Startup Shutdown and Malfunction Rule Update September 7

Startup, Shutdown and Malfunction Rule Update September 7 -8 , 2016 Michael Pjetraj Department of Environmental Quality

Start-up, Shut-down, Malfunction (SSM) SIP Call • May 22, 2015 - U. S. Environmental Protection Agency (EPA) issued a final action (80 FR 43340) to ensure states have plans in place that are fully consistent with the Clean Air Act (CAA) and recent court decisions concerning start-up, shut-down and malfunction (SSM) emission limit exemptions • EPA’s action: • Responded to Sierra Club Petition • Clarified EPA’s SSM Policy to assure consistency with the Clean Air Act and recent court decisions • Finalized findings that the SSM provisions in the State Implementation Plans (SIPs) of 36 states do not meet the requirements of the CAA • Issued a “SIP call” for each of those states Department of Environmental Quality 2

Start-up, Shut-down, Malfunction (SSM) SIP Call • In SIP Call EPA directed affected states to correct specific SSM provisions in their SIPs • Clean Air Act allows states a maximum of 18 months from issuance of the SIP call final action to submit a SIP revision • SIP submission deadline for each of the 36 states subject to the SIP call action is November 22, 2016 Department of Environmental Quality 3

Start-up, Shut-down, Malfunction (SSM) SIP Call • In the February 2013 proposal, the Sierra Club objected to two generally applicable provisions in the North Carolina SIP that provide exemptions for emissions exceeding otherwise applicable SIP emission limitations at the discretion of the state agency: • during malfunctions (15 A NCAC 02 D. 0535(c)); and • during start-up and shut-down (15 A NCAC 02 D. 0535(g)) Department of Environmental Quality 4

Start-up, Shut-down, Malfunction (SSM) SIP Call • EPA proposed to, and subsequently did, grant the Petition with respect to 15 A NCAC 02 D. 0535(c) and (g) • Finding: 15 A NCAC 02 D. 0535(c) and 15 A NCAC 02 D. 0535(g) are substantially inadequate to meet CAA requirements • Consistent with February 2013 proposal, EPA proceeded to issue a SIP call with respect to these provisions May 22, 2015 Department of Environmental Quality 5

Start-up, Shut-down, Malfunction (SSM) SIP Call • Note: NC disagreed with SIP Call • NC commented on 2013 proposal that EPA has not demonstrated NC SIP is inadequate to attain or maintain the NAAQS, did not read the rule in context of other provisions of the rules that help provide assurances that air quality and emissions standards will be achieved, and did not take into consideration the factors in 02 D. 0535(c) that the Director must consider in determining if excess emissions are the result of a malfunction • Several states, including NC, entered into litigation on validity of the SSM SIP Call • Obligation to submit a SIP revision remains in effect Department of Environmental Quality 6

Start-up, Shut-down, Malfunction (SSM) SIP Call • NC Proposed Rule Amendments • edit the existing 15 A NCAC 02 D. 0535 to add an “If then” applicability statement and • add a new rule 15 A NCAC 02 D. 0545 Department of Environmental Quality 7

Start-up, Shut-down, Malfunction (SSM) SIP Call • New 15 A NCAC 02 D. 0535 applicability: • 15 A NCAC 02 D. 0535 is not in effect if 15 A NCAC 02 D. 0545 is valid. In the event that US EPA’s SSM SIP call is declared invalid, unconstitutional, stayed, withdrawn, repealed, revoked or otherwise rendered of no force and effect, Rule 15 A NCAC 02 D. 0545 of this Subchapter shall be invalid, void, stayed, or otherwise without force. Department of Environmental Quality 8

Start-up, Shut-down, Malfunction (SSM) SIP Call • Proposed new rule: • 15 A NCAC 02 D. 0545, TREATMENT OF MALFUNCTION EVENTS AND WORK PRACTICES FOR START-UP AND SHUT-DOWN OPERATIONS Department of Environmental Quality 9

Start-up, Shut-down, Malfunction (SSM) SIP Call • 15 A NCAC 02 D. 0545 has a similar “if-then” statement so that. 0545 will not be in effect if the SIP call is invalidated. • 02 D. 0545 addresses Start-up, Shut-down and Malfunction events and defines how a facility can comply during those time periods. Department of Environmental Quality 10

Start-up, Shut-down, Malfunction (SSM) SIP Call • For Start-up and Shut-down periods, facilities can comply with: 1. Existing numeric emission limits 2. Generally available work practice standards 3. Federal work practice standards applicable to similar equipment 4. Source specific start-up and shut-down work practice standard permit limit Department of Environmental Quality 11

Start-up, Shut-down, Malfunction (SSM) SIP Call • For Malfunction periods, facilities can comply with: 1. Existing numeric emission limits 2. Source specific malfunction work practice standard permit limit Department of Environmental Quality 12

