Response to Comments Submitted to Docket but Not Addressed in Final Rule
to

Issue 9-month Stay of Grandfather Provision: 74 FR 48153, September 22,
2009

June 8, 2010

1. Comment: One commentor (Mirant) claims that the original
[administrative] stay that became effective on June 1, 2009 (see 74 Fed.
Reg. 26,098 (June 1, 2009)), is invalid because it responds to a
petition that was not authorized by statute (filed 151 days after
statutory deadline) and sought relief that is not available under
section 307(d) of the CAA.  In addition, the commentor claims that the
EPA could not subsequently extend that invalid stay.  Similarly, another
commentor (NEDA/CAP) states that EPA could not extend the 3-month stay
beyond the 3-month period provided for in CAA 307(d)(7)(B).

Response:  First, the original administrative stay that became effective
on June 1, 2009 expired in September 2009 and is not at issue in this
action to establish the current 9-month stay.  Thus, EPA does not need
to respond to this commentor’s claim that the original administrative
stay was invalid.

Second, the 9-month stay issued on September 22, 2009 at 74 FR 48,153,
is not an extension of the 3-month stay established under CAA
307(d)(7)(B) in the sense that the two stays combine to create a single
12-month stay.  Instead, the 9-month stay is a separate stay established
by a separate notice and comment rulemaking under the authority of CAA
301(a).  EPA understands that this confusion may have arisen because the
proposed 9-month stay described it as an “extension” ; however, the
authority identified as the basis for the proposed rule was CAA
301(a)--not CAA 307(d)(7)(B) which is the authority for the
administrative stay.  See 74 Fed. Reg. 36,427, 36,430 (July 23, 2009).
The final rule also identified CAA 301(a) as the statutory authority for
the 9-months stay, see 74 Fed. Reg. 48,153, 48,156 (Sept. 22, 2009), and
explained that use of the word ”extension“ and other forms of the
word ”extend“ was not intended to indicate that the 9-month stay was
extending the administrative stay beyond 3 months.  See 74 Fed. Reg. at
48,154 n. 2.  Finally, EPA notes that the 3-month stay expired on
September 1, 2009 (see 74 Fed. Reg. 26,098 (June 1, 2009), and the
9-month stay did not become effective until September 22, 2009 (see 74
Fed. Reg. 48,153 (Sept. 22, 2009).  This timing further confirms that
the two stays are separate actions.

2.  Comment: One commentor (Mirant) states that the stay has the effect
of imposing new requirements on regulated entities, and that EPA cannot
use an administrative stay to impose new requirements on permit
applicants. Instead, EPA must use notice and comment rulemaking, and it
has not done so.

Response: As noted above, the 9-month stay, which followed the original
administrative stay, is not based on the authority to establish an
administrative stay under CAA 307(d)(7)(B).  EPA used notice and comment
rulemaking to establish the 9-month stay.  See 74 Fed. Reg. 36,427(July
23, 2009) and 74 Fed. Reg. 48,153 (Sept. 22, 2009).  Further, we
disagree with the commentor’s premise here: that the stay of the
grandfather provision imposes new requirements.  Neither the PM10
surrogate policy nor the grandfather provision (when applied consistent
with the applicable case law and within the limits of the policy)
eliminates or reduces any requirements that must be met under the CAA. 
Instead, the PM10 surrogate policy provides an alternative means of
demonstrating compliance with the applicable requirements.

 

3. Comment: One commentor (NEDA-CAP) says that the stay would create
confusion among regulated entities and others concerning the application
of (1) the PM10 surrogate policy in states with approved NSR SIPs, and
(2) the NSR transition period for condensable PM.  The commentor
requests that EPA clarify that this stay has no effect on these two
provisions.

Response:  We regret any confusion that may exist between the proposed
stay to end the grandfather provision for PM2.5 and the other two
proposed actions identified by the commentor.  The proposed action to
stay the grandfather provision for PM2.5 applies solely to the
implementation of PM2.5 in the federal PSD program.  The proposed stay
does not does not affect permit applications in SIP-approved states
where applicants and permitting authorities that are considering relying
on the PM10 Surrogate Policy in SIP-approved states are expected to
consider the case law that impacts the use of the PM10 Surrogate Policy,
and other limits in the use of the policy. See, e.g., 75 Fed. Reg. 6827,
6831-32 (Feb. 11, 2010). Further, EPA notes that it has proposed to end
early the PM10 Surrogate Policy in SIP-approved states.  See 75 Fed.
Reg. 6827, 6833-35.  

