Netting - MARAMA€¦ · NNSR or PSD after step 1? NO! For applicability purposes it may not make a difference ... at‐hand. Step 2 ... PSD (40 TPY) as well as NNSR (25 TPY) a netting

Netting

What we’ve learned so far… In order to trigger NSR:

Pollutant must be subject to regulation* Facility is major** Significant increase (step 1) Significant NET emissions increase (step 2)

All 4 criteria must be met to trigger NSR

*Important for GHGs!**unless modification itself is major

What we’ve learned so far…

What constitutes a modification?

Red Flags: Doing something the facility previously physically or legally absent the change.

Picking up a wrench, hammer, etc. and using it on a unit.


Defining the project Where to “draw the box”


Maryland Delaware Calculating BAE

5/10 year lookback period Average of consecutive 24‐

month period Projected Actual Emissions

“could have accommodated” Step 1 Increase = PTE or PAE ‐

BAE

Calculating “Actual Emissions” Must use 24‐months

immediately preceding the project (can go back 5 years if more representative)

Step 1 Increase = PTE –Actual Emissions

NSR Step 1 – INCREASES ONLY


Step 1 Increase…if it’s less than the significance level,

you’re done.

…if it’s greater than the significance level,on to Step 2.

Step 2

What is Step 2? Takes into account emissions increases and decreases from projects at a facility over a defined period of time.

Goal is to calculate the “net emissions increase.”

Net emissions Increase = Step 1 Increase + Contemporaneous Increases and Decreases

Question:Can a facility choose not to go to step 2 if they trigger NNSR or PSD after step 1?

NO! For applicability purposes it may not make a difference, but NNSR emissions offset requirements and PSD modeling requirements need the NETemissions increase, not just the increase of the project‐at‐hand.

Step 2 A facility must account for all increases or decreases that:

have occurred within the “contemporaneous time period.”

are creditable, as defined in §52.21 and §51.165 as well as analogous state regs.

Contemporaneous Time PeriodThe date starting 5 yrs before construction commences on project at hand and ending the date the increase from the change occurs. Your state regs may differ! MD and DE…What do your state regs say?

Contemporaneous Period

Com

men

ce

Ope

ration

Com

men

ce

Con

stru

ction

2000

2001

2002

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

1999

5 years

STEP 1

STEP 2Contemporaneous Period

Contemporaneous Increases and Decreases

Increases Creditable If: Decreases Creditable If: Not relied on in issuing previous

NNSR/PSD permit (“clean slate” after permit is issued)

New level of emissions exceeds old level

Not relied on in issuing previous NNSR/PSD permit (“clean slate” after permit is issued)

Old level of emissions exceeds new level of emissions

Enforceable as a practical matter (i.e. PTE limits)

It has approximately the same qualitative significance for public health and welfare as the particular change

“Relied On”

“An increase or decrease in…emissions is creditable only if the Administrator or other reviewing authority has not relied on it in issuing a permit for the source under this section…”

This means that a major PSD or NNSR permit was issued.

“Relied on” Explanation

Project A Project B Project FProject C Project D Project E

TriggeredPSD permitfor CO

FutureContemporaneous Time Period

These are not creditable increases/decreases…FOR CO

They ARE creditable increases/decreases for other pollutants (e.g. NOx, SO2, PM…)

How to Calculate Step 2 Increases and Decreases

The first step in calculating the increase/decrease from a contemporaneous project is to calculate baseline actual emissions (or “actual emissions” for Delaware)…


Determining BAE or “actual emissions” for contemporaneous projects is the same as for the project‐at‐hand in step 1. Existing unit:

MD ‐ consecutive 24‐month average during previous 5/10yrs DE – 24‐months immediately before the contemporaneous

increase/decrease (can go back 5 years if more representative) New unit: BAE or “Actual Emissions” = 0

BUT… “Existing” and “New” mean at the time of the contemporaneous increase/decrease.

This means that an “existing unit” today could be a “new unit” during the contemporaneous time period.

Every project will have its own individual baseline period in time

Contemporaneous Period[5‐year period]

Future

Explanation of Baselines in Netting:Same Pollutant

Project A

Project B

Unit 4Shutdown

Unit 3Modification

Project C

Unit 5Modification

“project‐at‐hand”

Unit 1Modification

Unit 2Shutdown

“contemporaneous projects”


Future


Project A

Project B

Unit 4Shutdown

Unit 3Modification

Project C

Unit 5Modification

Unit 1Modification

Unit 2Shutdown

Baseline period

Baseline period

Baseline period


After BAE (Maryland) or “actual emissions” (Delaware) is calculated for the contemporaneous increase or decrease, it is then compared to the “post‐change” PTE of the unit to calculate the increase/decrease

= “post‐change” PTE – BAE (MD)

or

“post‐change” PTE – Actuals (DE)

“Double Counting”What happens if a unit is part of more than one project in the contemporaneous time period?


Future

“Double Counting”

Project A

Project B

Unit 4Shutdown

Unit 3Modification

Project C

Unit 3Modification

Unit 1Modification

Unit 2Shutdown

Unit 3 is part of 2 projects

“Double Counting”What happens if a unit is part of more than one project in the contemporaneous time period?

