Rule Number and Title

Biomass Boiler Update

Objective of rulemaking

Changes Proposed

Proposed rulemaking will amend DEQ rules so that uncertified stoves under 1 MM BTU/hr can be used at commercial, industrial and institutional facilities if they comply with existing state and federal (NESHAP, grain loading and opacity) emission standards.

Amend OAR 340-200-0020: General Air Pollution Procedures and Definitions: Clarifying that forms can be submitted to DEQ either electronically or on paper.

Amend OAR 340-210-: Stationary Source Notification Requirements:

-0100; Clarifying types of boilers required to register with DEQ

-0110; Specifying information to be included with registration by owners and operators of biomass boilers

-0120; Clarifying re-registration requirements for affected boilers

Amend OAR 340-212-0140: Stationary Source Testing and Monitoring:

Adding test methods to verify compliance with grain loading standards.

Amend OAR 340-228-: Requirements for Fuel Burning Equipment and Fuel Sulfur Content:

-0020, -0200 and -0210; Moving the definition of “New Source” into the sections where it is used in order to prevent reader from needing to refer to a separate section.

-0210; Exempting solid fuel burning devices certified under the Oregon Heat Smart rules from grain loading standards.

Amend OAR 340-262-: Heat Smart Program for Residential Woodstoves and Other Solid Fuel Heating Devices

-0450; Adding definition of “Institutional facility”

-0600; Exempting boilers that meet existing permitting and registration requirements from the definition “solid fuel burning device”

Need for this Rulemaking

What is the need for the proposed rules or amendments? Address each of the following that applies:

The Heat Smart rules need to be amended to allow uncertified solid fuel burning devices with heat outputs under 1 million British Thermal Units per hour (1 MM/Btu/hr) to be used at commercial, industrial and institutional facilities if they can comply with existing NESHAP, grain loading and opacity emission standards. The current rules do not allow the use of boilers with a heat output of less than 1 MMBtu/hr that are uncertified but are able to meet the emission standards that apply to larger boilers.

▪  Do the rule changes address a known environmental problem or a problem we speculate will occur? If the latter, how likely or serious is the problem? What are the consequences of not addressing it?

N/A

▪  Will the changes make it easier for the regulated community to do business? Have we consulted w/affected groups to confirm this?

Without the proposed rule changes, uncertified commercial, industrial and institutional wood-fired boilers with heat outputs less than 1 MMBtu/hr can’t be sold in Oregon. The proposed rulemaking will enable the sale of uncertified devices under certain conditions.

▪  Will the changes make it easier for DEQ to do business? What resource savings will be achieved?

N/A

▪  Will the changes further one or more of our strategic directions?

N/A

▪  Do the rules achieve or maintain consistency with federal requirements or delegation of federal programs? If so, explain why that is necessary or important.

N/A

▪  Is there another compelling reason?

Several small-scale commercial, industrial and institutional biomass boiler projects are under development across the state as part of the Governor’s statewide biomass initiative. These projects are relying on Congressional and Oregon Department of Energy funding, and there are project timelines critical to the successful outcome of these projects. Some of these projects (those with wood-fired boilers purchased on or after March 1, 2011 that have heat outputs less than 1 MMBtu/hr) may be prohibited if DEQ does not exempt them from the Heat Smart rules. This proposal would exempt boilers in the above mentioned projects from the Heat Smart rules while helping to ensure compliance with other applicable state and federal emissions standards.

▪  Can the need be met through policy, guidance, or another alternative to rulemaking? If not, briefly explain.

No. The proposed rule changes are needed to exempt uncertified boilers from the prohibition on the sale of solid fuel burning devices in Oregon with heat outputs less than 1 million Btu/hr resulting from the Heat Smart rules, provided they can demonstrate that they meet all other applicable emissions standards for NESHAPs, grain loading and opacity.

Relevant History

What other events have occurred that affect the rules? This may include previous rules, EPA actions, etc.

The EQC adopted the most recent version of the Heat Smart rules in February 2011, which specifically require any solid fuel burning device with a heat output of less than 1 million Btu per hour (MMBtu/hr) to be certified by DEQ in order to be sold in Oregon after March 1, 2011. The Heat Smart rules are intended to reduce air pollution from residential and commercial wood heating. Pursuant to the Heat Smart rules, DEQ certifies devices as meeting EPA emission standards. At this time, there are no small biomass boilers that are certified by the EPA. Therefore, none of these devices below 1 MMBtu/hr are currently allowed for sale in Oregon.

