The Part 200 amendments will add a definition for Routine Maintenance, Repair, or Replacement (RMRR), codifying 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. In addition, the Department is revising Part 200 (Sections 200.9 and 200.10). Section 200.9 is being amended to include all federal materials referenced in the proposed amendments to Part 231. Section 200.10(a) is being amended to reflect that the Department is no longer delegated responsibility for implementation of the Federal Prevention of Significant Deterioration (PSD) Program.

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 a nominal 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.

The existing nonattainment New Source Review program at Part 231 will be re-titled “New Source Review for New and Modified Facilities” and will include new Subparts 231-3 through 231-13. The new subparts will implement nonattainment New Source Review (NNSR) and attainment New Source Review (PSD). The NNSR requirements are based on New York's existing NNSR program Subpart 231-2, with revisions to include selected provisions from the December 31, 2002 Federal NSR reform rule. The PSD requirements are also based largely on the December 31, 2002 Federal NSR reform rule as codified at 40 CFR 52.21.

The proposed revisions to Part 231 will change the basis of applicability for modifications and emission reduction credits (ERCs) from an “Emission Unit” basis to an “Emission Source” basis, incorporate various federal requirements, provide clarification of existing requirements, and require comprehensive reporting, monitoring, and recordkeeping that will conform to the requirements of Title V. Through this rulemaking, the Department will also establish a new method for determining baseline actual emissions. Baseline actual emissions will be determined by using any 24 consecutive month period of emissions in the previous five years. All facilities (no separate baseline period for electric utility steam generating units) will be required to determine their baseline actual emissions using this method.

The Department will retain existing Subpart 231-1 “Requirements for emission sources subject to the regulation prior to November 15, 1992” and Subpart 231-2, “Requirements for emission units subject to the regulation on or after November 15, 1992”. These regulations are currently cited in many air permits issued throughout the State and retaining them will facilitate implementation and enforcement of the NSR program. Existing Subpart 231-2 will be revised only to indicate that the Subpart will not apply after the date the proposed revisions to Part 231 become effective. Thus, permit applications received on or after the effective date of revised Part 231 will be processed according to the provisions of Subparts 231-3 through 231-13, as applicable.

New Subparts 231-3 through 231-13 have been added to include provisions from the EPA December 31, 2002 NSR Rule, and incorporate the Federal PSD program. The NNSR provisions currently specified in Subpart 231-2 are being updated and incorporated into these new subparts. The Department is also adopting a State PSD program which is based largely on the Federal PSD rule and included in Subparts 231-7, 231-8, and 231-12. The subparts of the proposed regulation are being organized to ease determinations of applicability, to collect common requirements into groups, and to streamline the regulation. The organization of the new regulation strives to make a more coherent series of requirements and obligations.

Subpart 231-3 General Provisions specifies provisions which apply generally including a transition plan, general permit requirements, general prohibitions, exemptions, and circumvention.

Subpart 231-4 defines the terms used throughout Part 231 and incorporates terms from both the existing Subpart 231-2 and the Federal PSD rule, 40 CFR 52.21. The Department has made minor revisions to terms used in existing Subpart 231-2 and 40 CFR 52.21 so that definitions are consistent for both nonattainment and attainment NSR and with New York's regulations.

To facilitate the implementation and administration of Part 231, the Department has included the requirements for new and modified facilities in four main subparts (231-5 to 231-8) depending on the facility's location in an attainment or nonattainment area.

Subpart 231-5 is applicable to new facilities and to modifications at existing non-major facilities in nonattainment areas. Proposed new major facilities will continue to be subject to the requirements to install Lowest Achievable Emission Rate (LAER) and obtain emission offsets as they are under existing Subpart 231-2. The subpart also specifies that non-major facilities undertaking projects which are major by themselves, or increase the emissions of the facility above major thresholds must obtain permits which limit emissions.

Subpart 231-6 applies to modifications at existing major facilities in nonattainment areas. The subpart continues the requirements for LAER technology and emission offsets that exist in the Department's current nonattainment NSR program. The subpart also specifies that facilities can perform a netting exercise to determine whether the modification, when considering other contemporaneous activities at the facility, would exceed applicable emissions thresholds.