Similarly, the stay of the grandfather provision does not effect the
transition period for condensable PM, but EPA notes that it has taken a
separate action to take comment on ending the NSR transition period for
condensable PM earlier than January 1, 2011.  See 74 Fed. Reg. 12,970,
12,976 (March 25, 2009).

4. Comment: Two commentors (Mirant and UARG) state that a 9-month stay
of the grandfather provision is inconsistent with § 165(c) of the Clean
Air Act, which provides that any completed PSD permit application be
granted or denied within one year after the date of filing of the
completed application.  UARG further states that EPA’s rules and
policies in effect at the time of their application allowed the
applicants to rely on the PM10 surrogate policy, and any change in that
policy is contrary to the requirement for prompt action under CAA
165(c).]

Response:   EPA does not dispute that some of the permit applications
that fell within the grandfather provision have not been granted or
denied within the one-year period provided in 

§ 165(c) of the Act.  Commentors, however, have not shown that this
delay can be attributed to a stay of the grandfather provision.  For
example, even if the grandfather provision were not stayed with respect
to these pending applications, it is not clear that the applications
have provided the information or analysis necessary under the case law
to demonstrate that PM10 is a reasonable surrogate such that the
Surrogate Policy could be used.  See, e.g., discussion of case law in 75
Fed. Reg. 6827, 6831-32 (Feb. 11, 2010).  Finally, EPA notes that the
change that commentor refers to with respect to how the PM10 surrogate
policy is applied does not come from a change in the policy itself. 
Instead, it comes from the court opinions that EPA must recognize as
governing EPA’s policy. 

5.  Comment: One commentor (UARG) states that the proposed [second] stay
is unsupported and fails to provide adequate basis for public comment. 
The commentor further claims that the proposed stay has the effect of
imposing requirements that would not otherwise apply; thus, the stay
changes rather than preserves the regulatory status quo and thus imposes
a “particularly heavy burden” on EPA to explain the basis for the
stay (UARG p.3)

Response:  First, in the proposed rule, we stated the basis on which we
were proposing to impose a further 9-month stay on the grandfather
provision: that the grandfather provision was adopted without prior
public notice and is not longer substantially justified in light of the
resolution of  the technical issues with respect to PM2.5 that led to
the PM10 surrogate policy in 1997, and that an additional nine months
would provide time for EPA to propose, take comment on, and issue a
final action on whether the grandfather provision should be repealed. 
74 Fed. Reg. 36,427, 36,429 (col. 1) (July 23, 2009). To the extent that
this commentor or any other person believed that there were remaining
technical issues that required the continued use of the surrogate
policy, this was sufficient notice for them to identify any such
technical issues and explain why those issues should prevent the
proposed stay from being put in place. With respect to EPA’s statement
that the grandfather provision was adopted without public notice, EPA
notes that this same commentor provided its views on why there was
adequate public notice, demonstrating that EPA’s statement was
sufficient to put persons on notice of this issue.   

Second, as noted above, we disagree with the commentor’s premise that
the stay of the grandfather provision has the effect of imposing new
requirements on sources that would be permitted to rely on the PM10
surrogate policy under the grandfather provision.  Neither the PM10
surrogate policy nor the grandfather provision (when applied consistent
with the applicable case law and within the limits of the policy)
eliminates or reduces any requirements that must be met under the CAA.
Instead, the PM10 surrogate policy provides an alternative means of
demonstrating compliance with the applicable requirements.

6. Comment: One commentor (UARG) states that the timing of the proposed
9-month stay would not allow sufficient time for EPA to take final
action on the 9-month stay before the end of the 3-month administrative
stay on September 1, 2009. 

Response: This comment is founded on the premise that EPA would have to
finalize the 9-month stay before the end of the administrative stay on
September 1 to ensure that the second stay would be a legitimate
“extension” of the administrative stay.  In fact, the second stay
was not intended to extend the administrative stay, but instead to
establish a second, separate stay of the grandfather provisions.  EPA
did not finalize the 9-month stay until September 22.  See 74 Fed. Reg.
48,153 (Sept. 22, 2009).

