[Federal Register: September 16, 2008 (Volume 73, Number 180)]
[Rules and Regulations]
[Page 53366-53373]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16se08-5]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[EPA-R05-OAR-2007-1043; FRL-8714-1]
Approval and Promulgation of Air Quality Implementation Plans;
Michigan; PSD Regulations
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: EPA is conditionally approving into Michigan's State
Implementation Plan (SIP) specified revisions to add the prevention of
significant deterioration (PSD) construction permit program for the
purpose of meeting the requirements of the Clean Air Act (CAA) with
regard to new source review in areas attaining the National Ambient Air
Quality Standards. The Michigan Department of Environmental Quality
(MDEQ) submitted these rules to EPA for approval and inclusion into the
Michigan SIP on December 21, 2006. In addition, in a separate action in
today's Federal Register, EPA is proposing to partially disapprove the
portion of Michigan's SIP revision submission consisting of Michigan
Rule R 336.2816. The PSD SIP revision affects major stationary sources
in Michigan that are subject to, or potentially subject to, the PSD
construction permit program.
DATES: This final rule is effective on October 16, 2008.
ADDRESSES: EPA has established a docket for this action under Docket ID
No. EPA-R05-OAR-2007-1043. All documents in the docket are listed on
the www.regulations.gov Web site. Although listed in the index, some
information is not publicly available, i.e., Confidential Business
Information (CBI) or other information whose disclosure is restricted
by statute. Certain other material, such as copyrighted material, is
not placed on the Internet and will be publicly available only in hard
copy form. Publicly available docket materials are available either
electronically through www.regulations.gov or in hard copy at the U.S.
Environmental Protection Agency, Region 5, Air and Radiation Division,
77 West Jackson Boulevard, Chicago, Illinois 60604. This facility is
open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding
Federal holidays. We recommend that you telephone Laura Cossa,
Environmental Engineer, at (312) 886-0661 before visiting the Region 5
office.
FOR FURTHER INFORMATION CONTACT: Laura Cossa, Environmental Engineer,
Air Permits Section, Air Programs Branch (AR-18J), U.S. Environmental
Protection Agency, Region 5, 77 West Jackson Boulevard, Chicago,
Illinois 60604, (312) 886-0661, cossa.laura@epa.gov.
SUPPLEMENTARY INFORMATION: Throughout this document whenever ``we,''
``us,'' or ``our'' is used, we mean EPA. This supplementary information
section is arranged as follows:
I. What Is Being Addressed in This Document?
II. What Proposed Revisions Are Included in the Conditional
Approval?
III. What Proposed Revisions Are Not Included in Today's Conditional
Approval?
IV. What Were the Comments Received and EPA's Response to Comments?
V. What Action Is EPA Taking?
VI. Statutory and Executive Order Reviews
I. What Is Being Addressed in This Document?
MDEQ submitted Michigan Air Pollution Control Rules, Part 18, Rules
R 336.2801 to R 336.2819 and R 336.2823(1) to (14) (``Part 18'') to EPA
on December 21, 2006, for EPA approval and inclusion into the Michigan
SIP. Part 18 relates to Michigan's PSD permit program. Michigan adopted
revisions to Part 18 on December 4, 2006. Prior to approval of
Michigan's submitted PSD program, EPA delegated to Michigan the
authority to issue PSD permits through the Federal PSD rules at 40 CFR
52.21 (via delegation letter dated September 26, 1988).
On January 9, 2008, EPA proposed to conditionally approve
Michigan's PSD SIP rules under section 110 of the CAA. (73 FR 1570,
January 9, 2008). EPA received a number of comments on our proposal
(see discussion in Section IV below). After considering the comments
received, EPA is finalizing most of our proposed conditional approval
of Michigan Air Pollution Control Rules, Part 18, Rules R 336.2801 to R
336.2819 and R 336.2823(1) to (14) (with one exception discussed in
more detail below). Under section 110(k)(4) of the CAA, EPA may
conditionally approve a SIP revision based on a commitment from the
State to adopt specific enforceable measures by a date certain that is
no more than twelve months from the date of the conditional approval.
In addition, in a separate action also published today, EPA is
proposing to disapprove Michigan Rule R 336.2816, which is also
included in the State's December 21, 2006, PSD program submission. This
rule sets out the mechanisms which facilitate the participation of the
Federal Land Manager (FLM) in the State's permitting process for
purposes of protecting either the increment or the Air Quality Related
Values (AQRVs) associated with a Class I area from potential impacts
from a proposed major source or major modification. Michigan will
retain its Federal delegation of authority under 40 CFR 52.21(p) until
such time as the State submits promulgated rules equivalent to 40 CFR
51.166(p) and those rules are approved into its SIP. Under section
110(k)(3), EPA may disapprove a part of a SIP revision if the partial
disapproval meets certain conditions discussed in Section III, below.
Further, EPA is proposing to approve in the alternative a revised
Michigan Rule R 336.2816 once the State submits and EPA approves
promulgated rules equivalent to 40 CFR 51.166(p), which the State has
committed to do.
Michigan is not authorized to carry out its Federally approved air
program in ``Indian Country,'' as defined in 18 U.S.C. 1151. Indian
Country includes: 1. All lands within the exterior boundaries of Indian
reservations within the State of Michigan; 2. Any land held in trust by
the U.S. for an Indian tribe; and 3. Any other land, whether on or off
an Indian reservation that qualifies as Indian Country. Therefore, EPA
retains the authority to implement and administer the CAA program in
Indian Country.
