Implementation of the New Source Review (NSR) Program for Particulate Matter Less Than 2.5 Micrometers (PM2.5, 28646-28661 [2011-12089]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 76, Number 96 (Wednesday, May 18, 2011)]
[Rules and Regulations]
[Pages 28646-28661]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-12089]


=======================================================================
-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-HQ-OAR-2003-0062: FRL-9306-9]
RIN 2060-AP75


Implementation of the New Source Review (NSR) Program for 
Particulate Matter Less Than 2.5 Micrometers (PM2.5); Final 
Rule To Repeal Grandfather Provision

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The EPA is issuing a final rule that repeals the 
``grandfather'' provision for particulate matter less than 2.5 
micrometers (PM2.5) under the Federal Prevention of 
Significant Deterioration (PSD) permit program, which is administered 
by EPA in states that lack a PSD permit program in their approved state 
implementation plan (SIP). The grandfather provision allowed certain 
facilities under certain circumstances to satisfy the PSD permit 
program requirements for PM2.5 by meeting the requirements 
for controlling particulate matter less than 10 micrometers 
(PM10) and analyzing impacts on PM10 air quality 
as a surrogate approach based on an EPA policy known as the ``1997 
PM10 Surrogate Policy.'' In its February 11, 2010, notice of 
proposed rulemaking, EPA also proposed to end early the 1997 
PM10 Surrogate Policy in EPA-approved state PSD programs 
during the remainder of the SIP development period, which ends on May 
16, 2011. EPA is taking no final action on that aspect of the proposal.

DATES: This final rule is effective on July 18, 2011.

ADDRESSES: The EPA has established a docket for this action under 
Docket ID No. EPA-HQ-OAR-2003-0062. All documents in the docket are 
listed on the https://www.regulations.gov Web site. Although listed in 
the index, some information may not be publicly available, e.g., 
Confidential Business Information (CBI) or other information whose 
disclosure is restricted by statute. Certain other material, such as 
copyrighted material, is not placed on the Internet and will be 
publicly available only in hard copy form. Publicly available docket 
materials are available either electronically through https://www.regulations.gov or in hard copy at the Air Docket, EPA/DC, EPA 
West, Room 3334, 1301 Constitution Avenue, Northwest, Washington, DC. 
The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday 
through Friday, excluding legal holidays. The telephone number for the 
Public Reading Room is (202) 566-1744, and the telephone number for the 
Air Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Mr. Dan deRoeck, Air Quality Policy 
Division, (C504-03), U.S. Environmental Protection Agency, Research 
Triangle Park, NC, 27711; telephone number (919) 541-5593; fax number 
(919) 541-5509; or e-mail address: deroeck.dan@epa.gov.

SUPPLEMENTARY INFORMATION: The information in this Supplementary 
Information section of this preamble is organized as follows:

I. General Information
    A. Does this action apply to me?
    B. Where can I get a copy of this document and other related 
information?
II. Overview of This Final Rule
III. Background
    A. Prevention of Significant Deterioration Program
    B. Fine PM and the NAAQS for PM2.5
    C. How is the PSD program for PM2.5 implemented?
IV. Grandfather Provision for PM2.5 in the Federal PSD 
Program
    A. What is the grandfather provision for PM2.5?
    B. Why did EPA propose to repeal the grandfather provision for 
PM2.5?
    C. Summary of Comments and Responses on the Proposed Repeal of 
the Grandfather Provision
    D. What final action is EPA taking on the grandfather provision 
for PM2.5?
V. What action is EPA taking on the 1997 PM10 Surrogate 
Policy for state PSD programs?
VI. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health and Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect 
Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
    K. Congressional Review Act
    L. Conclusion and Determination Under Section 307(d)
VII. Judicial Review
VIII. Statutory Authority


[[Page 28647]]



I. General Information

A. Does this action apply to me?

    Entities potentially affected by this action include those proposed 
new and modified major stationary sources subject to the Federal PSD 
program that submitted a complete application for a PSD permit before 
the July 15, 2008, effective date of the final PM2.5 New 
Source Review (NSR) Implementation Rule (73 FR 28321), but have not yet 
received a final and effective permit authorizing the source to 
commence construction.
    The EPA estimates that fewer than 30 proposed new major sources or 
modifications will be affected by the repeal of the grandfather 
provision in the Federal PSD program. At least two projects known to 
have been grandfathered received final permits to construct (that are 
effective) prior to EPA taking action to stay the provision in June 
2009; EPA's final action to repeal the grandfather provision does not 
apply retroactively to such permits.
    The majority of sources potentially affected are expected to be in 
the following groups:

------------------------------------------------------------------------
             Industry group                         NAICS \a\
------------------------------------------------------------------------
Electric services......................  221111, 221112, 221113, 221119,
                                          221121, 221122.
Petroleum refining.....................  32411.
Industrial inorganic chemicals.........  325181, 32512, 325131, 325182,
                                          211112, 325998, 331311,
                                          325188.
Industrial organic chemicals...........  32511, 325132, 325192, 325188,
                                          325193, 32512, 325199.
Miscellaneous chemical products........  32552, 32592, 32591, 325182,
                                          32551.
Natural gas liquids....................  211112.
Natural gas transport..................  48621, 22121.
Pulp and paper mills...................  32211, 322121, 322122, 32213.
Paper mills............................  322121, 322122.
Automobile manufacturing...............  336111, 336112, 336712, 336211,
                                          336992, 336322, 336312, 33633,
                                          33634, 33635, 336399, 336212,
                                          336213.
Pharmaceuticals........................  325411, 325412, 325413, 325414.
------------------------------------------------------------------------
\a\ North American Industry Classification System.

    Entities affected by this action also include state and local 
governments responsible for implementing PSD pre-construction permit 
programs for new and modified major stationary sources under the 
Federal PSD permit program (40 CFR 52.21).

B. Where can I get a copy of this document and other related 
information?

    In addition to being available in the docket, an electronic copy of 
this final rule will also be available on the World Wide Web. Following 
signature by the EPA Administrator, a copy of this final rule will be 
posted in the regulations and standards section of our NSR home page 
located at https://www.epa.gov/nsr.

