6 NYCRR Parts 200, 201 and 231 Regulatory Flexibility Analysis for Small Business and Local Governments
Effects on Small Business and Local Governments
Small businesses are those that are independently owned, located within New York State, and that employ 100 or fewer persons.
The New York State Department of Environmental Conservation (Department) proposes to revise 6 NYCRR Parts 200, 201, and 231. The proposed rulemaking will apply statewide. The Part 231 applicability thresholds for facilities in New York State (excluding New York City, Long Island, and Lower Orange, Rockland and Westchester Counties) is large enough that it is unlikely any small business or local government that owns or operates a facility would be subject to the applicability requirements of Part 231. For New York City, Long Island, and Lower Orange, Rockland and Westchester Counties, the Part 231 applicability threshold is very small, thus it is likely that some small businesses and local governments would be subject to the proposed revisions.
The Department is undertaking this rulemaking to comply with the 2002 Federal New Source Review (NSR) Rule EPA promulgated and correct deficiencies that EPA identified in regards to New York's existing Nonattainment New Source Review (NNSR) regulation. The 2002 Federal NSR Rule modified both the NNSR and Prevention of Significant Deterioration (PSD) regulations at 40 CFR 51.165 and 52.21, respectively, and requires states with State Implementation Plan (SIP) approved NSR programs to revise their regulations in accordance with the 2002 Federal NSR Rule and submit the revisions to EPA for approval into the SIP. The Department's existing NNSR program at Part 231 is subject to this requirement. Another purpose of the rulemaking is to adopt a State PSD program for proposed new major facilities and major modifications to existing facilities located in attainment areas. The proposed Part 231 rule incorporates provisions from the federal PSD regulations in significant part with additional provisions to ensure enforceability of the rule and effective monitoring, recordkeeping and reporting.
The revisions to Part 231 do not substantially alter the requirements for the permitting of new and modified major stationary sources which are currently in effect in New York State and under 40 CFR 52.21. The proposed revisions will provide clarification of existing NSR requirements and require more comprehensive monitoring, recordkeeping, and reporting in a manner consistent with New York's Title V operating permit program. Specific recordkeeping and monitoring requirements have been included in the proposed amendments to address minor modifications. The revisions leave in-tact the major NSR requirements for application of Lowest Achievable Emission Rate (LAER) or Best Available Control Technology (BACT) as appropriate, modeling, and emission offsets. New York is also requiring facilities which obtain Plant-wide Applicability Limits (PAL) to reduce emissions or make a demonstration that they operate with current pollution control technology. This additional PAL requirement, however, is only applicable to facilities which choose to obtain a PAL, not all facilities. The Department has added under Part 200 a regulatory definition for Routine Maintenance, Repair, or Replacement (RMRR), which codifies the current Department practice of reviewing RMRR activities on a case by case basis, taking into account the nature and extent of the activity and its frequency and cost. The proposed amendments to Part 201 revise the definition for "major stationary source or major source" at 6 NYCRR 201-2.1(b)(21). The definition will now encompass the term "major facility" and incorporate major facility and significant project thresholds for facilities emitting particulate matter or particles with an aerodynamic diameter less than or equal to 2.5 micro-meters (PM-2.5). EPA designated the New York City metropolitan area as nonattainment for the PM 2.5 standard (70 Fed Reg 944). Nonattainment new source review (NNSR) is now required for new major facilities and major modifications to existing facilities that emit PM 2.5 in significant amounts in the PM2.5 nonattainment area. Collectively, these additional requirements will not affect all major facilities, only new facilities or those which undertake major modifications. Many of the significant requirements are not changing: new or modified major facilities will still have to undertake applicability reviews and in appropriate cases submit permit applications and undertake control technology reviews.
