[Federal Register Volume 61, Number 16 (Wednesday, January 24, 1996)]
[Proposed Rules]
[Pages 1880-1883]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-1051]



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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52

[VA25-1; A-1-FRL-5402-1]


Approval and Promulgation of Air Quality Implementation Plans; 
Commonwealth of Virginia--Prevention of Significant Deterioration 
Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to disapprove or, in the alternative, to 
conditionally approve a State Implementation Plan (SIP) revision 
submitted by the Commonwealth of Virginia. This revision, consisting of 
two parts, establishes a program for prevention of significant 
deterioration of air quality (PSD). The first part includes Virginia's 
regulations and procedures for a PSD program. The second part includes 
amendments to those regulations submitted as part of the SIP revision. 
The intended effect of this action is to propose disapproval or, in the 
alternative, approval of Virginia's request to amend its SIP to satisfy 
federal new source review requirements for the preconstruction 
permitting of new sources and modifications in attainment and 
unclassifiable areas, on the condition that deficiencies in the state 
program are corrected and submitted within one year of approval. This 
action is being taken under the Clean Air Act (CAA).

DATES: Comments must be received on or before February 23, 1996. Public 
comments on this document are requested and will be considered before 
taking final action on this SIP revision.

ADDRESSES: Comments may be mailed to Marcia L. Spink, Associate 
Director, Air, Radiation, and Toxics Division, U.S. Environmental 
Protection Agency, Region III, 841 Chestnut Building, Philadelphia, PA 
19107. Copies of the documents relevant to this action are available 
for public inspection during normal business hours at the Air, 
Radiation, and Toxics Division, U.S. Environmental Protection Agency, 
Region III, 841 Chestnut Building, Philadelphia, PA 19107, and at the 
Virginia Department of Environmental Quality, P.O. Box 10089, Richmond, 
Virginia, 23240.

FOR FURTHER INFORMATION CONTACT: Lisa M. Donahue (215) 597-2923, at the 
EPA Region III address above.

SUPPLEMENTARY INFORMATION: In a series of submittals, the Virginia 
Department of Air Pollution Control (DAPC), now known as the Department 
of Environmental Quality (VDEQ), submitted the elements for a revision 
to its SIP that would establish a program for the prevention of 
significant deterioration of air quality (PSD) in the review and 
permitting of new major sources and major modifications (the PSD 
program). On December 17 and 18, 1992, the VDEQ transmitted a request 
for the approval of the Commonwealth's regulations for PSD and its 
``Procedures for Implementation of Prevention of Significant 
Deterioration (PSD) of Air Quality Program (AQP-11)'', a non-regulatory 
procedures document, as a revision to the Virginia State Implementation 
Plan. Specifically, the December 17, 1992 submittal included AQP-11, 
and the December 18, 1992 submittal consisted of Virginia Regulation 
for the Control and Abatement of Air Pollution, Sec. 120-08-02 
Permits--Major Stationary Sources and Major Modifications Locating in 
Prevention of Significant Deterioration Areas. On February 3, 1993, 
DAPC sent a Summary of Public Testimony and Response Thereto in order 
to satisfy federal SIP revision completeness criteria. On February 18, 
1993 DAPC sent Virginia Regulations Appendix L, also to be included in 
the SIP revision. On August 16, 1993 the VDEQ submitted a supplementary 
revision to Sec. 120-01-01 and 120-08-02 to correct deficiencies in its 
earlier PSD regulations. 

[[Page 1881]]

    If Virginia's PSD regulations are disapproved by EPA the current 
federal implementation plan (FIP) for PSD in Virginia at 40 CFR 52.2451 
and the delegation agreement between EPA and Virginia will continue to 
be in effect. If Virginia's PSD regulations are approved by EPA, the 
state will have authority to implement and enforce the PSD program 
through its SIP, the current FIP at 40 CFR 52.2451 will be withdrawn, 
and the delegation agreement between EPA and Virginia will be 
terminated.

