U.S. EPA “Clarifies” its NSR Aggregation Policy
By Jennifer Thompson, Attorney, Bingham Greenebaum Doll LLP
On September 14, 2006 (71 Fed. Reg. 54235) the United States Environmental Protection Agency (“U.S. EPA”) proposed three improvements to its New Source Review (“NSR”) permitting program. The proposed changes were to address debottlenecking, project netting, and aggregation. However, U.S. EPA has decided not to move forward as proposed in 2006.
U.S. EPA published notice in the January 15, 2009 Federal Register that it is: (1) withdrawing its proposed rule revisions regarding debottlenecking (74 Fed. Reg. 2460); (2) not taking action on the project netting proposal “at this time” and fully disclaims the project netting text of the 2006 proposal as U.S. EPA’s interpretation of the current rules; and (3) taking final action on NSR aggregation without promulgating the proposed rule or changing anything in the existing rule. 74 Fed. Reg. 2376
To better explain its NSR aggregation policy and to ease implementation of the current rule, U.S. EPA moved forward with its final action on the aggregation portion of the above-referenced proposed rulemaking without revising the current text of the regulation. The interpretative text is intended to provide interpretative guidance, which up until now did not exist in a single document.
Despite being guidance, the new interpretative text for when emissions at a source should be aggregated into a single project for purposes of determining NSR applicability is to be applied prospectively from the effective date of the notice. The original effective date of February 17, 2009 has been stayed by U.S. EPA until May 18, 2009 while it reviews a petition for reconsideration filed by the Natural Resources Defense Council. Generally, the text provides a discussion of the following guidance:
- Activities should be aggregated when they are substantially related:
- when a technical or economic interconnection exists between the physical and/or operational changes; or
- a complimentary relationship exists (benefits of an otherwise independent activity is significantly reduced without the other activity).
- The timing of activities in and of themselves is not determinative in a decision to aggregate activities.
- A time-based rebuttable presumption for nonaggregation exists if a previous physical or operational change has operated for three or more years.
Despite moving forward with the final action on NSR aggregation, U.S. EPA adds that the interpretative text is unlikely to lead to appreciably different outcomes. Thus the final action differs significantly from the bright line criteria originally proposed which was intended to eliminate the need for case-by-case aggregation determinations and provide more certainty and efficiency in regulatory decisions.