V. Stationary Source Regulation in California|
A. Additional Planning Requirements in California
As a result of delays until 1990 in updating the federal Clean Air Act, the California legislature passed legislation to put a more stringent air quality planning program into effect with the California Clean Air Act of 1988 (CCAA). The CCAA required compliance with state ambient air quality standards. The stringency of planning and emission control requirements varied with extent to which a standard is violated. In addition, the SCM process was generally replaced by a process which generates measures incorporating best available retrofit control technologies (BARCT). BARCT is a state version of RACT, although it has a stringency more akin to BACT as defined by the federal Clean Air Act.1 BARCT is required under certain conditions in California districts having moderate, serious, severe, or extreme air pollution as defined by Section 40921.5, Chapter 10, Part 1, Division 26 of the Health and Safety Code. The CCAA provided for BARCT along with other requirements, such as: reasonably available transportation control measures, provisions for no net increase of precursor or direct emissions of nonattainment pollutants from new or modified sources, measures promoting the use of low emission vehicles, and provisions for programs addressing area-wide and indirect sources. The additional planning requirements imposed by the CCAA were to be addressed in local air quality plans which were separate from the nonattainment area plans required by the federal Clean Air Act.2
B. Structure of the California Regulatory System
Normally, states have the direct responsibility to meet requirements of the federal Clean Air Act and corresponding federal regulations. As stated earlier, however, California is different. As authorized by Division 26 of the California Health and Safety Code, the state (i.e., CARB) is directly responsible for regulating mobile source emissions. State law provides for delegation of permitting activities to the local and regional districts which meet certain state requirements found in Division 26 of the California Health and Safety Code. All California districts have taken advantage of the opportunity to conduct their own permitting program, at least for general permitting authority and NSR. The state still has oversight authority to monitor the performance of district programs and can even assume authority to conduct district functions if the district fails to meet certain responsibilities.
District permit programs for stationary sources are conditionally authorized by Section 42300 of the California Health and Safety Code. Regulations which just follow Section 42300 provide the minimum standards and constraints of any district permit program. Each district has its own set of regulations consistent with state requirements that will govern the siting process. These regulations govern both the siting of new stationary sources as well as the modification of existing stationary sources. Where applicable, district permit programs incorporate federal PSD, NSR, and Title V permit program requirements.
With regard to permitting sources of PSD pollutants, many California districts have neither adopted a PSD rule nor received delegation from the federal government for the PSD program. The only California districts which have authority to issue PSD permits are:
Where districts have not received authority to issue PSD permits, the program is administrated by the U.S. EPA. Federal permitting requirements are contained in the Code of Federal Regulations and enforced by the federal government.
In addition to district permitting, there are a few other programs that directly affect the siting of stationary sources in California. The California Environmental Quality Act (CEQA) of 1970 requires the review of projects to determine whether they will have a significant effect on the environment.3 If there is a significant effect, an environmental impact evaluation may be required before any environmental permits can be issued. In addition, electric power projects over 50 MWe in size may have to undergo a process that incorporates the environmental impact review of CEQA with the district permitting process. However, in this case, the two processes are rolled into a larger process of getting a license to build and operate from the California Energy Commission (CEC). Both CEQA and CEC requirements are discussed later in more detail.
C. Typical Requirements of a District Permit Program
In the siting of a new source or modification of an existing source, a project will have to meet several types of district requirements. All sources operating in a district will have to meet any applicable prohibitory rules. These rules can apply on a general basis or by specific type of source.4 Sources will also have to comply with a nuisance rule which provides general authority to the district to control the discharge of any air contaminants that will cause injury, detriment, nuisance, endangerment, discomfort, annoyance, or which have a natural tendency to cause damage to business or property. Finally, there are requirements which will constrain the design and operation of a new source which is not specifically exempt from district permit requirements. Except where a source is exempt from permit, the proponent of a new or modified source will normally have to demonstrate compliance with all three sets of the above requirements in any application submitted to the district.