II. What Proposed Revisions Are Included in the Conditional Approval?
EPA is conditionally approving the following sections of ``Part 18,
Prevention of Significant Deterioration of Air Quality'' of Michigan's
Air Pollution Control Rules, (a detailed discussion of the reasons for
the conditional approval is available in 73 FR 1043, January 9, 2008):
R 336.2801 Definitions (a) through (tt) [except for R 336.2801 (j)
and (ff), reserved in original rule];
R 336.2802 Applicability;
R 336.2803 Ambient Air Increments;
R 336.2804 Ambient Air Ceilings;
[[Page 53367]]
R 336.2805 Restrictions on Area Classifications;
R 336.2806 Exclusions from Increment Consumption;
R 336.2807 Redesignation;
R 336.2808 Stack Heights;
R 336.2809 Exemptions;
R 336.2810 Control Technology Review;
R 336.2811 Source Impact Analysis;
R 336.2812 Air Quality Models;
R 336.2813 Air Quality Analysis;
R 336.2814 Source Information;
R 336.2815 Additional Impact Analyses;
R 336.2817 Public Participation;
R 336.2818 Source Obligation;
R 336.2819 Innovative Control Technology; and,
R 336.2823 Actuals Plantwide Applicability Limits (PALs) (1) through
(14).
III. What Proposed Revisions Are Not Included in Today's Conditional
Approval?
Today's action does not extend conditional approval to Michigan
Rule R 336.2816, ``Sources Impacting Federal Class I Areas--Additional
Requirements.'' EPA determined that Michigan Rule R 336.2816 is not
consistent with 40 CFR 51.166(p), which sets out the mechanisms which
facilitate the participation of the FLM in the State's permitting
process for purposes of protecting either the increment or the AQRVs
associated with a Class I area from potential impacts from a proposed
major source or major modification.
As further discussed below, commenters raised concerns that,
insofar as Michigan Rule R 336.2816 does not fully provide this
mechanism, EPA should act to ensure that the SIP contains these
requirements. On November 30, 2007, in a letter from Steven Chester,
Director, MDEQ, to Mary Gade, Regional Administrator, Michigan
committed, among other things, to making changes to Michigan Rule R
336.2816 consistent with the requirements at 40 CFR 51.166(p).
Because Michigan currently implements the Federal PSD program under
EPA's delegation of 40 CFR 52.21, EPA's conditional approval of
Michigan Rule R 336.2816 would have made the Michigan SIP less
stringent than the currently applicable, Federally delegated program.
Therefore, in a separate action published today, EPA is proposing to
disapprove Michigan's submittal as it relates to Michigan Rule R
336.2816. Michigan will retain its Federal delegation of authority
under 40 CFR 52.21(p) to administer Michigan Rule R 336.2816 until such
time as the State submits promulgated rules equivalent to 40 CFR
51.166(p) for approval, and these rules are approved into its SIP.
IV. What Were the Comments Received and EPA's Response to Comments?
The public comment period for our proposed conditional approval
began on January 9, 2008 (73 FR 1570, January 9, 2008). During the
public comment period, EPA received both supportive and adverse
comments in response to our proposed rulemaking. EPA received comments
in support of our proposed action from the Alliance of Automobile
Manufacturers and Marathon Petroleum Company on February 7, 2008, and
from Consumers Energy Company on March 11, 2008 (Comment 1, discussed
below). EPA received adverse consolidated comments, dated March 11,
2008, from Clean Water Action, Environmental Law and Policy Center,
Michigan Energy Alternatives, Michigan Land Use Institute, Midland
Cares, Natural Resources Defense Council and Sierra Club
((``Consolidated Commenters'') Comment 2, discussed below). EPA also
received three requests, from Sidley and Austin LLP, Alliance of
Automobile Manufacturers and Marathon Petroleum Company, on January 8,
February 7, and March 11, 2008, respectively, to terminate the PSD
delegation agreement between MDEQ and EPA when the approval of PSD
program is issued (Comment 3, discussed below). One commenter
(Consumers Energy Company) requested that EPA explicitly state in this
notice the appropriate appeal procedures once the SIP is conditionally
approved (Comment 4, discussed below). One commenter (Alliance of
Automobile Manufacturers) expressed concern that Michigan's definition
of ``net emission increase'' was more stringent than the Federal
definition. As described in 40 CFR 51.166(b), states can use
definitions that are more stringent than the corresponding definitions
listed in 40 CFR 51.166(b)(1) to (56). However, in a letter dated May
17, 2007, Michigan stated that it did not intend to implement a more
stringent definition, and stated that the definition of ``net emissions
increase'' is being rewritten under a State rulemaking, so that it will
follow the same requirements as the Federal rule. Michigan indicates
that the definition of ``net emissions increase'' as currently set
forth in Michigan Rule R 336.2801(ee) will be applied until the state
rules are revised. The same commenter (Alliance of Automobile
Manufacturers) expressed concern that the requirements of Michigan Rule
R 336.2818 (Source Obligation) are more stringent than the Federal
requirements (Comment 5, discussed below).
On January 25, 2008, EPA received a request from the Consolidated
Commenters to extend the public comment period an additional 30 days
from the original closing date of February 8, 2008. Despite one comment
to the contrary, EPA reopened the public comment period for an
additional 30 days until March 10, 2008 (73 FR 8250, February 13,
2008).
EPA has considered the comments received and, with the exception of
the proposed disapproval of Michigan Rule R 336.2816, has finalized our
action as proposed. Presented below is a summary of the comments and
our responses.