Background

    On June 19, 1978, EPA promulgated the PSD regulations of 40 CFR 
52.21 (b) through (w) into the Virginia SIP at 40 CFR 52.2451 and 
federally implemented the PSD program in Virginia. As of June 3, 1981, 
authority for implementation of the Federal PSD program was delegated 
to the Commonwealth of Virginia, and Virginia began issuing and 
enforcing Federal PSD permits. On September 20, 1991, Virginia was 
granted the authority to implement and enforce the nitrogen dioxide 
(NO2) increment portion of the federal PSD program.
    On June 3, 1993 (58 FR 31636), EPA promulgated rules which revised 
the PSD requirement for particulate matter (PM). The revised increments 
for PM restrict increases in ambient concentrations of PM-10, which is 
defined as particles with an aerodynamic diameter of less than or equal 
to 10 micrometers. The revisions affect the regulations of 40 CFR parts 
51 and 52 which specify the increments for PM, and became effective on 
June 3, 1994. On July 20, 1993 (58 FR 38822), EPA promulgated rules 
which revised the ``Guidelines for Air Quality Models'' by adding a 
1993 supplement to the Guidelines. The revisions affect the regulations 
of 40 CFR parts 51 and 52 which specify the version of the guidelines, 
and became effective on August 19, 1993. Virginia must still revise its 
regulations to include the PM-10 increment and modeling guideline 
provisions and submit them as a revision to the SIP. However, EPA does 
not believe that it should delay the processing of the SIP revisions 
relating to PSD which Virginia has already submitted because of the 
need for additional revisions pertaining to PM-10 and modelling 
guidelines.
    EPA proposes to retain authority, under 40 CFR 52.21, for 
implementing and enforcing all Virginia PSD permits, or portions 
thereof, involving requirements related to PM-10. EPA also proposes to 
keep its current delegation of authority to Virginia to issue PSD 
permits in effect insofar, and only insofar, as PSD requirements 
pertaining to PM-10 are concerned. On October 16, 1995, Virginia 
published a ``Notice of Intended Regulatory Revision UU Concerning 
Prevention of Significant Deterioration'' and notified EPA of its 
intent. The purpose of the proposed action is to amend Virginia's PSD 
regulation to make it conform with federal PSD PM-10 increment and 
modeling guideline provisions. EPA solicits comments on this issue.

Summary and Analysis of Virginia's Submittal

    In the first part of the Commonwealth's submittal, the Commonwealth 
requested that the ``Virginia Regulations for the Control and Abatement 
of Air Pollution for Prevention of Significant Deterioration, Sec. 120-
08-02 and Appendix L'', and ``Air Quality Program Policies and 
Procedures for Implementation of Prevention of Significant 
Deterioration (PSD) of Air Quality Program (AQP-11)'' be added to the 
Virginia State Implementation Plan.
    Virginia's submittal included four commitments. The first 
commitment, to adopt certain regulatory changes and submit them for EPA 
approval, is addressed in this notice. The other three commitments 
were: the state will ``transmit to the Regional Administrator or his 
designee a copy of each permit application relating to a major 
stationary source or major modification, and provide notice to the 
Regional Administrator of every action related to the consideration of 
such permit,'' ``make a positive determination of completeness of an 
application and will notify the applicant whether or not the 
