BOARD MEETING DATE: July 10, 1998 AGENDA NO. 28
REPORT:
Status of Title V Program Implementation
SYNOPSIS:
This action is to report on the implementation of Title V, the federally mandated operating permit program for major sources, as directed by the Board at the November 1997 meeting. The report addresses many aspects of the Title V program, with emphasis on the public review and hearing processes.
COMMITTEE:
Stationary Source Committee, June 19, 1998, Reviewed
RECOMMENDED ACTION:
Receive and file this report.
Barry R. Wallerstein, D.Env.
Acting Executive Officer
Background
Title V of the federal Clean Air Act required the EPA to establish a national operating permit program for major sources of air pollution. In 1992, federal regulations were adopted that implemented the permit program through state and local air permitting authorities. The following year, AQMD integrated the new federal requirements into its permitting program with the adoption of Regulation XXX - Title V Permits. Many of the new Title V requirements either overlapped or conflicted with the AQMD’s permitting program, and the integration of the new federal requirements posed substantial administrative costs. AQMD joined with CARB and several other California air districts and industries to form the California Title V Implementation Working Group. This group successfully collaborated with EPA to simplify and streamline the rigid federal requirements so they provided more flexibility to complement existing permit programs. AQMD Regulation XXX was amended in 1995 and again in 1997 to simplify the program for the permit applicants and reduce the administrative burden on the AQMD.
Regulation XXX was amended in 1997 to provide additional flexibility. At that time, the Governing Board directed staff to report back to the Board on the program implementation status. This status report addresses key elements of the AQMD’s Title V permitting program. It also describes the development of the new Title V facility permits, streamlining of the permit application process, impacts of the program on AQMD resources and the unique methods AQMD used to determine if facilities are subject to Title V. Finally, the report outlines new opportunities for public participation in the permitting process that stemmed from Title V.
AQMD Facilities Subject to Title V
Title V applies to "major sources" of air pollution based on their potential-to-emit (PTE), not their actual emissions. The emission thresholds used to define a major source are lower in those regions that most frequently exceed the national ambient air quality standards. The South Coast Air Basin (SOCAB) is the only "extreme" ozone non-attainment area in the country, and therefore the Title V emission thresholds are lower than all other air basins (as low as 10 tons/year, compared to 100 tons/year in attainment areas). Based on EPA’s definition of major source, the AQMD is faced with the possibility that thousands of facilities will be considered major Title V sources and be required to obtain Title V facility permits. The Governing Board adopted a key amendment to Regulation XXX to allow facilities to use actual reported emissions from Emission Fee Billing forms rather than calculate potential emissions (based on maximum operational capacity for 7 days/week and 365 days/year). Considering the scope and complexity of AQMD’s permitting program, EPA supported the rule amendment, but actual emissions can only be used for the first three years of the program (Phase I). A total of 1,275 facilities were subject to Title V based on actual reported emissions in 1992 and 1993. The number of Title V facilities was reduced further with two rule amendments to Regulation XXX in 1997. The rule was changed to allow RECLAIM facilities to use the same method as non-RECLAIM facilities instead of their allocation of trading credits. Facilities that previously exceeded the thresholds can now be excluded from Title V requirements if the actual reported emissions have fallen below the thresholds in recent years due to permanent changes at the facility. The exclusion process required facilities to demonstrate to the AQMD that there was an emission calculation error in previous years, or that changes in the materials or equipment at the facility had reduced emissions below the thresholds. Combined, the two Regulation XXX amendments in 1997 lowered the number of Title V facilities to 791.
Title V Permit Application Process
AQMD simplified the permit application process to reduce the time required by Title V permit applicants to complete the forms and the time required by AQMD permit staff to review and approve the application. Permit applicants were provided preprinted application forms and were given the option of completing the forms electronically. The Title V Technical Guidance Document was distributed to all applicants to help facility owners understand the Title V permitting program and the permit application process. In addition, AQMD staff held two training classes for permit applicants to explain the Title V requirements. A dedicated phone line (Title V "hotline") was opened to provide updates on workshops, training classes, and application deadlines. Permit applicants could use the hotline to contact appropriate AQMD staff to ask questions on the program or the application process. Information on the application process was also made available on the internet at AQMD’s website.
In addition, Title V permit application forms were simplified in the following areas:
Efforts to streamline the application forms and provide training to permit applicants facilitated the processing of Title V permit applications and significantly reduced the facilities’ costs for preparing the Title V application. With the new Permit Streamlining Task Force and ombudsman, efforts to simplify Title V processes will continue.
