-- D R A F T -- July 18-19, 2002 WESTAR PSD Workgroup Meeting Summary

The meeting began at 1:00 on July 18 at the offices of EPA Region 8 in Denver. The following individuals were present:

Bernie Dailey, WY David Klemp, MT Terry O’Clair, ND Chuck Machovec, CO Brock LeBaron, UT John Coefield, MT Debra Wolfe, MT John Cox, CTUIR Dick Long, EPA Region 8 Bob Gruenig, NTEC

Mary Uhl, NM Bill Harnett, EPA OAQPS Colleen Cripps, NV Ken Bigos, EPA Region 9 Susan Johnson, NPS John Bunyak, NPS Laurie Ostrand, EPA Region 8 Sara Laumann, EPA Region 8 ORC Lee Alter, WRAP

WESTAR staff present: Dan Johnson

Agenda topics:

1. State overviews - PSD experiences
2. EPA, FLM, and tribal perspectives
3. Recent PSD activities in NV, ND, MT, UT
4. Brainstorming options to address re-designation and tracking issues
5. Pros and cons of options
6. Identify preferred options

1. State overviews - PSD experiences

State representatives responded to four questions. Eight states responded, including WA, MT, UT, WY, CO, NV, NM, and ND.

Q1: How are your state’s baseline areas established?

The baseline area in five states is the entire state, excluding non-attainment areas. One of these states, CO, has statewide baseline areas for SO2 and NO2, and 13 AQCRs for PM10. Another, WY, began with the entire state for PM, but has since redefined the area boundaries to create five PM baseline areas. Of the remaining 3 states, the number of baseline areas are: 2 (ND), 6 (WA) and 256 (NV) [Is this the number of baseline areas or the number of Section 107 areas? See notes where states say that not all “areas” are triggered]. WA, NV, and NM established baseline areas 25 or more years ago. NM has two AQCRs that extend into adjoining states.

Q2: Does your state model minor source increment consumption at the time of permitting?

• In general, states require minor source permitting applicants to perform a screening analysis to determine if there will be any NAAQS violations. The emissions requirements for minor source permits varies from state to state, from as little as 2 tpy to 25 tpy.
• In at least one state, the minor source permitting rules do not require compliance with PSD increments as a criterion for granting or denying permits.
• At least one state is required to determine the impact a new source would have on increment and may not issue a permit if modeling indicates an increment exceedance.

Q3: Does your state attempt to track increment? If so, briefly describe your process. If not, why not?

• All states attempt to track increment consumption when new sources apply for permits. Most states use the draft 1990 EPA guidance (“Puzzle book”), which directs regulators to model sources to a point 50 km outside the 1 ugm/m3 impact zone to determine emissions using available increment (Class I and Class II). NM, NV, CO and ND have increment tracking systems.
• Most states agree increment tracking is a resource-intensive effort.
• States are unclear about the geographic extent of modeling analysis. Does modeling extend beyond the source impact area? Why?
• States are also unclear regarding the use of actual or potential emissions for increment consumption demonstrations. Use of actuals necessitates accurate and periodical emissions inventories while potential emissions may create a situation where sources “bank” PTE in hotspots to prevent competitive development.

Q4: What is your state’s perception of problems, issues, or barriers to a) redesignation/redefinition of Section 107 areas and b) increment tracking?

a) Redesignation issues/barriers:

• If redesignation/redefinition of Section 107 areas causes a PSD baseline date to change for a particular area, States may experience difficulty recalculating increment consumption to determine if any increment is available.
• Changes in EPA interpretation of rules regarding redesignation/redefinition – moving target.
• Absence of guidance on how to address Class I areas.
• Resistance (EPA, FLM, elected officials, environmental groups) based on perception that air quality will degrade in redesignated areas.
• EPA not timely in acting on redesignation/redefinition requests.

b) Increment tracking issues/barriers:

• Inadequate historical source information to establish baseline emissions.
• Estimating differences in mobile source emissions (model revisions; historical traffic data).
• Different minor source baseline dates.
• Low management priority to track emissions.
• Inadequate staffing – tracking is resource intensive.
• Choice of model to determine impacts.
• How many years must be modeled?
• Inadequate historical meteorological data.
• Actuals vs allowables?
• Ho do we determine short term emission rates?
• How much modeling, re-modeling, and refinement is enough?
• Getting emission data from other states, local governments, and tribes.
• How to determine “normal operations” for baseline periods.
• Delays in models gaining guideline status.
• Inability of current models to resolve small concentration changes (i.e., significance levels used for Class I areas).
• State capacity to perform analyses (e.g., modeling capability).

