and Fees"
With the passage of HB 1372, 1st session of the 56TH GA, two stationary source fees were established for FY 1987-88. An annual compliance-monitoring fee of $60.00 per source was to be charged .to each permitted source. An hourly rate of $96.00 was to be applied to all permit processing time. After 1987-88 these fees were to be set by the Commission. These fees were to cover the "direct and indirect costs of such permit] processing. In establishing such fees, the Commission shall provide a higher per hour charge for permits which require five hours or more than for permits which require less than five hours to process; except that for the fiscal year 1987-88, the fee shall be ninety-six dollars per hour for all permits. In addition to such fee for processing, the Commission shall establish and as necessary revise non-refundable annual fees for each emissions source covered by a stationary source permit sufficient to cover the direct and indirect costs of administration and periodic inspections; except that for the fiscal year 1987-88, the fee shall be sixty dollars per year for each emissions source."
The Division has performed a thorough analysis of the direct and indirect costs of the permit and compliance monitoring programs and has proposed fees to the Commission designed to meet statutory requirements.
Statutory Authority
The statutory authority for this regulation is Section 25-7-114.
Section VI - Fees
Paragraph 1 of this Subsection requires that all persons required to obtain an emission permit or file an air pollution emission notice pay fees sufficient to recover the direct and indirect costs of processing and issuing permits in accordance with the fee schedule shown in the Regulation. With this regulatory change, the following language was struck to be consistent with the statutory language: '...to include the reasonable costs of such processing or administration, and of enforcement of the permit provisions. Such costs shall include the cost of predictive model utilization when the use of such models is deemed necessary by the Division for proper evaluation of the permit application." Paragraph 2 is unchanged.
Sub-Sections B and C are unchanged
Sub-Section D is changed by noting that the annual fees to be charged are in accordance with the schedule shown in the Regulation.
Fee Schedule
The fee schedule shows what the fees are for the hourly processing charge, the annual charge, and the APEN.
Revisions Concerning the Long-Term Strategy to Protect Visibility in Class I Areas (Section XV.F)
Authority
Colorado Air Quality Control Act
The Colorado Air Quality Control Commission's (Commission) authority to revise Regulation Number 3.XV.F, concerning the Long-Term Strategy Review of Colorado's State Implementation Plan for Class I Visibility Protection, is in the Colorado Air Quality Control Act. Relevant Sections are 25-7-102 Legislative declaration and 25-7-105(1)(a)(I) Duties of Commission.
Federal Clean Air Act
Additional authority for the Commission to make the regulatory revisions can be traced to the 1977 Amendments to the Federal Clean Air Act. Section 169(A) requires the federal Environmental Protection Agency to promulgate regulations that in turn require states to amend their State Implementation Plans (SIPs) to provide for Class I visibility protection - including a long-term strategy for making reasonable progress toward the national visibility goal. On December 2, 1980, EPA released final regulations to states detailing the specific requirements - including the development and periodic revision of a long-term strategy as specified by federal law.
Statement of Basis and Purpose of Changes to Regulation Number 3 Section XV.F.
Section XV.F.1.c.
Commission Regulation Number 3 required a Long-Term Strategy (LTS) review/revision report from the Colorado Air Pollution Control Division (Division) to the Commission every three years following the effective date of the regulation (November 1987). The August 1992 LTS report from the Division is late in arriving to the Commission. The purpose of the regulatory change is to clarify when subsequent LTS review and revision report cycles will occur. Without a regulatory change, the next LTS review would be due September 1993 - approximately a year from adoption of the August 1992 report.
In order to maintain the intent that a report is to arrive to the Commission, and ultimately EPA, at least every three years and to allow the Division to get back on schedule with a report to the Commission in approximately three years, Section XV.F.1.c. was altered.
Old language:
New language (changes underlined):
Section XV.F.1.c.vii.
EPA regulations (CFR Part 40 Section 51.306) require that the LTS be reviewed in seven areas. There was a discrepancy between EPA requirements and State regulations regarding the seventh item to be assessed. The purpose of the regulatory change is to bring Commission Regulation Number 3 into conformance with EPA requirements.
Old language:
New language (changes underlined):
Revisions to Regulation Number 3, Common Provisions and Regulation Number 7
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Administrative Procedure Act, C.R.S. 1973, Section 24-4-103(4) for adopted or modified regulations.
Basis
The EPA has identified portions of the State's Prevention of Significant Deterioration and New Source Review (PSD and NSR) rules, which do not conform to the Federal rules. The State rules must be at least as stringent as the Federal rules in order for the EPA to approve the State Implementation Plans. In addition, the State must revise the rules to include the addition of new requirements that were set forth in the 1990 Federal Clean Air Act. The EPA has also identified additional non-reactive volatile organic compounds, and a significant level for municipal waste combustor emissions. All of these revisions must be made for EPA approval.
The 1992 State Legislature revised the Colorado Clean Air Act to include new definitions and fee requirements. In addition, the revisions allow the Commission to make necessary revisions to the State's PSD and NSR rules, as described.
Specific Authority
The specific authority for this regulation is contained in the Colorado Air Quality Control Act, 1992 as amended. Section 25-7-103 sets forth definitions for use in implementing the new Colorado Act. Section 25-7-105 (1)(A)(I) requires the Commission to adopt into the State Implementation Plan all requirements of the federal act. Sections 25-7-105(1)(c), 203, 204, 205, 206, 210 and 301 provide authority to adopt a PSD and NSR program in conformance with the Federal and Colorado Acts. Section 25-7-105.1 sets forth the Commission's authority regarding Federal enforceability. Section 25-7-106 (1)(c) provides authority for adopting regulations, which are applicable to entire state, or only within specific areas or zones, or only to a particular pollutant. Section 25-7-114.5 sets forth time frames for the Division to review permit applications, and procedures for owners and operators to demonstrate compliance with construction permits. Section 25-7-114.7 sets forth fee requirements. Commission action in promulgating these revisions is taken pursuant to Sections 25-7-105 through 25-7-109 and 25-7-114, C.R.S., as amended.
Purpose
New Source Review Rules
Regulation Number 3 contains the permit requirements for major sources (Prevention of Significant Deterioration, PSD and New Source Review, NSR). The Common Provisions Regulation contains definitions that are used in the permit requirements of Regulation Number 3. The PSD and NSR requirements and definitions must be equivalent to the Federal requirements. The EPA has identified the portions of Regulation Number 3 and the Common Provisions, which do not conform to the Federal rules. On October 17, 1991, the Commission adopted revisions to Regulation Number 3 and the Common Provisions, to address some of the EPA's concerns. Additional concerns remained, however, because some of them could not be addressed until the Colorado Clean Air Act was revised. On May 27, 1992, the Governor signed Senate Bill 105, which revised the Colorado Clean Air Act to allow the Commission to proceed with the remaining necessary revisions to Regulation Number 3 and the Common Provisions. The new Colorado Act is effective as of July 1, 1992.
The 1990 Federal Clean Air Act revisions set forth additional revisions, which must be made to all State PSD and NSR rules.
The Commission has adopted the necessary revisions, which address the remaining EPA concerns regarding the State's PSD and NSR rules. These revisions are required to eliminate discrepancies between the State and Federal rules, and for approval of our State Implementation Plan. The required revisions are as follows.
Regulation Number 3
Section I.E. - Eliminate the reference to the definitions of major stationary source and major modification from the definition of fugitive dust;
Section I.B.3.e. and f - Eliminate the references to fugitive dust from the definition of major source;
Section IV.D.3.b.(i)(B) - Eliminate the fugitive dust exemption from the PSD rules;
Section XI - Eliminate the fugitive dust exemption from increment consumption requirements.
Common Provisions Definitions:
The Federal rules do not allow an exemption from PSD and NSR rules for right of ways, pipelines, etc. The definition of stationary source is revised to delete this exemption.
Non-Reactive VOCs:
On March 18, 1991, the EPA added five halocarbon compounds and four classes of perfluorocarbons to the list of organic compounds, which are negligibly reactive, and thus exempt from regulation as Volatile Organic Compounds under Regulation Number 3, the Common Provisions, and Regulation Number 7. In addition, the EPA revised the definition of Volatile Organic Compound.
The Non-Reactive Volatile Organic Compound (VOC) list, as amended by the EPA, is incorporated into Regulation Number 3, Section IV.D.4, the Common Provisions (definition of Net Emission Increase, paragraph h.), and Regulation Number 7, Section II.B. The State is not allowed to take credit for controlling these compounds in our SIP. In other words, sources cannot use reductions of emissions of these compounds to offset VOC emissions, and we are not allowed to include emissions of these compounds in our SIP inventory. The EPA has determined that these compounds do not react in the atmosphere to produce ground level ozone.
The EPA also revised the definition of "Volatile Organic Compound" to make slight clarifications. The definition in the Common Provisions and in Regulation Number 7, Section II.A.1. is likewise revised.
Municipal Waste Combustor Emissions Significant Level:
On February 11, 1991, the EPA promulgated New Source Performance Standards for Municipal Waste Combustors. In addition, the EPA promulgated "significant emission levels" for municipal waste combustor emissions. These significant levels are used to determine if PSD requirements apply to major sources.
The Commission revised the definition of "Significant" in the Common Provisions Regulation, to add the emission level for municipal waste combustor emissions. This addition is required in order to conform to the Federal PSD and NSR rules.
Senate Bill 92-105 Revisions
Senate Bill 105 revised the Colorado Clean Air Act. The new Colorado Act contains some new and revised provisions which are relatively simple and straightforward, and which could therefore be easily adopted into Regulation Number 3 and the Common Provisions at this time. These particular revisions were adopted to facilitate transition from the old Act to the new Act, and to eliminate confusion that could occur due to differences between the new Act and the existing regulations. The proposed revisions are as follows.
Regulation Number 3
Common Provisions
Revisions to Regulation Number 3 Regarding Construction Permits
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Administrative Procedure Act, C.R.S. 1973, Section 24-4-103(4) for adopted or modified regulations.
Basis
The Colorado Clean Air Act requires stationary sources to report their emissions, obtain construction permits, and be subject to public notice before construction occurs. The Commission has authority to exempt sources from these requirements, if the sources do not have a significant adverse impact on air quality. Regulation Number 3 has been in effect for approximately twenty years, and contains exemption lists for APEN and permit requirements. Based on twenty years of experience, the Commission believes it is appropriate at this time to revise the exemption lists to include additional sources, which do not adversely affect air quality in Colorado. In addition, it is appropriate to revise the public notice requirements to address the sources for which is public comment is most likely to be received.
The 1992 State Legislature revised the Colorado Clean Air Act to include new provisions concerning non-criteria pollutants. The Commission needs to address these provisions and revise the APEN reporting, permitting, and public notice requirements regarding these pollutants.
A technical revision must be made to the definition of "significant," contained in the Common Provisions, to address major sources in nonattainment areas, as required under the Federal Act.
Specific Authority
The specific authority for this regulation is contained in the Colorado Air Quality Control Act, 1992 as amended. The Legislative Declaration, Section 25-7-102, recognizes that an accurate emission inventory is needed in order to adequately manage air resources in Colorado. Section 25-7-105 (1)(A)(1) requires the Commission to adopt into the State Implementation Plan all requirements of the federal act. Sections 25-7-105(l)(c), 203, 204, 205, 206, 210 and 301 provide authority to adopt a PSD and NSR program in conformance with the Federal and Colorado Acts. Section 25-7-105(12) provides authority to adopt regulations to implement the emission notice and construction permit programs. Section 25- 7-106 (1)(c) provides authority for adopting regulations, which are applicable to the entire state, or only within specific areas or zones, or only to a particular pollutant. Section 25-7-109.3 provides authority for regulating non-criteria pollutants. Section 25-7-111 provides authority for the Division to administer regulations adopted by the Commission. Section 25-7-114.1 provides authority for requiring APENS, and for allowing exemptions from the requirement. Section 25-7-114.2 provides authority for requiring construction permits, and for allowing exemptions from the requirement. Section 25-7-114.5 provides authority for requiring public notice of construction permits. Commission action in promulgating these revisions is taken pursuant to Sections 25-7-105 to -109 and 25-7-114, C.R.S., as amended.
Purpose
Definition of "Significant"
The Common Provisions Regulation contains definitions that are used in the Prevention of Significant Deterioration (PSD) and New Source Review (nonattainment, NSR) permit programs of Regulation Number 3. The PSD and NSR requirements and definitions must be equivalent to the Federal requirements. The definition of significant lists emission levels at which modifications at major sources become subject to the PSD and NSR requirements. Currently, the language in the definition indicates that the emission levels only trigger PSD requirements. The definition is changed to indicate that the levels also apply to the NSR nonattainment rules.
APEN Requirements - General
This language is revised to clarify what emission estimates must be included in an APEN (actual emissions for annual fee purposes, and requested amount for permit limits). In addition, language is added to clarify that a source need not perform a stack test for the sole purpose of providing an APEN emission estimate. Other acceptable estimation methods are usually available for APEN purposes. In some instances, it is possible that an emission factor may supply a more accurate estimate than mass balance calculations, and vice versa. In such cases, a source may choose to use either mass balance, or emission calculations. If the Division believes that estimates can be better made using the method of these two that the source does not choose, the Division may question that source regarding the choice. The emission estimate included in an APEN is not required to be an exact calculation of emissions, but rather the source's best estimate, to the extent practical, of emissions. As stated in the Legislative Declaration of the Colorado Air Quality Control Act, the APEN information is to be used to achieve the most accurate and complete inventory possible, and to provide for the most accurate enforcement program achievable based upon that inventory.
The Colorado Clean Air Act states that APENs are valid for five years, unless a significant change in emissions occurs. This provision is added to the regulation.
Language is added to clarify that each unit is considered to be a "source" for APEN purposes, unless similar sources can be grouped together.
Emission calculations for purposes of determining if a de minimis emission level is triggered will be based on actual uncontrolled emissions. Sources will not be allowed to take credit for control devices in the de minimis calculation because the Commission has no method of determining if the control equipment will be used, or used continuously and properly.
The Commission believes there may be cases where the source demonstrates that it is not feasible to estimate the control efficiency of a device for non-criteria pollutants. In such instances, the Commission gives the Division discretion to allow the de minimis level to be triggered based on actual, instead of uncontrolled actual, emissions. New language is added regarding non-criteria pollutant APEN requirements.
Revised APEN Requirements
The Colorado Act requires revised APENs to be submitted whenever a "significant change" in emissions occurs. The significant levels for criteria pollutants remain unchanged from the previous regulation, except that a significant level has been added for lead emissions. For non-criteria pollutants, the significant change level is set at 50% or five (5) tons per year, whichever is less.
Sources should note that APENs must be submitted if the source begins to emit a pollutant which was previously not included on an APEN. Also, the Commission may add pollutants to the list of non-criteria reportable pollutants. When chemicals are added, the Commission will determine the schedule for submitting new or revised APENs to report the new pollutant emissions.
NOTE: Significant change criteria are used to report changes in emissions for inventory purposes only. If a planned change in emissions requires a new permit, or modification of an existing permit (violates an emission limit, triggers PSD or NSR), then an APEN must be filed and the permit must be revised before the change at the facility occurs.
Revised APENs for emission updates must be submitted by April 30 of the following year. The EPA requires states to update the emission inventory by July 1 of each year, to include the previous year's emissions (Code of Federal Regulations, 40 CFR 51.321). The Commission believes the April 30 date should give sources enough time to compile their inventory, and will also give the Division enough time to update the system by July 1. Sources should plan ahead and have as much of their inventory completed as possible before the end of the year. In this way, the source would then only need to add December, or at worst information for the last couple of months of the year, to the data in order to meet the April 30 deadline.
Revised APENs are required when a change in the type of control equipment being used is made. This allows the Commission to ensure that the new control equipment will meet the applicable requirements, and to verify that actual emissions have decreased or increased due to the use of the new equipment. Oftentimes, stack tests are required to ensure that control equipment meets applicable requirements. A change in the control equipment can affect this compliance determination. Revised APENs will not be required for routine maintenance, repair and replacements. These routine activities should not affect the effectiveness of the equipment.
Permit applications must include an APEN on which the owner or operator indicates what production or emission level the source wishes to be permitted at. Any desire to increase the permitted emission level requires the submittal of a revised APEN, so that the Division can evaluate the change against the regulations before modifying the permit.
Portable Facilities
Revised APENs are no longer required when a portable source changes location. The Commission does not believe it is reasonable to charge the APEN filing fee each time a source moves. Portable sources will still be required to notify the Division at least ten (10) days before relocating. This allows the Division to be aware of a source's location if any concerns regarding the source are raised by the public.
Emergency and Backup Generators
Electric utilities may use emergency or backup generators to ensure that blackouts do not occur in the electrical grid. These units are usually operated instead of, or for short periods in addition to, main utility boilers. Facilities that include the main boilers are usually major sources, and therefore have a major source construction permit, or will in the future have a major source-operating permit. Once the facility is covered under one of these permits, the Commission sees no need for the owner or operator to submit annual updates regarding the emissions from the emergency units.
Other emergency units are not located at the main unit facility, but are located individually in the field. These units will most likely obtain a synthetic minor permit to avoid major source permit requirements, since operation is usually intermittent. Once such sources obtain a synthetic minor permit, the Commission again will not require the source to submit annual emission updates.
APEN Requirements - Non-Criteria Pollutants
There are 363 non-criteria reportable pollutants. The Commission divided the pollutants in two major groups: those that are required to be reported in 1993, and those that have to be reported in 1994 and subsequent years. There are also two groups of chemicals (Radionuclides and Polycyclic Organic Matter) whose reporting requirements were postponed until such time as the Commission determines that they can be accurately quantified and reported.
APEN Requirements - De Minimis Levels
All de minimis levels are based on uncontrolled actual emissions (except where the control efficiency cannot be estimated), as discussed under General APEN Requirements.
APENs are required of sources in attainment areas when the emissions of any criteria pollutant from a source exceed two tons per year (except for lead).
Sources in nonattainment areas must file when emissions of any criteria pollutant exceed one ton per year. Note that the pollutant being emitted above the de minimis level does not have to be a nonattainment pollutant. Any pollutant triggers the one-ton per year level, regardless of the pollutant's attainment designation.
Because the area is a growth area, and inversions occur in the area, a Grand Junction group requested that APENs be filed when emissions of any criteria pollutant exceed one ton per year. The Commission determined that hearings should be held in the Grand Junction area, and that Grand Junction should pursue their own rules. Language that would have treated Pueblo likewise is not included, due to requests from industries in Pueblo, and the Pueblo County Health Department.
The de minimis level for lead in all areas is 100 pounds per year.
For non-criteria pollutants, the Commission assigned each pollutant to one of three "bins" based on information concerning the health effects of the pollutant. The Commission also developed a series of three scenarios for an emission point based on the release height of the pollutant and the distance from the release point to the property boundary. The resulting three by three grid as well as instructions on how to apply it can be found in Appendix A. Note that future actions by EPA may affect the de minimis reporting levels for certain chemicals that appear on the EPA list of 189 toxic chemicals.
APEN Requirements - Exemption List
Numerous new source categories have been added to the APEN exemption list. Each category was examined for its impact on air quality in Colorado before being added to the list. Each category that was added is believed to have a negligible impact on air quality.
The source category exemptions override the de minimis levels. Sources that fit into the category are exempt, even if emissions exceed the de minimis levels.
Each category will not be addressed individually in this statement; however, the following categories deserve specific comment.
Fires and equipment used for cooking of food for human consumption: Not all cooking equipment has been exempted in this category. The Commission has concerns regarding equipment in which grease from the food being cooked comes into contact with the flame of the equipment, thus leading to potential opacity and particulate matter problems. This is especially of concern in PM-10 nonattainment areas. This exemption applies only to noncommercial cooking and to food service establishments, such as restaurants and cafeterias. The exemption does not apply to manufacturing facilities.
Fuel burning equipment: The design rate cutoff for fuel burning equipment has been raised from 750,000 BTU/hour to 5 MMBTU/hour. The fuel use is still restricted to gas, and does not include oil or coal, since the latter two fuels may result in significant sulfur dioxide emissions. Fuel burning equipment which uses gaseous fuel and which is used solely for building heat is exempt if the design rate is below 10 MMBTU/hour. The Commission has determined that the emissions from the exempted unit, based on EPA AP-42 emission factors, are negligible.
Chemical storage areas where chemicals are stored in closed containers...: This exemption only applies to the storage of chemicals at qualifying facilities. The exemption does not include facilities where chemicals are loaded into or out of, or transferred between, storage containers. Bulk storage tanks would not qualify for this exemption, since often the material is loaded and unloaded, and such tanks have vents from which emissions occur due to breathing losses. See Sections II.D.1.n., II.D.1.ee., II.D.1., II.D.1.uu., II.D.1.ddd. and II.D.1.fff. for storage tank exemptions.
The Commission will require APENs only for pollutants that are defined as "criteria" pollutants or "reportable non-criteria" pollutants (HAPs, CFCs, SARA 313). Any other pollutants such as carbon dioxide, methane, nitrogen, oxygen, do not require APEN submittals.
Aerosol Can Usage: There may be instances where a source may exclusively use large amounts of aerosol cans, or may use large amounts in addition to other processes. The Commission expects that these instances will be rare. If the Division, a local agency, or others discover such a source, and if the source emits amounts of pollutants, which are believed not to be negligible, such concern can be brought before the Commission as a request to require such source to file APENs and/or obtain a permit. (See discussion under "Adding and Deleting Exemptions")
Odorous emission sources: This exemption only applies to odor emissions, and not to any other emissions of criteria or non-criteria pollutants, which may be associated with the odor. This exemption does not absolve any source from the requirements of Regulation Number 2 (regarding odor limits). If a source emits any pollutant that is above an APEN de minimis level, the source must file an APEN, regardless of odor.
Portable 5 mm btu/hour engines: One party requested that these sources be exempt from APEN and permit requirements. The Commission has determined that sufficient evidence is not available to indicate that emissions from these sources have a negligible impact on air quality in Colorado, therefore they are not exempt until such evidence is forthcoming.
Laboratory equipment and pilot plants: The subcommittee for these rule revisions held extensive discussions regarding exemptions for laboratory equipment and pilot plant activities. More work is needed to define these activities, determine if the emissions are negligible, and if such activities should be exempt from APENS, permits, or both. The Commission recommends that subcommittee discussion of this issue continue, and that it be addressed when Regulation Number 3 is revised to include the Title V operating permit rules (currently scheduled to occur in July of 1993).
Adding and Deleting Exemptions
The Commission has delegated authority to the Division for adding source categories and activities to the APEN and permit exemption lists. If any person believes that a source category or activity should be removed from the exemption lists, because it is discovered that emissions have an impact on air quality or health that is not negligible, such person may at any time go before the Commission to request that such source category or activity be required to file APENs and/or obtain permits.
Oil and Gas Exploration Activities
Oil and gas exploration activities are activities for which it is difficult for the owner or operator to estimate what emission equipment will be required, and therefore what emissions will occur, until the exploration activities are already underway, and near completion. For this reason, the Commission has extended a temporary exemption from APEN and permit requirements for such activities. Before commencing exploration activities, the source must notify the Division. In this way, the Division is aware of the activities and will be able to address any concerns that are raised by the public. Once an owner or operator has determined that an oil or gas well will be produced, and has filed well completion information, the owner or operator must file an APEN and a permit application within 30 days of that completion filing.
The permit application must indicate what regulations are applicable to the source, and how compliance will occur, until the construction permit is issued. This helps the source and the Division to ensure that air pollution regulations are being met. If the well will not be produced, the source must notify the Division so that the Division does not expend resources following up on unproduced wells.
APEN Reporting Deferrals for Source Categories
Due to ongoing studies aimed at quantifying their emissions of non-criteria pollutants, the Commission has deferred APEN reporting requirements for five source categories until six (6) months after the studies have been completed or December 31, 1994, whichever is earlier. The categories are industrial boilers, municipal wastewater treatment plants, publicly owned water treatment plants, municipal power generators of less than ten (10) megawatts, which operate for 250 hours or less per year, and natural gas glycol dehydration units. The EPA is conducting studies regarding the first four categories. The oil and gas industry is conducting studies to quantify emissions from dehydration units. This study is currently underway and is expected to be completed in the near future.
In addition, sources which are not undergoing study, but which believe sufficient information is not available for estimating their non-criteria pollutant emissions, may petition the Division for deferral of those emissions until sufficient information is available.
HAP Permit Requirements
Of the 363 non-criteria pollutants/compounds, 330 are defined as hazardous air pollutants (HAPs). Sources emitting HAPs are required to obtain permits if they are subject to Colorado MACT or GACT or the Federal Title III or Title V provisions.
Synthetic Minor HAP Sources
Some parties to the hearing requested that sources which emit HAPs be allowed to avoid future Maximum Achievable Control Technology (MACT) and operating permit requirements by obtaining "synthetic minor" permits. These permits would contain federally enforceable limits, which would keep emissions below the levels, which trigger the MACT and operating permit requirements. The Colorado Act appears to restrict synthetic minor permits to criteria pollutants only. The subcommittee recommended that this issue be deferred to the HAP subcommittee, which will meet in the near future to address Colorado MACT and other HAP issues. Synthetic minor permits for HAP sources are therefore not addressed in this revision.
Permit Transfer of Ownership
The party to which a permit is issued, whose name is included on the permit, is legally responsible for ensuring that all conditions and terms in the permit are met. The permit must contain the correct legal name, reflecting the correct responsible party, in case an enforcement action needs to be taken. In some cases, the legal name of a company may change, while no modifications are made to the equipment. In such cases, the source need only file a single APEN indicating the change. In all cases, the Division must have on file an application and APEN form with the correct name of the responsible party, and including the signature of the person legally responsible for the information.
Permit Requirements - De Minimis Levels
Permit de minimis levels for criteria pollutants have been increased. Levels differ based on the attainment status of the area. As for the APEN de minimis levels, the nonattainment area levels are triggered by any pollutant, not just the nonattainment pollutants.
Language, which would have set permit levels for the Grand Junction area lower than the levels for attainment areas, was not adopted. See discussion under APEN de minimis levels.
Emissions are compared against the de minimis levels by adding emissions from all sources at the facility that are required to file and APEN. In some cases, a source may initially be below the de minimis levels, but as new units are added to the facility, the de minimis level is eventually exceeded. At such time that addition of new units causes the permit de minimis level to be exceeded, the source must file a permit application for all units at the facility.
Permit de minimis levels for sources of HAPs will be set at the time that the MACT or GACT for that source category is determined.
Permit Requirements - Exemption List
A few new source categories have been added to the permit exemption list. As for APENs, the source category exemptions override the de minimis levels.
Domestic wastewater treatment works: This exemption applies only to treatment facilities which handle wastewater strictly from domestic homes, or wastewater that is similar in nature. It does not include facilities that treat wastewater from municipalities or other sources. The facility may be publicly or privately owned. Wastewater other than domestic wastewater, including municipal wastewater, may contain contaminants from industry and other sources which would result in emissions which are much more significant than the emissions from domestic wastewater.
Fuel burning equipment: Fuel burning equipment with a design rate less than 10 MMBTU/hour, using natural gas as a fuel, are exempt from permit requirements because this is the rate at which the New Source Performance Standard for small boilers is applicable (Regulation Number 6).
Surface Mining Activities: 70,000 tons per year is the production rate at which the Mine Land Reclamation Bureau exempts mining operations from MLRB permit requirements. Oftentimes, these small operations are only temporary, in order to provide material for highway construction projects. The source has often ceased operation before an Air Pollution Control inspector can visit the source to determine compliance. Crushers, screens and other processing equipment are not exempt because these activities may be subject to specific air quality emission limit regulations.
Applicable Requirements Override APEN and Permit Exemptions
To ensure that sources comply with all applicable air quality regulations, an APEN or permit exemption may not be used if taking the exemption would allow a source to avoid any air quality regulation requirements. This provision applies to the source category exemptions and to the de minimis level exemptions. For example, a source may not claim that it is exempt from permit requirements because it has numerous sources, which are below a de minimis level, if the potential emissions from those sources would exceed the PSD major source limit of 100 or 250 tons per year. In such a case, the source would be required to apply for a PSD permit, or must obtain a permit to limit its potential to emit. In order to limit potential to emit, the permit must contain federally enforceable conditions, which limit the physical or operational capacity of the source so that emissions are below the 100 or 250 ton per year level.
Sources, which are subject only to the opacity or general fuel burning and manufacturing requirements of Regulation Number 1, may take any applicable exemption. Likewise, sources, which are subject to the general RACT requirements (but not the specific RACT requirements) of Regulation Number 7, and sources, which are subject to the current Regulation Number 8 provisions, may take any applicable exemptions (i.e., they are exempt if their emissions are below de minimis levels). RACT for sources that would qualify for the APEN exemptions is usually "no control."
Similarly, sources which are subject only to Regulation Number 1 opacity, general fuel burning, and general manufacturing requirements are exempt from permit requirements. Sources which are subject to Regulation 7, but which must adopt only work practice standards, are exempt from permit requirements if their emissions fall below the de minimis level (two tons per year of VOC). Sources, which are subject to State-only requirements of Regulation Number 8, are exempt from permit requirements.
Regulation Number 1, 7 and 8 sources, which take APEN or permit exemptions must still meet the regulation requirements, even though an APEN or permit is not required. The provisions that would apply to these sources are straightforward and can therefore be easily enforced by the Commission through the regulation, without requiring a permit.
Public Notice Requirements
The criteria pollutant emission level at which a source in an attainment area must go to public notice has been increased from 25 to 50 tons per year (except for lead). In nonattainment areas, the level remains at 25 tons per year. Lead sources are required to go to public notice when the emissions exceed 200 pounds per year. The Commission has determined that raising these levels will not impact the number of public comments the Division receives. Any source requiring a permit for HAPs is required to go to public notice.
Note that Section I IV.C.3 provides that the Division may require any source to be subject to public comment, if it is determined that such source warrants public comment. The EPA requires that all sources subject to PSD or NSR go to public comment. In addition, in order to make limits on potential to emit federally enforceable, permits containing such limits must go to public notice. At this time, the Commission will use this Section to ensure the EPA requirements are met. Language will be added to clarify these requirements when the next revision to Regulation Number 3 occurs (currently scheduled to occur in July of 1993).
Revisions to Regulation Number 3
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Administrative Procedure Act, C.R.S. 1973, Section 24-4-103(4) for adopted or modified regulations.
Basis
The 1990 Amendments to the Federal Clean Air Act requires states to implement an operating permit program. This program is applicable to certain sources, and requires the sources to obtain detailed permits, which are to be renewed every five years.
Failure of a state to implement an operating permit program will result in EPA sanctions, such as loss of highway funds and increased offset requirements for sources wishing to locate in Colorado nonattainment areas. In addition, the EPA may implement the operating permit program if a state fails to implement a program.
The existing construction permit program will continue to exist, however changes have been made to the program so that the two permit programs (construction and operating) complement each other.
Specific Authority
The specific authority for this regulation is contained in the Colorado Air Quality Control Act, 1992 as amended. Section 25-7-105(1)(A)(I) requires the Commission to adopt into the State Implementation Plan all requirements of the federal act. Sections 25-7-105(12) provide authority to implement the operating permit provisions of Title V of the Federal Act. Section 25-7-105.1 sets forth federal enforceability provisions. Section 25-7-106(6) provides authority for monitoring, recordkeeping and reporting requirements, Section 25-7- 109.3 provides authority for regulating hazardous air pollutants (HAPs). Section 25-7-111 provides authority for the Division to administer regulations adopted by the Commission. Section 25-7-114.1 provides authority for requiring APENS, and for allowing exemptions from the requirement. Sections 25-7-114.2 through 114.5 set forth construction and operating permit requirements, and application and public participation requirements. Commission action in promulgating these revisions is taken pursuant to Sections 25-7-105 to -109 and 25- 7-114, C.R.S., as amended.
Purpose
NOTE: Subcommittee documents, which discuss the issues and decisions regarding this regulation in detail, and provide fact sheets for various provisions, are available at the Division and Commission offices.
Sources with potential to emit* 100 tons per year of any air pollutant must obtain an operating permit (these sources are referred to as 'major sources"). For purposes of the operating permit program, air pollutant means any pollutant for which an ambient air quality standard has been set (and their precursors), any pollutant which is regulated under the New Source Performance Standard regulations (NSPS, Regulation Number 6), any Class I or Class II ozone depleting compound, and any hazardous air pollutant (all HAPs listed in either the Federal or Colorado Acts).
The Commission has determined that it is not appropriate to use the Colorado Act definition of air pollutant for operating permit purposes. The Act defines air pollutant as being any substance emitted to the ambient air, except for water vapor. Since many substances occur naturally in ambient air, and others will never be subject to any air regulations, operating permits are not needed for emissions of such pollutants.
Major sources of any air pollutant as defined for operating permit purposes must obtain an operating permit, even if no specific standard has been set for the particular air pollutant (see further discussion under "regulated pollutant," below).
Sources, which have potential to emit 10 tons per year or more of a single HAP or 25 tons per year or more of a combination of HAPs, are considered" major sources," and must obtain an operating permit, even if no standard for the HAP has yet been set.
Major sources of Colorado HAPs must obtain an operating permit. Permit conditions related to Colorado HAPs will be treated as state only conditions (see further discussion below).
*See definition of potential to emit, Part A of this regulation. Potential emissions are calculated assuming the source operates continuously, at full design rate, using no pollution control equipment. See additional information and details in subcommittee papers (Group D, Synthetic Minors Issue Paper and Fact Sheet).
Fugitive emissions must be included when determining if a source is major for HAPS. Fugitive emissions must be included when using the 100-ton per year threshold (to determine if the source is major) if the source is listed, or if the source and pollutant is subject to any NSPS or Title III regulation.
Fugitive emissions must be included as required for the Prevention of Significant Deterioration (PSD) and nonattainment new source review (NSR) programs.
The Commission has not included language, which exempts fugitive dust sources from the major source definitions at this time. Further investigation is occurring regarding HAP emissions from such sources, and discussions with EPA will continue to determine how to treat such sources. Once these activities are completed, the Commission will consider this issue.
Sources are ultimately responsible for determining if they are subject to operating permit requirements. The Small Business Assistance Program is available to assist small businesses in understanding the requirements, in determining applicability, and in complying with the requirements. No "applicability determinations" are available for other sources. The Division must recover the cost of implementing the operating permit program. Time spent reviewing informal requests for applicability determinations would not be recovered. Sources who believe they are subject to the operating permit program should file an application. During the sixty-day completeness determination, if the Division discovers that the source is not subject to the operating permit requirements, the source will be notified. In addition, if the source has obtained a construction permit, it will most likely have been determined then if an operating permit is required. Also, preapplication meetings with the Division are available to sources. All time spent by the Division in reviewing applications will be charged to the source.
Existing sources are subject to the operating permit requirements. Some existing sources may want to obtain federally enforceable limits on their production rates or hours of operation, or emission limits in order to avoid the operating permit requirements (known as synthetic minor sources because such limits are needed to make them minor). Construction permits can be obtained to keep emissions below the major source thresholds. Some existing sources do not have construction permits. Others may have construction permits, which do not currently limit emissions below the major source thresholds. Sources may avoid the operating permit requirements by obtaining an emission-limiting construction permit before they are required to apply for operating permits. Sources must obtain a synthetic minor construction permit before the November 1994 due date, or before one year after EPA program approval, whichever applies (see discussion below). If a synthetic minor permit is not obtained before the applicable date, an operating permit application must be submitted.
The Division will review all existing construction permits over a period of time as resources allow, to determine if the existing permits are federally enforceable. In the interim, the Division will assume that all previously issued construction permits are federally enforceable.
New sources may likewise obtain synthetic minor construction permits before they construct in order to avoid the operating permit requirements. All synthetic minor permits must go to public notice in order to be federally enforceable (see discussion below).
"Once in always in" does not apply to the operating permit program (however it does apply to the PSD program). If a major source has an operating permit and reduces its emissions below major source levels, the source may apply for a synthetic minor permit in order to cease being subject to operating permit requirements.
The EPA allows states to give minor sources subject to existing New Source Performance Standards (NSPS) a five-year deferral from the operating permit requirements. Within five years of the approval of any State program, the EPA will determine if the deferral should be extended further, or if some or all minor sources should be permanently exempt from operating permit requirements. If the EPA first approves any State program in November of 1994, this means that minor sources may be exempt until November of 1999. The EPA will decide if minor sources subject to new MACT or GACT (Maximum or Generally Available Control Technology) standards and NSPS should be exempt on a case-by-case basis as the new rules are promulgated.
The Commission has exempted existing minor NSPS sources from the operating permit program at this time. New NSPS and MACT standards will be adopted by the Commission as EPA promulgates them, and at such time, the Commission shall determine operating permit applicability.
Any source which is not required to obtain an operating permit (minor sources) can request an operating permit, if desired. An operating permit allows minor sources to obtain the operational flexibility and permit shield provisions allowed in the operating permit program (note, however, that most of the operational flexibility provisions are available under the construction permit program, see discussion under construction permit program Section). The operating permit will replace the source's construction permit. A construction permit is a SIP requirement, and conditions in the construction permit are federally enforceable (except for state only conditions). All conditions in the operating permit must therefore be federally enforceable. Operating permits, which are issued to sources voluntarily applying, will be subject to all of the operating permit procedural requirements (public notice, EPA review, etc.).
The federal act allows states to phase in processing of existing source applications over a three-year period. One third of the applications must be acted upon within each year after EPA approves the state's program. The program will be submitted to the EPA by November 15, 1993. The EPA has one year to approve the program, therefore the Division must begin processing applications beginning November 15, 1994.
The Commission has directed the Division to divide the existing sources into thirds. One third of the existing sources must submit their operating permit applications by November 15, 1994. The Division will use the new APEN information to identify the first third, and will notify the first third by November 15, 1993. The first third will consist of the least complex sources. The least complex sources should find it easier to prepare their operating permit applications, and the Division should find it easier to process these applications first. The Division will be able to identify any problems with the review procedures, etc. during the first year.
NOTE: The Division cannot issue an operating permit until the EPA has approved the program and is thus ready to begin receiving permits for review. The Division will therefore "hold" applications processed during the first year until the EPA is ready to accept them for review. Once EPA has reviewed and approved the permits, the permits can be issued.
The remaining existing source applications will be due one year after the EPA approves the state's program. The Division will provide notice of the EPA approval date and sources are responsible for submitting their applications on time.
The Division must determine if each application is complete within 60 days of receipt. This may not be possible during the three-year phase in, as many applications will be received at once. The Division will make its best effort to make the completeness determination for all permits within 60 days. If the Division fails to do this, the application shield applies, and the Division cannot enforce against the source for failure to have a complete application on file. The Federal rule provides, however, that the Division has the authority to ask for additional information at any time during the process, and to set a reasonable date by which the information must be submitted. If the source fails to submit the additional information by the due date, the application shields no longer applies. The Commission is confident that under these provisions sources and the Division can effectively work together to ensure that applications are processed in a timely fashion.
New sources that wish to locate in Colorado must obtain a construction permit, or a combined construction/operating permit before commencing construction. The source may choose to obtain a construction permit or a combined permit.
Sources that choose to obtain a construction permit must apply for a construction permit according to the provisions of Part B of this regulation. Once a construction permit is obtained, the source can commence construction and begin operating. Within 180 days of commencing operation the source must undergo a "final approval" inspection to demonstrate that all permit conditions are being met. Within 12 months of commencing operation, the source must apply for its operating permit. Once a complete operating permit application is submitted, the source can continue to operate under its construction permit until it receives its operating permit.
Sources that choose to obtain a combined construction/operating permit must apply for such permit before commencing construction. The application for a combined permit must contain all of the required information for an operating permit. The Division will issue the permit, which will essentially be an operating permit. The source can then commence construction and operation. Within 180 days of commencing operation, the source must demonstrate compliance with all permit conditions (this 180-day requirement will be a permit condition, and the appropriate hourly processing fee will be charged for the associated inspection). The source continues to operate under its operating permit and no further action is required until permit renewal.
The procedures for obtaining construction permits are not as intense as those required to obtain an operating permit. More extensive public and EPA participation is required in the operating permit process. In addition, more information and requirements must be incorporated into an operating permit than into a construction permit. Nevertheless, it may be advantageous for sources to combine the processing of these two types of permits in order to avoid duplication of effort.
The advantage of a combined permit is that an additional application step is avoided. Sources should note, however, that an operating permit application requires more specific information regarding compliance monitoring, recordkeeping, etc., than a construction permit application. Sources that choose to obtain an operating permit before construction must be able to supply all of the required information for a complete operating permit application.
Sources that choose to obtain an operating permit before construction will be subject to the operating permit timeframes for processing instead of the shorter construction permit timeframes. Construction permit applications can take up to 90, 135, or 365 days, depending on type and size of source. Operating permit applications can take up to 540 days. Construction permits require public notice and opportunity for comment only for sources emitting more than 25 or 50 tons/year of any criteria pollutant, and requires opportunity for public hearing for Prevention of Significant Deterioration (PSD) sources only.
The operating permit program requires public notice and opportunity for hearing for all sources. If the programs are not combined, a source may have to undergo public notice twice, once under each process. PSD sources may have to undergo public hearings twice. The EPA only reviews certain applications and draft permits under the construction permit program, and usually does so during the public comment period. The EPA is allowed 45 days to review draft operating permits near the end of the process, and then the Division has 90 days to revise the permit, if necessary.
Sources should consider carefully their confidence in their ability to operate as expected or planned after construction before choosing to obtain a combined permit.
Once a source has submitted a complete operating permit application the source is protected from enforcement action for operating without an operating permit, and can continue to operate until the operating permit is issued.
Sources that submit an application for a combined permit may not construct the source until they receive their combined permit.
Total emissions at an entire site (including fugitive emissions at listed and HAP sources) must be considered to determine if a source is subject to the operating permit requirements. Once a source is subject, however, the owner or operator may choose how many operating permits to obtain for the source. A single permit may be issued for the entire source, or individual permits may be issued for individual units, buildings, processes, etc. For example, research and development activities may be permitted separately from the rest of a facility, in order to take full advantage of the operational flexibility provisions for constantly changing research and development activities. In addition, portions of a source could be covered under general permits. See discussions below under operational flexibility and general permits.
The configuration for operating permits may, but is not required to, conform to the way in which a source chooses to file APENS. For example, a source may file separate APENs for all of the units at its facility, but a single operating permit can be obtained. Similarly, a source may file grouped APENs for similar units at its facility, and the operating permit could contain a general statement that the types of units exist at the facility, and could then state what the applicable requirement and associated monitoring, recordkeeping and reporting requirements are for that group of sources. The permit does not have to list the requirements separately, and the monitoring, recordkeeping and reporting requirements can be tailored to meet the needs of the source and the Division for that group of sources. SPECIFIC EXAMPLE: Numerous degreasers are located throughout a facility, which is located in the ozone nonattainment area (Metro-Denver). A grouped APEN is filed for all of the degreasers. Since Regulation Number 7 applies to the degreasers, they must be addressed in the operating permit. The operating permit choices are:
Once subject to operating permit requirements, a major source must include all applicable requirements and emission units in their application and must address each "regulated pollutant" associated with the source (except for insignificant activities, see below).
The definition of regulated pollutant is to be used strictly for determining what must be addressed in an operating permit once a source is required to obtain the permit. The definition of regulated pollutant has nothing to do with the definition of major source. (See discussion regarding the definition of air pollutant).
Pollutants to be addressed in the application include each pollutant for which an ambient standard has been set (and precursors to such standards, such as volatile organic compounds), ozone depleting chemicals (CFCs), any pollutant subject to a standard under regulation Number 6, and any pollutant subject to a standard under the HAPs requirements (including Colorado HAPs).
"Regulated HAPs"
Note that a HAP must be subject to a standard before the applicant is required to address it in the permit application. Once the EPA adopts a MACT standard for a particular HAP, all sources, even those not subject to the particular MACT standard, and even those not in the source category, must address that HAP in applications. In cases where the Commission or Division determines MACT on a case-by-case basis because the EPA has not, the HAP becomes regulated only for the particular source subject to the case-by-case standard. Once the EPA promulgates the list of 112(r) (accidental release) pollutants, those pollutants will be considered to be "regulated" for all sources.
Fees
The definition of regulated pollutant contained in Part A of this regulation is not used for fee purposes. The Colorado Act specifically sets forth which pollutants are to be assessed fees, and the fee pollutants are set forth in Section VI of Part A. A pollutant does not need to be subject to a standard before the Commission can assess fees.
Once subject to operating permit requirements, a major source must include all applicable requirements and emission units in their application and must address each "regulated pollutant" associated with the source except for activities, which the Commission has determined are "insignificant." This regulation sets forth to what extent each activity or piece of equipment at a facility needs to be fully described and included in an operating permit.
The Commission has tailored the insignificant list after the Air Pollution Emission Notice (APEN) and construction permit exemptions, to promote consistency and reduce confusion. The lists are repeated in Part C of the regulation, for convenience. The activities and sources listed in the APEN and construction permit exemption Sections are considered to be insignificant activities, with two exceptions. The lower APEN emission de minimis levels are used instead of the higher construction permit de minimis levels for insignificant activity purposes. Since the permit de minimis levels apply to the facility, the Commission does not believe it is appropriate to use the permit levels. The APEN 5 MMBTU per hour boiler design rate is controlling, rather than the higher 10 MMBTU per hour permit boiler exemption. All boilers with design rates greater than 5 MMBTU per hour must be addressed in the application and operating permit.
Exemptions based on emissions, size or production rate must still be listed in the permit. Enough information must be submitted in the application just to identify the equipment as qualifying for an exemption. An asterisk appears next to each activity listed in Part C, which must be listed in the application.
Applications do not have to list activities that are exempted based on category.
Applications cannot omit information needed to determine the applicability of, or to impose any applicable requirements on a source. In addition, the exemptions cannot interfere with fee determinations. Since the mechanism used to assess fees is the APEN and not operating permits, this should not pose a problem for purposes of insignificant activities.
The Commission has added APEN exemptions for research and development and laboratory activities. The exemptions apply to small research and development facilities, and to lab activities that the Commission has determined have a negligible impact on air quality in Colorado. Owners and operators of research and development facilities that are subject to APEN reporting are expected to report emissions from samples received from clients for evaluation, but only to the extent, the information is available. The Commission believes that facilities that accept material for evaluation should have some responsibility and knowledge regarding what is being accepted.
Research and development facilities may continually change the types of projects under investigation, therefore the control efficiency of equipment may not always be known. The Commission has determined that research and development facilities may base APEN reporting thresholds on actual instead of uncontrolled actual emissions. In addition, since owners and operators of such facilities do not always know in advance what projects will be undertaken, the Commission has allowed such sources to report emissions after the fact, in annual APEN updates to the inventory.
