BOARD MEETING
DATE: January 12, 1996
AGENDA NO.25
PROPOSAL: Public Hearing to Adopt Rule 518.2 - Federal Alternative Operating Conditions.
SYNOPSIS: Proposed Rule 518.2 - Federal Alternative Operating Conditions, establishes procedures by which owners/operators of Title V facilities seeking a variance from AQMD or state rules may obtain an Alternative Operating Condition (AOC) from the Hearing Board that would be recognized by the Environmental Protection Agency (EPA). Five major issues are addressed in the proposed rule: 1) federal recognition of variances through the approval of this rule; 2) creation of a State Implementation Plan (SIP) Allowance for variances; 3) content of AOC; 4) public participation; and 5) mitigation of excess emissions.
RECOMMENDED ACTION:
1. Certify the Notice of Exemption for Proposed Rule 518.2 - Federal Alternative Operating Conditions.
2. Adopt Rule 518.2 - Federal Alternative Operating Conditions.
James M. Lents, Ph. D.
Executive Officer
PL:CC/BB/AG:JW:ADO:VL
Attachments
Summary of Key Issues
Rule Development Flow Chart
Key Contacts List
Resolution
Notice of Exemption from CEQA
Rule Language
Staff Report
Socioeconomic Analysis
Background
The development of Proposed Rule 518.2 - Federal Alternative Operating Conditions, commenced in June 1995. At that time the Governing Board was considering the amendments to Regulation XXX - Title V Permits, which addressed issues identified by EPA as necessary to obtain interim program approval. A number of industry representatives stated their concerns regarding the unavailability of federally recognized variances as a basis for their opposition to the proposed amendments to Regulation XXX, which was, therefore, continued to August 11, 1995. Furthermore, the Governing Board directed staff to convene the Title V Working Group and seek to resolve the issue of federal recognition of variances and other issues at the earliest opportunity. Amendments to Regulation XXX were adopted by the Board on August 11, 1995. At that time, EPA, industry, and the AQMD had conceptual agreement on an approach to resolving the issue of federal recognition of variances. That approach is implemented in Proposed Rule 518.2.
Proposal
Traditionally, EPA has taken the position that a facility owner or operator operating under the terms of a variance granted by the local Hearing Board is not insulated from federal and citizen enforcement actions except where such variance has been submitted to EPA as a SIP revision. Proposed Rule 518.2 establishes AOCs through a process that is almost identical to the existing variance process, but since the rule itself will be in the SIP, and appropriate public notice will occur, protection against federal and citizen enforcement will be afforded. To accomplish this goal, the proposed rule:
Excess Emissions
Under existing state law and AQMD variance rules, facilities seeking a variance must mitigate excess emissions to the extent feasible. Proposed Rule 518.2 includes the same requirements and adds an option for using Emission Reduction Credits (ERCs) if no on-site mitigation is available, in the event that the SIP Allowance is depleted.
SIP Allowance
The SIP Allowance is intended to be sized to provide for reasonably foreseeable needs of facilities, and to ensure that the AQMD's attainment demonstration is not hindered. The proposal includes both an annual and monthly limit for the SIP Allowance. Based on the 1990 annual excess emission data, and 1992 through 1994 daily excess emission data, the annual and monthly SIP Allowances shown in Table 1 are proposed. The SIP Allowances can be adjusted, if necessary, during AQMP updates, and such adjustment will require rule amendment.
Table 1: Proposed SIP Allowance
Air Maximum Yearly Maximum Monthly
Contaminant Excess Emissions Excess Emissions
(Lb) (Lb)
VOC 197,000 34,000
NOx 7,000 650
PM10 28,000 7,000
SOx 4,200 350
CO 19,000 1,200
Public and EPA Review
Public and EPA notice (45 days) is required to satisfy Title V permitting requirements, but this notice can occur either before or after the variance hearing.
A facility owner or operator obtaining a variance pursuant to the proposed rule will not have to undertake any additional permit application, SIP revision or public notice procedures to obtain protection from federal and citizen enforcement actions for covered violations. The SIP Allowance is set at a level which, to the extent feasible, is adequate to cover all reasonably foreseeable needs of Title V facilities. If, however, the Allowance is exhausted during a time period, AOCs which would allow further excess emissions during that period will not be approved under the proposed rule. Local variances will still be available in this unlikely event.
AQMP & Legal Mandates
The SIP Allowance is funded by designating a portion of the AQMP emissions inventory for this purpose. It is anticipated that the AQMP control strategies need not be altered by such funding because excess emissions under variances are currently included in the planning inventory, although they are not separately identified. Additionally, through the creation of a SIP Allowance for excess emissions, the proposed rule will ensure that aggregate excess emissions from Title V sources under AOCs will not exceed a level which would interfere with the region's plan for attainment of the National Ambient Air Quality Standards (NAAQS).
CEQA & Socioeconomic Analysis
Staff has reviewed Proposed Rule 518.2 and determined that it is exempt from the requirements of CEQA. The proposed rule is administrative in nature and has no potential to impact the environment. A Notice of Exemption has been prepared pursuant to state CEQA Guidelines Section 15002 (k)(1) - Three Step Process [AQMD CEQA Section 1.2 (k)(1)], and state CEQA Guidelines Section 15061 (b)(3) [AQMD Section 5.1 (b)(3)]. The Notice of Exemption will be filed with the county clerk immediately following the adoption of the proposed amendments.
Staff has reviewed Proposed Rule 518.2 and determined that it is not expected to impact the economy and employment negatively as mentioned in the attached Socioeconomic report.
Implementation Plan
Currently, the public obtains assistance about 1) how to request a variance, 2) understanding the technical aspects of the rule being violated, and 3) the variance process, through the AQMD's Clerk of the Board Office, Hearing Board Liaison, and AQMD General Counsel's Office. The variance proceedings under the proposed rule and existing rules are similar, except that under the proposed rule, AQMD will be required to track excess emissions and ensure that the SIP Allowance is not exceeded. As such, Title V owners/operators will continue to obtain assistance from these offices on issues relating to variances and AOCs.
Resource Impacts
The proposed rule will require AQMD resources to ensure that the aggregate excess emissions from all sources under federally-recognized variances will not exceed the SIP Allowance for such emissions. A fee will be proposed to recover resource costs in the future. Nevertheless, the implementation of the proposed rule will not impact the AQMD's budget significantly.