Frequently Asked Questions
Rule 801 - New Source Review

• Applicable SIP ^*
• Calculating NEI based on ATC or PTO Date^*
• Calculating NEI from November 15, 1990 to Date of Rule Adoption^*
• Certification Statement^*
• NEI Equation
• NEI and Exempt Equipment
• Net Air Quality Benefit^*
• Net Emissions Increase Calculations^*
• Project, Clarification of the Definition^*
  

^* means that the question is taken out of Section 8 of the NSR Staff Report.

For more information or assistance, call the Engineering Division at (805) 961-8800, or e-mail us at engr@sbcapcd.org.

Applicable SIP

A: Several provisions of Rule 801 use the term "Applicable State Implementation Plan." For example this term is used in the definition of permanent. What is meant by the term "Applicable State Implementation Plan" as used in Rule 801?

Several sections of Regulation VIII contain provisions pertaining to "applicable State Implementation Plan." The definition of "State Implementation Plan," depends on how it is used. For example, the definition of "surplus" in Rule 801.C indicates that only those emission reductions "surplus" to the State Implementation Plan can be used as offsets. In this context, State Implementation Plan refers to the Clean Air Plan and APCD Rules and Regulations that have been promulgated into the State Implementation Plan by the US EPA.

The definition of "permanent" in Rule 801.C states that in order for emission reductions to qualify as emission reduction credits, the reductions must be federally enforceable. One way for the reductions to be federally enforceable is the through the State Implementation Plan. In this context, the State Implementation Plan refers to APCD rule provisions governing the enforceability of the emission reductions used as emission reduction credits, primarily the provisions of Rule 806. Once Rule 806 is incorporated into the State Implementation Plan, it will be federally enforceable.

Calculating NEI based on ATC or PTO date

A: When the District issues an ATC for an emission increase, it is giving the stationary source the right to pollute by the amount listed on the ATC. However, when a source comes in for an emission decrease, the District cannot legally enforce that decrease until the PTO is issued. Therefore, to calculate the resultant NEI, the District will base it on the ATC date for an emission increase and the PTO date for an emission decrease. The table below provides an example of how the District will handle the concern stated in the comment.

Calculating NEI from November 15, 1990 to Date of Rule Adoption

A: To calculate NEI at date of rule adoption, staff will sum all permitted increases and decreases in NEI from Nov. 15, 1990 to date of rule adoption. If the resulting NEI is negative, then the source's NEI we be set to zero. The negative value may not be banked. If the NEI is positive, then that is the value of the NEI as of that date. Subsequent permit actions after rule adoption will either be added or subtracted from the NEI value as of the date of rule adoption. Decreases below zero may be banked.

Certification Statement

A: This requirement is in the current New Source Review Rules and is mandated by the Clean Air Act, 42 US Section 7503. The APCD will follow EPA's guidance on the application of this requirement.

NEI Equation

A: As used in the formula, prior means all permitted increases in the source potential to emit since the baseline date of 11/15/90. These prior increases do not include the increases due to the application being processed.

NEI and Exempt Equipment

A: Decreases in emissions due to the removal or modification of exempt equipment are not used in the NEI calculation for a stationary source. Please refer to APCD P&P 6100.021. The policy pertains to both attainment and nonattainment pollutants. Exempt equipment includes all equipment which is currently or was specifically exempt from the provisions of Rule 201. The decreases may, however, be qualified as ERCs in the Source Register. Furthermore, increases in emissions due to the addition or modification of currently exempt equipment are not used in the NEI calculation for a stationary source.

Net Air Quality Benefit

A: This means that the emission reductions used to offset the proposed project are quantifiable and enforceable, are within the same geographic region, are surplus and permanent and will result in an overall net improvement in air quality.