Research and development activities are prime candidates for the types of operational flexibility allowed in this regulation (see discussion below). The Commission encourages research and development activities to use the operational flexibility provisions.
Some of the activities were described in the Statement of Basis and Purpose for the Commission's May 1993 Regulation Number 3 hearing. Parties to this hearing have asked for clarification regarding some of the provisions.
The emission levels for triggering APEN reporting requirements are based on uncontrolled actual emissions. The Commission recognizes that in some cases, "uncontrolled" emissions are not easily defined. For example, the uncontrolled emissions from a degreaser may be subject to interpretation. The emissions from this type of operation depend on how often it is used and how fast objects are cleaned in the unit. Uncontrolled emissions could possibly mean that a person is standing at the degreaser using the machine continually, and as rapidly as is humanly possible. The Commission recognizes that calculation of emissions for this and similar operations involves some judgment, and will take into consideration reasonable assumptions used in determining uncontrolled emissions.
The exemption for land development (less than 25 acres in size and 6 months in duration) applies to all land clearing activities, such as preparation of land for housing development, or preparation of land for oil and gas activities to occur.
As stated, insignificant activity exemptions cannot be used if it, would result in an applicable requirement being avoided. The EPA requires all applicable requirements to be addressed in operating permits. Similarly, APEN and construction permit exemptions cannot be taken if an applicable requirement would be avoided. The Commission has given certain sources an exemption from the applicable requirement provisions, for APEN and construction permit purposes. For example, a source that is subject to Regulation Number 7, but not to a specific source category requirement of regulation Number 7 (i.e. the source is subject only to a case by case RACT determination), may take the APEN exemption based on the 1 ton per year de minimis level. The Commission has determined that RACT for such small sources is usually no control. For construction permits, a source may take an exemption if it is subject solely to a work practice standard of Regulation Number 7.
For example, degreasers used in the ozone nonattainment area (Metro-Denver) are subject to a specific Section of Regulation Number 7, which requires covers and proper operation. Degreasers in the nonattainment area are subject to a specific Section of the regulation, therefore they must file APENs, however since the Section only requires work practice standards, no permit is required if the emissions are below the permit de minimis levels. It should be noted that since an applicable requirement exists, the degreaser and associated work practices must be addressed in the operating permit. Degreasers in the rest of the State are exempt from APEN and permit requirements if they are below the de minimis levels. Note that the EPA is required to set Maximum Achievable Control Technology (MACT) limits for degreasers in 1994. When the Commission adopts the MACT standards for degreasers, all degreasers subject to the MACT standard will be required to file APENs and obtain permits.
Operating permits must list all applicable requirements and must state how continuous compliance with the requirements will be demonstrated. The source is provided with protection from enforcement as long as each permit condition and compliance requirement is met (known as the permit shield). The source may wish to obtain enforcement protection for regulations, which do not apply. In such cases, the application must identify which regulations do not apply to the source. These regulations will then be identified in the permit, and the permit shield will apply.
This protects the source in the event that a mistake is made and the regulation really does apply to the source. The source is protected from enforcement action until the permit can be reopened and the correct requirements inserted.
Operating permit applications must contain a lot of complex information, including identification of all applicable (and inapplicable, if the permit shield is to apply) requirements. This can be a daunting task for the applicant. The Commission has directed the Division to develop checklists for use by the applicant. One checklist will identify all data that must be included in an application. Another checklist will identify all air regulations. The applicant can use the latter checklist to identify which regulations apply to their source, and which don't.
The State must submit an application form to the EPA along with the operating permit regulations. The Commission has directed the Division to develop an application form, taking into account suggestions and comments from the public.
The Commission has determined that it is appropriate to allow sources to set forth procedures in their permit that will show that a SIP limit is being met through methods that are equivalent to, but do not exactly follow, procedures set forth in the SIP.
For example, suppose a source is required to meet a volatile organic (VOC) compound limit by using a coating that does not contain more than a certain amount of VOC. The source could propose to meet the limit by some other means than using such a coating. Their application would set forth quantifiable, replicable, accountable procedures that would show that they could still meet the limit even though they would not be using the required coatings. Such procedure could consist of using control equipment, or using a combination of complying and non-complying coatings for which the average emissions would meet the VOC limit. Monitoring, recordkeeping and reporting procedures would be set forth in the permit. The procedures must be sufficient to show continuous compliance with the underlying applicable requirement.
This procedure allows sources to show compliance through alternative methods without having to go through the Commission and the EPA for a case-by-case SIP revision. The EPA would review the process during its 45-day review period. The public would have opportunity for comment and hearing.
NOTE: This procedure overrides the requirement in Regulation Number 7, which states that all such alternatives will undergo a case-by-case SIP revision.
Operating permits must address any requirements established under Title III (hazardous air pollutants) of the Federal Act, except that the accidental release plans required under Section 112(r) do not have to be incorporated into the permit. The permit must merely state that the source is required to submit a plan to the appropriate entity. The Commission can take enforcement action against a source for failure to submit a plan. Enforcement action cannot be taken for failure of the source to meet any of the requirements contained in the plan.
Operating permits must contain monitoring sufficient to demonstrate compliance with the applicable requirements. Methods and procedures may be set forth in the applicable requirements. If methods and procedures in the applicable requirement are insufficient to demonstrate compliance, the operating permit must "fill the gap" by specifying appropriate methods. Compliance methods may be as simple as recordkeeping, or may require continuous monitoring equipment. The source must state in their application how they will demonstrate compliance. The Division reviews this proposal and agrees with it or recommends something else. The Common Provisions provides the Division with the authority to require monitors. The Division has used, and will continue to use, best engineering judgment to determine when monitors are necessary and feasible. The Commission has determined that in some instances it may be appropriate to require continuous emission monitors, even in cases where the applicable requirement does not specify monitors, and that sufficient opportunity for discussion and appeal are available to the source, therefore monitors can be required even if the applicable requirement does not specifically require monitors.
The EPA is in process of developing and promulgating their enhanced monitoring rules. These rules may speak specifically to continuous monitoring. The Commission will take into account this new rule and determine if the operating permit monitoring requirements should be revisited once the EPA rule is promulgated.
By January 1994, the EPA will publish a list of existing rules, which do not contain sufficient monitoring, or recordkeeping methods, and will develop criteria that could be used to determine what is sufficient. After the rules are identified, the EPA will proceed to revise the rules to make them sufficient. The need for "gap filling" will then decrease.
Each operating permit application must be accompanied by a "compliance certification" indicating that all information presented is true and accurate. The certification must be signed by a "responsible official," usually a CEO, of the company. Likewise, compliance certifications must be submitted every six months, indicating the compliance status of the source. Such certifications must also be signed by the responsible official. The burden is on the source owner or operator to ensure that all permit conditions are addressed in the certification, and all information is complete and correct.
The Commission's definition of "responsible official" allows delegation of responsible official authority to plant managers under certain conditions, including prior approval from the Division.
The operating permit must contain all recordkeeping necessary to ensure compliance with the applicable requirements. The Federal Act requires such data to be maintained for five years. The Commission has determined that sources need not keep a full five years of data on site for inspection review. Instead, sources are required to make immediately available to the Commission or Division data for the past year, along with the compliance certifications for the past five years. The actual data for the remaining four years must be provided to the Commission or Division within 48 hours of request.
Monitoring data must be reported at least every six months.
The Commission will allow sources flexibility in determining what records are appropriate, and in determining the schedule for reporting, in order to allow coordination with other reporting requirements (such as Community Right to Know, etc.). Such flexibility is allowed provided the requirements of the Clean Air Act are met.
Malfunctions and emergencies - The Commission has adopted the Federal provisions for emergency and malfunction protection, except that sources are required to provide oral notice within two hours of the next working day, and written notice with one month after the emergency occurs. Past experience indicates that sources will most likely not be able to meet the EPA's recommended two-day written notice.
The Commission does not include continuous monitor malfunctions in the emergency provisions. The emergency provisions serve to provide an absolute defense if an applicable requirement is violated. Since the Commission cannot tell if a source is in or out of compliance with an applicable requirement when monitors malfunction, it is not appropriate to include monitor malfunctions in the emergency provisions. Monitor malfunctions which would violate provisions which set specific operating conditions and specifications for the monitor, however, could be granted the emergency protection for those specific performance conditions, if such malfunctions were due to unforeseen circumstances and reported as set forth in the emergency provisions. The Commission has determined that extra protection for monitor malfunctions is not warranted, as procedures and specifications for monitors include performance requirements which take into account the inherent operational fluctuations and abilities of the monitors.
Sources must report any exceedances of standards, which are not due to malfunctions or emergencies "promptly." The Commission has determined that including such deviations in the six-month monitoring report is sufficient. This will not impair the Division or Commission's authority to assess penalties regarding the deviation.
Public Availability of Reports: Copies of all reports and compliance certifications will be made available at the local health departments. As always, such information is available at the Division offices.
Certain Commission regulations are not part of the State Implementation Plan, and therefore are not federally enforceable. The Commission has given sources the option of including state only conditions in operating permits, or of maintaining such conditions in a separate construction permit. This option is available for all state-only conditions except those pertaining to major Colorado HAP sources. Major Colorado HAP sources are required by statute to obtain an operating permit. "State-only" conditions will be listed separately from federal conditions in operating permit. (Sources that are major for federal HAPs must obtain an operating permit, and provisions pertaining to the federal HAPs are federal, not state conditions.)
Since the operating permit is meant to be used as an all-encompassing document for sources and the Division, the source may want to refer to only one document to determine what needs to be done to remain in compliance. If the conditions are included in an operating permit, the source may choose whether or not to have the permit shield, operational flexibility, and other operating permit allowances and requirements apply to the conditions.
State-only conditions do not have to undergo the same procedural requirements as other operating permit conditions. Affected state and EPA review is not required.
Currently, the following regulations are state-only requirements: odor Regulation Number 2, municipal waste combustor Regulation Number 6, Part B. Future Colorado MACT/GACT standards will be state-only requirements.
Applicants are allowed to classify certain information as being confidential in terms of product or processes. In no case may emission information be kept confidential, and in no case may compliance certifications be kept confidential.
Records and reports may be kept confidential, however, instances where this will be allowed will most likely be rare, since emissions data or information related to emissions data may not be kept confidential.
The current confidentiality provisions and procedures remain in effect, however the Commission has directed the Division to examine the provisions and procedures and to recommend improvements.
The Division has sixty days from receipt of an application to determine if all information necessary to process the application is included. If the application is incomplete, the Division must notify the source and request the additional information. Additional information must be submitted by the applicant within a reasonable amount of time. Once a complete application is received, the Division must act on the application within 18 months. The Division must analyze the application, prepare the permit, and ensure that all of the procedural steps as set out below are met. Once all requirements are met, the Division will send the source its fee letter, and will not issue the permit until all applicable processing fees are paid. The fee letter must be sent within 18 months of receipt of a complete application.
Once the Division analyzes the application and prepares a draft permit, the permit and application must undergo a thirty-day public notice. If a hearing is requested during the public notice, thirty-day notice of the hearing must be provided, and the hearing must occur within sixty days of the notice.
The Commission has provided an opportunity for sources to respond to any public comments received. This source response in no way affects the Division's time constraints for issuing the permit, nor does it affect the permit, which the Division ultimately issues.
During the public notice, a copy of the draft permit will also be sent to any affected, nearby states, for their review.
Once public notice and hearing are completed, the Division will make any necessary revisions to the draft permit, and will submit a proposed permit to the EPA for their review. The EPA has 45 days to review the permit. The Division then has up to 90 days to make any necessary revisions to the permit to address EPA concerns, before the permit can be issued.
The applicant must provide a sufficient number of copies of the application for submittal to the EPA, affected states and public notice, including copies for County Commissioners.
Operating permits must be renewed every five years. Renewal applications must undergo all of the review procedures (public notice, EPA review) as the initial operating permit.
Applicants may incorporate by reference any previous application material or permits for portions of the operation which will not change from the initial application. The renewal application may only address operations which will change and which will require new permit terms or conditions. Copies of all material incorporated by reference must be included with the renewal application. All material must be provided for public comment, affected state review, and EPA review.
The federal rule states that permitting authorities should be able to process "90%" of renewal applications within six months. The federal rule does not mandate that states process renewals within six months. The rule gives states flexibility to require applications for renewals, and specifically states that other times may be approved, which are necessary to issue the permit before it lapses. The application can be due as soon as 18 months before expiration, and as late as six months. Renewed permits must be issued before the old permit expires.
As described, the public comment, hearing notice, hearing, EPA review, and revision periods required in the Federal rule take up 220 days, or approximately seven and a half months. The time allotted for these activities is fixed in the Acts and rules (except for the time allowed for States to revise draft permits, based on EPA review). The amount of time for actual review of the application itself varies depending upon the type of application. A breakdown of the allotted times follows:
Public Notice: | 30 days |
Hearing: | 60 days |
EPA Review: | 45 days |
Division Response: | 90 days |
TOTAL | 220 days |
Two hundred and twenty (220) days is the minimum required. No time is allotted for revising the permit between each step as necessary, nor for transmitting the permit from one step to the next. The 220 days is required for public notice and EPA review only, it does not include any time for the Division to actually review the application and draft a permit.
Sources are allowed to seek judicial review if a permit is not issued in time. This could potentially result in wasted Division and court resources dealing with an impossible situation. In addition, the EPA may determine that the program is not adequate if the Division continually fails to issue renewed permits before expiration. Finally, if permits are not issued in time, the EPA can revoke and reissue permits, or can terminate the permits, in which case the source's right to operate ceases.
Given that the notice and review procedures alone take 220 days, and the allowed flexibility, and the requirement that renewed permits be issued before expiration, the Commission has determined that it is not reasonable to allow renewal applications to be submitted as late as six months before expiration. Nine months may be adequate if hearings are not requested for such renewals, however, no one can predict how many applications will or will not require public hearing. It would not make sense to accept applications only six or nine months before expiration, knowing that if a hearing is requested, the new permit will not be issued before expiration. The twelve months will give the Division sufficient time to review the application, and in addition, will give the source some time to ensure that they have submitted a complete application before the permit expires. Sources are allowed to update their applications up to the time a draft permit is issued for public notice. This will allow sources a chance to address any last minute market considerations or changes in their application.
The Division will send written notice of the need to apply for a permit renewal to permittees six months prior to the date a renewal application is due. This notice is to aid permittees, and the failure of the Division to provide notice to any individual permittee is not contended to be used as a defense for the failure to apply for a permit renewal.
As sources and the Division gain experience with the new operating permit program, the Commission and the Division will determine if the timeframe for renewals can be shortened. The first renewals will not be due until the year 2000.
Operating permits must be "reopened" during the term of the permit if new regulations become applicable to the source, if a mistake is found in the permit, or if additional measures need to be incorporated to ensure compliance with applicable requirements. A permit is reopened to address only the new requirement or correction, not to address the entire permit. The Division must give the source 30 days' notice before reopening the permit. Reopening's must undergo all of the same procedures and requirements as the original permit (notice, EPA review, etc.). The Commission will allow sources the option to reopen an entire permit instead of just the necessary portion. This would require, however, that a source be able to submit a complete application for renewal within 30 days of notice, so that the Division can meet the 18-month deadline.
States must adopt expeditious procedures for processing changes that require a modification to a permit.
Administrative modifications are *minor changes to the permit, such as change in owner, more stringent monitoring requirements, or correction of typographical errors. The change at the source can be made upon submittal, and the Division must revise the permit within 60 days. No public notice or EPA review is required. The original expiration date does not change when administrative modifications are made.
The existing construction permit program requires sources to obtain construction permits before they construct or modify. Revisions to construction permits are required before any changes at the source are made. In contrast, the Federal rule allows changes to be made without revisions to the operating permit, provided no SIP requirements are violated. Sources are allowed to make "minor modifications" upon notice to the Division. The source must supply a draft permit, which is submitted for affected state and EPA review. The permit is revised within 90 days. No public notice is required at the time the modification is made. The Commission was faced with a dilemma. Since the construction permit program is a SIP requirement, sources would not be allowed to make minor modifications without first obtaining a construction permit. This in effect would negate the operational flexibility envisioned in the Federal Act.
Only certain modifications at the source may qualify as "minor modifications" for operating permit purposes. The change cannot be a "Title 1" modification. Title I contains requirements applicable to new sources. Title I revisions include the following changes:
The significant levels (defined in Part A of this regulation) are based on the potential to emit of a source or modification. Since no construction permit is in place to limit the potential to emit of a minor modification, all minor modifications will be triggered based on potential emissions, not actual emissions.
Minor modifications cannot involve any significant change or relaxation in monitoring, recordkeeping, or reporting requirements. Minor modifications also cannot violate any permit condition, which the source has voluntarily obtained in order to limit potential emissions for avoidance of requirements (such as PSD requirements).
The EPA expressed their concern regarding the construction permit SIP requirements and minor modifications. The Commission has determined that it is appropriate to submit a SIP revision for the construction permit program, in order to allow sources the flexibility allowed under minor modifications. The Commission will allow minor modifications under the operating permit procedure, and changes before obtaining a permit, however all substantial requirements needed for a construction permit must be met. These requirements include ambient modeling to assess the modification's impact on air quality in Colorado, as required in the SIP. As under the current construction permit program, minor modification procedures cannot be used to circumvent PSD or NSR requirements by making individual changes, which together would otherwise trigger PSD or NSR. The enforcement protection of the permit shield does not apply to these modifications. Sources should be confident that all applicable requirements would be met before submitting a change as a minor modification. If the source errs in its determination, the Division, the Commission, and the EPA can take enforcement action against the source and the source's right to operate under the modification is terminated (the source must revert back to the permit as it existed before the modification was requested).
Upon permit renewal, the minor modification undergoes public notice along with the rest of the permit, and the permit shield can be extended to the minor modification provisions.
Significant modifications are changes at the source which are not administrative modifications, and which do not qualify as minor modifications. Such changes trigger PSD or NSPS, etc., or involve significant changes in or relaxation of monitoring, recordkeeping and reporting requirements. A revised permit must be obtained before the source is allowed to commence construction for the change.
A source may choose to obtain a revision to its operating permit, or it may choose to obtain a construction permit before making the change. Significant modifications to operating permits must undergo all of the public notice and EPA review requirements, therefore a source should plan on submitting its application well in advance of making the change. If a construction permit is obtained first, the source should apply at least 3 to 4-1/2 months in advance (except for PSD sources, which should plan 12 months in advance). Once the construction permit is obtained, the source may commence construction. The conditions of the construction permit do not need to be incorporated into the operating permit until renewal, unless more than three years remains in the term of the operating permit, in which case the operating permit must be reopened, and the significant modification provisions incorporated.
The Federal rule requires a State's program to include operational flexibility provisions, which allow a source to make certain changes without having to obtain a modification to their operating permit. The changes are simply incorporated into the operating permit when it is renewed. The types of operational flexibility are described briefly below. Subcommittee papers and fact sheets, which explain the provisions in more detail, and give specific examples, are available at the Division and Commission offices. The Commission has directed the Division to devise simplified explanations of all of the provisions.
"502(b)(10)" Changes (named after a Section of the Federal Act): A source is allowed to make a change, which would violate an express permit term, provided no applicable requirements are violated. The source can make the change after a seven-day advance notice to the Division. The permit shield does not apply. The Commission will allow sources to revert back to the original permit term, provided seven-day notice is given to the Division. The permit shield can then apply again to the provision, which is contained in the permit.
Permit Caps: A source may ask for an upper limit in total facility emissions. Changes may occur within the facility, as long as the upper limit is not exceeded, and all applicable requirements are met. The permit shield applies to these changes. Seven-day notice is required before the change is made. This type of operational flexibility may be suitable for research and development facilities.
Alternative Scenarios: The source can identify various operational scenarios in its application, along with the applicable requirements and compliance demonstrations. The source can then switch from one scenario to another without notification to the Division. The permit shield applies to these changes.
Emission Trading Based on the Permit: The applicant can request that the trading provisions (for netting out) provided for in Part A of this regulation be incorporated into their operating permit. As long as all of the provisions are met, the source can use the provisions to make changes without notification to the Division.
Off Permit Changes: These changes can be made at the source with seven-day notice to the Division. The changes involve activities that are not addressed in the operating permit. The same qualifications as those for minor modifications apply to these changes (cannot be Title I modifications, significant monitoring changes, etc.) Note that the same SIP concerns apply to these changes that are discussed under minor modifications. A construction permit would be required before these changes could be made. The Commission has decided to submit a SIP revision to allow these changes.
Emission trading based on the SIP: This is the only federally allowed operational flexibility provision that the Commission did not adopt. This provision would allow sources to use the emission trading provisions of Part A without specifically stating the procedures in the permit. The Commission does not currently have an approved SIP that would allow this, therefore the EPA would not approve this procedure at this time. The EPA is expected to develop guidelines for approvable SIPs within two years. The Commission will consider this provision once it is apparent what the EPA would approve.
General permits are standard permits that apply to specific source categories. The sources in the category have similar applicable requirements and similar monitoring, recordkeeping and reporting requirements. The general permit will include criteria by which a source may qualify for the permit. Sources that are out of compliance may not qualify for a general permit, since a separate individual compliance plan would be required. The general permit undergoes one-time public notice and hearing and EPA review when it is initially developed. Qualifying sources can use standard, simplified applications and obtain the general permit without having to go through the entire application process (public notice and hearing) individually. A list of all sources that have been issued a general permit shall be maintained by the Division and made available upon request.
The general permit (as originally developed) undergoes five-year renewal, including public notice and EPA review.
General permits will also be developed for the construction permit program, and will usually be identical to the general operating permit for that source category. Existing sources that have not obtained a general construction permit through the construction permit program (probably because a general permit did not exist at the time a construction permit was obtained) may operate under the general operating permit within 60 days of submitting a complete application for the permit, which corresponds with the amount of time allowed for a completeness determination. The application shield becomes effective upon submission of a complete application. The Division will issue the general permit to the source upon completion of the analysis. The permit shield becomes effective upon issuance of the operating permit.
Sources which receive a general construction permit through the construction permit program may operate under the general permit as an operating permit 60 days after a complete operating permit application is submitted, provided the required compliance demonstration has been performed in the required time (180 days). Such source must apply for the operating permit within 12 months of commencing operation. Once such application is received and determined to be complete, the Division will issue a certification, which states that the construction permit now becomes the operating permit.
General permits will ideally be useful for minor sources that will be subject to operating permits at a later date. Minor sources are more likely to be subject to similar applicable requirements. The Commission has directed the Division to devote resources as they become available to identification of sources that would be suitable for general permits and to the development of general permits. Candidates for general operating permits include sources that become subject to new MACT/GACT standards (i.e. dry cleaners), or existing and new NSPS sources (i.e. asphalt plants).
The Commission will allow major sources to have general permits as part of their overall operating permit. As general permits are developed, major sources may use them. The source would just reference in their initial or renewal application that they have a general permit. General permits, however, cannot be issued to major sources if the issuance of the general permit would cause a violation of any of the applicable requirements in any other operating permits they have, or if issuance of a general permit would trigger a Title I or Title Ill modification. The Commission will allow general permits to be used for an entire major source only in those instances where the use of general permits is appropriate (homogenous, straight-forward sources).
The provisions of Title Ill must be implemented through the operating permit program. As discussed, all major sources of HAPs must obtain an operating permit. As the Commission adopts MACT standards, the permit must be reopened to include the new requirements.
As the EPA promulgates new MACT standards, they will decide if minor sources as well as major sources affected by the standard must obtain operating permits.
Once the EPA approves the State's operating permit program, the Division and Commission must begin making case by case MACT determinations for new major sources and modifications, if the EPA has not yet set a MACT standard for that category. The EPA will be setting emission levels at which modifications are triggered.
Once the EPA approves the State's operating permit program, if the EPA fails to meet its mandated deadline for setting a particular MACT standard, the State must determine MACT for that source category within 18 months. Permits will be reopened to incorporate the State MACT standard. Once the EPA determines MACT for the category, permits may need to be reopened again, and sources may need to retrofit their units, depending upon the difference between the State and EPA MACT determinations.
The Commission is required, and fully intends, to adopt the acid precipitation rules and requirements as promulgated by the EPA, and to implement the requirements through the Title V permits, as also required under the Federal Act.
Title IV sources (power plants) are required to submit the Title IV portion of their operating permits by January 1, 1996. The permits must be issued by December 31, 1997. The EPA is planning on having all of the requirements and forms finalized so that Title IV sources can apply for Title IV requirements at the same time they apply for their initial operating permit. This could help avoid re-opening of the permit. To facilitate this, the Commission has determined that Title IV sources should be included in the last group of existing sources required to apply for operating permits (due one year after EPA approves the program).
The Commission also intends to adopt provisions related to the WEPCO rule promulgated by the EPA, which deals with Clean Coal Technology Projects and other modifications at utilities. The rule is currently slated for the spring of 1994 in the Commission's regulatory agenda. In the interim, the Commission and Division will continue the existing policy of treating such projects as allowed by the EPA. Also, the Commission wishes to encourage Clean Coal Technology Projects, which are used to develop and identify better methods of controlling and preventing air pollution. The Commission has directed the Division to consider research and development factors, and the importance of developing new technologies, if enforcement action may be necessary due to violations related to such projects.
As discussed, construction permits are the vehicles through which sources can obtain federally enforceable limits on their emissions in order to avoid the operating permit requirements. In some cases, sources may also choose to obtain limits to avoid PSD or NSR requirements. Such synthetic minor permits must undergo public notice in order to be federally enforceable.
The Commission has determined that it is appropriate to allow construction permit sources to use the SIP equivalency procedure that is provided for operating permits in the Federal Act. Current regulations, such as Regulation Number 7, require a case-by-case SIP revision for equivalent procedures, which involves public notice, a mandatory Commission hearing, and EPA approval. The new SIP equivalency provisions override Regulation Number 7 provisions. All SIP equivalency proposals require public notice, opportunity for hearing (but not mandated if not requested), and EPA review. The Commission will require such construction permits to follow the PSD track, which requires public notice and an opportunity for public hearing. The EPA will review the proposal during the public comment period.
The Commission has extended most of the operational flexibility provisions directly to the construction permit program, since no modification to a permit is required. These provisions include Administrative Modifications, Alternative Scenarios, Emission Trading Based on the Permit, and Permit Caps.
The remaining operational flexibility provisions, and the minor modification provisions are not available through the construction permit program, however sources may obtain these additional allowances by voluntarily applying for an operating permit.
The Commission has determined that the general permit process will be allowed only for the operating permit program. The general application and permit forms, however, should be used for construction permits as they are developed. The Colorado Act requires new sources to obtain a construction permit before commencing construction, therefore the source must have their construction permit in hand before constructing. In addition, Regulation Number 3 requires certain sources to undergo public notice before construction. The Commission believes that notice should continue to be provided to the public where appropriate, before a source constructs near them.
As discussed under general operating permits, the Division will identify candidates for general construction permits as resources are available. The same sources identified in the discussion are candidates for general construction permits. In addition, general permits may be suitable for sources wishing to obtain synthetic minor status, such as emergency and backup generators.
Though it was not noticed for this hearing, some parties indicated they had concerns regarding the Division's policies for charging annual emission fees. A request was made to include the Division's policy in the regulation. The Commission believes the Division should be given the flexibility to determine the most efficient and reasonable procedures and policies for assessing fees, therefore the policy will not be included in the regulation. The Division will prepare a written policy for public distribution on the methods it will use to calculate and collect emission fees.
Even though existing minor sources (small businesses) are exempt from the operating permit program, small businesses will need help understanding the construction permit program requirements. In addition, small businesses need to understand the operational flexibility requirements, and need to understand if it would be advantageous for them to apply for an operating permit. The EPA may decide that some minor sources should be required to apply for operating permits as new MACT and NSPS standards are promulgated.
Last September, the Commission approved a plan for developing a Small Business Assistance Program. The program is under development and is expected to be implemented and fully operational by November of 1994. In the interim, Division staff is available to answer any questions, which a small business may have regarding air quality regulations and requirements.
Some information has already been developed regarding APEN requirements and simplified calculation procedures.
This regulation provides opportunity for any source to request a preapplication meeting with the Division, to discuss what requirements may be applicable to a source.
Division staff will remain available to all sources and the public, to answer questions regarding the operating permit and construction permit programs.
Revisions to Regulation Number 3 Part A, Section II.E.
Pursuant to Section 112(n) of the federal Clean Air Act, the US Environmental Protection Agency (EPA) is required to conduct an extensive study to create a reliable estimate of the existence or quantity of hazardous air pollutants (HAPS) emissions from certain sources such as utility and non-utility industrial boilers. Another study under Section 112(n) relates to emissions from publicly owned treatment works (POTWs). Section 112(n) recognizes that technological limitations exist on the ability to reliably estimate these emissions. The required studies are complex and costly, and EPA has indicated that the utility and non-utility boiler study will not be concluded until the end of 1995. The original time frame contemplated by Congress anticipated that the study would be completed by November 15, 1993. Unlike the mandatory boiler study, the Clean Air Act merely authorized EPA to study POTW emissions and EPA has decided not to continue with the study. Thus, the emissions information that was originally expected will not be developed in time to facilitate APEN reporting by December 1994. Since the emissions from facilities that treat municipal-type wastewater are virtually identical to those from POTWs, the lack of POTW emissions data also affects this category of sources as well.
During rulemaking in 1993, a deferral for HAP reporting from boilers and other listed sources was granted until six months from the date federal studies are complete or until December 31, 1994. This deferral appears in Part A, Section II.E.
This was based in large part on the recognition that it would be unreasonable and infeasible to expect these sources to attempt to duplicate the EPA studies and to provide meaningful data earlier than EPA. The postponement was not intended to forgo reporting obligations (it applied to emissions points and processes only, not to entire facilities), but rather, to recognize technical limitations and to await (not duplicate) the results of the EPA studies.
The Statement of Basis, Specific Statutory Authority and Purpose for the 1993 rulemaking session explained, "Due to ongoing studies aimed at quantifying their emissions of non-criteria pollutants, the Commission has deferred APEN reporting requirements for five source categories until six (6) months after the studies have been completed or December 31, 1994, whichever is earlier."
It is now apparent that neither the EPA boiler study nor the POTW study will be timely completed for effective implementation of ' II.E. The clear intent of the regulation is to postpone report of HAP emissions by sources such as utility and non-utility industrial boilers, POTWs and municipal-type wastewater treatment works, pending the results of the ongoing EPA studies. The rationale for this intention is that it is technologically infeasible for these sources to comply with this reporting requirement without the results and utilization of the EPA studies. The original intent and rationale for a postponement continue to pertain at this time and provide the basis for this rulemaking.
Additionally, highly costly tests would be required if reporting is required prior to the results of the EPA studies. There is a serious question about the accuracy of any reporting prior to the conclusions of the EPA studies. Moreover, if sources attempt to formulate tests, inconsistencies with testing procedures, resulting data and interpretation thereof would result, thereby further complicating issues for impacted sources and administration by the state. It is believed that using the EPA studies results will allow avoidance of such costs and result in more accurate APENS, which, in turn, will facilitate easier administration by the state.
During the Commission's prior deliberations on this matter, the Commission expressed intent to revisit this December 31, 1994 deadline if the EPA studies would not be timely completed. Impacted sources must be placed on notice as early as possible concerning any deadline because lead-time to conduct studies and extensive planning would be necessary. This rulemaking postpones to December 31, 1995, or six (6) months after the EPA studies are complete, whichever are earlier, for utility and non-utility industrial boilers, and POTWs and municipal-type wastewater treatment plants. This decision furthers the Commission's original intent concerning the underlying reporting. This issue may be revisited in the future if the information expected to be derived from the EPA studies continue to be delayed.
The specific authority for this regulation is contained in the Colorado Air Pollution Prevention and Control Act, 1992 as amended. The Legislative Declaration, ' 25-7-102, recognizes that an accurate emission inventory is needed to adequately manage air resources in Colorado. Section 25-7-109.3 provides authority for regulating HAPs. Section 25-7-114.1 provides authority for requiring APENS, and for allowing exemptions from the requirements. Section 25-7-109(4) requires the Commission to promulgate regulations pertaining to HAPs.
Findings Regarding the Basis for the Emergency Rule Revisions to Regulation Number 3, Concerning the Operating Permit Program
The Air Quality Control Commission held this emergency rulemaking hearing on May 19, 1994, after such notice of rulemaking as practical, to postpone the November 15, 1994 deadline for submission of operating permit applications by those existing major stationary sources previously notified by the Division to submit applications by that deadline. The revisions to Regulation Number 3 would phase-in the required submission of operating permit applications by these sources over a three-month period beginning January 1, 1995. The Commission finds that the immediate adoption of this emergency regulation is imperatively necessary for the preservation of the public welfare and to ensure compliance with the federal law, and that compliance with normal notice requirements for rulemaking would be contrary to the public interest.
This emergency regulation is necessary for three reasons. First, the Environmental Protection Agency (EPA) has issued a formal letter to the State of Colorado advising the State that its Title V operating permit program submission, contained in the Commission's Regulation Number 3, must be revised in order to obtain federal approval of the State operating permit program in accordance with the mandates of the federal Clean Air Act. The earliest date by which the Commission is able, pursuant to law, to promulgate such revisions and make them effective is September 30, 1994. Sources that are subject to the operating permit application deadline of November 15, 1994 will not have sufficient time to complete their applications and submit them by that time after the promulgation of the revisions.
Secondly, and more importantly, it was not until the 1994 Colorado legislative session that the legislature appropriated money for the necessary FTE's at the Division to process operating permit applications and to implement the program. The money will not be available for the Division's use until July 1994, and given the shortcomings of the State personnel system, the new Division employees will not, in all likelihood, begin their employment until on or around November 1, 1994. If the Commission did not act on an emergency basis to postpone the application deadline of November 15, 1994, persons subject to the application deadline will be required to apply to the Division prior to its ability to fully train the new employees or to provide sources any services necessary under the mandates of the federal Clean Air Act. This imposes an unnecessary burden on sources, as well as the Division.
Finally, the federal Clean Air Act requires that the State have sufficient money to cover the direct and indirect costs of implementing the Title V program. These costs include those necessary for the Division to review permit applications and issue permits within certain established timeframes, as well as to perform inspections and other compliance monitoring actions. The EPA has indicated to the State, in a letter dated April 8, 1994, that if the State does not have sufficient money to cover these costs, the EPA cannot grant any type of approval, including interim program approval. In this event, EPA must take over the Title V program in Colorado, and has threatened to impose sanctions on the State. Therefore, the Commission must act on an emergency basis to postpone the operating permit application deadline in order to give sources sufficient advance notice of the changed deadline and in order to ensure that the Division will be able to review and process those applications within the timeframes set forth in the federal Clean Air act.
In light of the evidence presented at the emergency hearing on the difficulty and cost to sources of completing operating permit applications, given the short timeframe between the Commission's ability to revise and make effective changes to Regulation Number 3 required by the EPA and the current deadline; on the difficulty and cost of evaluating operating permit applications filed with the Division and of the Division's inability to perform services required by the current Regulation Number 3 and deadline of November 15, 1994; and on the EPA's letter evidencing its concern that the Division will not be sufficiently financed to perform those federally-mandated services, the Commission finds that an emergency exists which warrants the passage of this emergency regulation. The Commission does not believe that this emergency regulation represents any risk to public health.
Revisions to Regulation Number 3
This Statement of Basis, Specific Statutory Authority, and Purpose comply with the requirements of the Administrative Procedures Act, Section 24-4-103(4), C.R.S. (1994) for adopted or modified regulations.
Basis
The 1990 Amendments to the Federal Clean Air Act require states to implement an operating permit program. Failure of a state to implement the operating permit program will result in EPA sanctions.
On July 15, 1993, the Air Quality Control Commission adopted revisions to Regulation Number 3 necessary to implement the State's operating permit program. The Commission also adopted revisions to Regulation Number 3 that were necessary to integrate the operating permit program with the existing construction permit program, and that were necessary to extend certain provisions of the operating permit program to minor sources not otherwise subject to the program.
On November 5, 1993, the Governor submitted Colorado's operating permit program to the Region VIII, Environmental Protection Agency (EPA) for its approval. The EPA reviewed Colorado's submittal and on April 8, 1994 responded to the State's submittal, noting certain deficiencies in the program. These deficiencies must be corrected and the revisions submitted to the EPA no later than October 1, 1994. The Commission promulgated these revisions to Regulation Number 3 in response to EPA's comments. EPA also noted certain legislative changes that are required in order for the State of Colorado to obtain full approval of its operating permit program. Therefore, at this time, the Commission contemplates that the State will receive interim approval of the operating permit program; within 18 months after receiving the interim approval from EPA, the State must submit legislation that will satisfy all of the federal requirements.
The EPA in its April 8 letter required the Commission to revise in certain respects the Statement of Basis, Specific Statutory Authority, and Purpose for Revisions to Regulation Number 3 that was dated July 15, 1993 and which was submitted to the EPA on November 5, 1993. The required revisions are reflected in this Statement of Basis, dated August 18, 1994.
Specific Authority
The specific authority for this regulation and its revisions is contained in the Colorado Air Quality Control Act, 25-7-101, et seq. (1989 & 1994 Supp.). Section 25-7- 105(l)(A)(1) requires the Commission to adopt into the State Implementation Plan all requirements of the federal act. Sections 25-7-105(12) provide authority to implement the operating permit provisions of Title V of the federal act. Section 25-7-105.1 sets forth the federal enforceability provisions. Section 25-7-106(6) provides authority for monitoring, recordkeeping and reporting requirements. Section 25-7-114.1 provides authority for APEN requirements and for allowing exemptions from the requirements. Section 25-7-114.2 through 114.5 set forth construction and operating permit requirements, and application and public participation requirements. Commission action in promulgating these revisions is taken pursuant to Sections 25-7-105 to 109 and 25-7-114.
Statement of Basis and Purposes of Changes to Regulation
Changes to the Statement of Basis and Purpose dated July 15, 1993
Revise this paragraph to read:
Note that a HAP must be subject to a standard before the applicant is required to address it in the permit application. Once the EPA adopts a MACT standard for a particular HAP, all sources, even those not subject to the particular MACT standard, and even those not in the source category, must address that HAP in applications. In cases where the Commission or Division determines MACT on a case-by-case basis because the EPA has not timely promulgated a MACT standard for a source category or subcategory of sources, the MACT becomes applicable to all sources within that source category, pursuant to 112(g) of the federal act. In cases where the Commission or Division determines MACT on a case-by-case basis for an existing source that modifies prior to promulgation of an applicable MACT standard, the HAP becomes regulated only for a particular source subject to the case-by-case standard, pursuant to 112(g) of the federal act. Once the EPA promulgates the list of 112(r) (accidental release) pollutants, those pollutants will be considered to be "regulated" for all sources.
Revise the second paragraph under this heading to read:
Only certain modifications at the source may qualify as "minor modifications" for operating permit purposes. The change cannot constitute a "major modification" as that term is defined in Part A, Section II.B.35.B. The change cannot otherwise be a "Title I" modification. Other Title I requirements are applicable to new sources. These Title revisions include the following changes: (same).
Emission Trading Based on the Permit: Revise this paragraph to read: The federal rule allows a source to change its operations, using the emissions trading provisions of an EPA-approved SIP to net out and avoid the need to revise its permit. At this time, the emissions trading provisions of Part A, Section V, have not been approved by EPA as generic trading provisions. Therefore, until the Colorado SIP contains a generic emissions trading policy approved by EPA, each emissions trade request will require a case-by-case SIP revision. EPA is intending to provide guidance for an emissions trading program in the near future.
Revisions to Regulation Number 3 Construction Permit Program
Background
At the request of the U.S. Environmental Protection Agency, Region 8, the Air Quality Control Commission adopted amendments to Regulation Number 3, Parts A and B, in order to clarify how the provisions relate to each and the federal regulations. These changes were necessary in order to gain federal approval of the State Implementation Plan.
Specific Statutory Authority
The Specific authority for this regulation is found in the Colorado Air Quality Control Act. Section 25-7-105(1) provides that the Commission shall promulgate such rules and regulations as are consistent with the legislative declaration and necessary for the proper implementation and administration of the Colorado Pollution Prevention and Control Act, including a comprehensive state implementation plan which shall meet all requirements of the federal act and shall be revised whenever necessary or appropriate. Section 25-7-109 provides that the Commission shall adopt, promulgate and from time to time modify or repeal emission control regulations that require the use of effective practical air pollution controls. Section 24-4-103 provides the rule making procedure followed during the promulgation of this rule. Section 25-7-110 provides the specific Commission procedures followed during the setting of standards and regulations. Commission action in promulgating these regulations is taken pursuant to the statutory provisions.
Purpose
Most of the amendments to Regulation Number 3, Parts A and B are of a general housekeeping nature. However, three provisions require greater explanation:
The Division originally proposed adding a definition of "construction" consistent with the federal definition for New Source Review and Prevention of Significant Deterioration. To eliminate the potential for confusion and conflict with the state statutory definition, the Division has removed that provision from the amendments. There is a definition for construction, which applies to Regulation Number 3, Parts A and B, in the General Provisions Regulations; that definition matches the state statutory definition.
The changes to the definition of "Net Emissions Increase" in Part A, Section I.B.37 needs some explanation. In order for an increase or decrease to be creditable, the Division could not have relied on the increase or decrease in issuing a permit under Regulation Number 3. Also, the source has two choices for proving the extent of the emissions increase or decrease:
The general constructions permit provisions of Part B, Section IV.J. were amended to provide greater detail of how the Division would actually implement the provisions. The Division retains the discretion to determine whether it will issue a general construction permit, although a source or group of sources can request that the Division do so. These provisions are meant only for minor sources, including sources wishing to obtain federally enforceable limits on their potential to emit, making them synthetic minors. The contents of a general construction permit will vary depending on the type of source involved.
The Division will state in the general construction permit that goes out for public notice all the criteria a source must meet in order to qualify for coverage under the permit, the method of application (including specific application forms if different from a standard construction permit), the deadline for application, and other requirements as necessary and specified in the permit (i.e. monitoring, reporting, and recordkeeping requirements). After receiving an application to be covered by a general construction permit, the Division will determine whether the source fits within the intended coverage of the general construction permit, meets all applicable requirements, and satisfies all the criteria as laid out in the general construction permit. If the Division grants a source the right to construct and operate under a general construction permit, there are still some situations under which the Division may require the source to obtain an individual construction permit (i.e., the source makes changes that bring it out of compliance with the general construction permit or circumstances change such that the source is no longer appropriately controlled under the general construction permit).
Overall, the amendments to Regulation Number 3, Parts A and B are meant to integrate with the existing rules and meet the federal requirements for the State Implementation Plan.
Revisions to Regulation Numbers 8 and 3 Synthetic Minor Permit Program
This Statement of Basis, Specific Statutory Authority, and Purpose comply with the requirements of the Administrative Procedures Act, Section 24-4-103(4), C.R.S. (1994) for adopted or modified regulations.
Background
At the request of the Division, the regulated community and the state legislature (HB94-1264), the Air Quality Control Commission adopted rules that would allow the Division to issue permits to limit a source's potential to emit hazardous air pollutants (HAP). Such a mechanism is necessary and important because it enables the Division to issue a permit to a source of HAP in order to limit the source's potential to emit below emission thresholds requested by the applicant, thus allowing the source to avoid a variety of requirements such as Title V operating permit requirements, Title III maximum achievable control technology (MACT) requirements promulgated by the U.S. Environmental Protection Agency (EPA), or Colorado MACT requirements.
Specific Statutory Authority
The specific authority for these revisions is contained in the Colorado Air Quality Control Act, 25-7-101, et seq. (1989 & 1994 Supp.). Section 25-7-109.3(2) provides the specific authority for the Commission to adopt provisions allowing the Division to create synthetic minor sources of hazardous air pollutants. Section 25-7-109 provides that the Commission shall adopt emission control regulations requiring the use of effective practical air pollution controls. Section 25-7-109.3(2) provides that in order to minimize additional regulatory and compliance costs to the state's economy, any program created by the Commission shall contain a provision, which exempts those sources or categories of sources, which it determines to be of minor significance from the requirements of the program. Section 24-4-103 provides the rule making procedure followed during the promulgation of this rule. Section 25-7-110 provides the specific Commission procedures followed during the setting of standards and regulations. Commission action in promulgating these regulations is taken pursuant to the statutory provisions.
Purpose
The rulemaking includes the permanent addition of Regulation Number 8, Part E, Section IV and amendments to Regulation Number 3, Part B. Following is a description of the purpose of each Section within Regulation Number 8, Part E, Section IV:
Section A of the rule clarifies that Regulation Number 8, Part E, Section IV applies to sources that choose to voluntarily limit their potential to emit HAP. This Section clarifies that although the Division shall issue permits to qualified applicants, the Division will not include in the permit any indication of the source's exemption status for other requirements (i.e. Title V or Title III of the federal Act) unless the source asks the Division to include all relevant emissions units and pollutants in the permit review. Under this regulation, the applicant chooses which emission units to cover in the particular permit: that can be all HAP emission points, some or one HAP emission points, all criteria pollutant emission points, and/or some or one criteria pollutant emission points. Unless there is a need for a state-only or federally enforceable permit condition, the Division will not impose any additional applicable requirements on criteria pollutants or HAPs for the emission unit or a number of emission units. If the permit applicant wants a thorough review of the facility and a determination by the Division that the facility qualifies as a synthetic minor from Title V and/or Title III, or other specific provisions of the state or federal Act, then the applicant can choose to have a comprehensive Division review in the permit. Sources choose in the permit application the threshold level below which they want to limit the potential to emit hazardous or criteria pollutants. Sources may want to bring their emissions below Title V major source thresholds or may want to limit their emissions below affected source thresholds under specific MACT standards or enhanced monitoring thresholds when those rules are eventually enacted. When a source applies for a permit under Regulation Number 8, the Division uses the procedural provisions of Regulation Number 3 to issue the permit. Finally, this Section clarifies that receiving a permit under this regulation will not relieve a source from possible future EPA requirements that apply to minor or area sources of HAP or state conditions; however, such sources may request a permit to further limit the potential to emit HAP below the trigger threshold.