application is complete,'' and ``perform a periodic assessment'' of the 
PSD SIP.
    The second part of Virginia's submittal, consisting of amendments 
to Virginia Regulation Sec. 120-08-02, Permits for Major Stationary 
Sources and Major Modifications in Prevention of Significant 
Deterioration Areas, and Appendix L, Prevention of Significant 
Deterioration Areas, was submitted on August 16, 1993. These 
corrections to the PSD regulations included certain elements necessary 
for federal approval of the state PSD program. The August 16, 1993 part 
of the submittal also included a revision to general definitions for 
Class I, II, and III areas, at Sec. 120-01-02, Terms Defined.
    The provisions of Virginia Regulation Sec. 120-08-02 apply to the 
construction of any major source or major modification in areas that 
are designated attainment or unclassifiable for the National Ambient 
Air Quality Standards (NAAQS). Specific applicable geographic locations 
in Virginia are designated in Appendix L of the regulations. Through 
the definitions of major source and major modification equivalent to 
federal definitions, Virginia's regulations capture the correct 
universe of sources for the PSD program. Each new source or 
modification is required to apply Best Available Control Technology 
(BACT) and demonstrate that the proposed source or modification would 
not cause or contribute to air pollution in violation of a NAAQS in any 
Air Quality Control Region or an applicable maximum allowable increase 
over the baseline concentration (increment) in any area.
    Regulation 120-01-02, Terms Defined, was included in the August 16, 
1993 supplement to the submittal. The definitions of Class I, II, and 
III geographic locations in Virginia that are applicable to PSD are 
designated in Appendix L of the regulations and defined by locality for 
criteria and other pollutants. Appendix L classifies PSD areas, which 
include two federal Class I areas, James River Face Wilderness Area and 
Shenandoah National Park. Virginia has no Class III areas.
    The procedures used to determine increment allocation, consumption 
and protection, established in Virginia's AQP-11, are consistent with 
federal regulations. Under Virginia's program, increment is allocated 
to permit applicants on a sequential basis at the time an application 
is determined to be complete. Increment consumption shall be calculated 
using the most recent representative meteorological data. Any PSD 
applicant shall be required to demonstrate through air quality modeling 
that emissions increases would not cause or contribute to any violation 
of allowable increments within a Class I area if: (1.) the applicant 
proposes to construct or modify within 100 kilometers of a Class I 
area, (2.) EPA believes a demonstration is necessary, even though the 
applicant will be constructing beyond 100 kilometers, or (3.) Virginia 
believes the change in question may appreciably affect increment 
consumption in the Class I area. Virginia's regulations also include 
the requirements of 40 CFR 51.166(p) for sources impacting federal 
class I areas. In Sec. 120-08-02 and AQP-11, Virginia cites and will 
use EPA's Guideline on Air Quality Models and EPA guidance regarding 
``Class I Area Significant Impact Levels and Modeling Class I Area 
Impacts'' for increment analysis and maintenance of the NAAQS. An 
inventory of emissions that consume Class I increment will be 
maintained by the Commonwealth. AQP-11 also outlines steps to prevent 