II. Overview of This Final Rule

    In this final rule we \1\ are taking final action on one of the two 
actions that we proposed in a notice of proposed rulemaking on February 
11, 2010, at 75 FR 6827. We are taking final action on the proposal to 
repeal the grandfather provision for PM2.5 contained in the 
Federal PSD rules at 40 CFR 52.21(i)(1)(xi). The grandfather provision, 
applicable only to PSD source applications that were determined to be 
complete before July 15, 2008, enabled those applications to continue 
to be reviewed for PM10 (i.e., the 1997 PM10 
Surrogate Policy) in lieu of the new requirements for PM2.5, 
which became effective on July 15, 2008.
---------------------------------------------------------------------------

    \1\ In this preamble, the terms ``we,'' ``us,'' and ``our'' 
refer to the EPA.
---------------------------------------------------------------------------

    When EPA issued the PM10 Surrogate Policy in 1997, the 
policy enabled sources, EPA, and state and local permitting authorities 
to address the PSD requirements for PM2.5 simply by 
satisfying the requirements for PM10--a regulated form of 
particulate matter (PM) that includes PM2.5 as well as 
larger particles. As explained in the 1997 PM10 Surrogate 
Policy, some alternative to directly addressing PM2.5 was 
necessary at that time because of various technical problems that made 
it infeasible to estimate PM2.5 and conduct the analyses 
necessary to demonstrate compliance with the applicable 
PM2.5 requirements under the PSD program as required by 
section 165 of the Clean Air Act (CAA or Act).
    More recently, EPA has made important progress in addressing the 
technical issues that impeded a PM2.5 analysis. With the 
deployment and operation of the monitoring network for PM2.5 
beginning in 1999, ambient air quality monitoring data has become more 
abundantly available. Also, EPA has promulgated screening tools, 
including a significant emissions rate (SER), significant impact levels 
(SILs), and a significant monitoring concentration (SMC) to streamline 
the implementation of the PSD program for PM2.5. Finally, 
EPA has issued revised test methods for sampling emissions of 
PM2.5 and its condensable fraction, and issued interim 
modeling guidance for modeling PM2.5 emissions to complete a 
cumulative air quality analysis for PM2.5.
    Accordingly, in this final action, EPA will end the use of the 1997 
PM10 Surrogate Policy for PSD permits under the Federal PSD 
program (40 CFR 52.21) for sources that have been covered by the 
grandfather provision (that is, those sources for which a complete 
permit application was submitted before July 15, 2008 \2\) and that 
have not yet been issued a permit by the effective date of this final 
rule. After this final rule becomes effective, in order for those 
permits to be issued, such applications will have to be reviewed 
directly against the PM2.5 requirements or, alternatively, 
use a surrogate approach for PM2.5 (other than the 1997 
PM10 Surrogate Policy) that is consistent with the 
applicable case law. Thus, those affected PSD permit applications must 
be amended to include further analyses to demonstrate compliance with 
the PSD requirements for PM2.5. Alternatively, those 
affected PSD permit applications must show that PM10 is an 
adequate surrogate for PM2.5 for that specific project. The 
demonstration must show, at a minimum, that the source's emissions are 
controlled to a level that satisfies Best Available Control Technology 
(BACT) requirements for PM2.5 and that the emissions will 
not cause or contribute to a violation of any National Ambient Air 
Quality Standard (NAAQS or standard) for PM2.5.
---------------------------------------------------------------------------

    \2\ Sources that applied for a PSD permit under the Federal PSD 
program on or after July 15, 2008, are already excluded from using 
the 1997 PM10 Surrogate Policy as a means of satisfying 
the PSD requirements for PM2.5. See 73 FR 28321.

---------------------------------------------------------------------------

[[Page 28648]]

    We believe that it is appropriate to terminate the use of the 1997 
PM10 Surrogate Policy at this time for those PSD 
applications grandfathered under the Federal PSD program because the 
necessary technical tools to conduct PM2.5 analyses for PSD 
sources are now available. The 1997 PM10 Surrogate Policy 
was always intended as an interim measure that was to remain in effect 
only as long as needed. Over the past 13 years, EPA believes that the 
necessary technical tools and test methods required to show compliance 
with PM2.5 have been developed and, hence, we believe that 
the need for this interim approach no longer exists.
    We do not believe that the use of the 1997 PM10 
Surrogate Policy affords the same degree of protection of the 
PM2.5 NAAQS from major new and modified stationary sources 
as does the direct analysis of PM2.5 emissions. In addition 
to the fact that the original PM2.5 NAAQS promulgated in 
1997 were generally more stringent than the corresponding 
PM10 NAAQS, the strengthening of the 24-hour primary 
PM2.5 NAAQS in 2005 created a greater disparity between the 
relative stringency of the PM2.5 and PM10 
standards. Thus, now that the necessary technical tools are available, 
we believe that it is important to move as quickly as possible to 
implement fully the PSD program for PM2.5.
    We recognize that this action will in some cases increase the PSD 
permit review timeframe (although not unexpectedly) for the affected 
grandfathered sources, but we believe that the use of the 1997 
PM10 Surrogate Policy should be permanently discontinued 
under the Federal PSD program. Those grandfathered sources with pending 
permits have been on notice since June 1, 2009, (the date of our 
Federal Register notice announcing that we had agreed to reconsider the 
grandfather provision and to administratively stay the provision so 
that we could propose repealing it) that EPA was considering ending the 
grandfather provision for PM2.5 and, as noted above, now 
have additional technical tools to complete the permitting process for 
PM2.5.
    In our February 2010 proposed rule, we also proposed to end the use 
of the 1997 PM10 Surrogate Policy for permits issued under 
PSD programs implemented by states as part of their approved SIP. We 
received and have reviewed some comments that support an early end to 
the policy and some comments that oppose ending the policy earlier than 
the original May 16, 2011, sunset date. Some of the opposing comments 
also asked EPA to extend the time that the policy could be used beyond 
the original sunset date. At this time, however, we are taking no 
action on our proposal to end the use of the 1997 PM10 
Surrogate Policy or to otherwise change the time period during which 
the policy could continue to be used.
    Thus, as announced in the May 2008 rulemaking, the 1997 
PM10 Surrogate Policy may not be used for any state PSD 
permits after the 3 years allowed for SIP development (ending May 16, 
2011). With the end of the 1997 PM10 Surrogate Policy in 
SIP-approved states on May 16, 2011, and the repeal of the grandfather 
provision in this final action, the 1997 PM10 Surrogate 
Policy may not be relied on for any pending or future applications.