Start-up, Shut-down, Malfunction (SSM) SIP Call • Since the facility will have the ability to comply with work practice standards, the facility will be subject to a standard at all times. • Reporting will continue to be required for excess emissions associated with malfunctions. Department of Environmental Quality 13

Start-up, Shut-down, Malfunction (SSM) SIP Call • Amendments to 02 D. 0535 & Adoption of 02 D. 0545 – Startup, Shutdown and Malfunction State Implementation Plan Call • March 9, 2016 – Air Quality Committee (Air Quality Committee) Draft Rules • May 12, 2016 – Environmental Management Commission (EMC) Approval to Proceed to Hearing • July 18, 2016 – Hearing in Raleigh • July 20, 2016 – Hearing in Charlotte • August 1, 2016 – Public Comment Closed • September 8, 2016 - EMC Hearing Officers’ Report • November 1, 2016 – Earliest Effective Date • November 22, 2016 – SIP Submittal due • May 22, 2018 – Recommended Effective Date Department of Environmental Quality 14

Start-up, Shut-down, Malfunction (SSM) SIP Call • Comments • 1781 total comments received • EPA • Environmental Groups • Regulated Community • Majority template type (1773) - generally expressed concern regarding health and environmental impacts and requested stronger rules including control of emissions during SSM periods • A few nontemplate: • Urge rules more specifically limit allowable emissions exceedances and require more prompt reporting, better monitoring; concerns regarding toxics, dioxins and mercury impacts to environment, food chain, and public health • Suggested strengthen by requiring detailed processes be put in place for monitoring, limiting emissions; require permittee notify DEQ of excess emissions that could endanger public health within 1 hour of awareness of event; require permittee cease operations within 48 hours of start of malfunction if exceedance unresolved; require development of plan for communication to local health departments and community of emissions exceedances that threaten sensitive populations; require facility to submit summary of complaints related to air quality received over year; require malfunction abatement plan for all sources; require third party review of work practices for adequacy Department of Environmental Quality 15

Start-up, Shut-down, Malfunction (SSM) SIP Call • EPA comments • Clarification may be needed regarding impact of automatic rescission clause on SIP • Desire for clarification that Director’s consideration of listed factors in determining enforcement response to excess emissions from malfunctions doesn’t limit EPA or citizens’ right to pursue enforcement action • Concern that source specific work practice standard permit limits need to be incorporated into the SIP through the SIP revision process Department of Environmental Quality 16

Start-up, Shut-down, Malfunction (SSM) SIP Call • Environmental Community Comments • Language in. 0535(a) and. 0545(a) avoids the EMC review process • 02 D. 0545 fails to implement strong policies to hold facilities accountable for excess emissions and allows to avoid enforcement • Concern about opportunity for the environmental justice community to be heard through the public hearing and comment process • 02 D. 0545 leaves Director a level of discretion in determining whether emissions are avoidable that group is uncomfortable with Department of Environmental Quality 17

Start-up, Shut-down, Malfunction (SSM) SIP Call • Regulated Community Comments • Clarify applicability to sources subject to New Source Performance Standards (NSPS) and Maximum Achievable Control Technology(MACT), rescission clause, and effective date of rule such that its not effective until EPA approves the rules • Work practice standards should not apply when source is achieving all otherwise applicable SIP emission limits • Increase the flexibility for development and approval of source specific malfunction work practice standard • Revise generally available work practices to better reflect operational limitations of SCRs and authorize startup on clean fuels • Revise. 0545(i) to avoid confusion regarding violations Department of Environmental Quality 18

Start-up, Shut-down, Malfunction (SSM) SIP Call • Overall Response • Applicability language not to preclude sources from pursuing a plan but to avoid imposing duplicative or conflicting SSM requirements for sources covered under other CAA authorities • Rule language doesn’t restrict EPA or citizens’ ability to pursue enforcement action which emanates from Clean Air Act; rule sets out what State considers in determining appropriate enforcement response • Site specific work practice standards permit limits meet requirements of CAA Section 302(k); provide option for facilities to actively address excess emissions resulting from SSM; provide continuous emissions reductions during such periods; disagree site specific work practice permit limits need to be incorporated into SIP since NC permits are practically and legally enforceable • Rescission language properly noticed; changes needed as a result of outcome of litigation will go through rulemaking process with opportunity for public comment • Revised. 0545(i) to avoid confusion by eliminating unnecessary sentences regarding violations • Effective date of May 22, 2018 recommended Department of Environmental Quality 19

Thank you Questions? Michael Pjetraj Stationary Source Compliance Branch Supervisor NC Division of Air Quality 919 -707 -8 Michael. Pjetraj@ncdenr. gov Department of Environmental Quality 20