Compliance Requirements
As described above, the revisions to Part 231 do not substantially alter the requirements for the permitting of new and modified major stationary sources which are currently in effect in New York State and under 40 CFR 52.21. The proposed revisions will provide clarification of existing NSR requirements and require more comprehensive monitoring, recordkeeping, and reporting in a manner consistent with New York's Title V operating permit program. The proposed amendments to Part 231 require facilities which undertake modifications with a project emission potential which does not exceed the applicable significant project threshold (with or without demand growth emissions) to maintain records which support their emissions calculations and provide them to the Department upon request. The 2002 Federal NSR Rule does not contain such a requirement. In addition, facilities that undertake modifications that would exceed the applicable significant project threshold if demand growth emissions were considered or would equal or exceed fifty (50) percent of the applicable significant project threshold will be required to maintain records of their demand growth determinations, monitor post-modification emissions, and submit an annual report to the Department to verify the accuracy of their emission calculations. The federal regulations require the same recordkeeping, monitoring, and reporting for modifications that the facility believes have a "reasonable possibility" of causing a significant emissions increase. The Department believes that, in order for the regulations to be enforceable, that a more objective standard must be adopted as a trigger for recordkeeping, monitoring, and reporting. The amendments to Part 231 instead use two approaches; 1) whether demand growth emissions, if considered, would result in post-modification emissions exceeding the significance threshold, or 2) the project emission potential would equal or exceed fifty (50) percent of the applicable significant project threshold. Given the difficulty of separating post-modification emission increases attributable to demand growth versus those attributable to the modification, the Department's approach is faithful to the "reasonable possibility" concept but uses a more objective standard to improve enforceability. The Department believes these requirements are necessary to ensure that facilities take into account the emissions from such projects in any future Part 231 applicability determination or netting analysis and comply with the proposed amendments to Part 231. Because facilities will have to generate this information to determine whether they are subject to the proposed amendments to Part 231, there should be little if any additional cost associated with maintaining the records. In the case of netting at existing major facilities, and for minor modifications, the proposed recordkeeping, monitoring, and reporting requirements are more extensive than those included in the 2002 Federal NSR Rule. For netting, the proposed regulation is consistent with current Department practice which requires permits to include enforceable emission limits and appropriate recordkeeping, monitoring, and reporting. For minor modifications, the proposed regulation requires that facilities maintain records of the modification and comply with any other requirements that may be applicable, including Part 201 permitting requirements. While proposed Part 231 recordkeeping, monitoring, and reporting requirements may be more extensive than the 2002 Federal NSR Rule, from the perspective of New York State's implementation of NSR, the requirements are not significantly changing. Accordingly, these requirements are not anticipated to place any undue burden of compliance on small businesses and local governments.
Professional Services
The professional services for any small business or local government that is subject to Part 231 are not anticipated to significantly change from the type of services which are currently required to comply with NNSR and PSD requirements. The need for consulting engineers to address NSR applicability and permitting requirements for any new major facility or major modification proposed by a small business or local government will continue to exist.
