R98010A.PDF

ILLINOIS POLLUTION CONTROL BOARD

September 4, 1997

IN THE MATTER OF:

MAJOR STATIONARY SOURCES

CONSTRUCTION AND

MODIFICATION (NEW SOURCE

REVIEW RULES): AMENDMENTS

TO 35 ILL. ADM. CODE 203

)

R98-10

(Rulemaking - Air)

Proposed Rule. First Notice.

OPINION AND ORDER OF THE BOARD (by K.M. Hennessey):

On September 2, 1997, the Illinois Environmental Protection Agency (Agency) filed

this proposal for rulemaking to amend 35 Ill. Adm. Code 203, the New Source Review (NSR)

rules. This rulemaking proposes to revise particular sections in 35 Ill. Adm. Code 203 so that

the language more closely reflects the terminology used in Sections 182(c)(7) and (8) of the

Clean Air Act. 42 U.S.C.

7511(c)(7), (8) (1996). The proposal will affect existing sources

in ozone nonattainment areas that are subject to the “special rules” for modifications found at

Sections 182(c)(7) and (8) of the Clean Air Act,

i.e.

, existing sources making “major”

modifications at sources in serious and severe ozone nonattainment areas. (This would, as a

practical matter, currently affect only the Chicago ozone nonattainment area. See 35 Ill. Adm.

Code 218.103.)

The Board had adopted the “special rules” as portions of Sections 203.206, 203.207,

and 203.301 in its rulemaking entitled In the Matter of: Amendments to New Source Review

Rules, 35 Ill. Adm. Code 203 (April 22, 1993), R92-21. These rules were based on the

Agency’s understanding of the United States Environmental Protection Agency’s (USEPA)

preliminary guidance on Sections 182(c)(7) and (8) of the Clean Air Act. The current

proposal amends our rules to be consistent with USEPA’s more recent interpretation of the

“special rules” in its 1996 NSR rule proposal. 61 Fed. Reg. 38249 (July 23, 1996). The

proposed rules change the method of handling internal emission offsets, which may allow a

source to “net-out” of NSR rule requirements or at least avoid imposition of some Best

Available Control Technology and Lowest Achievable Emission Rate requirements. The

Agency asserts that these proposed rules also will impact some calculations under the proposed

Emissions Reduction Market System (ERMS). See In the Matter of: Emissions Reduction

Market System: 35 Ill. Adm. Code 205, R97-13. The ERMS program is an element of

Illinois’ “Rate of Progress” plan required by Section 182(c)(2)(B) of the Clean Air Act.

This proposal was filed pursuant to Section 28.5 of the Environmental Protection Act

(Act). 415 ILCS 5/28.5 (1996). Pursuant to that section, the Board is required to proceed

within set timeframes toward the adoption of the regulation. The Board has no discretion to

adjust these timeframes under any circumstances. Today the Board sends this proposal to first

notice under the Illinois Administrative Procedure Act (5 ILCS 100 (1996)) without

commenting on the merits of the proposal. The following schedule indicates the deadlines by

which the Board must act as provided in Section 28.5 of the Act (415 ILCS 5/28.5 (1996):

First Notice

on or before September 17, 1997

First Hearing

on or before October 27, 1997

Second Hearing

on or before November 26, 1997

Third Hearing

on or before December 10, 1997

Second Notice

(if 3rd hearing is canceled)

on or before January 10, 1997

(if 3rd hearing is held)

on or before January 30, 1997

Final Adoption of Filing

21 days after receipt of JCAR

certificate of no objection

The Board notes that the above dates are deadlines established by Section 28.5 of the

Act (415 ILCS 5/28.5 (1996)) and do not represent actual hearing dates or filing dates. While

the schedule includes a second and third hearing, these hearings may be canceled if

unnecessary. The Board will proceed in this matter as Section 28.5 of the Act (415 ILCS

5/28.5 (1996)) requires and as discussed in the Board’s resolutions regarding Section 28.5 of

the Act. See RES 92-2 (October 28, 1992, and December 3, 1992).