District permitting rules are structured to require pollutant-emitting sources to obtain both permits to begin construction and permits to begin more permanent online operation, unless they are specifically exempted. These permits are usually referred to as authorities to construct and permits to operate, respectively. Unlike federal permits, most California permits are issued for each nonexempt, pollutant emitting process or individual piece of equipment (for purposes of brevity, these entities are referred to as units, permit units, or emissions units5) found within a facility. As a result, any modification or addition of equipment at a facility does not usually affect the permitted operation of unmodified units. However, some requirements, such as control technology and emission offset requirements, may apply facility-wide, or at least over the aggregate of new and modified units at the facility.6
Most federal major-source siting requirements are incorporated into district rules. Within the context of a permitting action, federal permitting requirements for major sources will be triggered by the proposed emission level or projected air-quality impacts of the project. Many district requirements, both siting requirements and prohibitory rules, are triggered by emission levels of the project, or in the case of a modification, by the net change in emissions.7 If the source exceeds emission thresholds for triggering control technology and mitigation requirements for air quality impacts, the application needs to demonstrate that the project meets such requirements. If the application does not appropriately address applicable requirements, the district may reject the permit application for not being complete.
In California, most district siting rules require evaluation of the air quality impact of a project to be based on proposed emissions of the project. Rarely will district source siting rules determine siting requirements using projections of air quality impacts generated by air quality models. Usually, air quality analyzes are only required when emission offsets are not provided, and even then the required analyzes are limited to primary pollutants or secondary pollutants that can be estimated without the aid of any complex photochemistry. In most cases only NSR requirements are imposed by California districts since PSD requirements are mostly enforced by the U.S. EPA. As a result, air quality modeling is mostly used to demonstrate that the project does not create a new violation of a state or federal ambient air quality standard, or exacerbate an existing one. If there are projected new violations of standards or, in some cases, PSD increments, that may not be approved, unless acceptable mitigation measures are provided as part of the application. The project is assumed to meet the net air quality benefit requirement if it complies with all district emission offset requirements.8 The emission threshold level at which offsets are required varies by district and is in accordance with minimum requirements of the California Clean Air Act, as will be addressed later in this text.
In addition to an authority to construct, sources not exempt from permit have to get an operating permit. Beginning in the early 1970s, California districts already had required permits for both the construction and operational phase of any non-exempt new or modified emissions unit. A permit to operate was obtained after fulfilling all requirements and obligations stated in the authority to construct. A federal operating permit program was not authorized until the addition of Title V in the 1990 federal Clean Air Act Amendments. Following the implementation of Title V, there are new federal operating permit requirements enacted at the district level. Now major sources and, in some cases minor sources, will need Title V operating permits. Minor sources not subject to Title V requirements will still be required to comply with current local permit program requirements, if they are not specifically exempt.
Conditions on authorities to construct often include demonstration of compliance via a source test prior to continuous on-line operation. Such tests would be required after a reasonable amount of time for "shakedown." In many districts, the source may use the authority to construct as a temporary operating permit during the shakedown phase of new equipment operation. A significant modification under Title V is required to revise both the authority to construct and Title V permit before shakedown can begin. The addition of Title V requirements makes the permitting process more complex for major sources.
Table 7 provides a matrix of California stationary source and permitting requirements as a function of source status (i.e., exempt, nonexempt, minor, and major) and designation status of the air quality jurisdiction with respect to any given criteria pollutant. (You may want to contrast this with federal requirements given in Table 6.) Unlike requirements for getting a permit, PSD and NSR requirements for any given criteria pollutant emitted by a source will vary depending on the level of emissions and the area designation for the pollutant, i.e., whether it is attainment, nonattainment, or unclassified. As a result, a given permitted source being sited or modified could trigger PSD requirements for the attainment pollutants it emits and NSR requirements for nonattainment pollutants it emits.9 If the district has received authority from the U.S. EPA to issue PSD permits, only one preconstruction permit will be required for any given unit being sited or undergoing modification. If the district does not have authority to issue PSD permits, the applicant will have to obtain an authority to construct issued by the district that will cover all pollutants in addition to a PSD permit for any pollutants triggering PSD review. The PSD permit will be issued by the U.S. EPA. This latter permit will only cover PSD requirements. Note, however, that most districts will issue authorities to construct for each new or modified unit in the project. The U.S. EPA, on the other hand, will issue one permit for the whole facility.