Section B describes the elements of a permit issued under this regulation. The permit needs to include practically enforceable permit conditions. The Division makes the final determination on what those conditions are on a case-by-case basis for each permit. The monitoring, recordkeeping, and reporting requirements will depend on the specific source, for instance, practical enforceability may require calculating mass balances, installing a continuous emission monitor, keeping track of consumption rates for various materials, etc. However, the permit conditions to limit a source's potential to emit shall be only as stringent as necessary to limit the source's potential to emit the pollutant of concern. For instance, the Division cannot require a source to add control equipment to reduce emissions significantly if the source can adequately reduce emissions without that control equipment. The applicant may consolidate reporting or monitoring requirements from this regulation and Regulation Number 3 for the emissions unit. Finally, if requested by the applicant, the permit may include alternative operating scenarios, approved by the Division. Such alternative operating scenarios shall include specific monitoring, recordkeeping, and reporting methods as needed. However, Section IV.B.4 for alternative operating scenarios is not intended to include modifications that trigger new source review unless such sources go through all the specific requirements of the construction permit program for modifications under new source review.
Section C tells the source what information to turn in to the Division, increasing the efficiency of communications between the source and the Division and streamlining the application process. The application forms will reflect the intent for the Division to be flexible in its approach to permitting these sources. Although the Division would prefer a consistent approach (i.e., all applications filled out fully), the Division recognizes that often these sources will have unique circumstances that cannot be adequately addressed in a standard application form. The Division further intends that the application forms be flexible enough so that sources can choose to have the Division calculate emissions and determine the permit conditions for them.
Section D, the public participation requirements, is a requirement of EPA. This Section makes mandatory what was previously discretionary for the Division.
Section E clarifies that the Division can combine the requirements from this Regulation with those for limiting the potential to emit criteria pollutants under Regulation Number 3 into a single permit so that it is easier for both the Division and the source to keep track of the overall permit requirements. Also, this Section IV of Regulation Number 8 is not intended to restrict the ability of a source to apply for and the Division to issue a construction permit under Regulation Number 3 with limits on the potential to emit criteria or hazardous air pollutants.
Section F explains to the source that if a physical or operational change triggers another requirement, the permit issued under this Section will not relieve the source of the obligation to comply with that requirement.
Section G informs the source that is must comply with the permit conditions at all times, i.e. on an ongoing basis.
Section H serves as an interim mechanism for gaining federal enforceability of the permit and is based on EPA guidance on potential to emit; this Section does not apply once EPA has approved these rules for limiting the potential to emit HAP. In order for a permit to be federally enforceable, EPA must receive a certification of compliance from the source indicating the source will comply with the permit terms. The source should send a copy of the initial permit approval with the certification of compliance to EPA and a copy of the certification to the Division (to keep in the permit file). The responsible official, defined in Regulation Number 3, needs to sign the certification.
The revisions to Regulation Number 3 are necessary to implement the provisions of Regulation Number 8, Part E, Section IV through the construction permit program. Note, that the operating permit program already has the necessary provisions to integrate Regulation Number 8, Part E, Section IV. The amendment to Section III.A.4 is not intended to extend any new rights to the applicant in the event the applicant declines permit conditions set by the Division, this amendment just makes explicit that the permit is strictly voluntary and that a dissatisfied applicant has normal rights of appeal associated with construction permits issued under Regulation Number 3. The addition of Section III.A.7 is to clarify that if a source wants to request a limit on the potential to emit in a standard construction permit, the source may do so. This Section also gives the Division the authority to limit the potential to emit HAP in a construction permit. The amendments to Section IV.C implement the public participation requirements of Regulation Number 8, Part E, Section IV. The requirement that the Division submit a copy of the public notice to EPA for sources applying for a permit to limit the potential to emit criteria pollutants or federal HAP is meant to include criteria pollutants (already required under an agreement between the Division and EPA) and federal HAP listed in Appendix A of Regulation Number 8 (these are the HAP listed by EPA under Section 112(b) of the federal Act). Permits for sources limiting the potential to emit Colorado HAP do not need to be sent to EPA for comment.
Overall, these rules are intended to meld with the existing permit provisions within Regulation Number 3 while providing the added authority for the Division to issue permits to limit the potential to emit hazardous air pollutants and the opportunity for Colorado sources to get out of more rigorous permit requirements.
Revisions to Regulation Number 3 Part A, Section II.E.2 (As requested by Metro Wastewater Reclamation District)
This Statement of Basis, Specific Statutory Authority and Purpose for revisions to Regulation Number 3 complies with the requirements of the Administrative Procedures Act, C.R.S. ' 24-4-103(4) for adopted or modified regulations.
Basis
The 1990 Clean Air Act Amendments required states to inventory air emissions. C.R.S. ' 25-7-114.1 contains the requirements for this inventory. The Amendments also authorized EPA to conduct emissions studies for certain source categories, included publicly owned treatment works (POTWs). No adequate, reliable, and economically reasonable emissions estimations methods are currently widely available for these emissions.
Based on the expectation that publication of these studies would result in the creation and dissemination of practical emission estimation techniques, revisions to Regulation Number 3 were promulgated in March of 1994 which postponed reporting of non-criteria reportable pollutants for these sources until July 31, 1995, or until six months after the completion of the national studies, whichever occurred first. The postponement also applied to facilities, which treat municipal-type wastewater, since such facilities' emissions are virtually identical to those from POTWs.
EPA has eliminated funding for the federal POTW study. However, the Association of Metropolitan Sewerage Agencies (AMSA) has been assisting EPA in preparing its guidance document, and AMSA has also been preparing its own guidance. These documents are expected to be useful in estimating POTW air emissions. A final draft of AMSA's report is expected to be issued in the summer of 1995. EPA is also expected to issue its finding of presumptive MACT for POTWs for purposes of the Clean Air Act '' 112(j) and (g) at about this time.
Authority
The specific authority for this regulatory amendment is contained in C.R.S. ' 25-7-106(1), which authorizes the Air Quality Control Commission to promulgate such regulations as are necessary or desirable to carry out an effective air quality control program, and ' 25-7-114.1, which authorizes the Commission to promulgate the APEN inventory program.
Purpose
In order to give POTWs and facilities that treat municipal-type wastewater sufficient time to prepare reliable APENs, the Commission has extended the postponement of reporting for non-criteria reportable pollutants for these sources until December 31, 1995. The Commission finds that extending the APEN reporting deadline is in the public interest because the information to be published by EPA and AMSA will not become available to these sources in time to allow for sufficiently reliable APEN reporting.
Revisions to Regulation Number 3 to Change TSP to PM-10 for PSD Increments and Housekeeping
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Administrative Procedure Act, C.R.S. 1973, Section 24-4-103(4) for adopted or modified regulations.
Basis
On June 3, 1993 the U. S. EPA promulgated changes to the Prevention of Significant Deterioration (PSD) rules replacing the Total Suspended Particulate (TSP) increment with particles with an aerodynamic diameter of less than or equal to a nominal 10 micrometers (PM-10) increments. TSP continues to have a significance level for new sources but no longer influences the PSD increments.
Additionally, the Division has identified several mistakes in the publishing of Regulation Number 3.
Specific Authority
The specific authority for this regulation is contained in the Colorado Air Pollution Prevention and Control Act, 1992 as amended. Section 25-7-105 (1) (a) (I) requires the Commission to promulgate a comprehensive state implementation plan that meets all requirements of the federal Clean Air Act. Section 25-7-105(1) (c) requires the Commission to promulgate a prevention of significant deterioration program.
Purpose
The Regulation Number 3 PSD rules implement the Federal PSD rules in Colorado. Under the PSD program areas that are in compliance with the National Ambient Air Quality Standards (NAAQS) are required to adopt a permit program for the preconstruction review of new stationary sources and modifications of existing stationary sources to prevent significant deterioration of existing air quality levels. The implementation of the new PM-10 increments will utilize the existing baseline dates and baseline areas for PM. The PM increments measured, and PM-10 already consumed since the original baseline dates established for TSP will continue to be accounted for, but all future calculations of the amount of increments consumed will be based on PM-10 emissions.
The Division is also proposing some minor housekeeping while revising this regulation. There were several Sections where the language published in the Colorado Register was either repeated or the changed paragraph and the original paragraph were both printed. There was also an outside request that submitted an outdated version of the regulation that was inadvertently published.
Part A, Sections I.B.37 & 67; Part B, Section IV.D.4
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Colorado Administrative Procedures Act, Section 24-4-103, C.R.S. and the Colorado Air Pollution Prevention and Control Act, Section 25-7-110.5, C.R.S.
Basis
Regulations 3, 7 and the Common Provisions establish lists of Negligibly Reactive Volatile Organic Compounds (NRVOCs). The revisions adopted consolidate the list of NRVOCs into the Common Provisions, assuring that the same list of NRVOCs apply to all the Colorado Regulations. This provides more consistency in those chemicals regulated as VOCs.
Specific Statutory Authority
The Colorado Air Pollution Prevention and Control Act provides the authority for the Colorado Air Quality Control Commission to adopt and modify Regulations pertaining to organic solvents and photochemical substances. Section 25-7-109(2)(f) and 25-7-109(2)(g), C.R.S., grant the Commission the authority to promulgate regulations pertaining to Organic solvents and photochemical substances. The Commission's action is taken pursuant to authority granted and procedures set forth in Sections 25-7-105, 25-7-109, and 25-7-110, C.R.S.
Purpose
Of the EPA list of non-photochemically VOCs), and adopting the EPA definition by reference, a single list of negligibly reactive VOCs will apply uniformly to all These revisions to Regulations Number 3, 7, and the Common Provisions are intended to clarify substances that are negligibly reactive VOCs, which are reflected in the EPA list of non-photochemically reactive VOCs. By consolidating the list (which consists Colorado Air Quality Control Commission Regulations.
This revision will also include EPA's recent addition of acetone to the negligibly reactive VOC list. The addition of acetone to the list of negligibly reactive VOC's provides additional flexibility to sources looking for an alternative to more photochemically reactive VOCs. Because the EPA has added acetone to their list of non-photochemically reactive VOCs many industries, which make and supply products to Colorado industries, are planning to substitute acetone for more reactive VOCs. This change in the content of products purchased by industry for use in Colorado would adversely affect industries in Colorado if acetone remains a regulated VOC in Colorado. By adopting acetone as a negligibly reactive VOC, industries will be able to take advantage of and benefit from this possible shift in product contents.
Revision to Part A, Section II.E.1 APEN Deferral for Utility and Non-Utility Boilers
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Administrative Procedures Act, CRS 1793, Section 24-4-103(4) for adopted or modified regulations.
Basis
The current provisions of Regulation Number 3, Part A, Section II.E.1., were designed to postpone reporting of non-criteria reportable pollutants by sources such as utility and non-utility industrial boilers and small municipal generators pending the results of ongoing studies being conducted by EPA pursuant to Section 112(n) of the federal Clean Air Act. EPA was directed by Congress to complete those studies within three years after enactment of the federal act, i.e., by November 15, 1993; however, EPA has yet to do so.
During the Commission's last deliberations on this subject, it was stated that if EPA could not meet its deadline, then the Commission would revisit this deadline. Both the Commission and the regulated community were hopeful that EPA would be able to finish its work by the fall of 1995 so sufficient time was available for utilities to meet the December 31, 1995 deadline.
Specific Authority
Section 25-7-114.1 provides authority to the Commission to identify APEN reporting requirements. There currently are no federal reporting requirements concerning emissions of non-criteria reportable pollutants (NCRPs) or hazardous air pollutants (HAPs) from boilers. The current state regulations exceed federal regulatory requirements with respect to APEN reporting of emissions.
Purpose
A short postponement of the original deadline serves a significant dual purpose and both the state and the regulated community benefit from a deferral in this instance. The postponement avoids forcing an uneconomic and non-beneficial compliance requirement at this time on the regulated community. Since there are no compliance obligations respecting HAP emissions from boilers, either in effect or proposed, EPA and Division interpretations provide that an applicant for a Title V operating permit need only list - not estimate quantities of emission of - an application for an operating permit. This revision is administrative in nature, and is not intended to affect air emissions.
Revisions to Parts A, B & C for Insignificant Activities (Parties: Air Pollution Control Division, Colorado Association of Commerce & Industry and the Colorado Utilities Coalition for Clean Air Division - Part A, Section I.B.9.a.; Part A, Sections II.D.1.kk., II.D.4.a, II.D.4.b.(iii) & II.D.4.b.(vi); Part C, II.E.3.kk.
Basis
The Division reviews the addition of any requested insignificant activities to Regulation Number 3 once each year. The additions requested included small remote reservoir degreasers and torch cutting activities. Both of these items were reviewed by EPA Region VIII prior to the hearing date and given verbal approval.
The degreaser exemption provides that degreasers not using any chemicals covered by a Maximum Achievable Control Technology (MACT) standard and meeting the definition of small remote reservoir are not required to submit an APEN to the Division. The torch cutting exemption clarifies the status of torch cutting as an exempt activity.
Authority
The specific authority for this regulatory amendment is contained in § 25-7-114.1(2), C.R.S., which requires the Commission to exempt those sources or categories of sources, which it determines to be of minor significance from the requirement than an air pollutant emission notice is filed. Section 25-7-114.6(1), C.R.S., requires that the Commission designate those classes of minor or insignificant sources of air pollution which are exempt from the requirement for an emission notice or the payment of an emission notice filing fee because of their negligible impact upon air quality.
Purpose
This rule change provides some clarification and additions to the APEN exemption list for those sources that the Division believes to be of minor significance.
Colorado Association of Commerce and Industry - Part A, Section II.D.1.ttt; Part C, Section II.E.3.nnn.
Basis
The Division reviews the addition of any requested insignificant activities to Regulation Number 3 once each year. The Colorado Association of Commerce and Industry (CACI) requested the addition of emergency power generators with limitations based on the size or hours of operation. The revisions rely on EPA guidance regarding emergency power generators.
Authority
The specific authority for this regulatory amendment is contained in C.R.S § 25-7-114.1(2), which requires the Commission to exempt those sources or categories of sources, which it determines to be of minor significance from the requirement that an air pollutant emission notice be filed. C.R.S. § 25-7-114.6(1) requires that the Commission designate those classes of minor or insignificant sources of air pollution that are exempt from the requirement for an emission notice or the payment of an emission notice filing fee because of their negligible impact on air quality.
Purpose
This rule change provides an addition to the APEN exemption list and clarification of the insignificant activities list for emergency power generators that are of minor significance base on size and/or hours of operation.
Colorado Utilities Coalition for Clean Air - Part A, Section II.D.1.aaa.(i), (ii); sss.(1).iv to vii; uuu; vvv; www; xxx; yyy; zzz; aaaa.(i), (ii); Part C, II.E.3.aaa.(i), (ii), xxx.(1).iv to vii; yyy; zzz; aaaa; bbbb; cccc; dddd; eeee.
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Administrative Procedure Act, C.R.S. 1973, Section 24-4-103(4) for adopted or modified regulations.
Basis
The current provisions of Regulation Number 3., Part A and Part C both contain lists of activities and sources considered to be "insignificant" or exempt from reporting requirements. On December 29, 1995, the Commission proposed revisions to its existing Regulation Number 3, Parts A and C. Alternative proposals were submitted by members of the public, and after consultation, were endorsed by the Division.
Specific Authority
Section 25-7-114.1 provides authority to the Commission to identify APEN reporting requirements. Further, the rulemaking authority of the Commission is found in Sections 25-7-105 to 109 CRS, as amended. The regulations of the Commission currently contain lists of activities and sources exempt from APEN and reporting requirements. On July 10, 1995, the U.S. EPA issued a White Paper designed to streamline and simplify the development of Part 70, Title V permit applications. The White Paper explains that Part 70 provides permitting authorities considerable flexibility in defining certain activities or sources as "insignificant" upon proper showing of such. The White Paper itself contains substantial lists of activities or sources that are insignificant for reporting purposes.
Purpose
The addition of the following sources or activities to existing APEN exemption and reporting requirements serves a significant dual purpose and both the state and regulated community benefit from the alternate proposals. The revision of existing regulation avoids forcing an uneconomic and non-beneficial compliance requirement on the regulated community. Several of the following activities or sources are on federal lists as "insignificant," as well as those of neighboring states. These revisions are administrative in nature, and are not intended to affect air emissions.
Non-road Internal Combustion Engines:
Machinery utilized by the construction and service industries such as various types of pumps, light plants, compressors, and generators are powered by various sizes of internal combustion engines. Most are relatively small. Some emergency equipment such as fire pumps are powered by larger engines, but are operated infrequently. The exemptions listed identify those within this category that have insignificant emissions. This exemption is consistent with other exemptions in the regulation (see, for example, Subsections k. and l.). As a practical matter, APENS have not been required from most of these machines in the past. The sizes of most of these engines are comparable to the thousands of light and heavy trucks (gasoline and diesel powered), which travel the roads in this state without any reporting requirements.
The EPA proposal of May 17, 1990 (58 Fed. Reg. 28809) and the EPA study it references contains useful findings. It exempts all spark-ignition (gasoline, propane and natural gas powered) engines. On page 28816 of the Federal Register notice, EPA finds that it did not propose manufacturing standards for spark-ignition engines because little to no emission benefit would be achieved for testing, record keeping and reporting requirements on these engines. Cost burdens industry would have to bear would not be reasonable. It also found that test procedures have not been demonstrated to be capable of accurately predicting the levels of hydrocarbons, carbon monoxide and particulate matter emissions generated by these engines in actual use. In addition, the economics and failure problems associated with gasoline-powered engines dictate that relatively small sizes of gasoline engines are used for the light commercial equipment. As a result, all spark-ignition engines should be exempt from APEN reporting and classified as an insignificant activity.
The EPA study found that it could also exempt engines located on a trailer or truck bed. These engines are relatively small (dictated by trailer size and carrying capacity limitations) and power light commercial equipment, such as welders, compressors and generators, see page 28815 of the Federal Register notice.
Larger machines are typically powered by diesel engines of varying sizes. A review of emission factor data from AP-42 supports a Division of diesel-powered engines into three categories for APEN exemption purposes. Using emission factors from AP-42, expected emissions from a 175 horsepower diesel engine operating 24 hours per day, 7 days per week, 52 weeks per year at a load factor of 0.5 would present a "worst case" estimate under the 8760 hours per year "potential to emit" methodology. The following emissions are calculated:
0.5 ton per year of carbon monoxide
0.2 ton per year of hydrocarbons
0.2 ton per year of particular matter
2.5 ton per year of nitrogen oxides
0.2 ton per year of sulfur oxides
A 300 horsepower engine could operate up to 3 hours per day, or 1095 hours per year, and have the same emissions as the 176 horsepower engines. Similarly, an engine up to 750 horsepower could operate 1 hour per day, or 365 hours per year and have the same emissions as the 175 horsepower engine class.
This approach is consistent with the approach taken by the EPA in its Guidance Document for "Calculating Potential to Emit for Emergency Generators," issued September 6, 1995. There, the EPA agreed that the use of 8,760 hours per year for calculating the potential to emit for emergency generators did not control. Instead, EPA recommended that the potential to emit be based upon an estimate of the maximum amount of hours the generators could operate based on a case-by-case basis where justified by the source owner or permitting authority. Surface water storage impoundment of non-potable water and storm water evaporation ponds: Chemical analysis and observation of these sources has consistently demonstrated that they are a negligible emission source of any regulated air pollutant.
Non-potable water pipeline vents:
Proper flow through of non-potable water maintains these sources as insignificant. Proper flow keeps the water in line from becoming septic and therefore a negligible source of any regulated air pollutant.
Safety release valve vents enable immediate reduction of pressure in steam lines. Emissions out of the safety valves consist only of pure water vapor.
These are negligible sources of emission of any regulated air pollutant.
Atmospheric vents exist in coal-fired utility turbine lube oil systems enable removal of water vapor from lube oil return lines from the turbine and generator bearings. This enables atmospheric pressure operation of lube oil storage tanks. These are not storage systems, but actual service operations. Calculations reveal that these activities would emit less than one ton of VOC's a year, per facility.
To enable the safe delivery of fuel gas to the utility boilers, and provide the ability to safely purge natural gas from fuel lines within a generation building, vent lines exist to allow the intermittent discharge of natural gas to safe areas away from personnel and ignition sources.
The intermittent discharge of natural gas would occur during start-up and shutdown of the natural gas supply to generating unit burners to purge air or natural gas from the piping system within the generation building. These activities are not expected to emit more than one ton of VOC's or more than 110 pounds of hexane a year.
Sulfuric acid storage tanks not to exceed 10,500 gallons capacity and sodium hydroxide tanks:
Sulfuric acid and sodium hydroxide, used to control pH, are stored in tank systems vented to the atmosphere. These vents will exhaust vapor from a tank system through vapor extraction and contraction because of changes in temperature and barometric pressure. These losses, which are referred to as breathing losses, occur without any significant change in liquid level in the tank, and are negligible.
Waste lubricating oil storage tanks not larger than 40,000 gallons and lubricating oil-conditioning systems:
Low volatility waste turbine and motor lube oil generated by utility plant machinery and mobile heavy equipment is stored in tanks. These tanks are equipped with atmospheric vents on the tops of the tanks. Emissions through these vents are expected to occur during the filling and emptying of the tanks. These emissions contain trace amounts of VOC's, with no other reportable emissions expected. Based on the low annual throughput of these tanks, emissions are insignificant, assuming that the tanks are emptied approximately five times per year or less.
Colorado Utilities Coalition for Clean Air - Part A, Section II.E.1
This Statement of Basis, Specific Statutory Authority and Purpose complies 24-4- with the requirements of the Administrative Procedure Act, C.R.S. 1973, Section 103(4) for adopted or modified regulations.
Basis
The current provisions of Regulation Number 3, Part A, Section II.E.1, were designed to postpone reporting of non-criteria reportable pollutants by sources such as utility and non-utility industrial boilers and small municipal generators pending the results of ongoing studies being conducted by EPA pursuant to Section 112(n) of the federal Clean Air Act. EPA was directed by Congress to complete those studies within three years after enactment of the federal act, i.e., by November 15, 1993; however, EPA has yet to do so.
Both the Commission and the regulated community were hopeful that EPA would be able to finish its work by the fall of 1995 so sufficient time was available for utilities to meet the original December 31, 1995 deadline. The EPA did not meet that deadline, and the Commission granted a deferral until June 30, 1996. The EPA study is now the subject of further delay due to one of the individual constituent hazardous air pollutant studies and the extensive federal government furloughs in both late 1995 and early 1996 that substantially contributed to further delay the study's progress.
Specific Authority
Section 25-7-114.1 provides authority to the Commission to identify APEN reporting requirements. There currently are no federal reporting requirements concerning emissions of non-criteria reportable pollutants (NCRPs) or hazardous air pollutants (HAPs) from boilers. The current state regulations exceed federal regulatory requirements with respect to APEN reporting of emissions.
Purpose
A short postponement of the amended deadline serves a significant dual purpose and both the state and the regulated community benefit from a deferral in this instance. The postponement avoids forcing an uneconomic and non-beneficial compliance requirement at this time on the regulated community. Since there are no compliance obligations respecting HAP emissions from boilers, either in effect or proposed, EPA and Division interpretations provide that an applicant for a Title V operating permit need only list - not estimate quantities of emissions of - HAPs reasonable believed to be contained in the boiler emissions in an application for an operating permit. This revision is administrative in nature, and is not intended to affect air emissions.
Revisions to Part B, Section III.D.1.f, Section IV.C.1.e, Section IV.C.1.f, and Section IV.C.
The changes to Regulation Number 3 were adopted in order to make it clear that the redesignation of the Denver metropolitan area as an attainment maintenance area for ozone does not change the requirement for gasoline stations in the Denver metropolitan area are to obtain a construction permit.
Section III.D.1.f appears to imply that, upon such redesignation, gasoline stations in the Denver area would not be required to obtain a permit because that area would become an attainment area. However, Section III.D.5 goes on to provide that such exemptions do not apply because gasoline stations are subject to the RACT requirements of Regulation Number 7, Section VI.B.3.b. The purpose of the revisions is simply to make it clear from the text of Regulation Number 3, Part B, Section III.D.1.f alone that gasoline stations in the Denver area are still required to obtain a construction permit. The revisions to Sections IV.C.1 and IV.C.4 were necessary to ensure that permits for de minimis exemptions from, and alternative means of compliance with, the requirements of Regulation Number 7 are subject to review and comment by the public and by EPA. Such comment and review is necessary because the Sections I.A. and II.D of Regulation Number 7 provide the agency with the authority to revise the requirements that apply to a source without revising the SIP. The SIP requirements were developed and adopted following review and comment by EPA and the public. It follows that any change in those requirements with respect to any source or category of sources should also be subject to such public comment and review. The specific statutory authority to amend this regulation pertaining to exemptions from permit requirements is set out at § 25-7-114.2. Further statutory authority can be found in the Commission's authority to redesignate the area because such redesignation must include an approvable maintenance plan. The specific statutory authority to promulgate the rules necessary for redesignation is set out in § § 25-7-105(1)(a)(I) and (2); -106(1)(a); -107 (1) and (2.5); and -301.
This revision to Regulation Number 3 is not intended to reduce air pollution and will have no regulatory effect on any person, facility or activity.
For clarification, the Commission adopted these regulation revisions as follows:
Regulation Revision | Ozone SIP and Maintenance Plan |
Part B, Section III.D.1.f | Exists in Appendix C of the Ozone Maintenance Plan to become a part of that document approved March 21, 1996 |
Part B, Section IV.C.1.e and f; Section IV.C.4 | Adopted as subsequent regulation revisions to be submitted to the Governor and EPA Separately and concurrently as a revision to the SIP (and Maintenance Plan). |
Revisions to Part A, Section V.C.1.f (Fees Correction)
Basis
This revision corrects an erroneous regulation change requested by the Division in response to an EPA letter of September 19, 1994, which provided comments on the revisions to Regulation Number 3 for the operating permit program. The comment made by EPA was for clarification, not a requirement that the State should not charge for fugitive emissions. The change requested by the Division in 1995 included the term fugitive emissions in the paragraph of exclusions from the definition of regulated pollutant. Because of this change, the Division's authority under the statute to charge annual fees for fugitive emissions became confused which affected the Division's ability to cover its operating costs through fees. The regulation text also no longer conformed to Section 25-7-114.7, as revised in the 1996 legislative session.
Authority
Section 25-7-114.6.(3), C.R.S., requires that the revenues from fees collected by the Division approximate the annual appropriations to the Division to carry out its duties with respect to stationary sources. Section 25-7-114.7, C.R.S., requires imposition of an annual emission fee on stationary sources, and defines what is a regulated pollutant for purposes of these fees.
Purpose
These changes address an erroneous March 1995 revision made with respect to the charging of fees for fugitive emissions. The revision specifically exempted fugitive emissions and would significantly reduce the Division's ability to collect fees sufficient to cover duties with respect to stationary sources. In 1992 the General Assembly prohibited imposition of annual fees for fugitive dust or fugitive emissions as those terms were defined at the time in "Commission rule I.B.1 of regulation number 3, 5 CCR 1001-5." That rule defined only fugitive dust and the March 1995 regulatory revision inadvertently addressed fees on fugitive emissions as well. This rule conforms the regulation to statute, and eliminates any ambiguity between the two. Moreover, during the 1996 legislative session, the legislature in HB1271 amended Section 25-7-114.7(1) to clarify the authority of the Commission to assess fees for fugitive emissions. The Commission intends that all forms of "fugitive dust," regardless of whether the dust is of a size or substance to adversely affect public health or welfare, is excluded from the definition of "regulated pollutant", for purposes of annual fees.
The Commission determines that these revisions are administrative in nature and are not intended to reduce air pollution.
Revisions to Part A, Section I.B.9, 59, Section V.C.12; Part B, Section III.D.2; Part C, Section II.A.1.b, Section VI.A, E, H.3 and Section XII.A.1;Appendices B, C and D for Hydrogen Sulfide
Background
The Division requests that the Commission adopt changes to Parts A and C and the Appendices within Regulation Number 3 to better reflect current EPA implementation of the Title V operating permit program. These changes include:
The current notation under Regulation Number 3, Part C Section II.A, General Considerations, lists all major sources as being required to obtain Operating Permits. The EPA has issued a written guidance document indicating that the definition of regulated air pollutant for purposes of Title V applies only to emissions of PM-10, and not TSP. The current requirements reflected in Part C, Section II.A.1.b does not reflect the federal program requirements.
Currently, H2S is reflected as a Hazardous Air Pollutant in Appendices B, C, and D. The EPA stated that the inclusion of H2S on the federal list was a typographical error and removed the pollutant from the federal list. As a result of the reference to H2S as a hazardous air pollutant in the Appendices, sources emitting H2S have been charged annual fees for HAPs and sources major for H2S emissions could be required to get an Operating Permit.
The current definition of applicable requirement in Part A, Section I.B.9.a does not provide authority for EPA-issued PSD permits to be incorporated into Operating Permits. The definition of "applicable requirement" in Part 70 of the federal program includes permits issued by EPA. The State needs this regulatory change to make the rules consistent with the federal law. Currently, regulated entities subject to these requirements can obtain a permit from EPA or can voluntarily have the requirement placed in their Title V permits, but this situation does not support the intent behind the Title V program.
Specific Authority
The specific authority for changes to this regulation is found in the Colorado Pollution Prevention and Control Act. Section 25-7-105(12) provides authority to promulgate regulations, which are necessary to implement the minimum elements of Title V. Section 25-7-103 (1.5) allows the Commission to define air pollutant consistent with the federal act. Section 25-7-114.4(1)(l) and Section 25-7-114.4(3)(a) provide authority for promulgating regulations for the effective administration of construction and operating permits, and complying with all applicable requirements for operating permits. Section 25-7-114.5 provides authority for evaluating permit applications to determine whether operation and emissions comply with all applicable emission control regulations. Relevant federal law includes 42 U.S.C. Section 7661a(b)(5)(A), and 40 C.F.R. Sections 70.1(b), 70.3, and 70.6(a)(1) regarding applicable requirements. Commission action in making changes to Regulation Number 3 is taken pursuant to the statutory provisions.
Purpose
The amendments adopted by the Commission add language in Regulation Number 3, Part C, Section II.A.1.b indicating that a source that is major only for TSP is not required to receive an Operating Permit. This amendment ensures conformity with the federal law.
The amendments delete the reference to Hazardous Air Pollutant noted next to hydrogen sulfide in Appendices B, C, and D. This ensures consistency with the Federal delisting and eliminates the potential confusion for sources that will be major only based on emissions of hydrogen sulfide as a Hazardous Air Pollutant to obtain an Operating Permit. The amendments expand the definition of applicable requirement in Part A to include those permits issued by EPA under Part C and Part D of the federal act. This ensures conformity with the federal law.
The amendments correct a few typographical errors that existed in Regulation Number 3, Parts A, B, and C.
Finally, the amendment to Part C, Section II.A.1.b, regarding TSP, is administrative in nature and is intended to reflect current EPA policy; it is not intended to reduce air pollution. The amendment to Part A, Section I.B.9.a, regarding the definition of applicable requirement, is administrative in nature and reflects the requirements of Part 70. This action regarding the definition of applicable requirement maximizes air quality benefits in the most cost effective manner by enabling sources to incorporate federally issued PSD permit into their Operating Permit. Thereby, these sources will only be reporting to one enforcement authority. These revisions applicable to Part C, are not to be submitted as part of the State Implementation Plan.
Revisions to Generic Part A, Section V, (with Regulation Number 5, Emissions Trading and Banking
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Colorado Administrative Procedures Act, Section 24-4-103, C.R.S. and the Colorado Air Pollution Prevention and Control Act, Sections 25-7-110, 25-7-110.5 and 25-7-110.8, C.R.S.
Basis
The Division has worked with the emissions trading and banking subcommittee to develop Regulation Number 5 and revisions to Regulation Number 3 for the purpose of implementing an EPA-approvable emissions trading program.
The subcommittee has developed a trading rule combining elements from the existing EPA guidance and the prior Commission rule. The subcommittee spent a great deal of time discussing the issues around the possible uses for credits, how credits could be certified, and how they should be traded and tracked.
Emission reduction credits are intended to be granted only for reductions beyond compliance levels that are actual, quantifiable, surplus and enforceable. This rule is not intended to impose additional control limitations on sources. The rule does impose requirements to ensure that these basic criteria are met in order to guarantee that the source flexibility afforded by this program does not occur at the expense of air quality.
This rule is a revision to the SIP done only under the Commission's general authority. Thus, the trading and banking rule will not be state enforceable until after legislative review. Section 25-7-133(2), C.R.S. Additionally, because EPA must approve this change into the SIP, the Commission finds it appropriate to delay the effective date of these revisions until EPA approval as a SIP revision. This will provide the sources that might wish to participate the assurance that the rule is approved and that the credits are useable prior to the implementation of the program. The existing trading provisions in Regulation Number 3 will remain in effect until the new trading rules are approved by EPA. These constraints on the effective date of these revisions are reflected in the rule text approved by the Commission. In addition, in order to avoid confusion about what portions of the regulations are effective until EPA approval of the SIP change, the parts of Regulation Number 3 that will be repealed are printed in italics.
State implementation plans are to include, among other things, enforceable emissions limitations and other control measures, means or techniques to meet the requirements of the Clean Air Act. These are to include economic incentives such as fees, marketable permits, and auctions of emissions rights. 42 U.S.C. 7410(a)(2)(A). These regulation revisions are being submitted as a SIP revision pursuant to the foregoing Clean Air Act requirements.
The following issues were identified by the subcommittee and noticed by the Commission for further consideration. The Commission discussed and resolved these issues in the course of this rulemaking proceeding and makes the following findings regarding these issues.
Issue: Once used, does a permanent emission reduction credit (ERC) ever expire? Some believe that an ERC once used, even if from a permanent reduction, should expire after some period (e.g., 20 years).
Conclusion: The Commission, based on the experience in the previous trading rules, decided that the permanent credits should not expire after they are put into use.
Conclusion: Because of the existence and operation of the national electrical grid system, the Commission believes that it would be far too difficult to verify that there had been a decrease in demand (a decrease in actual emissions) and not a variation in the grid structure, and therefore at this time finds it is inappropriate to allow a decrease in demand to generate ERCs.
Conclusion: The Commission agrees that there is currently insufficient scientific information available to support inter-pollutant trades in most cases. In order to ensure that the Division staff is not placed in the position of having to develop information and protocol to support an inter-pollutant trade proposal, the Commission finds that the burden of proving the acceptability of an inter-pollutant trade shall be placed on the source.
Because of concerns expressed by the EPA that the protocol for inter-pollutant trades has not yet been developed, the language of VI.B. was amended to allow proponents of such trades the opportunity to make their case to the Division and EPA for approval. This amendment attempts to address the EPA concern.
Conclusion: The Commission finds that the use of temporary credits should be restricted to the same season in which they were generated, or a season of lower concern. This will help mitigate any significant increases in seasons that may cause a violation of the NAAQS.
Issue: At this time no internal provisions exist for program development and implementation. How should the cost of the program implementation and development be addressed?
Conclusion: The Commission acknowledges that the Division will monitor the activity in the trading program and, if needed, legislative fee authority will be sought. Fees for permit changes required by this rule will be charged pursuant to Regulation Number 3. Nevertheless, the Commission acknowledges that resources are not currently available and funding may be needed for this program.
Conclusion: The Commission is concerned that use of ERCs for criteria pollutants that contain or consist of HAPs could unduly increase the risks to communities and the environment in the vicinity of the credit-using source. Assessing relative risk is difficult, time-consuming and highly fact-specific to a particular source and trade. In order to address this concern, the Commission adopted Section VI.G.8 that requires that the HAPs reduced to generate the ERC must be of equal or greater toxicity than the HAPs contained in the emissions for which the ERC will be used in lieu of satisfying an applicable requirement. Section VI.G.8 does not operate as an emissions control regulation on any HAPs, but is simply a limitation on participation in the trading program.
Conclusion: The Commission adopts provisions that require using the last twelve months' actual emission rate unless the last twelve months are not representative. The source may propose to the Division to use any consecutive twelve months in the last ten years as more representative of normal unit operations. This allows most sources to use a period, which the Commission believes is likely to be representative of normal operating conditions. Where the source can show that the period is not representative, the rule allows source flexibility in determining their pre-reduction actual emissions.
Conclusion: The Commission agreed to provide such flexibility to the Division for generators that have voluntarily adopted comprehensive and facility-wide environmental programs such as a Pollution Prevention Program or other similar voluntary "beyond-compliance" programs.
Conclusion: The Commission believes that ERCs may appropriately be used in lieu of the emissions reductions which would otherwise be achieved by application of the BACT technology requirements in situations where such technology requirements are not cost-effective or exacerbate other pollutant emissions, and the use of an ERC would achieve the same purposes more efficiently. In such instances, it will be incumbent on the source to demonstrate that such a situation exists. In any case, however, the other PSD provisions and required analyses would apply to the source. PSD requirements are performed on future allowable emission rates. Because of concerns about the use of ERCs for BACT requirements, although the Commission has allowed ERCs to be used to meet BACT requirements in limited instances, it believes that this provision should only be applied prospectively for new BACT requirements and not to allow a source to remove BACT where it has already been installed. The Commission concludes that use of ERCs in lieu of emissions reductions from LAER is not appropriate because of the potential impacts on nonattainment areas.
Conclusion: The Commission has provided for ERCs to be available to satisfy conformity requirements in accordance with the federal rules. The Transportation Conformity requirements (40 CFR Parts 51 and 93) presently allow for trades among emissions budgets where either a SIP revision or a SIP establishes mechanisms for such trades. 40 CFR § 93.124(c). The Colorado emissions trading rule is intended to be a SIP revision establishing such a "mechanism" to allow for such trades.
The Commission recognizes that, if mobile source emissions rise above the mobile source emissions budget in the state implementation plan, a plan revision may be necessary as otherwise required by state and federal law.
Conclusion: The Commission finds that methods exist to allow a source to retain the operating flexibility from a pre-reduction "buffer." When a source wants such flexibility, it may claim credits for less than the entire reduction in emissions accomplished; the difference constitutes a new "buffer." A source may use temporary credits to meet short-term operating needs.
These methods retain flexibility for the source without relying on "paper reductions." The Commission concludes that it is imperative that reductions for which credits are granted must be actual reductions. Allowing a source to retain a buffer from within the credits granted, as proposed by the Colorado Association of Commerce and Industry, would result in credits for "reductions" which did not actually occur. This result is unacceptable, particularly because sources determine their own permitted emissions levels when they file their Air Pollution Emission Notices.
For example, a source with a ninety-five ton per year permitted level that actually emits fifty tons reduces its emissions to forty tons. The source should take a new permit with a level between forty and fifty tons (e.g., forty-five tons) so that the source has a five-ton buffer. The source may then fluctuate its emissions between forty and forty-five tons without violating the permit, and generate temporary credits for any emissions reductions below forty-five tons.
In order to ensure that reductions are actual, an ERC-generating source will not be able to increase its permitted emissions in the absence of a process or control modification. The source cannot, for example, simply file an APEN with higher emissions estimates and thereby increase its permitted emissions. The effect would be to allow emissions for which credits were already granted, resulting in "paper reductions." This consequence is unacceptable.
Conclusion: The original proposed regulation did not have a modeling requirement for ERC use. The Division subsequently proposed that modeling be required prior to an ERC use unless the source requests that such modeling be waived and the source can show that the ERC use would have a "negligible" impact. The Colorado Association of Commerce and Industry expressed a concern that the Division would require costly or unnecessary modeling in most cases. This concern stems from the lack of definition of what is "negligible" in the judgment of the Division. The Commission believes that modeling should only be required where the location or circumstances of the ERC use would reasonably be expected to cause or contribute to a NAAQS violation, an increment exceedance, or violation of a SIP provision such as near a "hot spot" in a nonattainment area or where ambient conditions are within 5% of any applicable standard. The Commission, based on the explanation offered by the Division, believes that the modeling required by the rule as adopted will adequately address this issue.
Conclusion: The Commission adopts two levels of limitations on the geographic scope of trading. First, trades are limited to sources within the same nonattainment area or from a source in a nonattainment area to one in an attainment area. Second, all trades must be between sources within the same PM-10 PSD areas. These limitations are intended to avoid excessive impacts on local communities and Class I areas from long-distance trades.
In addition to the issues discussed, the Commission also considered concerns about granting ERCs for emission reductions that occurred in the past. This rule allows a source to use credits generated under the old rule and to seek credit certification for reductions, which occurred prior to adoption of this rule. However, the Commission wants to emphasize that past emission reductions, which have been used to demonstrate attainment or reasonable further progress for SIP purposes are not eligible to qualify as ERCs.
The Commission recognizes that use of ERCs in lieu of compliance with an emission limitation may raise public concerns in the vicinity of the credit-using source. For this reason, the rule anticipates that notice to the Division will be required prior to use of ERCs. Permanent ERC use must be accomplished through a permit change. Temporary ERC use may occur only after an APEN is filed with the Division. Each of these documents is available to the public. Notices of ERC use will be published on the ERC Trading Network by the Division. The provisions of Regulation Number 3 requiring and allowing public notice and comment of proposed permits and modifications will also apply to permit actions to approve use of ERCs. The Commission believes that use of the Division's discretion to seek public comment needs to be supplemented in order to provide sufficient information to the public regarding proposed uses of ERCs. Accordingly, the Commission has included a requirement that the Division notify local governments in the affected area when the trade will result in the use of ERCs, which would exceed the threshold for, or otherwise trigger, public notice and comment pursuant to Section IV.C.1 of Part B, Regulation Number 3. The Commission anticipates that local governments will be able to use this notice to schedule informational meetings for citizens, which Commission members and appropriate Division staff will be able to attend. The Commission also emphasizes that the Division should exercise appropriate discretion to provide public notice and comment for trades that involve HAPs, which would be implemented by notifying the local government pursuant to the process described.
The Commission elected to preclude trading of elemental lead because of that pollutant's particular characteristics and modified the definition of criteria pollutant for the purposes of this regulation.
The Commission included Section IV.A.1.d. in this regulation to ensure that ERCs are granted only for real overall reductions in emissions. This provision ensures that reductions will be creditable only if the emissions are not replaced in the airshed by another generator in a business of like kind. In order to assure that this program does not grant credit for "paper" reductions, the rule prohibits generating ERCs where this business shift will replace emissions within the same airshed. This determination will be made on a case-by-case, fact-specific basis.
Specific Statutory Authority
These regulation revisions are adopted under the general authority of the Commission found in Section 25-7-105(1), C.R.S. and are consistent with 42 U.S.C. 7410(a)(2)(A).
Purpose
This rule was proposed in order to provide the maximum flexibility for sources in meeting the state and federal requirements outlined under the possible uses for credits. The Commission makes the following findings in regards to the adoption of this regulation:
Revisions to Appendices B, C
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Colorado Administrative Procedures Act, Section 24-4-103, C.R.S. and the Colorado Air Pollution Prevention and Control Act, Section 25-7-110.5, C.R.S.
Basis
Regulations 3, 7 and the Common Provisions establish lists of Negligibly Reactive Volatile Organic Compounds (NRVOCs). The revisions adopted update the list of NRVOCs so that the state list remains consistent with the federal list. Additionally, because perchloroethylene will no longer be listed as a VOC in Regulation Number 7, Section XII, Control of VOC Emissions from Dry Cleaning Facilities using Perchloroethylene as a Solvent, is being deleted.
Regulation Number 8 and 3 list the federal Hazardous Air Pollutants (HAPs). In the June 8, 1996 Federal Register the EPA removed Caprolactam (CAS 105-60-2) from the federal list of Hazardous Air Pollutants. The conforming changes in Regulation Number 3 Appendices B, C and D have been made to keep the list of federal HAPs in Regulation Number 3 consistent with the federal list. The list of HAPs in Regulation Number 8 has been removed and a reference to the list in Regulation Number 3 has been added.
Specific Statutory Authority
The Colorado Air Pollution Prevention and Control Act provides the authority for the Colorado Air Quality Control Commission to adopt and modify Regulations pertaining to organic solvents and photochemical substances. Section 25-7-109(2)(f) and 25-7-109(2)(g), C.R.S., grant the Commission the authority to promulgate regulations pertaining to organic solvents and photochemical substances. Sections 25-7-105(1)(I)(b) and 25-7-109(2)(h) provide authority to adopt emission control regulations and emission control regulations relating to HAPs respectively. The Commission's action is taken pursuant to authority granted and procedures set forth in Sections 25-7-105, 25-7-109, and 25-7-110, C.R.S.
Purpose
These revisions to Regulations Number 3, 7, 8 and the Common Provisions are intended to update the state lists of NRVOCs, the Ozone SIP, and HAPs for consistency with the federal lists.
Revisions to Part C Incorporation by Reference of New and Revised Federal Regulations Concerning Compliance Assurance Monitoring (40 C.F.R. Parts 64, 70, and 71) into Colorado Air Quality Control Commission Regulation Number 3, Part C, Addition of Section XIV.
Background
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Administrative Procedures Act, C.R.S. (1988), Sections 24-4-103(4) and (12.5) for adopted or modified regulations.
Pursuant to Section 114 of the 1990 Clean Air Act Amendments ("CAAA"), the U.S. Environmental Protection Agency ("EPA") promulgated new regulations in 40 C.F.R. Part 64 and revised regulations to 40 C.F.R. Parts 70 and 71 to implement compliance assurance monitoring ("CAM") for pollutant specific emission units at major stationary sources of air pollution that are required to obtain Title V operating permits. The requirements imposed by the CAM rule are separate from the requirements of EPA's "periodic monitoring" rule found at 40 C.F.R. Section 70.6(a)(3)(i). The periodic monitoring rule requires that each operating permit contain any emissions monitoring or test methods already required by an applicable requirement including any "periodic monitoring sufficient to yield reliable data from the relevant time period that are representative of the source's compliance with the permit . . . such monitoring shall assure use of terms, test methods, units, averaging periods, and other statistical conventions consistent with the applicable requirement." See 40 C.F.R. Section 70.6(a)(3)(i)(B) (emphasis added).
Subject to certain exemptions, the new CAM regulations require owners or operators of such sources to conduct monitoring that satisfies particular criteria established in the rule to provide a reasonable assurance of compliance with applicable requirements of the Act. Monitoring requirements contained in the rules focus on emissions units that rely on pollution control equipment to achieve compliance with applicable standards. The CAM regulations also provide procedures for coordinating these new requirements with the Operating Permits Program regulations.
The CAM regulation generally will not require implementation of its requirements for most units subject to CAM until the first round of Title V permit renewals, which will generally be five years after initial Title V permit issuance.
