BOARD MEETING DATE: April 1, 2005
AGENDA NO. 32

Reaffirm Board’s Previous Action to Relinquish Prevention of Significant Deterioration (PSD) Analysis Back to Federal Government and Render Regulation XVII Inactive Unless Facility/Permit-Specific Action Receives New Delegation from U.S. EPA

SYNOPSIS:

AQMD Regulation XVII entitled "Prevention of Significant Deterioration" ("PSD") was initially adopted in 1988 to implement the federal PSD program by setting forth preconstruction review requirements to ensure that air quality in clean air areas would not significantly deteriorate. On March 3, 2003, the U.S. Environmental Protection Agency ("EPA") officially notified the AQMD that the AQMD’s authority to implement the PSD programs had been revoked and rescinded. On February 27, 2003, the Board authorized the Executive Officer, upon the anticipated withdrawal of the EPA delegation, not to request any further delegation and to allow the EPA to terminate the AQMD’s PSD delegation agreement and for EPA to become the permitting agency for PSD sources in the AQMD. Questions have been raised in the Hearing Board as to the present status of Regulation XVII and the intent of the Governing Board in its action taken on February 27, 2003. This action proposes that the Governing Board confirm its intent in adopting Regulation XVII in 1988 and its prior action on February 27, 2003, that Regulation XVII is currently inactive and shall remain inactive unless and until the EPA provides the AQMD with new delegation of authority to act either in full or on a Facility/Permit-Specific basis.

COMMITTEE:

Not Applicable

RECOMMENDED ACTION:

Reaffirm Board’s previous action to relinquish Prevention of Significant Deterioration (PSD) analysis back to federal government and render Regulation XVII inactive unless the District receives new delegation in part or in full from U.S. EPA.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

Prior to 1990, the federal Clean Air Act, Title 1, Part C and U.S. EPA regulations, 40 CFR Part 52.21, required that areas meeting National Ambient Air Quality Standards (NAAQS) for any criteria pollutant (i.e. "attainment" areas) have a major source NSR program called Prevention of Significant Deterioration (PSD). AQMD adopted Regulation XVII – PSD in October 1988 (subsequently amended in January 1989 and August 1999) solely to implement the requirements of the federal PSD program. AQMD Rule 1701, in the Applicability Section, specifically states "Effective upon delegation by EPA". In January 1997, the EPA determined that Regulation XVII met the requirements of the federal program and signed a delegation agreement ("Delegation") with AQMD delegating authority from the EPA to AQMD to implement the provisions of the federal PSD program (40 CFR Part 52.21). Subsequently, on December 31, 2002, the EPA published revised NSR rules for both PSD and non-attainment NSR programs, and made them mandatory. Shortly thereafter, the EPA reassessed the AQMD program and on March 3, 2003 it revoked the delegation (See Attachments 1 and 2).

On February 27, 2003, the Governing Board adopted the following actions:

1. Authorized the Executive Officer to request from U.S. EPA recognition that AQMD’s Regulation XVII – PSD is as stringent, and therefore equivalent to the U.S. EPA’s revised PSD regulations published in the Federal Register on December 31, 2002.
    
2. Authorized the Executive Officer, in the event that U.S. EPA does not find AQMD’s Regulation XVII – PSD to be equivalent to their revised PSD regulations, to not request any further delegation and allow U.S. EPA to terminate AQMD’s PSD delegation agreement and become the permitting agency for the PSD sources in AQMD.

Regulation XVII was not rescinded, so that it might remain available in the event that the EPA elected either to deem Regulation XVII equivalent to federal PSD regulations, or to make a delegation of PSD authority to the AQMD. However, Regulation XVII was intended to remain ineffective unless and until the EPA made a subsequent PSD delegation to the AQMD in accordance with recommendation number 1, above. By not fully rescinding Regulation XVII, AQMD could therefore avoid the necessity of going through the labor intensive and time consuming process of adopting a new Regulation XVII, in the event that the EPA, at a subsequent date, proposed to implement a new delegation of PSD authority to the AQMD.

Since March 3, 2003, there has been neither an EPA recognition of equivalency of Regulation XVII to the federal PSD regulations, nor any further delegation of PSD authority to the AQMD. Accordingly, since March 3, 2003, Regulation XVII has remained inactive and the EPA has been the sole permitting agency for PSD sources in the AQMD¹.

¹ The EPA and AQMD staff have agreed to a limited re-delegation of PSD permitting authority for a single proposed facility for which the District largely completed PSD analysis prior to the March 2, 2003 withdrawal of PSD delegation. This further indicates EPA staff’s position that general PSD permitting authority is not currently delegated to the District.
 

Questions have recently arisen in a Hearing Board action involving the ConocoPhillips refinery regarding the intent of the rule as adopted and Board’s actions taken on February 27, 2003 (Attachment 3).

Staff requests that the Board clarify any confusion as to the status of Regulation XVII by (a) reaffirming that the intent of the Governing Board in adopting Regulation XVII was that the Regulation would only be in effect when the District has an effective delegation from EPA, (b) reaffirming that the Governing Board action on February 27, 2003 remains in full force and effect, and (c) reaffirming that, as of March 3, 2003, Regulation XVII was rendered inactive and unenforceable by the AQMD.

Recommendation

Based on the above discussion, it is recommended that the AQMD Governing Board:

Reaffirm Board’s previous action to relinquish Prevention of Significant Deterioration (PSD) analysis back to federal government and render Regulation XVII inactive and unenforceable unless the District receives new delegation in part or in full from U.S. EPA.

Attachments

Attachment 1 – Letter from EPA
Attachment 2 – 40 CFR Part 52; 68 FR 19371
Attachment 3 – Board Letter dated February 7, 2003; Agenda Item No. 29

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