Comment 1: Three commenters supported the approval of Michigan's
PSD Rules into the Michigan SIP and requested that EPA make the rule
effective immediately upon publication.
Response: EPA acknowledges receipt of the comments and for reasons
set forth in this Notice is proceeding with a conditional approval of
the specified PSD rules (along with the proposed disapproval of
Michigan Rule R 336.2816). Pursuant to section 110(k)(4) of the CAA,
EPA may conditionally approve a portion of a SIP revision based on a
commitment from the State to adopt specific, enforceable measures, no
later than twelve months from the date of final conditional approval.
The State must provide the corrected promulgated rules, not a new SIP
submittal, to EPA for approval. If the State fails to actually make the
changes within the twelve month period, EPA would subsequently publish
a notice in the Federal Register providing notice and details of such
disapproval. EPA is not required to propose the finding of disapproval.
If Michigan submits final and effective rule revisions correcting the
deficiencies, as discussed above, within one year from this conditional
approval becoming final and effective, EPA will publish a subsequent
notice in the Federal Register to acknowledge that Michigan has met the
criteria of a conditional approval and to inform the public about the
conversion from a conditional approval to a full approval.
Federal regulations at 40 CFR 51.166 set forth the criteria for a
PSD program approval that EPA applies. With the exception of several
deficiencies that need to be corrected, EPA has determined that
Michigan's PSD rules meet these criteria. These deficiencies are
explained below, in Part IV of this document, entitled ``What Action Is
EPA Taking.'' Therefore, EPA is conditionally approving a revision to
the SIP that includes specified sections of Michigan's PSD construction
permit program, with the exception of the proposed disapproval of
Michigan Rule R 336.2816.
[[Page 53368]]
The requirement to provide at least 30 days notice before a rule
becomes effective comes from the Administrative Procedures Act (APA),
which governs all Federal rulemaking, not just EPA rulemaking. Section
553(d) of the APA provides that set
[T]he required publication or service of a substantive rule
shall be made not less than 30 days before its effective date,
except--
(1) A substantive rule which grants or recognizes an exemption
or relieves a restriction;
(2) Interpretative rules and statements of policy; or
(3) As otherwise provided by the agency for good cause found and
published with the rule.
5 U.S.C. 553(d)(1)-(3).
In rulemaking, exemptions from APA requirements are to be
interpreted narrowly, not broadly. The commenters have not shown ``good
cause,'' which, in this case, would be a demonstration of what actual
hardship they would face as a result of a 30-day effective date. In the
context of adoption of a State program, such as this, which essentially
mirrors a Federal program, it is difficult to conceive of situations
that would actually present such good cause. Arguments for rushing the
new program into place imply that the new program is less stringent
than the existing Federal rules, and undercut the rationale for
approving it. Considerations supporting the 30 day notice period
include: Providing advance notice to the regulated community and the
public of the legal and practical requirements under the regulations,
giving MDEQ time to get ready to implement the program, giving EPA time
to work out the protocol of reviewing the State permits, and giving
Michigan sources advance notice of which rules will apply and where
their applications should be submitted. We find that the reasons listed
by the commenters do not constitute a ``good cause'' to deviate from
the general rule of section 553 of the APA. Therefore, the effective
date of this rule is 30 days after the publication. Additionally, the
commenter urges EPA to adopt an effective date concurrent with
signature because this approach was followed by EPA in its conditional
approval of the Ohio PSD SIP (66 FR 51570, October 10, 2001). The
commenter is mistaken. In the case of the Ohio PSD SIP, the approval
was not effective until the conditions were actually determined to be
fulfilled, which would have taken more than 30 days.
Comment 2: One group of commenters requested that EPA deny approval
of Michigan's current PSD SIP revision, require the State to resubmit a
revision with materials addressing the comments made, and impose
appropriate conditions on any subsequent approval.
Response: EPA acknowledges receipt of the comments and has
addressed them specifically below (Comments A through F). As explained
in EPA's response to Comment D.2, in a separate action EPA is proposing
disapproval of Michigan Rule R 336.2816 (Sources Impacting Federal
Class I Areas--additional requirements).
Comment A: The commenters requested that EPA should make explicit
in its approval that provisions in the Michigan SIP concerning best
available control technology (``BACT'') analysis and air quality
analysis, 40 CFR 51.166(j) and (m), apply to construction of any new
major stationary source or major modification that would result in any
emissions of particulate matter of less than or equal to 2.5
micrometers in diameter (PM2.5), carbon dioxide, and/or other
greenhouse gases (GHG), based on the definitions of ``significant'' and
``regulated New Source Review (NSR) pollutant'' contained in the
Federal regulations.
Response: The minimum program requirements at 40 CFR 51.166 do not
require States to designate individual pollutants as being covered by
their PSD programs. As long as States adopt regulations that meet the
requirements of 40 CFR 51.166 and their regulations include the
pollutants covered by our definition of ``regulated NSR pollutant'' at
40 CFR 51.166(b)(49), then the State has satisfied the requirements for
SIP approval. The definition of ``regulated NSR pollutant'' in Michigan
Rule R 336.2801(nn) follows the Federal definition.