Subpart 231-7 applies to new facilities and to modifications at existing non-major facilities in attainment areas. The subpart implements the requirements for determination of air quality impacts through modeling, and the application of Best Available Control Technology (BACT). The subpart also specifies that non-major facilities undertaking projects which are major by themselves, or increase the emissions of the facility above major thresholds must obtain permits which limit emissions.

Subpart 231-8 applies to modifications at existing major facilities in attainment areas of the State. The subpart implements the requirements for determination of air quality impacts through modeling and the application of BACT in the case of facilities which undertake a NSR major modification. These requirements address Federal PSD requirements. The subpart also specifies that facilities can perform a netting exercise to determine whether the modification, when combined with other contemporaneous activities at the facility, would exceed emissions thresholds.

The remaining five subparts include general provisions that apply to both new and modified subject facilities.

Subpart 231-9 sets forth the requirements for establishing Plantwide Applicability Limitations (PAL) at Title V facilities. A PAL allows a facility to undertake modifications without being subject to NSR review as long as the facility does not exceed its PAL emission limit. Subpart 231-9 is based on the PAL provisions from the December 31, 2002 Federal NSR rule (67 Fed Reg at 80278), which specify PAL creation, duration, and expiration. The Department has made a few revisions to the federal regulatory language to take into account Subpart 201-6, New York's approved Title V regulation and to ensure that reduced emissions and improved air quality will result. PALs are established in Title V permits and are subject to Title V permit application and processing procedures for creation, modification, or renewal. PALs are created for an initial period of 10 years, less if established during the middle of a Title V permit term, and can be renewed for 10 years, subject to certain restrictions. The proposed regulation requires 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 Department may authorize a reduction in the PAL to a level that would reflect the emissions from the facility if all major PAL emission sources are operated at full capacity after complying with BACT and/or LAER, as applicable.

Subpart 231-10 defines emission offset and Emission Reduction Credit (ERC) creation and use. The provisions for ERC creation and use are substantially the same as existing Subpart 231-2.

Subpart 231-11 sets forth specific permit, monitoring, reporting and recordkeeping requirements that apply to new major facilities, NSR major modifications and minor modifications. These requirements are in addition to any Part 201 requirements that may apply.

Subpart 231-12 specifies the ambient air quality impact analysis requirements for facilities in attainment areas. These requirements emanate from the Federal PSD rule which is codified at 40 CFR 52.21.

Subpart 231-13 includes several tables which list applicable emission thresholds for proposed new and modified facilities, emission offset ratios, federal Class I variance maximum allowable increase concentrations, and maximum allowable increase in SO2 concentrations for gubernatorial variances. Table 9—Source Category List includes the new chemical process plant exclusion for ethanol production facilities that produce ethanol by natural fermentation (included in NAICS codes 325193 or 312140). This exclusion was promulgated in the EPA May 1st, 2007 Final Rule for 40 CFR Parts 51, 52, 70, and 71 Prevention of Significant Deterioration, Nonattainment New Source Review, and Title V: Treatment of Certain Ethanol Production Facilities Under the Major Emitting Facility” definition.

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, including the regulation of mobile sources of air pollution. 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. To facilitate this purpose, 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 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. The 1970 Act amendments mandated that SIPs contain “a procedure for review (prior to construction or modification) of the location of any new or modified air pollution source.” When it became clear that the goals of the 1970 Act amendments would not be achieved, 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. In particular, the 1977 amendments strengthened the Act by (1) expressly creating a preconstruction review program for new or modified major sources located in “nonattainment” areas (i.e., areas which failed to meet NAAQS) (‘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 (i.e., areas which met NAAQS or where there was insufficient information to evaluate whether NAAQS were met) (‘see generally id.’ Sections 7470-7492).

In 1978, EPA promulgated a NSR regulation, followed by multiple sets of regulations including regulations applying to PSD and 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]). The proposed changes were “intended to reduce costs and regulatory burdens for permit applicants” without sacrificing air quality (‘id.’ at 38251) EPA estimated that the changes, if finalized, would result in approximately 50 percent fewer sources being subject to NSR (‘see id.’ at 38319). 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]). EPA stated that the rule was designed to “reduce burden, maximize operating flexibility, improve environmental quality, provide additional certainty, and promote administrative efficiency” (‘id.’ at 80189). The 2002 Federal NSR Rule required States with approved PSD and NNSR programs to submit a SIP revision by January 2006. The Department 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. The Department could have continued to implement the PSD program as a delegated State but objected to several aspects of EPA's 2002 Federal NSR Rule and determined that it could not implement the 2002 Federal NSR Rule in its entirety and EPA declined to have the Department implement the PSD program on a partial agreement. 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 State PSD program that would be protective of the State's air resources and submit the regulations to EPA for SIP approval.