The term actual emission reductions is defined in rule 102 and ensures that emission reductions are quantifiable and enforceable. The requirement for the same general area is met through the appropriate offset ratios stated in Proposed Rule 802 for New Source Review. For Prevention of Significant Deterioration the requirements for the same general area are met through the requirements set forth in Rule 803 Section E.2, Location of Offsets and Offset Ratios. Surplus means that the emission reductions are not required by any local, state or federal regulation. Examples include local control rules, clean air plan control measures, reductions relied upon in the clean air plan, federal and state RACT measures, New Source Performance Standards, and National Emission Standards for Hazardous Air Pollutants. Permanent means that the change that created the emission reductions is not reversed, for example removing emission control equipment. The term permanent is also used to address shift in load such as removing an emission unit but maintaining facility production by increasing throughput and emissions in another emissions unit.

Net Emissions Increase Calculations

A: The definition of NEI now resides in Rule 801. The two significant changes to the definition are: (a) a change in the baseline date to 11/15/90 and (b) a clarification that the PTO issuance date is used for determining the NEI. No other significant changes were made to how the NEI calculation is applied.

To aid the user, the NEI definition was amended to clarify how the calculation works. The most important clarification is the inclusion of two equations for calculating the NEI. The first equation applies to an entirely new stationary source:

  Net emission increase = I .......... Equation #1

Where

I = Potential to emit of the new source

  The use of this equation is fairly self evident. Simply put, the NEI equals the potential to emit ("PTE") of the equipment subject to permit.

The second equation applies to existing stationary sources:

  Net emission increase = I + (P1 - P2) - D .......... Equation #2

Where

  I = Potential to emit of the modification.

P1 = All prior increases in potential to emit resulting from permit actions at the stationary source where the emission unit creating the increase was permitted on or after November 15, 1990 and where the permit action was subject to New Source Review.

P2 = All decreases in potential to emit resulting from permit actions at the stationary source, including the proposed modification where the modification reduces the potential to emit of the emission unit, and where the emission unit creating the decrease was permitted on or after November 15, 1990 provided the emissions were included in P1 above.

D = Decreases in actual emissions resulting from permit actions at the stationary source provided the emissions are not included in P2 above and are not included in the source register or used as a source of emission offsets.

The second equation reflects the basic steps on how NEI was calculated under the prior rule (205.C) and thus the new rule does not reflect a change in that approach. The I term is the PTE of the new or modified emission units and can only be comprised of positive values. The I term includes only the requested increase(s) in the PTE for the emission unit(s). The (P1 - P2) expression addresses the prior NEI of the source. P1 includes all increases in emissions since the baseline date that were subject to New Source Review. P1 would not include emissions from previously exempt emission units since these emissions would not be subject to NSR. P1 can only be comprised of positive values. The P2 term is included to allow for decreases in the term P1 and is based on the PTE of the emission unit(s). P2 should not be confused with decreases allowed in the term D since the latter can only be based on actual emissions and not PTE. P2 is used in very specific situations. Namely, P2 allows for decreases in the P1 emissions such that ghost NEI emissions are not left on the books. Thus the effect of P2 is to zero out any corresponding NEI increase that is included in P1 for the same emissions unit where that emissions unit is removed from service or where the emission unit's PTE is reduced. The D term allows for decreases in emissions and can only be comprised of negative values. D is based on an actual emissions baseline and not the PTE of the emissions unit. Double counting is not allowed, so if the emissions unit is used as a decrease in the P2 term, then it cannot be used in the D term. In determining the emissions baseline for D, the same procedures and criteria used for qualifying an emission reduction credit are used. This includes use of a three year baseline and quantifying emissions at actual historical loads (which may necessitate source tests if prior tests were not representative of these operational loads). In general, the decrease must be real, surplus, quantifiable, enforceable and permanent. Finally, negative NEI is not allowed. If a source calculates a negative NEI, then the NEI is set to zero and the balance should be banked in the Source Register for future use (it is the source's responsibility for registering these reductions).

A few examples are provided:

Example #1:

Scenario: An application for a new cement batch plant is submitted to the APCD. The company submitting the application is not permitted by the APCD. The company's application lists the potential daily and annual emissions of PM₁₀ at 20 lb/day and 5 tpy respectively. No other pollutants will be emitted.

Analysis: Because this application is for an entirely new stationary source, Equation #1 is used and the requested increase (I) is equal to the potential to emit of the new cement batch plant. Therefore, the NEI equals 20 lb/day and 5 tpy respectively for PM₁₀. BACT and offsets are not required.