The BACT requirement set forth in 40 CFR 51.166(j) applies to each
regulated NSR pollutant covered by the definition at 40 CFR
51.166(b)(49), and Michigan's submission is consistent with the
requirement. In addition, EPA construes the air quality analysis
requirement set forth in 40 CFR 51.166(m) to apply only to regulated
NSR pollutants. The regulation at 40 CFR 51.166(m)(1)(a)-(b) indicates
that the air quality analysis needs to cover the pollutants that a new
major source would have the potential to emit in significant amounts
and each pollutant for which a major modification would result in a net
significant emissions increase. EPA's definition of ``major stationary
source,'' ``major modification,'' ``net emissions increase'' and
``significant,'' each refer to emissions of regulated NSR pollutants.
40 CFR 51.166(b)(1), (2), (3), and (23). Since the applicability of 40
CFR 51.166(m) cannot be determined without reference to these other
definitions, we construe 40 CFR 51.166(m) to apply to regulated NSR
pollutants as well. Michigan's program satisfies the requirements of 40
CFR 51.166(m), as interpreted by the Agency.
On May 16, 2008, EPA finalized a specific regulation addressing
implementation of the NSR program for PM2.5, which became effective on
July 15, 2008. (73 FR 28321, May 16, 2008). Section V.H. of the
preamble to the regulation discusses the process for transitioning
State PSD programs to address PM2.5. (73 FR 28340, May 16, 2008).
Michigan submitted its PSD program for approval to EPA prior to the
publication of the implementation rule on May 16, 2008. The SIP
revision that we are conditionally approving today does not
specifically address the EPA PM2.5 rulemaking that became effective on
July 15, 2008. Michigan has assured us that it has the authority under
its SIP provisions to implement the PSD program for PM2.5, and that it
intends to do so. Michigan is currently drafting revised regulations to
address the PM2.5 rulemaking. EPA will act on those revisions when the
State formally submits them as SIP revisions.
Comment B: The commenters requested that EPA should not approve the
SIP revision until it undertakes the Section 7 consultation under the
Endangered Species Act (``ESA'') to determine whether the proposed
approval of major changes to the State's PSD permit program may affect
any listed species. In addition, these commenters request that EPA
retain its ESA oversight obligations under the Act.
Response: EPA disagrees with the commenters. Recent Supreme Court
precedent has confirmed that the ESA requirements cited in the comments
do not apply to EPA's decision to approve the PSD rules into a State's
Federally authorized CAA program.
Section 7(a)(2) of the ESA generally requires Federal agencies to
consult with the relevant Federal wildlife agencies to ensure that
actions they authorize, fund, or carry out are not likely to jeopardize
the continued existence of Federally listed endangered or threatened
species, or result in the destruction or adverse modification of
designated critical habitat of such species. 16 U.S.C. 1536(a)(2). In
accordance with relevant ESA implementing regulations, this requirement
applies only to actions in which there is discretionary Federal
involvement or control. 50 CFR 402.03. In National Ass'n of Home
Builders v. Defenders of Wildlife, 127 S. Ct. 2518 (2007) (Defenders of
Wildlife), the
[[Page 53369]]
Supreme Court examined these provisions in the context of EPA's
decision to approve a State permitting program under the Clean Water
Act (CWA). In that case, the Court held that when a Federal agency is
required by statute to undertake a particular action once certain
specified triggering events have occurred, there is no relevant agency
discretion, and thus the requirements of ESA Section 7(a)(2) do not
apply. 127 S. Ct. at 2536.
With regard to EPA's transfer of CWA permitting authority to a
State, the Court found that the relevant CWA provision mandated that
EPA ``shall approve'' a state permitting program if a list of CWA
statutory criteria are met. Therefore, EPA lacked the discretion to
deny a transfer application that satisfied those criteria. Id. at 2531-
32. The Court also found that the relevant CWA program approval
criteria did not include consideration of endangered or threatened
species, and stated that ``[n]othing in the text of [the relevant CWA
provision] authorizes EPA to consider the protection of threatened or
endangered species as an end in itself when evaluating [an]
application'' to transfer a permitting program to a State. Id. at 2537.
Accordingly, the Court held that the CWA required EPA to approve the
state's permitting program if the statutory criteria were met; those
criteria did not include the consideration of ESA-protected species;
and thus, consistent with 50 CFR 402.03, the non-discretionary action
to transfer CWA permitting authority to the state did not trigger
relevant ESA Section 7 requirements.
Similar to the CWA program approval provision at issue in Defenders
of Wildlife, section 110(k)(3) of the CAA mandates that EPA ``shall
approve'' a SIP submittal that meets applicable CAA requirements. 42
U.S.C. 7410(k)(3). The CAA provides a list of SIP submittal criteria in
section 110. See 42 U.S.C. 7410(a)(2). As was the case with the CWA
requirements in Defenders of Wildlife, the SIP requirements contained
in section 110 of the CAA do not include protection of listed species,
and Title I, Part C of the CAA does not explicitly state that
consideration of the impacts on listed species is a required factor in
SIP approval decisions. EPA's action on State SIP submittals is
governed by section 110 of the Act, which unequivocally directs EPA to
approve State plans meeting applicable CAA requirements.
EPA recognizes that it exercises some judgment when evaluating
whether a SIP submittal meets specific statutory criteria. However, as
the Supreme Court held in Defenders of Wildlife, the use of such
judgment does not allow the Agency ``the discretion to add another
entirely separate prerequisite''--such as the ESA Section 7(a)(2)
consultation requirements--to the list of required criteria EPA
considers when determining whether it ``shall approve'' a SIP revision
request. 127 S. Ct. at 2537. Applying the reasoning of Defenders of
Wildlife, the SIP approval criteria contained in the CAA do not provide
EPA with the discretionary authority to consider whether approval of
SIP revisions may affect any listed species. EPA has determined that
MDEQ has submitted a SIP revision request to incorporate the PSD rules
that satisfies all of the applicable SIP requirements contained in
section 110 of the CAA. Thus, given the Supreme Court precedent and
applicable regulations (see 50 CFR 402.03), EPA is without discretion
to disapprove or condition the State's SIP revision request based on
concerns for listed species, and the ESA requirements cited by the
commenters are thus inapplicable to this approval action.