The following table reflects the schedule by which CAM plans must be submitted by owners and operators of affected emissions units:
Pollutant Specific Emission Unit (PSEU) Size | CAM Plan Due as part of the Operating Permit INITIAL Application | CAM Plan Due as part of the Operating Permit REVISION Application | CAM Plan Due as part of the Operating Permit RENEWAL Application |
"Large" PSEU (see 40 C.F.R. Section 64.5(a)) | If Title V permit application is not complete by 4/20/98 OR if PSEU part of a greenfield permit application after 4/20/98 | If a significant permit revision1 at an existing Title V source | If Title V permit application was complete before 4/20/98 |
"Other" PSEU (see 40 C.F.R. Section 64.5(b)) | Never | Never | Always |
In the event of a significant proposed operating permit modification that may trigger the earlier application of the CAM rule, the rule's provisions only become applicable with respect to those pollutant specific emission units for which the proposed operating permit revision is applicable. See 40 C.F.R. Section 64.5(a)(2).
Basis
Regulations to implement these CAAA mandates were originally proposed in 1993 as the "enhanced monitoring" program. The enhanced monitoring proposal focused on monitoring air emissions as a means of ensuring source compliance with CAAA emission limitations and operating permit conditions. The EPA received approximately 2,000 comment letters to the enhanced monitoring proposal. In response to these comments and through a series of stakeholder meetings, the agency decided to redesign the Part 64 program. In 1995, the EPA promulgated a revised draft Part 64 rule, which is now known as the CAM rule. The final CAM rule was promulgated on October 22, 1997.
The Commission heard testimony from members of the public who were concerned that the implementation of the rule would have the effect of making existing applicable requirements more stringent. It is the Commission's understanding however that this is not the purpose nor should be the result of implementation of the CAM rule. In adopting the CAM rule by reference, the Commission does not intend that existing applicable requirements become more stringent.
Authority
Section 25-7-105(12), C.R.S. (1997) provides authority to promulgate regulations that are necessary to implement the minimum elements of Title V of the Clean Air Act. Section 25-7-106(6), C.R.S. (1997) provides the Commission with the authority to require testing, monitoring and record keeping. Commission action in promulgating these regulations is taken pursuant to the statutory provisions. The Commission is not adopting the CAM rule in this incorporation by reference as part of the Colorado State Implementation Plan. For that reason, the provisions of Section 25-7-105.1 C.R.S. (1999) regarding federal enforceability do not apply.
Purpose
Adoption by reference of the Federal CAM regulations contained in 40 C.F.R. Part 64, and the revisions to 40 C.F.R. Parts 70 and 71 make the regulations enforceable under Colorado law. Adoption of the regulations will not impose upon sources additional requirements beyond the minimum required by Federal law, and may benefit the regulated community by providing sources with up-to-date information.
Revisions to Regulation Number 3, Part B: Concerning Construction Permits, Including Regulations for the Prevention of Significant Deterioration
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Colorado Administrative Procedures Act, Section 24-4-103, C.R.S., and the Colorado Air Pollution Prevention and Control Act, Sections 25-7-110 and 25-7-110.5, C.R.S., and implements Sections 25-7-105(17) and 25-7-212, C.R.S.
Basis
The rule revisions adopted implement the provisions of House Bill 99-1351. Regulation Number 3 contains permitting, monitoring, reporting, visibility protection, and fee requirements.
Specific Statutory Authority
The Colorado Air Pollution Prevention and Control Act, Section 25-7-105(17), C.R.S., provides the authority for the Commission to hold hearings to approve emission inventories related to state and federal lands. That subsection also directs the Air Pollution Control Division to prepare inventories for all state land management agencies with jurisdiction over state lands. Section 25-7-212, C.R.S., requires federal land managers to develop a plan for evaluating visibility in mandatory class I federal areas and to provide to the state an emission inventory for pollutants that affect any mandatory federal class I area within Colorado. This Section also directs the Commission to use the inventories to develop control strategies for reducing emissions within the state of Colorado as a primary component of the visibility long-term strategies. The Commission's action is taken pursuant to procedures set forth in Sections 25-7-105, 25-7-110 and 25-7-110.5, C.R.S.
Purpose
In general, HB 99-1351 was intended to provide mechanisms for the state to develop information important to its efforts to protect and enhance visibility, particularly in mandatory federal class I areas. This bill specifies the types of information that must be reported, collected and approved for use in the state implementation plan.
Federal agencies own and administer approximately 36 % of the land in Colorado. Accordingly, the federal government has jurisdiction over many sources of emissions within the state. The inventory information developed under this regulation will provide additional information needed regarding these emissions, as well as those from similar state lands.
The rule requires that all federal and state lands have emission inventories approved by the Commission by December 31, 2002 and at least every five years thereafter. The emission inventories must include emissions in both Colorado and other states that may affect visibility in mandatory federal Class I areas in Colorado.
House Bill 99-1351 requires the first submittal of inventory information by the federal land management agencies by December 31, 2001. The Commission anticipates that the affected federal land managers may rely upon regional inventory information to satisfy in part the requirements of this rule. The regional inventory development process is in its early stages. In addition, this hearing has been continued once and accordingly this rule may not become effective before the statutory deadline for the initial federal public lands emission inventory submittal. The Commission recognizes that this created uncertainty for the federal land managers. Nevertheless, the General Assembly established the deadline for submittal of the federal public lands inventory in 1999 and the federal agencies have known about this requirement for more than two years.
The Commission anticipates that submittal of the regional emission inventory will provide enough information to reasonably meet the December 31, 2001 deadline. In order to ensure that inventories reflect the best information available, however, the Commission allowed the federal agencies an additional six months to provide supplemental information to fully meet the requirements of this rule. Any such additional information must be submitted to the Commission by July 1, 2002. The Commission is to hold a public hearing on the inventories and approve them by December 31, 2002. This schedule will still allow sufficient time for the Commission to consider and approve, if appropriate, the inventory information submitted.
The Commission believes that the emissions subject to the reporting requirements of this rule are in the order of hundreds of tons per day of criteria pollutants and that this level of emissions justifies application to federal and state land managers of reporting requirements similar to those that apply to owners and operators of other large emissions sources.
The Commission has the authority to exempt from the inventory requirements any sources or categories of sources that it determines to be of minor significance. This rule does not contain such an exemption because little is known about several of the source categories (e.g., biogenic sources). The Commission may consider at a later time whether such an exemption is appropriate based on additional information that may be gathered.
The Commission elected for the purposes of this regulation to define federal land management agencies as those agencies that own and manage at least 50,000 acres of land in Colorado. The Commission intended to exempt agencies with relatively small amounts of land (e.g., Department of Commerce, Bureau of Reclamation) from having to prepare inventories. In the Commission's view, the benefit of developing information relative to emissions from lands managed by smaller agencies did not justify the administrative burden and costs of preparing such emission inventories.
The Division is required by the bill's provisions to provide an inventory of emissions from activities of all state of Colorado land management agencies on state of Colorado lands that may affect visibility in Colorado's Class I areas. The inventory is to be delivered to the Commission by July 31, 2002 and at least every five years thereafter.
There are several requirements in the statute that have not been included in the regulation as they are largely policy directives to the Commission and Division from the General Assembly
The rule revisions adopted address the procedural mechanisms for accomplishing the mandatory requirements of House Bill 99-1351. The Commission concludes that these rule revisions are adopted to implement prescriptive state statutory requirements, where the Commission is allowed no significant policy-making options, for the purposes of § 25-7-110.5, C.R.S. The Commission also concludes that it has no discretion under state law to adopt alternative rules that differ significantly from these revisions, for the purposes of § 25-7-110.8(1), C.R.S. Accordingly, the Commission did not include in the record some of the portions of the rulemaking prerequisites addressed in § 25-7-110.5, C.R.S. and did not make specific determinations regarding the factors listed in § 25-7-110.8(1), C.R.S.
The Commission took into consideration the appropriate items enumerated in Section 25-7-109(1)(b), C.R.S.
Revisions to Regulation Number 3
This Statement of Basis, Specific Statutory Authority and Purpose comply with the requirements of the Colorado Administrative Procedure Act Sections 24-4-103(4) and (12.5), C.R.S. for new and revised regulations.
Basis
Regulation Number 3 sets forth the Air Quality Control Commission's permitting and air pollutant emission notice programs for stationary sources. The regulation is organized into four parts: Part A contains general provisions and the Air Pollution Emission Notice (APEN) program; Part B deals with major and minor source Construction Permits; Part C sets forth the Operating Permit program; and, Part D provides the statements of basis, specific statutory authority and purpose for revisions to the regulation. Changes have been made to each of these parts to clarify ambiguous language, eliminate duplicative or unnecessary provisions and to make the requirements more understandable and easier to read. Additionally, some substantive changes have been made to address inconsistencies between the regulation and state and federal law, to improve the permit program from an air quality protection perspective and to eliminate unnecessary burdens on the regulated community. Appendices B and C to the regulation were deleted because they were duplicative of Appendix D. The majority of the revisions were proposed by the Air Pollution Control Division based on internal review and extensive discussions with interested parties. The Division's initial proposals were addressed at length during a subcommittee process involving the Commission, the Division, stakeholders and other interested parties. During this process, participants commented on the initial proposal and offered additional suggestions. The proposal presented to the Commission is a collaborative effort of the Division and interested stakeholders.
Specific Statutory Authority
The specific statutory authority for these revisions is set forth in various Sections of the Colorado Air Pollution Prevention and Control Act ("Act"). Section, 25-7-105(1), C.R.S., gives the Air Quality Control Commission authority to promulgate rules and regulations necessary for the proper implementation of the Act, including regulations to assure attainment and maintenance of national ambient air quality standards, emission control regulations and a prevention of significant deterioration program. Section, 25-7-105(12), C.R.S., provides specific authority to establish, emission notice, construction permit and operating permit programs. Some of the statutory parameters for these programs are set forth in Sections 25-7-114, through 25-7-114.7 of the Act, and these Sections in turn, provide statutory authority for the current revisions. Additional authority for these revisions is set forth in Section 25-7-106, C.R.S., in Section 25-7-119, C.R.S., and in Section 25-7-132, C.R.S.
Purpose
A review of the previous Regulation Number 3 revealed numerous stylistic, grammatical and formatting problems, language ambiguities and obsolete or duplicative provisions. These revisions are intended to update, clarify and streamline this regulation. Additionally, changes have been made to address developments in state and federal law, to eliminate inconsistencies between the regulation and state and federal law, and to improve the programs set forth in the regulation from an air quality perspective while eliminating or minimizing undue and unnecessary burdens on the regulated community.
Part A of Regulation Number 3 contains a definitional Section and provisions that set forth the Air Pollution Emission Notice program and other general provisions relevant to the notice and permit programs.
Numerous changes to the definition Section were made. Primarily, these changes were designed to fix ambiguous language, to make the definitions more readable or to delete obsolete or duplicative definitions. For example, the definition of applicable requirement was modified to clarify that it included construction permit requirements that may have been modified during the operating permit process. This definition was always intended to include such modifications, but the old language failed to clearly explain that intent. Similarly, a change to the definition of major modification was necessary to clarify that the term included both physical changes and changes in the method of operation. The prior version omitted language resulting in an ambiguity regarding this intended meaning. Changes were made to the definition of net emissions increase to clarify that in calculating an increase or decrease of emissions, sources are not committed to use the emission numbers contained in an APEN. For example, when credible demonstrable evidence indicates a different amount of actual emissions exists, this information can be used to demonstrate a net emissions decrease. The definition of significant was also changed to clarify that the Prevention of Significant Deterioration (PSD) and New Source Review (NSR)-nonattainment area (NAA) programs do not apply to certain hazardous air pollutants. Specifically, the state PSD and NSR/NAA programs exempt those hazardous air pollutants that are exempt from the federal PSD and NSR/NAA programs pursuant to Section 112(b)(6) of the Federal Act.
In addition to the clarifications, formatting and readability changes made to the definition Section, a number of definitions were added or modified to reflect developments in federal law. For example, the Commission revised the definitions of actual emissions and major modification to include special provisions governing physical or operational changes at electric utility steam generating units. These changes were necessitated by changes in the federal regulations arising out of the decision in the Wisconsin Electric Power Company ("WEPCO") case. The changes are applicable only to coal-fired electric utility steam generating units. Colorado law has required that NSR provisions be interpreted consistent with federal requirements since 1994 when the Colorado General Assembly enacted HB94-1264, Section 25-7-109, C.R.S. The WEPCO definitions have been added, consistent with EPA's regulations, in order to clarify the meaning and scope of the changes to the definitions of actual emissions and major modification. Units need not have obtained a formal applicability determination from the Division before proceeding with the physical or operational change, although doing so is at the risk of the source. Actual emissions levels may be determined from the information found in periodic APENs which sources file pursuant to Regulation Number 3, Part A., or from other credible information, such as data from continuous monitoring systems. The filings by sources in the past, such as APENs, have enabled the Division to track sources' emission increases and decreases in a manner consistent with the provisions in the WEPCO rule, therefore, the Commission believes this formal adoption should not impose a greater burden on sources in Colorado than they have historically experienced. The Commission notes that, consistent with the legislature's intent, the WEPCO provisions have been implemented by the Division in recent years. One example is the flexibility provided a change qualifying as a pollution control project.
The definition of major modification was further changed to restrict what constituted a temporary activity. Under both the old and new regulations, temporary activities are not considered to be part of a major stationary source. The old definition could be read, however, to exclude activities that constituted temporary sources under the PSD program. Such sources are subject to certain limited PSD requirements, and could be classified as an exempt temporary activity resulting in an exemption from those limited requirements. The new version clarifies that only temporary construction or exploration activities are exempt, thus preserving the applicability of the PSD temporary source requirements.
Under the definitions for major modification and major source, while emissions from temporary construction are not included in determining whether there is a major modification or source, emissions from ongoing construction are included. Several parties requested clarification as to what constitutes ongoing construction. Such a determination must be made on a case-by-case basis, but generally, construction lasting more than two years will be considered ongoing.
At the suggestion of the regulated community, the definition of commenced construction was supplemented to identify the entire range of pre-construction activities that may be undertaken without obtaining a construction permit.
Provisions governing regulation of non-road engines have undergone a complete overhaul. In addition, the definition of non-road engines was moved from the APEN exemption provisions in Part A, Section II.D.1.sss., to the definition Section of Part A. The prior regulation (Section II.D.1.sss.) exempted certain non-road engines from APEN and permitting requirements, provided these exemptions did not apply where the engines would otherwise trigger PSD, NSR-NAA review or other applicable requirements. Since the promulgation of that regulation, Congress amended the federal Clean Air Act. These amendments, as interpreted by the D.C. Circuit Court of Appeals, precluded the states from enacting emission control regulations for non-road engines except under very restricted circumstances. The Court of Appeals held, however, that states could enact use restrictions such as restrictions on the hours of operation or amount of fuel usage. To address this situation, the regulated community requested that non-road engines be specifically identified as non-stationary sources, thus exempting them from most, if not all, of the requirements of Regulation Number 3. While agreeing that non-road engines should not be treated as stationary sources, the Division expressed a concern that a large aggregation of these engines might result in a violation of ambient air quality standards. To reconcile these conflicting concerns the regulatory revisions create a new state-only non-road engine program for certain non-road engines.
The Commission's authority to establish a non-road engine program and to regulate the operation of non-road engines is set forth in 27-7-106(1) C.R.S., and through the legislative declaration in 25-7-102 C.R.S. Non-road engines subject to the program must submit an APEN and pay appropriate APEN fees. If specified emission levels are tripped in the APEN, the program further requires that the source obtain a temporary permit and pay applicable permit fees. The permit will include such use restrictions as are necessary to prevent an exceedance of ambient air quality standards. Non-road engines that are mobile or self-propelled equipment such as bulldozers, haul trucks, water trucks, loaders, shovels, backhoes, road graders, cranes or similar mobile equipment are not subject to the state-only permit program and are not required to obtain an APEN.
Whether an engine qualifies as a non-road engine as opposed to a stationary source will depend on the facts of a particular case. To qualify as a non-road engine under Regulation Number 3, Part A, Section I.B.40.a.iii., the engine must be portable. What constitutes portable will be determined on a case-by-case basis. Additionally, such portable engines lose their status as non-road engines if they remain at a location for more than twelve consecutive months. The regulation narrowly defines location such that use of a portable engine at multiple sites at a given source does not constitute use at a single location. This provision, however, is not intended to allow a source to circumvent the regulation by moving a given engine for the purpose of avoiding expiration of the twelve-month period.
For sources that have voluntarily obtained permits for a non-road engine(s) as defined in Regulation Number 3, Part A, Section I.B.40., prior to the effective date of this rule revision, a source may continue to operate under the existing permit. A modification or re-opening of the existing permit will effectively subject a source to the requirements set forth in the non-road engine state-only permit program (Part A, Sections I.B.40.c. and I.B.40.d.)
During the public hearing on this rulemaking, the Commission raised concerns regarding the flexibility and responsiveness of the new state-only non-road engine permit program in emergency or other unforeseen situations. In these situations, it is an operator's obligation to file an APEN and obtain a state-only non-road engine permit under Sections I.B.40.c., and I.B.40.d., prior to the exceedance of any trigger level (i.e., hours of operation and/or emission limitation). This clarification is intended to increase program flexibility by ensuring that operators, including local and state government, will not be penalized when responding to emergencies and business planning conditions when such conditions subsequently trigger APEN and permit application requirements under the program.
To enhance and foster program responsiveness, the Commission expects that the Division shall act to complete state-only non-road engine permit applications as expeditiously as possible. In addition, under the authority set forth in Section 25-7-114.5(5), C.R.S., the Commission has determined that state-only non-road engine permit applications shall not be designated as permit actions subject to public notice requirements.
The Division proposed to add record keeping requirements to a number of APEN exemptions. The Commission did not adopt the specific record keeping language in Part A of the regulation. The intent of the Commission, however, is that sources should have records or other information sufficient to verify that an exemption from APEN requirements can be taken in accordance with the regulatory requirements.
The Commission revised Section II.D.4.a.(vi), deleting the solvent return opening size requirement for small remote reservoir cold solvent degreasers contained in Section II.D.4.a.(vi)(A). The Commission also revised the emissions limit in Section II.D.4.a.(vi)(C) from 350 pounds of volatile organic compounds per year to one ton of emissions per year. These changes were requested by industry based on the argument that the existing provision was specifically designed for one particular source and is not useful for the broader industry. While sources are no longer required to meet the solvent return opening provision in order to claim the exemption, they are subject to the requirements contained in Regulation Number 7, Section X.B.
Measurement of the throughput threshold for the fuel storage and dispensing equipment APEN Exemption in Section II.D.1.ccc., was changed from a 30-day average to an annual average. In addition, language was added to clarify that sources in the Denver ozone attainment-maintenance area must still utilize Stage 1 vapor recovery on all tanks with a capacity greater than 550 gallons, as required by Regulation Number 7. While ordinarily sources subject to other applicable requirements would be precluded from taking the exemption under the APEN and constructions permit exemption catchall provisions, in this particular instance, it is the Commission's intent that sources may take this exemption providing that the Regulation Number 7 vapor recovery requirements are met.
An APEN exemption for wet screening operations was added at Section I.D.1.cccc. Certain wet screening operations are subject to New Source Performance Standard ("NSPS") Subpart OOO. This federal requirement requires that such facilities comply with a zero visible emissions standard. Ordinarily, a source that is subject to a New Source Performance standard precludes the source from taking an APEN exemption pursuant to the catchall provision in Section II.D.4. It is the Commission's intent that in this particular case, application of NSPS Subpart OOO shall not prevent a wet screening operation from taking the exemption.
A substantive change was made to the applicable de minimis levels for APEN exemptions in attainment and nonattainment areas. Under the prior regulation, if an area was nonattainment for any pollutant the lower nonattainment de minimis levels applied for all pollutants. This has been revised so that the lower levels will only apply to the pollutants for which the area is not in attainment.
The exemption for agricultural operations was changed to provide greater clarity and to be consistent with the requirements of the State Act. Conforming changes were also made to the agricultural exemption set forth in Part C.
Because Regulation Number 3 and the Common Provisions Regulation underwent contemporaneous review, the primary focus with respect to duplicative provisions was to eliminate duplications between the two regulations. Duplicative provisions that were only applicable to Regulation Number 3 were deleted from the Common Provisions Regulation. Provisions applicable to multiple regulations remain in the Common Provisions and were deleted from Regulation Number 3. Certain non-Regulation Number 3 duplications were also addressed. A full review of all the Commission's regulations was not undertaken at this time. It is expected that there are additional duplications that should be addressed as other regulations are opened for revision.
The language governing the fee schedule for APENs and permit processing was simplified to provide that fees will be charged in accordance with the procedures and amounts set forth in the Act. This change alleviates the requirement of revising the regulation every time the statutory fee schedules change.
The rules governing confidentiality of documents submitted in connection with APENs and permit applications were changed to be consistent with the Act, and to clarify ambiguities in the prior regulation. In addition, more specific provisions were added regarding the process involved in asserting confidentiality and determining whether documents are in fact confidential. Under the prior regulation, the evaluation of confidentiality claims was very ambiguous making it difficult for the Division to determine whether a document was confidential, and providing sources no guidance as to the steps they should take to ensure confidential treatment of documents. The new provisions clearly set forth the rules for claiming confidentiality and for evaluating such claims. This should benefit the Division and the regulated community by providing a clear understanding of confidentiality protections.
Pursuant to the State Act, information submitted as part of an air pollutant emission notice, Permit Application or Operating Permit reports is confidential only if it relates to secret processes or methods of manufacture or production. This limitation is reflected in the revised regulation. In contrast, Section 25-7-111(4), C.R.S. provides that information obtained by the Division in connection with an enforcement action may be entitled to confidential treatment if it constitutes a trade secret. The current regulatory revision is not intended to alter or affect the protections offered under Section 25-7-111(4), C.R.S.
In cases where the Division determines that certain information is not subject to confidential treatment the revisions shorten the notification period from fifteen to three days. This change was made based on the statutory mandate in the Colorado Open Records Act requiring release of public records within three days after a request for such records. The notification period is intended to allow the source the opportunity to obtain judicial relief from the Division's determination under the State Administrative Procedures Act prior to release of the information. While it is recognized that the three-day notification period may make it difficult for a source to institute a timely action, the requirements of CORA preclude a longer period. It is expected that the Division will take the steps necessary to provide actual notice to the source as soon as a determination is made, so that the source will have adequate time to protect its rights.
The majority of revisions to Part B involve stylistic changes intended to improve the readability of the regulation. A small number of substantive revisions were made as described below.
The provisions in Section IV.H., were changed to clarify the requirements for obtaining a final approval construction permit. The previous regulation required the source to demonstrate compliance with the initial approval construction permit. The Division was then required to conduct an inspection to determine compliance. Because an inspection during the initial approval period is not required by law, the new regulation makes the inspection discretionary. This provides necessary protections in those instances where an inspection may be needed. The provision was further modified to give the Division discretion as to whether to issue a final approval permit when there is a pending operating permit application. Requiring the issuance of a final approval permit was often an unnecessary step in situations where an operating permit would be issued shortly thereafter. To avoid confusion among sources when the Division elects not to issue a final approval construction permit, a notice will be provided to the source in writing. Similar flexibility was added to Section III.D.6., in cases where a previously permit exempt source loses its exemption based on addition of new emission points.
The prior regulation required submission of an operation, maintenance, and record keeping plan with the construction permit application. This provision ignored the reality that such plans are difficult to provide until after the source has been constructed. The new regulation provides that these plans must be submitted prior to obtaining final approval.
Significant changes were made to the post construction monitoring requirements for the PSD program. The changes were made to be consistent with the federal PSD regulations. The revisions provide flexibility to either require or waive post-construction monitoring.
The revisions expand the provisions governing appeals of construction permits. The prior regulation provided that a source could appeal the Division's decision to the Commission, but failed to identify the process for such an appeal. The revision provides that the appeal must be made within thirty days after the issuance of the permit, denial or revocation, and will be held in accordance with the general rules for adjudicatory hearings. A similar provision was also added in Part C, Section V.E.
Section V.B. has been changed to reflect that the Black Canyon of the Gunnison has been reclassified as a National Park. The boundaries of this area remain the same, and there is no change in the classification of this area as Class I or Class II.
Revisions have been made throughout the regulation to address changes in areas from the nonattainment classification to the attainment/maintenance classification. A search of the regulation was conducted to identify those provisions that depended on the area being classified as nonattainment. When a requirement remains in place after the reclassification of an area, the word nonattainment was changed to attainment/maintenance. Otherwise, no change was made. A substantive change was made to the applicable de minimis levels for permit exemptions in attainment and nonattainment areas. Under the prior regulation, if an area was nonattainment for any pollutant the lower nonattainment de minimis levels applied for all pollutants. This has been revised so that the lower levels will only apply to the pollutants for which the area is not in attainment to be consistent with a similar revision in Part A.
As with Parts A and B, the majority of revisions to Part C include changes to improve readability and to clarify ambiguous provisions. Revisions were made to Section II.E., to fix poorly worded language. The new provision more clearly explains when an insignificant activity exemption can be taken. In addition, changes in II.E., and to other Sections regarding exemptions included in Part C were made to conform to exemptions in Part A and B.
Provisions regarding the phase-in of the operating permit program were deleted since these provisions are now obsolete.
Section III.B.2., sets forth certain timing requirements with respect to submitting operating permit applications. The prior regulation was unclear as to the new legal requirements for sources subject to the operating permit requirement after start-up by operation of law. The revised provision clarifies that sources shall submit an application within twelve months of the effective date of the new requirements or at such other time specified in those requirements. The revisions also clarify that when a source subject to an operating permit is modified, an application to revise the permit must be submitted within twelve months of the modification.
In the past, significant confusion has arisen when a source seeks an operating permit prior to obtaining a final approval construction permit under Part B. Revisions to Sections V.A., and IV.B.3., clarify the rules governing these situations. These revisions also conform to the changes made in Part B, Section IV.H. The flexibility given to the Division to issue an operating permit absent a final approval construction permit under Section V.A., is intended to apply regardless of whether the source has commenced operation of the emission unit(s) at issue.
Prior to this rulemaking, Regulation Number 3 included four appendices: Appendix A, Method for Determining De Minimis Levels for Non-Criteria Reportable Pollutants; Appendix B, 1993 Non-Criteria Reportable Pollutants; Appendix C, 1994 and Subsequent Years Non-Criteria Reportable Pollutants; and Appendix D, Non-Criteria Reportable Pollutants. This rulemaking deletes the original Appendix B and Appendix C because they are duplicative of Appendix D. Appendix D has been revised to Appendix B in order to maintain continuity in the regulation.
Revisions to Regulation Number 3
This Statement of Basis, Specific Statutory Authority and Purpose comply with the requirements of the Colorado Administrative Procedure Act Sections 24-4-103(4) and (12.5), C.R.S. for new and revised regulations.
Basis
Regulation Number 3 sets forth the Air Quality Control Commission's permitting and air pollutant emission notice programs for stationary sources. Pursuant to its statutory authority, the Commission may exempt certain stationary sources from permitting and APEN requirements where emissions from such sources are deemed to be insignificant. The Commission is revising the exemptions for condensate and crude oil tanks and condensate and crude oil loading equipment to ensure that the exemptions apply only where the emissions are truly insignificant. Additionally, the Commission is revising the provisions designed to ensure that in exempting certain sources from APEN and permit requirements, the regulation does not allow sources to avoid other state and federal requirements. This revision clarifies when application of other requirements prohibits sources from claiming exemptions.
Specific Statutory Authority
The specific statutory authority for these revisions is set forth in various Sections of the Colorado Air Pollution Prevention and Control Act ("Act"). Section, 25-7-105(1), C.R.S., gives the Air Quality Control Commission authority to promulgate rules and regulations necessary for the proper implementation of the Act, including regulations to assure attainment and maintenance of national ambient air quality standards, emission control regulations and a prevention of significant deterioration program. Section, 25-7-105(12), C.R.S., provides specific authority to establish, emission notice, construction permit and operating permit programs. Some of the statutory parameters for these programs are set forth in Sections 25-7-114.1, and 25-7-114.2 of the Act, including the authority to exempt certain sources from APEN and Permitting requirements. These Sections in turn, provide additional statutory authority for the current revisions.
Purpose
Revisions to the crude oil and condensate storage tank exemption in Part A, Section II.D.1.ddd. and crude oil and condensate truck loading equipment exemption in Part A, Section II.D.1.ee., were proposed to address the issue of flashing emissions in condensate tanks. The exemptions, and a corresponding exemption in Part C, Section II.E.3.ee. and ddd., did not take flash emissions into account when the Commission initially adopted the exemption. The large quantity of volatile organic emissions that can be released during a flash event led to changes in the exemptions. Additionally, separate exemptions have been established for crude oil tanks and equipment and condensate tanks and equipment in recognition of the fact that flashing emissions from crude oil and condensate are significantly different.
The Commission recognizes that in changing these exemptions a number of tanks and equipment that were previously exempt from APEN reporting, and therefore exempt from construction permitting requirements, will now be required to file APENs. The Commission does not believe, however, that these existing sources will now be required to obtain state construction permits, since such a requirement is triggered by construction or modification of a source, and not by a change in a previously applicable exemption. If, however, the tanks or equipment is modified after December 30, 2002, a construction permit will be required for the modification unless the tanks or equipment qualifies under the revised APEN exemption or constructions permit exemption. During the revision process there was some discussion about what might constitute a modification that would trigger construction permit requirements. Based on the information provided to date, the Division and Commission do not currently believe that reworking of an existing well would constitute a modification under the regulations. Additionally, sources subject to PSD, NSR-NAA and Title V permitting requirements are required to have such permits regardless of their exemption status. The Commission notes to permit applicants that this change becomes effective on the effective date of this regulation.
In connection with these revisions, the Commission has also looked at the timing requirements set forth in Part A, Section II.D.1.lll., for submitting APENs and obtaining construction permits for tanks at crude oil and natural gas exploration and production sites. The Commission enacted this provision in 1993 to allow sources sufficient time to determine production levels before being required to submit APENs or construction permit applications. To affect this, Section II.D.1.lll. provided that APENs for oil and gas exploration and production operations were not required until 30 days after filing the well completion or recompletion report with the appropriate state or federal agency. Additionally, Part B, Section III.D.8. provided that applications for construction permits for such operations were due at the same time as the APEN filing. Based on discussions during the regulation revision process the Commission discovered that the well completion report must be filed before production levels can be determined and that the provision should have referenced the report of first production. Therefore, the Commission has revised Section II.D.1.lll. to clarify and effectuate the intent of the 1993 revisions.
The Commission also recognizes the definition of condensate that appears in the Common Provisions Regulation does not include reference to an API gravity and therefore could be read to include crude oil. It is the Commission's intent that for the purposes of these exemptions, as well as APEN reporting, condensate should only include hydrocarbon liquids that fit within the Common Provisions definition and that have an API gravity of 40 degrees or above. The Commission anticipates revising the Common Provisions definition to more clearly reflect this intent the next time the Common Provisions regulation is opened for revision.
Changes to the APEN catchall in Part A, Section II.D.4. and the construction permit catchalls in Part B, Section III.D.5., were significantly reworked to add clarity. The prior versions were somewhat unclear as to both the effect of APEN and permitting exemptions on other applicable requirements and when otherwise exempt sources would be required to file APENs. While the revisions minimally change the substantive requirements of the two catchall provisions the new language is intended to more clearly express these requirements. The new language clarifies that sources that are exempt from APEN and/or construction-permitting requirements are not, by virtue of that exemption, exempt from any other applicable requirements. Thus, for example, a source that is exempt from APEN or permitting requirements, must still comply with the Regulation Number 1 20% opacity standard. Likewise, an APEN exempt emission point at a major source is excused from paying APEN fees but may still need to be listed as an insignificant activity under the requirements of the Title V program. Additionally, where the emissions from a particular emission point would cause a source to avoid PSD, NSR-NAA or Title V information regarding that emission point cannot be omitted from any permit application, notwithstanding the fact that the emission point standing alone might be exempt from APEN or Construction Permit requirements.
The Commission also requires that if the potential to emit, taking into account full design rate and continuous operation, triggers PSD or NSR requirements, the source must submit an Air Pollutant Emission Notice and apply for the appropriate permit, or must apply for a permit to limit the physical or operational capacity of the source such that the source is not considered to be a major source as defined in Section I.B.59 of Part A of this regulation. This language previously appeared in the catchalls, but was relocated to this statement of basis.
Finally, the revised catchall provisions subject certain emission points and sources to APEN and Construction Permit requirements notwithstanding the fact that such points and sources would otherwise be exempt. Sources specifically identified in the applicability Section of any subpart of Part A of Regulation Number 6 (New Source Performance Standards), or Regulation Number 8 (Hazardous Air Pollutants), Parts A, C, D, and E. This provision allows the Division to keep track of these points and sources, and ensure that the requirements of these programs are being properly followed. It must be noted, however, that wet screening operations subject to the exemption set forth at Part A, Section II.D.1.cccc. may claim exemptions notwithstanding the fact that such sources are subject to New Source Performance Standard OOO.
Revisions to Colorado Air Quality Control Commission Regulation Number 3 Stationary Source Permitting and Air Pollutant Emissions Notice Requirements
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Colorado Administrative Procedures Act, Section 24-4-103, C.R.S., and the Colorado Air Pollution Prevention and Control Act, Sections 25-7-110 and 25-7-110.5, C.R.S.
Basis
Regulation Number 3 sets forth the Air Quality Control Commission's ("Commission") permitting and air pollutant emission notice programs for stationary sources. The rule revisions adopted reorganize and clarify the permitting, monitoring, reporting and fee requirements of Regulation Number 3. In addition, new provisions were added to conform the state program to the federal rules.
The existing regulation was composed of four parts. Part A contained general provisions and the Air Pollution Emission Notice [APEN] program; Part B addressed major and minor source construction permits; Part C set forth the Operating Permit Program; and Part D included the statements of basis, specific statutory authority and purpose for historical revisions to the regulation.
The Commission reorganized the rule in order to make it easier for sources to find and comply with applicable requirements. Part A now contains general provisions applicable to reporting and permitting, including the Air Pollution Emission Notice requirements; Part B addresses construction permits; Part C includes the operating permit program; and Part D deals with the Nonattainment New Source Review and Prevention of Significant Deterioration ["New Source Review" or "NSR"] programs for major stationary sources. Minor sources will only be subject to Parts A and B; major sources (as defined for the Operating Permit program) are governed by Parts A, B and C. Major stationary sources must comply with Parts A, B, C and D. In particular, this reorganization separated the major stationary source NSR provisions from the construction permit requirements applicable to all sources. This will make it easier for minor sources to comply with the regulation. The Commission also made changes to each part in order to clarify ambiguous language, eliminate duplicative or unnecessary provisions, increase the level of certainty for the regulated community and make the regulation more understandable. Part E is now reserved for Environmental Management Systems and Part G contains the historical and current Statements of Basis, Specific Statutory Authority and Purpose for Commission rulemaking actions.
In addition, the changes incorporate modifications to the nonattainment new source review and prevention of significant deterioration programs. Changes to these programs were necessary to comply with federal rule revisions that must be incorporated into the Colorado State Implementation Plan ("SIP"). The Commission tailored the federal requirements to Colorado's air quality program to ensure efficient and flexible operation and administration of the program while eliminating or minimizing undue and unnecessary burdens on the regulated community.
Specific Statutory Authority
The Colorado Air Pollution Prevention and Control Act, Section 25-7-105(17), C.R.S., gives the Commission authority to promulgate regulations necessary for the proper implementation of the Act, including rules to assure attainment and maintenance of national ambient air quality standards and a prevention of significant deterioration program. Section 25-7-105(12), C.R.S, provides specific authority to establish emission notice, construction permit and operating permit programs. Some of the statutory parameters for these programs are set forth in Sections 25-7-114 through 25-7-114.7 of the Act and these Sections, in turn, provide statutory authority for the current revisions. Additional authority for these revisions is set forth in Sections 25-7-106, 25-7-119 and 25-7-132, C.R.S.
The Commission's adoption of this rule is taken pursuant to procedures set forth in Sections 25-7-105, 25-7-110 and 25-7-110.5, C.R.S.
Purpose
The Commission took into consideration the appropriate items enumerated in Section 25-7-109(1)(b), C.R.S.
General Revisions to Regulation Number 3
The Commission's reorganization of this rule separates the provisions applicable to all sources (Part A), the construction permit program (Part B) and the operating permit program (Part C). The NSR provisions for major stationary sources are now contained in Part D. In the past, these various components of the rule were intermingled to an extent that caused confusion and unnecessary work for both sources and for the Air Pollution Control Division ("Division"). By separating the major components of Regulation Number 3, the Commission intends to make the provisions more readily usable, particularly for minor sources.
As part of the reorganization, the Commission relocated some definitions. If a definition relates only to one part, it can be found at the beginning of that part. Definitions that are used in more than one part are placed in Part A. This approach will allow minor sources to identify applicable provisions without having to address the differences between construction permit, operating permit and major NSR requirements.
The Commission in this rulemaking did not amend Section V. of Part A of the existing rule. That Section addresses emissions trading and changes to it are beyond the scope of this proceeding. Likewise, the Commission specifically concluded that this rulemaking should not extend to changes to the construction-permitting program for minor sources unrelated to the federal NSR revisions; this restriction appeared in the notice of rulemaking. The Commission understands that discussions between the Division and stakeholders prompted by this proceeding may lead to policy and implementation changes.
The Commission established the effective date for the NSR revisions as the date of EPA approval of the changes as part of the Colorado SIP. An earlier effective date would have created differences between federal and state rules that could expose the regulated community to inconsistent requirements. For the remainder of the rule, the Commission concluded that the effective date need not await EPA action. Those provisions will become effective following publication in the Colorado Register.
Finally, an issue arose regarding the use of the term "attainment/maintenance" areas. Although this terminology is used in Colorado's State Implementation Plan, its relationship to these rule changes is unclear. The Commission decided to address this question at a later time.
Finally, the Commission concluded that the revisions to Regulation Number 3 do not change the procedural, administrative nature of the regulation and are not specifically intended to reduce air pollution. Accordingly, the Commission did not make the determinations addressed in Section 25-7-110.8, C.R.S., although this Statement of Basis and Purpose includes discussion to inform interested parties of the Commission's intent.
Part A Changes
Changes to Part A largely clarify or correct existing provisions. Where EPA changed specific language used in this part, the Commission adopted identical phrasing absent an identified reason for a distinction.
The term "annual actual emissions" in Section I.B.9. replaces "actual emissions" throughout Part A in references to Air Pollutant Emissions Notices ("APENs") so that a source's reported emissions are those actually emitted during a single calendar year. This will distinguish reported emissions from the two-year average of "actual emissions" used for major NSR purposes.
Section II.D.1.g. has been modified to refer to a "major source" rather than a "major stationary source," a term that is specific to the major NSR program. This conforms to Section 25-7-109, C.R.S.
The Commission changed Section VI.C.3 to permit sources sixty days from issuance of an invoice to pay annual emissions fees. This approach will allow sources additional time to process fee payments. In addition, the Division is required to forward any bills more than thirty days overdue to the collections office for the state. This extended payment period will reduce the number of instances in which delays in payment result in a fee bill being sent to collections.
The Commission adopted a change to the definition of "stationary source" reflected in Section Part A, Section I.B.41 to conform it to federal and state law.
Changes to Parts B and C
The Commission made only conforming changes in Parts B and C after moving the provisions applying to major NSR to Part D.
Part D Changes
Nonattainment New Source Review and Prevention of Significant Deterioration Provisions
On December 31, 2002, the Environmental Protection Agency ("EPA") promulgated a final rule addressing the major NSR programs mandated by Parts C and D of Title I of the federal Clean Air Act. The Agency changed the requirements applicable to Colorado's SIP. The Commission adopted these revisions in order to comport Colorado's air quality program to the EPA rules. The revised regulation references to "NSR requirements" include both the nonattainment new source review and prevention of significant deterioration programs.
EPA's major NSR changes modified the method for determining whether a proposed facility modification results in a significant emissions increase, thus triggering major NSR evaluation and technology requirements. In addition, EPA added new applicability options, Plant-wide Applicability Limitations and Clean Units, and an exclusion from major modification provisions for Pollution Control Projects.
On October 27, 2003, EPA adopted further revisions to the major NSR program. In that rule, EPA provided a category of equipment replacement activities that would not be subject to the major NSR requirements under the routine maintenance, repair and replacement ("RMRR") exclusion. That rule has been challenged in U.S. Court of Appeals in Washington, D.C. The Court issued a stay, because of which the rule was not yet effective at the time of the hearing in this proceeding. The Commission elected to address RMRR issues in the future and not consider RMRR rule changes at this time.
In general, the Commission changed Part D of Regulation Number 3 to mirror the EPA major NSR rules. There are instances in which the Commission's rule differs from the federal provisions. These cases are specifically identified in this Statement of Basis and Purpose, as required by Section 25-7-110.5, C.R.S.
General
The Commission required Division review and/or approval of certain actions in instances in which the federal rule was either silent or contained no similar specific requirement. The EPA rule preamble anticipates that state minor source permit programs will continue and the Commission agreed. Colorado's Air Pollution Prevention and Control Act ("the State Act") specifically requires permits for construction and modification of air pollution sources. The Commission has historically used permits as the basic administrative structure for its stationary source programs. Exceptions to permit requirements exist in the rule for sources or activities with small emissions that have a minimal impact on air quality. In Section I.B.5., the Commission imposed a requirement that owners or operators using the actual-to-projected-actual applicability test for a project that requires a minor source permit or modification [pursuant to Part A, Section I.B.26., Part C, Section I.A.4. or Part C, Section X., or any minor source permit under any provisions of Part B], to submit an otherwise-required permit application and include documentation adequate to substantiate calculations made for the test. The federal rule requires that the owner or operator retain, but not report to the permitting authority, this information. However, the information listed in this Section would necessarily be generated by the owner or operator to satisfy the federal requirements and need only be submitted with an otherwise-necessary construction permit application. Accordingly, the Commission concluded that this requirement does not exceed federal requirements for the purposes of the Colorado Air Pollution Prevention and Control Act.
The Commission also concluded that the emissions calculated for the actual-to-projected actual test did not need to be the subject of a permit limitation. Accordingly, the information submitted will only be placed in an appendix to the major stationary source's Title V and/or in a construction permit note. This provision will assist the Division in evaluating the results of the applicability test before the relevant project is begun. Both the Division and the owner or operator will benefit from early identification of any disagreements about the applicability test.
The Commission noted discrepancies in the use in the federal rule of the terms "regulated NSR pollutant" and "regulated air pollutant." The latter includes Hazardous Air Pollutants by definition. In order to conform all of the Sections using these terms, the Commission used "regulated NSR pollutant" throughout Part D.
The federal rule allows a reviewing authority to establish a "reasonable period" for determining what constitutes a "contemporaneous" net emissions increase. Part A, Section I.B.37.b. of the old rule specified a period of five years. The Commission retained that five-year period in the revisions adopted. This period remains reasonable, just as it was under the prior version, serves to increase certainty and should assure that any net emission increase calculations are more accurate.
For calculation of Baseline Actual Emissions levels in Part D, Section II.A.4., the Commission concluded that emissions during periods of startup, shutdown and malfunction must be quantified based on the rate of operation during that period. For example, during a control equipment malfunction the calculation must assume that no controls were used to reduce emissions during that period unless the source can demonstrate the actual level of control provided during the malfunction. The Commission will allow a source to use estimation methods based on best engineering judgment, subject to approval by the Division; however, sources utilizing Continuous Emissions Monitors should be able to quantify these emissions with relative ease. In any event, the Baseline Actual Emissions calculations must be approved by the Division for use in the applicability test.
In calculating Baseline Actual Emissions, Part D, Section II.A.3., the emissions from malfunctions/upsets that exceed any enforceable limitations effective at the time of the event must be excluded. Allowing inclusion of these emissions in the calculation could reward a source for failing to limit, as much as possible, emissions during these events. Existing rules relating to these periods and "upsets" are not otherwise changed by the revisions.
The federal rule requires that emissions from "demand growth" be excluded from the Projected Actual Emissions calculation. Demand growth is any increased utilization that could have been accommodated by the source prior to any change. In no case, however, may demand growth emissions exceed an enforceable limitation existing prior to the change or modification.
The Commission elected not to elaborate on or further define some issues in the rule, instead relying on policy and practice that will be developed as necessary by the Division and/or EPA. These include what "could" increase emissions and what constitutes "regular operations" in Section VI.B.5.c. as well as the approach for evaluating "design capacity" in Section II.A.38.a. In another provision, Section VI.B.5., the Commission intends that the Division will implement the wording "reasonable possibility" consistent with, though not necessarily identical to, EPA's rule preamble and the Notice of Reconsideration issued by EPA regarding this issue. Likewise, when an owner or operator uses emission factors to monitor PAL pollutant emissions [Section V.A.7.c.(iii)], it and the Division will adjust, as appropriate, those factors to account for uncertainties or limitations inherent in the factor. The federal preamble may be consulted for guidance on such issues, including the option for the Division to exempt a source from having to validate the factors.
Sections II.A.4.a. and VI.B.5.c. include the concept of a period that is "more representative of normal source operations" in the definition of Baseline Actual Emissions. The Commission decided that such determinations will continue to be resolved on a case-by-case basis by the Division.
Plant-wide Applicability Limitations ("PAL")
For the purpose of setting a PAL, a unit planned but not yet constructed as of the date of PAL determination has Baseline Actual Emissions of 0 tons per year, as it does not have actual emissions as of that date. These units do not differ in practice from those later planned but not yet constructed under the PAL. Both types of units must meet the emissions limitations and other conditions assessed in the PAL. Emissions units constructed at the time the PAL is set, but that have not yet operated for more than two years are new units. The Division, after consultation with EPA, recommended that the Commission not allow PALs for major stationary sources that have not been in operation for at least two years. The Commission agreed. These sources would not have "actual emissions" for this purpose because they would not yet have operated during a representative period. Allowing PALs for these sources would effectively create an "allowable PAL." EPA clearly indicated in the December 31, 2002 preamble that it did not intend to create provisions for allowable PALs in that promulgation. The phrasing here comports with EPA's intent.
Process and control equipment changes under PALs require application and approval of a permit under existing provisions of Colorado law. PALs, since they establish a new emissions limitation for an entire facility, will necessitate a revision to the Operating Permit held by the owner or operator. The Division will act on any such permit application during the period otherwise provided in Part C. Once a source has obtained a PAL, the PAL emission limits and conditions must remain in place for the entire ten-year effective period of the PAL. Allowing a source to obtain and renounce a PAL at a shorter interval would create confusion and potentially allow manipulation of the PAL option to avoid major NSR.
The Commission adopted language differing in minor respects from the federal rule in Sections XVII.B.2. and XVII.I.2. The federal language used to construct Section XVII.B.2. was incomplete and unclear in that it did not specify that baseline actual emissions calculations must be provided for each emissions unit as parts of a PAL permit application. The phrase added creates no additional burden for sources that would have to evaluate emissions from these units in any event. In Section XVII.I.2., the Commission added the phrase "including any additional information requested by the Division." Although the Division's authority to request information in order to confirm an owner or operator's calculations is well accepted, this addition places the PAL applicant on notice that a request may be made.
