6 NYCRR Parts 200, 201 and 231 Revised Regulatory Impact Statement Summary
1. Statutory Authority:
The statutory authority for these regulations is found in the Environmental Conservation Law (ECL) Sections 1-0101, 3-0301, 3-0303, 19-0103, 19-0105, 19-0107, 19-0301, 19-0302, 19-0303 and 19-0305, and in Sections 160-169 and 171-193 of the Federal Clean Air Act (42 USC Sections 7470-7479; 7501-7515) (Act or CAA).
2. Legislative Objectives:
Articles 1 and 3, of the ECL, set out the overall State policy goal of reducing air pollution and providing clean air for the citizens of New York. They provide general authority to adopt and enforce measures to do so. In addition to the general powers and duties of the New York State Department of Environmental Conservation (Department) and Commissioner to prevent and control air pollution found in Articles 1 and 3, Article 19 of the ECL was specifically adopted for the purpose of safeguarding the air 'quality' of New York from pollution. The Legislature bestowed specific powers and duties on the Department, including the power to formulate, adopt, promulgate, amend and repeal regulations for preventing, controlling and prohibiting air pollution.
The Clean Air Act (Act) requires states to have a preconstruction and operating permit program for new and modified major stationary sources. In 1970, Congress amended the Act "to provide for a more effective program to improve the quality of the Nation's air." The statute directed the United States Environmental Protection Agency (EPA) to adopt National Ambient Air Quality Standards (NAAQS) and required states to develop implementation plans known as State Implementation Plans (SIPs) which prescribed the measures needed to attain the NAAQS. Congress amended the Act in 1977 to provide additional safeguards to protect the nation's air quality. The 1977 amendments required states to identify areas that did not meet the NAAQS which were then designated as "nonattainment" areas. The 1977 amendments strengthened the Act by (1) expressly creating a preconstruction review program for new or modified major sources located in "nonattainment" areas ('see generally' 42 USC Sections 7501-7515); and (2) expressly providing a parallel preconstruction review program for new or modified sources located in "attainment" areas ('see generally id'. Sections 7470-7492).
In 1978, EPA promulgated a New Source Review (NSR) regulation, followed by multiple sets of regulations including regulations applying to prevention of significant deterioration (PSD) and nonattainment new source review (NNSR) in states with and without approved SIPs. In 1996, EPA proposed a NSR rule revision that it described as "the first comprehensive overhaul of the program in 15 years" (61 Fed Reg 38250 [July 23, 1996] [1996 Draft Rule]). On December 31, 2002, the EPA published a final rule revising the regulations that implement the PSD and NNSR provisions of the Act (see 67 Fed Reg 80185 [2002 Federal NSR Rule. The 2002 Federal NSR Rule required States with approved PSD and NNSR programs to submit a SIP revision by January 2006. The Department's NNSR regulation at 6 NYCRR Part 231 is subject to this SIP submittal requirement. The Department implemented the PSD program on behalf of EPA pursuant to a delegation agreement with EPA that had been in effect since the mid 1980s. On May 24, 2004, the Department returned delegation of the PSD program to EPA after failing to reach agreement on a partial implementation of the program. The Department advised EPA that it intended to adopt a revised State NSR program, which includes PSD requirements, for SIP approval.
Following the Department's publication of its proposed rulemaking in the State Register on September 26, 2007, the EPA on December 21, 2007 published in the Federal Register (Vol. 72, No. 245, 72 Fed. Reg. 72607) its final NSR rule, "Prevention of Significant Deterioration and Nonattainment New Source Review: Reasonable Possibility in Recordkeeping". The rule finalizes EPA's proposed revisions to its 2002 Federal NSR Rule governing the major NSR programs mandated by parts C and D of title I of the Act by clarifying what constitutes "reasonable possibility" and when the "reasonable possibility" recordkeeping requirements of the 2002 Federal NSR Rule apply. The December 21, 2007 rule finalizes a "percentage increase trigger" for reasonable possibility and identifies the criteria under which an owner or operator of a major facility undergoing a physical change or change in the method of operation that does not trigger major NSR requirements (insignificant modification) must keep records. The standard also specifies the recordkeeping, monitoring and reporting requirements on such facilities.