Comment C: Some commenters requested assurance that EPA's approval
of the PSD revisions would not diminish Federal authority pursuant to
Title V of the CAA to review, object to, or deny issuing an operating
permit where the state has issued a permit under its federally approved
SIP.
Response: Following approval of the Michigan's PSD revisions, EPA
retains its authorities and obligations under Title V.
Comment D: Some commenters expressed concern over MDEQ's
commitments made in its November 30, 2007, letter to EPA. Specifically,
the concerns are related to the definitions of ``replacement unit'' and
``potential to emit,'' and the mechanism by which the FLM may present
to a State a demonstration of impacts of air quality-related values
from proposed sources or modifications. The responses to these two
comments follow (Response D:1 and Response D:2).
Response D.1: Regarding the missing definition of ``replacement
unit,'' Michigan committed in a letter to EPA, dated May 17, 2007, to
follow the Federal definition of ``replacement unit'' (40 CFR
51.166(b)) in its implementation of these rules, and to add the
definition to the state rules in a future rulemaking.
Regarding the definition of the terms ``potential to emit'' and
``legally enforceable'' in the Michigan SIP rules, commenters requested
that MDEQ provide to EPA a clear definition of these terms. EPA agrees
with the commenters.
The MDEQ's definition of ``potential to emit'' (Michigan Rule R
336.2801(hh)) follows the Federal definition, except instead of
``federally enforceable'' the Michigan rules use the more general term
``legally enforceable.'' Michigan has committed, in its letter to EPA,
dated September 11, 2007, to define the term ``legally enforceable'' to
mean ``legally and practically enforceable by the Administrator, a
state or local air pollution agency,'' consistent with the Interim
Policy dated January 22, 1996, and to revise the rule to make it
consistent with this definition. In a subsequent letter to EPA, dated
November 30, 2007, MDEQ committed to add this definition to its rules
no later than one year after EPA's conditional approval of the State's
PSD SIP. A final approval relies on MDEQ's commitment to submit a clear
definition of ``legally enforceable.''
Comment D.2: The Consolidated Commenters requested that EPA deny
approval of Michigan's current PSD SIP revision until the State
promulgates rule corrections to ensure that its regulations
implementing the special requirements for sources impacting Class I
areas are consistent with Federal requirements found at 40 CFR
51.166(p). The commenters assert that Michigan's current regulation to
implement this provision (found at Michigan Rule R 336.2816) diminishes
the role of the FLM in the State's permitting process. The commenters
urge EPA to ensure that the State program provides, at a minimum, that:
The FLM will receive timely written notice of proposed PSD permits that
may affect the FLM's Class I area; the FLM will be provided with all
relevant information to assess anticipated impacts to the Class I area;
and the State will consult with the FLM regarding potential adverse
impacts, and providing public notice and opportunity to comment on any
FLM adverse impact findings and the State's response.
Response D.2: EPA agrees that a federally approved SIP must meet
the minimum requirements set forth in 40 CFR 51.166(p) which: Requires
that a PSD permitting authority transmits to EPA copies of permit
applications and related documents for major sources and major
modifications; provides for a process by which a FLM may present his or
her comments, findings, and certifications relating to such draft
permit applications to the State; and provides for a process by which
the State consults with such FLM. The State has committed to
incorporating the requirements of 40 CFR 51.166(p) into its PSD SIP
rules via letter to EPA, dated November 30, 2007. In order to keep the
Federally delegated requirements under
[[Page 53370]]
40 CFR 51.166(p) in place until Michigan has revised its rules to add
these requirements and EPA has approved them into the SIP, EPA is
proposing, in a separate notice, disapproval of Michigan Rule R
336.2816. In that same proposed disapproval notice, EPA is also
proposing in the alternative to approve such rules once they are
properly promulgated and submitted.
40 CFR 51.166(p) sets out those requirements that apply to major
sources or major modifications that will affect Class I areas. This
section contains both requirements for State plans and optional
provisions. Pursuant to 40 CFR 51.166(p)(3), the State plan must
provide a mechanism whereby the FLM may
present to the State * * * a demonstration that the emissions
from the proposed source or modification would have an adverse
impact on the air quality-related values (including visibility) of
any Federal mandatory Class I lands, notwithstanding that the change
in air quality resulting from emissions from such source or
modification would not cause or contribute to concentrations which
would exceed the maximum allowable increases for a Class I area. If
the State concurs with such demonstration, the reviewing authority
shall not issue the permit. 40 CFR 51.166(p)(3).
As submitted, Michigan's Rule R 336.2816 did not contain an
equivalent to this required provision. Additionally, EPA sought
clarification from the State as to how it planned to implement certain
State rules corresponding to the variance provisions contained in 40
CFR 51.166(p)(4), (5), and (6).
On November 30, 2007, Michigan provided suggested rule
clarification language to address both the lack of an equivalent to 40
CFR 51.166(p)(3) and how the State intends to implement the variance
provisions in 40 CFR 51.166(p)(4), (5), and (6). Michigan also provided
its commitment to promulgate these changes into its PSD regulations
within one year of EPA's action on Michigan's PSD SIP submittal.