Within the context of the federal program, NSR regulates only criteria pollutants. Similarly with PSD, except there are several "noncriteria pollutants" that are also regulated under the program. The Title V program addresses both HAPs and criteria air pollutants. Previously, the federal program did not have a "new source review" program for HAPs until the 1990 addition of Section 112(g) to the federal Clean Air Act. The recently promulgated federal regulations to implement Section 112(g) will now require districts to adopt and implement programs which require MACT for major constructing and reconstructing sources of HAPs. Until then, most California districts include toxic air contaminant10 review coincident with permit review of criteria pollutants. It is apparent that Section 42301(b) of the California Health and Safety Code requires district permit systems to site a source so that it is in compliance with all district and state air quality regulations. Since every district has a nuisance rule, a district can claim authority to regulate toxic air contaminants in any district permitting action.
D. Contrasts Between the Federal and California Approaches
The differences between federal and California stationary source regulation are summarized in Table 8. Principal among these differences, federal regulations are structured to regulate sources on a facility-wide11 basis, with one permit issued on a per facility basis. Most California districts issue permits at the emissions unit level. A new facility and changes or additions to an existing facility requiring the issuance of one or more new permit is evaluated as a project12 and the cumulative impact of several units composing a project may trigger additional requirements beyond those triggered by any individual unit.13 Also worth noting are the differences in operating permit programs. Prior to Title V requirements of the 1990 federal Clean Air Act Amendments, the federal program had only required the issuance of a preconstruction permit. Finally, federal construction permitting requirements address major new sources and major modifications (i.e., at a facility- wide level).(14)
Secondly, California siting requirements address minor as well as major stationary sources. However, certain emissions units are exempt from requirements for a permit. In addition, a unit may be required to get a permit and still not be subject to NSR or even Title V requirements. NSR requirements are implemented only if the permitting action causes emission increases beyond de minimis levels that trigger NSR requirements. Note that in California, exemptions from permit are stated by equipment type, where in federal regulations, there are no such exemptions for sources with emissions exceeding applicability thresholds.
There are two important consequences of these California-federal differences. First, minor sources are given permits in California. The second is that permits are issued mostly on a unit basis rather than a facility- wide basis. As a result, more sources are permitted in California than would otherwise be required under the federal permitting programs.
Another important difference between the federal and state programs is the level of applicability. Federal requirements apply mostly to major sources and major modifications. California rules require permitting of all minor sources and modifications that are not specifically exempt from permit. However, NSR requirements may not apply unless the size of the new facility or modification reaches a certain threshold emission level. Such requirements may include control technology (BACT or LAER), offsets of emission increases, air quality impact assessment, and certification of compliance of all other sources operating in California. In addition, the applicant will have to demonstrate that the source will meet all state and local prohibitory rules.
Finally, demonstration of a positive net air quality benefit can require modeling of if emission offset ratios are insufficient and/or the location of the offsets are significantly different than the emissions being offset. Federal guidance on the requirement for a positive net air quality benefit is present in Appendix S of 40 CFR 51. In California, NSR rules are designed with the implicit assumption that if the emission offset requirements of an NSR rule are met by a new or modified source, the requirement to demonstrate a positive net air quality benefit is fulfilled.(15)
California Stationary Source Requirements for Criteria Pollutants According to Source Status and Area Designation
Differences between the Federal and California Permitting Programs
E. Emission Thresholds for Control and Mitigation Requirements in California
Although the California program for siting stationary sources generally follows the federal design and requirements, in many ways it is more stringent. For example, with the initial passage of the California Clean Air Act in 1988, very stringent requirements were imposed on the siting of sources emitting criteria pollutants or precursors affecting compliance with a state ambient air quality standard. The act called for permit programs to have a design so that there were no net emission increases for siting actions at stationary sources with the following potentials to emit:
Of course, districts which use emission thresholds in pounds per day would have to use an equivalent level.