Example #2:

Scenario: An application for a new boiler is submitted by an existing source. All existing equipment under permit was installed prior to 1990. The potential emissions from the new boiler are 50 lb/day and 9 tpy of NO_x (this example ignores the other pollutants). No decreases in emissions are proposed by the source.

Analysis: This is an application for an existing source, so Equation #2 is used. The increase (I) is equal to 50 lb/day and 9 tpy. There is no prior NEI at the source, so the P1 and P2 terms are zero. No decreases are proposed, so the D term is zero. The NEI in this case is equal to I, since all other terms are zero. NEI equals 50 lb/day and 9 tpy. BACT is required for NO_x, a nonattainment pollutant.

Example #3:

Scenario: An application for a new boiler (Unit D) is submitted by an existing source. The source has three existing boilers (Units A, B, C). Unit A was permitted prior to 1990 and Units B and C were permitted afterwards and were subject to NSR. The potential emissions from Unit D are 20 lb/day and 4 tpy of NO_x (this example ignores the other pollutants) and 15 lb/day and 3 tpy for Units A, B and C. The actual emissions from Unit A have been verified as being 10 lb/day and 2 tpy. The source is proposing to remove Units A and C from service.

Analysis: This is an application for an existing source, so Equation #2 is used. The increase (I) is equal to 20 lb/day and 4 tpy. There is prior NEI at the source. P1 is equal to the PTE for Units B and C. Because Unit C is being removed from service, P2 is equal to the PTE for that unit. Decreases are proposed for the removal of Unit A, so the D term is 10 lb/day and 2 tpy.

  NEI = I + (P1 - P2) - D

  I = 20 lb/day, 4 tpy

P1 = 30 lb/day, 6 tpy

P2 = 15 lb/day, 3 tpy

D = 10 lb/day, 2 tpy

NEI = 25 lb/day, 5 tpy

BACT and offsets are not required for the new boiler (note: since NAR BACT is based on PTE on a per project basis, BACT is not required even though the NEI is 25 lb/day).

Project, Clarification of the Definition

A: The term "project" is used in Rule 802.C.1 (Requirements - Best Available Control Technology), the requirement for NAR BACT is based on the concept of a project. The term "project" is defined in Rule 801 as follows:

"Project" means any article, machine, equipment or contrivance belonging to the same emission unit at a stationary source and applied for in one or more applications for an Authority to Construct permit. Project shall not include any article, machine, equipment or contrivance described in any application for an Authority to Construct permit submitted more than 12 months after issuance of the Permit to Operate.

  Emission Unit is defined in Rule 102 as follows:

"Emission Unit" means any identifiable piece of equipment or activity that is part of a stationary source which emits or would have the potential to emit any affected pollutant.

In other words, an emission unit is an aggregation of components dependent upon each other to perform a necessary function or activity. Typically, these activities are composed of production or process lines within the source (i.e., they are part of the source). Examples of an emission unit are (also see the discussion under de minimis for more examples): a cogeneration system; auto body spray booth (including associated prep/touch-up and solvent usage); non-metallic mineral processing line (crusher, furnace, calciner, classifier, packing); sulfur recovery train (amine unit, sulfur recovery unit, tail gas unit).

The term "project" was introduced to provide a more innovative way of addressing BACT in the New Source Review rule for modifications to existing sources. Under the current rules, once a facility exceeds the NEI threshold for BACT, then all subsequent applications, regardless of size, also require BACT review. This resulted in some uncertainty and additional level of effort on the part of the applicant and the APCD as to what BACT was for small emission increases. Indeed, often BACT for such small modifications was determined to be no stricter than RACT. With the change from an NEI-based BACT threshold to the 25 pound per day PTE-based BACT threshold, much of the prior problems with small emissions increases disappears. The term "project" is intended to provide more clarity for both the applicants and the APCD by focusing the review on emission units. The resulting change is that BACT review is no longer required for modifications to existing sources for projects with small emissions increases. The term project is not applicable to new sources.