ORDER

The Board directs the Clerk to cause publication of the proposed amendments in the

Illinois Register

for first notice:

TITLE 35: ENVIRONMENTAL PROTECTION

SUBTITLE B: AIR POLLUTION

CHAPTER I: POLLUTION CONTROL BOARD

SUBCHAPTER a: PERMITS AND GENERAL PROVISIONS

PART 203

MAJOR STATIONARY SOURCES CONSTRUCTION AND MODIFICATION

SUBPART A: GENERAL PROVISIONS

Section

203.101

Definitions

203.103

Actual Construction

203.104

Actual Emissions

203.107

Allowable Emissions

203.110

Available Growth Margin

203.112

Building, Structure and Facility

203.113

Commence

203.116

Construction

203.117

Dispersion Enhancement Techniques

203.119

Emission Baseline

203.121

Emission Offset

203.122

Emissions Unit

203.123

Federally Enforceable

203.124

Fugitive Emissions

203.125

Installation

203.126

Lowest Achievable Emission Rate

203.127

Nonattainment Area

203.128

Potential to Emit

203.131

Reasonable Further Progress

203.134

Secondary Emissions

203.136

Stationary Source

203.145

Volatile Organic Material (Repealed)

203.150

Public Participation

203.155

Severability (Repealed)

SUBPART B: MAJOR STATIONARY SOURCES IN NONATTAINMENT AREAS

Section

203.201

Prohibition

203.202

Coordination With Permit Requirement and Application Pursuant to 35

Ill. Adm. Code 201

203.203

Construction Permit Requirement and Application

203.204

Duration of Construction Permit (Repealed)

203.205

Effect of Permits

203.206

Major Stationary Source

203.207

Major Modification of a Source

203.208

Net Emission Determination

203.209

Significant Emissions Determination

203.210

Relaxation of a Source-Specific Limitation

203.211

Permit Exemption Based on Fugitive Emissions

SUBPART C: REQUIREMENTS FOR MAJOR STATIONARY SOURCES IN

NONATTAINMENT AREAS

Section

203.301

Lowest Achievable Emission Rate

203.302

Maintenance of Reasonable Further Progress and Emission Offsets

203.303

Baseline and Emission Offsets Determination

203.304

Exemptions from Emissions Offset Requirement (Repealed)

203.305

Compliance by Existing Sources

203.306

Analysis of Alternatives

SUBPART F: OPERATION OF A MAJOR STATIONARY SOURCE OR MAJOR

MODIFICATION

Section

203.601

Lowest Achievable Emission Rate Compliance Requirement

203.602

Emission Offset Maintenance Requirement

203.603

Ambient Monitoring Requirement (Repealed)

SUBPART G: GENERAL MAINTENANCE OF EMISSION OFFSETS

Section

203.701

General Maintenance of Emission Offsets

SUBPART H: OFFSETS FOR EMISSION INCREASES FROM ROCKET ENGINES AND

MOTOR FIRING

Section

203.801

Offsetting by Alternative or Innovative Means

AUTHORITY: Implementing Section 9.1 and 10 and authorized by Section 27 and 28.5 of the

Environmental Protection Act (Ill. Rev. Stat. 1991, ch. 111 1/2, pars. 1009.1, 1010 and

1027) [415 ILCS 5/9.1, 10 27 and 28.5].

SOURCE: Adopted and codified at 7 Ill. Reg. 9344, effective July 22, 1983; codified at 7

Ill. Reg. 13588; amended in R85-20 at 12 Ill. Reg. 6118, effective March 22, 1988;

amended in R91-24 at 16 Ill. Reg. 13551, effective August 24, 1992; amended in R92-21 at

17 Ill. Reg. 6973, effective April 30, 1993; amended in R93-9 at 17 Ill. Reg. 16630,

effective September 27, 1993; amended in R93-26 at 18 Ill. Reg. 6335, effective April 15,

1994; amended in R98-10 at , effective

SUBPART B: MAJOR STATIONARY SOURCES IN NONATTAINMENT AREAS

Section 203.206 Major Stationary Source

a) For purposes of this Part, the term "major stationary source" shall exclusively mean

"building, structure and facility," as those terms are defined in Section 203.113 of

this Part.

b) The following constitute a major stationary source:

For an area designated as nonattainment for ozone, a major stationary

source is a stationary source which emits or has the potential to emit

volatile organic material in an amount equal to or greater than the

following:

100 tons per year in an area classified as marginal or moderate

nonattainment for ozone;

50 tons per year in an area classified as serious nonattainment for

ozone;

25 tons per year in an area classified as severe nonattainment for

ozone; and

10 tons per year in an area classified as extreme nonattainment

for ozone.