3. NEEDS AND BENEFITS:

The Department is undertaking this rule making 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 rule making 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.

From the State's perspective, major NSR is a critical tool in meeting the Legislature's air quality objectives. The program ensures that air quality is preserved in areas of the state that meet the NAAQS and does not further degrade, but actually improves, in areas of the State which currently are not in attainment of the NAAQS. The State of New York currently has areas that are designated nonattainment for ozone, PM-10, and particulate matter or particles with an aerodynamic diameter less than or equal to 2.5 micro-meters (PM-2.5). As a result, the Department must have a NNSR program that meets the requirements of Part D of Title I of the Act to adopt permit programs for the construction, modification, and operation of major stationary sources in non-attainment areas.

The proposed regulation is one in a series of programs intended to track pollution, ensure that sources are meeting their regulatory obligations, and maintain permits. These permits contain provisions to limit emissions of ozone precursors (volatile organic compounds and nitrogen oxides), fine particulate matter, sulfur dioxide, carbon monoxide, and lead.

The proposed regulation is being organized to facilitate its implementation. The organization of the new regulation strives to make a more coherent series of requirements and obligations. The existing subparts 231-1 and 231-2 are being retained with only modifications of the applicability dates. The initial subparts, Subpart 231-3 General Provisions and Subpart 231-4 Definitions, specify those provisions and definitions applicable throughout the regulation. The next four subparts address new and modified facilities in nonattainment and attainment areas. These specific subparts are intended to clearly indicate which provisions apply to facilities in different areas of the state. Subpart 231-5 provisions apply to new facilities and existing non-major facilities in nonattainment areas and Subpart 231-6 applies to modifications to existing major facilities in nonattainment areas. Subpart 231-7 applies to new facilities and to existing non-major facilities in attainment areas and Subpart 231-8 applies to existing major facilities in attainment areas of the State. The remaining five subparts specify how various major provisions apply to the four scenarios in Subparts 5 through 8. Subpart 231-9 defines how Plantwide Applicability Limitations can be applied to facilities that choose to undertake them. Subpart 231-10 sets forth requirements for Emission Reduction Credit (ERC) creation and use as emission offsets and for netting. Subpart 231-11 provides specific permit, monitoring, reporting, and recordkeeping requirements. Subpart 231-12 embodies the Ambient Air Quality Impact Analysis requirements for facilities in attainment areas. Subpart 231-13 compiles tables and lists emission thresholds applicable throughout the proposed regulation.

The proposed revisions to Part 231 will change the basis of applicability for modifications and emission reduction credits (ERCs) from an “Emission Unit” basis to an “Emission Source” basis, incorporate various federal requirements, provide clarification of existing requirements, and require comprehensive reporting, monitoring, and recordkeeping that will conform to the requirements of Title V. The revisions are expected to make the regulations less burdensome to the business community without compromising air quality. The revisions are not expected to have any measurable impact on employment opportunities in the State. The proposed regulations will make revisions to the current Part 231 to address deficiencies previously identified by the EPA.

In May 2004, the Department convened a workgroup to discuss the development and adoption of a State NSR rule. Participants included members of the regulated community, State and Federal agencies, and environmental organizations. The Department held meetings in 2004, 2006, and 2007 to discuss the major NSR reform provisions. The Department has also provided outreach through Part 231 rule making presentations at the NYS Business Council's 2005 Annual Industry-Environmental Conference held on October 13 & 14, 2005 in Saratoga Springs, NY, and at the Air & Waste Management's Ninth Annual Environmental, Health & Safety Seminar held in Rochester, NY on February 15, 2006.

4. 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 a facility located in a rural area. 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.

5. PAPERWORK:

Most of the proposed amendments to Part 231 are not expected to entail any significant additional paperwork for the Department, industry, or state and local governments beyond that which is already required to comply with the Department's existing permitting program under 6 NYCRR Part 201-6 and existing NSR regulations under 6 NYCRR Part 231, and federal 40 CFR 52.21. Also, while Part 231 may include more specific recordkeeping requirements than the Federal NSR rule, as discussed above, EPA appears to be changing its approach. Another area where revised Part 231 may entail additional paperwork is with the initial PAL review, which is a voluntary program. Applicants that seek to justify a reduction of less than 25 percent in the PAL will have to conduct control technology assessments that will increase the amount of paperwork beyond that required if the applicant chose not to avail itself of the option to agree to a PAL.

