TITLE 326 AIR POLLUTION CONTROL DIVISION

The Indiana Department of Environmental Management (IDEM) is soliciting public comment on amendments to rules at 326 IAC 1-6 and 326 IAC 2-9-1(h) concerning the treatment of excess emissions at certain industrial facilities during periods of startup, shutdown, or malfunction (SSM). IDEM seeks comment on the affected citations listed and any other provisions of Title 326 that may be affected by this rulemaking.

First Notice of Comment Period: September 30, 2015, Indiana Register (DIN: 20150930-IR-326150326FNA).

The United States Environmental Protection Agency (U.S. EPA) published findings in the Federal Register (FR) on June 12, 2015 (80 FR 33839) concerning inadequacies to startup, shutdown, and malfunction (SSM) provisions in state rules. This action, effective on May 22, 2015, directs thirty-six (36) states, including Indiana, to correct specific provisions in State Implementation Plans (SIPs) concerning the treatment of excess emissions that occur at certain industrial facilities during periods of SSM to be consistent with the Clean Air Act (CAA) and with U.S. EPA's updated SSM policy. Section 302(k) of the CAA requires SIPs to contain emission limitations that "limit the quantity, rate, or concentration of emissions of air pollutants on a continuous basis." However, the conditions listed in 326 IAC 1-6-4(a) would allow an exemption for noncompliance with emission limitations during certain malfunction events. Owners and operators of facilities that are required to obtain a permit under 326 IAC 2-5.1 or 326 IAC 2-6.1, generally those sources requiring a construction permit after December 25, 1998, except for exemptions as listed in the rule, will be affected by this rulemaking. States are required to submit a revision of the inadequate SSM provisions for approval into the SIP by November 22, 2016.

IDEM is proposing to amend state rules to address SSM deficiencies. The preventive maintenance plan provision at 326 IAC 1-6-3 will not be affected by this rulemaking because it does not pertain to a malfunction. Therefore, it is not included in this rulemaking. The language at 326 IAC 2-9-1(h) will be changed because it references 326 IAC 1-6 in its requirements and states that if exceedances are due to a malfunction, then the provisions of 326 IAC 1-6 shall apply.

IDEM seeks comment on the affected citations listed, including suggestions for specific rule language, any other provisions of Title 326 that may be affected by this rulemaking, and alternative ways to achieve the purpose of the rulemaking.

No element of the draft rule imposes either a restriction or a requirement on persons to whom the draft rule applies that is not imposed under federal law.

There is no fiscal impact on affected sources of the draft rule amendments for this rulemaking.

At this time, no work group is planned for the rulemaking. If you feel that a work group or other informal discussion on the rule is appropriate, please contact Jack Harmon, Rules Development Branch, Office of Legal Counsel at (317) 234-9535 or (800) 451-6027 (in Indiana).

IDEM requested public comment from September 30, 2015, through October 30, 2015, on alternative ways to achieve the purpose of the rule and suggestions for the development of draft rule language. IDEM received comments from the following parties by the comment period deadline:

Indiana Energy Association (IEA)

Indiana Chamber of Commerce (IN Chamber)

Indiana Manufacturers Association (IMA)

Following is a summary of the comments received and IDEM's responses thereto:

Comment: Generally, the provisions of 326 IAC 1-6-4(a) and the relevant provisions of 326 IAC 2-9-1(h) do not apply to the large electric generating facilities represented by Indiana Energy Association (IEA) because these facilities are regulated and permitted under the provisions of Title V that supersede 326 IAC 1-6-4(a). The U.S. EPA's revised policy on SSM is overreaching and does not provide appropriate flexibility for states in their primary role to regulate sources to assure attainment of air quality standards. Finally, U.S. EPA's recent policy change in this matter may require IDEM to address other provisions of the Indiana SIP in the future; therefore, it is important that the issues be addressed effectively at this time.

IDEM should work with affected industrial stakeholders to retain and revise the rule to incorporate as much flexibility as possible to assure sources having proper emission controls are not subject to rigid and inappropriate enforcement against unavoidable malfunctions. At a minimum, IDEM should retain provisions which define how a source's operation will be evaluated to demonstrate that the source has taken reasonable actions to prevent and mitigate malfunctions. IDEM should consider how an affirmative defense may be allowed as part of the state's enforcement authority based on Clean Air Act provisions and certain legal precedents. (IEA)

We support common sense environmental regulations that recognize that excess emissions from startup, shutdown and malfunction (SSM) events are often unavoidable. Startup and shutdown activities are transition periods that are usually minimized and are not reflective of a normal operation of the source. Malfunction periods, despite preventive measures regularly taken, are inherently unpredictable, and, therefore, sources should be protected from frivolous allegations of non-compliance based on these transitional periods of startup and shutdown. (IN Chamber) (IMA)

Response: IDEM appreciates the participation in this rulemaking by providing comments. IDEM agrees that this rulemaking is generally not relevant to the facilities represented within this comment. The U.S. EPA's mandate was specific because the current rule violates the Clean Air Act (CAA), and could jeopardize Indiana's approval to implement its permitting program; therefore, IDEM must address this SIP call. IDEM has drafted a rule change to address the U.S. EPA's concerns, but does not plan to form a work group at this time because the flexibility requested in the comment conflicts with the federal requirements to remove the provision. IDEM cannot control U.S. EPA's possible future policies or rulemaking processes, but will work with all stakeholders on future rulemakings where there is flexibility to the state in developing new or amended rules.