[[Page 1882]]
increment violations and to respond to a Federal Land Manager who has 
determined that a proposed emissions increase would have an adverse 
impact on the air quality related values.
    The PSD provisions of the CAA emphasize the importance of public 
participation in permitting decisions. See section 160(5) of the CAA. 
In addition, section 165(a)(2) of the CAA provides that no PSD permit 
shall be issued unless a ``public hearing has been held with 
opportunity for interested persons including representatives of the 
Administrator to appear and submit written or oral presentations on the 
air quality impacts to the source, alternatives thereto, control 
technology requirements, and other appropriate considerations.'' See 
also section 40 CFR 51.166(q)(2)(v). Further, 40 CFR 51.166(a)(1) 
provides that ``[i]n accordance with the policy of section 101(b)(1) of 
the CAA and the purposes of section 160 of the CAA, each applicable 
State implementation plan shall contain emission limitations and such 
other measures as may be necessary to prevent significant deterioration 
of air quality.'' See also section 161 of the CAA.
    EPA interprets existing law and regulations to require an 
opportunity for state judicial review of PSD permit actions under 
approved PSD SIPs by permit applicants and affected members of the 
public in order to ensure an adequate and meaningful opportunity for 
public review and comment on all issues within the scope of the 
permitting decision, including environmental justice concerns and 
alternatives to the proposed source. The EPA believes that an 
opportunity for public review and comment, as provided in the statute 
and regulations, is seriously compromised where an affected member of 
the public is unable to obtain judicial review of an alleged failure of 
the state to abide by its PSD SIP permitting rules. Accordingly, all 
such persons, as well as the applicant, must be able to challenge PSD 
permitting actions in a judicial forum.
    In Section 307(b) of the CAA, Congress expressly provided an 
opportunity for judicial review of PSD permitting decisions when EPA is 
the permitting authority. In a federal PSD program (PSD FIP) such as 
the one currently in effect in Virginia, any member of the public who 
has participated in the public comment process and meets the threshold 
standing requirements of Article III of the U.S. Constitution may 
petition for administrative review of the permit within 30 days of 
issuance and ultimately seek judicial review of the administrative 
disposition of the permit. There is no indication that Congress 
intended that citizens' rights would be diminished upon the EPA 
approval of a state's PSD program.
    Similarly, Congress has provided citizens the ability to challenge 
the failure of a major source to obtain the PSD permit required under 
Part C of the CAA or the violation of such permit in Federal district 
court under the citizen suit provisions of section 304(a)(3), 
regardless of whether the permitting authority is the EPA or a State. 
The operative language of section 304(a)(3) could be read as equivalent 
to the federal New Source Review (NSR) enforcement provisions of 
sections 113(a)(5) and 167, as enabling challenges to both construction 
without any permit and construction without a permit that satisfies 
applicable NSR requirements. The EPA believes that the better view is 
that expressed in the legislative history of the 1977 Amendments, which 
directed citizen challenges to State court: ``[i]n order to challenge 
the legality of a permit which a State has actually issued, or proposes 
to issue, under [the PSD provisions of the CAA] however, a citizen must 
seek administrative remedies under the State permit consideration 
process, or judicial review of the permit in State court.'' Staff of 
the Subcommittee on Environmental Pollution of the Senate Committee on 
Environment and Public Works, 95th Congress, 1st Session, A Section-by-
section Analysis of S. 252 and S. 253, Clean Air Act Amendments 36 
(1977), reprinted in 5 Legislative History of the Clean Air Act 
Amendments of 1977 (1977 Legislative History) 3892 (1977). The EPA 
believes that Congress intended such opportunity for state judicial 
review of PSD permit actions to be available to permit applicants and 
at least those members of the public who can satisfy threshold standing 
requirements under Article III of the Constitution.
    Currently, under the PSD FIP in effect in Virginia, a Virginia 
citizen can petition EPA to conduct an administrative review of a PSD 
permit issued by Virginia (under a delegation agreement with EPA) and 
seek judicial review of the final permitting action in federal court. 
In sharp contrast, section 10-1.1318(B) of the Code of Virginia extends 
the right to seek judicial review only to persons who have suffered an 
``actual, threatened, or imminent injury * * *'' where ``such injury is 
an invasion of an immediate, legally protected, pecuniary and 
substantial interest which is concrete and particularized * * *'' The 
Virginia statute, as well as Virginia case law, does not enable any 
member of the public who participated in the public comment process on 
a PSD permit and who meets the threshold standing requirements of 
Article III of the Constitution to obtain judicial review of the permit 
in the Commonwealth's court system.
    The limited judicial review in Virginia thus does not meet the 
minimum requirements for standing for judicial review required for PSD 
SIP programs under the CAA and EPA's implementing regulations. 
Therefore, the EPA is proposing to disapprove Virginia's PSD submittal. 
The EPA solicits comment on this view, and, in the alternative, 
proposes to approve the submittal should EPA conclude that such 
judicial standing is not required for approval of a PSD SIP.
    EPA has noted that some of Virginia's definitions do not conform 
with the Clean Air Act Amendments (CAAA) of 1990, although they do 
conform with federal regulations. EPA does not believe that this 
affects the decision-making process for this proposed rulemaking 
action. EPA is currently in the process of making changes to federal 
regulations at 40 CFR parts C and D to comply with the CAAA. When EPA 
promulgates changes to the PSD regulations, all states will be required 
to comply with the new federal regulations, either through SIP 
revisions or updated delegation agreements. Specific timetables for 
those changes will be included in the rulemaking notice.
    EPA's review of this material indicates that, with the exception of 
the issue highlighted above, Virginia's regulations and procedures are 
sufficient to implement and enforce a PSD program. A more detailed 
evaluation of Virginia's regulations for PSD can be found, in this 
rulemaking's docket file, in a memorandum entitled ``Revision to the 
Commonwealth of Virginia Implementation Plan for Prevention of 
Significant Deterioration of Air Quality--Technical Support Document''. 
Copies of that document are available upon request from the EPA 
regional office listed in the Addresses section of this notice.