It is important, therefore, to know how the definition of "project" is applied. Examples are provided below to illustrate the intent of the rule. Some generalities, however, can be made when assessing what constitutes a "project". These are:

• A project is typically composed of all the equipment listed in an Authority to Construct or Permit to Operate application whereas a modification to existing sources typically involves one emission unit at a time.

   

• All modified equipment that is part of the same emission unitis the same project.

   

• A project incorporates equipment using the broadest scope of activities. Projects are not intended to be individual components of a process but rather to include all components or units within the process or production line.

   

• Projects are not intended to be individual components of a process, but rather to include all such components or units within the broad scope of a single project.

   

• Modifications to a project prior to or during the SCDP are considered the same project as defined in the underlying ATC permit and supporting documentation.

   

• Any modifications to the affected emissions unit which occurs within 12 months of receiving a PTO for that emission unit are considered the same project.

Example #1:

An applicant at an existing facility wishes to add a new vapor degreaser; this addition is not associated with another project that received a PTO within the past 12 months. The "project" for this example would be the vapor degreaser. (If the application was associated with similar processes that were permitted within the past 12 months, then the "project" would include the prior project's emission units and the new vapor degreaser).

Example #2:

An operator for an existing oil and gas plant seeks a permit to add a bypass line for one of their gas production streams. The equipment involved includes the addition of a small number of piping components in hydrocarbon service. The facility-wide permit for the plant contains federally enforceable permit conditions regarding the implementation of an Inspection and Maintenance Program. The "project" for this example would include all piping components associated with installation of the new by-pass line. Since the facility-wide permit already ensures that the I&M Program is federally enforceable, a de minimis exemption via Rule 202.D.6 can be requested with the potential to emit based on controlled emission factors from implementation of the existing I&M program on the new piping components.

Example #3a:

An existing sand, rock and gravel plant seeks to add a new concrete recycling facility. The equipment includes: hoppers, screens, crushers, transfer belts, stacker belts and baghouses. The "project" for this example would be all the equipment comprising the new concrete recycling facility.

Example #3b:

As a follow on to the above example, two months after the Permit to Operate for the concrete recycling facility is issued, the operator submits a new ATC permit application to expand to capacity of the facility. The "project" for this example would include the original concrete recycling facility plus the new equipment associated with the expansion, as the application for the new equipment occurred within one year of the Permit to Operate issuance of the original project. (If the ATC application for the new equipment is submitted 3 years after issuance of the PTO permit, the "project" would be the new equipment only.)

Example #4:

An applicant seeks a permit for an exploratory oil and gas program. The equipment includes: drilling rig engines and associated service engines, temporary Baker tanks, separation vessels, flare, and piping components in hydrocarbon service. The "project" for this example would include all the equipment listed in the application because the aggregation of the listed equipment comprises an identifiable activity.

Example #5:

An existing non-metallic mineral processing plants seeks to add a new bag packing facility. The equipment includes: bag packing machines, hoppers, cyclones, bins, transfer belts and a baghouse. The "project" for this example would be all the equipment comprising the new bag packing facility.

Example #6:

An applicant seeks to install a new paint spray booth at an existing facility. The booth and its related solvent emissions constitute a new process at the facility. The "project" for this example includes the paint spray booth and the related solvent emissions.

Example #7:

An existing electronics manufacturing/assembly plant wishes to relocate a business unit from another company-owned site located outside Santa Barbara County. The new business unit utilizes solvent emitting equipment such as: degreasers, photoresist units, solvent work stations and a carbon adsorption unit. The equipment will be moved into an existing building alongside existing operations. The "project" for this example includes all the equipment utilized by the new business unit.

Example #8:

An existing offshore oil and gas platform operator requests to add a new skid-mounted gas compressor system. The equipment involved includes a substantial number of components in hydrocarbon service (including the compressor, valves, flanges and vessels). No other changes are proposed by the applicant. The "project" for this example would be the new skid-mounted compressor unit and all associated components. (If the application was for a entirely new oil and gas platform, part of which includes a skid-mounted compressor unit and associated components, the "project" would, in that case, be the entire platform).

For more information or assistance, call the Engineering Division at (805) 961-8800, or e-mail us at engr@sbcapcd.org.

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