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          Texas Natural Resource Conservation Commission
                      Interoffice Memorandum

To:  NSR Permit Reviewers
Date:  August 25, 1999
Through:  FNSR Team
From:  Kurt Kind, Ph.D.
Subject:  Draft - FNSR Applicability for Flexible Permits

     The following discussion provides background for how federal applicability
     may be determined for modifications at facilities covered by flexible
     permits (within the emission caps).  Note that netting may be avoided
     altogether if the source has established a Plantwide Applicability Limit
     The first section discusses how the endpoints method might be used to
     simplify netting for flexible permits.  The second section, flexible permit
     project increases, provides direction on how to determine project
     increases to determine whether netting is required and how those project
     increases would be shown in subsequent netting exercises.
     Endpoints Method (suggested if flexible permit was issued in the
     contemporaneous period)
     If netting was performed for the flexible permit and/or there were
     significant emission reductions over the implementation of the permit, this
     method may limit the calculations necessary to net out of federal review. 
     In this case, the applicant assumes that the project would trigger netting
     for the pollutants of concern.
     The two year average actual emissions prior to the first (earliest)
     modification in the contemporaneous period are subtracted from the
     proposed allowable for each facility.  Facilities in a flexible permit may be
     lumped together when making this comparison as illustrated below.
     This method eliminates the need to consider changes in actual emissions
     at each individual existing facility covered by the flexible permit.  It also
     prevents double counting of emission increases at a facility with more
     than one modification during the contemporaneous period.  For example, 
               A flexible permit was issued in 1997, with 100 existing
          facilities (some grandfathered, others permitted) and an
          initial emission cap of 1000 TPY.  Federal PSD applicability
          was evaluated at that time and the past 2 years actual
          emissions from those facilities were 1010 TPY.  All facilities
          at the site are in this permit and there were no modifications
          at the site in 1995 or 1996.
               Modifications were made in 1998 and 1999 which added
          new facilities that contributed emissions of 100 TPY each to
          the cap.  Another modification is proposed in 2000 which
          adds facilities that contribute 50 TPY to the cap.  The
          proposed cap is 1000 TPY (there were reductions as BACT
          was phased in).
  Emission cap history
  Cap Year     Original  1998 Amd. (+100)  1999 Amd. (+100) 2000 Proposed (+50)
  1997      990    -           -              -
  1998      890    990         -              -
  1999      850    950         1050           -
  2000      750    850         950            1000
  2001      720    820         920            970
               The net change for the contemporaneous period is 1000 -
          1010, or -10 TPY and the project is not subject to federal
     This method is limited to major sources that have to net to determine
     applicability.  It becomes more complex if there are other construction
     permits at the site and will also be complicated by any cap reductions
     which may have been required by the SIP.
     Flexible Permit Project Increases
     The applicant must identify facilities to be physically modified and any
     resulting upstream and downstream effects (debottlenecking).  The
     facilities covered by a flexible permit fall into one of these 2 categories for
     any modification:
       A. Modified, this includes -
                    i.   those that are physically modified
                    ii.  those not have not been physically modified but require an increase in emission cap contribution
     B. Not modified.
     Project increases are determined as follows for each of the categories:
            A. The increase is the difference between the new cap contribution
          (total including 9% if applicable) and the past 2 year actual
          emissions for that facility.  The actual emissions may not exceed
          the contribution to the current cap.  If actual emissions exceed the
          cap contribution, similar facilities (such as tanks) should be
          grouped to avoid this; if that is not possible method B should be
          used and the basis for the emission cap evaluated.
               In all cases, these increases must be at least equal to those
          increases that would be determined through method B.  Note that
          those facilities with a proposed allowable not based on a physical
          limitation (such as tanks and loading in most cases) will be subject
          to an enforceable allowable emission for those facilities.
            B. The increase in emissions is the potential increase in emissions
          due to the debottlenecking of the process (incremental increase
          that could result at the facility, actual emissions do not come into
          play because the facility is not modified).
     Note that any creditable decreases must be determined through the
     method for category A facilities.  Only those changes at facilities covered
     in category A will be shown in future netting.
     Basis for this approach
     A flexible permit allows for the maximum operational flexibility under the
     emission caps (which are generally based on design capacity). 
     Therefore, aside from the emission caps, the facilities have very few
     operational restrictions.  This method correctly accounts for increases to
     the design capacity of the affected facilities without having to show
     increases for unaffected emission points in the cap.
     A modification is proposed that will affect the following units; reactor
     upgrade, new distillation column (DU), increased boiler steam demand,
     increased tank turnovers at any one of four tanks (greater than the current
     cap contribution).
     The project increases are determined as follows for each of the 4 facilities:
                      reactor -    physically modified, total new cap contribution - 2 year actual
              DU - new, cap contribution
                      boiler -     not modified, increase based on anticipated increase in
                    steam demand.  In this case, the steam demand necessary
                    for the modification is equivalent to an increase in boiler load
                    of 50 MMBtu/hr.  Therefore, the project increase at this
                    emission point would be 50 MMBtu times the NOx emissions
                    factor, 0.06 lb/MMBtu in this case.  The resulting emission
                    increase is
                         50 MMBtu/hr(0.06 lb/MMBtu)(4.38 TPYhr/lb) = 13.14 TPY.
               This is not dependent on the past actual emissions for this facility.
                 tanks - modified, in this case one of the 4 tanks has been operating
               with emissions above the emission cap contribution and the
               product could go to any one of 4 tanks.  The increase is total
               new cap contribution for the 4 tanks - 2 year actual for the 4
               tanks.  A separate emission cap or permit condition will be
               necessary to make the new allowable for the tanks federally
     Forward any questions regarding this memo or other netting issues to the
     FNSR team.