III. Background

A. Prevention of Significant Deterioration Program

    The NSR provisions of the Act are a combination of air quality 
planning and air pollution control technology program requirements for 
new and modified major stationary sources of air pollution. Section 109 
of the Act requires EPA to promulgate primary NAAQS to protect public 
health and secondary NAAQS to protect public welfare. Once we have set 
these standards, states must develop, adopt, and submit to us for 
approval SIPs that contain emission limitations and other control 
measures to attain and maintain the NAAQS and to meet the other 
requirements of section 110(a) of the Act.
    Part C of title I of the Act contains the requirements for a 
component of the major NSR program known as the PSD (short for 
``Prevention of Significant Deterioration'') program. The PSD program 
sets forth procedures for the preconstruction review and permitting of 
new and modified major stationary sources of air pollution locating in 
areas meeting the NAAQS (``attainment'' areas) and areas for which 
there is insufficient information to classify an area as either 
attainment or nonattainment (``unclassifiable'' areas). In most states, 
EPA has approved a PSD permit program that is part of the applicable 
SIP. The Federal PSD program at 40 CFR 52.21 applies in states that 
lack a SIP-approved PSD permit program, and in Indian country.\3\ The 
applicability of the PSD program to a new major stationary source or 
major modification must be determined in advance of construction and is 
a pollutant-specific determination. Once a major new source or major 
modification is determined to be subject to the PSD program (i.e., to 
be a ``PSD source''), among other requirements, it must undertake a 
series of analyses for each regulated NSR pollutant subject to review 
to demonstrate that it will use the BACT and will not cause or 
contribute to a violation of any NAAQS or increment. In cases where the 
source's emissions of any NSR regulated pollutant may adversely affect 
an area specially classified as ``Class I,'' such as national parks and 
wilderness areas, additional review must be conducted to protect the 
Class I area's increments and special attributes referred to as ``air 
quality related values.''
---------------------------------------------------------------------------

    \3\ We have delegated our authority to some states that lack an 
approved PSD program in their SIPs and have requested the authority 
to implement the Federal PSD program. The EPA remains the reviewing 
authority in non-delegated states lacking SIP-approved programs. The 
current status of individual state PSD programs can be found at 
EPA's Web site at https://www.epa.gov/nsr/where.html.
---------------------------------------------------------------------------

    When the reviewing authority reaches a preliminary decision to 
authorize construction of a proposed major new source or major 
modification, the authority must provide notice of the preliminary 
decision and an opportunity for comment by the general public, 
industry, and other persons that may be affected by the emissions of 
the proposed major source or major modification. After considering 
these comments, the reviewing authority issues a final determination on 
the construction permit in accordance with the PSD regulations. 
However, under EPA regulations at 40 CFR part 124 and similar state 
regulations, an administrative appeal of a permitting determination may 
prevent the permit from becoming final and effective until the appeal 
is resolved.

B. Fine PM and the NAAQS for PM2.5

    Fine particles in the atmosphere are made up of a complex mixture 
of components. Common constituents include sulfates; nitrates; 
ammonium; elemental carbon; a great variety of organic compounds; and 
inorganic material (including metals, dust, sea salt, and other trace 
elements) generally referred to as ``crustal'' material, although it 
may contain material from other sources. Airborne PM with a nominal 
aerodynamic diameter of 2.5 micrometers or less (a micrometer is one-
millionth of a meter, and 2.5 micrometers is less than one-seventh the 
average width of a human hair) is considered to be ``fine particles,'' 
and is also known as PM2.5. ``Primary'' particles are 
emitted directly into the air as solid or liquid particles (e.g., 
elemental

[[Page 28649]]

carbon from diesel engines or fire activities, or condensable organic 
particles from gasoline engines). ``Secondary'' particles (e.g., 
sulfates and nitrates) form in the atmosphere as a result of various 
chemical reactions.
    The health effects associated with exposure to PM2.5 are 
significant and well studied. Epidemiological studies have shown a 
significant correlation between elevated PM2.5 levels and 
premature mortality. Other important effects associated with 
PM2.5 exposure include aggravation of respiratory and 
cardiovascular disease (as indicated by increased hospital admissions, 
emergency room visits, absences from school or work, and restricted 
activity days), lung disease, decreased lung function, asthma attacks, 
and certain cardiovascular problems. Individuals particularly sensitive 
to PM2.5 exposure include older adults, people with heart 
and lung disease, and children.
    The EPA has established primary health-based long-term and short-
term NAAQS for PM2.5. The long-term annual average standard 
is 15 micrograms per cubic meter ([micro]g/m\3\), established in 1997. 
See 62 FR 38652. The short-term 24-hour standard is 35 [micro]g/m\3\, 
established in 2006. See 71 FR 61286. At the time we established the 
primary standards in 1997, we also established welfare-based 
(secondary) standards identical to the primary standards. The secondary 
standards are designed to protect against major environmental effects 
of PM2.5 such as visibility impairment, soiling, and 
materials damage.
    In addition, EPA has established a short-term primary and secondary 
NAAQS for PM10 as an indicator for coarse PM. The short-term 
standard for PM10 is 150 [micro]g/m\3\. See 71 FR 61236.

C. How is the PSD program for PM2.5 implemented?

    After we promulgated the NAAQS for PM2.5 in 1997, we 
issued a guidance document titled, ``Interim Implementation for the New 
Source Review Requirements for PM2.5'' (John S. Seitz, EPA, 
October 23, 1997).\4\ That guidance document, referred to throughout 
this preamble as the ``1997 PM10 Surrogate Policy,'' allows 
proposed major sources and major modifications to satisfy the PSD 
requirements for PM2.5 by meeting the requirements for 
controlling PM10 and for analyzing impacts on 
PM10 air quality as a surrogate approach. The 1997 
PM10 Surrogate Policy was designed to temporarily help 
states implement the CAA requirements for PSD pertaining to the new 
PM2.5 NAAQS and PM2.5 as a regulated pollutant. 
We intended to make the policy available until we resolved the known 
technical difficulties associated with addressing PM2.5.\5\
---------------------------------------------------------------------------

    \4\ Available in the docket for this rulemaking, ID No. EPA-HQ-
OAR-2003-0062, and at https://www.epa.gov/region07/programs/artd/air/nsr/nsrmemos/pm25.pdf.
    \5\ We identified various technical difficulties, including the 
lack of necessary tools to calculate the emissions of 
PM2.5 and related precursors, the lack of adequate 
modeling techniques to project ambient impacts, the lack of 
PM2.5 monitoring sites, and the lack of adequate approved 
test methods.
---------------------------------------------------------------------------