Compliance Costs
NSR reviews are done on a case-by-case basis so the costs of compliance with either the Federal NSR rules or the proposed Part 231 revisions will be very facility specific. Under proposed Part 231, the following types of costs may be incurred by small businesses and local governments. New facilities or facilities that undertake modifications will have costs associated with determining regulatory applicability in the first instance. Some facilities that undertake minor modifications will only incur the costs associated with maintaining records while others may be also subject to some emission monitoring depending on the other activities at the facility. Facilities that require emission caps will have the costs of preparing permit applications and emissions monitoring, recordkeeping and reporting. Facilities that are subject to NSR in its entirety will have costs associated with preparing permit applications, including control technology and environmental impact assessments, emission offsets for nonattainment areas, and emissions monitoring, recordkeeping, and reporting. The proposed amendments to Part 231, in general, add provisions for increased regulatory flexibility and provide for a coordinated review process for NSR affected projects. The technology assessment requirements of LAER, for facilities subject to the Department's existing Part 231, remain unchanged in the Department's proposed amendments to Part 231. While some aspects of the regulatory applicability determination will be more restrictive for non-attainment NSR than current Part 231, i.e. the baseline actual emissions to projected actual emissions methodology will replace the maximum annual potential (MAP) methodology calculation, other aspects of the proposed regulation will be more flexible than the current regulation. For example, for baseline determinations facilities will have the option to choose any 24 consecutive month period in the past five years while the current Part 231 requires facilities to use the most recent 24 consecutive month period unless they can demonstrate that another period is more representative. It is possible that the proposed revisions to Part 231 will result in more facilities being subject to nonattainment NSR review than under current Part 231 since the Department is eliminating the maximum annual potential (MAP) applicability concept. It is also possible that more facilities will be subject to NSR under revised Part 231 than under the Federal regulations since the Department is proposing to determine baseline actual emissions based on a five-year look back period rather than a 10-year look back as in the Federal NSR rule. Although the Department anticipates that more facilities will be subject than under the federal NSR rule since there will be less opportunity for an emission look back, the Department does not have definitive data to determine for certain that this will be the case. As far as the costs of compliance are concerned the Department does not envision significant increased costs. Since the proposed amendments to Part 231 apply to proposed major facilities and major modifications, annual compliance and administrative costs would remain consistent with those currently incurred to comply with the Department's 6 NYCRR Part 201 Title V requirements.
The proposed regulation requires that for any facility seeking the establishment of a PAL, that the PAL shall be reduced to 75 percent of the initial PAL, commencing with the first day of the sixth year of the PAL, unless the owner or operator demonstrates that a lesser level of reduction is justified. The owner or operator may seek an alternative reduced PAL by demonstrating that the application of BACT and/or LAER, as applicable, on all major PAL emission sources at the facility would not result in a 25 percent reduction in the initial PAL. The capital, operation and maintenance, and monitoring costs associated with the acceptance of a PAL, if any, will vary on a case-by-case basis. The requirement to reduce the PAL may cause an increase in cost to the facility that chooses to use a PAL, if a facility chooses a capital-intensive means of achieving the emission reductions. However, some facilities may meet the 25 percent reduction without incurring any additional costs, such as when a facility already plans to reduce the usage of a less efficient source within the facility, or implements efficiency improvements that reduce emissions and the cost of operation. Since PALs are a new compliance option, no specific cost estimates are available to determine if the PAL provisions will cause a monetary burden on any facility that chooses to use a PAL.
The proposed amendments to Part 231 set forth PM 2.5 applicability requirements for new major facilities and NSR major modifications consistent with new federal PM 2.5 requirements. The Department must include PM 2.5 in its proposed amendments to Part 231 to receive SIP approval. For new major facilities and NSR major modifications for PM 2.5, located in a PM 2.5 nonattainment area, the proposed rule requires the application of LAER and emission offsets of PM 2.5 at a ratio of one to one. For new major facilities and NSR major modifications for PM 2.5, located in a PM 2.5 attainment area, the proposed rule requires the application of BACT and preparation of an ambient air quality impact analysis. Facilities which meet the PM 2.5 applicability criteria will incur additional costs above those in existing Part 231 since PM 2.5 is not a regulated contaminant under existing Part 231 and was not previously a regulated contaminant under federal 40 CFR 52.21 (PSD). The most significant cost increase will be for new facilities and modifications that need to obtain PM 2.5 emission offsets. These costs will, however, vary greatly being dependent on the amount (tons per year) of emission offsets needed and the availability of approved reductions to be used as PM 2.5 offsets.
Minimizing Adverse Impact
The proposed rulemaking revisions as described above are not expected to create significant adverse impacts on any small business or local government. The proposed revisions to Part 231 involve a major restructuring of the rule which will make it less burdensome for the Department to implement and easier for the regulated community to comprehend. The Department has provided a more flexible approach for determining the baseline period (any 24 consecutive month period in the previous five years) than under the current Part 231 (immediate 24 consecutive month period in the previous five years). NNSR and PSD review requirements will now be included in one regulation rather than in separate State and Federal rules. The rule also includes PAL provisions which allow a facility to accept a 10 year facility-wide emission cap for a particular pollutant and then make changes at the facility avoiding NSR applicability provided the facility remains in compliance with its PAL.