Because the State program currently lacks a functional equivalent
to 40 CFR 51.166(p)(3), EPA cannot conditionally approve Michigan's
Rule R 336.2816 without creating a regulatory gap. Therefore, by
separate notice today, EPA is disapproving Michigan's Rule R 336.2816,
and Michigan will retain federal delegation of this provision until
such time as the State promulgates and EPA has approved the corrective
rules it has proposed in its November 30, 2007 letter. Retention of the
delegated program until such time as Michigan promulgates a corrective
rule will ensure that the provisions of 40 CFR 51.166(p) will continue
to apply, thereby avoiding any regulatory gap, and ensuring full
participation of the FLM, as appropriate, in State permitting
decisions.
The commenters also request that EPA provide public notice and
opportunity for comment on any adverse finding made by an FLM, in
addition to making public the State's decision on such finding. EPA's
responsibilities regarding State permit actions that may impact Class I
areas are set forth in Section 165(d) of the CAA, 42 U.S.C. 7475(d).
EPA's functions include providing notice to FLMs of permit
applications, consulting with FLMs regarding the potential impact of a
proposed source on AQRVs, and coordinating with the State regarding
issuance (or non-issuance) of permits. Information developed during
this process is part of the public docket for permit issuance, and as
such would be available to the public. Additionally, the regulations
require public notice and comment, and the opportunity for a public
hearing, on State proposed permits. Together these provisions enable
fully informed public participation in State permit issuance. These
provisions apply nationwide, and commenters have not shown why more
should be required from Michigan here.
Comment E: The commenters asked EPA not to approve the PSD SIP
until MDEQ demonstrates that the current fiscal situation of the State
government and its agencies will not hinder the implementation of the
PSD program. These commenters provide examples of current State funding
problems, including the small portion of the State's overall budget
that is devoted to environmental protection, the sunset of State
environmental fee programs, and projected shortfalls in the State's
ability to fund environmental programs.
Response: EPA agrees that the CAA requires the States to provide
the ``necessary assurances'' that they are able to carry out the
implementation of SIP requirements through adequate staffing and
funding. 42 U.S.C. 7410(a)(2)(E), CAA section 110(a)(2)(E). MDEQ
already implements the federal PSD program within the State. EPA finds
that a demonstration of current fiscal capabilities is not necessary.
There is no evidence that MDEQ has encountered financial difficulties
in carrying out the PSD program. Moreover, because MDEQ is already
implementing the program based on the Federal delegation of authority,
these rules are not expected to result in additional costs for MDEQ.
The Consolidated Commenters enclosed a copy of a September 2007
Report by the Southeast Michigan Council of Governments titled
``Funding Environmental Protection in Michigan: The Need for Change,''
which, among other things, describes how funding sources for
environmental protection programs in Michigan have shifted their
priorities. Nevertheless, the overall funds available to MDEQ, as
portrayed in this report, appear to have increased slightly. While EPA
is aware that environmental regulators at the State level must make
many difficult decisions between competing priorities in the allocation
of available resources, EPA cannot conclude on the basis of this
comment that Michigan is unable to fund its PSD program.
Comment F: The commenters request a shorter deadline for State
adoption of SIP Rules meeting the terms of conditional approval
(namely, 6 months instead of 1 year).
Response: EPA disagrees with the comment. Under section 110(k)(4)
of the CAA, EPA may conditionally approve a SIP revision based on a
commitment from the State to adopt specific enforceable measures by a
date certain that is no more than one year from the date of conditional
approval. According to Michigan's rulemaking process, the rules have to
go through several State agencies, such as the Michigan Legislature's
Joint Committee on Administrative Rules and the State Office of
Administrative Hearings and Rules, and be open for public comments for
at least 30 days; then after the public comment period closes, the
state must respond to comments. This procedure reasonably would take
more than 6 months. In a letter dated November 30, 2007, MDEQ committed
to adopt the revised rules, subject to the conditional approval, no
later than one year after EPA's conditional approval of the State's PSD
SIP. This one year commitment is reasonable here and the final approval
relies on this commitment.
Comment 3: Some commenters requested that the PSD delegation
agreement between MDEQ and EPA be terminated when EPA issues the final
approval of PSD program.
Response: EPA agrees with the commenters, with one exception
(relating to Michigan Rule R 336.2816). 40 CFR 52.02 and 40 CFR
52.21(a)(1) provide that EPA's delegation will not apply at such time
as when the State's SIP is approved. In a similar situation to
Michigan's, EPA's recent approval of South Dakota's PSD SIP (72 FR
72617, December 21, 2007) also includes a clear statement rescinding
the prior delegation agreement. The one exception to the termination of
EPA's
[[Page 53371]]
delegation of the PSD program in Michigan is, as discussed elsewhere in
this notice, the Federal delegation for the requirements at 40 CFR
51.166(p), which is to remain in place until an equivalent State
provision is approved into the Michigan SIP.
Comment 4: One commenter requested that EPA explicitly state in
this notice that parties seeking to appeal PSD permits issued by the
State under a Federally approved program must go through procedures
contained in Michigan's laws and rules, and not appeal through
Environmental Appeal Board (EAB).