    We believed the 1997 PM10 Surrogate Policy was necessary 
because section 165(a)(1) of the Act provides that no new or modified 
major source may be constructed without a PSD permit that meets all of 
the section 165(a) requirements with respect to the regulated 
pollutant. Moreover, section 165(a)(3) provides that the emissions from 
any such source may not cause or contribute to a violation of ``any 
NAAQS.'' The EPA policy for implementing the Federal PSD program 
provides that the term ``any NAAQS'' applies to any existing NAAQS, 
including new or revised NAAQS upon their effective date. Also, section 
165(a)(4) requires BACT for each pollutant subject to PSD regulation. 
PM2.5 became a regulated pollutant when EPA promulgated the 
NAAQS for PM2.5 in 1997.
    On November 1, 2005, we proposed the Clean Air Fine Particle 
Implementation Rule (PM2.5 Implementation Rule) to implement 
the 1997 PM2.5 NAAQS. See 70 FR 65984. The PM2.5 
Implementation Rule proposal described the requirements that states and 
tribes must meet in their implementation plans for attainment of the 
PM2.5 NAAQS. Among other things, that rule proposal sought 
comments on revisions to the NSR program in attainment and 
unclassifiable areas (the PSD program), and in nonattainment areas (the 
nonattainment NSR program).
    For PSD, EPA proposed to revise the existing PSD rules in several 
ways: by proposing a PSD major source threshold and SER for 
PM2.5; proposing to define applicable precursors to regulate 
under PSD and SERs for those precursors; proposing to clarify that 
condensable PM2.5 must be included in determining major 
source status; proposing options for implementing the preconstruction 
monitoring requirements for PM2.5; and proposing transition 
provisions for implementing the new PSD requirements for 
PM2.5.
    On September 21, 2007, EPA proposed additional program elements for 
the PSD program for PM2.5 that were not included in the 2005 
PM2.5 Implementation Rule proposal. The 2007 PSD proposal 
included several options for defining the PM2.5 increments, 
SILs, and an SMC for PM2.5. Increments define maximum 
allowable increases in pollutant concentrations above a baseline 
concentration for a particular area. The SILs and SMC are useful 
screening tools for effectively implementing the air quality impact 
requirements under PSD. See 72 FR 54112.
    On May 16, 2008, EPA published a final PM2.5 NSR 
Implementation Rule to complete the rulemaking for NSR based on the 
2005 PM2.5 Implementation Rule proposal. The 2008 
PM2.5 NSR Implementation Rule contains requirements for 
state and tribal plans to implement the Act's preconstruction review 
provisions for the PM2.5 NAAQS in both attainment and 
nonattainment areas. See 73 FR 28321. The 2008 PM2.5 NSR 
Implementation Rule generally requires that, as of the effective date 
of the new rule (July 15, 2008), major stationary sources seeking 
permits must begin directly satisfying the PM2.5 
requirements, rather than relying on the 1997 PM10 Surrogate 
Policy. In PM2.5 attainment (or unclassifiable) areas, the 
new PSD requirements under 40 CFR 51.166 set forth the PM2.5 
requirements for states with SIP-approved programs to include in their 
state PSD programs; similar requirements were added to 40 CFR 52.21--
the Federal PSD program--for EPA (or, where applicable, delegated state 
agencies) to use for implementing the new PM2.5 requirements 
in states lacking approved PSD programs in their SIPs.
    Although the 2008 PM2.5 NSR Implementation Rule 
generally requires states to begin implementing the new 
PM2.5 requirements upon the July 15, 2008, effective date of 
the rule, EPA provided two transition provisions within the PSD program 
under specific conditions. The first of these transition provisions, a 
grandfather provision, applied specifically to certain sources that had 
applied for PSD permits pursuant to the Federal PSD program under 40 
CFR 52.21. The second transition provision allowed states to continue 
using the 1997 PM10 Surrogate Policy on an interim basis to 
implement the PM2.5 requirements in any state PSD program 
that is part of an approved SIP. This latter exception was to apply to 
permit reviews under state PSD programs until the end of the 3-year SIP 
development period (which ends in May 2011) or until EPA approves the 
revised state program, whichever comes first.

[[Page 28650]]

IV. Grandfather Provision for PM2.5 in the Federal PSD 
Program

A. What is the grandfather provision for PM2.5?

    Under certain circumstances, EPA has allowed proposed new major 
sources and major modifications that have submitted a complete PSD 
permit application before the effective date of an amendment to the PSD 
regulations, but have not yet received a final and effective PSD 
permit, to continue relying on information already in the application 
rather than immediately having to amend applications to demonstrate 
compliance with the new PSD requirements. In such a way, these proposed 
sources and modifications were ``grandfathered'' or exempted from the 
new PSD requirements that would otherwise have applied to them. For 
example, the Federal PSD regulations at 40 CFR 52.21(i)(1)(x) provide 
that the owners or operators of proposed sources or modifications that 
submitted a complete permit application before July 31, 1987, (i.e., 
the effective date of the revisions to the Federal PSD regulations to 
implement the PM10 NAAQS) are not required to meet the 
requirements for PM10, but may instead satisfy the 
requirements for total suspended particulate matter (TSP) that were 
previously in effect.
    In addition, EPA has allowed some grandfathering for permit 
applications submitted before the effective date of an amendment to the 
PSD regulations establishing new maximum allowable increases in 
pollutant concentrations (also known as PSD increments). The Federal 
PSD regulations at 40 CFR 52.21(i)(10) provide that proposed sources or 
modifications that submitted a complete permit application before the 
effective date of the increments for PM10 in the applicable 
implementation plan are not required to meet the increment requirements 
for PM10, but may instead satisfy the increment requirements 
for TSP that were previously in effect. Also, 40 CFR 52.21(b)(i)(9) 
provides that new sources or sources making modifications that 
submitted complete permit applications before the provisions embodying 
the maximum allowable increase for nitrogen oxides (the nitrogen 
dioxide increments) took effect are not required to demonstrate 
compliance with the new increment requirements to be eligible to 
receive the permit.
    Similarly, the 2008 PM2.5 NSR Implementation Rule added 
a grandfather provision allowing permit applicants that had submitted a 
complete application under the Federal PSD program at 40 CFR 52.21 
prior to the July 15, 2008, effective date, but had not yet received 
their PSD permit by that date, to continue being reviewed using the 
1997 PM10 Surrogate Policy. The grandfather provision for 
PM2.5, added as new paragraph (xi) to 40 CFR 52.21(i)(1), 
was not proposed for notice and comment in the 2005 PM2.5 
Implementation Rule proposal. Instead, the 2005 PM2.5 
Implementation Rule proposal had provided that when we issued the final 
rule, the new PM2.5 requirements would take effect 
immediately in PSD permits issued in states where the Federal PSD 
program applies. See 70 FR 65986 at 66043.
    As described more in the discussion that follows in section IV.B of 
this preamble, EPA has twice stayed the grandfather provision for 
PM2.5, with the first of the two stays beginning on June 1, 
2009. Consequently, permits covered by the grandfather provision that 
had not already been issued by the effective date of the first stay 
could not be issued relying upon the 1997 PM10 Surrogate 
Policy as the basis for approval during the time periods that the stays 
remained in effect.\6\ Prior to the stays, the grandfather provisions 
remained in effect from July 15, 2008, until June 1, 2009, during which 
time PSD permit applications relying on the 1997 PM10 
Surrogate Policy to satisfy the PSD requirements for PM2.5 
continued to be acceptable for purposes of approving and issuing the 
PSD permits.
---------------------------------------------------------------------------