In 1992, Assembly Bill 2783 added another nonattainment area status and reset the limits to the following:
After passage of the California Clean Air Act, some of the larger districts dropped emission thresholds for triggering BACT requirements to 0 lb/hr. Assembly Bill 2783 addressed these thresholds by requiring BACT for stationary sources with the following potentials to emit:
Assembly Bill 3319, which was recently signed into law, will allow districts which are not classified as "extreme" to opt out of the above no-net-increase requirements. In order to opt out, a district's governing board has to find "that the no-net-increase permitting program is not necessary to achieve and maintain the state ambient air quality standards by the earliest practicable date." The Air Resources Board is currently working on criteria to make such a determination.
In addition to this last change mentioned above, there may be several other influences that will strongly alter NSR in the future. The current rules have not been revised to comply with the proposed U.S. EPA regulation on NSR which incorporates requirements of the 1990 federal Clean Air Act Amendments. District NSR rules may eventually become more compatible with district Title V rules. Secondly, the State of California is now assuming the role of permitting authority for certain qualifying portable equipment. Thirdly, there is a state effort to make some basic changes in environmental permitting. The California Environmental Agency (Cal/EPA) is seeking ways to merge the regulatory functions of different environmental media, such as air and water, into one regulatory entity from which one permit would be issued. Some of these influences will create a high probability for major changes sometime in the future. Finally, Assembly Bill 1777 (see Health Safety Code Section 39607.5) will allow districts to have emission banking programs which include not only point sources, but also area, indirect, and mobile sources. This will broaden the spectrum of sources available for mitigating the impact of large stationary sources.
F. Regulation of Toxic Air Contaminants
In the 1980s, the California program for noncriteria pollutants developed more rapidly than the corresponding federal program. The federal program for NESHAPs regulates federally defined HAPs, while the California program regulates listed "toxic air contaminants" or TACs through airborne toxic control measures (ATCMs). In 1991, AB2728 added all federal HAPs to the list of TACs.
Sources emitting TACs must comply with district requirements regarding the risk assessment and mitigation of TAC emissions. Some districts have established acceptable levels of health risk. Screening analyzes and risk assessments may be performed as part of the permitting process, or as part of the AB2588 Hot Spots Program. In the case of significant health risks, districts or lead agencies may require mitigation sufficient to reduce increased risk to tolerable levels. Such mitigation is often achieved through the application of very high efficiency controls referred to as T-BACT. In addition, a new or modified source, as well as existing sources, may be subject to either a NESHAP, a state-mandated ATCM, or both.
Local districts may need to implement the newer federal requirements referred to as generally available control technology (GACT) and maximum achievable control technology (MACT) for new and existing sources via Title V permits. Typically, GACT was meant to apply to area sources16, and the more stringent MACT requirement will apply to major sources. By June 29, 1998, districts must implement requirements at least as stringent as Section 112(g) case-by-case MACT for new and reconstructed sources not already subject to MACT.
G. Review of Significant Effects on the Environment
In addition to permitting requirements, a new project siting in California must meet the requirements of the California Environmental Quality Act (CEQA). The act requires an evaluation of any project which may have a significant effect on the environment. It provides for the evaluation of the potential impact of new projects and the identification of potential mitigation measures.17
CEQA review is coordinated by a local or state agency with the broadest discretionary authority in approving the project. Such a lead agency is usually a local land-use planning agency, such as a county planning department. The lead agency is responsible for coordinating with a statewide CEQA clearinghouse and responsible agencies, which are defined as agencies which issue permits. By law, no agency is supposed to issue any permits until the project has been approved by the lead agency.