The Commission also departed from the federal wording in Section XVII.N.1. that addressed the semi-annual report to be provided by PAL sources. The Commission concluded that requiring submittal with the report of all data relied upon imposed an unnecessary and undue burden on sources. Instead, the rule allows the Division to request these data if it finds it necessary to implement its administration of the PAL permit.
Clean Units
The CU provisions of this regulation address only the emissions from a specific unit. If a unit is designated as a Clean Unit, the source does not need to go through the major source NSR program if it makes certain types of changes in the future. This allows greater flexibility to a source. The source must accept the changes to its Title V permit that are required by the rule. Additionally, an owner or operator must apply for and obtain either a Construction Permit or Operating Permit for future changes at the CU that meet the definition of modification for Part B or C purposes even though it need not evaluate the project for major source NSR applicability. The Division will act on a permit application during the period otherwise provided in Part B or C of this regulation.
Section XV.A.3. requires an owner or operator to submit a request for designation as a Clean Unit ("CU"), although this requirement does not affect automatic qualification as a CU. This provision ensures that the Division may conduct an initial, cursory review to confirm the qualification. Absent this provision, sources mistakenly using the CU option might operate for years in the belief that the designation protects operation of the unit. One principal concern for the Commission in adopting any regulation is to provide a high level of certainty for sources to avoid delayed compliance issues. By allowing the Division to review the information the source used to qualify as a CU, the Commission is providing that certainty for sources. In addition, this provision simplifies field and other inspections by assuring that the Division has an accurate record of the operations and equipment at the source.
Pollution Control Projects
The Commission believes that the Pollution Control Project ("PCP") exclusion will only be used for projects that result in a significant emissions increase in a "collateral" pollutant. If the project does not cause increases in any regulated pollutant, it would not need an exclusion from major modification requirements. Therefore, Section XVI.A. requires that a source intending to use the PCP exclusion must submit an APEN and a permit application, whether the PCP is listed or unlisted, as a significant emissions increase is likely to occur. Under the federal rule, unlisted PCPs are required to obtain permits or permit modifications. The Commission omitted the provision in the federal rule requiring a written notice for listed projects to streamline duplicative requirements in the federal PCP provisions and Parts B and C of the regulation. However, recognizing the nature of PCPs, the Commission has retained the list of the information that must be submitted to the Division. This list differs in some respects from the information required in the permit provisions of Regulation Number 3.
The Commission also adopted a provision requiring owners or operators of PCPs to retain records for a minimum of five years, consistent with the Operating Permit recordkeeping timeframe. The federal rule does not specify a retention period. This Commission action was appropriate to assure that sources and the Division have a common understanding about the retention period. Finally, in order to comply with the federal rule, the Commission included a public notice and comment opportunity for PCPs.
Revisions to Regulation Number 3
The primary purpose of this rule revision is to clarify the applicability of various permitting and APEN provisions to sources within areas designated as attainment/maintenance. Such clarification merely makes express the rule that applied by interpretation. In most cases, the revision makes the requirements applicable to attainment areas applicable to attainment/maintenance areas. One notable exception is the requirement for construction permits for gasoline stations within the Denver 1-hour ozone attainment/maintenance area, which requirement is specified in the SIP. 40 CFR 52.320(c)(94). This rule revision also includes other minor revisions, including reporting requirements for condensate storage tanks subject to Regulation Number 3, Section XII., and corrections for accuracy. This rule revision makes no significant, substantive changes to the regulation. Nothing in this rule change exceeds the requirements of federal law. This rule change is administrative in nature, is not intended to cause reductions in air pollution, and therefore is exempt from the requirement for findings pursuant to Section 25-7-110.8, C.R.S.
Revisions to Regulation Number 3
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Colorado Administrative Procedures Act, Section 24-4-103, C.R.S., and the Colorado Air Pollution Prevention and Control Act, Sections 25-7-110 and 25-7-110.5, C.R.S.
Basis
Regulation Number 3 sets forth the Air Quality Control Commission's permitting and air pollutant emission notice programs for stationary sources. The Commission amended Regulation Number 3, Part A, Section V. to make it consistent with the repeal of the Emissions Trading Rule in Regulation Number 5 in December 2004. It was originally anticipated that Regulation Number 5 would replace Part A, Section V. in Regulation Number 3 as the Commission's trading program, essentially identical to EPA's. The text of Part A, Section V. was italicized to represent provisions that would remain effective until EPA approved the program in Regulation Number 5. EPA decided not to finalize its trading program; therefore, it would never approve Regulation Number 5 as a SIP component. The Commission deleted Section V.A.3., Part A that contained the outmoded effective date. The Commission also replaced the italicized text with normal font in all of Part A, Section V. to conform the text to these circumstances. In addition, one hazardous air pollutant (2-butoxyethanol) was deleted to conform the State's list (in appendix b) to the Federal list of hazardous air pollutants.
The Common Provisions Regulation sets forth requirements and definitions that pertain or may pertain to all of the other Commission regulations. EPA added four compounds to its list of compounds (known as non-reactive volatile organic compounds) to be excluded from the definition of volatile organic compound on the basis that these compounds make a negligible contribution to tropospheric ozone formation. The Commission adopted a conforming change to the definition of non-reactive volatile organic compounds in the Common Provisions Regulation, Section I.G.
Specific Statutory Authority
The Colorado Air Pollution Prevention and Control Act give the Commission authority to promulgate regulations necessary for the proper implementation of the act. Section 25-7-105(12), C.R.S, provides specific authority to establish emission notice, construction permit and operating permit programs. Some of the statutory parameters for these programs are set forth in Sections 25-7-114 through 25-7-114.7 of the act and these Sections, in turn, provide statutory authority for the current revisions. Additional authority for these revisions is set forth in Sections 25-7-106, 25-7-119 and 25-7-132, C.R.S.
The Commission's adoption of this rule is taken pursuant to procedures set forth in Sections 25-7-105, 25-7-110 and 25-7-110.5, C.R.S.
Purpose
The Commission took into consideration the appropriate items enumerated in Section 25-7-109(1)(b), C.R.S.
The purpose of removing the italicized text from Regulation Number3, Part A, Section V. was to prevent any ambiguity about the applicability of those provisions. Changing the font of the text does not have any regulatory impact since the provisions were already in effect and will remain in effect. Section V.A.3. was deleted because it was an outmoded provision that was only necessary if Section V. was to be replaced by Regulation Number 5. The Commission's repeal of Regulation Number 5 made that provision unnecessary. Removing the italics from Section V. also will eliminate confusion with the italicized text in Part D of Regulation Number 3.
The purpose of the deletion of one hazardous air pollutant in appendix b of Regulation Number 3 and the addition of four non-reactive volatile organic compounds to the list in Section I.G. of the Common Provisions Regulation is to conform the Commission's rules to Federal regulations. The Federal rule changes were published on November 29, 2004. If the Commission did not make these revisions, the State rules would be more restrictive than the Federal rules because these revisions serve to exempt the compounds from emission standards, monitoring, reporting and record keeping requirements.
Revisions to Regulation Number 3
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Colorado Administrative Procedures Act, Section 24-4-103, C.R.S., and the Colorado Air Pollution Prevention and Control Act, Sections 25-7-110 and 25-7-110.5, C.R.S.
Specific Statutory Authority
The Colorado Air Pollution Prevention and Control Act, Section 25-7-105, C.R.S., gives the Commission authority to promulgate regulations necessary for the proper implementation of the Act, including rules to assure attainment and maintenance of national Ambient Air Quality Standards and a prevention of significant deterioration program. Section 25-7-105(12), C.R.S. provides specific authority to establish emission notice, construction permit and operating permit programs. Some of the statutory parameters for these programs are set forth in Sections 25-7-114 through 25-7-114.7 of the Act and these Sections, in turn, provide statutory authority for the current revisions. Additional authority for these revisions is set forth in Sections 25-7-106, 25-7-119 and 25-7-132, C.R.S.
The Commission's adoption of this rule is taken pursuant to procedures and requirements set forth in Sections 25-7-105, 25-7-110 and 25-7-110.5, C.R.S.
Purpose
On December 31, 2002, the Environmental Protection Agency ("EPA") promulgated a final rule revising the Major New Source Review ["NSR"] programs mandated by Parts C and D of Title I of the Federal Clean Air Act. EPA changed the several Federal provisions that were reflected in Colorado's SIP and in 2004 the Commission made revisions to match the new Federal Rule.
In the 2002 Rule, EPA provided several new applicability options for stationary sources. Among those options is treatment of some sources as clean units. To qualify, the source operators must employ state-of-the-art pollution control technology as a result of a major NSR determination within the last ten years, or demonstrate that control technology being employed is comparable to the best available control technology or lowest achievable emission rate. A source that qualifies as a clean unit would not have to go through a traditional NSR applicability determination if it makes certain types of changes in the future. The Commission's 2004 Rule adopted the clean unit exemption virtually without change.
The 2002 Rule also expanded the exemption from major modifications for pollution control projects (PCPS), originally provided only to electric utility steam generating units in the 1992 WEPCO Rule. Under the 2002 Rule, collateral emissions increases resulting from a PCP at an existing unit would not be included in calculations to determine if a project involving that unit would trigger NSR.
As part of the 2002 rule, EPA allowed sources to calculate their actual and projected actual emissions to determine whether a modification will trigger NSR. If a source concludes that there is no "reasonable possibility" that emissions from a project will trigger NSR, the source is not required to keep records substantiating that calculation. However, the data and records would necessarily be generated by the owner or operator to calculate its emissions.
The Commission did not follow the Federal Rule in this regard. In Section I.B.5., the Commission imposed a requirement that owners or operators using the actual-to-projected-actual applicability test for a project that requires a minor source permit or modification [pursuant to Part A, Section I.B.26.; Part C, Section I.A.3.; or Part C, Section X.; or any minor source permit under any provisions of Part B], submit an otherwise-required permit application and include documentation adequate to substantiate calculations made for the test.
On June 24, 2005, the United States Court of Appeals for the District of Columbia Circuit issued its decision and opinion in the case of State of New York v. U. S. Environmental Protection Agency,----F.3D---- 2005 WL 1489698, 35 Envtl. L. Rep. 20,135, D.C.Cir., June 24, 2005. The court concluded that, regarding the clean unit exemption from NSR, the plain language of the Clean Air Act indicated that Congress intended to apply NSR to changes that increase actual emissions instead of potential or allowable emissions. As a result, the court vacated the clean units portions of the Federal Rule. The court also concluded that EPA lacks the authority to create pollution control project exemptions from NSR and vacated the PCP portions of both the 1992 Wepco Rule and the 2002 rule. By vacating those portions of the Federal NSR rule, the court terminated those exemptions to new source review.
In view of the court's decision, the Commission concluded that there was no basis to retain the clean unit and pollution control project provisions in Regulation no. 3. The federal rule no longer allows operators to use those provisions to determine applicability of NSR to the source and Colorado law and the Colorado State Implementation Plan should be conformed to federal law in this instance.
The D.C. Circuit court also addressed the recordkeeping and reporting requirements of the federal rule. The 2002 rule excused a source from maintaining records of the information and calculations used in the actual-to-projected actual applicability test if the source determined that there was no "reasonable possibility" that the modification would trigger NSR. These are the same records necessary to substantiate calculations made for the applicability test. The court concluded that lack of evidence, in the form of data and records, could inhibit enforceability of the NSR program in this context. The court remanded this part of the rule.
By remanding this portion of the 2002 rule, the court allowed EPA to further consider its position and return to the court at some time in the future for more proceedings in support of the rule. In this case, EPA has the opportunity to explain how it can ensure NSR compliance without the relevant data. There is no deadline, or requirement, for EPA to take further action.
The Commission, in its 2004 rulemaking, elected to require that sources retain records that, among other things, are essential to substantiate sources' calculations using the actual-to-projected-actual applicability test. The Commission also chose to require that a source submit its data and calculations along with a permit application that would otherwise be required for the physical or operational change. The Division reviews the data and calculations only to confirm a source's conclusions whether it triggers NSR. The information submitted is then included in a non-enforceable appendix to a source's Title V Permit or as a permit note in the source's construction permit
The recordkeeping requirement adopted by the Commission has benefits to both sources and the Division, one of which is to avoid later uncertainty whether a project triggered NSR. Accordingly, the Commission elected not to modify this part of Regulation Number 3.
The recordkeeping requirement adopted by the Commission has benefits to both sources and the Division, one of which is to avoid later uncertainty whether a project triggered NSR. Accordingly, the Commission elected not to modify Part D, Section I.B.5. and to modify Part D, Sections V.A.7.c. and VI.B.5. in a manner, that maintains consistency with Section I.B.5.
Revisions to Regulation Number 3, Part F, Best Available Retrofit Technology
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Colorado Administrative Procedures Act, § 24-4-103, C.R.S., and the Colorado Air Pollution Prevention and Control Act, § § 25-7-110 and 25-7-110.5, C.R.S ("the Act").
Specific Statutory Authority
The Commission promulgates this regulation pursuant to the authority granted in C.R.S., Sections 25-7-105 (general authorities and duties of the Commission for air quality control); 25-7-105(1)(c), (authority to adopt a prevention of significant deterioration program); 25-7-106 (additional authorities of the Commission for air quality control); 25-7-106(1) (authority to exercise flexibility in developing effective air quality control program); 25-7-106(2) (authority to hold public hearings); 25-7-109(1)(a) (authority to require the use of air pollution controls); 25-7-109(2)(a) (authority to adopt emission control regulations pertaining to visible pollutants); 25-7-114.4(1) (authority to adopt rules for the administration of permits); 25-5-114.5 (authority to require permit applications and make determinations, and to provide for public participation), and 25-7- 1002 (authority to maintain a program that complies with the requirements of the Federal act for prevention and remediation of significant deterioration of visibility in class I Federal areas).
Basis and Purpose
On July 1, 1999, the U.S. Environmental Protection Agency promulgated final regulations that require each state to submit a State Implementation Plan (SIP) to address regional haze. Those regulations require the State to establish a mechanism to identify sources that must analyze installation of Best Available Retrofit Technology (BART) and to require those analyses and implementation of resulting determinations.
The process begins with defining air pollution facilities that are "BART-eligible." Among the BART-eligible sources, some sources are "subject to BART." Sources that are subject to BART must complete an analysis and submit a proposal for determination by the State of the Best Available Retrofit Technology applicable to that source. This regulation establishes the mechanisms for this process. In many instances, the regulation matches the Federal BART rule, including provision for a BART-Alternative approach that would yield "better than BART" results.
The Commission elected to assume that all BART-eligible sources are subject to BART, but require the Division to perform modeling to determine whether BART eligible sources will cause or contribute to visibility impairment in any class I area. BART-eligible sources that do not cause or contribute to visibility impairment in any class I area would not be subject to BART. Individual sources would also have the opportunity to demonstrate that they are not eligible or not subject to BART. This approach will provide information necessary to develop the regional haze SIP on the schedule required by Federal law and allows for challenges to decisions on whether individual sources must complete BART analyses and to BART determinations by the State.
Sources subject to BART must evaluate all technologies through a five step case-by-case BART analysis. The five steps require sources to:
This rule requires a source subject to BART to file an application for a construction permit as the mechanism for submitting its BART analysis and proposal, and for seeking a Division determination of BART for the source. The Commission concluded that using the existing permitting mechanism was the most expedient way to present the analysis for Division determination. The Commission further determined that applications for BART determinations should be subject to the public comment process applicable to construction permit applications for new or modified major sources.
When identifying the available retrofit control technologies, sources must include appropriate BACT, LAER, NSPS, Pollution Prevention (P2) and other controls used by similar sources. This can include new control technologies that are in the development stages of licensing and commercial demonstration or commercial sales. Where EPA has already conducted extensive analyses for a source category (e.g., EGUs) in relation to the Federal BART Rule and determined that certain control technology would not be required under the pertinent BART analyses, the Commission intends that a Colorado source subject to BART may adequately demonstrate that the same technology excluded under the EPA analyses would not be appropriate for the Colorado source by showing sufficient similarity between the source evaluated by EPA and the Colorado source.
Sources that identify specific options as technically infeasible must show to the Division's satisfaction that the technology is not commercially available or that specific physical or chemical characteristics of the unit(s) or emission(s) involved will not allow the technology to operate effectively.
The control effectiveness of any technology must be evaluated based on the highest removal efficiency available for the technology. Sources may also look at lower efficiencies in addition, but must include consideration of the best removal efficiency. If a source has existing controls in place, improvements to the existing controls or running the existing controls at a higher efficiency must be included in the analysis.
The Commission realizes that emission controls often have secondary impacts. Sources must evaluate the costs of compliance including the average cost effectiveness and the incremental cost effectiveness of each technology that is feasible for the source. Energy impacts including the direct energy consumption for each technology and any locally scarce fuels must be evaluated. Many control options have secondary impacts on other media. Sources must evaluate any increases in hazardous waste, wastewater, or other waste products, including increased usage of scarce resources such as water. In cases where a facility has a limited remaining operating life, the source can place a federally enforceable shutdown date in its operating permit.
The Commission intends that the Division use EPA's presumptive limits as guidelines when evaluating the BART analyses, with the understanding that there is a strong presumption that power plants capable of generating 750 megawatts or greater will meet these limits or do better, while the coal-fired electric generating units at smaller plants need to consider the presumptive limits as part of the BART analysis. Further, if a source submits an analysis demonstrating that it will meet the presumptive limits, then the source will be presumed to have met the BART-analysis requirements, absent an adequate showing to the contrary. If a source proposes a BART limit that exceeds EPA's presumptive limits, the Division would determine whether the BART analysis sufficiently supports the higher limit or whether other controls or increased control efficiencies are feasible. The Commission intends that the Division would establish a BART limit higher than the presumptive limit if supported by the BART analysis.
The Federal rules require the State to submit a SIP that identifies BART-eligible sources in the State, and requires the State to either adopt BART controls or adopt a BART Alternative. In some respects, the approach in the proposed State rule to applying the requirements of the Federal Act is not specifically mandated by the Federal rule, but left to the discretion of the State. The Federal Act does not specify the administrative decision-making process that will be used to make the relevant BART determinations. The State rule establishes such a procedure, relying on existing permitting procedures to the extent possible and appropriate. The procedure established by the State rule affords sources an opportunity for a hearing on the relevant BART decisions. This process is consistent with permitting practices and otherwise not more stringent than Federal requirements.
NOx emissions from coal-fired power plants vary considerably depending on the design of the boiler, the type of combustion controls and the type of coal used. Each of these factors has an impact on the BART analysis. In setting presumptive BART limits for NOx, EPA took into account available types of combustion control equipment, the differences between boiler types, and ranks of coal (bituminous, sub-bituminous and lignite), thereby indicating these factors should be a part of BART analyses-not solely for large power plants subject to the presumptive levels for NOx, but for all coal-fired power plants. These NOx-related characteristics should be taken into account in setting BART limits. The BART guidelines allow states to take these characteristics into account and it is the intent of the Commission that the Division should evaluate this issue as part of BART analyses. Consistent with the Federal BART Guidelines, BART determinations should take into account possible local economic disruption and unemployment that might result from adverse impacts on coal sales related to BART determinations.
In consideration of the unusual number of significant and complex permit determinations under the BART rule that will be become open to public comment about the same time, the Commission intends that the Division consider reasonable flexibility in applying procedures and time periods for public comment. The Commission also intends that all agreements and BART alternatives be noticed together with the construction permit for public comment purposes.
The Air Quality Control Commission expects that the Division will provide the information required by 40 CFR 51.308. (d)(1) and (2) for the July 20,2006 regular monthly meeting of the Commission.
Revisions to Regulation Number 3
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Colorado Administrative Procedures Act, Section 24-4-103, C.R.S., and the Colorado Air Pollution Prevention and Control Act, Sections 25-7-110 and 25-7-110.5, C.R.S.
Basis
In accordance with the 1990 Amendments to the Federal Clean Air Act, the U.S. Environmental Protection Agency (EPA) has approved incorporation of the provisions for the New Source Review and Prevention of Significant Deterioration programs (collectively referred to as "NSR") into Colorado's state implementation plan (SIP). In June 2005, the Governor submitted revisions to Colorado's NSR program to EPA Region VIII for review and approval. During review of the submittal, Region VIII identified minor issues with provisions in Regulation Number 3 that the Commission is correcting to ensure continuing federal approval of Colorado's NSR program. The Commission is also adopting language to treat nitrogen oxides as an ozone precursor, consistent with EPA's promulgation of corresponding language on November 29, 2005.
Section 112 of the Clean Air Act requires EPA to maintain a list of hazardous air pollutants (HAPs) subject to regulation under that Section. EPA occasionally revises the list by adding or removing pollutants based on updated scientific evidence of health impacts. EPA removed methyl ethyl ketone (MEK) from the list on December 19, 2005. Therefore, the Commission is removing MEK from the list of HAPs in Regulation Number 3, Part A, Appendix B.
On November 29, 2004, EPA revised the federal definition of volatile organic compounds (VOCs) to specifically treat tertiary butyl (t-butyl) acetate as a VOC only for certain purposes, including reporting and photochemical dispersion modeling. The Commission is making corresponding changes to the definition of VOCs in the Common Provisions Regulation, and is adding t-butyl acetate as a non-criteria reportable pollutant in Regulation Number 3, Part A, Appendix B. Sources of t-butyl acetate will be required to report the pollutant separately from their VOC emissions on an Air Pollutant Emission Notice, and should not count their t-butyl acetate emissions when evaluating compliance with applicable VOC emission limitations. The Division should combine VOC emissions and reported t-butyl acetate emissions when conducting dispersion modeling for sources of t-butyl acetate.
The Commission is also correcting several regulatory reference errors in Parts A, C, and D.
Specific Statutory Authority
The Colorado Air Pollution Prevention and Control Act, Section 25-7-105, C.R.S., gives the Commission authority to promulgate regulations necessary for the proper implementation of the Act, including rules to assure attainment and maintenance of national Ambient Air Quality Standards and a prevention of significant deterioration program. Section 25-7-105(12), C.R.S. provides specific authority to establish emission notice, construction permit and operating permit programs. Some of the statutory parameters for these programs are set forth in Sections 25-7-114 through 25-7-114.7 of the Act and these Sections, in turn, provide statutory authority for the current revisions. Additional authority for these revisions is set forth in Sections 25-7-106, 25-7-119 and 25-7-132, C.R.S.
The Commission's adoption of this rule is taken pursuant to procedures and requirements set forth in Sections 25-7-105, 25-7-110 and 25-7-110.5, C.R.S.
Purpose
The Commission is revising Regulation Number 3 to address issues identified by the U.S. Environmental Protection Agency (EPA) during review of Colorado's state implementation plan (SIP) in 2005, to incorporate federal changes to the New Source Review program, to revise the definition of volatile organic compounds and the list of hazardous air pollutants consistent with federal actions, and to make miscellaneous technical corrections. These changes will help to ensure continued approval by EPA of Colorado's New Source Review program and will provide consistent treatment by EPA and the Division of hazardous air pollutants and volatile organic compounds. These changes will also correct regulatory cross-references within Regulation Number 3, which will make the regulation easier to understand. Further, these revisions include any typographical errors within the regulation.
Revisions to Regulation Number 3, Part A, Section VI.D.1.
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Colorado Administrative Procedure Act Sections 24-4-103(4), C.R.S. for new and revised regulations.
Basis
The Air Quality Control Commission has adopted revisions to Part A, Section VI.D.1. in order to increase the annual emission fees charged to air pollution sources in Colorado commencing in 2007. The revised fees are within the statutory limit set by Section 25-7-114.7, C.R.S. The increase is necessary to address decreasing fee revenues used to fund existing programs, as well as to provide additional funding for requested additional permitting and inspection personnel. The proposed increase was addressed at length during a subcommittee process involving the Commission, the Division, stakeholders and other interested parties. The revision is a collaborative effort of the Division and interested stakeholders.
Specific Statutory Authority
The specific statutory authority for these revisions is set forth in Sections 25-7-114.7 of the Colorado Air Pollution Prevention and Control Act ("Act"), which allows the Commission to set annual emission fees for regulated and hazardous air pollutants.
Purpose
The revisions to Part A, Section VI.D.1. were adopted to cover anticipated revenue shortfalls and fund requested additional FTE that will be used to address the Division's permitting backlog and the increased workload arising from the rapid growth of oil and gas sources in Colorado.
Revisions to Regulation Number 3, Part A, Section VI.D.1.
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Colorado Administrative Procedure Act Sections 24-4-103(4), C.R.S. for new and revised regulations.
Basis
The Air Quality Control Commission has adopted revisions to Part A, Section VI.D.1. in order to increase the annual emission fees charged to air pollution sources in Colorado commencing in 2007. The revised fees are at the statutory limit set by Section 25-7-114.7, C.R.S. The increase is necessary to address decreasing fee revenues used to fund existing programs. These revisions are concurrent with other recent fee adjustments to ensure appropriate funding for the program.
Specific Statutory Authority
The specific statutory authority for these revisions is set forth in Sections 25-7-114.7 of the Colorado Air Pollution Prevention and Control Act ("Act"), which allows the Commission to set annual emission fees for regulated and hazardous air pollutants.
Purpose
The revisions to Part A, Section VI.D.1. were adopted to cover anticipated revenue shortfalls and fund requested additional FTE that will be used to address the Division's permitting backlog and the increased workload arising from the rapid growth of oil and gas sources in Colorado.
Revisions to Regulation Number 3, Part E, Best Available Retrofit Technology
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Colorado Administrative Procedures Act, § 24-4-103, C.R.S., and the Colorado Air Pollution Prevention and Control Act, § § 25-7-110 and 25-7-110.5, C.R.S ("the Act").
Specific Statutory Authority
The Commission promulgates this regulation pursuant to the authority granted in Sections 25-7-105(1)(c), C.R.S. (authority to adopt a prevention of significant deterioration program); 25-7-109(1)(a) (authority to require the use of air pollution controls); 25-7-109(2)(a) (authority to adopt emission control regulations pertaining to visible pollutants); 25-7-114.4(1) (authority to adopt rules for the administration of permits); and 25-7-1002 (authority to maintain a program that complies with the requirements of the federal act for prevention and remediation of significant deterioration of visibility in class I federal areas).
Basis and Purpose
This regulatory change places the Division's BART determinations and associated requirements in a new section of Regulation Number 3, Part E - Section VI.
EPA has raised concerns regarding the practical enforceability of the Colorado's BART determinations. The emission limits and averaging times for each of Colorado's BART sources will be included in each Title V permit, and included in the proposed SIP. The Title V permits and the SIP are each federally enforceable when approved by EPA. Nonetheless, EPA believes that more is needed to ensure the practical enforceability of these BART limits.
To address EPA's concerns the BART emission limits and related provisions concerning the installation, operation and maintenance of BART controls have also been added to Regulation Number3, and new Section VI will become part of Colorado's SIP.
The foregoing approach is largely similar to the approach taken on the state's PM-10 SIP in 2001, where the state agreed to include certain emission limits in Regulation Number 1.
Revisions to Regulation Number 3
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Colorado Administrative Procedure Act Sections 24-4-103(4), C.R.S. for new and revised regulations.
Basis and Purpose
The Colorado Air Quality Control Commission ("Commission") intends to revise the provisions of Regulation Number 3, Part A and B to include PM2.5 as a Colorado regulated pollutant, to address inadvertent removals of rule revisions previously adopted by the Commission, and finally to correct typographical, grammatical and formatting errors found throughout Regulation Number 3.
Regarding PM2.5 emissions, the EPA promulgated a revised national ambient air quality standard ("NAAQS") for PM2.5 emissions on October 17, 2006. The effective date for the new standard was December 18, 2006. The Commission intends to apply the Regulation Number 3 requirements to PM2.5 emissions.
Additionally, the Commission intends to reinstate several previously adopted revisions and to correct several typographical errors in Regulation Number 3.
Note that the Commission intends to defer any decision to exclude ethanol production facilities from the major stationary source definition of "chemical process plant" as proposed in the Federal Register on May 1, 2007 [see 72FR24060] until all relevant pending matters at the federal level are resolved.
PM2.5 Emissions
The Commission intends to apply the Regulation Number 3, Part A and B requirements to PM2.5 emissions by 1) including PM2.5 emissions under the "air pollutant" and "criteria pollutant" definitions found in Part A, Sections I.B.6 and I.B.16, and 2) setting permitting thresholds as the same level as PM10 emissions (revise Part B, Sections II.D.2 and II.D.3). Note that the EPA has not yet promulgated the PM2.5 New Source Review ("NSR") Implementation Rule, which will specify how PM2.5 emissions should be treated for Prevention of Significant Deterioration ("PSD") and major source NSR sources. Upon promulgation, the Commission intends to incorporate those changes into Regulation Number 3, Part D as well.
Inadvertent Removals of Rule Revisions
Several previously adopted rule revisions were discovered as having been inadvertently removed from Regulation Number 3. The Commission intends to reinstate these previously adopted revisions.
Specifically, the Commission intends to:
Re-identify volatile organic compounds ("VOCs") as being subject to the Reasonably Available Control Technology ("RACT") requirements. During the December 16, 2004 Regulation Number 3 rulemaking, VOCs were inadvertently removed from the RACT requirements. Since the minor source RACT requirement for VOC emissions were part of the State Implementation Plan, EPA considers removal of VOCs from minor source RACT requirements as backsliding. Therefore, this revision should be reinserted into Regulation Number 3, Part B, Section III.D.2.
Re-insert the inadvertent removal of the following text previously adopted by the Commission on December 16, 2004:
Reference to "attainment/maintenance" areas in Part B, Sections II.D.1.c.(iii)(B), III.B.5.d., and III.C.1.a., and
Remove exemption reference to Denver Metropolitan PM10 attainment/maintenance area and change reference to "Denver Metropolitan PM10 and ozone attainment/maintenance area" to "Denver 1-hour ozone attainment/maintenance area" in Part B, Section II.D.1.f.
Typographical, Grammatical and Formatting Errors
The Commission intends to correct several specific typographical errors in Regulation Number 3.
Specifically, the Commission intends to:
Revise "citric acid plants" to "nitric acid plants" in Part A, Section I.B.23.b.(ix), and
Revise incorrect citation in Part B, Section I.A.
In addition, the Commission intends to correct grammatical and formatting errors in Regulation Number 3.
Specific Statutory Authority
The Colorado Air Pollution Prevention and Control Act, Section 25-7-105, C.R.S., gives the Commission authority to promulgate regulations necessary for the proper implementation of the Act, including rules to assure attainment and maintenance of the NAAQS and a PSD program. Section 25-7-105(12), C.R.S. provides specific authority to establish emission notice, construction permit and operating permit programs. Key statutory parameters for these programs are set forth in Sections 25-7-114 through 25-7-114.7 of the Act and provide statutory authority for the current revisions. Additional authority for these revisions is set forth in Sections 25-7-106, 25-7-119 and 25-7-132, C.R.S.
The Commission's adoption of this rule is taken pursuant to procedures and requirements set forth in Sections 25-7-105, 25-7-110 and 25-7-110.5, C.R.S.
Revisions to Regulation Number 3, Part F
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Colorado Administrative Procedures Act, § 24-4-103, C.R.S., and the Colorado Air Pollution Prevention and Control Act, § § 25-7-110 and 25-7-110.5, C.R.S ("the Act").
Specific Statutory Authority
The Commission promulgates this regulation pursuant to the authority granted in Sections 25-7-105(1)(c), C.R.S. (authority to adopt a prevention of significant deterioration program); 25-7-109(1)(a) (authority to require the use of air pollution controls); 25-7-109(2)(a) (authority to adopt emission control regulations pertaining to visible pollutants); 25-7-114.4(1) (authority to adopt rules for the administration of permits); and 25-7-1002 (authority to maintain a program that complies with the requirements of the federal act for prevention and remediation of significant deterioration of visibility in Class I federal areas).
Basis and Purpose
The original language in Section IV.B established that the Division could not require post combustion NOx controls for any BART source. The Division has reviewed the data available on post combustion NOx controls in the EPA BART regulation and requested that the Commission narrowly modify the exclusion of post combustion NOx control. The EPA BART regulation investigated post combustion NOx control for Electric Utility Generators (EGUs) and generally determined that post combustion NOx control was only necessary in limited cases. The Commission believes that this analysis should be extended to boilers, as they are similar types of equipment. The Commission does not believe that the analysis done by EPA in the BART rule can be extended to cement production because of the dissimilar nature of the overall process of operation between boilers and cement kilns. The Commission narrowly modifies the provisions regarding the analysis of post combustion NOx controls as it relates to non-EGUs and non-boilers. The Commission believes this narrow amendment to Regulation Number 3 is appropriate and supported by the evidence in the hearing record.
Revisions to Regulation Number 3, Part A
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Colorado Administrative Procedures Act, § 24-4-103(4), C.R.S., for new and revised regulations.
Basis
The Air Quality Control Commission has adopted revisions to Part A, Section VI.D.1. in order to increase the annual emission fees charged to air pollution sources in Colorado commencing in 2008. The revised fees are at the statutory limit set by Section 25-7-114.7, C.R.S. The proposal increases the fees to the levels enacted by the General Assembly, and signed by the Governor, in SB08-055, reflected in Section 25-7-114.7, C.R.S. as amended.
Specific Statutory Authority
The specific statutory authority for these revisions is set forth in Sections 25-7-114.7 of the Colorado Air Pollution Prevention and Control Act ("Act"), which allows the Commission to set annual emission fees for regulated and hazardous air pollutants.
Purpose
The revisions to Part A, Section VI.D.1. were adopted to provide necessary revenue for existing and anticipated revenue shortfalls, and fund additional legislatively-authorized FTE and legislatively-directed air quality monitoring.
Revisions to Regulation Number 3, Part A, B and C
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Colorado Administrative Procedure Act Sections 24-4-103(4), C.R.S. for new and revised regulations.
Basis
As of November 20, 2007, the EPA's deferral of a nonattainment designation for the 8-Hour Ozone Nonattainment Area expired, signifying that the area is now considered nonattainment, or in violation of the 1997 8-Hour Ozone NAAQS of 0.08 parts per million (ppm) for ground level ozone. This area is now known as the Denver Metro Area/North Front Range Nonattainment (DMA/NFR) Nonattainment Area. The DMA/NRF Nonattainment Area includes all of Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, and Jefferson Counties as well as portions of Larimer and Weld Counties.
Pursuant to the Federal Clean Air Act, Colorado must prepare and submit a State Implementation Plan (SIP) to the EPA no later than by June 30, 2009. This plan must propose measures designed to reduce ground level ozone precursor pollutants. The plan must provide for reductions in these precursor pollutants sufficient to ensure that ozone is reduced to below the 8-Hour Ozone NAAQS no later than 2010. If Colorado fails to submit a sufficient SIP by the aforementioned deadline, the Clean Air Act mandates that the U.S.E.P.A. prepare and implement a Federal Implementation Plan in Colorado.
Pursuant to C.R.S. § 25-7-105(1)(a)(I), the Commission must adopt such measures as are necessary to ensure compliance with the NAAQS. The Commission has adopted these rules to carry out this mandate. Specifically, the Commission has adopted revisions to Regulation Number 3, Parts A, B and C to address ozone formation in the DMA/NFR Nonattainment Area. Specifically, the Commission has adopted revisions to reduce an ozone precursor, volatile organic compound (VOC) emissions, and thus reduce ozone formation. These revisions are necessary to ensure attainment of the current 8-Hour Ozone NAAQS set at 0.08 ppm. Also, these revisions help Colorado make progress toward eventual compliance with the new ozone NAAQS set at 0.075 ppm as well as the Governor's directive to proactively and pragmatically reduce ozone levels.
Photochemical grid dispersion modeling indicates that without further emission controls, Colorado will attain the 8-hour standard by 2010. The dispersion modeling reflects that Colorado would attain the standard by a narrow margin - within 0.001 ppm on a standard of 0.08 ppm. Photochemical dispersion modeling analysis is the primary tool used to assess present and future air quality trends, and is required for EPA to approve the state attainment demonstration in the SIP. Dispersion modeling results have an inherent level of uncertainty, as recognized in EPA guidance, and it is appropriate for a state to use other tools at its disposal, including further control measures, to address and mitigate any uncertainties that can be present in dispersion modeling. It is appropriate for the state to use such tools to increase the confidence in and otherwise ensure that the predicted modeling results are accurate and borne-out in future air quality monitoring demonstrating attainment with the 8-Hour Ozone NAAQS.
In addition, pursuant to EPA guidance, if modeling results indicate that the highest ozone levels will fall between 0.082 and 0.087 ppm, Colorado must conduct a "weight of the evidence" analysis and other supplemental analysis in order to corroborate the modeling results. Colorado's model results are within this range, and thus the state has conducted this analysis. The analysis supports the conclusion that Colorado will attain the standard by 2010, although by a narrow margin. To increase the certainty of the model results and the weight of evidence demonstration, the Commission concludes that these additional control measures are necessary to carry out its mandate to adopt a SIP that contains those elements that are necessary to assure attainment of the 8-Hour Ozone NAAQS.
In order to maintain consistency between state regulations and federally enforceable regulations contained in the SIP, specifically changes to the exemptions, the Commission intends these revisions be adopted into the SIP.
Statutory Authority
The statutory authority for these revisions is set forth in the Colorado Air Pollution Prevention and Control Act ("Act"), C.R.S.§ 25-7-101, et seq., specifically, C.R.S. § 25-7-105(1)(a) (authorizing a comprehensive state implementation plan which will assure attainment and maintenance of the NAAQS), 105(12) (authorizing rules necessary to implement the provisions of the emission notice and construction permit programs and the minimum elements of the operating permit program), 109(1)(a), (2) and (3) (authorizing rules requiring effective practical air pollution controls for significant sources and categories of sources, including rules pertaining to nitrogen oxides and hydrocarbons, photochemical substances, as well as rules pertaining to the storage and transfer of petroleum products and any other VOCs) and § 25-7-301 (authorizing the development of a program for the attainment and maintenance of the NAAQS).
Purpose
These revisions to Regulation Number 3 are part of an overall ozone reduction strategy to be incorporated into Colorado's SIP for ozone. The Commission intends that this overall ozone reduction strategy accomplishes five objectives:
The Commission is adopting revisions to Part A to eliminate exemptions for certain facilities from air pollution emission notice requirements. These facilities include:
* Petroleum industry flares less than 5 tons per year (tpy) emissions,
* Specified crude oil truck loading equipment,
* Oil/gas production wastewater
* Crude oil storage tanks,
* Surface water storage impoundment, and
* Condensate tanks with production 730 BBL/year or less.
The Commission is also adopting revisions to Part B to exempt the following facilities from construction permit requirements:
* Petroleum industry flares less than 5 tons per year (tpy) emissions,
* Specified crude oil truck loading equipment,
* Oil/gas production wastewater, except for commercial wastewater processing facilities, and
* Specified crude oil storage tanks.
The Commission is adopting revisions to Part C to clarify that the chemical storage tank exemption and surface water storage impoundment exemptions do not apply to specified production wastewater.
In support of objectives A and E, the Commission adopts these revisions to Regulation Number 3, Parts A, B and C to revise APEN reporting exemptions for specific source categories (Regulation Number 3, Part A, Section II.D., Part B, Section II.D., and Part C, Section II.E.).
Improve Emissions Inventory
The Commission is changing several categorical APEN reporting and/or permitting exemptions in Regulation Number 3, Parts A, B and C in order to improve the Division's emissions inventory and for the sake of equity. These changes fall in three categories:
Remove APEN and Permitting Exemptions
The Commission has eliminated the APEN exemption for condensate tanks because the exemption was based on an emission level used in attainment areas. The Division will now be able to develop a complete inventory of condensate tanks and their emissions.
Condensate tanks are now subject to the same APEN requirements as other source categories in the 8-Hour Ozone Nonattainment Area. Additionally, the condensate tank exemption is based on a standardized emission factor, 13.7 pounds of VOC emissions per barrel of production, which may not be representative of each natural gas field. Even though the exemption was removed sources may still make use of the generic APEN exemption, upon determining that actual annual uncontrolled emissions fall below the applicable de minimis levels identified in Regulation Number 3, Part A. If based on this generic exemption, a source is determined to be APEN exempt, the source is also permit exempt.
Remove APEN Exemptions, Keep Permit Exemptions
The Commission has removed specific source category APEN exemptions for petroleum industry flares, crude oil truck loading, oil production wastewater and crude oil storage tanks to improve the inventory of actual uncontrolled emissions. Sources may still use the generic APEN exemption, upon determining that actual annual uncontrolled emissions fall below the applicable de minimis levels. The Commission is maintaining current permitting exemptions until such time that the APEN data justify the need for permitting activities.
Revise APEN and/or Permitting Exemptions
Similarly, based on the Division's experience, actual emissions from several source categories specific to oil and gas-related operations may be higher than previously believed. Thus the APEN and permitting exemptions for surface water impoundments (Regulation Number 3, Part A, Section II.D.1.uuu. and Part C, Section II.E.3.yyy.) were revised to exclude from the exemption, oil and gas production wastewater (similar to Regulation Number 3, Part A, Section II.D.1.uu.). Also, the APEN and permitting exemptions for chemical storage tanks (Regulation Number 3, Part C, Section II.E.3.n.) were revised to exclude oil and gas production wastewater or commercial facilities' operations (similar to Regulation Number 3, Part A, Section II.D.1.uuu. and Part C, Section II.E.3.yyy.).
Finally, the APEN and permitting exemptions for fuel storage dispensing (Regulation Number 3, Part A, Section II.D.1.cccc. and Part C, Section II.E.3.cccc.) were revised to expand the applicability of the current exemption from specifically the 1-Hour Ozone Nonattainment or Attainment/Maintenance Area to any ozone nonattainment area for the sake of equity.
Revisions to Regulation Number 3, Part F
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Colorado Administrative Procedure Act Sections 24-4-103, C.R.S. and the Colorado Air Pollution Prevention and Control Act Sections 25-7-110 and 25-7-110.5, C.R.S. ("the Act").
Specific Statutory Authority
The Commission promulgates this regulation pursuant to the authority granted in Sections 25-7-105(1)(c), C.R.S. (authority to adopt a prevention of significant deterioration program); 25-7-109(1)(a) (authority to require the use of air pollution controls); 25-7-109(2)(a) (authority to adopt emission control regulations pertaining to visible pollutants); 25-7-114.4(1) (authority to adopt rules for the administration of permits); and 25-7-1002(authority to maintain a program that complies with the requirements of the federal act for prevention and remediation of significant deterioration of visibility in Class I federal areas.
Basis and Purpose
This regulatory change updates the Division's BART determinations by adding determinations for Colorado Springs Utilities Drake Units 5, 6, and 7 and CEMEX Portland cement facility regarding limits and averaging times for sulfur dioxide, nitrogen oxides and particulates.
The proposed change provides state and federally enforceable limitations for the BART sources. States must ensure that "each source subject to BART maintain the control equipment required by this subpart and establish procedures to ensure such equipment is properly operated and maintained". 40 CFR 51.308(e)(v). This is required for SIP approval.
Revisions to Parts A, B, C and D to Address Greenhouse Gases or GHGs
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Colorado Administrative Procedure Act Sections 24-4-103(4) and (12.5), C.R.S. for new and revised regulations.
Basis
Regulation Number 3 is designed to implement substantive regulatory programs authorized under the Colorado Air Pollution Prevention and Control Act ("Act") including provisions of the State Implementation Plan addressed in C.R.S. Section 25-7-105(1)(a), emission control regulations addressed in C.R.S. Section 25-7-105(1)(b), Prevention of Significant Deterioration requirements addressed in C.R.S. Section 25-7-105(1)(c), regulations as may be necessary and proper for the orderly and effective administration of construction permits and renewable operating permits addressed in C.R.S. Section 25-7-114.4(1), as well as other authorized programs under the Act. The current revisions have been promulgated in order to facilitate this goal. The revisions were proposed by the Air Pollution Control Division based on EPA's GHG Tailoring Rule. On June 3, 2010, EPA promulgated the "Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule." See 75 Fed. Reg. 31514 (June 3, 2010). EPA's Greenhouse Gas (GHG) Tailoring Rule was designed to tailor the applicability criteria that determine which stationary sources and modification projects become subject to permitting requirements for GHGs under the Prevention of Significant Deterioration (PSD) and Title V Permitting Programs of the Clean Air Act (CAA).
Specific Statutory Authority
The Act, under C.R.S. Section 25-7-105(1)(a) authorizes the Air Quality Control Commission (Commission) to adopt rules necessary to implement the Act, and to adopt and revise comprehensive State Implementation Plans (SIP) to assure attainment and maintenance of national ambient air quality standards. C.R.S. Section 25-7-109 authorizes the Commission to adopt rules that are consistent with state policy regarding air pollution and with federal recommendations and requirements. C.R.S. Section 25-7-109(2) authorizes the Commission to regulate oxides of carbon, oxides of nitrogen and other chemicals, which encompasses the pollutant GHG. Additionally, Colorado is authorized to regulate GHGs under PSD and Title V in C.R.S. Sections 25-7-103 (1.5), 25-7-114(3), 25-7-114.3, and 25-7-201. Additional authority for these revisions is set forth in C.R.S. Sections 25-7-106 and 25-7-109, and 25-7-114. In order to maintain consistency between state regulations and federally enforceable regulations contained in Colorado SIP, the Commission intends these revisions be adopted into the SIP.
Purpose
The Commission has adopted revisions throughout Regulation Number 3 to address GHG regulation in Colorado. These revisions were made to incorporate EPA's GHG Tailoring Rule into Colorado's Title V and PSD Permitting Programs, and to extend synthetic minor permitting to Colorado's stationary sources seeking federally enforceable limits to avoid major source or major stationary source applicability thresholds specific to GHGs.
EPA's GHG Tailoring Rule establishes a phased approach for applying the CAA's PSD and Title V Permitting Programs to the sum of six GHGs.1 The GHG Tailoring Rule has several different components including permitting thresholds and timing, commitments to the next steps, implementation options, and information requests.