2. EPA, FLM, and tribal perspectives

a) FLM perspective

• Permit application processes are primarily a means to protect Air Quality Related Values (AQRV).
• FLAG is primary source of information for guiding permit process as it affects Class I areas.
• States are required to track cumulative impacts of sources. PSD increments are only one test of air quality degradation. Key issues to cumulative analysis of air quality include increment analysis and AQRVs.
• FLMs see no distinctions between Class I or II analysis. All sources, regardless of size, “cause or contribute” to increment consumption.
• “Periodic” analysis needs to be more clearly defined.
• The FLM’s responsibility is to determine if a source will have an adverse impact on AQRVs. To determine if there is a significant impact with respect to increment consumption, FLMs use 1996 proposed guidance, which uses approximately 4% of the increment as a significance test
• Regarding area redesignations, if too many areas are created, tracking increment and maintaining accountability will be impossible.
• FLMs object to regulations allowing the use of the 1 ug/m³ test when the Class I increment is 2 ug/m³. FLMs don’t particularly object to redesignation/redefinition, but the 1 ug/m³ test circumvents increment.
• With respect to the 1 ug/m³ annual average test, short-term concentrations are forcing and should be evaluated, not just annual.

b) EPA perspective

• Redesignation/redefinition is an issue affecting western states primarily.

• EPA currently evaluates the following when considering a state’s request to redesignate an area (these evaluation criteria were discussed in more detail later in the meeting):

1. Is the area large enough to be credible as an air quality management area?

2. Is this a rural or an urban area? Will the baseline concentrations be re-set to include historical growth?

3. Is this an attempt by a source to establish its own increment?

4. Will this lead to an adverse result as far as air quality is concerned? Where is the analysis of the impact that assures EPA that the proposal won’t have a negative impact?

5. What is the effect on Class I areas?

6. Is the proposal driven solely by economic development considerations?

• EPA formed an internal workgroup to develop guidance for responding to state redesignation requests. The group has been meeting for about a year. Their goal is to provide for more consistent and timely responses to state requests.
• EPA Regional Offices have had difficulty balancing headquarters guidance, national consistency, and unique regional issues in responding to state redesignation/redefjnition requests.
• EPA recognizes that the current rules are inadequate and probably require revision, but rulemaking is politically difficult. Congressional/administrative focus is currently on NSR legislative reform.
• If a state professes to be unable to track increment to date, what guarantee does EPA have that it will have the ability to track increment going into the future following a redesignation/redefinition action?

c) Tribal perspective

• Tribes concerns most likely align with those of the FLM (see above)
• Tribes will have many of the same issues as states concerning data deficiencies and historical estimates – especially noteworthy: agriculture and silviculture.
• Biggest issue for tribes is building capacity to manage and regulate air quality.

3. Recent PSD activities in NV, ND, MT, UT

a) Nevada

Nevada proposed to split one of its AQCRs in half to support economic development in the region. Worked with EPA Region 9. Region 9 staff were participating in the EPA workgroup developing guidance for redesignation/redefinition requests. Region 9 felt that the entire state was the baseline area, not 256 hydrographic basins, as Nevada contended. Once historical records were found confirming the existence of 256 AQCRs, EPA published a proposal in the federal register to approve the redesignation request. The proposal included several policy-related statements. The proposal and comment letters from Western Mining Action Project, Newmont Mining, and a citizen were circulated to workgroup members.

b) North Dakota

North Dakota has been tracking increment consumption for some time. Several sources have been permitted with waivers, when increment violations were modeled. ND and EPA agree that CALPUFF is the appropriate model but have a difference of opinion on model inputs and some assumptions used in the modeling analysis. As noted earlier, CALPUFF’s lack of guideline status is an issue. ND feels that historical monitoring data should be allowed as a method to determine if impacts are getting worse or better, since there are so many problems estimating historical emissions.