Title V Permit Development
Implementation of the Title V program officially began on March 31, 1997, when EPA gave interim approval of AQMD’s Title V program. The 791 facilities in Phase I are divided into three permit groups (Groups A, B and C). At least one-third of the permits must be issued every year over the first three years of the program (Phase I ends March 31, 2000).
Title V permits consolidate individual equipment-based permits into a single facility permit with additional conditions that are required to ensure compliance. Many of the facilities in Group A are RECLAIM facilities that already had a facility permit. Staff has only had to add Title V requirements to these permits. For non-RECLAIM facilities, staff is preparing a facility permit that incorporates Title V features. The equipment descriptions and permit conditions are standardized in the Title V facility permit to facilitate automation and data tracking. One of the new features required by Title V is the identification of the regulatory basis for each permit condition.
The Title V permit identifies all regulatory requirements that apply to the facility, and indicates which are federally enforceable and which are only locally enforceable. AQMD rules that have been approved by EPA and adopted into the State Implementation Plan (SIP) are considered federally enforceable for purposes of Title V. However, a number of AQMD rules in the SIP have been amended and EPA has been slow to review and take action on the amended version of AQMD rules. Currently, 29 rules or rule amendments have been forwarded to EPA and are awaiting review. Until EPA takes action on the AQMD rule amendments, Title V permits must list both the SIP-approved version of the rule that is still federally enforceable and the most recently amended version that is enforced by AQMD. Facilities must comply with all rule requirements in the SIP-approved version and the most current amended version, but if a facility cannot comply with the older SIP-approved version, EPA is allowing AQMD to defer issuing those portions of the Title V permit.
To help Title V permit applicants obtain all applicable AQMD rules, the applicable versions of AQMD rules (including the older SIP-approved versions) may be downloaded from the AQMD website. The rules are periodically updated when EPA approves rule amendments in the SIP.
Draft Title V permits are sent to the facilities for review and comment before they are released for public and EPA review. The facility review process has been completed on 205 of the 301 Group A permits. Review of the remaining permits is scheduled to be complete by July 1998.
Public Participation
The Title V program allows the public to review and comment on the initial Title V permit, permit renewals, and significant permit revisions. The 30-day comment period is announced in the legal notice section of newspapers in the county where the facility is located. To increase visibility, a second display ad is placed in the Metro or Local News sections of papers that references the detailed ad in the legal section. All Title V public notices are available, at no cost, through AQMD’s Subscription Services. Currently, 221 subscribers receive all Title V notices. In addition, the Title V Hotline and the AQMD website provide information on proposed initial permits. Copies of all proposed permits are available for review at the AQMD and are distributed to at least one public library in the county where the facility is located. The libraries are selected near Title V facilities and the locations of the libraries are listed in the public notice.
At the request of both EPA and environmental groups, AQMD prepares a summary of each proposed permit to facilitate permit review. The permit summaries can be used to screen proposed permits to identify particular pollutants of concern (e.g. toxic air contaminants), emission levels, health risk, or compliance issues. The one-page permit summary includes the following information:
Typically, 20 to 40 permits are released for review at the same time as they are completed by AQMD staff. This staggered review allows for a more even workload distribution and gives EPA and the public more time for a thorough review. To date, AQMD has issued 97 proposed Title V permits for public review and received one comment letter regarding four facilities.
The Title V program allows the public to request a hearing on proposed Title V permit actions. The procedure for requesting a hearing is described in all Title V public notices. The criteria for approving a hearing request were developed with input from the AQMD Title V Ad Hoc Committee, made up of affected permit holders and environmental groups, and the AQMD’s Ethnic Community Advisory Group. A four-member committee will evaluate all hearing requests. The committee will consist of the Assistant Deputy Executive Officer for Major Sources in Stationary Source Compliance (SSC); the Public Advisor; the District Counsel; and the SSC Permit Team Manager with permitting responsibility for the Title V facility subject to the permit action. Once the Hearing Request Committee approves the hearing request, Title V staff will issue a public notice of the permit hearing. A Title V Hearing Officer shall be appointed from AQMD staff by the AQMD Executive Officer to preside over all Title V Public Hearings. Based on issues described in the hearing request and considering all testimony received during the public hearing, the Hearing Officer will make a decision to:
The Statement of Findings and Decision will be announced at the hearing and read into the hearing record. A hearing summary will be prepared that identifies the issues raised during public testimony and decisions of the Hearing Officer. The summaries and any revisions to the proposed permits will be forwarded to EPA.
