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Our Insights

EPA Proposes Project Emissions Accounting Rule

September 10, 2019

Lou Corio of POWER EngineersBy Lou Corio
Senior Air Quality Scientist, Environmental Division

EPA published the proposed Project Emissions Accounting Rule (Rule) on August 9, 2019. The proposed Rule formalized EPA’s recent interpretation of the existing regulatory language regarding the accounting of emissions in Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NNSR) applicability analyses for potential major source modification projects.

EPA’s regulatory interpretations were first presented to the public in a March 2018 policy memorandum that we summarized in the Summer 2018 issue of POWER’s Currents newsletter. The proposed Rule does not present any notably additional or different explanations/rationale than the March 2018 policy.

In general, regulators and industry have been reluctant to rely on EPA’s March 2018 policy for applicability determinations. As explained below, the proposed Rule, which is consistent with the March 2018 policy, would provide certainty regarding the applicability determination methodology.

POWER anticipates that the proposed Rule will be widely supported by industry.

The historical method of assessing applicability

Historically, the PSD/NNSR applicability assessment – determining if a project is a major modification to a major source – has been a two-step process:

Prior to EPA’s March 2018 interpretation of the Rule, emission decreases at the source could only be counted under Step 2 as part of the “netting” analysis. However, all emission decreases and increases at the source during the contemporaneous period must be included in this analysis step, which can be a complex and resource-intensive exercise.

The proposed new approach

Under the proposed Rule, emission increases and decreases associated with a project can be accounted for under Step 1. Including project decreases in Step 1 is a more straightforward analysis than the historical applicability analysis and would likely result in fewer projects triggering PSD/NNSR.

EPA believes that “sources could potentially be incentivized to seek out emission reductions that might otherwise be forgone entirely – e.g., because of a perceived complexity with contemporaneous netting under Step 2 of the NSR applicability analysis.”

Determining the specific emission decreases at a source that are appropriate to include as part of a project in Step 1 may be controversial. EPA believes that defining the scope of a project that a source proposes to undertake is a determination that “rests within the reasonable discretion of the source.”

EPA is taking comments on this and other aspects of the proposed Rule; comments must be submitted to EPA on or before October 8, 2019.

About the Author:

Lou has been providing air quality consulting services to industry and government and conducting special atmospheric studies since 1983. He has extensive experience with important air quality topics, including New Source Review (both Prevention of Significant Deterioration and nonattainment areas) and Title V permitting, atmospheric dispersion model development, evaluation, and application; utility and industry facility air compliance assessments and audits; Environmental Impacts Statements and Environmental Assessments, most recently for LNG export terminals; and inhalation risk assessment. He has directed or conducted technical research projects on complex air quality issues such as nitrate deposition to the Chesapeake Bay and condensable particulate matter (PM) measurement method challenges. Lou has developed guidance documents for trade organizations for complying with major air regulations, such as Title V operating permits and Risk Management Programs/Plans. He has provided public hearing support and testimony in numerous Maryland Public Service Commission (PSC) proceedings on power generation source licensing. Do you have questions for Lou? Send him an email at lou.corio@powereng.com.

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