3. Needs and Benefits:
The Department is undertaking proposed revisions to its September 26, 2007 State Register Part 231 rulemaking proposal to address comments received, and EPA's final reasonable possibility requirements promulgated on December 21, 2007. Proposed Subparts 231-3 and 231-4 have been revised to remove the previously proposed Clean Coal technology exemptions and definitions. The Department has determined that these exemptions and definitions are out of date and no longer necessary for implementing the NSR program. Proposed Subpart 231-11 has been re-structured to include permit and reasonable possibility requirements. Facilities which undertake insignificant modifications will be required to comply with the proposed Part 231 Reasonable Possibility Requirements for Insignificant Modifications set forth in revised Subpart 231-11, and comply with any other requirements that may be applicable, including Part 201 permitting requirements. The proposed revisions to Part 231 extend EPA's post-change reasonable possibility monitoring requirements for insignificant modifications. Some facilities that undertake insignificant modifications will only be required to maintain records of information that they would have needed to generate to determine whether they are subject to the proposed amendments to Part 231. Other facilities proposing an insignificant modification will be required to keep records of their calculation of emission increases from independent and unrelated factors such as demand growth, monitor post-modification emissions, and submit annual reports to verify the accuracy of their calculations. The proposed revisions also extend EPA's pre-construction notification requirements for insignificant modifications. 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 to ensure accountability and enforceability. Additionally, any project that involves a physical change or change in the method of operation that the owner or operator determines would be followed by a significant facility emissions increase attributable solely to independent factors must notify the Department in writing of the proposed project prior to implementing the change. Finally, some revisions to clarify or correct requirements were also made to the Department's original proposal based on comments received, but the substantive requirements are essentially the same.
4. Costs:
NSR reviews are done on a case-by-case basis so the costs of compliance with the proposed Part 231 revisions will be very facility specific. New facilities or facilities that undertake modifications will have costs associated with determining regulatory applicability in the first instance. Based on the Department's proposed restructuring of Subpart 231-11 to address reasonable possibility requirements for insignificant modifications, some facilities that undertake an insignificant modification will only incur the costs associated with maintaining records of information that they would have needed to generate to determine whether they are subject to the proposed amendments to Part 231, therefore, there should be little if any additional cost associated with maintaining the records. Other facilities proposing an insignificant modification will be required to keep records of their calculation of emission increases from independent and unrelated factors such as demand growth, monitor post-modification emissions, and submit annual reports to verify the accuracy of their calculations. Although the Department anticipates that more facilities will be subject to recordkeeping, monitoring or reporting under Part 231 than under the Federal NSR Rule, and thus will likely incur some additional costs, the Department believes that the costs will not be significant and are necessary for accountability and enforceability, consistent with the D.C. Circuit Court's decision in 'New York v. EPA', 413 F.3d. 3. Facilities that undertake a project that involves a physical change or change in the method of operation that the owner or operator determines would be followed by a significant facility emissions increase attributable solely to independent factors must notify the Department in writing and submit supporting data of the proposed project prior to implementing the change. The requirement to submit data records is not expected to result in any significant cost increase. Annual compliance and administrative costs are expected to remain relatively consistent with those currently incurred to comply with the Department's 6 NYCRR Part 201 Title V requirements.
5. Paperwork:
While the proposed Part 231 revisions may include more specific recordkeeping, monitoring and reporting requirements than the Federal NSR rule for insignificant modifications, the paperwork involved in complying with the additional requirements is not considered extensive or significantly more than facilities are currently required to maintain under the Title V permit program.
6. State and Local Government Mandates:
The adoption of the proposed amendments to Part 231 are not expected to result in any additional burdens on industry, state, or local governments beyond those currently incurred to comply with the requirements of the existing NSR process under 6 NYCRR 201-6, 6 NYCRR 231-2, and 40 CFR 52.21.
7. Duplication:
This proposal is not intended to duplicate any other Federal or State regulations or statutes. The proposed amendments to Part 231 will ultimately conform to the Act. In the short term, some duplication may occur. Currently, EPA Region 2 implements the PSD program for new and modified major facilities in attainment areas of New York State. Once the proposed revisions are in effect, and approved by EPA into the SIP, the Department will have sole responsibility for the PSD provisions, and no duplication will occur.
8. Alternatives:
Adoption of the proposed amendments to Part 231 is necessary to conform to federal requirements. The Department returned delegation of the PSD rules in a letter to EPA dated May 24, 2004, retroactively effective March 3, 2003. As a result, the Department must develop its own regulations in order to implement the PSD program. The Department is taking the opportunity to resolve issues cited by the USEPA and the regulated community, while incorporating the EPA NSR Reform provisions, in modified form. The amendments will provide further clarification of existing rules, coordinate review and requirements in both attainment and nonattainment areas, and make Part 231 less burdensome to the regulated community. The Department believes that no viable alternatives to this rulemaking are available.
The following is a discussion of the available alternatives:
- Take no action. - This option is not a legitimate option. The State is required to either incorporate the Federal NSR regulations into the SIP or adopt its own program.
- Adopt the Federal NSR Rule - The Department does not believe that adoption of the Federal NSR Rule is consistent with the policy objectives of the State as articulated in the ECL and therefore has determined that this is not a viable option.