Small Business and Local Government Participation
In May 2004, the Department convened a workgroup to discuss the development and adoption of a State NSR regulation (revised Part 231). Participants included members of the regulated community, State and Federal agencies, and environmental organizations: American Lung Association; the Business Council of New York State, Inc. (BCNYS); the Chemical Alliance; the National Federation of Independent Businesses; Consolidated Edison Company of New York; the Energy Association of New York State; EPA Region II; Independent Power Producers of New York; the Natural Resources Defense Council (NRDC); the New York Public Interest Research Group (NYPIRG); New York Department of Public Service (NYSDPS); New York State Office of the Attorney General (NYSOAG); and the Governor's Office of Regulatory Reform (GORR).
The Department held four meetings in the summer and fall of 2004 to discuss the major reform provisions included in EPA's 2002 Federal NSR Rule and Equipment Replacement Provision (ERP). The following issues were discussed: the Clean Unit and Pollution Control Project exemptions; whether the 2002 Federal NSR Rule adequately addressed compliance monitoring, reporting and recordkeeping; the methodology for determining baseline actual emissions, including the appropriate look-back period (five years versus 10 years); the "reasonable possibility" test; the method for determining whether a significant emission increase occurred - the baseline actual emission to projected actual emissions test; whether "demand growth" should be excluded from the projection of post-modification actual emissions; routine maintenance, repair, and replacement, including the ERP rule, and the practice of conducting case-by-case determinations; and the PAL provision.
The workgroup reconvened on February 16, 2006 to discuss proposed amendments to Part 231. The Department presented an overview of the proposed amendments to Part 231 and discussed the differences between the proposed amendments to Part 231, EPA's 2002 Federal NSR Rule and the Department's existing NNSR Regulation (6 NYCRR Subpart 231-2). The workgroup commented on provisions which might be too broadly (e.g., permit modification triggers) or too narrowly construed (e.g., definition for routine maintenance repair and replacement). The attendees were also interested in the timing of the regulation and other pending and anticipated EPA regulations which might impact NSR review. The Department requested written comments and revised the proposed amendments to Part 231, as appropriate, taking into account comments that were received. On September 6, 2006, the Department publicly noticed for hearings and comment proposed amendments to Part 231. Following this proposal and receipt of comments, the workgroup reconvened once again on March 28, 2007 to discuss further changes that the Department planned to make to its proposed amendments to Part 231. The workgroup attendees were interested in the Department's proposed changes to baseline emissions, exemptions, PALs, and monitoring/reporting/recordkeeping requirements particularly as they relate to minor modifications and demand growth emissions. The Department once again requested written comments and revised the proposed amendments to Part 231, as appropriate, taking into account comments that were received.
The Department has also provided outreach through Part 231 rulemaking presentations at the New York State Business Council's 2005 Annual Industry-Environmental Conference held on October 13 & 14, 2005 in Saratoga Springs, New York, and at the Air & Waste Management's Ninth Annual Environmental, Health & Safety Seminar held in Rochester, New York on February 15, 2006. Comments from these presentations were also considered during development of the proposed amendments to Part 231. Furthermore, public notice and hearings will be held to obtain additional comments on the Department's proposed revisions to Parts 200, 201 and 231. Participation by every affected party will be actively sought through these hearings.
Economic and Technological Feasibility
The proposed revisions do not substantially alter the requirements for subject facilities as compared to those that currently exist. The revisions leave in-tact the major NSR requirements for application of Lowest Achievable Emission Rate (LAER) or Best Available Control Technology (BACT) as appropriate, modeling, and emission offsets. Therefore, the Department believes there are no additional economic or technological feasibility issues to be addressed by any small business or local government that may be subject to the proposed rulemaking.