Comment: There should be a basis for mitigating factors for periods of malfunction, and affirmative defense for periods of SSM events. Based on NRDC vs EPA, and Luminant Generation Co. vs EPA, IDEM has the authority to retain provisions in the Indiana rules that provides the option to establish mitigating factors or affirmative defense for SSM events. Therefore, IDEM should convene a formal work group with stakeholders to develop amendments to the rules. (IN Chamber) (IMA)

Response: In proposing and issuing the SSM SIP call, U.S. EPA acknowledged that NRDC vs EPA, Luminant Generation Co. vs EPA, and several other cases either upheld or did not question U.S. EPA's authority to approve SIP provisions providing an affirmative defense for unplanned SSM events. (See 79 FR 55920, Sep. 17, 2014; and 80 FR 33840, Jun. 12, 2015). In the SSM SIP call, U.S. EPA expressly "revised its prior interpretation" of affirmative defenses for unplanned SSM events (80 FR 33845). The legality of U.S. EPA's revised interpretation is currently under review by the D.C. Circuit Court of Appeals in a consolidated case involving several state and industry parties. (Florida v. EPA, Case No. 15-1267; D.C. Cir. Aug. 11, 2015). Because the D.C. Circuit Court of Appeals has not stayed the SSM SIP call during the pendency of the case, IDEM must address the SSM SIP call within the required timeframes. U.S. EPA's revised interpretation in the SSM SIP call does not allow IDEM to retain affirmative defenses for SSM events. Should the resolution of the court case affect this interpretation, IDEM will revisit the requirements at that time.

This notice requests the submission of comments on the draft rule language, including suggestions for specific revisions to language to be contained in the draft rule. Comments may be submitted in one of the following ways:

(1) By mail or common carrier to the following address:

LSA Document #15-326 Startup, Shutdown, and Malfunction (SSM) Emissions

Jack Harmon

Rules Development Branch

Office of Legal Counsel

Indiana Department of Environmental Management

Indiana Government Center North

100 North Senate Avenue

Indianapolis, IN 46204-2251

(2) By facsimile to (317) 233-5970. Please confirm the timely receipt of faxed comments by calling the Rules Development Branch at (317) 232-8922.

(3) By electronic mail to jaharmon@idem.in.gov . To confirm timely delivery of submitted comments, please request a document receipt when sending the electronic mail. PLEASE NOTE: Electronic mail comments will NOT be considered part of the official written comment period unless they are sent to the address indicated in this notice.

(4) Hand delivered to the receptionist on duty at the thirteenth floor reception desk, Office of Legal Counsel, Indiana Government Center North, 100 North Senate Avenue, Indianapolis, Indiana.

Regardless of the delivery method used, to properly identify each comment with the rulemaking action it is intended to address, each comment document must clearly specify the LSA document number of the rulemaking.

All comments must be postmarked, faxed, or time stamped not later than April 29, 2016. Hand-delivered comments must be delivered to the appropriate office by 4:45 p.m. on the above-listed deadline date.

Additional information regarding this action may be obtained from Jack Harmon, Rules Development Branch, Office of Legal Counsel, (317) 234-9535 or (800) 451-6027 (in Indiana).

SECTION 1. 326 IAC 1-6-1 IS AMENDED TO READ AS FOLLOWS:

Affected: IC 13-15; IC 13-17

Sec. 1. This rule applies to the owner or operator of any facility source required to obtain a permit under 326 IAC 2-5.1 or 326 IAC 2-6.1.

SECTION 2. 326 IAC 1-6-2 IS AMENDED TO READ AS FOLLOWS:

Affected: IC 13-15; IC 13-17

Sec. 2. (a) The owner or operator must keep a record shall be kept of all malfunctions, including startups, or shutdowns of any facility emission unit or emission control equipment which that result in violations of:

(b) The records shall must be retained for a period of three (3) years and shall be made available to the commissioner upon request.