For an area designated as nonattainment for nitrogen dioxide, a major

stationary source is a stationary source which emits or has the potential

to emit 100 tons per year or more of nitrogen dioxide.

For an area designated as nonattainment for ozone, a major stationary

source is a stationary source which emits or has the potential to emit

nitrogen oxides in an amount equal to or greater than the following,

unless United States Environmental Protection Agency (USEPA) has

made a finding under Sections 110 and 182(f) of the Clean Air Act that

controlling of emissions of nitrogen oxides from such source shall not be

required:

100 tons per year in an area classified as marginal or moderate

nonattainment for ozone,

50 tons per year in an area classified as serious nonattainment for

ozone,

25 tons per year in an area classified as severe nonattainment for

ozone, and

10 tons per year in an area classified as extreme nonattainment

for ozone.

For an area designated nonattainment for PM-10, a major stationary

source is a stationary source which emits or has the potential to emit:

100 tons per year or more of PM-10 in an area classified as

moderate nonattainment area, or

70 tons per year or more of PM-10 in an area classified as

serious nonattainment.

For an area designated nonattainment for carbon monoxide, a major

stationary source is a stationary source which emits or has the potential

to emit:

100 tons per year or more of carbon monoxide in a nonattainment

area, except as provided in (B) below,

50 tons per year or more in an area classified as "serious"

nonattainment for carbon monoxide where stationary sources

significantly contribute to ambient carbon monoxide levels, as

determined under rules issued by USEPA, pursuant to the Clean

Air Act.

For an area designated nonattainment for a pollutant other than ozone,

nitrogen dioxide, PM-10 or carbon monoxide, a major stationary source

is a stationary source which emits or has the potential to emit 100 tons

per year or more of the pollutant.

Any physical change that occurs at a stationary source which does not qualify

under subsection (a) of this Section as a major stationary source will be

considered a major stationary source, if the change would constitute a major

stationary source by itself.

d) The reconstruction of a major stationary source will be treated as the

construction of a new major stationary source if the fixed capital cost of new

components exceeds approximately half of the fixed capital cost of an entirely

new stationary source. Determining whether reconstruction will occur is based

on the following:

1) Fixed capital cost shall mean the capital needed to provide all the

depreciable components;

2) The fixed capital cost for the replacements in comparison to the fixed

capital cost that would be required to construct a comparable entirely

new source;

3) The estimated life of the source after the replacements compared to the

life of a comparable entirely new source; and

4) The extent to which the components being replaced cause or contribute

to the emissions from the source.

e)d)

For purposes of this Part, in areas that are classified as serious, severe, or

extreme nonattainment, the fugitive emissions of a stationary source shall be

included in determining whether it is a major stationary source. In areas that

are not classified as serious, severe or extreme nonattainment, the fugitive

emissions of a stationary source shall not be included in determining whether it

is a major stationary source, unless the source belongs to one of the following

categories of stationary sources:

Coal cleaning plants (with thermal dryers);

Kraft pulp mills;

Portland cement plants;

Primary zinc smelters;

Iron and steel mills;

Primary aluminum ore reduction plants;

Primary copper smelters;

Municipal incinerators capable of charging more than 250 tons of refuse

per day;

Hydrofluoric, sulfuric, or nitric acid plants;

10)

Petroleum refineries;

11)

Lime plants;

12)

Phosphate rock processing plants;

13)

Coke oven batteries;

14)

Sulfer recovery plants;

15)

Carbon black plants (furnace process);

16)

Primary lead smelters;

17)

Fuel conversion plants;

18)

Sintering plants;

19)

Secondary metal production plants;

20)

Chemical process plants;

21)

Fossil-fuel boilers (or combination thereof) totaling more than 250

million Btu per hour heat input;

22)

Petroleum storage and transfer units with a total storage capacity

exceeding 300,000 barrels;

23)

Taconite ore processing plants;

24)

Glass fiber processing plants;

25)

Charcoal production plants;

26)

Fossil fuel-fired steam electric plants of more than 250 million Btu per

hour heat input;

27)

Any other stationary source categories regulated by a standard

promulgated under Section 111 or 112 of the Clean Air Act (42 U.S.C.

7411, 7412), but only with respect to those air pollutants that have been

regulated for that category;

28)

Any other stationary source category designated by the USEPA by rule.