On April 2, 2007, the U.S. Supreme Court held that GHGs are included in the definition of "air pollutant" under CAA Section 302(g). Massachusetts v. EPA, 549 U.S. 497 (2007). As part of this decision, the Court mandated EPA to determine under CAA Section 202(a) whether GHG emissions from new motor vehicles endanger public health or welfare, or if too much scientific uncertainty remains to make such a determination.2
On December 7, 2009, EPA issued the Endangerment Finding and the Cause or Contribute Finding, both addressing GHGs under CAA Section 202(a). See 74 Fed. Reg. 66496 (Dec. 15, 2009). EPA's Endangerment Finding found that GHGs endanger the public health and welfare of current and future generations. The Cause or Contribute Finding found that the combination of the six well-mixed GHGs from new motor vehicles contributes to the GHG pollution which threatens public health and welfare. EPA's findings were a prerequisite to establishing GHG standards for light-duty vehicles, but they did not in themselves impose any requirements on GHG stationary sources.
On May 7, 2010, EPA published the Light-Duty Vehicle Rule (LDVR) jointly with the National Highway Traffic Safety Administration to reduce GHG emissions and improve fuel economy of new passenger cars, light-duty trucks, and medium-duty passenger vehicles. See 75 Fed. Reg. 25324 (May 7, 2010). The new GHG emissions standards under the LDVR first apply to model year 2012 vehicles and become increasingly more stringent through model year 2016.
EPA addressed the implications of GHGs as a newly regulated pollutant under the LDVR through the Johnson Memo ("EPA's Interpretation of Regulations that Determine Pollutants Covered by Federal Prevention of Significant Deterioration (PSD) Permit Program"). See 75 Fed. Reg. 17004 (March 29, 2010). EPA concluded that a previously unregulated pollutant is subject to regulation once it is subject to actual control of emissions under the CAA or EPA regulation, and that control requirement takes effect. Accordingly, EPA concluded that once the LDVR takes effect on January 2, 2011 (the earliest date that a model year 2012 vehicle could be put on the market), GHGs will become regulated pollutants under the PSD and Title V permitting programs. Absent the Tailoring Rule, GHGs would then be subject to regulation at the existing PSD and Title V thresholds of 100 / 250 tons per year (tpy).
The foregoing federal actions now require appropriate changes to Colorado's regulations. Colorado law already provides the Commission authority and an obligation to regulate GHGs under the state's PSD and Title V permitting programs. Colorado's definition of "air pollutant" mirrors EPA's definition under the CAA. See C.R.S. Section 25-7-103 (1.5) and CAA Section 302(g).3 Following the U.S. Supreme Court's holding in Massachusetts v. EPA, GHGs are included in the definition of air pollutant under CAA Section 302(g). Colorado's PSD program applies PSD permitting requirements to new major stationary sources and major modifications. C.R.S. Section 25-7-210. Similarly, Colorado defines a Title V "major source" as "any stationary source [...] that directly emits, or has the potential to emit, one hundred tons per year or more of any air pollutant." C.R.S. Section 25-7-114(3)(b). Furthermore, a Title V permit is required for any major source. C.R.S. Section 25-7-114.3(1)(b). The Division's proposed changes to Regulation Number 3 align these key definitions to Colorado's statute (which in turn map to the CAA) and add a definition of "subject to regulation," as defined in the Tailoring Rule.
The Commission's mandate includes promulgation of regulations to reduce air pollution, including the promulgation of a comprehensive state implementation plan which "shall meet all requirements of the federal act and shall be revised whenever necessary or appropriate." C.R.S. Section 25-7-105 ; see also C.R.S. Section 25-7-102 (legislative declaration). Furthermore, Colorado's statutes provide that "In the formulation of each emission control regulation, the commission shall take into consideration [...] the state policy regarding air pollution, as set forth in section 25-7-102 [and] Federal recommendations and requirements." C.R.S. Section 25-7-109(1)(b).
In addition to Colorado's statutory authority, federal PSD and Title V provisions under the CAA also place requirements on states to maintain PSD and Title V Permitting Programs in compliance with federal requirements. The chain of events described renders GHGs to be considered a regulated pollutant subject to the federal PSD and Title V permitting requirements. Under PSD, EPA mandates that "each applicable implementation plan shall contain emission limitations and such other measures as may be necessary, as determined under regulations promulgated under this part, to prevent significant deterioration of air quality ..." CAA Section 161. Under Title V, the CAA provides that "Whenever the Administrator makes a determination that a permitting authority is not adequately administering and enforcing a program, or portion thereof, in accordance with the requirements of this title, the Administrator shall provide notice to the State and may, prior to the expiration of the 18-month period referred to in paragraph (2), in the Administrator's discretion, apply any of the sanctions specified in section 179(b)." CAA Section 502(i)(1).
In order to avoid both the possibility of sanctions for failure to comply with EPA's permitting programs, as well as the unsustainable workload of regulating GHGs at the existing permitting thresholds of 100/250 tpy, the Division proposes regulatory revisions to comport with EPA's GHG Tailoring Rule.
Permitting Thresholds and Timing
Regarding permitting thresholds and timing, EPA's GHG Tailoring Rule identifies three steps - Steps 1, 2 and 3 - to phase in GHG permitting requirements over time. This rulemaking addresses only Steps 1 and 2, as discussed in EPA's GHG Tailoring Rule. While EPA's GHG Tailoring Rule generally discusses a Step 3,4 it provides few details on any associated timing and thresholds; instead EPA's GHG Tailoring Rule establishes an enforceable commitment to complete another rulemaking no later than by July 1, 2012 for Step 3 and beyond. The Commission intends to expressly address these future actions expeditiously as they arise.
This rulemaking establishes key definitions and the authority to regulate GHGs as well as addresses Steps 1 and 2 as identified in EPA's GHG Tailoring Rule. Step 1 spans from January 2, 2011 through June 30, 2011, and applies PSD and Title V permitting requirements to GHG emissions at "anyway sources," or stationary sources that are already subject to these permitting requirements for non-GHG pollutants. During Step 1, no source shall be required to obtain a Title V operating permit or PSD permit solely due to GHG emissions. Step 2 spans from July 1, 2011 through June 30, 2013. In Step 2, in addition to the requirements of Step 1, PSD and Title V permitting requirements apply to stationary sources which may be major5 for GHG emissions and no other regulated pollutant.
EPA's GHG Tailoring Rule sets a 100,000 tpy carbon dioxide equivalent (CO2e) applicability threshold for stationary sources that are major for GHG and no other non-GHG NSR regulated pollutant for PSD, and re-affirms that a significant emissions increase and a significant net emissions increase must occur in order to trigger PSD review. PSD and Title V permitting applicability thresholds and significance levels have traditionally been determined on a mass-basis. However, the Tailoring Rule sets a PSD significance level for GHG at 75,000 tpy on a CO2e basis. There are distinct units of measure used in identifying GHG applicability thresholds and significance levels. Some are mass-based and some are CO2e-based. The distinction between the two focuses on whether or not the global warming potential (GWP) is applied to each individual GHG species before summing the total of GHG classes for comparison to the appropriate value.
The Commission recognizes that the EPA is currently developing GHG permitting guidance. At its earliest convenience prior to January 2, 2011, the Division is instructed to provide permitting guidance to sources to minimize uncertainty.
Permitting and Application Requirements
The Commission recognizes the difficulties in developing a GHG inventory in short order, and directs the Division to request permit applicants which are required to provide a GHG inventory to submit one by a reasonable deadline set by the Division.
See the citations below for further information.
Complete Application
In Regulation Number 3, Part C, Section III.C.3.a., the Commission requires that all information related to the "emissions of pollutants sufficient to verify which requirements are applicable to the source" (which includes GHG) must be included in a complete application. Similarly, 40 C.F.R. 70.5(c)(3)(i) requires that Title V applications must include emissions of all regulated air pollutants.
Further, in Regulation Number 3, Part C, Section IV.B.4, the Commission requires that a source update its permit application to address any requirements that become applicable after the date the source has submitted its application, prior to issuance of the draft permit for public comment.
Application Shield
In Regulation Number 3, Part C, Section II.B., the Commission grants a defense to an enforcement action to sources which submit a timely and complete application under Part C until a final determination on the permit has been made. Per Regulation Number 3, Part C, Section IV.D., after an application is deemed complete, the Division may request additional information in writing and set a reasonable deadline for response. However, the application shield defense is not available if the source "fails to submit by the deadline specified in writing by the Division any additional information identified as necessary to process the application, or to otherwise supplement its application in accordance with the provisions of Regulation Number 3, Part C, Sections IV.B.3. and IV.B.4."
Applicable Requirement
In Regulation Number 3, Part A, Section I.B.9., the Commission defines applicable requirement consistently with that definition found in 40 C.F.R. Part 70, Section 70.2. Based on these definitions the mandatory GHG Reporting Rule requirements codified in 40 C.F.R. Part 98 do not meet the definitions of applicable requirements at this time; however, any GHG BACT requirement or other federally enforceable GHG requirements, including GHG synthetic minor permit conditions necessary to avoid major source or major stationary source thresholds are considered applicable requirements.
Regulation Number 3, Part C, Section V.B.4. requires that any operating permit address "all applicable requirements," however existing Title V sources that do not undergo PSD review should not trigger any GHG applicable requirements.
"Subject to Regulation or Requirement"
Prior to this rulemaking the Title V operating permit requirements of Regulation Number 3, Part C, Sections II.A.1.g., II.E.1. and II.E.2. already contained the language "subject to regulation or requirement", followed by a specific reference to the Federal Act or another part of Regulation Number 3. The phrase "subject to regulation" was addressed in the Johnson Memo, "EPA's Interpretation of Regulations that Determine Pollutants Covered by the Federal Prevention of Significant Deterioration (PSD) Permit Program" and later codified in the GHG Tailoring Rule and Regulation Number 3, Part A, Section I.B.44. See 75 Fed. Reg. 17004 (March 29, 2010). For the purpose of these sections, the definition of "subject to regulation" is not applicable and the full phrase "subject to regulation or requirement" relates to the reference at the end of those statements.
Rescission Clause
The Commission recognizes the uncertainty facing GHG stationary sources, given the potential for future federal legislation and the extensive pending legal challenges to GHG regulation under the CAA. The Commission intends GHG regulation in Colorado be consistent with the Federal Act, and has inserted a rescission clause making the effectiveness of the term Subject to Regulation dependent upon federal enforceability. Should either federal legislation or Court rulings from the District of Columbia Circuit Court of Appeals or the U.S. Supreme Court limit or render ineffective the regulation of GHG emissions under the PSD or Title V provisions of the Federal Act, then GHGs shall only be subject to regulation under this Regulation Number 3 for the affected permitting program(s) to the same extent. Example 1: if the regulation of GHGs under both PSD and Title V is vacated in whole, then all GHG emissions limitations or requirements included in any construction or operating permit issued under this Regulation Number 3 shall no longer be enforceable. Example 2: if the Court remands the regulation of GHG emissions to EPA such that GHG regulation under the Federal Act is temporarily ineffective, either in whole or in part, any GHG emissions limitation or requirement included in any permit issued under this Regulation Number 3 shall be limited or rendered ineffective to the same extent. Sources may actively seek to maintain those permit conditions if they so choose pursuant to Regulation Number 3, Part A, Section I.A. These examples are not intended to address all potential outcomes, but rather to provide some degree of implementation guidance. The Commission intends that this rescission will be automatically and immediately effective final of applicable court action or legislation. When triggered, this clause prevents regulation of GHG under Regulation Number 3 to the same extent of the federal action or court ruling and may require a new rulemaking action by the Commission to regulate GHGs for the affected permitting program, including any new details of such future regulation.
Synthetic Minor Permits for GHGs
No minor source air pollution construction permits are required at this time for GHGs, except where stationary sources voluntarily seek federally enforceable limits for GHGs to avoid major source PSD and Title V permitting requirements. (Regulation Number 3, Part B, Section II.A.7.) An application for a voluntary synthetic minor construction permit must include GHG emissions reported on Division-approved forms. Construction permits shall be issued based on production/process rates requested in the application, and the emission limit requested shall be a permit condition. (Regulation Number 3, Part B, Section II.A.4.)
If the mentioned rescission clause is triggered, any federally enforceable GHG emission limits contained in synthetic minor permits are no longer enforceable. The stationary source is requested to submit a cancellation request to the Division to cancel GHG emissions points and permits.
Regulation Number 3 Revisions:
The revisions to Regulation Number 3 as approved by the Commission are summarized below.
Part A
* Add Regulation Outline
* Add new definitions of Greenhouse Gas and Carbon Dioxide Equivalent. The CO2e definition incorporates by reference EPA's GWP codified via the GHG Mandatory Reporting Rule (Sections I.B.10., I.B.23.)
* Revise Major Source definition so that it applied to regulated NSR pollutant (which includes GHG) as well as to air pollutants (which does not include GHG) so that GHG is addressed and the definition may be used to establish the mass based GHG threshold (Section I.B.25.b.)
* Add new definition of Subject to Regulation consistent with EPA's GHG Tailoring Rule and include the rescission clause as discussed (Section I.B.44.)
* Revise annual emission fees to exclude GHGs (Section VI.D.)
Part B
* Revise general permitting requirements to authorize the Division to issue synthetic minor permits for GHGs where stationary sources voluntarily choose to seek federally enforceable limits for GHG if they would otherwise be subject to PSD or Title V Permitting Programs (Sections II.A.4., II.A.7.)
Part C
* Clarify that complete Title V Operating Permit applications include the reporting of GHG emissions as they are pollutants which may be subject to requirements applicable to the source, but not air pollutants, under Regulation 3 definitions (Section III.C.3.a.).
Part D
* Revise the Definitions (Section II.A.):
* Revise BACT, Major Modification and Major Stationary Source Definition to use the term Regulated NSR Pollutant for consistency and remove italics consistent with EPA's GHG Tailoring Rule so that these definitions become effective by January 2, 2011 (Sections II.A.8., II.A.22., II.A.24.a., II.A.24.a.(ii) and II.A.24.b.)
* Revise Regulated NSR Pollutant definition and remove italics consistent with EPA's GHG Tailoring Rule so that it becomes effective by January 2, 2011 (Section II.A.38.)
Additionally, the Commission approves typographical, grammatical and formatting changes, as necessary.
I.UU. Adopted January 7, 2011
Regulation Number 3, Part D (Concerning Major Stationary Source New Source Review and Prevention of Significant Deterioration) and Part F (Best Available Retrofit Technology (BART) and Reasonable Progress for Regional Haze)
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Colorado Administrative Procedures Act, Section 24-4-103, C.R.S, and the Colorado Air Pollution Prevention and Control Act, Sections 25-7-110 and 25-7-110.5, C.R.S (the Act).
Specific Statutory Authority
The Colorado Air Quality Control Commission (Commission) promulgates this regulation pursuant to the authority granted under Colorado Revised Statutes, Sections 25-7-105(1)(c), (authority to adopt a prevention of significant deterioration program); 25-7-109(1)(a) (authority to require the use of air pollution controls); 25-7-109(2)(a) (authority to adopt emission control regulations pertaining to visible pollutants); 25-7-114.4(1) (authority to adopt rules for the administration of permits); and 40-3.2-208 (authority to incorporate emission reduction plans for rate-regulated utilities within the state's Regional Haze State Implementation Plan).
Basis and Purpose
PART D
These revisions to Regulation Number 3, Part D change the review and revision period for the Regional Haze Long Term Strategy (LTS) from every three years to every five years. This change aligns the reporting periods for the Regional Haze LTS and the Regional Haze progress reports that are required every five years pursuant to 40 C.F.R. Section 51.308(g).
PART F
On July 1, 1999, the U.S. Environmental Protection Agency (EPA) promulgated the final Regional Haze Rule (Rule), which went into effect, on August 30, 1999, and which requires each state to submit a State Implementation Plan (SIP) to address regional haze. The Rule is intended to achieve the national visibility goals as expressed in Section 169(a) of the Clean Air Act, 42 U.S.C. Section 7491. Colorado must develop a SIP revision in coordination and consultation with other states, tribes, federal land managers, EPA and Regional Planning Organizations (RPOs) designated by EPA. In the west, the RPO is the Western Regional Air Partnership (WRAP).
Regional Haze is a visibility impairment that is caused by multiple sources over a broad geographic region. EPA's Regional Haze Rule requires every state to submit a SIP designed to improve visibility in its mandatory Class I federal areas (Class I areas). Class I areas are areas of great scenic importance, such as national parks and wilderness areas. There are 12 Class I areas in Colorado, and 156 nationwide.
A key element of EPA's regional haze program is Best Available Retrofit Technology (BART) for certain emission sources. Section 169A(b)(2)(A) of the Clean Air Act requires BART for certain existing major facilities, placed into operation between August 7, 1962 and August 7, 1977, that have the potential to emit more than 250 tons of visibility-reducing pollution a year. EPA's Regional Haze Rule requires SIPs to include BART emission limits for each subject-to-BART source that may reasonably be anticipated to impair visibility in any Class I area, unless the state demonstrates that an emissions trading program or other alternative measures will achieve greater reasonable progress toward natural visibility conditions. See 40 CFR Part 51 Section 308(e) . EPA promulgated a BART Rule separate from its Regional Haze Rule. EPA's BART Rule includes guidelines (Appendix Y) regarding how states should make BART determinations. See 70 Fed. Reg. 39104 (July 6, 2005). EPA also promulgated a "BART Alternative" Rule. See 71 Fed. Reg. 60612 (October 13, 2006). The BART Alternative Rule allows an alternative program to source-by-source BART, if the program results in greater reasonable progress than would occur pursuant to individual BART.
States were required to submit their regional haze SIPs to EPA by December 17, 2007. The Regional Haze Rule establishes the year 2064 as the date by which a goal of visibility at natural background levels is desired in all Class I areas. The Rule divides the 2007-2064 time periods into numerous planning periods. States were required to submit their initial RH SIP by December 31, 2007, then a revised Regional Haze SIP to EPA by July 31, 2018, and every ten years thereafter. See40 CFR Section 51.308(f).
Colorado submitted much of its regional haze SIP (including most of its BART determinations) to EPA in early 2008 for review. Following additional revisions, the Commission approved the remainder of Colorado's BART determinations in December 2008, and submitted Colorado's Regional Haze SIP to EPA's Region 8 for review in 2009.
Upon review, EPA Region 8 informed Colorado that its regional haze SIP submittal was not approvable and needed to be revised before EPA could reconsider it for inclusion in the State Implementation Plan. EPA has identified deficiencies with Colorado's Regional Haze Element of the SIP, including the basis for and enforceability of BART determinations and the lack of reasonable progress goals (RPGs) and RP source determinations. These alleged deficiencies must be addressed in order for EPA to approve the Regional Haze element of the SIP. This regulation is the second part of a bifurcated rulemaking process in which the Commission adopted the remaining outstanding Regional Haze SIP elements.
EPA made a finding on January 15, 2009 that 37 states, including Colorado, had failed to make all or part of the required Regional Haze SIP submissions. See 74 Fed. Reg. 2393 (January 15, 2009). This action started a clock by which states must have approved SIPs, or EPA must promulgate Federal Implementation Plans (FIPs) within two years (i.e., by January 15, 2011). EPA initiated actions in Colorado to begin preparing a FIP, and this action by the Commission is taken to complete the adoption of a regional haze element of the SIP, address the deficiencies that Region 8 EPA has identified, and to prevent such a federal action in Colorado, with its attendant consequences (e.g., federal determinations of BART, federal reasonable progress determinations, federal permits, and state loss of CAA grant monies so EPA can prepare a FIP).
During the 2010 legislative session, the Colorado legislature passed House Bill 10-1365, the "Clean Air - Clean Jobs Act" (CACJA). The CACJA sets forth requirements applicable to investor owned utilities in Colorado (Public Service Company of Colorado (PSCo) and Black Hills Energy) and certain of their electric generating units. The CACJA requires the investor owned utilities to submit emission reduction plans to the Colorado Public Utilities Commission (PUC), and provides that the Commission shall consider the air quality provisions of the emission reduction plans for incorporation into the regional haze element of Colorado's SIP. See Section 40-3.2-208, C.R.S. PSCo and Black Hills submitted their emission reduction plans to the PUC on August 13, 2010, and the PUC approved the plans on December 15, 2010.
The Commission adopted into Regulation Number 3 BART determinations for PSCo's Hayden and Comanche plants, two units at CENC's Golden plant, CEMEX's Lyons Portland cement plant, and Colorado Springs Utilities' Drake power plant. The Commission also adopted an Alternative to BART program for two units at Tri-State Generation and Transmission Association's Craig power plant. The Commission determined that, for nitrogen oxide (NOx) emissions, the appropriate BART control for Craig Units 1 and 2 would be emission rates associated with the assumed installation and operation of selective non-catalytic reduction (SNCR). As an alternative to BART, it was proposed and the Commission adopted, a more stringent NOx emissions control plan that consists of emission limits associated with the assumed operation of SNCR for Unit 1 and the assumed operation of SCR for Unit 2. The state has determined that the alternative program achieves greater reasonable progress than would be achieved through the installation and operation of source-by-source BART, and thus meets the requirements of the regional haze rule.
The Commission also adopted into Regulation Number 3 a BART Alternative for a number of PSCo plants and incorporated it into the Regional Haze SIP. The BART Alternative is based on reductions achieved as a result of a combination of shutdowns and retrofit emissions controls at certain PSCo facilities planned as part of HB 10-1365. The BART Alternative includes ten units at four PSCo facilities. The facilities included in the BART Alternative include Arapahoe Units 3 and 4, Cherokee Units 1-4, Valmont and Pawnee. The BART Alternative includes both BART and non-BART sources. The non-BART sources are older than the BART timeframe, and in effect will all be controlled by 2017 and reduce their NOx and SO2 emissions as a result of enforceable facility retirement dates and, for one unit, fuel switching to natural gas as a peaking unit. For the BART sources, Cherokee 4, Pawnee and Valmont, Valmont will be retired by 2018, Pawnee will be fully controlled by mid-2015, and Cherokee will operate on natural gas by 2018. The state has determined that the BART Alternative achieves greater reasonable progress than would be achieved through the installation and operation of source-by-source BART and RP determinations at the covered sources, and thus meets the requirements of the Regional Haze rule. PSCo has designed and proposed the BART Alternative to meet the state CACJA.
The Commission determined that to the extent there is any inconsistency between the CACJA and older, more generic legal requirements, the more recent and specific CACJA controls. The state has used simplifying assumptions to compare the emission reductions and visibility impacts associated with the PSCo BART Alternative, and believes that the BART Alternative is clearly superior to, and will result in greater reasonable progress than, source-by-source BART. For example, the state has determined and demonstrated that PSCo's BART Alternative emissions reductions are greater than, and would provide greater reasonable progress than, the presumptive or source-by-source BART limits. The Commission also adopted retirement dates of "no later than" July 1, 2012 and December 31, 2016 for Cherokee Units 1 and 3, respectively. In doing so, the Commission is no way rejecting any portion of PSCo's emission reduction plan as approved by the PUC on December 15, 2010 (Decision No. C10-1328). Rather, the Commission's action is intended to provide flexibility and consistency in light of PSCo's pending application for rehearing, re-argument or reconsideration (RRR) before the PUC, in which PSCo states that the revised dates are important for providing sequencing of activities that will ensure electrical system reliability in the Denver Metropolitan area. These dates are also wholly consistent with the PUC's decision because PSCo can comply with the dates established by both the PUC and the Commission, regardless of how the PUC rules on PSCo's RRR application. The Commission also notes that Hayden, another PSCo BART source, is not part of the BART Alternative program. The PUC approved controls for Hayden as part of PSCo's emission reduction plan under HB 10-1365, consistent with the state's BART determination for that source.
The Commission also established non-binding goals for each Class I area in Colorado (expressed in deciviews) that provide for Reasonable Progress (RP) towards achieving natural visibility conditions in 2018 and to 2064. See40 C.F.R. Section 51.308(d)(1). The reasonable progress goals (RPGs) provide for improvement in visibility for the most-impaired (20% worst) days over the period of the SIP and ensure no degradation in visibility for the least-impaired (20% best) days over the same period. The Commission adopted into Regulation Number 3 emission limits for "reasonable progress" sources that have a significant impact on visibility impairment in Class I areas, in order to help the State make reasonable progress towards improving visibility in this first planning period. These sources include Black Hills Energy Clark Station (a HB10-1365 facility), the Holcim Cement Plant, Tri-State Generation and Transmission Association's Craig Station Unit 3 and Nucla Station, Platte River Power Authority's Rawhide Station, Colorado Springs Utilities' Nixon Power Plant, PSCo's Cameo plant, and CENC's Unit 3.
For all BART and BART Alternative determinations made by the Commission in the November 2010 - January 2011 proceedings, a source that has installed BART or implemented a state-approved BART Alternative is exempted from the imposition of further regional haze controls during this first regional haze planning period (i.e., through December 31, 2017). This exemption applies only to regional haze, and does not apply to controls or emission reductions that may be required or otherwise imposed pursuant to other air pollution programs (including, but not limited to, ozone standards).
The revisions to Regulation Number 3, Part F also apply Monitoring, Recordkeeping and Recording (MRR) Provisions to BART, BART Alternative and Reasonable Progress emission limits.
In addition to the regulatory changes described, the Commission adopted changes to Colorado's Regional Haze SIP. Many of the changes are non-substantive edits while other changes address comments from Federal Land Managers, incorporate the justification for the BART and reasonable progress determinations, and provide the justification for the reasonable progress goals. The following presents an overview of the content of Colorado's Regional Haze SIP document:
Chapter 1 - Overview
Chapter 2 - Plan Development and Consultation
Chapter 3 - Monitoring Strategy
Chapter 4 - Baseline and Natural Visibility Conditions in Colorado, and Uniform Progress for Each Class I area
Chapter 5 - Sources of Impairment in Colorado
Chapter 6 - Best Available Retrofit Technology
Chapter 7 - Visibility Modeling and Apportionment
Chapter 8 - Reasonable Progress
Chapter 9 - Long Term Strategy
Chapter 10 - Commitment to Consultation, Progress Reports, Periodic Evaluations of Plan Adequacy, and Future SIP Revisions
Chapter 11 - Resource and Reference Documents
Appendix A - Periodic Review of Colorado RAVI Long Term Strategy
Appendix B - SIP Revision for RAVI Long Term Strategy
Appendix C - Technical Support for the BART Determinations
Appendix D - Technical Support for the Reasonable Progress Determinations
The revised chapters are intended to fully replace previously adopted SIP chapters.
Additional Considerations
The Commission provides the following additional statement, consistent with Sections 25-7-110.5(5)(a) and 110.8, C.R.S.
Additionally, HB10-1365 provides, in part, that the Commission must vacate this rulemaking proceeding and must initiate a new proceeding for the consideration of alternative proposals for the appropriate controls for those units covered by the utility plans for inclusion in the regional haze element of the state implementation plan if, among other things, the Commission rejects any portion of the plans as approved by the PUC. Section 40-3.2-208(2)(b), C.R.S. If the Commission were to reject any portion of the utility plans, this proceeding would be vacated and a new proceeding initiated, making it impossible for Colorado to submit a timely and complete SIP revision to address Regional Haze, and resulting in a FIP. Under these circumstances, it is reasonable to conclude that the Commission rules regarding "1365" sources are being adopted to implement prescriptive state requirements, that the Commission has no significant policy-making options with respect to these sources, and that many provisions of Sections 25-7-110.5 and 110.8 do not apply. See Section 25-7-110.5(2), C.R.S.
Despite the foregoing, certain elements of this proceeding could be viewed (as certain parties have alleged) as exceeding the federal act or differing from the federal act. For example, the closure or repowering of PSCo facilities would not be required solely by EPA's Regional Haze Rule. Accordingly, the Commission is providing this additional statement, consistent with Sections 25-7-110.5(5)(a) and 110.8, C.R.S.
Regulation Number 3, Part A, B, C and D - addressing federal changes to the New Source Review (NSR) Program related to PM2.5 National Ambient Air Quality Standards (NAAQS), several recent Environmental Protection Agency (EPA) State Implementation Plan (SIP) actions in which EPA partially disapproved various SIP revisions, EPA's Deferral of Biogenic Sources of CO2 Emissions, other miscellaneous revisions, and typographical, grammatical and formatting errors.
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Colorado Administrative Procedures Act, Section 24-4-103, C.R.S, and the Colorado Air Pollution Prevention and Control Act, Sections 25-7-110 and 25-7-110.5, C.R.S (the Act).
Specific Statutory Authority
The Colorado Air Quality Control Commission (AQCC) promulgates this regulation pursuant to the authority granted under Colorado Revised Statutes, Sections 25-7-105(1)(c), (authority to adopt a prevention of significant deterioration program); 25-7-109(1)(a) (authority to require the use of air pollution controls); 25-7-109(2)(a) (authority to adopt emission control regulations pertaining to visible pollutants); and 25-7-114.4(1) (authority to adopt rules for the administration of permits).
Basis and Purpose
EPA promulgated federal changes to the New Source Review (NSR) Program, which must be incorporated into Regulation Number 3 in order to maintain consistency with the federal NSR Program related to PM2.5 National Ambient Air Quality Standards (NAAQS). Subsequently, EPA disapproved and proposed to disapprove Air Pollutant Emission Notice (APEN) exemption provisions in Regulation Number 3, associated with Colorado's September 1997, April 2003 June 2003, July 2005, August 2006, and August 2007 SIP submittals. Also, EPA proposed its Deferral of Biogenic Sources of CO2 Emissions, deferring biogenic carbon dioxide (CO2) from regulation under the federal Prevention of Significant Deterioration (PSD) and Title V Permitting Programs for three years. In addressing the actions, several additional Regulation Number 3 provisions were identified in need of revision.
Sources affected by this proposal include PM2.5 and CO2 emission sources, as well as open burning sources, mobile sources, stationary internal combustion engines, emergency generators, oil and gas surface water impoundments, deaerator/vacuum pump exhaust, and air curtain destructors.
PM2.5 Related Rules
On February 21, 2008, the AQCC adopted revisions to Regulation Number 3, Parts A and B to identify PM2.5 as a criteria pollutant, triggering reporting and minor source permitting requirements. However, the AQCC did not make corresponding revisions to major stationary source permitting requirements under the New Source Review (NSR) Program as the EPA had not yet promulgated the associated PM2.5 implementation rules. Since that time, EPA promulgated a series of rules regarding the regulation of PM2.5 under the NSR program. See "Implementation of the New Source Review (NSR) Program for Particulate Matter Less than 2.5 Micrometers (PM2.5)" (73 FR 28321, May 16, 2008), "Prevention of Significant Deterioration (PSD) for Particulate Matter Less Than 2.5 Micrometers (PM2.5) - Increments, Significant Impact Levels (SILs) and Significant Monitoring Concentration (SMC)" (75 FR 64864, October 20, 2010), "Requirements for Preparation, Adoption, and Submittal of Implementation Plans" (76 FR 18870, April 6, 2011), and "Implementation of the New Source Review (NSR) Program for Particulate Matter Less Than 2.5 Micrometers (PM2.5); Final Rule to Repeal Grandfather Provision" (76 FR 28646, May 18, 2011). The 2008 and 2010 rules, combined with the December 21, 2010 promulgation of the methodology to test for PM2.5, provide a complete framework establishing how to apply PM2.5 to the NSR Program. Prior to the promulgation of the December 2010 rules, application of PM2.5 to the NSR Program made little sense. See 75 FR 80118. Consequently, the AQCC chose to wait to adopt the suite of PM2.5 implementation rules until after the last of the PM2.5 implementation rules and the 2010 PM2.5 testing methodology were finalized.
The May 16, 2008 rule provided flexibility in designating PM2.5 precursor pollutants. While sulfur oxides (SO2) must be treated as a PM2.5 precursors in all areas of the state, more flexibility is afforded to nitrogen oxides (NOx), volatile organic compounds (VOCs) and ammonia (NH3). This rule requires that NOx be presumed a PM2.5 precursors state-wide unless a state demonstrates that NOx is not a "significant contributor" to PM2.5 concentrations within any area. See73 FR 28328. However, VOCs and NH3 are not required to be treated as PM2.5 precursors, except that high molecular weight VOCs (equal to or greater than 25 carbon atoms and low vapor pressure) will be addressed as a condensable particulate. See 73 FR 28329-283330.
At this time, the AQCC has identified SO2 and NOx as PM2.5 precursors, state-wide. Based on the limited PM2.5 modeling and monitoring data available for Colorado, the AQCC determined that there is insufficient evidence to claim either way that NOx emissions do or do not contribute significantly to the concentration of PM2.5 in any area in Colorado. Without evidence to narrow the identification of NOx as a precursor to specific areas, Colorado must identify NOx as a PM2.5 precursors state-wide. Less is known about VOCs and NH3 and their contribution to PM2.5 in Colorado, and so Colorado has chosen to not identify them as PM2.5 precursors at this time.
EPA Partial Disapproval Actions
On October 3, 2011, EPA's action granting partial disapproval and partial approval of revised Air Pollution Emission Notice (APEN) and permitting exemptions that the Commission submitted to EPA as SIP revisions in September 1997, June 2003, July 2005, August 2006, and August 2007, was published in the Federal Register. See 76 FR 61054. EPA partially disapproved APEN exemptions for open burning, mobile sources, stationary internal combustion engines, emergency generators, oil and gas surface water impoundments, deaerator/vacuum pump exhaust, and air curtain destructors. The basis for EPA's disapproval of the subject provisions and the revisions intended to address each provision are as follows:
Open burning APEN exemption was corrected to reference federally enforceable Regulation Number 1 (Part A, Section II.D.1.q.). EPA commented that the change in reference from Regulation Number 1, which is part of Colorado's SIP, to Regulation Number 9, which is not part of Colorado's SIP, was not approvable.
Mobile sources APEN exemption was clarified (Part A, Section II.D.1.ppp.) and associated revisions were made to the insignificant activities list (Part C, Section II.E.3.uuu.). EPA commented that these exemptions only apply to stationary sources, not non-road engines and not sources being used for transportation purposes.
Stationary internal combustion engine APEN exemption was repealed (Part A, Section II.D.1.sss.) and related revisions were made to the associated permitting exemption (Part B, Sections II.D.2.c., and II.D.2.c.(i)-(iii)) and insignificant activities list (Part C, Section II.E.3.nnn.). EPA commented that the APEN exemption should require recordkeeping and reporting. The AQCC repealed the APEN exemption and revised the permit exemption to be consistent with current SIP approved language instead of requiring additional recordkeeping and reporting. Note that while the categorical exemption is being repealed, sources may still utilize the general one and two ton APEN exemptions found in Part A, Section II.D.1.a.
Emergency generator APEN exemption was repealed (Part A, Section II.D.1.ttt.), and related revisions were made to the associated permitting exemption (Part B, Sections II.D.2.c., and II.D.2.c.(i)-(iii)) and insignificant activities list (Part C, Section II.E.3.nnn.). EPA commented that the APEN exemption should require recordkeeping and reporting. The AQCC repealed the APEN exemption, and revised the permit exemption to be consistent with current SIP approved language instead of requiring additional recordkeeping and reporting. Note that while the categorical exemption is being repealed, sources may still utilize the general one and two ton APEN exemptions found in Part A, Section II.D.1.a.
Surface water impoundment APEN exemption was clarified (Part A, Section II.D.1.uuu.) and related revisions were made to the associated permitting exemption (Part B, Section II.D.1.m.) and insignificant activities list (Part C, Section II.E.3.yyy.). EPA commented that the APEN exemption should be clarified to confirm that the exemption applied to oil and gas produced water. In addition to making this revision, the AQCC also clarified exceptions to these exemptions and insignificant activity.
Deaerator/vacuum pump exhaust APEN exemption was repealed (Part A, Section II.D.1.xxx.) and associated revisions were made to the insignificant activities list (Part C, Section II.E.3.uuu.). EPA commented that it was unclear what these activities were. The AQCC is unaware of any source making use of this exemption, and thus has removed this exemption and associated insignificant activity.
Air curtain destructor APEN exemption removal (Part A, Section II.D.1.ffff.). EPA commented that because air curtain destructors meet the SIP approved definition of an incinerator and as such are required to submit APENs and obtain permits, that this exemption should be removed.
On February 4, 2011, EPA's action granting partial approval and partial disapproval of SIP revisions submitted to EPA in April 2003 and June 2003, was published in the Federal Register. See 76 FR 6331. Those 2003 SIP revisions to Regulation Number 3 revised APEN exemptions and permitting exemptions in Regulation Number 3, Parts A and B, respectively. To address EPA's concerns, the following provisions that EPA disapproved or on which EPA otherwise provided comment, were revised or removed as follows:
Stationary internal combustion engines 10 ton per year permitting exemption in attainment areas (Part B, Sections II.D.1.c., and II.D.1.c.(iii)). EPA commented that Colorado did not make the anti-backsliding demonstration necessary to increase the permitting exemption threshold from 5 tons per year to 10 tons per year. The AQCC opted to revert back to the 5 tons per year threshold that EPA previously approved instead of making the necessary demonstration at this time. Note that this revision does not prevent any source from making use of the facility-wide permit exemptions found in Part B, Sections II.D.2. or II.D.3.
Non-road engine state-only requirements (Part A, Sections I.B.31.c. and I.B.31.d.). EPA commented that it could not approve provisions which are identified as state-only provisions. The AQCC agrees and has further placed "(State-only Requirement)" at the beginning of these sections to clearly identify that they are state-only provisions.
Biogenic Deferral Revisions:
On June 3, 2010, EPA's "Prevention of Significant Deterioration and Title V Greenhouse Gas (GHG) Tailoring Rule," commonly called the GHG Tailoring Rule, was published in the Federal Register. See 75 FR 31514. EPA's GHG Tailoring Rule was designed to tailor the applicability criteria that determine which stationary sources and modification projects become subject to permitting requirements for GHGs under the Prevention of Significant Deterioration (PSD) and Title V Permitting Programs of the Clean Air Act (CAA).
On July 20, 2011, EPA's "Deferral for CO2 Emissions from Bioenergy and Other Biogenic Sources Under the Prevention of Significant Deterioration (PSD) and Title V Programs," commonly called the Biogenic Deferral, was published in the Federal Register. See 76 FR 43490. Beginning July 1, 2011, EPA's Biogenic Deferral temporarily excludes biogenic CO2 emissions from the definition of "subject to regulation" to allow biogenic sources of carbon dioxide (CO2) emissions a three-year deferral from the PSD and Title V permitting requirements; the three-year deferral applies even if the source's GHG emissions exceed the threshold established in the Tailoring Rule. To maintain consistency with implementation of federal requirements associated with the Tailoring Rule and the associated Biogenic Deferral, the AQCC incorporated EPA's Biogenic Deferral into Colorado's PSD and Title V Permitting Programs, as follows:
Revise the existing definition of Subject to Regulation consistent with EPA's proposed Biogenic Deferral (Part A, Section I.B.44.b.).
Other Revisions:
In addressing the actions, the AQCC made several additional Regulation Number 3 revisions that relate to: revising the time frame for reporting the Notice of Startup to the Division from thirty days prior to fifteen days after commencing operation, which is consistent with Colorado's House Bill 10-1042, as codified in 25-7-114.5(12)(a), C.R.S.; including NOx as a precursor to ozone in ozone significant monitoring concentration (SMC) and removing the total suspended solid SMC, both consistent with federal requirements; and making typographical, grammatical and formatting corrections.
Additional Considerations
These adopted rules are mandated by federal law and necessary to maintain EPA approval of Colorado's SIP. The revisions associated with the PM2.5 Implementation Rules and Biogenic Deferral mirror the federal requirements. While the PM2.5 Implementation Rules do allow States the opportunity to deviate from the specified PM2.5 precursor pollutants, Colorado does not have sufficient modeling and monitoring data available to support a decision to identify VOC and NH3 as PM2.5 precursors or narrow the area in which NOx is identified as a PM2.5 precursors in Colorado. The related revisions adhere to federal requirements [as required by Sections 25-7-105(1), 25-7-201(a) and 25-7-203, and 25-7-302, C.R.S.], and therefore the provisions of Sections 25-7-110.5(5) and 110.8, C.R.S. do not apply to these revisions.
With respect to EPA's SIP disapproval actions, while the AQCC must address EPA's comments, Colorado has some flexibility in addressing those comments. Here, the provisions of Sections 25-7-110.5(5) and 110.8, C.R.S. apply to this rulemaking. Thus, the AQCC makes the following determinations only as they pertain to the SIP disapproval actions, and only where the AQCC has flexibility in addressing EPA's comments.
Pursuant to 25-7-110.5(5). C.R.S., the AQCC makes the determination that:
Further, pursuant to 25-7-110.8(1), C.R.S., the AQCC makes the determination that:
Regulation Number 3, Parts A, B, C, D, and Appendix B of Part A - revising language for conformity with the New Source Review (NSR) Program and approved State Implementation Plan ("SIP"); streamlining the permit issuance process; and correcting other typographical, grammatical, and formatting errors.
This Statement of Basis, Specific Statutory Authority, and Purpose complies with the requirements of the Colorado Administrative Procedures Act, Section 24-4-103, C.R.S., and the Colorado Air Pollution Prevention and Control Act, Sections 25-7-110 and 25-7-110.5, C.R.S.
Specific Statutory Authority
The Colorado Air Pollution Prevention and Control Act, Sections 25-7-105(1)(a), 25-7-201 through 25-7-206, 25-7-210, 25-7-301, and 25-7-302, C.R.S. authorize the Air Quality Control Commission ("Commission") to promulgate a comprehensive State Implementation Plan ("SIP") which will assure attainment and maintenance of national ambient air quality standards ("NAAQS") and prevent significant deterioration ("PSD") of air quality in conformance with the Federal and Colorado Acts. Section 25-7-105(1)(c) further states that definitions used in the PSD program shall not differ from definitions pertaining to the federal PSD program in the Clean Air Act Section 169. Section 25-7-105(12) authorizes the Commission to promulgate regulations necessary to implement the provisions of the emission notice, construction permit, and Title V programs. Section 25-7-106(7)(a) authorizes the Commission to develop a program to apply and enforce relevant provisions of the SIP including the imposition of any fees necessary to administer the program. Section 25-7-114.7 requires owners or operators of air pollution sources to pay permit application processing fees. Section 25-7-114.4 authorizes the Commission to promulgate regulations necessary and proper for the orderly and effective administration of construction permits and renewable operating permits. And, Section 25-7-114.5 authorizes the Commission to designate which projects or activities requiring a construction permit application warrant public comment.
Basis and Purpose
The Commission revised the Permit Processing Fees, Section VI.B.5., to streamline construction permit issuance by allowing the Division to issue a construction permit prior to receiving full payment for the assessed permit processing fees. Currently, the Division cannot issue an approved construction permit until the Division receives the applicant's complete processing fees payment, which delays the applicant's ability to commence construction due to the invoicing and payment process. This revision eliminates this delay as, under the revised issuance process, applicants will receive the approved construction permit and be able to commence construction during the invoicing and payment process. Also under the revised issuance process, failure to pay the assessed permit processing fees may result in late fees according to Section 25.7.114.7(2)(a)(I)(A.5), C.R.S. and/or revocation of the permit utilizing the current Division revocation procedures. Applicants will be notified of the potential consequences of nonpayment as well as corrective actions in the written request for processing fees and the written request for late processing fees, if applicable. This revision will not negatively impact permit applicants who pay their permit processing fees on time.
The Commission amended Appendix B to Part A to identify non-criteria reportable pollutants first alphabetically by Chemical Bin ("BIN") and then by chemical abstract service ("CAS") number to increase the clarity and usability of the Appendix.
The Commission amended the Part B, Section III.C.1.a., Public Comment and Hearing Requirements to include attainment/maintenance areas.
The Commission removed the italic font and deleted the underlined text throughout the regulation, primarily in Part D, in response to EPA's approval of the corresponding language into Colorado's SIP on January 9, 2012 (77 Fed. Reg. 1027), and April 10, 2012 (77 Fed. Reg. 21453). The provisions under review by EPA were italicized to indicate the text was not yet effective while other text was underlined to indicate it would only be effective until EPA approved the italicized text into the SIP. Based on EPA's final actions in January and April, the italicized rule language, minus the underlined text, became effective on May 10, 2012. Paragraph (b) of the definition of Representative Actual Annual Emissions, II.A.40.5, was also deleted to conform with the NSR Program and SIP because, though not underlined in Regulation Number 3, the NSR Program removed the entire definition from 40 C.F.R. Part 51.
The Commission corrected the PM2.5 Major Source Baseline Date, Part D, Section II.A.23.c., which was inadvertently adopted as October 20, 2011, to reference the major source baseline date of October 20, 2010, set by EPA on October 20, 2010 (75 Fed. Reg. 64864).
The Commission corrected a regulatory reference in Requirements Applicable to Nonattainment Areas, Part D, Section V.A.6., to reference Section XIII.A. Section V.A.6. currently refers Federal Land Manager involvement to Section XII.A., Innovative Control Technology, instead of XIII.A., Federal Class I Areas.
Regulation Number 3, Parts A, B, C, D, and Appendices A and B of Part A - removing requirements for a source subject to a NSPS or NESHAP/MACT incorporated into Regulation Number 6, Part A or Number 8, Parts A, C, D, and E to file an APEN and obtain a minor source permit regardless of whether the source's emissions exceed the reporting of permitting thresholds ("catch-all provisions"); simplifying the Part A, Appendix A de minimis determination for non-criteria reportable pollutants; removing the crude oil storage tank exemptions; and correcting other typographical, grammatical, and formatting errors.
This Statement of Basis, Specific Statutory Authority, and Purpose complies with the requirements of the Colorado Administrative Procedures Act, C.R.S. § 24-4-103, the Colorado Air Pollution Prevention and Control Act, C.R.S. §§ 25-7-110 and 25-7-110.5, and the Air Quality Control Commission's ("Commission") Procedural Rules.
Specific Statutory Authority
The Colorado Air Pollution Prevention and Control Act § 25-7-105(1) directs the Commission to promulgate such rules and regulations as are consistent with the legislative declaration set forth in Section 25-7-102 and are necessary for the proper implementation and administration of Article 7. C.R.S. § 25-7-105(1)(a)(l) authorizes the Commission to revise Colorado's State Implementation Plan whenever necessary and appropriate. C.R.S. § 25-7-105(1) authorizes the Commission to promulgate regulations necessary to implement the provisions of the Colorado emission notice, minor source permit, and Title V programs. C.R.S. § 109(3) authorizes the Commission to promulgate emissions control regulations pertaining to the storage and transfer of petroleum products and other VOCs. C.R.S. § 25-7-109.3(3)(c) directs the Commission to exempt classes of minor or insignificant sources of emissions of hazardous air pollutants from the Colorado hazardous air pollutant control and reduction program requirements. Section 25-7-109.3(5)(c) directs the Commission to establish de minimis emission levels for each hazardous air pollutant beneath which emissions are considered to be of minor significance.