    \6\ At the time the grandfather provision for PM2.5 
was put into effect, we estimate that fewer than thirty proposed new 
or modified major stationary sources were covered. Of these, at 
least two projects subsequently received final and effective PSD 
permits after the July 15, 2008, effective date of the final rule 
and before the June 1, 2009, administrative stay took effect.
---------------------------------------------------------------------------

B. Why did EPA propose to repeal the grandfather provision for PM2.5?

    On July 15, 2008, Earthjustice, acting on behalf of the Natural 
Resources Defense Council and the Sierra Club, submitted a petition to 
the Administrator seeking reconsideration of four provisions of the 
2008 PM2.5 NSR Implementation Rule.\7\ One of the four 
challenged provisions was the grandfather provision for 
PM2.5 under the Federal PSD program. In the petition, the 
petitioners argued that ``EPA unlawfully failed to present this 
grandfather provision and accompanying rationale to the public for 
comment.'' See July 15 Petition at 6. Thus, petitioners argued, EPA had 
not given interested parties any notice of and the opportunity to 
comment on the grandfather provision that EPA adopted in 40 CFR 
52.21(i)(1)(xi) in the final rule. Moreover, with regard to the 
grandfather provision itself, the petitioners questioned EPA's 
authority to waive statutory requirements by establishing such a 
provision, and argued that Congress specifically addressed the issue of 
grandfathering in section 168(b), where it allowed for the 
grandfathering of only those sources on which construction had 
commenced before enactment of the 1977 Clean Air Act Amendments. See 
July 15 Petition at 7.
---------------------------------------------------------------------------

    \7\ Available in the docket for this rulemaking at https://www.regulations.gov, document number EPA-HQ-OAR-2003-0062-0279.1.
---------------------------------------------------------------------------

    Finally, petitioners argued that the technical difficulties 
associated with ambient monitoring, estimating emissions, and air 
quality modeling that led to the adoption of the 1997 PM10 
Surrogate Policy no longer existed. Hence, the petitioners argued that 
all sources must conduct the required analyses for PM2.5 
directly without relying on the 1997 PM10 Surrogate Policy, 
and, therefore, there was no justification for continuing to allow any 
sources to rely on the grandfather provision. See July 15 Petition at 
8. In sum, petitioners asserted that the grandfather provision in 40 
CFR 52.21(i)(1)(xi) was illegal and arbitrary, and requested that EPA 
stay the provision.
    On January 14, 2009, EPA responded in a letter to the petitioners 
that the Agency was denying all aspects of the petition for 
reconsideration. However, on February 10, 2009, the same petitioners 
submitted a second petition similar to thefirst to EPA.\8\
---------------------------------------------------------------------------

    \8\ Available in the docket for this rulemaking at https://www.regulations.gov, document number EPA-HQ-OAR-2003-0062-0281.
---------------------------------------------------------------------------

    The second petition made the same arguments that were presented in 
the July 15, 2008, petition seeking reconsideration and an 
administrative stay and sought reconsideration of both the 2008 
PM2.5 NSR Implementation Rule and the January 2009 denial of 
petitioners' first petition for reconsideration. In response to the 
second petition, the Administrator reversed the Agency's earlier 
decision and agreed to reconsider each of the four challenged 
provisions.
    In a letter dated April 24, 2009, the Administrator indicated that 
the Agency would reconsider the grandfather provision and propose to 
repeal the grandfather provision ``on the grounds that it was adopted 
without prior public notice and is no longer substantially justified in 
light of the resolution of the technical issues with respect to 
PM2.5 monitoring, emissions estimation, and air quality 
modeling that led to the PM10 Surrogate Policy in 1997.'' 
Finally, the

[[Page 28651]]

Administrator's letter announced an administrative stay of the 
grandfather provision for 3 months under the authority of section 
307(d)(7)(B) of the Act.
    The 3-month administrative stay became effective on June 1, 2009--
the date the notice announcing the stay was published in the Federal 
Register--and ended on September 1, 2009. See 74 FR 26098. In order to 
allow additional time necessary to finalize this rulemaking, EPA 
proposed and promulgated a second stay that stayed the grandfather 
provision until June 22, 2010. See 74 FR 48153, September 22, 2009. 
During the second stay, on February 11, 2010, EPA issued a notice of 
proposed rulemaking that proposed repealing the grandfather provision. 
See 75 FR 6827. The same notice also proposed to end early the use of 
the 1997 PM10 Surrogate Policy in PSD programs implemented 
by states under an approved SIP. EPA is taking no final action on the 
latter proposed action, as described further in section V of this 
preamble.