It is treated the same way as any other contemporaneous increase/decrease, using “post change” PTE – BAE (“Actuals” for Delaware) for each modification to calculate the increase or decrease, so there is “double counting.”

Projected Actual Emissions Are NOT part of Step 2

Maryland only:PAE can only be used to calculate the significant emissions increase (step 1), notcontemporaneous increases/decreases.

Delaware:You can never use PAE. This is not a problem, so ignore the next 4 slides.


ProjectB

ProjectC

ProjectA

Future

PAE in Step 1, not Step 2


ProjectB

Future

PAE in Step 1, not Step 2

At time of the project, applicability analysis was done and facility used PAE, PSD/NNSR was not triggered


ProjectB

ProjectC

ProjectA

Future

PAE in Step 1, not Step 2 ExampleAt the time of Unit A’s modification,the contemporaneous increase fromProject B is calculated using PTE, NOT the PAE used in the original analysis.

Contemporaneous Increases and Decreases:Maryland

For increases and decreases: = (“post‐change” PTE) – BAE(increases are +, decreases are ‐)

For New Units: = PTE

For Shutdown Units:“Post‐change” PTE = 0,

= BAE

General equation: = PTE ‐ BAE

Contemporaneous Increases and Decreases:Delaware

For increases and decreases: = (“post‐change” PTE) –

“actual emissions”(increases are +, decreases are ‐)

For New Units:“actual emissions”

= PTE

For Shutdown Units:“Post‐change” PTE = 0, = “actual emissions”

General equation: = PTE – “actual emissions”

Final Applicability Steps

Increase from the Project‐At‐Hand(Step 1)

+Sum of Contemporaneous Increases and Decreases

=Net Emissions Increase

Final Applicability Steps

If the net emissions increase is equal to or greater than significance thresholds, NSR has been triggered.

A facility in the 250 TPY source category is located in a severe ozone nonattainment area and has a NOx PTE of 300 TPY. The facility is proposing to modify Unit 1 and shut down Unit 2.

In the last 5 years the facility has modified Unit 3 and shut down Unit 4 (two separate projects) via minor‐NSR permits/permit modifications.

The facility submits emissions information for the project‐at‐hand and the previous modifications at the facility(Be CAREFUL! Some of the information submitted by the company is irrelevant or has no meaning!):

Netting Example

NOx TPY Emissions Info:BAE/Actuals

“Post‐change”PTE PAE

Unit 1 45 120 100

BAE/Actuals“Pre‐change”

PTE

Unit 2 20 55

“Pre‐Change”BAE/Actuals

“Post‐Change”BAE/Actuals

“Pre‐Change” PTE

“Post‐Change”PTE

PAE from PSD analysis of minor NSR

permit permit

Unit 3 30 45 55 75 65

BAE/ActualsPre‐change

PTE

Unit 4 50 95

With respect to only NOx/NO2 emissions, will the proposed project be subject to NNSR or PSD?

Severe non‐attainment thresholds: Major Source: 25 TPY Significance Threshold: 25 TPYPSD Significance Threshold: 40 TPY

Netting Example


Unit 3Modification

Unit 4Shutdown

Unit 1Modification

Unit 2Shut Down

Future



Unit 3Modification

Unit 4Shutdown

Unit 1Modification

Unit 2Shut Down

Future


The Project

ContemporaneousProjects


Unit 3Modification

Unit 4Shutdown

Unit 1Modification

Unit 2Shut Down

Baseline period (24 month)5/10year lookback

Future

Netting Example



The Project

Maryland Answer

Unit 1:Existing Unit, modification = (PTE or PAE) – BAE= 100 TPY – 45 TPY

= 55 TPY

Unit 2:Existing Unit, Shut Down

DECREASE, NOT PART OF STEP 1

Step 1: Increase from the Project‐At‐Hand

Since the increase from the project‐at‐hand (55 TPY) isgreater than the significance threshold for

PSD (40 TPY) as well as NNSR (25 TPY) a netting analysis must be performed for both PSD and NNSR

applicability.



= BAE= 20 TPY

Step 2: Netting

Unit 3:Existing Unit (at time of modification), Modified

= post‐change PTE ‐ BAE= 75 – 30= 45 TPY

Step 2: Netting


= BAE= 50 TPY

Step 2: Netting

Project at Hand 55

Shutdown of Unit 2 ‐20

Modification of Unit 3 45


Step 2: Netting

Project at Hand 55




Net Total 30

Step 2: Netting

PSD (NO2) NNSR (NOx)

Major Source?

Significant Increase?(Step 1)

Significant Net Increase?(Step 2)

Yes, PTE > 250 TPY for any pollutant subject to regulation

Yes, > 40 TPY

Yes, > 25 TPY

Yes, > 25 TPY

No, < 40 TPY

Yes, NOx PTE > 25 TPY

Summary Slide

The facility triggered NNSR for NOx but not PSD for NO2

Delaware Answer

Unit 1:Existing Unit, modification = PTE – Actual Emissions

= 120 TPY – 45 TPY= 75 TPY


DECREASE, NOT PART OF STEP 1


Since the increase from the project‐at‐hand (75 TPY) isgreater than the significance threshold for

PSD (40 TPY) as well as NNSR (25 TPY) a netting analysis must be performed for both PSD and NNSR

applicability.