(Source: Amended at 17 Ill. Reg. 6973, effective April 30, 1993; amended at

, effective )

Section 203.207 Major Modification of a Source

Except as provided in subsection (c), (d) or (f) below, a physical change, or

change in the method of operation of a major stationary source that would result

in a significant net emissions increase of any pollutant for which the area is

designated a nonattainment area, shall constitute a major modification of a

source.

Any net emissions increase that is significant for volatile organic material or

nitrogen oxides shall be considered significant for ozone.

A physical change or change in the method of operation shall not include:

Routine maintenance, and repair, and replacement which does not

constitute reconstruction pursuant to Section 203.206(c).

Use of an alternative fuel or raw material by reason of any order under

Sections 2(a) and (b) of the Energy Supply and Environmental

Coordination Act of 1974 (15 U.S.C. 791), the Power Plant and

Industrial Fuel Use Act of 1978 (42 U.S.C. 8301) (or any superseding

legislation) or by reason of a natural gas curtailment plan pursuant to the

Federal Power Act (16 U.S.C. 791, et seq.).

Use of an alternative fuel by reason of an order or rule under Section

125 of the Clean Air Act (42 U.S.C. 7425).

Use of an alternative fuel at a steam generating unit to the extent that the

fuel is generated from municipal solid waste.

Use of an alternative fuel or raw material by a stationary source which:

Was capable of accommodating such alternative fuel or raw

material before December 21, 1976, and which has continuously

remained capable of accommodating such fuels or materials

unless such change would be prohibited under any enforceable

permit condition established after December 21, 1976, pursuant

to 40 CFR 52.21, this Part, or 35 Ill. Adm. Code 201.142 or

201.143, or

Is approved for use under any permit issued pursuant to this Part

or 35 Ill. Adm. Code 201.142 or 201.143.

An increase in the hours of operation or in the production rate, unless

such change is prohibited under any enforceable permit condition which

was established after December 21, 1976 pursuant to 40 CFR 52.21, this

Part, or 35 Ill. Adm. Code 201.142 or 201.143.

Any change in ownership at a stationary source.

In areas classified as serious or severe nonattainment for ozone, beginning

November 15, 1992, or such later date that an area is classified by the United

States Environmental Protection Agency (USEPA) as a serious or severe

nonattainment area for ozone, any physical change or change in the method of

operation of a major stationary source which results in an increase in emissions

of 25 tons per year or more of volatile organic material or nitrogen oxides from

any discrete operation, unit, or other pollutant emitting activity at the source

shall be considered a major modification unless: In an area classified as serious

or severe nonattainment for ozone, increased emissions of volatile organic

material or nitrogen oxides resulting from any physical change in, or change in

the method of operation of, a stationary source located in the area shall be

considered de minimis for purposes of this Part if the increase in net emissions

of such air pollutant from such source does not exceed 25 tons when aggregated

with all other net increases in emissions from the source over any period of five

consecutive calendar years which includes the year in which such increase

occurred.

e) In the case of any major stationary source of volatile organic material or

nitrogen oxides located in an area classified as serious or severe nonattainment

for ozone (other than a source which emits or has the potential to emit 100 tons

or more or volatile organic material or nitrogen oxides per year), whenever any

change at that source results in any increase (other than a de minimis increase)

in emissions of volatile organic material or nitrogen oxides, respectively, from

any discrete operation, unit, or other pollutant emitting activity at the source,

such increase shall be considered a major modification for purposes of this Part,

except such increase shall not be considered a major modification for such

purposes if the owner or operator of the source elects to offset the increase by a

greater reduction in emissions of volatile organic material or nitrogen oxides,

respectively, from other operations, units, or activities within the source at an

internal offset ratio of at least 1.3 to 1.

1) The emissions and potential to emit emissions of such pollutant, i.e.,

volatile organic material or nitrogen oxides, are less than 100 tons per

year, and

2) The owner or operator of the source elects to offset the increase by a

greater reduction in emissions of such pollutant, i.e., volatile organic

material or nitrogen oxides, from other operations, units, or activities

within the source at an internal offset ratio of at least 1.3 to 1.

cf)

In areas classified as extreme nonattainment for ozone, beginning on the date

that an area is classified by USEPA as an extreme nonattainment area for ozone,

any physical change in or change in the method of operation of a major

stationary source which results in any increase in emissions of volatile organic

material or nitrogen oxides from a discrete operation, unit, or other pollutant

emitting activity shall be considered a major modification.

(Source: Amended at 17 Ill. Reg. 6973, effective April 30, 1993; amended at

, effective .)