DEQ has learned that several of the biomass utilization projects supported by the the Governor’s state biomass initiative are small enough to be affected by the Heat Smart rules. DEQ is currently conducting a temporary rule that exempts such boilers from the Heat Smart rules, and establishes a pathway to ensure that these uncertified boilers meet all other existing state and federal air quality requirements, including grain loading, opacity and air toxics standards. DEQ proposes this rulemaking with public comment to make permanent the proposed changes in temporary rule going before the EQC for adoption in June of this year. Doing so will enable these small-scale commercial, industrial and institutional biomass projects to meet critical federal and state funding deadlines.

If the rulemaking implements a statute(s) adopted within the two years before the SRP, provide bill number or ORS citation, and date that statute was adopted or amended.

N/A

Deadlines

Identify any deadlines for completing this rulemaking required by law, regulation, court order, program needs etc.

If adopted by the EQC in June, 2011, the temporary rule amendments would become effective upon filing with the Secretary of State and would be effective for no more than 180 days. This proposed permanent rule needs to be adopted by the EQC no later than December, 2011, in order to make the temporary rules permanent.

Technical or Environmental Issues

Identify all known technical or environmental issues associated with this rulemaking (if not already addressed in Need).

N/A

Cross Media Issues

Identify potential cross media issues associated with this rulemaking.

N/A

Policy or Political Issues

Identify policy or potential political issues associated with this rulemaking.

The proposed rule will balance the Department’s need to protect public health from particulate and toxic air emissions from biomass sources while aligning DEQ rules affecting small commercial, industrial and institutional biomass boilers with the incentives provided by the Oregon Department of Energy and interest of the Governor’s Office to further biomass utilization statewide.

Potential Impacts to MSD

Identify all potential costs within DEQ to providing any new service related to this rulemaking.

MSD management must be aware of any potential cost prior to bringing the rulemaking to ODAM for SRP. For example, if internet payment for a fee is being proposed, ensure that administrative costs for developing that service (or additional resources) are discussed with MSD management and described here briefly.

These rules establish registration requirements for uncertified small-scale commercial, industrial and institutional boilers with a heat input equal to or less than 1MMBtu/hr.

MSD services will be required to design and implement a database and web based portal that biomass boiler owners and operators can use to self-register their boilers in order to verify that the registered devices meet applicable emission standards. There is no fee associated with the self-registration process, and no invoicing is required. The system will be modeled after the existing Greenhouse Gas EZ-Filer and Heat Smart Notification tools, utilizing existing code which will require minor re-programming to adapt these programs for use in this application. It is anticipated that this effort will create a moderate work impact to MSD.

Potential Impacts to OCE

Does this rulemaking develop new or expand existing compliance requirements? If yes, briefly explain.

This rulemaking requires boilers with heat outputs of 1MMBtu/hr or less at commercial, industrial and institutional facilities that are not permitted to register their devices with DEQ. This will improve compliance with NESHAP, grain loading and opacity standards as they apply to these devices.

Does this rulemaking subject previously unregulated persons to regulations? If yes, identify that group of stakeholders and briefly explain how they may be impacted if this rulemaking is adopted.

No. This rulemaking exempts certain biomass boilers for the Heat Smart rules. Devices being made exempt from the Heat Smart rules are still subject to applicable emissions standards for grain loading, opacity and NESHAP requirements. Manufactures of affected boilers will need to provide source test data to owners and operators to verify that the devices they sell in Oregon on or after March 1, 2011, are able to meet applicable emission standards. Owners and operators of boilers purchased after this date must also verify that their device meets all applicable requirements.

Does this rulemaking develop a new or expand an existing permit/regulatory program?

This rulemaking provides an alternative compliance path for existing regulated parties who sell, own or operate boilers with heat outputs less than 1 million Btu/hr in Oregon as of March 1, 2011. It also adds a registration requirement for affected biomass boilers. The proposed rules would exempt these boilers from the Heat Smart rules if they are registered with DEQ.

If the answer to any of the above questions is yes, then prior to presenting the start rulemaking proposal to ODAM, the rule writer needs to:

1) discuss the rulemaking with OCE to determine any potential enforcement costs, and

2) include OCE on the rulemaking team to specifically review any rule changes for enforceability.

Implementation Issues

Will we be able to implement the rules? Yes, through a no-fee, self-registration program.

Can we effectively enforce the rules?

Owners and operators of affected devices will be able to self- register in order to verify that their devices are in compliance with applicable emissions standards. Compliance can be verified as needed using source test data supplied by the manufacturer or registrant.