H. Siting of Energy Projects
The California Energy Commission (CEC) has exclusive statewide authority for the licensing of thermal power plants (and related facilities) with a net generating capacity of at least 50 MWe or more. The application for certification (AFC) is a "one-stop process," bundling the authority and requirements of many state and local agencies into one permit process. A request for an exemption from the AFC process, referred to as small power plant exemption (SPPE), can be filed for plants with less than 100 MWe capacity. For a limited number of power plant types, a notice of intention (NOI) must be filed and a site approved before an AFC can be filed.
The CEC's enabling legislation is the Warren-Alquist Act, Public Resources Code Section 25000 et seq., which was passed in 197418. The CEC has adopted Rules of Practice and Procedure and Power Plant Certification Regulations.19 These are known as the siting regulations. The information requirements for an NOI, AFC, and SPPE are specified in these regulations.
The CEC's certificate (license) is in lieu of any permit, certificate, or similar document required by any state, local, or regional agency to the extent permitted by federal law. The site certification process is designed to eliminate duplication and regulatory uncertainty. As outlined by the legislature, the process provides:
CEQA is designed to make certain that all potential environmental impacts are reviewed prior to permitting a major project. Environmental review required by CEQA is fully integrated into the CEC siting process and has been determined to be a certified regulatory or "functionally equivalent" program.20
For each project, a siting case committee is nominated by the CEC chairman and approved by the full commission. The committee consists of two commissioners who are referred to as the presiding and associate members. Responsibilities of the committee include establishment of the case schedule, regulation of the conduct of all proceedings and hearings, the formal record for the case, granting or denying petitions to intervene, and preparation of proposed decisions. The final decision to approve or disapprove a project is made by the full commission. Following the approval of the energy facility, the CEC compliance monitoring program ensures that the project owner complies with all conditions of approval which govern the design, construction, operation, and closure of the facility.
As required by regulation, all hearings, presentations, conferences, meetings, workshops and site visits are open to the public. The staff establishes a project-specific mailing list, and notices are used to inform the applicant, staff, intervenors21, agencies, interest groups, and the public of all CEC, committee, or staff activities related to the project.
1. As defined by Sections 404406 and 40952, Chapter 10, Part 1, Division 26 of the Health and Safety Code, BARCT "means an emission limitation that is based on the maximum degree of reduction achievable, taking into account environmental, energy, and economic impacts by each class or category of source."
2. Information on state requirements for district ozone plans to attain state ambient air quality standards can be found in Chapter 10, Part 3, Division 26 of the California Health and Safety Code, particularly Sections 40918 through 40920.6.
3. According to Section 15002(g) in Chapter 3 in CEQA: California Environmental Quality Act, Statutes and Guidelines 1986, published by the Office of Planning and Research of the State of California, "A significant effect on the environment is defined as a substantial adverse change in the physical conditions which exist in the area affected by the proposed project."
4. Unlike siting rules, some prohibitory rules can apply to all new and existing sources. Some are general rules such as visible emission standards, fuel sulfur content restrictions, and mass-loading (often referred to as grain-loading) standards. Others may apply narrowly as emission control standards for a specific category of source. Such is the case for control measures required by nonattainment-area plans. In either case, there is much less discretion in applying the requirements of prohibitory rules than there is in siting rules.
5. According to 40 CFR 51.165(a)(1)(vi) and 40 CFR 51.666(b)(7) referring to permit requirements for NSR and PSD, respectively, "Emissions unit means means any part of a stationary source which emits or would have the potential to emit any pollutant subject to regulation under the Act."