Proposed Action

    If the Agency determines, after reviewing public comment on this 
issue, that Virginia's PSD program must provide access to judicial 
review on a PSD permit to any party who participates in the public 
comment process and who meets the threshold standing requirements of 
Article III of the U.S. Constitution, EPA will disapprove the SIP 
revision submitted 

[[Page 1883]]
by Virginia. Alternatively, if the Agency determines, after reviewing 
public comment on this proposal, that provisions for judicial review 
are unnecessary, and that Virginia's PSD program, with the exception of 
the PM-10 and modeling guideline provisions, meets the requirements of 
the CAA applicable to state PSD Programs, EPA will conditionally 
approve the SIP revision. In order to correct the deficiencies, 
Virginia must amend the Virginia Regulations and AQP-11 to meet the 
current federal PSD requirements at 40 CFR part 51 by addressing the 
PM-10 and modeling guideline provisions. The program amendments must be 
submitted within one year of conditional approval. If Virginia fails to 
revise and submit the amendments within one year, the conditional 
approval will convert to a disapproval.
    EPA is soliciting public comments on Virginia's SIP submittal, and, 
in particular, on the issues discussed in this notice. These comments 
will be considered before taking final action. Interested parties may 
submit written comments to the EPA Regional office listed in the 
Addresses section of this notice.
    EPA is proposing to disapprove or, in the alternative, 
conditionally approve Virginia's request to revise the Commonwealth's 
SIP to include Virginia Regulation for the Control and Abatement of Air 
Pollution, Sec. 120-08-02, permits for major sources and major 
modifications located in prevention of significant deterioration areas, 
and Appendix L, prevention of significant deterioration areas; and Air 
Quality Program Policies and Procedures for Implementation of 
Prevention of Significant Deterioration (PSD) of Air Quality Program, 
AQP-11. EPA is also proposing to disapprove or, in the alternative, 
conditionally approve supplementary revisions to Sec. 120-01-02, 
Sec. 120-08-02, and Appendix L. For conditional approval, Virginia must 
amend the program as specified above to satisfy the applicable federal 
PSD requirements of 40 CFR part 51, subpart I. With the exception of 
the PM-10 requirements, the Commonwealth will have authority to 
implement and enforce the PSD program through its SIP, and the 
delegation agreement will be terminated. EPA will retain authority 
under 40 CFR Sec. 52.21, for implementing and enforcing all Virginia 
PSD permits, or portions thereof, involving requirements related to PM-
10 until a SIP revision for PM-10 increments and modeling guidelines is 
approved. EPA's current delegation of authority to Virginia to issue 
PSD permits will remain in effect insofar, and only insofar, as PSD 
requirements pertaining to PM-10 are concerned. If Virginia later 
submits, as the October 16, 1995 ``Notice of Intended Regulatory 
Action'' indicates, and receives EPA approval of a revision to the 
Virginia PSD SIP incorporating the PM-10 increments and modeling 
provisions, the delegation agreement will be completely terminated.
    If these revisions to the PSD requirements of the Virginia SIP are 
approved, EPA will continue to oversee implementation of this important 
program by reviewing and commenting on proposed permits with respect to 
applicable statutory and regulatory provisions and guidance. Also, EPA 
will implement and enforce the PM-10 increment standards until such 
time as EPA receives and approves a revision to the Virginia SIP 
incorporating those standards into the SIP. If a final permit is issued 
which still does not reflect consideration of the relevant factors, EPA 
may deem the permit inadequate for purposes of implementing the 
requirements of the Act and Virginia's SIP, and may consider 
enforcement action under sections 113 and 167 of the Act to address the 
permit deficiency.
    Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., EPA 
must prepare a regulatory flexibility analysis assessing the impact of 
any proposed or final rule on small entities. 5 U.S.C. 603 and 604. 
Alternatively, EPA may certify that the rule will not have a 
significant impact on a substantial number of small entities. Small 
entities include small businesses, small not-for-profit enterprises, 
and government entities with jurisdiction over populations of less than 
50,000.
    SIP disapprovals or conditional approvals under section 110 and 
subchapter I, Part D of the Clean Air Act do not create any new 
requirements but simply approve requirements that the State is already 
imposing. Therefore, because the Federal SIP disapproval or approval in 
this situation does not impose any new requirements, the Administrator 
certifies that it does not have a significant impact on any small 
entities affected. Moreover, due to the nature of the Federal-State 
relationship under the CAA, preparation of a flexibility analysis would 
constitute Federal inquiry into the economic reasonableness of state 
action. The Clean Air Act forbids EPA to base its actions concerning 
SIPs on such grounds. Union Electric Co. v. U.S. EPA, 427 U.S. 246, 
255-66 (1976); 42 U.S.C. 7410(a)(2).
    Under Section 202 of the Unfunded Mandates Reform Act of 1995 
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA 
must prepare a budgetary impact statement to accompany any proposal or 
final that includes a Federal mandate that may result in estimated 
costs to state, local or tribal governments in the aggregate; or to the 
private sector, of $100 million or more. Under section 205, EPA must 
select the most cost-effective and least burdensome alternative that 
achieves the objectives of the rule and is consistent with statutory 
requirements. Section 203 requires EPA to establish a plan for 
informing and advising any small governments that may be significantly 
or uniquely impacted by the rule. This federal action disapproves, or 
conditionally approves pre-existing requirements. Accordingly, no 
additional costs to state, local, or tribal governments, or to the 
private sector, result from this action.
    The Administrator's decision to disapprove, or in the alternative, 
to conditionally approve Virginia's SIP revision for the Prevention of 
Significant Deterioration Program will be based on whether it meets the 
applicable requirements of the Clean Air Act and of the EPA regulations 
in 40 CFR part 51.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide, 
Hydrocarbons, Incorporation by reference, Intergovernmental relations, 
Nitrogen dioxide, Ozone, Particulate matter, Reporting and 
recordkeeping requirements, Sulfur oxides.

    Authority: 42 U.S.C. 7401-7671q.

    Dated: December 15, 1995.
Stanley L. Laskowski,
Acting Regional Administrator, Region III.
[FR Doc. 96-1051 Filed 1-23-96; 8:45 am]
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