SUBPART C: REQUIREMENTS FOR MAJOR STATIONARY SOURCES IN

NONATTAINMENT AREAS

Section 203.301 Lowest Achievable Emission Rate

For any source, lowest achievable emission rate (LAER) will be the more

stringent rate of emissions based on the following:

The most stringent emission limitation which is contained in the

implementation plan of any state for such class or category of stationary

source, unless it is demonstrated that such limitation is not achievable; or

The most stringent emission limitation which is achieved in practice by

such a class or category of stationary source. This limitation, when

applied to a modification, means the lowest achievable emissions rate for

the new or modified emissions units within the stationary source. In no

event shall the application of this term permit a proposed new or

modified stationary source to emit any pollutant in excess of the amount

allowable under an applicable new source performance standard adopted

by United States Environmental Protection Agency (USEPA) pursuant to

Section 111 of the Clean Air Act and made applicable in Illinois

pursuant to Section 9.1 of the Act.

The owner or operator of a new major stationary source shall demonstrate that

the control equipment and process measures applied to the source will produce

LAER.

The owner or operator of a major modification shall demonstrate that the

control equipment and process measures applied to the major modification will

produce LAER. This requirement applies to each emissions unit at which a net

increase in emissions of the pollutant has occurred or would occur as a result of

a physical change or change in the method of operation.

The owner or operator shall provide a detailed showing that the proposed

emission limitations constitute LAER. Such demonstration shall include:

A description of the manner in which the proposed emission limitation

was selected, including a detailed listing of information resources,

Alternative emission limitations, and

Such other reasonable information as the Agency may request as

necessary to determine whether the proposed emission limitation is

LAER.

e) In areas classified as serious or severe nonattainment for ozone, for

modifications which are major pursuant to the applicability provisions of Section

203.207(d) for volatile organic material and nitrogen oxide emissions, LAER

shall apply except as provided as follows:

1) In the case of a stationary source which does not emit or have the

potential to emit 100 tons per year or more of volatile organic material

or nitrogen oxides, a requirement for Best Available Control Technology

(BACT) as defined in Section 169 of the Clean Air Act (42 U.S.C.

7401 et seq.) substitutes for LAER. BACT shall be determined in

accordance with policies and procedures published by the USEPA.

2) In the case of a stationary source which emits or has the potential to emit

100 tons per year or more of volatile organic material or nitrogen

oxides, the requirements for LAER shall not apply if the owner or

operator of the source elects to offset the increase by a greater reduction

in emissions of such pollutant from other operations, units or activities

within the source at an internal offset ratio of at least 1.3 to 1.

e) If the owner or operator of a major source (other than a source which emits or

has the potential to emit 100 tons per year or more of volatile organic material

or nitrogen oxides) located in an area classified as serious or severe

nonattainment for ozone does not elect to provide internal offsets for a change at

the source in accordance with Section 203.207(d) of this Part, such change shall

be considered a major modification for purposes of this Part, but in applying

this Section in the case of any such modification, the Best Available Control

Technology (BACT), as defined in section 169 of the Clean Air Act, shall be

substituted for the Lowest Achievable Emission Rate (LAER). BACT shall be

determined in accordance with policies and procedures published by USEPA.

f) In the case of any major stationary source of volatile organic material or nitrogen

oxides located in an area classified as serious or severe nonattainment for ozone

which emits or has the potential to emit 100 tons per year or more of volatile

organic material or nitrogen oxides, respectively, whenever any change at that

source results in any increase (other than a de minimis increase) in emissions of

volatile organic material or nitrogen oxides, respectively, from any discrete

operation, unit, or other pollutant emitting activity at the source , such increase

shall be considered a major modification for purposes of this Part, except that if

the owner or operator elects to offset the increase by a greater reduction in

emissions of volatile organic material or nitrogen oxides, respectively, from

other operations, units or activities within the source at an internal offset ratio of

at least 1.3 to 1, the requirements of this Section concerning LAER shall not

apply.

(Source: Amended at 17 Ill. Reg. 6973, effective April 30, 1993; amended at

, effective )

IT IS SO ORDERED.

I, Dorothy M. Gunn, Clerk of the Illinois Pollution Control Board, hereby certify that

the above opinion and order was adopted on the 4

day of September 1997, by a vote of 7-0.

Dorothy M. Gunn, Clerk

Illinois Pollution Control Board