6. That is, a new project at a stationary source undergoing modification may only affect that portion of the source which is constituted by new or modified units. If BACT or LAER is triggered for the project, it will only be required for new units or those undergoing modification. The owner of the source will not be required to retrofit BACT or LAER on the unmodified existing units that constitute the rest of the facility.
7. In some smaller districts, a concept called net emission increases is still used to determine the emission impact of a permitting action. Essentially, all emission increases for a facility are accumulated from some baseline date. This baseline date is usually the first date the NSR rule was changed after the 1977 federal Clean Air Act Amendments. The net emission increase is determined each time the facility is subject to a permitting action.
8. Demonstration of "net air quality benefit" is implicit if the applicant complies with any applicable district offset requirements.
9. In some cases, a given precursor to a criteria pollutant can be regulated both as a PSD and nonattainment pollutant. Such situations can occur when a pollutant is a precursor to two or more pollutants. For instance, oxides of nitrogen are precurors to nitrogen dioxide, ozone, and PM10. Similarly, oxides of sulfur are precursors to sulfur dioxide, PM10, and sulfate. If one of the secondary criteria pollutants is nonattainment while the other is attainment or unclassified, both PSD and NSR requirements can apply simultaneously.
10. Recall that toxic air contaminants is a California regulatory term that by definition includes all federal HAPs.
11. Strictly speaking, the federal term here would be stationary source, which is defined in both NSR and PSD regulations as "any building, structure, facility, or installation which emits or may emit any air pollutant subject to regulation under the Act." Furthermore, "building, structure, facility, or installation" is defined both in 40 CFR 51 and 52 for NSR and PSD. However, we use "facility" since some stationary source definitions in California have defined stationary source as either the emission unit or the facility-wide source, i.e., the stationary source definition was a "dual source" definition. Federal definitions for "Major stationary source" used in regulations for NSR and PSD are still "dual source" definitions.
12. The project is considered the collection of emissions units which are new or being modified by the permitting action. For instance, the permitting of a new facility would constitute a project. In contrast, a project for a modified source would only include units proposed to be added to the facility, or existing units which are undergoing changes which require the addition or deletion permit conditions, or other modification of the former preconstruction or operating permits. Additionally, potential control requirements for BACT or LAER will only apply to that portion of the source which is being modified, i.e., the collection of new and modified units. 13. A facility, as the term informally is used in this text, can be thought of as being composed of one or more equipment units (or emissions units in federal terms). These units are usually related by the fact that they are under common ownership, covered by the same standard industrial classification code, and are located on contiguous or adjacent property. Emissions units are essentially distinguishable pieces of equipment, processes, facility components, or pollutant-generating activities that collectively compose the facility and occur within the facility.
14. Note that Title V is not a requirement of just attainment or nonattainment areas, otherwise it would be found in Parts C or D of Title I. It is not, therefore, part of the local air quality plan or SIP. In addition, it applies to both attainment and nonattainment pollutants.
15. There is no formal operating definition of "net air quality benefit." As a result, whether or not one has achieved a net air quality benefit is a somewhat subjective judgement within criteria provided by Appendix S of 40 CFR 51. One possible way to provide for a net air quality benefit may be to have an emission offset ratio of greater than 1:1 and progressively greater offset ratios for emission offsets located at greater distances from the location of the projected emissions being offset (see Section IV(A) and (D) of Appendix S in 40 CFR 51).
16. In the context of the federal HAPs program, minor sources are referred to as area sources.
17. Energy projects producing a net output of 50 MWe or greater are not reviewed under the CEQA process, but are subject to similar requirements under the power plant certification process which is overseen by the California Energy Commission.
18. See Chapter 6 (Power Facility and Site Certification, Sections 25500 through 25542).
19. Title 20, California Code of Regulations, Chapters 1, 2, and 5.
20. See Title 14, California Code of Regulations, Section 15251(k).
21. An intervenor is a member of the public or governmental agency which formally files to become party to the California Energy Commission certification proceedings on a given energy project.