(c) When a malfunction of any facility emission unit or emission control equipment occurs which that lasts more than one (1) hour, said the condition shall must be reported to the commissioner or his the commissioner's appointed representative as follows:

SECTION 3. 326 IAC 1-6-4 IS AMENDED TO READ AS FOLLOWS:

Affected: IC 13-15; IC 13-17

Sec. 4. (a) Facility Source owners or operators shall be responsible for operating operate and maintaining maintain all emission control equipment and combustion or process equipment or processes in compliance with all applicable rules. Emissions temporarily exceeding the standards which are due to malfunctions of facilities or emission control equipment shall not be considered a violation of the rules provided the source demonstrates that:

(b) No facility shall An emission unit must not be operated unless the air pollution control device or devices and measures are also in operation simultaneously and are not bypassed. unless necessary to prevent damage to equipment or injury to persons or unless there is a malfunction and the requirements set forth in subsection (a) of this section are met.

(c) Excessive emissions shall must be brought into compliance with all practicable speed, and appropriate action, including those set forth above, actions must be taken to:

SECTION 4. 326 IAC 1-6-5 IS AMENDED TO READ AS FOLLOWS:

Affected: IC 13-15; IC 13-17

Sec. 5. The commissioner may consider the following guidance in determining cases of excessive malfunctions: where

SECTION 5. 326 IAC 1-6-6 IS AMENDED TO READ AS FOLLOWS:

Affected: IC 13-15; IC 13-17

Sec. 6. (a) Any owner or operator of a facility which has the potential to emit concentration in excess of the concentrations stated in an emission unit that is required to obtain a permit under 326 IAC 1-6-1 shall submit by January 19, 1980, or a malfunction emission reduction program within one hundred eighty (180) days after a new source emission unit commences operation. a malfunction emission reduction program. Said

(b) The program shall must include: but not be limited to

(c) The program shall must be based on the:

(d) The program may be is subject to review and approval by the commissioner.

SECTION 6. 326 IAC 2-9-1 IS AMENDED TO READ AS FOLLOWS:

Affected: IC 13-11-2; IC 13-14-8

Sec. 1. (a) The definitions in IC 13-11-2, 326 IAC 1-2, 326 IAC 2-7, and 326 IAC 2-8 apply throughout this rule.

(b) A source may limit its potential to emit by complying with the specific restrictions and conditions listed in this rule. A source electing to comply with this rule shall apply to the commissioner for a source specific operating agreement. A source issued a source specific operating agreement under this rule is not subject to 326 IAC 2-6.1 unless otherwise required by state, federal, or local law. A source issued a source specific operating agreement pursuant to this rule is not subject to 326 IAC 2-5.1 or 326 IAC 2-7 provided the source specific operating agreement limits the source's potential to emit below the applicability thresholds for 326 IAC 2-5.1 or 326 IAC 2-7. Until the commissioner has issued an operating agreement for a source that would otherwise be subject to 326 IAC 2-5.1, 326 IAC 2-6.1, 326 IAC 2-7, or 326 IAC 2-8, the source is subject to all applicable requirements of those rules. A source complying with this rule may at any time apply for a permit under 326 IAC 2-5.1, 326 IAC 2-6.1, 326 IAC 2-7, or 326 IAC 2-8.

(c) The owner or operator of a source seeking an operating agreement shall must submit a request to the commissioner. The request shall must include all information necessary for the commissioner to verify that the source meets the applicable restrictions and conditions specified in this rule, including the following:

(d) If the commissioner determines that the source meets the applicable restrictions and conditions specified in any applicable section of this rule, the commissioner shall issue the operating agreement. The operating agreement shall: must:

(e) Before a source subject to this section modifies its operations in such a way that it will no longer comply with the applicable restrictions and conditions of its source specific operating agreement, it shall obtain the appropriate approval from the commissioner under the following:

(f) Any records required to be kept by a source in accordance with any section of this rule shall must be:

(g) A source may apply for up to four (4) different types of source specific operating agreements contained in this rule provided allowable emissions or potential to emit for any regulated air pollutant, as limited under the source specific operating agreements, do not exceed major source levels when aggregated. A source may combine up to four (4) types of source specific operating agreements in one (1) application. Upon billing, the applicant shall pay the applicable fee in accordance with 326 IAC 2-1.1-7(g).

(h) Any source subject to this rule shall report to the department, in writing, any exceedance of a requirement contained in this rule or its operating agreement within one (1) week of its occurrence. The exceedance report shall must include information on the actions taken to correct the exceedance, including measures to reduce emissions, in order to comply with the established limits. If an exceedance is the result of a malfunction, then the provisions of 326 IAC 1-6 apply.

(i) This rule does not affect a source's requirement to comply with provisions of any other applicable federal, state, or local requirement, except as specifically provided.

(j) Revocation of the operating agreement and a source becoming subject to the applicable requirements of a major source may result from noncompliance with any:

Notice of Public Hearing

DIN: 20160330-IR-326150326SNA

Composed: May 19,2024 10:29:34AM EDT

A PDF version of this document.