- Adoption a State-specific NSR program - Because neither option discussed above is acceptable, the Department proposes to adopt a State specific NSR program. The program will consist of modifications to the Department's existing Part 231 NNSR program and adoption of a State PSD program. The rulemaking will incorporate some of the provisions of the 2002 Federal NSR Rule as amended on December 21, 2007, as well as other provisions tailored to New York's air quality needs and objectives.
9. Federal Standards:
The Department's proposed revisions to its September 26, 2007 State Register Part 231 rulemaking proposal will align the state regulation with the federal NSR rule in terms of the methodology for determining emission increases, but will exceed minimum federal standards with more stringent provisions for determining baseline emissions and requiring emission reductions for PALS, which the Department has previously explained, and by requiring additional monitoring and reporting in connection with reasonable possibility requirements for insignificant modifications and for accountability of the NSR applicability requirements.
As noted above, on December 21, 2007 EPA finalized its Reasonable Possibility Rule. The rule identifies the criteria under which an owner or operator of a major facility undergoing a physical change or change in the method of operation that does not trigger major NSR requirements (insignificant modification) must keep records. Proposed Part 231 tracks these federal requirements with a few additional provisions. Some revisions for clarification were made to the Department's original proposal but the substantive requirements are essentially the same. EPA has concluded that it is "very important that the source retain a record of all information available to support its initial claim that an emissions increase predicted to occur as a result of demand growth did not result from the physical or operational change to an emissions unit."
The Federal Reasonable Possibility Rule only requires post-change monitoring for insignificant modifications if the projected actual emissions increase (Part 231 project emission potential) is by itself greater than or equal to 50 percent of the applicable significance threshold. Proposed Part 231 extends the post-change monitoring requirement to also include any modification with a project emission potential which is less than 50 percent of the applicable significant project threshold in Table 3, Table 4 or Table 6 of Subpart 231-13, but equals or exceeds 50 percent of the applicable significant project threshold when emissions excluded in accordance with Clause 231-4.1(b)(42)(i)(c) (emissions from independent and unrelated factors) are added. For such modifications, facilities will be required to keep records of their calculation of emission increases from independent and unrelated factors such as demand growth, monitor post-modification emissions, and submit annual reports to verify the accuracy of their calculations.
Additionally, the Federal Reasonable Possibility Rule only requires EUSGUs to notify the Department, prior to beginning actual construction, for any modification with a project emission potential which equals or exceeds 50 percent of the applicable significant project threshold. Proposed Part 231 extends the pre-construction notification requirement to any facility that proposes a modification with a project emission potential which equals or exceeds 50 percent of the applicable significant project threshold or proposes a modification with a project emission potential which is less than 50 percent of the applicable significant project threshold in Table 3, Table 4 or Table 6 of Subpart 231-13, but equals or exceeds 50 percent of the applicable significant project threshold when emissions excluded in accordance with Clause 231-4.1(b)(42)(i)(c) (emissions from independent and unrelated factors) are added. 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.
Some facilities that undertake insignificant modifications will only incur the costs associated with maintaining records of information that they would have needed to generate to determine whether they are subject to the proposed amendments to Part 231. Therefore, there should be little if any additional cost associated with maintaining the records. Other facilities proposing an insignificant modification will be required to keep records of their calculation of emission increases from independent and unrelated factors such as demand growth, monitor post-modification emissions, and submit annual reports to verify the accuracy of their calculations. Although such facilities will incur some additional costs, the Department believes that the costs will not be significant and are necessary for accountability and enforceability, consistent with the D.C. Circuit Court's decision. While proposed Part 231 may include more specific recordkeeping and monitoring requirements for some insignificant modifications than under the Federal NSR Rule, as discussed above, the Department does not believe that the additional requirements are extensive or significantly more than facilities are currently required to maintain under the Title V permit program.
Subdivision 231-3.6(c) includes a requirement that any owner or operator of a facility that proposes a project that involves a physical change or change in the method of operation that the owner or operator determines would be followed by a facility emissions increase that equals or exceeds any of the significant project thresholds in Subpart 231-13, Tables 3, 4 or 6, must notify the Department in writing of the proposed project prior to implementing the change if the owner or operator determines that the project does not constitute a modification because all the emission increases are attributable to independent factors in accordance with Clause 231-4.1(b)(42)(i)(b). The notification must include (1) a description of the change, (2) the calculation of the projected emissions increase, (3) the proposed date of the change, and (4) an explanation of the factual basis for the conclusion that none of the projected emission increases are attributable to the proposed project. The Department believes these requirements are necessary to ensure accountability of the NSR applicability requirements and the Department's goals of improving air quality. Facilities that meet this requirement will only incur the costs associated with developing information that they would have needed to generate in order to determine whether they are subject to the proposed amendments to Part 231, therefore, there should be little if any additional cost.
10. Compliance Schedule:
The proposed amendments do not involve the establishment of any compliance schedules. The regulation will take effect 30 days after publication in the State Register.