If not, have we considered another approach to compliance? If the rules will not be accompanied by new resources, what other work will not get done? Are we prepared to drop that work?

N/A

Have we communicated internally and externally with stakeholders? To date, internal discussions have occurred with the Regional Managers, Regional Administrators and the EMT. External communications include conversations with the Governor’s Office, the Oregon Department of Energy and emails from developers. Additionally, conference calls with manufacturers, owners and operators are scheduled for the first week of June as part of the temporary rulemaking process currently underway.

Is there an internal and external communication strategy to ensure that both DEQ staff and the regulated community are prepared for the effects of the rules?

Internal – Rules communicated to DEQ Inspectors via the Inspection Forum.

External – Rules will be communicated to the regulated community through conference calls and fact sheets; and to the public through a dedicated web page and the rulemaking process.

Is this strategy for both rulemaking and rule implementation?

Yes

5 year Review

Will the rules eventually adopted through this rulemaking be required to be reviewed within five years per ORS 183.405 (Check with your division rules coordinator)?

No. This rulemaking modifies existing Heat Smart and other rules, which are subject to a 5-year review.

If yes, how will DEQ subsequently determine whether this rulemaking has accomplished its objective? Looking ahead five years, how would that objective (defined at the top of the first page of this document) be measured?

N/A

What reasonable measures will provide this information? Examples of reasonable measures might include: aligning state AQ regulations with new federal regulations; renewal of existing WQ storm water permit; establish/revise WQ program fees; establish LQ compost program.

N/A

Stakeholders

Identify persons, businesses, or organizations that may be interested in or affected by these rules and their potential interests, issues, or responses. Be as specific as possible.

Manufacturers – Interest in ability to sell solid fuel burning devices in Oregon.

Owners and operators – Interest in ability to purchase and operate solid fuel burning devices in Oregon.

Governor’s Office – Interest in/support for statewide biomass utilization and job creation.

ODOE – Providing financial incentives to purchase solid fuel burning devices in Oregon.

County’s with Non-Attainment Areas – Interest in balancing Air Quality Planning needs with job creation.

Residents/members of the public – Interest in addressing potential air quality/health impacts while spurring job growth in their communities.

Have we conducted any initial consultations with stakeholders? If so, do they support the proposed changes?

Consultations are scheduled for the first week of June (see above).

Effects on Small Business, Individuals

Do the rules affect individuals, small businesses or small communities? If so, what alternatives have been or will be explored to minimize costs, including different requirements for these entities? Have we evaluated the cumulative effect of DEQ requirements and considered existing requirements that could be repealed or modified as these new requirements are adopted?

This rulemaking creates a registration program for non-Title V businesses. The proposed rules do not affect small communities or industries. The proposed rulemaking is designed to minimize impacts on small businesses by exempting small-scale uncertified biomass boilers from the Heat Smart rules through a no-fee registration process.

Rulemaking Process

Rulemaking Team

Identify persons who will be involved in the rulemaking team. Others may be added through the ODAM opt in/out process. Estimate hours or FTE and time period for each. At a minimum, identify the sponsoring DA, lead manager, and rule writer.

Advisory Process

Describe the advisory process to be used. E.g., type of advisory process (e.g., policy advisory committee, technical advisory committee, workgroups), goals of process, probable participants (e.g., organizations, key individuals, other agencies).

None.

If no advisory process is proposed, explain why.

Coordination with stakeholders will occur directly. The issue is policy-related (as opposed to technical), and is not significant enough to warrant the creation of an advisory committee.

Public Involvement

Describe how the stakeholders and general public will be informed of this rulemaking and be provided an opportunity to participate. E.g., the required public notice and comment process or additional education and outreach.

Stakeholders and the general public will receive notice of this rulemaking through the required public notices and public hearings associated with the Department’s rulemaking process.

EQC Involvement

Describe any recommendations for involving the Environmental Quality Commission before rule adoption. E.g., informational briefings or policy direction.

The Commission will be informed about the issues presented in this SRP during the temporary rulemaking process currently under way, scheduled for EQC adoption in June of this year.

Rulemaking Target Dates

Identify target milestones for rulemaking, including those listed below.

Notice published in SOS Bulletin: 8/01/11

Public Comment Deadline: 8/25/11

EQC Adoption: 12/15/11

Milestone

Target Dates

Advisory Process (e.g., committees; workgroups)

June – Nov. 2011

Publication in SOS Bulletin

8/01/2011

EQC rule adoption

12/15/11