C. Summary of Comments and Responses on the Proposed Repeal of the 
Grandfather Provision

    A total of 38 commenters, including 7 commenters speaking at the 
public hearing held on February 26, 2010, responded to the 2010 notice 
of proposed rulemaking. Most of these commenters specifically addressed 
the proposed repeal of the grandfather provision for PM2.5 
in the Federal PSD rule at 40 CFR 52.21(i)(1)(xi).
    Seven commenters support the proposal to repeal the grandfather 
provision, while 20 expressly opposed it. The commenters provided 
various reasons for their positions. The following discussion 
summarizes the significant comments and our responses categorized by 
specific topics. A more detailed summary of the comments and our 
responses is contained in the Response to Comment document in the 
docket for this rulemaking.
1. Comments on Legal Concerns
    Comments on Legality of the Grandfather Provision:
    Some environmental group commenters support EPA's proposed repeal, 
in part, because of their interpretation that the grandfather provision 
is illegal. The commenters claim that EPA has no discretion to waive or 
grandfather any permits under the Federal PSD program. On the other 
hand, 12 commenters disagree that there is anything unlawful about the 
grandfather provision for PM2.5. Those commenters claim that 
EPA clearly has the authority to establish a grandfather provision as 
part of a transition procedure for implementing new requirements. Some 
of these commenters point out that EPA indicated in the 2008 
PM2.5 NSR Implementation Rule that the grandfather provision 
was consistent with existing grandfather provisions contained in 40 CFR 
52.21(i)(1)(x).
    Response:
    We disagree with the comments stating that EPA may not establish 
grandfather provisions in appropriate circumstances. Our decision to 
repeal the grandfather provision here does not reflect any conclusion 
by EPA that the grandfather provision for PM2.5, or 
grandfather provisions in general, are unlawful. See also our response 
to the following comments on statutory authority.
    Comments on Statutory Authority:
    Several commenters argue against the petitioners' claim in the 2009 
petition for reconsideration that section 168(b) of the Act restricts 
EPA's ability to grandfather sources by allowing for the grandfathering 
of only those sources on which ``construction was commenced * * * after 
June 1, 1975, and prior to the enactment of the Clean Air Act 
Amendments of 1977 * * *.'' These commenters argue that Congress' 
inclusion of a one-time grandfather provision upon enactment of the PSD 
program is clearly different from grandfathering when a new pollutant 
is identified for regulation by a NAAQS, which the Act does not 
address. These commenters urge EPA to confirm that the grandfather 
provision in section 168 (intended to ease transition upon enactment of 
the PSD statute) does not constrain the Agency with respect to offering 
reasonable transition provisions when pollutants become newly subject 
to a NAAQS. The commenters argue instead that the existence of the 
grandfather provision in section 168 generally indicates that Congress 
intended for smooth transitions to new programs under the Act.
    One of these commenters argues that in the PSD program, EPA has 
included grandfather provisions when it adopted a number of new 
permitting requirements, and that the Act gives EPA substantial 
discretion to decide on the specifics of PSD applicability. (Citing 
Envt'l Defense v. Duke Energy Corp., 127 S. Ct. 1423, 1433-34 (2007).) 
Another of the commenters claims that a repeal of the grandfather 
provision would be unfair and contrary to the Act.
    Finally, some commenters expressly call upon EPA to clarify that it 
retains the authority to issue transition policies, such as the 
grandfather provision, when new NAAQS are issued.
    Response:
    We do not agree with the petitioners' original claim that EPA lacks 
authority to adopt and implement the grandfather provision for 
PM2.5. Thus, we agree with the commenters who also question 
the petitioners' claim. In particular, we do not agree that the 
existence of certain grandfathering in section 168(b) of the Act is 
properly read to prohibit grandfathering in all other circumstances. As 
discussed previously in section IV.A of this preamble, and as pointed 
out in some of the comments, we have relied on the use of grandfather 
provisions in past NSR regulations where we believed that it was 
appropriate as part of the transition process for implementing new 
requirements. In the preamble to the 2008 PM2.5 NSR 
Implementation Rule, we stated our position that the PM2.5 
grandfather provision is consistent with the existing provision under 
40 CFR 52.21(i)(1)(x) whereby EPA grandfathered new and modified major 
stationary sources with permit applications based on PM (measured as 
TSP) from the then-new PM10 requirements established in 
1987. However, while we continue to believe that we have the discretion 
to use grandfather provisions in the PSD program where appropriate, we 
have decided to repeal the grandfather provision for PM2.5 
at 40 CFR 52.21(i)(1)(xi) on policy grounds, as discussed later in this 
preamble.
    Comments on the Section 165(c) Requirement To Issue a PSD Permit 
within 1 Year:
    One commenter points to section 165(c) of the Act as creating a 1-
year deadline for issuing a PSD permit after a complete application has 
been submitted, and argues that since most, if not all, of the permit 
applications that would be affected by the repeal of the grandfather 
provision were likely submitted more than 1 year before the initial 
(administrative) stay of the grandfather provision took effect, those 
applications are entitled to final action consistent with the 
grandfather provision and the use of PM10 as a surrogate for 
PM2.5. The commenter further argues that, in addition to 
allowing EPA or states with delegated PSD authority to continue ongoing 
violations of the section 165(c) deadline, repealing the grandfather 
provision for PM2.5 would deepen and perpetuate the 
``unlawful'' effects of the stay.
    Response:
    We do not dispute that some of the permit applications relying on 
the grandfather provision were not granted or denied within the 1-year 
period provided in section 165(c) of the Act,

[[Page 28652]]

but disagree that this is a valid justification for allowing the use of 
the grandfather provision, for all of the reasons discussed in this 
preamble. In making this comment, the commenter has not shown that the 
failure to act on those applications within 1 year can be attributed to 
the stays of the grandfather provision (which, as the commenter 
recognizes, came into effect almost 1 year after the grandfather 
provision for PM2.5 was promulgated). Indeed, the fact that 
a permit was not issued within a year during the time that the 
grandfather provision was in effect suggests that there were other 
factors that prevented the source from receiving a permit within the 1-
year period provided by CAA section 165(c). Moreover, even if the 
grandfather provision had not been stayed with respect to those pending 
applications (or if the 1997 PM10 Surrogate Policy were to 
become available to the applicant through some other mechanism in the 
future), it is not clear that the applications provided the information 
or analyses necessary under the case law to demonstrate that 
PM10 is a reasonable surrogate such that the 1997 
PM10 Surrogate Policy could be used. See, e.g., discussion 
of case law in 75 FR 6827, 6831-32 (February 11, 2010). Finally, if the 
applicant believes that it can demonstrate that surrogacy is consistent 
with the case law, then it may do so under the case law even in the 
absence of EPA's 1997 PM10 Surrogate Policy.
    Comments on the Legality of Repealing the Grandfather Provision for 
PM2.5:
    Some commenters opposing the proposed repeal of the grandfather 
provision for PM2.5 argue that the repeal, in addition to 
the second petition for reconsideration, is illegal. With regard to the 
repeal action, some commenters question EPA's alleged position that it 
must repeal the grandfather provision because there was not adequate 
notice to the public of EPA's intent to continue the use of the 1997 
PM10 Surrogate Policy. The commenters disagree with this 
position, claiming that a failure to provide for notice and comment on 
a provision of a rule cannot be a reason to repeal that provision.
    One commenter disputes that there was inadequate notice because 
technical difficulties of measuring, modeling, and monitoring 
PM2.5 have been well known since 1997 and were fully 
documented during the rulemaking. Thus, the commenter asserts that EPA 
lacked the technical basis to require sources that had complete 
applications pending at that time of the promulgation of the 2008 
PM2.5 NSR Implementation Rule to measure or predict 
PM2.5 concentration. In addition, this commenter asserts 
that EPA failed to meet the administrative requirements for terminating 
the 1997 PM10 Surrogate Policy. Specifically, the commenter 
states that EPA would have had to provide notice of the withdrawal of 
the 1997 PM10 Surrogate Policy to reverse its use by sources 
grandfathered by the final 2008 PM2.5 NSR Implementation 
Rule.\9\ Based on these assertions, the commenter contends that EPA may 
not repeal the grandfather provision retroactively.
---------------------------------------------------------------------------

    \9\ In support of this position, the commenter cites Appalachian 
Power v. EPA, 208 F.3d 1015, 1028 (D.C. Cir. 2001); Alaska 
Professional Hunters Association v. FAA, 177 F.3d 1030, 1033-34 
(D.C. Cir. 1999); and Paralyzed Veterans of America v. D.C. Arena 
L.P., 117 F.3d 579, 586 (D.C. Cir. 1997).
---------------------------------------------------------------------------