Response: EPA agrees with the commenter, with the exception of
those provisions Michigan will continue to retain as a Federally
delegated program (See proposed partial disapproval of Michigan Rule R
336.2816 pursuant to a separate notice published today). For permits
issued by the State under the rules covered by this conditional
approval, appeals will not be made to the EAB; rather, such appeals
will be subject to the opportunity for review and appeal procedures
provided under the State law. Michigan's Rule R 336.2830 is intended to
provide a parallel appeal procedure to the procedure that is currently
in place for the Federal PSD program in Michigan under the regulation
at 40 CFR part 124. The rule creates a right to an administrative
hearing before a state administrative law judge that is similar to the
current appeal rights under the Federal PSD permitting program. This
rule was not submitted as part of Michigan's PSD SIP. Therefore, EPA is
not taking action on Michigan Rule R 336.2830. However, EPA finds the
State appeal process sufficient to conditionally approve the specified
parts of the PSD program as submitted. An appeal of any permit
requirement(s) under 40 CFR 51.166(p) would still need to be brought
before the EAB until a replacement State regulation is approved into
the SIP. Depending on other permit issues on appeal, the EAB can decide
how to best structure such appeal.
Comment 5: One commenter expressed concern that the requirements of
Michigan Rule R 336.2818 (Source Obligation) are more stringent than
the Federal requirements, and requested that EPA allow MDEQ to review
its rules and adopt the new rule in its next submittal. The commenter
also suggested EPA issue a direct final rule to approve this aspect of
the regulation.
Response: Michigan Rule R 336.2818 places specified requirements
upon the PSD permit applicant, including recordkeeping requirements for
applicants using certain methods for determining if a project results
in a significant emissions increase.
On December 31, 2002, EPA published revisions to the Federal PSD
and non-attainment NSR regulations. These revisions are commonly
referred to as ``NSR Reform'' regulations and became effective on March
3, 2003. These regulatory revisions include provisions which require a
source to follow the recordkeeping and reporting requirements in this
section if there is a ``reasonable possibility'' that a source may
exceed the projected actual emissions (40 CFR 51.166(r)(6)). The
``reasonable possibility'' clause of this provision of the Federal rule
was remanded to EPA in the June 24, 2005, D.C. Circuit Court ruling in
State of New York et al. v. EPA, 413 F.3d 3 (D.C. Cir. 2005). At the
time of Michigan's PSD SIP submittal, EPA had responded to the remand
order. However, the MDEQ's minor source permitting program--Michigan
Rule R 336.201--requires this information to be submitted for all
sources as part of a complete Permit To Install application before
beginning actual construction on the proposed project (not just where
there is a ``reasonable possibility'' that the source may exceed the
projected actual emissions). Because this is more stringent than the
Federal requirement, we approve this approach. All other requirements
of Michigan Rule R 336.2818 are consistent with 40 CFR 51.166(r). At
this time Michigan has made no request to adopt different language than
what the state already requires for this rule.
V. What Action Is EPA Taking?
EPA is conditionally approving specified revisions to Michigan's
SIP to include the State's PSD construction permit program.
What Is the Effect of Conditional Approval?
Pursuant to section 110(k)(4) of the CAA, EPA may conditionally
approve a portion of a SIP revision based on a commitment from the
State to adopt specific, enforceable measures no later than twelve
months from the date of final conditional approval. The State must only
provide the rule changes, not a new SIP submittal to EPA for approval.
If the State fails to commit to undertake the necessary changes, or
fails to actually make the changes within the twelve month period, EPA
would subsequently publish a notice in the Federal Register providing
notice and details of such disapproval. EPA is not required to
separately propose a finding of disapproval. If Michigan submits final
and effective rule revisions correcting the deficiencies, as discussed
above, within one year from this conditional approval becoming final
and effective, EPA will publish a subsequent notice in the Federal
Register to acknowledge conversion of the conditional approval to a
full approval.
What Is Our Basis for Conditional Approval of Michigan's Rules?
EPA has identified several deficiencies that need to be corrected
in Michigan's rules so that the rules are approvable. The deficiencies
referenced above are summarized below.
Issues regarding definitions: In its May 17, 2007, letter to EPA,
Michigan committed to follow the Federal definition of ``replacement
unit'' (40 CFR 51.166(b)(7)) in its implementation of these rules, and
to add the definition to the state rules in a future rulemaking. For
the definition of ``potential to emit'' (Michigan Rule R 336.2801(hh)),
Michigan follows the Federal definition, except instead of ``federally
enforceable,'' the Michigan rules use the more general term ``legally
enforceable.'' Michigan has committed, in its September 11, 2007 letter
to EPA, to define the term ``legally enforceable'' to mean ``legally
and practically enforceable by the Administrator, a State or local air
pollution agency,'' consistent with the Interim Policy dated January
22, 1996.
Issues regarding FLM authority: The State's current Michigan Rule R
336.2816 does not include an equivalent State provision to 40 CFR
51.166(p), which sets out the mechanisms which facilitate the
participation of the FLM in the State's permitting process for purposes
of protecting either the increment or the AQRVs associated with a Class
I area from potential impacts from a proposed major source or major
modification. Therefore, this provision of the State rule is subject to
the proposed partial disapproval set forth in a separate rulemaking
notice. A partial disapproval of this section would keep the Federal
delegation to Michigan in place to implement 40 CFR 51.166(p) until an
equivalent State provision is approved into the SIP. The deficiencies
being addressed in this rulemaking are described in more detail in Part
III of 73 FR 1570, January 9, 2008.
VI. Statutory and Executive Order Reviews
Under the CAA, the Administrator is required to approve a SIP
submission that complies with the provisions of the Act and applicable
Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a).