Basis and Purpose
As part of a larger rule revision package, the Commission incorporated the federal Standards of Performance for Crude Oil and Natural Gas Production, Transmission, and Distribution found in 40 C.F.R. Part 60, Subpart OOOO ("NSPS OOOO") in full, as amended, into Regulation Number 6, Part A and made the corresponding revisions to Regulation Number 3 described below. The Commission also revised Regulation Number 7 for consistency with and to complement NSPS OOOO and to include additional emission control measures for oil and gas production operations and equipment. Finally, the Commission revised Regulation Number 7 storage tank control requirements with the intent that industry could utilize such controls when determining whether a storage tank was subject to NSPS OOOO.
These Regulation Number 3 revisions were important to the comprehensive proposal because they reduced reporting and permitting burdens that would otherwise occur when NSPS OOOO was adopted in full. These Regulation Number 3 revisions apply broadly to all emission sources and are not solely applicable to oil and gas operations.
Catch-all Provisions
The Commission removed the catch-all provisions in Part A, Sections II.D.1. and Part B, Sections II.A.5. and II.D. so that sources subject to a New Source Performance Standard ("NSPS"), National Emission Standard for Hazardous Air Pollutants ("NESHAP"), or Maximum Achievable Control Technology ("MACT") incorporated into Regulation Numbers 6 or 8 are not automatically required to file an APEN and obtain a minor source permit, regardless of whether the source's uncontrolled actual emissions exceeded reporting or permitting thresholds.
These rule changes reduced the administrative reporting and permitting burden for the Division and the regulated community, both for sources subject to NSPS OOOO and other future NSPS and NESHAP/MACT. For example, NSPS OOOO affected facilities with uncontrolled actual emissions less than the reporting and permitting thresholds no longer automatically have to file APENs and obtain minor source permits. This reduced permitting burden will allow the Division to reallocate permitting resources to more complicated sources with the greater impact to Colorado's air quality, as well as to develop and maintain other guidance and compliance assistance tools. The environmental impacts of this revision were minimal and no emissions increases were anticipated because the revisions did not exempt any source from complying with the requirements of an applicable NSPS, NESHAP, or MACT.
Part A, Appendix A
The Commission revised the Part A, Appendix A method for determining non-criteria reportable pollutant de minimis levels in order to standardize the de minimis reporting threshold and set a 250 pounds per year threshold for all non-criteria reportable pollutants. This revised threshold applies statewide. This revision simplified non-criteria reportable pollutant reporting by eliminating the determination of reporting level based on release point, property boundary, and pollutant bin. Prior to revision, these reporting determinations were complicated and confusing, and sources often utilized the most stringent reporting threshold with the applicable Bin category, rather than attempt to follow the methodology. This revision increased regulatory clarity and reduced the administrative reporting burdens for both the Division and the regulated community by simplifying the process. No emissions increases were anticipated as a result of this revision because this revision was administrative in nature and did not change the applicability of controls or regulations to sources.
Crude Oil Storage Tanks
The Commission removed the crude oil storage tank permitting exemptions in Part B, Section II.D.1.n. and Part C, Section II.E.3.ddd. The emissions from crude oil storage tanks can be significant and permitting exemptions are meant to be limited to emission points with negligible impacts on air quality.
Crude Oil and Condensate Truck Loading Equipment
The Commission corrected an error in Part B, Section II.D.1.l. by removing the last sentence of the crude oil truck loading equipment minor source permitting exemption. In 2006, the Regulation Number 3 APEN exemption inadvertently merged the original exemption language with the 2002 exemption revision so that in 2008, when the Commission removed the APEN exemption to build the emissions inventory and moved the exemption in Part B to maintain the associated permitting exemption, the erroneous language persisted. This revision corrected that error.
This Statement of Basis, Specific Statutory Authority, and Purpose complies with the requirements of the Colorado Administrative Procedures Act, C.R.S. § 24-4-103, the Colorado Air Pollution Prevention and Control Act, C.R.S. §§ 25-7-110 and 25-7-110.5, and the Air Quality Control Commission's ("Commission") Procedural Rules.
Basis
Regulation Number 3, Part F - revising the NOx emission limit, compliance date and BART determination for Tri-State Generation and Transmission Association ("Tri-State"), Craig Station Unit 1.
Specific Statutory Authority
The Colorado Air Pollution Prevention and Control Act, C.R.S. § 25-7-105(1) directs the Commission to promulgate such rules and regulations as are consistent with the legislative declaration set forth in Section 25-7-102 and are necessary for the proper implementation and administration of Article 7, including a comprehensive state implementation plan which will prevent significant deterioration of air quality. Section 25-7-109(1)(a) authorizes the Commission to require the use of air pollution controls. Section 109(2) authorizes the Commission to adopt emission control regulations pertaining to visible pollutants and nitrogen oxides.
Purpose
The Colorado Air Quality Control Commission ("Commission") revises Regulation Number 3, Part F, Section VI., containing the Regional Haze Best Available Retrofit Technology ("BART") determinations that the Commission adopted and the EPA approved as part of Colorado's Regional Haze State Implementation Plan ("SIP").
After EPA approved Colorado's Regional Haze SIP, WildEarth Guardians and the National Parks Conservation Association challenged portions of this approval by filing suit against EPA in the Tenth Circuit. As part of this lawsuit, the plaintiffs contested the nitrogen oxides ("NOx") provisions for Craig Station Unit 1. In furtherance of settlement of this litigation, the Commission has revised Regulation Number 3, Part F, Section VI. to strengthen the NOx emission limit and set the compliance deadline for Craig Station Unit 1. The Commission revised Craig Station Unit 1's BART determination for NOx by revising the NOx emission limit from 0.28 lb/MMBtu to 0.07 lb/MMBtu, and revising the associated compliance deadline from January 30, 2018, to August 31, 2021. The Commission also clarified that compliance with the specified emission limits and compliance dates for both Units 1 and 2 constitute BART for this facility.
In addition to the regulatory changes described, the Division proposes to make corresponding changes to Colorado's Regional Haze SIP: Chapter 6 - Best Available Retrofit Technology; Chapter 9 - Long Term Strategy; and Appendix C - Technical Support for the BART Determinations. The revisions to the Regional Haze SIP do not impact the emission limits or compliance deadline for Craig Station Unit 2. The revised chapters fully replace previously adopted SIP chapters.
Findings of Fact
Colorado's Regional Haze SIP revisions are consistent with EPA's federal requirements under the Regional Haze rule. Accordingly, the revisions do not exceed the requirements of the federal act or differ from the federal act or rules. However, to the extent that these revisions could be viewed as exceeding or differing from the federal act, the Commission determines in accordance with C.R.S. § 25-7-110.5(5)(b):
As part of adopting the revisions to Regulation Number 3, Part F, Section VI., the Commission has taken into consideration each of the factors set forth in C.R.S. § 25-7-109(1)(b).
To the extent that C.R.S. § 25-7-110.8 requirements apply to this rulemaking, and after considering all the information in the record, the Commission hereby makes the determination that:
The revisions also correct typographical, grammatical, and formatting errors.
Regulation Number 3, Part A, Section I.B.44. - revising GHG permitting thresholds.
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Colorado Administrative Procedure Act Sections 24-4-103, C.R.S., the Colorado Air Pollution Prevention and Control Act Sections 25-7-110 and 25-7-110.5, C.R.S. ("the Act"), and the Air Quality Control Commission's ("Commission") Procedural Rules.
Basis
The Commission revised the definition of "subject to regulation" to correspond to revisions to the federal definition of subject to regulation.
Specific Statutory Authority
The Colorado Air Pollution Prevention and Control Act, Sections 25-7-105(1)(a), 25-7-201 through 25-7-206, 25-7-210, 25-7-301, and 25-7-302, C.R.S. authorize the Commission to promulgate a comprehensive State Implementation Plan ("SIP") which will assure attainment and maintenance of national ambient air quality standards ("NAAQS") and prevent significant deterioration ("PSD") of air quality in conformance with the Federal and Colorado Acts. Section 25-7-105(1)(c) further requires the Commission to promulgate a PSD program in conformity with federal requirements, including definitions that do not differ from the federal definitions.
Purpose
In 2014, the United States Supreme Court held that EPA could not treat GHG as a pollutant for purposes of defining a "major emitting facility" (or a "modification" thereof) for Prevention of Significant Deterioration ("PSD") or a "major source" for Title V, essentially invalidating the Step 2 GHG permitting thresholds in EPA's Tailoring Rule. (see Util. Air Regulatory Grp. v. EPA, 134 S. Ct. 2427 (2014)) In 2015, the Court of Appeals vacated EPA regulations to the extent that they required a stationary source obtain a PSD or Title V permit solely because the source emitted GHG in excess of applicable GHG-major source thresholds. (see Coalition for Responsible Regulation v. EPA, Nos. 09-1322, 10-073, 10-1092, 10-1167 (2015)) On August 19, 2015 (80 Fed. Reg. 50199), EPA issued a final rule that removed the Step 2 GHG permitting thresholds from the definitions of subject to regulation at 40 CFR Sections 51.166 and 52.21.
In response to the court decisions and EPA's corresponding revisions, the Commission revised Section I.B.44.e. to correspond to the federal definition of subject to regulation.
Further, the Commission corrected any typographical, grammatical and formatting errors found within the regulation.
Regulation Number 3, Part D, Sections II.A.22.b., II.A.25.b., and II.A.44.a.
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Colorado Administrative Procedure Act Sections 24-4-103, C.R.S. and the Colorado Air Pollution Prevention and Control Act Sections 25-7-110 and 25-7-110.5, C.R.S. ("the Act").
Basis
The Commission revised the definition of "major stationary source" contained in Regulation Number 3, Part D, Section II. to include the ozone nonattainment area major source thresholds, consistent with federal requirements. The Commission also revised the definitions of "major emission unit" and "significant" in Regulation Number 3, Part D, Section II.
Statutory Authority
The Colorado Air Pollution Prevention and Control Act, Sections 25-7-105(1)(a), 25-7-301, and 25-7-302, C.R.S. authorize the Commission to promulgate a comprehensive State Implementation Plan ("SIP") which will assure attainment and maintenance of national ambient air quality standards ("NAAQS") in conformance with the Federal and Colorado Acts. Section 25-7-105(12) authorizes the Commission to promulgate regulations necessary to implement the provisions of the emission notice, construction permit, and Title V programs. Pursuant to Section 25-7-106, C.R.S., the Commission has the maximum flexibility in establishing an air quality control program and may promulgate regulations as necessary or desirable to carry out that program.
Purpose
Major Stationary Source Definition
Regulation Number 3, Part D, concerning Major Stationary Source New Source Review ("NSR") and Prevention of Significant Deterioration ("PSD"), applies statewide to any new or existing major stationary source (Section I.) and it has been fully incorporated into Colorado's SIP. If a source is a "major stationary source" as defined in Section II.A.25.b., then it will need to comply with Sections V. (Requirements Applicable to Nonattainment Areas) and VI. (Requirements applicable to attainment and unclassifiable areas and pollutants implemented under Section 110 of the Federal Act (PSD Program)) of Part D, as applicable.
A major stationary source is defined as, "Any stationary source of air pollutants that emits, or has the potential to emit 100 tons per year or more of any regulated NSR pollutant for which the area is nonattainment." Unlike the federal definition, Colorado's definition of "major stationary source" does not step-down the thresholds for determining what is a major source based on ozone nonattainment area classification. See40 C.F.R. § 51.165(a)(1)(iv)(A)(1) and 40 C.F.R. Part 51, Appendix S. Thus, if an ozone nonattainment area were ever classified or reclassified as serious or severe, in order to maintain permitting authority, Colorado would need to adopt the same lower major stationary source thresholds that would apply on a federal basis before permitting new or modified sources. Therefore, in order to ensure consistency with federal definitions and to provide regulatory certainty by avoiding any disruption to the permitting process should Colorado's ozone nonattainment area ever be reclassified to a more stringent classification beyond a moderate nonattainment area, the Commission has revised the definition of "major stationary source" contained in Part D, Section II.A.25.b. to include the ozone nonattainment area major source thresholds.
Major Emissions Unit Definition
Currently, Section II.A.22.b. defines a major emissions unit as, "Any emissions unit that emits or has the potential to emit an amount that is equal to or greater than the major stationary source threshold (as defined in Section II.A.25. of this part) for the [plant-wide applicability limitation (PAL)] pollutant for nonattainment areas." The definition of major emissions unit in Section II.A.22.b. then goes on to provide an example of when an emissions unit would be a major emissions unit for volatile organic compounds. This example is not required to maintain consistency with federal definitions and it does not provide additional clarity to the regulation. Therefore, the Commission is removing this example.
Significant Definition
Currently, the definition of significant contained in Section II.A.44.a. (in reference to a net emissions increase or the potential of a source to emit air pollutants) contains emission rates in tons per year, but it does not contain emission rates pertaining to serious, severe or extreme ozone nonattainment areas. In order to ensure consistency with federal definitions and provide certainty by avoiding any disruption in the permitting process, the Commission is adding emission rates for serious, severe and extreme ozone nonattainment areas.
Further, the Commission corrected any typographical, grammatical and formatting errors found within the regulation.
Regulation Number 3, Part F - Revising the BART and Reasonable Progress determinations for Craig Station Unit 1 ("Craig Unit 1") and Nucla ("Nucla").
This Statement of Basis, Specific Statutory Authority, and Purpose complies with the requirements of the Colorado Administrative Procedures Act, C.R.S. § 24-4-103, the Colorado Air Pollution Prevention and Control Act, C.R.S. §§ 25-7-110 and 25-7-110.5, and the Air Quality Control Commission's ("Commission") Procedural Rules.
Basis
Regulation Number 3, Part F - Revising the BART and Reasonable Progress determinations for Craig Unit 1 and Nucla, respectively.
Specific Statutory Authority
The Colorado Air Pollution Prevention and Control Act, C.R.S. § 25-7-105(1) directs the Commission to promulgate such rules and regulations as are consistent with the legislative declaration set forth in Section 25-7-102 and are necessary for the proper implementation and administration of Article 7, including a comprehensive state implementation plan which will prevent significant deterioration of air quality. Section 25-7-109 authorizes the Commission to adopt emission control regulations pertaining to air pollutants.
Purpose
The Colorado Air Quality Control Commission ("Commission") makes targeted revisions to portions of Regulation Number 3, Part F, Section VI., containing the Regional Haze Best Available Retrofit Technology ("BART") and Reasonable Progress determinations that the Commission previously adopted as part of Colorado's Regional Haze State Implementation Plan ("SIP").
After the U.S. Environmental Protection Agency ("EPA") approved Colorado's Regional Haze SIP, WildEarth Guardians and the National Parks Conservation Association ("NPCA") challenged portions of the approval by filing suit in the Tenth Circuit (Guardians v. EPA, No. 13-9520 and NPCA v. EPA, No. 13-9525). As part of that lawsuit, the plaintiffs contested the nitrogen oxides ("NOX") provisions for Craig Unit 1, which is owned, in part, and operated by Tri-State Generation and Transmission Association, Inc. ("Tri-State"). In furtherance of settlement of that litigation, in 2014, the Commission approved revisions to Regulation Number 3, Part F, Section VI. to change the Craig Unit 1 NOX emission limit from 0.28 lb/MMBtu to 0.07 lb/MMBtu, and set the associated compliance deadline for Craig Station Unit 1 as August 31, 2021.
Since the Commission approved the 2014 revisions to Regulation Number 3, Part F and Colorado's Regional Haze SIP, an agreement has been reached involving Craig Unit 1 and Nucla Station ("Nucla"). The agreement includes the following commitments:
The Air Pollution Control Division ("Division") conducted a BART reassessment for Craig Unit 1 and Reasonable Progress review for Nucla, respectively, taking into account the agreement. The agreement reflects a changing industry, economic, and regulatory landscape that does not necessarily favor the installation of costly post-combustion retrofit controls on aging coal-fired electric generating units. The agreement and these revisions will also result in greater emissions reductions than would result from the previously approved SIP. The Commission's adoption of these revisions will result in further reductions of visibility impairing pollutants, in addition to providing other environmental co-benefits.
In accordance with the BART reassessment and Reasonable Progress review, the Commission revises 3, Part F, Section VI to reflect the applicable elements of the agreement described herein.
In addition to the regulatory changes to Regulation Number 3, Part F, the Commission revises corresponding portions of Colorado's Regional Haze SIP: Chapter 6 - Best Available Retrofit Technology; Chapter 8 - Reasonable Progress; Appendix C - Technical Support for the BART Determinations; and Appendix D - Technical Support for the Reasonable Progress Determinations. The revised chapters fully replace previously adopted SIP chapters. The revisions to Colorado's Regional Haze SIP, Chapter 6 -Best Available Retrofit Technology and Appendix C - Technical Support Document - for the BART Determinations, include, among other things, revised cost comparisons as part of the NOx BART reassessment for Craig Unit 1. The Commission is aware of the fact that there are differing views among parties to the recent agreement as to what the appropriate amortization periods should be for use in calculating the cost effectiveness of SNCR and SCR in Scenario 1 (closure on or before December 31, 2025). The Commission finds that regardless of the amortization period used, under Scenario 1, both SNCR and SCR are not cost effective when the remaining useful life is shortened.
The revisions also correct any typographical, grammatical, and formatting errors.
Findings of Fact
Colorado's Regional Haze SIP revisions are consistent with EPA's federal requirements under the Regional Haze rule. Accordingly, the revisions do not exceed the requirements of the federal act or differ from the federal act or rules. However, to the extent that these revisions could be viewed as exceeding or differing from the federal act, the Commission determines in accordance with C.R.S. § 25-7-110.5(5)(b):
As part of adopting the revisions to Regulation Number 3, Part F, Section VI., the Commission has taken into consideration each of the factors set forth in C.R.S. § 25-7-109(1)(b).
To the extent that C.R.S. § 25-7-110.8 requirements apply to this rulemaking, and after considering all the information in the record, the Commission hereby makes the determination that:
Revisions to Regulation Number 3, Part A, Section VI.
This Statement of Basis, Specific Statutory Authority and Purpose complies with the requirements of the Colorado Administrative Procedure Act Sections 24-4-103, C.R.S. and the Colorado Air Pollution Prevention and Control Act Sections 25-7-110 and 25-7-110.5, C.R.S. ("the Act").
Basis
The Commission adopted revisions to Regulation Number 3, Part A to increase air pollutant emission notice filing fees, permit processing fees, and annual emission fees in accordance with House Bill 18-1400. The increase is necessary to address revenue shortage and fund existing programs. Concurrent with these revisions and also pursuant to House Bill 18-1400, the Air Pollution Control Division ("Division") has convened a stakeholder group consisting of affected industries to (1) identify and assess measures to improve billing practices and increase accounting transparency with respect to application processing fees, including providing more detail on the application review process and the time spent on the process, and (2) assess potential efficiency improvements, including associated metrics to measure the Division's performance, with respect to Division activities financed by the stationary sources control fund. Beginning in 2019, and continuing through 2023, as directed by House Bill 18-1400, the Division will present the results and progress of this stakeholder process, including improved billing practices, increased accounting transparency, implemented efficiency improvements and efficiency metrics, to the House of Representatives Health, Insurance, and Environmental Committee and the Senate Health and Human Services Committee, or any successor committees.
Specific Statutory Authority
The Colorado Air Pollution Prevention and Control Act, Sections 25-7-114.1 and 25-7-114.7 authorize annual emission fees, air pollutant emission notice filing fees, and permit application processing fees.
Purpose
The revisions to the fee provisions in Part A were adopted to address revenue shortfalls and fund existing programs.
Further, these revisions correct any typographical, grammatical, and formatting errors found within the regulation.
Revisions to Regulation Number 3, Part A, Sections I., and II., Part B, Sections II., and III., and Part C, Section II.E.
This Statement of Basis, Specific Statutory Authority, and Purpose complies with the requirements of the State Administrative Procedure Act, § 24-4-103(4), C.R.S., the Colorado Air Pollution Prevention and Control Act, §§ 25-7-110 and 25-7-110.5., C.R.S., and the Air Quality Control Commission's ("Commission") Procedural Rules, 5 Code Colo. Reg. §1001-1.
Basis
During the 2019 legislative session, Colorado's General Assembly adopted SB 19-181 (Concerning additional public welfare protections regarding the conduct of oil and gas operations), revising § 25-7-109, C.R.S. SB 19-181 directs the Commission to "adopt rules to minimize emissions of methane and other hydrocarbons, volatile organic compounds [VOC], and oxides of nitrogen [NOx] from oil and natural gas exploration and production facilities and natural gas facilities in the processing, gathering and boosting, storage, and transmission segments of the natural gas supply chain."
The Commission adopted revisions to Regulation Number 3, Stationary Source Permitting and Air Pollutant Emission Notice Requirements. Specifically, the Commission adopted revisions:
Specific Statutory Authority
The Colorado Air Pollution Prevention and Control Act, §§ 25-7-114.1 and 25-7-114.7 authorize annual emission fees, air pollutant emission notice filing fees, and permit application processing fees. Section 25-7-114.2 authorizes the construction permitting program. Section 25-7-105(12) authorizes the Commission to promulgate regulations necessary to implement the provisions of the emission notice, construction permit, and Title V programs. Pursuant to § 25-7-106, C.R.S., the Commission has the maximum flexibility in establishing an air quality control program and may promulgate regulations as necessary or desirable to carry out that program. Section 25-7-106(6) further authorizes the Commission to require owners and operators of any air pollution source to monitor, record, and report information.
Purpose
The following section sets forth the Commission's purpose in adopting the revisions to Regulation Number 3, and includes the technological and scientific rational for the adoption of the revisions. The Commission adopted revisions to APEN requirements both to clarify the timing of APEN submittal for oil and gas well production facilities, to clarify the APEN (and permitting) requirement for venting of natural gas lines, and to remove the exemption for certain produced water impoundments and tanks. The Commission also removed the 90-day permitting deferral for oil and gas well production facilities, which will now need to obtain coverage under a permit prior to construction. The Commission made other clarifying and related revisions to the construction permitting program to conform to current implementation practice and to statute.
The revisions also correct typographical, grammatical, and formatting errors found through the regulation.
The following explanations provide further insight into the Commission's intention for certain revisions and, where appropriate, the technological or scientific rationale for the revision.
Definition Revisions (Part A, Section I)
The Commission revised the definition of "Commencement of Operation" in Part A, Section I.B. to ensure clarity for oil and gas operations and to aid with compliance and ensure consistency across state air regulations. The Commission's definition reflects that when permanent equipment is on-site and operating, commencement of operation has occurred, even if there is some temporary equipment still on-site. For example, if a well is producing into one temporary tank and two permanent storage tanks, the storage tanks have commenced operation for purposes of Regulation Number 3. The Commission's revision decouples the requirement from any specific stage of well operation - i.e. commencement of operation is not always determined by the transition from well completion operations into startup of production as those terms are defined by 40 C.F.R. § 60.5430a (Subpart OOOOa). However, to ensure that an operator cannot simply continue to produce into temporary tanks indefinitely and thereby avoid APEN reporting and permitting requirements, the Commission has clarified that the end of flowback (i.e. when product is capable of consistently flowing to permanent equipment) is the latest date at which commencement of operation may occur. The Commission's definition also reflects that the date of commencement of operation may be different for different sources at the same site (e.g. separation equipment v. storage tanks).
The Commission also duplicated the definition of "Well Production Facility" from Regulation Number 7 in Regulation Number 3 to ensure consistency.
Oil and Gas APEN and Permitting Revisions (Part A, Section II; Part B, Section III)
Regulation Number 3, Part A, Section II.D. and Part B, Section II.D., currently allow oil and gas exploration and production facilities (well sites and associated equipment) to defer APEN reporting and construction permitting requirements for up to 90 days after the first date of production. This provision was established in 1993 to allow sources sufficient time to determine production levels before being required to submit APENs or construction permit applications. This deferral previously referred to an undefined term "exploration and production". In practice, that has been analogous with the currently defined term well production facility in the context of Regulation Number 3. The Commission believes that this deferral period for permits is no longer necessary or appropriate. Therefore, the Commission has repealed the deferral in Part B, Section II.D.7. Oil and gas well production facilities now require a pre-construction permit just like all other sources subject to Part B.
However, the Commission continues to recognize that oil and gas well production facilities will better understand and predict emissions once production is underway. Therefore, the Commission has amended Part A, Section II.A.2 to maintain the requirements that owners or operators of well production facilities are required to:
The Commission has also revised Part B, Section III.B.2., to allow the Division more flexibility in the permitting process, such as requiring emissions information to be submitted on forms other than APENs.
Alignment with Statute (Part B, Sections II.A and III.I.2.a)
The Commission updated language in Part B, Section II.A.1., and Part B, Section III.I.2.a., to align with existing language with the Air Pollution Prevention and Control Act provision regarding permits. See § 25-7-114.2, C.R.S. These revisions are intended to reflect how the Part B permitting program has been operated and implemented, and to ensure consistency with the governing statute. In making these revisions, the Commission does not intend to change the timing of the requirement to obtain a pre-construction permit (i.e. sources still need to obtain a permit prior to commencing construction). The Commission also does not intend for this rule revision to apply to grandfathered sources.
Transfer of Ownership (Part B, Section II.B)
The Commission revised Part B, Section II.B., to clarify that a transfer of ownership form is due to the Division within 30 days of completion of a transfer or assignment of ownership for reissuance of existing permits. Previous language indicated that a "prospective" owner must submit the transfer of ownership form, indicating that the form must be submitted prior to acquisition. This was unworkable for many sources, and resulted in confusion about the requirement. The language has also been modified to explicitly state that the responsibility for compliance with existing permitting requirements transfers to the new owner or operator when the forms are submitted.
Exemption Revision and Clarifications (Part A, Sections II.D.1.uuu and II.D.1.zzz; Part B, Section II.D.1.m; Part C, Sections II.E.3.uu, II.E.3.yyy, and II.E.3.dddd.)
The Commission has clarified an existing APEN reporting and permitting exemption for emissions resulting from venting of natural gas lines for safety purposes. This exemption is contained in Part A, Section II.D.1.zzz. and Part C, Section II.E.3.dddd. These provisions were added in March 1996 and were intended to apply only to fuel gas lines on utility boilers within a generation building. However, as some stakeholders noted, the Statement of Basis explanation of the Commission's intent in 1996 was not reflected in the language ultimately adopted by the Commission. Nor is that Statement of Basis language consistently reflected in the permitting and enforcement practices of the Division.
As a result, the Commission has determined that it is no longer appropriate to exempt from APEN and permitting requirements those venting activities that are routine or predictable, and which are likely to result in emissions. The Commission is also clarifying that these routine or predictable activities that take place across the year at or associated with a stationary source are to be grouped together for purposes of APEN reporting and permitting. For example, the "routine or predictable" blowdown of oil and gas equipment, such as storage tanks or compressors, for maintenance (e.g., preventive maintenance, well swabbing or unloading), gauging, and loadout, as well as venting from pipeline pigging activities must be aggregated across the year and reported and permitted accordingly. Oil and gas sources may use some existing APEN forms, such as APEN Form 211, which covers gas venting from certain oil and gas equipment.
The Commission has also revised the exemptions in Part A, Section II.D.1.uuu. Part B, Section II.D.1.m., and Part C, Section II.E.3.uu., and II.E.3.yyy., to no longer exclude oil and gas production wastewater impoundments that contain less than 1% by volume crude oil on an annual average from APEN and permitting requirements. The Commission has determined that even at these low concentrations, these sources may have significant emissions, and therefore an exemption from reporting and permitting requirements is no longer appropriate. However, sources may still rely upon the general APEN exemption found in Part A, Section II.A. if emissions are sufficiently low.
The Commission recognizes that sources will need some time to evaluate whether APENs and permits are necessary for emissions that have historically been exempt under these three categories of exemptions. The Commission intends for these rule revisions to apply to existing sources, not just newly constructed and modified, with the understanding that the submission of APENs and issuance of appropriate permits will not be able to occur prior to the effective date of this rule revision. Therefore, the Commission directs the Division to develop a memorandum for use by operators during the implementation of this rule that will clarify the due dates for APENs and permit applications, where appropriate. Additionally, the Commission intends that operators subject to these new requirements must submit APENs or permit applications (if applicable) for sources expected to be at or above the appropriate thresholds, and cannot wait until the source has emissions over APEN or permitting thresholds on a rolling 12-month basis to evaluate the need for an APEN or permit.
Additional Considerations
The revisions to Parts A, B and C that correspond to APEN updates, transfer of ownership, and to the pre-construction permitting requirements do not exceed or differ from the requirements of the federal act or rules. Therefore, neither §§ 25-7-110.5(5)(a) or 25-7-110.8, C.R.S., apply.
Hundreds of people from across the state submitted written comments on the proposed changes to Regulation Numbers 3 and 7. Most of these written comments called for additional regulation of oil and gas operations, to fulfill the directives of SB 19-181, protect public health, and reduce greenhouse gas emissions. Prior to the rulemaking hearing, the Commission held public comment sessions in Rifle, Durango, and Loveland, on December 10, 11 and 16, respectively. Dozens of members of the public spoke at each of these sessions. Many commenters expressed support for the proposed changes to Regulation Numbers 3 and 7, citing concerns about risks to health and to the climate from oil and gas emissions. Many commenters at the Rifle and Durango meetings emphasized the need for rules to be applied statewide. Commenters also called on the Commission to develop requirements for continuous monitoring of oil and gas emissions. Some speakers at each comment session expressed concern that the industry was being overregulated, with some on the Western Slope emphasizing that their part of the state was in attainment with ozone standards and expressing concerns with the impact more stringent rules might have on the industry.
Revisions to Regulation Number 3, Part F.
This Statement of Basis, Specific Statutory Authority, and Purpose complies with the requirements of the State Administrative Procedure Act, § 24-4-103(4), C.R.S., the Colorado Air Pollution Prevention and Control Act, §§ 25-7-110 and 25-7-110.5., C.R.S., and the Air Quality Control Commission's (Commission) Procedural Rules, 5 Code Colo. Reg. §1001-1.
Basis
EPA's Regional Haze rule requires states to reduce emissions of visibility impairing pollutants that negatively impact class I areas. The Commission has previously approved regional haze requirements in Regulation Number 3 that included emission reduction requirements for sources subject to Best Available Retrofit Technology (BART) and Reasonable Progress (RP) requirements during the first planning period of the regional haze program. In this rulemaking, the Commission adopted revisions to Regulations Number 3 transferring these previously established determinations from Regulation Number 3, Part F to the new Regulation Number 23, which will be the central repository for new and existing provisions to comply with the regional haze rule. This change is intended to improve readability of Regulation Number 3 as well as the regional haze requirements.
Regulation Number 23 will contain BART and RP determinations from the first regional haze planning period, as well as new emissions reductions requirements to meet the reasonable progress goals for the second 10-year planning period. The existing emission limits and new requirements established for specified sources will limit emissions of nitrogen oxides (NOx), sulfur dioxide (SO2), and particulate matter (PM10) to improve visibility in Colorado's twelve class I areas. Many of the emission reduction requirements have the benefit of also reducing greenhouse gas and other emissions.
Specific Statutory Authority
The Colorado Air Pollution Prevention and Control Act, § 25-7-106, C.R.S. provides the Commission the maximum flexibility in establishing an air quality control program and authority to promulgate regulations as necessary or desirable to carry out that program. Section 25-7-105(1) directs the Commission to promulgate such rules and regulations as are consistent with the legislative declaration set forth in Section 25-7-102 and are necessary for the proper implementation and administration of Article 7, including a comprehensive state implementation plan which will prevent significant deterioration of air quality. Section 25-7-109 authorizes the Commission to adopt emission control regulations pertaining to air pollutants. Section 25-7-106(6) further authorizes the Commission to require owners and operators of any air pollution source to monitor, record, and report information.
Purpose
The following section sets forth the Commission's purpose in adopting the revisions to Regulation Number 3, and includes the technological and scientific rational for the adoption of the revisions.
The sections of Regulation Number 3, Part F discussing applicability of the regional haze provisions, relevant definitions, the BART and RP determinations from the first 10-year planning period, and the monitoring and recordkeeping requirements will be transferred to Regulation Number 23. Regulation Number 23 will also contain new emission reduction requirements to meet the RP goals for the second 10-year planning period. Any new emission reduction requirements in Regulation Number 23 will be discussed in the SBAP for that regulation.
The Commission did not move into Regulation Number 23 but deleted Regulation Number 3, Part F, Sections III. and IV. As discussed in the March 16, 2006, Regulation Number 3 Statement of Basis and Purpose, EPA's regional haze regulations require states to define BART-eligible facilities and require sources subject to BART to complete a BART analysis. Regulation Number 3, Part F, Sections III. and IV. identified which sources were required to perform a BART analysis and specified the elements of the BART analysis. The federal rules also require states to submit a SIP identifying the BART-eligible sources and either the BART controls or the BART alternative. The Commission adopted BART controls and/or BART alternatives for the BART-eligible sources in December 19, 2008, January 7, 2011, November 20, 2014, and December 15, 2016. EPA last approved Colorado's Regional Haze SIP on July 5, 2018 (83 Fed. Reg. 31332). Therefore, the provisions identifying which sources must perform a BART analysis and specifying the elements of a BART analysis are no longer necessary as those provisions led to the BART and RP determinations now approved by EPA. The Commission also did not move but deleted Regulation Number 3, Part F, Sections VI.A.4. and VI.B.4. These provisions required sources to submit and the Division to publish compliance schedules for the sources in the BART and RP determinations tables. As these requirements have also passed, and were complied with, they are no longer necessary. Removing these provisions will improve and facilitate the readability and better allow the regulated community and other interested persons to identify and understand the provisions governing their activities.
The revisions also correct typographical, grammatical, and formatting errors found through the regulation.
Incorporation by Reference
Section 24-4-103 (12.5) of the State Administrative Procedure Act allows the Commission to incorporate by reference federal regulations. The criteria of Section 24-4-103(12.5) are met by including specific information and making the regulations available because repeating the full text of each of the federal regulations incorporated would be unduly cumbersome and inexpedient. To fully comply with these criteria, the Commission includes reference dates to rules and reference methods incorporated in Regulation Number 3.
Additional Considerations
The revisions to Part F will be discussed in the Regulation Number 23 Statement of Basis and Purpose.
Revisions to Regulation Number 3, Part A, Sections I. and II.; Part B, Sections III.C. and III.D.; Part C, Sections II.E.3.xxx., III.B., III.C., VI.B., and X.D.; Part D, Sections II.A.11. and IV.A..
This Statement of Basis, Specific Statutory Authority, and Purpose complies with the requirements of the State Administrative Procedure Act, § 24-4-103(4), C.R.S., the Colorado Air Pollution Prevention and Control Act, §§ 25-7-101, C.R.S., et. seq., and the Air Quality Control Commission's (Commission) Procedural Rules, 5 Code Colo. Reg. §1001-1.
Basis
The proposed revisions to Regulation Number 3 revise definitions and construction, operating, and new source review permitting programs to update definitions and conform to current implementation practice and corresponding federal regulations.
Specific Statutory Authority
The Colorado Air Pollution Prevention and Control Act, § 25-7-106, C.R.S. provides the Commission the maximum flexibility in establishing an air quality control program and authority to promulgate regulations as necessary or desirable to carry out that program. Section 25-7-105(1) directs the Commission to promulgate such rules and regulations as are consistent with the legislative declaration set forth in Section 25-7-102 and are necessary for the proper implementation and administration of Article 7, including a comprehensive state implementation plan which will prevent significant deterioration of air quality. Section 25-7-114.2 authorizes the construction permitting program. Section 25-7-105(12) authorizes the Commission to promulgate regulations necessary to implement the provisions of the emission notice, construction permit, and Title V programs. Section 25-7-106(6) further authorizes the Commission to require owners and operators of any air pollution source to monitor, record, and report information.
Purpose
The following section sets forth the Commission's purpose in adopting the revisions to Regulation Number 3, and includes the technological and scientific rational for the adoption of the revisions.
Global warming potential
The Commission revised the CO2e definition in Part A, Sections I.B.10. and I.B.44.b.(i) to update the incorporation date and reflect EPA's revisions to the global warming potentials for fluorinated greenhouse gases in Part 98, Subpart A, Table A-1 on December 11, 2014 (79 Fed. Reg. 73750 (December 24, 2014)).
Permitting programs
Regulation Number 3 includes provisions for construction permits, operating permits (aka Title 5 permits), and new source review permits (i.e., nonattainment new source review (NANSR) and prevention of significant deterioration (PSD)). These permitting programs are authorized in the Colorado Air Pollution Prevention and Control Act. Further, the operating permit program aligns with EPA's regulations in 40 CFR Part 70 and the new source review program aligns with EPA's regulations in 40 CFR Part 51 . The Colorado Air Pollution Prevention and Control Act, Part 70, and Part 51 include requirements for public participation, including electronic notification.
The Commission revised Regulation Number 3 to update the construction, operating, and new source review permitting programs to conform to current implementation practice and corresponding federal regulations. Specifically, the Commission revised the public notification provisions in Part B, Sections III.C. and III.D. to clarify for what permits hearings may be required, in alignment with the CRS Section 25-7-114.5, and to clarify the process for electronic notification. The Commission made similar clarifying revisions in Part C, Section VI.B. and Part D, Sections II.A. and IV.A. The Commission updated the provisions in Part C, Sections III.B., III.C., and X.D. to align with current electronic submittal processes. And, the Commission updated the provisions in Part D, Section IV.A. to align with corresponding federal language in 40 CFR Section 51.166(q).
The Commission also aligned the Part C, insignificant activities in Section II.E.3.xxx. with the Part A, APEN exemptions. The engine exemption was removed from Part A in 2011 in response to an EPA disapproval. Corresponding revisions were made at that time to Part C, Section II.E.3.nnn. but not Section III.E.3.xxx. The Commission now made the corresponding revision to Section III.E.3.xxx. to be consistent with the state implementation plan approved language in Part A.
The revisions also correct typographical, grammatical, and formatting errors found through the regulation.
Incorporation by Reference
Section 24-4-103 (12.5) of the State Administrative Procedure Act allows the Commission to incorporate by reference federal regulations. The criteria of Section 24-4-103(12.5) are met by including specific information and making the regulations available because repeating the full text of each of the federal regulations incorporated would be unduly cumbersome and inexpedient. To fully comply with these criteria, the Commission includes reference dates to rules and reference methods incorporated in Regulation Number 3.
Additional Considerations
The revisions to Part A concerning definitions and reporting and Parts B, C, and D concerning the construction, operating, and new source review permitting programs do not exceed or differ from the requirements of the federal act or rules. Therefore, neither §§ 25-7-110.5(5)(a) or 25-7-110.8, C.R.S., apply.
Revisions to Regulation Number 3, Part A, Sections I., II., and VI.; Part B, Sections III.C.; Part C, Section VI.; and Part D, Section II.
This Statement of Basis, Specific Statutory Authority, and Purpose complies with the requirements of the State Administrative Procedure Act, § 24-4-103(4), C.R.S., the Colorado Air Pollution Prevention and Control Act, §§ 25-7-101, C.R.S., et. seq., and the Air Quality Control Commission's (Commission) Procedural Rules, 5 Code Colo. Reg. §1001-1.
Basis
The proposed revisions to Regulation Number 3 revise APEN requirements to include greenhouse gases; revise definitions and construction, operating, and new source review permitting programs to update definitions and conform to current implementation practice and corresponding federal regulations; supplement emissions reporting to further address the annual reporting requirement in the Clean Air Act (CAA) Section 182; include major source fee provisions as specified in the CAA Section 185 for severe and extreme ozone nonattainment areas; and include 1-bromopropane in the list of reportable pollutants in Appendix B.
Specific Statutory Authority
The Colorado Air Pollution Prevention and Control Act, § 25-7-106, C.R.S. provides the Commission the maximum flexibility in establishing an air quality control program and authority to promulgate regulations as necessary or desirable to carry out that program. § 25-7-105(1) directs the Commission to promulgate such rules and regulations as are consistent with the legislative declaration set forth in § 25-7-102 and are necessary for the proper implementation and administration of Article 7, including a comprehensive state implementation plan which will prevent significant deterioration of air quality. § 25-7-105(12) authorizes the Commission to promulgate regulations necessary to implement the provisions of the emission notice program. § 25-7-114.1 authorizes the air pollutant emission notice program. § 25-7-114.2 authorizes the construction permitting program. § 25-7-105(12) authorizes the Commission to promulgate regulations necessary to implement the provisions of the emission notice, construction permit, and Title V programs. § 25-7-106(6) further authorizes the Commission to require owners and operators of any air pollution source to monitor, record, and report information.
Purpose
The following section sets forth the Commission's purpose in adopting the revisions to Regulation Number 3, and includes the technological and scientific rational for the adoption of the revisions.
1-Bromopropane
In 2022, EPA amended the list of hazardous air pollutants (HAP) under the Clean Air Act (CAA) to add 1-BP. See 87 Fed. Reg. 393 (Jan. 5, 2022). Regulation Number 3, Part A, Appendix B lists state and federal HAPs and the Commission added 1-BP to correspond to the federal list of HAPs.
Greenhouse gas APENs
In 2021, the Colorado legislature revised CRS § 25-7-114.1 to direct the Commission to include GHGs (carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3)) in the list of air pollutants required to be reported in an APEN in a rulemaking no later than December 31, 2022. The Commission identified sources reporting GHGs under Regulation Number 22 or Regulation Number 7 with facility emissions greater than or equal to 25,000 tpy CO2e to include GHG emissions on an annual facility-wide greenhouse gas APEN. The adoption of a facility-wide GHG APEN program does not modify the scope, applicability, or timing of APEN reporting for non-GHG emissions. The first GHG APENs must be submitted by December 31, 2023, reporting 2022 emissions data. The timing of this first submittal will allow the Division to develop a system to collect fees on GHG emissions as directed by the 2021 revisions to CRS 25-7-114.7, which requires the Commission to establish fees sufficient to cover the costs required to develop and administer the programs pertaining to GHG emissions. The GHG fees may be adjusted annually. The Commission directs the Division to initiate a stakeholder process in early 2023 to both develop a GHG reporting form for per facility reporting by subject GHG reporters and to evaluate a potential GHG fees rule, including potential alignments between the GHG reporting rule and a future GHG fee rule as necessary.
Fees
The Commission updated the APEN, emissions, and permit process fees to reflect the current fees provided in CRS §§ 24-7-114.1 and 24-7-114.7.
CAA 185 fee program
The Commission adopted revisions to include the major source fee provisions of the CAA Section 185. Section 185 requires severe and extreme ozone nonattainment areas to collect a fee from major stationary sources of VOC or NOx should the area fail to attain the ozone NAAQS by the applicable attainment date. This major source fee program is not required for a severe or extreme ozone nonattainment area that attains by the applicable attainment date. However, should Colorado fail to attain the 2008 ozone NAAQS by July 20, 2027, or later if EPA grants an attainment extension, the adopted provisions will require Colorado to implement, and sources to comply with, a major source fee program as directed by Section 185.
CAA 182 annual emissions statements
The Commission adopted revisions to supplement the emission statement requirement of the CAA Section 182(a)(3)(B). Section 182 requires ozone nonattainment areas to require owners or operators of stationary sources emitting greater than or equal to 25 tpy NOx or VOC to provide annual statements concerning actual NOx and VOC emissions. Regulation Number 3, Part A currently requires sources to submit an air pollutant emission notice (APEN) reporting estimated annual actual emissions prior to construction or modification and then at least every five years or when the source has had a significant change in emissions (e.g., for sources of VOC or NOx emissions in the nonattainment area emitting less than 100 tpy a change in annual actual VOC or NOx emissions of one tpy or more or five percent, whichever is greater). Unless exempt, sources must submit APENs for individual emission points with uncontrolled actual emissions of NOx or VOC of one tpy or more if located in the ozone nonattainment area. These current reporting requirements result in much more extensive reporting of emissions than the 25 tpy threshold specified in Section 182. However, for sources that do not have an annual significant change in emissions, Regulation Number 3 does not require the submission of an annual APEN or annual certification of emissions. Therefore, the Commission adopted a requirement for sources located in the ozone nonattainment area with the potential to emit VOC and/or NOx emissions equal to or greater than 25 tpy to certify their actual annual VOC and/or NOx emissions. This additional certification is not intended to require sources to conduct additional review of their APENs beyond current requirements or practice, to limit sources from operating with variable emissions from year to year, or to require sources to submit any additional forms in relation to this annual certification. The Commission anticipates that this certification will occur as part of the annual emissions billing process.
Permitting programs
The Commission adopted revisions to Regulation Number 3, Part D to correspond to EPA's correction amendments to 40 CFR Part 51 (86 Fed. Reg. 37918 (July 19, 2021)), to Part C to correspond to information in a public notice as in 40 CFR Section 70.7(h), and to Part B to align with current practice. The revisions also correct typographical, grammatical, and formatting errors found through the regulation.
Incorporation by Reference
§ 24-4-103 (12.5) of the State Administrative Procedure Act allows the Commission to incorporate by reference federal regulations. The criteria of § 24-4-103(12.5) are met by including specific information and making the regulations available because repeating the full text of each of the federal regulations incorporated would be unduly cumbersome and inexpedient. To fully comply with these criteria, the Commission includes reference dates to rules and reference methods incorporated in Regulation Number 3.
Additional Considerations
The revisions to Part A concerning definitions, reporting, and the major source fee program and Parts B, C, and D concerning the construction, operating, and new source review permitting programs do not exceed or differ from the requirements of the federal act or rules. Therefore, neither §§ 25-7-110.5(5)(a) or 25-7-110.8, C.R.S., apply.
Revisions to Regulation Number 3: Part A, Sections I.B. and II.A., Part B, Sections III.B., III.D., III.G., and III.J., and Part C, Sections III.B., III.C., III.D., and V.C.
This Statement of Basis, Specific Statutory Authority, and Purpose complies with the requirements of the State Administrative Procedure Act, Section 24-4-103(4), C.R.S., the Colorado Air Pollution Prevention and Control Act, Sections 25-7-110 and 25-7-110.5., C.R.S., and the Air Quality Control Commission's (Commission) Procedural Rules, 5 Code Colo. Reg. §1001-1.
Basis
During the 2021 legislative session, Colorado's General Assembly adopted House Bill (HB) 21-1266 (concerning efforts to redress the effects of environmental injustice on disproportionately impacted communities), revising Section 25-7-114.4(5), C.R.S. HB 21-1266 directs the Commission to adopt rules that must "provide for enhanced modeling and monitoring requirements for new and modified sources of affected pollutants in disproportionately impacted communities that are identified or approved at the time of permit application." Additionally, HB 21-1266 directs the Commission to identify disproportionately impacted communities and identify the types of monitoring technology that can be used by the sources of affected pollutants. HB 21-1266 also requires the Commission to "consider requiring enhanced monitoring for existing sources of affected pollutants." Affected pollutants are identified by HB 21-1266 as: volatile organic compounds, nitrogen oxides, fine particulate matter, and hazardous air pollutants identified by the Commission, including benzene, toluene, ethylbenzene, and xylene.