7. Comment: One commentor (Mirant) states that EPA has misrepresented
the effects of the nine-month stay and presented arguments why the stay
would not apply to completed applications because the stay cannot have
retroactive effect.   

Response: EPA does not agree with the commentor’s arguments concerning
the effect of the stay or its analysis concluding that the effect of the
stay would constitute a retroactive effect that is inconsistent with
case law or EPA regulations, but does not need to respond to these
arguments at this time. Whether or not the effect of the stay will be
consistent with the commentor’s arguments will be determined in
individual permitting decisions going forward for sources that had
originally been grandfathered.  With respect to the stay overall, EPA
has determined that the 9-month stay is appropriate regardless of
whether the commentor’s arguments on these points are correct or not,
for the reasons presented in response to other comments and in the final
rule preamble.  74 Fed. Reg. 48,153, 48,154 (Sept. 22, 2009).  

8.  Comment: One commentor (UARG) states that a 9-month stay is
inconsistent with the argument that EPA made in opposing a motion to
stay the grandfather provision (among other parts of EPA’s May 2008
final rule) in NRDC v. EPA, No. 08-1250 (D.C. Cir.).  

Response: EPA disagrees that its opposition to a court-ordered stay of
the grandfather provision is inconsistent with an agency stay of the
provision.  As EPA made clear, the issue on the motion to stay was
whether the Court should issue a stay that had the effect of rewriting
an agency rule by severing related provisions of the rule and allowing
some, but not others, to take effect.  EPA opposed such a court-ordered
stay on the basis of well-established case law finding that it is not
proper for courts to sever and stay a portion of an agency action if
there is substantial doubt that the agency would have adopted the
severed portion on its own.  That situation is different than the
circumstances here, where the agency (not the court) considers whether
one portion of the rule (the grandfather provision) should be stayed
while the other part of the rule (the decision to otherwise end the use
of the PM10 surrogate policy in federal program states) remains in
effect.

9.  Comment:  Two commenters claim that there is a lack of adequate
guidance to justify ending the use of the PM10 surrogate policy at this
time.  One commentor (Mirant ) states that with stay in place, there is
no guidance to review pending applications. There is no modeling
available to meet PM2.5 requirements.  The second commentor (UARG)
claims that EPA mentions resolution of technical issues but does not
explain this conclusion. This commentor believes that there is no
evidence that technical issues are resolved.  The commentor also states
that EPA gives no reason why the PM10 surrogate policy is no longer
appropriate (which was reaffirmed in 2005 and restated in our Sept. 2008
Opp. To Motion for Stay). 

Response:  We believe that there is sufficient information available to
enable sources to estimate the ambient impacts of direct PM2.5 emissions
from stationary sources, and to a limited extent to account for ambient
levels of secondarily-formed PM2.5 as well.  In fact, some of the
sources affected by the stay have chosen to revise their analyses for
PM2.5 by addressing PM2.5 emissions in lieu of relying on the PM10
surrogate policy.  While the technical tools needed to complete a
comprehensive analysis of all emissions that contribute to ambient
concentrations of PM2.5 are only in the developmental stage; the use of
available tools is preferred over the continued use of the PM10
surrogate policy to satisfy the requirements for PM2.5.  Modeling of
direct PM2.5 emissions from stationary sources can be accomplished using
the same air quality model that is used for PM10.  Moreover, EPA is in
the process of developing procedures that will assist sources and
permitting authorities to carry out the required analyses for meeting
the PM2.5 requirements.  An initial outcome of this process is a
memorandum dated March 23, 2010, titled “Modeling Procedures for
Demonstrating Compliance with PM2.5 NAAQS,” which clarifies the
implications of the transition away from the PM10 surrogate policy, and
provides basic guidance that can be used by PSD applicants and
permitting authorities to assist in completing a PM2.5 ambient impact
analysis for PSD applications. 

	With regard to commentor’s claim that EPA gave no reason why the PM10
surrogate policy was no longer appropriate, we have made it clear that
courts have issued various opinions that govern the use of PM10 as a
surrogate for meeting the PSD requirements for PM2.5.  For example,
courts have held that a surrogate may be used only after it has been
shown to be reasonable to do so, and this would include a discussion of
the differences between PM10 and PM2.5 and a demonstration that PM10 is
nonetheless an adequate surrogate for PM2.5.  Finally, the 1997
surrogate policy presumes that the necessary technical tools for
completing a PM2.5 analysis are not available.  Because we have
concluded that these technical issues have been sufficiently resolved, 
we believe that any use of the surrogate policy should include a finding
that the technical tools needed for a PM2.5 analysis are not available,
thereby necessitating the use of a surrogacy approach.