c) Montana

Montana considers the minor source baseline date to be triggered only in baseline areas, i.e., the 1 ug/m³ impact area of a major source locating in a Section 107 area designated as attainment or unclassifiable. EPA believes the minor source baseline date has been triggered for the entire state . Montana tracks increment consumption on the basis of emissions reports from permitted sources in baseline areas. Montana does not calculate increment consumption for minor sources proposing to locate in areas outside of baseline areas.

d) Utah

The whole state has been triggered, though this may be re-visited based on the workgroup discussions. A summary of Utah’s PSD Increment Modeling was presented. Utah is interested in policy related to redesignated nonattainment areas (i.e., maintenance areas). How are emission increases tracked in these areas? Will minor source baseline dates be triggered when the next PSD application is submitted (after redesignation)?

4. Brainstorming options to address re-designation/redefinition and tracking issues.

a) Redesignation/redefinition options

The workgroup focused on the criteria presented by EPA as a starting point (see 2. b. above). After some discussion, the group felt that EPA guidance related to redesignation/redefinition should be consolidated in one rule or comprehensive guidance document. Two important points were noted:

• The states have the authority to manage their internal growth and increment consumption and do not necessarily concede that EPA has the authority to disapprove a redesignation/redefinition proposal.
• States feel a need for clear and unambiguous guidance that assists the states in preparing approvable proposals and SIP amendments, although any such guidance must be flexible enough to address the unique circumstances that exist in different states. Achieving balance between clear guidelines and flexibility requires further discussion.

In concept, guidance could be developed that summarizes the critical factors EPA will consider when reviewing redesignation/redefinition proposals. The factors EPA expects to constitute a reasonable proposal are summarized below, in the form of five questions. Work remains to flesh out details and address how these factors will be weighed against one another. The general questions EPA is trying to answer are: (1) Why are you redesignating, and (2) what are the air quality impacts?

1. Is the area a reasonable size from the perspective of basic air quality planning?
2. How much growth would be built into the baseline if you were to re-trigger?
3. What is the impact of re-triggering on Class I areas?
4. What would this mean with respect to increment tracking, past and future?
5. What is the purpose behind this redesignation proposal?

Several additional comments were summarized on a wall chart:

1. Follow Bill Harnett’s suggestions (see above)
2. Differentiate Class I v. Class II issues when following Bill Harnett’s suggestions
3. Rule – Comply with existing rules
• PSD source in area – can’t be redesignated
• May not create new area that intersects impact area of major source of < 1 ug/m3
4. Economic development sole criteria? OK, but should still consider other factors
5. Remember your mission
6. Address stakeholder process – involve public
7. Regional consistency.

b) Increment tracking options

Several ideas were presented in the brainstorming session:

• Create fields in national database that include data that would facilitate increment tracking.
• Expand budget for emission inventory to support increased effort – EPA grants to states.
• Consistent methodology for establishing baseline area concentrations:
• conversion to short term emission rates
• meteorological factors
• model choice
• transition from one model to another
• Incorporating model versions into EPA guideline
• use of monitoring data
• use of emissions (actual, allowable, other)
• Establish necessary factors in model
• When is rulemaking appropriate?
• Focus on economic development for state management of increment.
• Models may not be capable of measuring small changes in ambient concentrations.

5. Pros and cons of options

The workgroup did not address this agenda topic due to time constraints.

6. Identify preferred options

While the group did not go through a formal priority setting exercise, all of the options discussed above were considered important by workgroup members.

ACTION ITEMS/NEXT STEPS

1. Draft letter from WESTAR to EPA expressing interest in working together on the development of guidance for redesignation/redefinition proposals (fast track) and increment tracking (slower track).
2. Recommend WESTAR Technical Committee give increment tracking top priority
3. Prepare a policy proposal for consideration by the WESTAR Council at their Fall Business meeting outlining next steps.
1. Regarding redesignations, the policy statement should include basic principles around which guidance or rules should be developed, highlighting the issue of balancing specific direction with the need for flexibility.
2. Regarding increment tracking, the sentiment was to hold a specialty conference with the objective of identifying the most efficient ways to track increment in the situations typically encountered in western states.