Specific Statutory Authority
The Colorado Air Pollution Prevention and Control Act, Section 25-7-114.2, C.R.S. authorizes the construction permitting program. Section 25-7-105(12), C.R.S. authorizes the Commission to promulgate regulations necessary to implement the provisions of the emission notice, construction permit, and Title V programs. Section 25-7-106, C.R.S. provides the Commission the maximum flexibility in establishing an air quality control program and authorizes the Commission to promulgate regulations as necessary or desirable to carry out that program. Section 25-7-106(6), C.R.S. further authorizes the Commission to require owners and operators of any air pollution source to monitor, record, and report information. Section 25-7-114.4(5), C.R.S. authorizes the Commission to promulgate enhanced modeling and monitoring requirements for new or modified sources of affected pollutants in disproportionately impacted communities, and to identify those disproportionately impacted communities. Further, Section 25-7-106(1)(c), C.R.S., authorizes the Commission to promulgate "[e]mission control regulations that are applicable to the entire state, that are applicable only within specified areas or zones of the state, or that are applicable only when a specified class of pollution is present."
Purpose
The following section sets forth the Commission's purpose in adopting the revisions to Regulation Number 3, and includes the technological and scientific rationale for the adoption of the revisions.
Definition Revisions (Part A, Section I.B.)
With this action, the Commission is identifying Disproportionately Impacted Communities as set forth in Section 24-4-109(2)(b)(II)(A) -(D), (F), C.R.S. (2023). Further, for the purposes of implementing the requirements outlined in Regulation Number 3, the Commission identified Regulation Number 3-specific definitions for Disproportionately Impacted Communities, Cumulatively Impacted Communities, and Socioeconomically Vulnerable Communities that reference the Colorado EnviroScreen tool. The Commission selected Colorado Department of Public Health and Environment's (CDPHE's) Colorado EnviroScreen tool to geographically identify disproportionately impacted communities as it incorporates data from 35 different indicators to assess environmental health burdens that communities experience, was developed using methodologies that were developed by other states and recognized as valid by a peer-reviewed study conducted by the U.S. Centers for Disease Control and Prevention, and underwent an extensive year-long stakeholder engagement process. Additionally, during the 2023 legislative session, the General Assembly amended the statutory definition of Disproportionately Impacted Community, consistent with the recommendations of the Environmental Justice Action Task Force (EJATF), to clarify that communities with a Colorado EnviroScreen percentile score above the 80th percentile presumptively meet the definition of Disproportionately Impacted Community in Section 24-4-109(2)(b)(II)(F), C.R.S. (2023). See Section 24-4-109(5)(a)(I), C.R.S. (2023). The use of the Colorado EnviroScreen tool ensures Disproportionately Impacted Communities are identified in a consistent, publicly accessible, data-driven, and transparent manner.
Regulation Number 3 specific definitions for Disproportionately Impacted Communities, Cumulatively Impacted Communities, and Socioeconomically Vulnerable Communities were adopted to clarify the applicability of the proposed enhanced requirements. For the purposes of Regulation Number 3, Disproportionately Impacted Communities are those census block groups identified in the Air Quality Control Commission (AQCC) Regulation (Reg.) 3 Disproportionately Impacted Community layer of Colorado EnviroScreen. This specific layer was created in Colorado EnviroScreen for purposes of providing clear direction to regulated entities, local governments, the public, and Division staff about which areas meet the definition of Disproportionately Impacted Community established in this rule.
Consistent with Section 24-4-109(2)(a)(I)(B), C.R.S. (2023), for purposes of this Regulation Number 3, the Commission determined that it was warranted to prioritize and target certain criteria of the definition of Disproportionately Impacted Community in Section 24-4-109(2)(b)(II), C.R.S. (2023), in order to appropriately tailor the regulatory requirements to the categories of communities that will most benefit from those requirements. Specifically, the Commission determined that it would prioritize and target Socioeconomically Vulnerable Communities that meet the demographic prongs of the statutory definition in Section 24-4-109(2)(b)(II)(A) -(D), C.R.S. (2023), and Cumulatively Impacted Communities that meet the cumulative impacts prong of the statutory definition in Section 24-4-109(2)(b)(II)(F), C.R.S. (2023). The Commission prioritized and targeted the Socioeconomically Vulnerable Communities that meet the demographic prongs of the statutory definition because those demographic characteristics are associated socioeconomic vulnerabilities that may result in potential barriers for community members to meaningfully engage in the Division's permitting processes. As discussed further below, the Commission prioritized the Cumulatively Impacted Communities that meet the cumulative impacts prong of the statutory definition because the protections afforded by this rule will help reduce the environmental health disparities faced by those communities due to a variety of cumulative impacts.
Consistent with Section 24-4-109(2)(a)(I)(B), C.R.S. (2023), the Commission also determined that it was not warranted to prioritize or target certain communities that met other prongs of the statutory definition of Disproportionately Impacted Community in this rulemaking for the following reasons. First, the Commission did not identify, target, or prioritize any communities as disproportionately impacted under the history prong of the statutory definition, Section 24-4-109(2)(b)(II)(E), C.R.S. (2023), because no party to the rulemaking presented evidence of historic discriminatory laws, policies, or practices, or evidence of present day environmental health disparities.
Second, the Commission did not identify, target, or prioritize mobile home parks as Disproportionately Impacted Communities for the purposes of this rulemaking under the mobile home park prong of the statutory definition, Section 24-4-109(2)(b)(II)(G), C.R.S. (2023), because the Commission is not aware of any stationary sources of air pollution that would require a permit that are located within a mobile home park, and this prong of the definition is therefore irrelevant to the rulemaking. Third, the Commission did not identify, target, or prioritize areas under the jurisdiction of the Southern Ute or Ute Mountain Ute tribal government as Disproportionately Impacted Communities for the purposes of this rulemaking under the tribal lands prong of the statutory definition, Section 24-4-109(2)(b)(II)(H), C.R.S. (2023), because the Commission's permitting rules do not apply to areas under tribal jurisdiction, and this prong of the definition is therefore irrelevant to this rulemaking. Finally, the Commission did not identify, target, or prioritize communities as disproportionately impacted under the cumulative impacts prong of the statutory definition, Section 24-4-109(2)(b)(II)(F), C.R.S. (2023), solely because they met the federal definition of disadvantaged community from the Council on Environmental Quality's Climate and Economic Justice Screening Tool. The Commission acknowledges that such communities presumptively meet the cumulative impacts prong of the definition pursuant to Section 24-4-109(5)(b), C.R.S. (2023). However, that presumption is not warranted for the specific purposes of this rulemaking because the purpose of the Climate and Economic Justice Screening Tool is to identify disadvantaged communities that will benefit from programs included in the federal Justice40 initiative. It is intended to identify communities that should benefit from federal investments in climate, clean energy, and related areas. The Council on Environmental Quality's instructions and memorandum regarding the use of the tool by federal agencies is clear that it is intended solely for purposes of allocating federal funding. Moreover, as discussed further below, Colorado EnviroScreen was specifically created for purposes of identifying communities that experience cumulative impacts and the Commission determined that it is more appropriate to use Colorado EnviroScreen for prioritizing additional protections for these Cumulatively Impacted Communities in this Regulation Number 3.
Though the proposed rules provide additional protections for all Disproportionately Impacted Communities, more stringent requirements are being assessed under Regulation Number 3 for those communities that experience the greatest cumulative impacts and are, therefore, most in need of additional environmental protections. Consistent with Section 24-4-109(2)(a)(I)(B), C.R.S. (2023), the Commission determined that prioritizing additional protections for this subset of communities that meet the definition of Disproportionately Impacted Community is warranted and reasonably tailored to this rulemaking action for the reasons set forth below. These communities that are disproportionately impacted by multiple environmental impacts and stressors and experience the greatest environmental health burdens are identified by the Commission as Cumulatively Impacted Communities, and defined as communities with Colorado EnviroScreen scores above the 80th percentile. The 80th percentile was informed by subject matter expert feedback, robust community input through the EJATF process, and consultation of best practices established by the U.S. Environmental Protection Agency. It is also consistent with the presumption established in Section 24-4-109(5)(a)(I), C.R.S. (2023), that the 80th percentile in Colorado EnviroScreen may be used to identify census block groups that meet the cumulative impacts prong of the definition of Disproportionately Impacted Community in Section 24-4-109(2)(b)(II)(F), C.R.S. (2023). The Commission therefore identifies Disproportionately Impacted Communities with a Colorado EnviroScreen score above the 80th percentile as meeting the cumulative impacts prong of the statutory definition of disproportionately impacted community in Section 24-4-109(2)(b)(II)(F): "a community identified by a state agency as being one where multiple factors, including socioeconomic stressors, vulnerable populations, disproportionate environmental burdens, vulnerability to environmental degradation, and lack of public participation, may act cumulatively to affect health and the environment and contribute to persistent disparities." Section 24-4-109(2)(b)(II)(F), C.R.S.
The Colorado EnviroScreen version available on the date this rule takes effect, which is Version 1.0, will be used to identify a source's geographical identification in relation to Disproportionately Impacted Communities. CDPHE will maintain historic versions of Colorado EnviroScreen and the data used to determine Colorado EnviroScreen scores, as the tool will be updated on a biennial basis.
The Commission recognizes dividing Disproportionately Impacted Communities into two categories can raise concerns that the impacts some communities experience are viewed as less important. By identifying Cumulatively Impacted Communities, it is not the Commission's intent to communicate that other burdens are less critical. Rather, the Commission intends to prioritize environmental protections in the communities where they can have the greatest positive impact. With this rule, the Commission is using readily-available data to assess where the greatest cumulative environmental impacts are being experienced and assessing more stringent environmental protections in those communities.
Further, the Commission uses the term "Disproportionately Impacted Community" throughout the proposed regulatory language. The Commission acknowledges that this term raises concerns, as it defines communities by their deficiencies rather than their strengths. Per the recommendations of the EJATF, this term will be used until more input from community members can be gathered to find language that the majority agrees appropriately defines communities that experience cumulative impacts. The Commission notes that it adopted a definition of Disproportionately Impacted Community in this rulemaking based on the legislative changes to the definition in Section 24-4-109, C.R.S. (2023) that the General Assembly adopted shortly before this rulemaking. However, all parties were on notice that such legislative changes were a possibility throughout the pendency of this rulemaking process because the possibility of such a legislative change was noted in the rulemaking notice and earlier drafts of this Statement of Basis and Purpose and the notice for this rulemaking. Additionally, the prior statutory text in Section 24-4-109(2)(a)(I), C.R.S. (2021), clearly stated that the EJATF was directed to recommend changes to the definition of Disproportionately Impacted Community in Section 24-4-109(2)(b)(II), C.R.S. (2021), and that as such the definition only applied until the General Assembly acted by bill to modify the definition. Moreover, the EJATF recommendations to change the definition were well known to the public and were attached as an exhibit to the Division's prehearing statement.
In its definition of "Affected Construction Sources" and throughout the proposed regulatory language, the Commission uses the term "requested permitted emissions" to refer to the total potential emissions with the consideration of emissions controls. The Commission uses the term "estimated annual actual emissions" to refer to the emission rates of benzene, toluene, ethylbenzene and xylene reported on Air Pollutant Notices. The Commission used "requested permitted emissions" to refer to emissions of criteria pollutants. These separate terms were used because permits typically do not establish maximum emission rates for HAPs. When considering whether a source is an Affected Construction Source, only emissions from the project for which the permit application is submitted will be compared to the Affected Construction Source thresholds. Further, enhanced requirements are triggered on a per pollutant basis, meaning only for the pollutant(s) exceeding Affected Construction Source thresholds.
Permitting Revisions (Part B, Section III and Part C, Section V)
To facilitate the consideration of undue environmental burdens experienced by Disproportionately Impacted Communities in Colorado, the Commission revised Regulation Number 3, Part B, Section III.C. to require all sources of affected pollutants to include an environmental justice summary with construction and operating permit applications. The environmental justice summary will serve as a notification to both sources themselves and to Division staff during permit review that enhanced permitting requirements may be required. The purpose of the environmental justice summary is to present community-specific information regarding environmental and demographic indicators to be evaluated and considered during the permit review process when determining enhanced monitoring and/or modeling requirements. Along with the environmental justice summary, owners or operators must also provide documentation of occupied areas within one mile of the proposed source, such as an aerial or satellite mapped image.
The environmental justice summary will compile readily-accessible information integrated into the Colorado EnviroScreen tool by using a printable report application which will be incorporated into Colorado EnviroScreen by the effective date of the rule. The Colorado EnviroScreen version available at the time of the rulemaking did not allow users to generate reports for the census block group where a facility is located and for all census block groups within a certain radius around a facility/location. As such, the Commission is establishing a requirement for sources that are located in more than one census block group to submit an environmental justice summary for each census block group within which they are operating. The Division will be providing a forthcoming guidance document to facilitate sources in identifying whether a proposed project is located in a Disproportionately Impacted Community, and to provide guidance on using the Colorado EnviroScreen tool to create environmental justice summaries.
The requirements of Regulation Number 3, Part B, Section III.B. must be completed by an owner or operator of a facility prior to submission of permit applications to prevent any potential permitting delays and to proactively engage those communities early in the permitting process. Completing the requirements of Regulation Number 3, Part B, Section III.B. as part of the planning process for the construction of the facility will also ensure timely engagement with members of the disproportionately impacted community, and may minimize requests and/or petitions for a public hearing. Sources are encouraged to engage with communities throughout the permitting process to ensure that public concerns are understood and considered, and to provide feedback to both communities and the Division on how public input influenced the proposed project. Community engagement may include holding listening sessions to better understand the concerns of community members, distributing information on the proposed project in plain-language in nearby communities, working with community groups to distribute relevant information, and/or promoting and providing multiple methods for community members to provide input. Potential community groups that applicants should consider contacting include, but are not limited to: neighborhood organizations, schools, clinics, social and activity clubs, libraries, civic associations, businesses, nonprofits, faith-based and secular organizations, and local government(s). And while sources are encouraged to engage in the efforts outlined in Section III.C.5.d. to promote fair treatment and meaningful involvement of disproportionately impacted community members and to provide the Division with documentation of any such efforts undertaken by the source, at this time these components are not substantive application requirements.
The Commission revised Regulation Number 3, Part B, Section III.D. to require new and modified sources of affected pollutants in cumulatively impacted communities to implement Reasonably Available Control Technology (RACT) to limit the impacts of new or modified emission sources of volatile organic compounds (VOCs), nitrogen oxides (NOx), or fine particulate matter (PM2.5) in disproportionately impacted communities. Concerning modifications, owners or operators must assess whether the modified emission sources will result in an overall increase in a facility's requested permitted emissions in an amount over the construction permit thresholds in Part B, Sections II.D.2. or II.D.3. of Regulation Number 3. However, the analysis and potential application of RACT is specific to the new or modified emission unit(s) for which the construction permit is submitted. Though the Commission does not currently have the authority to require a RACT analysis for hazardous air pollutants (HAPs), including benzene, toluene, ethylbenzene, and xylene (BTEX) it encourages consideration of HAPs, including BTEX, emissions when assessing RACT for VOCs. The Commission further directs the Division to revisit the thresholds in Table 1 of Section III.J. and the list of HAPs identified as Affected Pollutants, in future rulemaking proceedings under Section 24-4-114.4(5)(a)(IV).
It is the Commission's expectation that sources in cumulatively impacted community's self-identify controls that would be used for the emission source that is subject to the assessment and demonstrate why it would or would not be technologically feasible to utilize. The Commission recognizes that given the heightened need to mitigate the disparate burden being experienced in disproportionately impacted communities, HB 21-1266 recognizes that the key to addressing these historic wrongs is to rapidly reduce pollution in disproportionately impacted communities.
The Commission sees the expansion of RACT requirements as being in line with the statutory directive of HB 21-1266 to ensure that all Colorado communities have equal access to clean air and are not forced to bear disparate environmental health impacts and within the authority of the Commission to adopt emission control regulations pursuant to Section 25-7-106(1)(c), C.R.S.
Following the adoption of HB 21-1266, the Division adopted a number of administrative changes under the existing regulatory language to enhance how it evaluates the impacts of new and modified sources on ambient air concentrations to ensure that such sources do not cause or contribute to violations of National Ambient Air Quality Standards (NAAQS) and Colorado Ambient Air Quality Standards. These changes are reflected in the proposed updates to the Colorado Minor Source Modeling Guideline for Air Quality Permits (April 2023). In addition to these administrative changes, HB 21-1266 provides the Commission with the authority to establish further enhanced modeling requirements for new and modified sources in disproportionately impacted communities to better understand and address unique air quality challenges facing these communities resulting from the emissions of affected pollutants identified by HB 21-1266. As such, the Division has established more protective modeling thresholds which are reflected in the April 2023 proposed updates to the Colorado Minor Source Modeling Guideline for Air Quality Permits for sources of affected pollutants in Disproportionately Impacted Communities. Additionally, the Commission has adopted rules establishing requirements for sources to conduct modeling of BTEX in cumulatively impacted communities. Together, these enhanced modeling requirements will provide additional protections to Disproportionately Impacted Communities, provide information on impacts experienced in communities, and allow for the appropriate application of enhanced monitoring through projecting the quantity and location of maximum annual average modeled concentrations.
In response to HB 21-1266, the Commission adopted revisions to Regulation Number 3, Part B, Section III.J. to provide for enhanced monitoring requirements for sources located in Disproportionately Impacted Communities. Enhanced monitoring will provide quality data in a transparent and consistent manner that informs residents on pollution levels in their communities. These data will also provide Division staff with information to guide future planning efforts. The revisions were informed by community members during the outreach and engagement meetings for this rule who, expressed a strong desire for additional monitoring of the air they were exposed to and for further educational opportunities pertaining to the use and understanding of air quality monitoring data. Educational resources and easily accessible data assists community members in understanding their health risk factors and helps make informed decisions about behavioral responses to air quality concerns in their community.
To help ensure that quality data is meaningful and readily understandable, the Commission directs the Division to develop a standardized process for reviewing data and determining its validity, and communicating valid data to community members. In such communication, the Division should include a lay person explanation of the data in the languages represented by the community. In addition, the Division should consider allowing any facility located in the Disproportionately Impacted Community an opportunity to provide information that will be made available to community members in the same place as the monitoring data.
Enhanced monitoring requirements for sources located in Cumulatively Impacted Communities includes the requirement that sources design and operate Division-approved source-specific monitoring plans. The appropriate monitoring requirements will be determined with the consideration of several factors including: the requested permitted emissions of affected pollutant(s), attainment status of community (for criteria pollutants), characteristics of community environmental indicators, operating characteristics of the facility subject to enhanced monitoring requirements, division-approved air monitoring data that meet data standardization requirements, the reliability and accuracy of potential monitoring techniques, cost of monitoring techniques, emission estimates, dispersion characteristics, density of existing monitoring, proximity to occupied areas, and location in a disproportionately impacted community.
The Commission recognizes that well production facilities are already subject to pre-production monitoring requirements in Regulation Number 7 for at least six months. The Commission considers the expansion of pre-production monitoring beyond the currently specified time frame to be enhanced monitoring. The Commission also recognizes that technologies being used to monitor oil and gas operations are evolving and wants to encourage innovation. Therefore, the Commission is allowing operators of applicable well production facilities to meet the rule's enhanced monitoring requirements through alternative, Division-approved monitoring methodologies.
For sources located in Socioeconomically Vulnerable Communities, enhanced monitoring includes a requirement for sources to participate in a community monitoring and education program. Participation in a community monitoring and education program includes paying a fee, assessed on a per pollutant basis, to be paid at the time of permit issuance. The Division will reassess the costs associated with community monitoring fees every three years, with consideration of the number of affected sources required to pay into the community monitoring fund and changes in monitoring technology and costs. The Commission recognizes that in addition to changes in available monitoring technology, there may be changes in community needs. As such, the Commission requests the Division be responsive to these changes as they arise in the future by continuing to consider the following to ensure the continued efficacy of community monitoring efforts: the selection and placement of community monitors to ensure monitors continue providing reliable and meaningful data, potential opportunities for improving the accessibility and transparency of collected monitoring data, and methods for providing community education to allow for public engagement with, and understanding of, monitoring data. As implemented, this approach allows enhanced monitoring requirements to be tailored to the needs of specific communities by establishing funding for the operation of community monitors and providing associated educational outreach in all disproportionately impacted communities, while implementing more stringent, source-specific monitoring requirements in communities experiencing the greatest cumulative impacts. Throughout the outreach process, the Division received feedback that different communities have different needs, and this approach is responsive to that feedback.
HB 21-1266 allows the Commission to also consider requiring enhanced monitoring for existing sources of affected pollutants located in disproportionately impacted communities (Section 25-7-114.5 (12.5)(a)(I)(E), C.R.S.). Throughout the outreach process, community members expressed strong support for existing sources to be subject to enhanced monitoring requirements. In response to this feedback, revisions to Regulation Number 3, Part C, Section V.C. were adopted to allow for enhanced monitoring requirements to be included during operating permit renewal for sources of affected pollutants located in disproportionately impacted communities.
All enhanced monitoring required of sources in disproportionately impacted communities will be identified in the permit and will be enforceable as a permit term, and all data collected through enhanced monitoring efforts will be submitted to the Division in accordance with Division data standards. Compliance with the enhanced monitoring requirements does not relieve a source of compliance with monitoring requirements pursuant to other state or federal law.
As part of the screening process for assessing when source-specific monitoring would be appropriate and meaningful, the Commission adopted Cumulatively Impacted Community Monitoring Thresholds. These thresholds are used as screening metrics against which the modeled impact of a source is compared to determine if the level of pollution generated by that source is expected to have an impact on a cumulatively impacted community's air quality that necessitates the implementation of source-specific monitoring. These thresholds were identified with consideration of U.S. Environmental Protection Agency established National Ambient Air Quality Standards (NAAQS) and Health Guideline Values (HGVs) aggregated by CDPHE following the review of health-based levels established by Federal and State agencies. The Commission recognizes that unlike NAAQS which are established to provide public health protection, HGVs are screening thresholds which are used to identify when additional investigation is necessary.
Further, the Commission notes that significant efforts are being undertaken pursuant to House Bill 22-1244 to identify and determine Health Based Standards for toxic air contaminants and the completion of this work may necessitate reconsidering the use of HGVs as a basis for establishing the Cumulatively Impacted Community Monitoring Thresholds. The Commission directs the Division to consider priority toxic air contaminants and associated health based standards identified by HB 22-1244 when revisiting the enhanced permitting requirements set forth by Regulation Number 3.
If a project's emissions exceed the Cumulatively Impacted Community Monitoring Thresholds, the facility's owner or operator must submit a source-specific monitoring plan to the Division. To allow time for the Division to review and approve monitoring plans, sources are required to implement a source-specific monitoring plan must submit the plan to the Division at least sixty days prior to beginning operations. Source-specific monitoring plans must detail how project operations will impact concentrations of affected pollutants beyond the property boundary of the proposed project. Source-specific monitoring plans must detail how source impacts will be profiled during periods of routine operations and during periods of non-routine operations (start up, shut down, and malfunction) to ensure all periods of source operations are considered in the selection of appropriate monitoring technology. The Division uses "beyond the property boundary" to mean locations that are outside of the immediate vicinity of the proposed project or facility's fenceline, and includes locations such as neighboring communities, nearby residences, and/or sensitive receptor facilities.
The Commission recognizes that the impacts of a source may be sufficiently understood after a period of monitoring, and that the continued operation of the source-specific monitoring may no longer have utility. As such, the Commission adopted rules that allow sources to petition to the Division to discontinue source-specific monitoring if certain criteria are met, including documentation that the completed source-specific monitoring has sufficiently profiled the source's impact on the DI Community in which the source is located, evidence that there is sufficient community monitoring occurring in the DI Community in which the sources is located to inform residents of air pollution impacts, demonstrated history of compliance with all permit terms and applicable regulations, relevant National Ambient Air Quality Standards (NAAQS) and Health Guideline Values (HGVs), and an established plan for monitoring and communicating impacts during periods of planned start-up, shut-down, or maintenance.
The Commission recognizes the Division may adopt changes to General Permits to reflect enhanced permitting requirements in Disproportionately Impacted Communities, and considers the enhanced permitting requirements to be compatible with the general permit process.
The Commission further recognizes that, when determining enhanced permitting requirements for sources, the Division should consider the remaining useful life of a source, if the source has a deadline to close under state or federal law or regulations.
The Commission directs the Division to develop a monitoring guideline in collaboration with subject matter experts, Division staff, and stakeholders, to identify appropriate monitoring technologies and/or strategies, and to facilitate the development and implementation of source-specific monitoring plans. The subject matter expert panel will be comprised of representatives with expertise in air quality monitoring from various industries, environmental organizations, members of Disproportionately Impacted Communities, and academia. The monitoring guideline development process will be open to the public, and conducted in a transparent manner by providing opportunities for public comment during each meeting. A public comment form will also be made available in both English and Spanish for the duration of the monitoring guideline development process.
The monitoring guideline will focus on documenting criteria for the design and operation of an approvable source-specific monitoring plan, detailing how the Division will evaluate best available monitoring technology that is reasonably available, and providing a framework for assessing requests to discontinue source-specific monitoring. Additionally, the monitoring guideline will specify data quality assurance protocols, data standardization requirements, and requirements pertaining to reporting frequency. Importantly, while there is currently no data standard for non-regulatory monitoring, the Division intends to create a standard for the data collected as a result of proposed enhanced monitoring requirements. Standardizing monitoring data requirements, along with efforts the Division is undertaking as a result of a 2021/2022 Legislative Decision Item to improve the structure of the Division's available data and make that data easier to collate, extract, and understand, will create a structure for making data publicly available and accessible.
Using a guideline approach would allow the Division to provide greater detail and specificity than a regulatory framework, use plain language to facilitate accessibility and understanding of the Division's expectations for monitoring to prevent unnecessary delays in the permit process, and allow for adjustments to monitoring determinations to account for changes to community needs and/or updates to monitoring technology. The Division anticipates that the monitoring guideline development process will require extensive deliberation amongst subject matter experts, and will also require and rely on continued meaningful public engagement. The applicability dates of July 2024 for the proposed enhanced monitoring requirements allows the time needed for this robust and collaborative monitoring guideline development process to take place.
Federal vs. State-Only Conditions (if applicable)
In accordance with Sections 25-7-105.1 and 25-7-133(3), C.R.S., the Commission states the rules adopted in this rulemaking are state-only requirements, are not intended as additions or revisions to Colorado's State Implementation Plan (SIP), and do not exceed or differ from the requirements of the federal act or rules. Therefore, Section 25-7-110.5(5)(a) does not apply.
Findings pursuant to C.R.S. Section 25-7-110.8
To the extent that Section 25-7-110.8, C.R.S., requirements apply to this rulemaking, and after considering all the information in the record, the Commission hereby makes the determination that:
* The rule is based on reasonably available, validated, reviewed, and sound scientific methodologies.
* The rule shall result in a demonstrable reduction in air pollution (unless the rule is administrative in nature).
* The rule is the most cost effective alternative, or provides an analysis detailing why the alternative is unacceptable.
* The rule maximizes air quality benefits in the most cost effective manner.
Further, these revisions will include any typographical, grammatical and formatting errors found within the regulation.
Revisions to Regulation Number 3, Part A, Sections II. and VI.
This Statement of Basis, Specific Statutory Authority, and Purpose complies with the requirements of the State Administrative Procedure Act, § 24-4-103(4), C.R.S., the Colorado Air Pollution Prevention and Control Act, §§ 25-7-101, C.R.S., et. seq., and the Air Quality Control Commission's (Commission) Procedural Rules, 5 Code Colo. Reg. §1001-1.
Basis
The proposed revisions to Regulation Number 3 revise fee requirements to include greenhouse gas emission fees.
Specific Statutory Authority
The Colorado Air Pollution Prevention and Control Act, § 25-7-106, C.R.S. provides the Commission the maximum flexibility in establishing an air quality control program and authority to promulgate regulations as necessary or desirable to carry out that program. § 25-7-105(1) directs the Commission to promulgate such rules and regulations as are consistent with the legislative declaration set forth in § 25-7-102 and are necessary for the proper implementation and administration of Article 7. § 25-7-114.1 authorizes the air pollutant emission notice program. § 25-7-114.7 authorizes the collection of greenhouse gas emission fees sufficient to cover the indirect and direct costs required to develop and administer the programs pertaining to emissions of greenhouse gas.
Purpose
The following section sets forth the Commission's purpose in adopting the revisions to Regulation Number 3, and includes the technological and scientific rationale for the adoption of the revisions.
Greenhouse Gas APENs
In 2021, the Colorado legislature revised in House Bill 21-1266 Section 25-7-114.1, C.R.S. to direct the Commission to include GHGs (carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3)) in the list of air pollutants required to be reported in an APEN in a rulemaking no later than December 31, 2022 (see HB 21-1266). In December 2022, the Commission identified sources reporting GHGs under Regulation Number 22 or Regulation Number 7 with facility emissions greater than or equal to 25,000 tpy CO2e to include GHG emissions on an annual facility-wide greenhouse gas APEN. The first GHG APENs must be submitted by December 31, 2023, reporting 2022 emissions data.
The Colorado legislature also revised CRS § 25-7-114.7 to direct the Commission to establish fees on greenhouse gas emissions reported on the above described and adopted APEN sufficient to cover the costs required to develop and administer the programs pertaining to GHG emissions. In 2023, the Colorado legislature further revised CRS § 25-7-114.7 to allow the Commission to adopt a rule to establish fees on greenhouse gas emissions reported on the APEN or reported to the Division pursuant to CRS § 25-7-140(2)(a)(I) (see SB 23-016).
Therefore, the Commission revised Regulation Number 3 to establish the following greenhouse gas emission fee structure. These fees will be first assessed in 2024 for 2023 reported emissions, collecting approximately $6.54 million dollars. However, in recognition of necessary company budget planning, the first of fees in 2024 will collect 60 percent of the direct and indirect program costs, approximately $3.9 million dollars.
Subject fee payers include facilities reporting greenhouse gas emissions pursuant to Regulation Number 22 with facility emissions equal to or greater than 25,000 metric tpy; facilities reporting greenhouse gas emissions company-wide emissions equal to or greater than 25,000 metric tpy on the Regulation Number 7, Part B, Section V. annual emissions report; or facilities reporting greenhouse gas emissions pursuant to Regulation Number 7, Part B, Section IV. and on the GHG APEN. The annual greenhouse gas fee is determined by calculating the facility or company's proportional greenhouse gas emissions, individualizing the facility or company's estimated dollar per ton, and multiplying the dollar per ton by the 4,000 ton value in section 25-7-114.7(a)(2)(II), C.R.S.
The Commission directs the Division, no later than September 30th of each year, starting in calendar year 2024, to publish, at a minimum, an estimate of total billable CO2e emissions that were emitted during the preceding calendar year as reported by companies pursuant to Regulation Number 22.
The Commission directs the Division to annually evaluate the Division's direct and indirect GHG program costs and request a rulemaking hearing to adjust the costs if program costs are determined during that assessment to be higher, lower, or alternatively funded.
The Commission requests the Division, in consultation with emission sources and other stakeholders, assess the method and structure for the fee program and make recommendations to:
The Commission heard conflicting testimony regarding what the appropriate emission fees should be for each fee payor, with some parties advocating for a flat fee per ton structure while the Division and other parties advocated for a proportional fee structure that would result in fee payors with greater greenhouse gas emissions paying a larger share of the total annual budget. One issue is whether the 4000 ton limit for calculating emission fees for regulated pollutants found in section 25-7-114.7(a)(2)(II), C.R.S. applies to limit the fees for greenhouse gas emissions that any single source or fee payor must pay. After considering the testimony and evidence presented by the parties and the Division, the Commission determined, as a policy matter, to take the more balanced and equitable approach by establishing annual greenhouse gas fees on a proportional basis. The Commission, however, also incorporated the 4000 ton limit in the calculation for determining proportional fees. By adopting this calculation the Commission acknowledges that there is uncertainty and concern from parties around whether and how to apply the 4000 ton limit to greenhouse gas emission fees, and the Commission encourages the General Assembly to speak more clearly to these issues as sufficient funding of Air Pollution Control Division programs will be an ongoing concern.
Additional Considerations
The revisions to Part A concerning greenhouse gas emission fees do not exceed or differ from the requirements of the federal act or rules. Therefore, the requirements of § 25-7-110.5(5)(a) do not apply. Further the revisions to Part A concerning greenhouse gas emission fees are not intended to reduce air pollution; therefore, the requirements of § 25-7-110.8 do not apply.
Revisions will include any typographical, grammatical and formatting errors.
Revisions to Regulation Number 3: Part A, Sections I.B., II.D., V.D., V.H., and V.F.; Part B, Sections III.B. and III.J.; and Part C, Sections III.C., III.D., V.C., and VII.
This Statement of Basis, Specific Statutory Authority, and Purpose complies with the requirements of the State Administrative Procedure Act, § 24-4-103(4), C.R.S., the Colorado Air Pollution Prevention and Control Act, §§ 25-7-110 and 25-7-110.5., C.R.S., and the Air Quality Control Commission's (Commission) Procedural Rules, 5 Code Colo. Reg. §1001-1.
Basis
In May 2023, the Commission adopted several new provisions to Regulation Number 3, including establishing requirements for environmental justice summaries to be submitted along with permit applications. The purpose of the environmental justice summaries is to present community-specific information regarding environmental and demographic indicators to be evaluated and considered during the permit review process. Additionally, the Commission adopted provisions that provide for source-specific monitoring requirements for sources located in Disproportionately Impacted Communities. Included in the enhanced monitoring provisions is the establishment of a Disproportionately Impacted Community Monitoring program; funded by fees paid by certain sources in Disproportionately Impacted Communities who are not subject to the source-specific monitoring requirements of Part B, Section III.J. The Commission established that the fees used to administer the Disproportionately Impacted Community Monitoring program be collected and administered by the Air Quality Enterprise.
In August 2023, the U.S. Environmental Protection Agency (EPA) removed 40 CFR 70.6(g) and 71.6(g) regarding emergency affirmative defense provisions for Title V Operating Permits. 88 Fed. Reg. 47029 (Aug. 21, 2023). EPA's rule revision requires states to make conforming revisions to their EPA-approved Title V operating permit programs and submit such revisions to EPA by August 21, 2024.
The proposed revisions to Regulation Number 3 revise the environmental justice summary requirements in the construction permit and operating permit application programs; change the administrator for the Disproportionately Impacted Community Monitoring program fees; clarify requirements for Disproportionately Impacted Community monitoring requirements in the operating permit program; remove the emergency affirmative defense provisions from the operating permit program; and make typographical cross-reference corrections.
Specific Statutory Authority
The Colorado Air Pollution Prevention and Control Act, § 25-7- 105(1) directs the Commission to promulgate such rules and regulations as are consistent with the legislative declaration set forth in § 25-7-102 and are necessary for the proper implementation and administration of Article 7. § 25-7-114.2, C.R.S. authorizes the construction permitting program. §§ 25-7-114.1 and 25-7-114.7 authorize annual emission fees, air pollutant emission notice filing fees, and permit application processing fees. § 25-7-105(12), C.R.S. authorizes the Commission to promulgate regulations necessary to implement the provisions of the emission notice, construction permit, and Title V programs. § 25-7-106, C.R.S. provides the Commission the maximum flexibility in establishing an air quality control program and authorizes the Commission to promulgate regulations as necessary or desirable to carry out that program. § 25-7-106(6), C.R.S. further authorizes the Commission to require owners and operators of any air pollution source to monitor, record, and report information. § 25-7-114.4(5), C.R.S. authorizes the Commission to promulgate enhanced modeling and monitoring requirements for new or modified sources of affected pollutants in disproportionately impacted communities, and to identify those disproportionately impacted communities. Further, § 25-7-106(1)(c), C.R.S., authorizes the Commission to promulgate "[e]mission control regulations that are applicable to the entire state, that are applicable only within specified areas or zones of the state, or that are applicable only when a specified class of pollution is present."
Purpose
The following section sets forth the Commission's purpose in adopting the revisions to Regulation Number 3.
Revisions to Environmental Justice Summary Requirements (Part B, Section III.B.5. and Part C, Sections III.C. and III.D.)
The Commission adopted revisions to the environmental justice summary provisions required for construction permit and operating permit applications. The Commission revised the provisions to clarify that the environmental justice summaries are required to be submitted and verified by the Division prior to the submission of the associated permit application by a source. The Commission included information about what constitutes when a summary is verified. The Commission further revised the requirements for what must be included in the environmental justice summaries and made minor clarifications to the requirements. In Part B, Section III.B.5.a., the conditions no longer require an estimation of the Affected Pollutants emitted from the source, but rather, just an identification of the Affected Pollutants. The emission estimates will be included in the associated permit applications, and are not needed in the environmental justice summaries. In Part B, Section III.B.5.b., the conditions were revised to require that a 1-mile radius be shown around the source in the aerial or satellite image. This will more clearly show the source's proximity to other occupied areas and communities in order to better understand who is immediately impacted by the source's emissions. In Part B, Section III.B.5.c., the Commission removed the requirement that the data from the Disproportionately Impacted Community Layer of Colorado EnviroScreen incorporated into this regulation be reported for only sources located in Disproportionately Impacted Communities, instead making it a requirement for all sources who submit an environmental justice summary. In Part B, Section III.B.5.d., the Commission made several changes to the sentence structure and terms used in order to make the provisions clearer; the Commission removed the provision requiring applicants to provide addition information about the summary if requested by the Division after the summary has already been verified and submitted with a permit application; and the Commission removed the provision that emissions reduction strategies only considered be included in the summary. These changes provide additional clarification regarding community engagement and provide greater certainty about what is required for a complete and verifiable environmental justice summary.
Additionally, the Commission adopted several new exemptions to the environmental justice summary requirements in both the construction permit application and operating permit application sections (Parts B and C, respectively). These provisions exempt the need for permit applicants to submit environmental justice summaries with permit applications for certain permitting actions. For construction permit applications, the first exemption applies to sources submitting applications for administrative permit amendments only, as described in Section I.B.1.a. of Part A. Because these specific permit amendments address only administrative elements of permits, environmental justice summaries are not necessary for the applications.
The second exemption for construction permit applications applies to sources submitting environmental justice summaries if the associated permit application requests an overall decrease in emissions limits or there is no change in the requested emissions limits of an Affected Pollutant. If there is a facility-wide overall increase in the annual emissions limit(s) of any individual Affected Pollutant, and the source does not otherwise qualify for another exemption, a Division-verified environmental justice summary must be submitted along with the permit application. The purpose of this exemption is to limit administrative burden on affected sources and the Division by focusing on sources whose increasing emissions are adding to the pollutants of the ambient air in the communities they reside near and to incentivize emissions reductions by reducing administrative tasks for permit applications that decrease emissions.
The third exemption for construction permit applications applies to sources submitting environmental justice summaries with permit applications if they have already submitted an environmental justice summary using data from the most current version of the Disproportionately Impacted Community Layer of Colorado EnviroScreen incorporated into this regulation, which provides the information about the community that the facility resides in. Because the most current information about the community will have already been provided in the previous environmental justice summary, there would be no changes to the summary based on subsequent permit applications. The sources will, however, need to submit updated summaries whenever there is a new permit modification that increases emissions of Affected Pollutants from the source and a new version of the Disproportionately Impacted Community Layer of Colorado EnviroScreen incorporated into this regulation with updated data has been released in between permit applications.
For operating permit applications, the first exemption applies to sources submitting applications for administrative permit amendments only.
The second exemption for operating permit applications applies to sources submitting environmental justice summaries if the associated permit application requests an overall decrease in emissions limits or there is no change in the requested emissions limits of an Affected Pollutant. If there is a facility-wide overall increase in the annual emissions limit(s) of any individual Affected Pollutant, and the source does not otherwise qualify for another exemption, a Division-verified environmental justice summary must be submitted along with a permit application.
The third exemption for operating permit applications applies to sources submitting environmental justice summaries with permit applications if they have already submitted an environmental justice summary using data from the most current version of the Disproportionately Impacted Community Layer of Colorado EnviroScreen incorporated into this regulation. For this exemption, sources are allowed to apply an environmental justice summary from a previously-submitted construction permit application as long as the environmental justice summary submitted for the construction permit application used the most current version of the Disproportionately Impacted Community Layer of Colorado EnviroScreen incorporated into this regulation and the provisions of the construction permit are being incorporated into the operating permit. If the Disproportionately Impacted Community Layer of Colorado EnviroScreen incorporated into this regulation has been updated since when the construction permit application was submitted, the source must submit a new Division-verified environmental justice summary along with the operating permit application.
The Commission adopted these exemptions to reduce unnecessary burden on affected sources for preparing the summaries, and on the Division for reviewing the summaries, in cases where the information in the Disproportionately Impacted Community Layer of Colorado EnviroScreen about the Disproportionately Impacted Community where a facility is located has not changed between permit applications. The Commission intends for the Division to focus on obtaining environmental justice summaries for sources who are increasing emissions limits and for which the Division does not have the most up-to-date environmental justice information.
Additionally, the Commission adopted a new provision for the environmental justice summaries that includes deadlines for when the Division must review and respond to sources regarding submitted summaries and deadlines for sources who submitted summaries to respond to Division requests for information. The Division has fourteen (14) days to provide an initial notification to the source that the summary is complete or incomplete, and if incomplete, what requirements are missing. The Division also has the option of invoking a 14-day extension to the initial review period, if the Division receives an unexpected number of environmental justice summaries that prevent review; or additional time is needed to request and receive additional information from the application or to review the content of the summaries due to extenuating circumstances such as staff turnover or changes in regulatory requirements.
If the Division fails to timely notify an applicant that the summary is incomplete, the source is allowed to submit the unverified summary with the permit application. The summary may be submitted with the permit application, but may not be used in the future for consideration of the exemptions in Part B, Section III.B.5.e.(iii) and Part C, Section III.C.14.a.(ii) for any future applications, unless subsequently verified by the Division. In that case, the permit applicant must state in their permit application that the submitted summary is unverified due to the Division not meeting the response deadline.
Finally, in cases where the term "Colorado EnviroScreen was used", the Commission changed the language to "the Disproportionately Impacted Community Layer of Colorado EnviroScreen incorporated into this regulation". This change was made to provide greater clarification about how data from the Colorado EnviroScreen platform is used. Referring to the data source just as Colorado EnviroScreen may be misleading, as it encompasses the entirety of the Colorado EnviroScreen platform, as opposed to just the layer of Colorado EnviroScreen-produced data that is used to inform the definition of Disproportionately Impacted Community and requirements in the environmental justice summary provisions.
Revisions to Disproportionately Impact Community Monitoring Fees (Part B, Section III.J.3.)
The Commission adopted revisions to the Disproportionately Impacted Community Monitoring program that transfer the administration of the Disproportionately Impacted Community Monitoring fees from the Air Quality Enterprise to the Division through the Stationary Source Control Fund. The Commission understands that the funds collected for the Disproportionately Impacted Community Monitoring Program will be more effectively collected through the Stationary Source Control Fund and administered via Division-operated programs. The Division will be able to actively assess where funding is needed, through continuous data collection and consideration for how the Monitoring Program is impacting Disproportionately Impacted Communities. Additionally, this will help the Division offer more tailored support to sources subject to the Disproportionately Impacted Community Monitoring Program requirements. The fees are considered processing fees for purposes of collection by the Division.
In order for the Division to have enough time to build-out and test the new invoicing and inventory systems required to collect and administer the Disproportionately Impacted Community Monitoring fees, the Commission adopted a delay to the start date of the fee collection requirements. Previously, the fees were set to begin being collected based on permit applications submitted on or after July 15, 2024, along with the rest of the provisions in Part B, Section III.J. With the revisions, the fee provisions in Part B, Section III.J.3. take effect based on permit application submitted on or after October 15, 2024.
Revisions to Source-specific Disproportionately Impacted Community Monitoring Requirements (Part C, Section V.C.5.d.(i))
The Commission adopted revisions to the Disproportionately Impacted Community source-specific monitoring requirements for major sources submitting operating permit renewal applications. The requirements apply to sources who, since their last operating permit renewal, have submitted operating permit modification applications, or permits have been issued, that include an increase in requested permitted emissions or permitted emissions of an Affected Pollutant (excluding volatile organic compounds), and the increase is above the Affected Construction Source thresholds defined in Part A, Section I.B.4. For the purposes of this provision, the rule language uses the term "requested permitted emissions" to refer to the emissions limits that are requested in a permit application, and the rule language uses the term "permitted emissions" to refer to the emission limits included in issued permits. In the May 2023 Statement of Basis and Purpose for this provision, the Commission clarified that the term "requested permitted emissions" refers to the total potential emissions with the consideration of emissions controls. For the adopted revisions in this version of the provision, the Commission intends for that to remain true for both "requested permitted emissions" and "permitted emissions". The revisions add clarifications to the operating permit renewal applications that prompt the need for sources located in Cumulatively Impacted Communities to design and submit source-specific monitoring plans, per Part B, Section III.J.
The Commission also added a provision that clarifies, for the purposes of the source-specific monitoring plan emissions triggers, that sources should only review operating permit renewal applications back to July 15, 2023, as that is when the monitoring plan requirements were adopted into this regulation. Finally, the Commission adopted additional language that clarifies that sources already operating Division-approved source-specific monitoring for the Affected Pollutant(s) are not required to conduct additional monitoring under V.C.5.d.(i) and that source-specific monitoring will not be required for total volatile organic compounds, as stated in Part B, Section III.J.2.a.
Repeal of Emergency Affirmative Defense Provisions (Part C, Section VII.)
The Commission repealed Part C, Section VII, regarding emergency affirmative defense provisions for Title V operating permits. On August 21, 2023, EPA removed 40 CFR 70.6(g) and 71.6(g) regarding emergency affirmative defense provisions for Title V operating permits. The removal of these provisions prevents sources from asserting an affirmative defense during enforcement actions against the source for exceedances of a technology-based emissions limitation in an operating permit in cases where the emissions exceedances are a result of a qualifying emergency event. EPA's rule revision required states to make conforming revisions to their EPA-approved part 70 Title V operating permit programs. The repeal of the operating permit program emergency provisions complies and maintains consistency with EPA's removal of 40 CFR 70.6(g) and 71.6(g).
Further, the adopted revisions address typographical cross-reference errors found within the regulation.
5 CCR 1001-5, pt. F