10.  Comment:   One commenter (Mirant) seeks assurance from EPA that the
grandfather provision is still applicable to two permit applications for
the commentor’s facilities in Contra Costa County, California, which
were determined to be complete while the provision was in effect prior
to the issuance of the stay.   This commenter requests that EPA concur
that the grandfather provision remains applicable to two permit
applications pending before the Bay Area Air Quality Management Division
(BAAQMD), which administers a delegated PSD program.  The commenter
reasons that this result is achieved by virtue of a BAAQMD regulation
that EPA has approved into the SIP, which provides that a decision to
authorize construction shall be based on federal and state regulations
and standards in force on the date the application is declared to be
complete.  

Response:   EPA has determined that the area in which the two permit
applications of concern are located is currently designated
“nonattainment” for PM2.5.  Hence, as long as the area continues to
be designated nonattainment when construction permits are issued to
these sources, the federal PSD permit requirements under 40 CFR 52.21 do
not apply to them, and so they are not impacted by the stay of the
grandfather provision.  

	However, even if the area of concern was not designated as
nonattainment for PM2.5, EPA could not provide assurance to any proposed
source that the conditions allowed under the grandfather provision would
remain applicable under the circumstances described by the commenter. 
While the stay of section 52.21(i)(1)(xi) remains in effect, the
grandfathering provision will not be applicable under federal law to a
final decision by BAAQMD to issue either of these PSD permits. 
Permitting decisions are generally governed by the law in effect at the
time they are made.  See, In re: Dominion Energy Brayton Point, LLC, 12
E.A.D. 490, 614-616 (EAB 2006).   Even if the “regulations in force”
provision is applicable under state law (section 2-1-409 of BAAQMD
regulations), this provision cannot supercede or nullify the EPA
regulations at 40 CFR 52.21 that also apply and determine the
requirements of federal law for these pending PSD permit applications. 
Although EPA has approved section 2-1-409 of BAAQMD regulations as part
of the State Implementation for Plan for certain purposes, BAAQMD does
not have an approved SIP that applies to PSD permitting.   As the
administrator of a delegated PSD permitting program under section
52.21(u), BAAQMD stands in the shoes of US EPA Region 9 and is required
to apply the provisions of 40 C.F.R. 52.21.   See, In re: West Suburban
Recycling and Energy Center, LP, 6 E.A.D. 692, 703-707 (EAB 1996).   The
commenter impermissibly equates BAAQMDs delegated PSD program with a
state PSD program that has been duly authorized by EPA as part of a
state SIP.   See, id. at 704. The applicable delegation agreement
between Region 9 and BAAQMD specifies that “[t]he District shall issue
PSD permits under this partial delegation agreement in accordance with
the PSD requirements of the District’s Regulation 2 – Rule 2 and 40
CFR 52.21, as amended on December 31, 2002.”   U.S. EPA – Bay Area
Air Quality Management District Agreement for Delegation of Authority to
Issue and Modify Prevention of Significant Deterioration Permits Subject
to 40 CFR 52.21 (Feb. 6, 2008). While the delegation agreement
references District Regulation 2, the agreement does not specify that
District Regulation 2 may supercede 40 CFR 52.21 in this or any other
circumstance.   

 Mirant’s letter providing its comments on the proposed nine-month
stay began with a request that EPA state that the proposed nine-month
stay would not apply to the applications for Mirant’s two facilities
in Conta Costa County, California, and said that if EPA were to provide
such a statement then Mirant had no objection to the proposed nine-month
stay.  Because EPA is not providing the statement requested by Mirant,
it is responding to Mirant’s comments opposing the nine-month stay. A
response to Mirant’s argument that the stay does not apply to these
two facilities is provided below.

	 This inaccurate description of the 9-month stay as an extension of the
3-months stay appears elsewhere.  See Memorandum from Stephen D. Page,
Director, Office of Air Quality Planning and Standards, “Modeling
Procedures for Demonstrating Compliance with PM2.5 NAAQS” (March 23,
2010) at 2.

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