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 rule making 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 rule making will incorporate some of the provisions of the 2002 Federal NSR Rule as well as other provisions tailored to New York's air quality needs and objectives.

9. FEDERAL STANDARDS:

The proposed amendments are incorporating federal regulatory language, and will align the state regulation with federal standards for the most part, and exceed minimum federal standards for other items.

Provisions of the regulation which exceed federal standards include: use of a uniform baseline period (any consecutive 24 month period over the previous five years) for all facilities; limiting projects to the use of only one baseline period for all NSR regulated pollutants for determining whether a project is subject to the regulation; modifications that would otherwise not be subject to the regulation according to the EPA Rule due to their insignificance are required to keep records of such a modification under the Department regulation; certified emission reduction credits are being required for netting analyses for PSD areas that would not otherwise be required by the EPA Rule; the PAL allowance is being limited to 10 years or less depending on the renewal of the applicable Title V permit, whereas EPA would allow 10 years regardless of permit duration, and the PAL will be required to be reduced up to 25 percent by year six of its duration.

On May 1, 2007 EPA promulgated rule revisions to 40 CFR Parts 51, 52, 70, and 71 Prevention of Significant Deterioration, Nonattainment New Source Review, and Title V: Treatment of Certain Ethanol Production Facilities Under the Major Emitting Facility” definition; Final Rule—with an effective date of July 2, 2007. To remain consistent with this rule making, the Department proposes to modify the definition of “Major stationary source or major source or major facility” under Part 201, and Table 9—Source Category List under Subpart 231-13 to exclude ethanol production facilities that produce ethanol by natural fermentation (included in NAICS codes 325193 or 312140) from chemical process plants.

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.

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 rule making 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 rule making 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 rule making 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 rule making 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 rule making 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 rule making.

TYPES AND ESTIMATED NUMBERS OF RURAL AREAS AFFECTED:

Rural areas are defined as rural counties in New York State that have populations less than 200,000 people, towns in non-rural counties where the population densities are less than 150 people per square mile and villages within those towns.

The New York State Department of Environmental Conservation (Department) proposes to revise 6 NYCRR Parts 200, 201, and 231. The proposed rule making will apply statewide and all rural areas of New York State will be affected.

The Department is undertaking this rule making 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 rule making 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. As such, the professional services that will be needed by any facility located in a rural area are not anticipated to significantly change from the type of services which are currently required to comply with NNSR and PSD requirements. 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 businesses in rural areas.

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 a facility located in a rural area. 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 rural areas. 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.

RURAL AREA 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 rule making 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.

NATURE OF IMPACT:

The New York State Department of Environmental Conservation (Department) proposes to revise 6 NYCRR Parts 200, 201, and 231. The proposed rule making will apply statewide.

The Department is undertaking this rule making 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 rule making 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. The Department does not anticipate that any of the proposed rule revisions would adversely affect jobs or employment opportunities in the State.

CATEGORIES AND NUMBERS OF JOBS OR EMPLOYMENT OPPORTUNITIES AFFECTED:

Due to the nature of the proposed amendments to Part 231, as discussed above, no measurable effect on the categories or numbers of jobs, or employment opportunities in any specific category is anticipated. There may be some job opportunities for persons providing consulting services and/or manufacturers of pollution control technology in relation to the new requirements.

REGIONS OF ADVERSE IMPACT:

There are no regions of the State where the proposed revisions would have a disproportionate adverse impact on jobs or employment opportunities. The existing NSR requirements are not being substantially changed from those that currently exist.

MINIMIZING ADVERSE IMPACT:

The proposed rule making revisions as described above are not expected to create significant adverse impacts on existing jobs or promote the development of any significant new employment opportunities. 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.

SELF-EMPLOYMENT OPPORTUNITIES:

The types of facilities affected by these regulatory changes are larger operations than what would typically be found in a self-employment situation. There may be an opportunity for self-employed consultants to advise facilities on how best to comply with the revised requirements. The proposed revisions are not expected to have any measurable negative impact on opportunities for self-employment.