    Two commenters believe that the grandfather provision, while not 
explicitly proposed, was a logical outgrowth of the proposal. One of 
the commenters expresses the belief that EPA raised for comment, in the 
2005 PM2.5 Implementation Rule proposal, issues concerning 
appropriate means for and timing of the transition to implementation of 
PM2.5 requirements in the PSD program. The other commenter 
alleges that the 2005 PM2.5 Implementation Rule proposal 
expressly announced continued use of the 1997 PM10 Surrogate 
Policy as Option 1 at 70 FR 66044 and solicited comment on this 
approach.
    The latter commenter also argues that the 2010 proposal to repeal 
the grandfather provision for PM2.5 represents a dangerous 
procedural precedent. While acknowledging that some actions adopted in 
a final rule could clearly be outside the scope of the proposed rule, 
the commenter asserts that as an overarching rule, the determination of 
whether regulatory actions adopted by a previous Administration's final 
rule were a logical outgrowth of the proposed rule should be left for 
the courts to decide. The commenter believes that leaving such 
decisions to the courts will ensure objective and consistent 
determinations of administrative law, rather than politically-
influenced determinations that likely will shift from Administration to 
Administration. The commenter contends that the grandfather provision 
is not an instance that warrants EPA's departure from that principle.
    One commenter claims that the issue of the lawfulness of the 
grandfather provision was previously addressed and decided by EPA in 
the January 14, 2009, denial of the first petition for reconsideration 
of the final 2008 PM2.5 NSR Implementation Rule. The 
commenter contends that EPA's reliance on the second petition for 
reconsideration, filed on February 10, 2009, is contrary to section 
307(d)(7)(B) of the Act because the second petition did not contain any 
new information that would justify reconsideration and, thus, the 
second petition was untimely and unfounded.
    Response:
    We do not agree with the commenters' claim that we are repealing 
the grandfather provision because of the lack of adequate notice to the 
public. The lack of prior public notice was a basis only for granting 
reconsideration and going through a subsequent rulemaking. EPA's 
decision to repeal the grandfather provision is not based on the fact 
that the provision was not explicitly proposed in the 2005 
PM2.5 Implementation Rule proposal. EPA in this rule is not 
taking any position on whether a lack of public notice could be a basis 
for repealing a rule, or on the other issues that these comments raise 
concerning the adequacy of public notice, logical outgrowth, the 
timeliness of the second petition for reconsideration, and other 
procedural matters.
    We believe that the Act provides EPA with sufficient authority to 
issue transition policy, including grandfather provisions, as needed to 
provide for the reasonable implementation of new NSR requirements. This 
is evidenced by the fact that we have established grandfather 
provisions in the past, as described in section IV.A of this preamble. 
However, it should not be taken to mean that we have or intend to 
automatically use grandfathering as a transition mechanism for all 
changes in NSR requirements. In this case, we continue to believe that 
the technical tools needed to carry out a PM2.5 analysis are 
currently available to the degree necessary to justify requiring 
sources to comply with the PM2.5 requirements via 
PM2.5 analyses for BACT and air quality impacts. Indeed, 
this is what all other sources that are not subject to the grandfather 
provision but are located in areas subject to the Federal PSD program 
are required to do. Alternatively, sources may use an appropriate 
surrogacy demonstration in accordance with past court decisions. For 
this reason and the other substantive reasons discussed in this 
preamble, we have decided to repeal the grandfather provision for 
PM2.5.
    Finally, we wish to clarify a point made by the commenter who 
alleged that the 2005 PM2.5 Implementation Rule proposal 
expressly announced and sought comment on the continued use of the 1997 
PM10 Surrogate Policy as Option 1. That proposal actually

[[Page 28653]]

