Texas Natural Resource Conservation Commission Austin Texas Interoffice From: Lawrence E. Pewitt, P.E., Director, Permits Division To: All Permit Engineers Date: August 5, 1987 Subject: Prevention of Significant Deterioration (PSD) Applicability Issues In determining PSD applicability, there are three interrelated factors to consider: 1. federal enforceability 2. potential to emit and 3. contemporaneous reductions. This memo will discuss the definition and use of these three factors. Federal Enforceability - Only items in the State Implementation Plan (SIP) are federally enforceable. Construction permits are in the SIP; special permits and exemptions (special and standard) are in the SIP. Construction permits can be used as a suitable vehicle to define or limit potential to emit, equipment removal, contemporaneous reductions, etc. for use in PSD applicability determinations. Potential to Emit - Potential to emit is defined as the capability at maximum design capacity and continuous operation to emit a pollutant, before air pollution control equipment is applied, unless the capability is limited by federally enforceable permit restrictions that limit utilization, hours of operation, amount of material used, etc. Contemporaneous Reduction - Only those reductions accomplished as a condition on a permit are federally enforceable. Conditions on special permits and exemptions do not count, nor does the physical removal of a piece of equipment count. The only benefit of removing equipment would be in determining the "major source" status of a site. For example, assume a compressor station has three engines and each engine emits 100 TPY NOx. Since total NOx emissions are 300 TPY (i.e., > 250 TPY) the site is a major source. The company wants to replace one engine under standard exemption (SE) number six with one that emits 60 TPY NOx. By removing one engine, the site drops to 200 TPY and is no longer a major site. The new engine can be installed under SE No. 6, and the site is major again at 260 TPY. Now suppose there were four old engines at 100 TPY each. If one is removed, the site emissions are 300 TPY and is still major. Therefore, the addition of 60 TPY (> 40 TPY) triggers PSD and requires a permit (since standard exemptions can't be used when PSD applies). However, the permit can now be used to mandate the removal of an old engine thereby making the contemporaneous reduction federally enforceable, after which PSD is no longer applicable. Note: if the site had an active permit, then that permit could have been amended to remove the old engine, after which the new engine could be authorized by SE No. 6 since PSD did not apply. In accumulating insignificant increases, only the potential to emit of the project needs to be considered in determining PSD applicability; insignificant increases are not accumulated. If, however, an applicant proposes contemporaneous decreases, all contemporaneous increases and decreases must be considered. If a contemporaneous reduction is proposed, the applicant will need to document the portion of the decrease being used and the portion that remains available for any future contemporaneous reduction; otherwise EPA will assume that the entire reduction has been relied upon and is not available for further reductions. cc: Mr. Steve Spaw, P.E., Deputy Executive Director Mr. James C. Myers, P.E., Director, Enforcement Program Regional Directors