[[Page 53372]]
Thus, in reviewing SIP submissions, EPA's role is to approve state
choices, provided that they meet the criteria of the CAA. Accordingly,
this action merely approves State law as meeting Federal requirements
and does not impose additional requirements beyond those imposed by
State law. For that reason, this action:
Is not a ``significant regulatory action'' subject to
review by the Office of Management and Budget under Executive Order
12866 (58 FR 51735, October 4, 1993);
Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
Does not contain any unfunded mandate, or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
Does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
Is not subject to requirements of Section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C.
272) because application of those requirements would be inconsistent
with the CAA; and
Does not provide EPA with the discretionary authority to
address, as appropriate, disproportionate human health or environmental
effects, using practicable and legally permissible methods, under
Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, this rule does not have tribal implications as
specified by Executive Order 13175 (65 FR 67249, November 9, 2000),
because the SIP is not approved to apply in Indian Country located in
the State, and EPA notes that it will not impose substantial direct
costs on tribal governments or preempt tribal law. Nevertheless, EPA
notified Michigan tribal environmental staff for the respective
Michigan tribes of the proposed conditional approval via email message
of November 29, 2007, and invited them to seek more information and to
submit comments during the public notice and comment period for the
proposed conditional approval.
The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. EPA will submit a report containing this action and
other required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. A major rule cannot
take effect until 60 days after it is published in the Federal
Register. This action is not a ``major rule'' as defined by 5 U.S.C.
804(2).
Under section 307(b)(1) of the CAA, petitions for judicial review
of this action must be filed in the United States Court of Appeals for
the appropriate circuit by November 17, 2008. Filing a petition for
reconsideration by the Administrator of this final rule does not affect
the finality of this action for the purposes of judicial review nor
does it extend the time within which a petition for judicial review,
may be filed, nor will it postpone the effectiveness of such rule or
action. This action may not be challenged later in proceedings to
enforce its requirements. (See section 307(b)(2).)
List of Subjects in 40 CFR Part 52
Environmental protection, Air pollution control, Carbon monoxide,
Incorporation by reference, Intergovernmental relations, Lead, Nitrogen
dioxide, Ozone, Particulate matter, Reporting and recordkeeping
requirements, Sulfur oxides, Volatile organic compounds.
Date: August 25, 2008.
Lynn Buhl,
Regional Administrator, Region 5.
0
40 CFR part 52 is amended as follows:
PART 52--[AMENDED]
0
1. The authority citation for part 52 continues to read as follows:
Authority: 42 U.S.C. 7401 et seq.
Subpart X--Michigan
0
2. A new Sec. 52.1188 is added to read as follows:
Sec. 52.1188 Conditional approval.
The plan commitments listed below were submitted on the dates
specified.
(a) On December 21, 2006, the State of Michigan submitted to EPA
Michigan Air Pollution Control Rules, Part 18, Rules R 336.2801 [(a)
through (tt) [except for (j) and (ff)] to R 336.2819 and R 336.2823(1)
to (14) (``Part 18''), for inclusion in the SIP. Part 18 relates to the
PSD permit program of the state of Michigan. Revisions to Part 18 were
adopted by MDEQ on December 4, 2006. On January 9, 2008, EPA proposed
to conditionally approve the PSD SIP rules under section 110 of the
CAA. On September 16, 2008 EPA conditionally approved the revisions to
Part 18.
(b) The conditional approval is based on the commitment from the
State to adopt specific enforceable measures by a date certain that is
no more than twelve months from the date of the conditional approval.
The deficiencies that need to be corrected in Michigan's rule so that
the rule is approvable include two missing definitions. In a separate
action also published September 16, 2008, EPA is proposing to
disapprove Michigan Rule R 336.2816, which is also included in the
State's December 21, 2006, PSD program submission. This rule sets out
the mechanisms which facilitate the participation of the FLM in the
State's permitting process for purposes of protecting either the
increment or the AQRVs associated with a Class I area from potential
impacts from a proposed major source or major modification. Michigan
will retain its Federal delegation of authority under 40 CFR 52.21(p)
until such time as the State submits promulgated rules equivalent to 40
CFR 51.166(p) and those rules are approved into its SIP.
(c) In its May 17, 2007, letter to EPA, Michigan committed to
follow the Federal definition of ``replacement unit'' (40 CFR
51.166(b)(7)) in its implementation of these rules, and to add the
definition to the state rules in a future rulemaking. For the
definition of ``potential to emit'' (Michigan Rule R 336.2801(hh)),
Michigan follows the Federal definition, except instead of ``federally
enforceable,'' the Michigan rules use the more general term ``legally
enforceable.'' Michigan has committed in its September 11, 2007, letter
to EPA, to define the term ``legally enforceable'' to mean ``legally
and practically enforceable by the Administrator, a state or local air
pollution agency,'' consistent with the Interim Policy dated January
22, 1996.
(d) The State must only provide the rule changes, not a new SIP
submittal to EPA for approval. If the State fails to actually make the
changes within the twelve month period, EPA would subsequently publish
a notice in the Federal Register providing notice and details of such
disapproval. If Michigan submits final and effective rule revisions
correcting the deficiencies, as
[[Page 53373]]
discussed above, within one year from this conditional approval
becoming final and effective, EPA will publish a subsequent notice in
the Federal Register to acknowledge that Michigan has met the criteria
of the conditional approval and to inform the public about the
conversion of the conditional approval to a full approval.
[FR Doc. E8-21209 Filed 9-15-08; 8:45 am]
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