AQMD Rule 301 – Permit Fees, gives the AQMD authority to pass on the costs for the public notices and hearings to the Title V permit holders. To minimize the costs for public notices, multiple facilities will be listed in the same notice for public hearings, unless a facility objects. Hearing fees will be divided among those facilities for which a formal public hearing is opened. To date, AQMD has received three requests for a hearing, all from a single consultant representing the three facilities. After a meeting with AQMD staff to discuss the issues, the consultant withdrew the hearing requests.
Permit Review by EPA
The permit review process has been streamlined so that the public and EPA review the permit at the same time. EPA has 45 days to review the proposed permit and return comments to the AQMD. AQMD has forwarded 97 proposed Title V permits to EPA for review and approval. EPA has requested that AQMD delay issuance of the final Title V permits, until their concerns over requirements in the permits to periodically monitor for compliance are resolved. The periodic monitoring requirements are an important enhancement to AQMD permits and to the compliance program, but staff wants to make sure that the requirements are reasonable and that they are not only applied to facilities in South Coast jurisdiction. On April 20, 1998, EPA requested that AQMD suspend further submittal of proposed Title V permits to them until concerns on earlier permits are addressed. Staff is continuing to try to resolve these concerns.
Impacts on AQMD Resources
Since 1993, up to six staff members have been devoted solely to Title V efforts to:
None of these efforts have been offset by new fees.
In the last year and a half, all permit engineers in the major source permitting teams have spent a large part of their time prescreening about 800 Title V permit applications, reviewing Group A Title V applications, and preparing facility permits for over 300 Group A facilities. Regulation XXX does not impose substantive new requirements on the permit holders, but it does require the preparation of a more complex permit, with a comprehensive listing of all applicable emission limits, references to all applicable rules, and new monitoring, recordkeeping and reporting requirements. Because of the increased permitting workload from Title V and a steadily declining workforce during the last four years, the ability to keep up with the regular permitting workload has been adversely affected.
While the federal Clean Air Act requires full recovery of Title V costs from permit fees, the fixed permit application fee of $786.50 did not cover the costs of processing the Group A permits. The average deficit was $9,800 for each Title V permit processed. To enable the AQMD to recover actual costs incurred to process the Title V permits, the fee structure was amended (effective July 1, 1998) to replace the fixed fee with a permit fee that is based on actual staff time spent to develop and issue the permit. The facility-specific fee will address the size and complexity of the permit as well as staff resources required to issue the final permit. A tiered initial fee or deposit is determined by the number of devices listed in the permit, and a "time and materials" final fee is charged for the actual time spent in excess of the hours covered by the initial fee. The new application fees are being phased in over a two-year period, and do not affect those facilities in Phase I of the program that submitted Title V permit applications prior to July 1, 1998.
Once final Title V permits begin to be issued, the workload of AQMD’s enforcement staff will also be affected. The new Title V monitoring, recordkeeping and reporting requirements put a big responsibility on Title V facilities to determine their compliance status and report non-compliance. However, AQMD enforcement staff will have to audit the Title V facilities to assure they are complying with all the new requirements and conduct tracking and follow-up for the new compliance reporting. If Title V facilities fully comply with the new requirements, compliance will improve and AQMD’s enforcement workload might eventually be reduced.
Phase II
Phase II of the Title V program, based on PTE rather than actual emissions, will bring hundreds more facilities into the Title V program. Thousands more facilities may be faced with modifying their permits to establish new permit conditions that will limit their PTE levels below the Title V thresholds. Because of the many more facilities involved and the difficulty in determining PTE compared to actual emissions, this will be a much larger project than the project of identifying Phase I Title V facilities. AQMD may have to create new revenue sources to pay for this new work program. Staff will be working on this program soon to identify potentially affected facilities, determine the facilities’ PTE, establish new permit conditions to reduce facilities’ potentials-to-emit, and have Phase II Title V facilities submit Title V applications by September 30, 2000.
Conclusion
Integration of a rigid national operating permit program with the AQMD permitting program has been demanding on staff resources and costly to administer. While key amendments to AQMD rules have streamlined the redundant federal requirements, simplified the program to complement AQMD’s program, and reduced the total number of facilities subject to Title V, nearly 800 Title V facility permits must be issued by March 31, 2000. Full implementation of the program has been delayed pending resolution of EPA concerns to require additional monitoring to ensure compliance. The number of facilities subject to Title V in the District and the resulting demands on AQMD resources will substantially increase in two years when "potential" emissions based on maximum operational capacity must be calculated to determine applicability.
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