proposed to allow the continued use of the 1997 PM10 
Surrogate Policy only for states that have SIP-approved PSD programs 
and need additional time to revise their rules to address the 
PM2.5 requirements. For all other circumstances involving 
the NSR rules, we clearly stated that PSD applicants would be subject 
to the PM2.5 requirements as of the effective date of the 
final rule. See 70 FR 66043-44.
2. Comments on the Burden on Sources Resulting From Repeal of the 
Grandfather Provision
    In the 2010 proposal to repeal the grandfather provisions for 
PM2.5, EPA solicited comments on the burdens that may be 
incurred by sources affected by a repeal of the grandfather provision. 
See 75 FR 6833. Several commenters express concern that repeal of the 
grandfather provision would unfairly penalize permit applicants who 
were in the process of obtaining construction permits.
    Comment:
    One commenter states that repeal would effectively impose 
retroactive requirements on sources that relied on past EPA statements 
of the law and the effect of the Agency's regulations, which goes 
against the concepts of fundamental fairness and equity.
    Response:
    We disagree with the premise of this comment: that the repeal of 
the grandfather provision imposes new requirements. The 1997 
PM10 Surrogate Policy did not eliminate any PSD 
requirements; it simply provided an alternative means of demonstrating 
compliance with the applicable requirements that were already in the 
PSD regulations at 40 CFR 52.21 when the PM2.5 NAAQS became 
effective in 1997. Thus, the repeal of the grandfather provision does 
not impose new requirements on any source. The commenter's concern 
about the fairness of our decision is addressed in the next response.
    Comment:
    Some commenters indicate that repeal would result in ``permit 
gridlock.'' These commenters state that each regulatory change adds 
another year onto the permitting process, during which more regulations 
could change and add further delay. The commenters contend that because 
of the length of the process, the major applicable rules need to stay 
constant (in all but extraordinary circumstances) in order for the 
process to proceed in a logical and orderly fashion.
    Another commenter claims that repeal of the grandfather provision 
would arbitrarily and unreasonably penalize applicants for the delay of 
the reviewing authority in discharging its permitting responsibilities. 
The commenter provides an example where two applicants (Applicants A 
and B) submit complete applications on the same date more than a year 
before the effective date of the stay of the grandfather provision, but 
Applicant A's permit is approved and issued before the effective date 
of the stay and Applicant B's permit is not yet ready to be issued on 
the effective date of the stay. The commenter concludes that, through 
no fault of Applicant B, EPA's violation of its nondiscretionary 
statutory duty to act within 1 year would impose on the applicant the 
significant costs and delay involved in undertaking a new analysis of 
PM and, potentially, revising the permit application.
    One commenter opines that an important principle underlies all 
grandfather provisions, including this PM2.5 grandfather 
provision. This principle is that a source that relies in good faith on 
EPA's existing standards and procedures to design a construction 
project and prepare a PSD permit application based upon that design 
should have the right to rely upon those existing standards and 
procedures and should not later be penalized retroactively when the 
standards and/or procedures change and, more importantly, go into 
effect after the application was submitted.
    The same commenter goes on to point out that the issuance of a PSD 
permit under the grandfather provision would not establish any future 
waiver of compliance or long-term exemption under law or in practice 
because the Act requires all sources, including those that have 
undergone PSD review, to comply with limitations the state determines 
in its SIP are necessary to meet NAAQS (including any future revised 
NAAQS) as well as to comply with any New Source Performance Standards. 
According to the commenter, this ensures that, regardless of whether a 
source avoided direct evaluation of its PM2.5 emissions 
during NSR because of the grandfather provision, its PM2.5 
emissions will still be evaluated for compliance with the 
PM2.5 NAAQS.
    Response:
    In projecting the burdens of extended permitting time and effort, 
the commenters assume that if we did not repeal the grandfather 
provision, sources could rely on the 1997 PM10 Surrogate 
Policy without further analysis. However, as discussed in the 2010 
proposal preamble (see 75 FR 6831-32) and later in section V.C.1.b of 
this preamble, at present sources are only able to use the policy after 
completing a surrogacy demonstration consistent with the case law 
(i.e., PM10 must be shown to be a reasonable surrogate for 
PM2.5 under the circumstances of the specific permit) and 
within the limits of the policy itself (i.e., there must be continuing 
technical reasons why a PM2.5 analysis is not technically 
feasible). These key prerequisites cannot be assumed to be met 
automatically, and the commenters have not shown these prerequisites to 
be met with respect to any of the applications that would be covered by 
the grandfather provision. Thus, even if the grandfather provision were 
to remain in force, additional analysis would be required of sources 
seeking to continue using the 1997 PM10 Surrogate Policy 
under that provision.
    The EPA has considered the comments concerning how a repeal of the 
grandfather provision might impact the permitting process and allegedly 
create unfairness and inequity in some of the hypothetical 
circumstances described in the comments. We recognize that the 
commenters' concerns pertain to the fairness of our proposal to change 
the procedures for demonstrating compliance with the PM2.5 
requirements in mid-permit process for individual permits. However, we 
believe that we have an obligation to weigh those concerns and 
associated burdens against our interpretation of the Act, which 
requires that PSD sources must demonstrate that their emissions will 
not cause or contribute to a violation of the PM2.5 NAAQS, 
and such demonstration should provide adequate assurance that such 
compliance will occur. We believe that the 1997 PM10 
Surrogate Policy, which has been in effect for about 13 years, no 
longer provides an acceptable means of making the required 
demonstration in light of the availability of the technical tools 
needed to complete a PM2.5 analysis. Thus, as part of our 
obligation to evaluate the need for transition policy both initially 
and on an ongoing basis, we have concluded that such burdens are 
neither unfair nor inequitable in comparison to the benefits associated 
with having a better understanding of the impacts the source's 
emissions will have on the PM2.5 NAAQS. This conclusion is 
based on our belief that the approach set forth in the 1997 EPA policy 
memo, while necessary in the absence of the technical tools needed to 
implement the PSD program for PM2.5 directly, is 
sufficiently deficient in its ability to satisfy the PM2.5 
requirements (in that it lacks a surrogacy demonstration), particularly 
with regard to possible

[[Page 28654]]

adverse impacts on the PM2.5 NAAQS, that it should no longer 
be available as a means of meeting those requirements now that the 
necessary technical tools for a PM2.5 analysis are 
available. Case law allows the use of surrogates when properly applied. 
Hence, we point out that the use of a valid surrogate approach in 
general is not prohibited by our action in this final rule.
    Finally, we note that we did not stay the grandfather provision 
until almost 1 year following its effective date. Some permits were 
issued during the time that the grandfather provision was in effect. 
Grandfathered sources for which a PSD permit was not issued during that 
period likely had problems related to factors other than the 
PM2.5 analyses that prevented the source from receiving a 
permit.
3. Comments on the Number of Sources Affected by Repeal
    Comment:
    We did not receive any comments that either validate or dispute the 
number of sources that we estimated would be affected by the stay of 
the grandfather provision for PM2.5.\10\ One commenter 
observes that EPA has recognized that continued use of the grandfather 
provision would affect very few, if any, still-pending permits, and 
finds it hard to understand why EPA feels it necessary not only to 
discontinue the grandfather provision altogether, but also to do so 
immediately by issuing the administrative stay. This commenter believes 
that the facts presented by EPA undercut the petitioners' claim that 
grandfathering certain permit applications presents an irreparable 
harm.
---------------------------------------------------------------------------

    \10\ A state agency commenter claims that EPA's repeal of the 
grandfather provision for PM2.5 could affect up to 16 of 
the agency's pending PSD projects. However, this agency's PSD 
program is part of an EPA-approved SIP and, as such, does not appear 
to be affected by the grandfather provision. Instead, we believe 
that the affected PSD projects would be affected by the ending of 
the 1997 PM10 Surrogate Policy. Thus, we address this 
comment in the section V, where our final action on ending the 1997 
PM10 Surrogate Policy in SIP-approved PSD programs is 
addressed.
---------------------------------------------------------------------------

    Response:
    In the 2010 proposal to repeal the grandfather provision, we 
reported that we were aware of 27 sources that had submitted PSD permit 
applications under the Federal PSD program prior to July 15, 2008-- the 
effective date of the 2008 PM2.5 NSR Implementation Rule--
but did not receive their permits by that date. Thus, these 
applications fell within the scope of the grandfather provision at the 
time it was promulgated. For at least six of these applications, the 
permit was either issued or denied, or the project was cancelled, prior 
to June 1, 2009, when the administrative stay became effective. For 
most of the remaining 21 applications, it is our understanding that the 
sources have already directly addressed, or are planning to directly 
address, the applicable PM2.5 requirements in order to 
obtain a permit. At least two of the sources are reportedly planning to 
take enforceable emissions limitations on their PM2.5 
emissions in order to avoid the PSD requirements for PM2.5 
altogether.
    Although only a few remaining grandfathered sources would be 
affected by a repeal of the grandfather provision, we believe that any 
air quality assessment contained in a PSD permit should reflect as 
accurately as possible the actual impacts that could be experienced in 
the area of concern. We do not believe that an analysis of 
PM10 emissions impacts on the PM10 NAAQS 
sufficiently represents the potential impacts that a source may have on 
the PM2.5 NAAQS. We did not base our decision to repeal the 
grandfather provision on the number of sources that could ultimately 
have to submit revised analyses to satisfy the PSD requirements for 
PM2.5.
4. Comments on Retroactive Implementation
    Comment:
    Several commenters who opp