Unit 2:Existing Unit, Shut Down = Actual Emissions

= ‐20 TPY

Step 2: Netting

Unit 3:Existing Unit (at time of modification), Modified

= post‐change PTE – Actual Emissions= 75 – 30= 45 TPY

Step 2: Netting

Unit 4:Existing Unit, Shut Down = Actual Emissions

= ‐50 TPY

Step 2: Netting

Project at Hand 75




Step 2: Netting

Project at Hand 75




Net Total 50

Step 2: Netting

PSD (NOx) NNSR (NO2)

Major Source?

Significant Increase?(Step 1)

Significant Net Increase?(Step 2)

Yes, PTE > 250 TPY for any pollutant subject to regulation

Yes, > 40 TPY

Yes, > 25 TPY

Yes, > 25 TPY

Yes, > 40 TPY

Yes, NOx PTE > 25 TPY

Summary Slide

The facility triggered NNSR for NOx and PSD for NO2

Delaware Don’t forget…you would also have to do an analysis on the unit(s) being modified based on the definition of the “dual source” definition for NNSR applicability.

56

What Happens Once Subject to PSD?

4/2/2012 U.S. Environmental Protection Agency 56

• Best Available Control Technology (BACT)• Ambient Air Quality Impact Analysis (modeling)

• NAAQS• PSD increments• Class I impacts

• Potential Ambient Monitoring• Meteorological• Pollutant

• Other Impacts• Growth Analysis • Visibility Impacts• Class I Air Quality Related Values (AQRVs)

57

What Happens Once Subject to NNSR?

4/2/2012 U.S. Environmental Protection Agency 57

• Lowest Achievable Emissions Rate(LAER)

• Emissions Offsets

• Alternative Site Analysis

• All other facilities in the state owned by company must be in compliance

NSR:Common Mistakes

Using Projected Actual Emissions (PAE) for contemporaneous increases (step 2)

Using PTE to PTE test in step 1 or 2 A decrease in PTE is NEVER considered justification for why NSR is not applicable

Stating PTE is the same as “could have accommodated”

NSR:Common Mistakes (cont’d)

Failure to “double count” for units that were installed/modified more than once in the contemporaneous time period

“Emissions caps” are NOT “mini‐PALs” PALs must be done on a PLANT‐WIDE BASIS

Emissions CapsGrouping similar emissions units together under a PTE

limit is allowed for compliance purposes

HOWEVER…

…The emissions cap does not allow the facility to make modifications as long as they stay under the cap. The facility must still follow traditional NSR rules, and in

some instances this could have undesirableconsequences for the facility.

Emissions Caps CAN be used for: Generating emissions decreases Compliance purposes

CANNOT be used for: “mini‐PALs”Making changes w/o an applicability determination

Emissions CapsExample

A facility has three existing boilers, operating under a 50 TPY emissions cap, which was previously taken for generating a creditable emissions decrease. For PSD purposes, they are all considered one emissions unit.


Going forward, a modification on one boiler means a modification to ALL THREE BOILERS, BAE and the post‐change PTE/PAE for the project would be evaluated based on ALL THREE BOILERS.


If NNSR or PSD was triggered, LAER or BACT would have to be installed on all three boilers.

If the facility ever wanted to relax the cap, 40 CFR 52.21(r)(4) or 51.165(a)(5)(ii)and analogous state regsapply.


40 CFR 52.21(r)(4) (similar wording in 51.165(a)(5)(ii)):If a particular source or modification becomes a major facility or major modification solely by virtue of a relaxation in an enforcement limitation which was established after August 7, 1980, on the capacity of the source or modification to emit a pollutant including a restriction on hours of operation, the requirements of this subchapter also apply to the source or modification as though construction had not yet commenced on the source or modification.

Emissions CapsBoilerplate Language Used in Pennsylvania:

“The emissions cap on Boilers 1, 2 and 3, is a compliance cap, imposed for the limited purpose of generating contemporaneous decreases for netting related to the installation of the turbine. This cap does not provide any relief from obtaining a plan

approval for any future physical change or change in the method of operation of any of the boilers, or the addition or modification of any steam‐consuming process(es) at the facility. The latter is

true even if the company does not request a change in the compliance cap. Furthermore, by accepting this cap and agreeing to consider the three boilers as one emissions unit for NSR/PSD purposes, any future applicability determinations must involve all three boilers, e.g. should major NSR/PSD be triggered for any

one boiler or process change, BACT/LAER is required for all three boilers. If the company finds it necessary to relax the cap

at some future date, the source obligation requirements of 127.203(e)(2) and 40 CFR 52.21(r)(4) apply.”

Questions?

Netting - MARAMA€¦ · NNSR or PSD after step 1? NO! For applicability purposes it may not make a difference ... at‐hand. Step 2 ... PSD (40 TPY) as well as NNSR (25 TPY) a netting

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