EPA Issues “NSR Corrections” Rule

On January 5, 2021, EPA Administrator Andrew Wheeler issued the final rule on “Error Corrections to New Source Review Regulations.” The final rule corrects typographical and grammatical errors, removed vacated language, removed or updated outdated cross-references, conformed certain language to the 1990 Clean Air Act Amendments and removed outdated grandfathering or transition provisions. The rule also implemented the DC Circuit’s decision in Murray Energy, which was not in the proposal.

ANALYSIS

Typographical, Grammatical and Punctuation Errors.

EPA generally received no adverse comments on its proposed typographical, grammatical and punctuation errors, but commenters did propose some additional corrections. These were included. EPA did receive a comment opposing the use of “shall be” in lieu of “is” in the definition of “emissions increase” in section 52.21. The commenter noted that the change could suggest a significant increase even though EPA has not yet completed its rulemaking. EPA agreed and used an alternative approach of deleting commas to avoid the implication in 52.21(b)(49)(iii) and 51.166(b)(48)(iii).

Regulatory References.

EPA proposed to update its references within one regulation to the other for consistency and to eliminate outdated references. EPA did not receive any adverse comments. EPA received and accepted a comment to update a reference in section 51.165(a)(3)(ii)(D) to a memorandum to the subsequent codified regulation. A similar change was made to Appendix S section I and to revise a cross-reference in paragraph IV.D to paragraph V based on comments.

Court Vacaturs.

Equipment Replacement Provision (ERP). In 2003, the D.C. Circuit indefinitely stayed the “Equipment Replacement Provision.” The D.C. Circuit later vacated these provisions in New York II. EPA is removing them from 51.165(a)(1)(v)(C), 51.165(h), 51.166(b)(2)(iii)(a), 51.166(y), 52.21(b)(2)(iii)(a) and 52.21(cc). EPA’s proposal to relocate the definitions of “basic design parameters” and “process unit” into the definition of “replacement unit” met with some adverse comment. One commenter argued that EPA could not retain the definition of “process unit” from a vacated rule. Other commenters suggested that definition of “functionally equivalent component” should be retained and moved to the definition of “replacement unit.” One state opposed keeping the examples of replacement units while another opposed keeping an example from a steam electric generating facility that was not involved in the production of electricity. Another state objected to not moving the definition of “pollution control equipment” to the definition of replacement unit. Based on these comments EPA: (1) has deleted the definition of “basic design parameters” and “process unit” because it believes that they were vacated “in toto” in the New York II decision; (2) EPA will remove the definition of “functionally equivalent component” for the same reason; and (3) stated that in the absence of a controlling definition of basic design parameters and process unit for the replacement unit definition, EPA and sources may “look to the vacated definitions rom the ERP rule to guide their understanding” and that EPA would evaluate whether further rulemaking is required.

Clean Units (CU) and Pollution Control Projects (PCP). In 2007, EPA had removed certain provisions relating to CUs and PCPs that were vacated in New York I in section 52.21, but had not removed it from 51.165 and 51.166, despite language in the preamble noting that “the plain language” of the New York I decision applied to all three. No adverse comments were received on the removal of the language from 51.165 and 51.166.

Outdated and Incorrect References.

(1) In 1980, EPA had deleted existing paragraph (k) and redesigned paragraphs (l) through (s) and (k) through (r) but had failed to make all corresponding changes in cross-references. This was changed without adverse comment.

(2) In 1980, EPA had added a provision for “future relaxations” under 52.21(r)(2), but included in the affected regulations paragraph 52.21(s), which is voluntary. EPA proposed to eliminate the reference to (s). No adverse comments.

(3) In the NNSR regulations (51.165 and Appendix S), there is a prohibition on emissions credits for replacing a VOC with a less reactive VOC while the rule also allows credit for replacing a VOC with an organic compound that is not considered a VOC. EPA proposed to provided an updated reference to the non-VOC compounds. A commenter suggested simply removing the prohibition because it was made when hydrocarbons and not VOCs were the regulated pollutant, but EPA did not believe it could do so without more substantive justification. The change is made as proposed, but elimination of the requirement will be considered for a future rulemaking.

(4) Updated Appendix S cross-references from 51.18 to 51.102 (public participation) or 51.165 (NNSR) as appropriate.

(5) Updated the PSD plantwide applicability limit (PAL) monitoring cross-reference from 51.166(w)(13) to (w)(12).

(6) Updated the “reasonable possibility” cross-reference in 51.166(r)(6)(vi)(b) to just 51.166(r).

Updates from Clean Air Act Amendments of 1990.

(1) The Amendments revised the definition of “major emitting facility” in CAA section 169(1) by striking out the words “two hundred and” in the phrase “municipal incinerators capable of charging more than two hundred and fifty tons of refuse per day.” There were no adverse comments to this change.

(2) EPA had proposed to replace cross-references to “Part 61” with “Part 61 and Part 63” to reflect both sets of standards under CAA section 112. This proposed change received push back, with a state asking it to also include Part 62 (state plans), another commenter arguing that no CAA section 112 standard is applicable due to CAA section 112(b)(6), which states HAPs are not subject to PSD, another argued that adding section 112 would make emissions reductions of criteria pollutants due to NESHAP controls “non-credible”. Based on these comments, EPA decided not to make its proposed change because the impact on allowable emissions and federally enforceable warranted more consideration, but determined that it should be included in the definition of BACT because it is expressly included in the statutory definition.

Outdated Exemptions.

The EPA had proposed to remove a number of outdated exemptions. A portable source owner objected that the preamble included the portable source provision. EPA agreed that the preamble was in error and the rule text did not remove the exemption, which remains in effect at section 52.21(i)(1)(viii). EPA finalized removal of sections 51.166(i)(6) through (11), 52.21(i)(1)(i) through (v), 52.21(i)(6) through (12), 52.212(m)(1)(v), 52.21(m)(1)(vii) and (viii), and 52.21(i)(1)(ix) and (x).

Removal of Vacated Ozone NAAQS Grandfathering Provision

Although not addressed in the proposed rule, in the final action EPA removed the 2015 ozone NAAQS grandfathering provision based on a DC Circuit ruling that held EPA has no authority to defer application of a NAAQS once its effective date has occurred. EPA therefore vacated 51.166(i)(11) and 52.21(i)(12) under the Administrative Procedure Act’s “good cause” authority.

State Implementation

EPA reaffirmed its decision that there is no enforceable timeline for states to make these upgrades to their implementation plans.

COMMENTARY

EPA’s NSR Corrections Rule represents an exercise in good housekeeping to keep the NSR rules up-to-date and to remove inadvertent errors that creep into any complex regulatory program. Where commenters pointed out possible unintended consequences, EPA appropriately stayed its hand or limited the action to allow further consideration.

On the elimination of any grandfathering in the future based on the DC Circuit’s Murray Energy decision, EPA will need to respond by crafting the “effective date” of future NAAQS more carefully to avoid disruption of the ongoing permit processes. Given the number of NAAQS and the mandated frequency of review, failure to take appropriate action in crafting the effective date may make NSR permitting extremely difficult. If EPA cannot or will not take such action, Congress may need to intervene to allow orderly processing of permits.